In a decision of 6 December 2016, the French Supreme Court of the Judiciary (“Cour de Cassation”) provided a very useful clarification in relation to unfair competition claim (“concurrence déloyale”, a tortious action) based on domain names. The Cour de Cassation stressed that neither the distinctiveness nor the originality of a domain name were a requirement for an unfair competition claim to be admissible but that they would simply be relevant when assessing likelihood of confusion.

The Claimant was a French company called Pressimmo On Line and was the owner of the word trade mark “lacoteimmo” (the “Trade Mark”) and the registrant of the domain names <> and <>.

The Defendant was a French company called La Cote immobilière and owned the domain name <> (the “Domain Name”) which it used actively at least since 26 December 2005.

Both the Claimant and the Defendant operated in the real estate sector.The Claimant sent a cease and desist letter to the Defendant on 23 January 2012 to ask them to cease using the term “lacoteimmo”, including as part of the Domain Name. Given the Defendant’s failure to cooperate, the Claimant initiated proceedings on 23 November 2012 based on the alleged infringement of its Trade Mark and also for unfair competition (based on general tortious liability as per ex-article 1382 of the French civil code which has become article 1240 since 1 October 2016 further to the reform of French contract law) based on the unauthorized imitation of the Claimant’s domain names in the Domain Name. In its response addressing the Claimant’s allegations, the Defendant also made a counter-claim requesting the cancellation of the Trade Mark for being merely descriptive of the services provided under the Trade Mark.

The first instance tribunal hearing the case found in favour of the Defendant on both accounts thus cancelling the Trade Mark and rejecting the unfair competition claim based on the Claimant’s domain names, in both cases due to the descriptiveness of the Trade Mark and the domain names. The first instance tribunal held that even if the domain names pointed to websites with similar services, the domain names needed to be distinctive as a source indicator for the specific services of the Claimant. Thus the first instance tribunal concluded that the Claimant could not prevent its competitors from using a domain name that was descriptive, such as the Domain Name.

The Claimant lodged an appeal against the first instance decision but the court of appeal confirmed the first instance decision. Thus, the Claimant challenged the court of appeal’s decision before the Cour de Cassation and the Cour de Cassation overruled the decision of the court of appeal on two points.

Firstly, the Cour de Cassation considered that there was a procedural irregularity in that the evidence relied upon by the Defendant to invoke the descriptive nature of the Trade Mark (and thus to justify its cancellation) had actually not been produced in the proceedings.

Secondly, the Cour de Cassation underlined that the purpose of the tort of unfair competition was to offer an alternative course of action precisely where a claimant could not rely on a Trade Mark, to obtain compensation where the claimant could establish a link between a detriment to the claimant and an unfair act or omission on the part of a competitor. Thus because the court of appeal (upholding the decisions from the tribunal of first instance) rejected the claim based on the unfair imitation of the domain names in the Domain Name due to the lack of distinctiveness and originality of the domain names, the Cour de Cassation found that reasoning to be ill-founded and cancelled the court of appeal’s ruling on that point. The Cour de Cassation highlighted that whilst distinctiveness and originality were not prerequisites for an unfair competition action, they could be of assistance in showing likelihood of confusion.

Whilst the decision is rather short as decisions from the Cour de Cassation often are, in practice this decision clarifies that (i) domain names associated with actively used websites can be relied upon in an unfair competition action in France and that (ii) as long as a claimant can demonstrate that it has suffered a detriment as a result of a competitor unduly seeking to benefit from the goodwill of its domain names, then it does not matter if the domain names relied upon are not original or distinctive.

The decision is available in French here.

First published on Anchovy News: Anchovy® is our a comprehensive and centralised online brand protection service for global domain name strategy, including new gTLDs together with portfolio management and global enforcement using a unique and exclusive online platform developed in-house.