The French Parliament has passed a new Law No 2014-315 "Aimed at Strengthening the Fight Against Counterfeiting" which has entered into force on March 13th, 2014 (available here).
As an extension of the Law No 2007-1544 "Relating to the Fight Against Counterfeiting" of October 29, 2007, this new Law aims to complete, reinforce and clarify the French legislative arsenal against counterfeiting in compliance with EU rules.
The new Law makes substantial improvements with regards to the assessment of the damages for infringement, procedural means in infringement proceedings before French courts, as well as customs' powers.
Improvement of the assessment of damages awarded to IP rights owners in infringement proceedings
Based on the finding that the remedies awarded by French courts in cases of IP rights infringements are too low, the French Parliament decided to improve and clarify the provisions regarding the assessment of damages awarded to IP rights owners for infringement.
Under the new Law, when assessing damages for IP rights infringement, the courts are now compelled to identify distinctively the 3 heads of damages which are (i) the negative economical consequences of the infringement, (ii) the moral prejudice and (iii) the profits made by the infringer. The previous Law of 29 October 2007 already required for the judge to take these three elements into consideration, but until now, the courts used to assess them together without identifying distinctively the heads of damages. By formalizing this requirement to distinguish the three heads of compensation, the new Law should enable a more accurate and detailed assessment of damages awarded for infringement.
With regard to the "negative economical consequences", the courts are now requested to compensate the victim not only for the shortfall in earnings, but also for the loss suffered by the IP rights owner. This loss should take into account, for instance, the depreciation or the trivialization of the trademark value, the loss of opportunity to enter into a license agreement, or the depreciation of the investments made by the IP rights owner.
In addition, as part of the "profits made by the infringer", the French Judges should now take into consideration the savings made by the infringer in terms of intellectual and material efforts and in terms of promotion. Until now, the French Intellectual Property Code only referred to the profits made by the infringer, not to the actual savings which were usually sanctioned on the grounds of unfair competition and parasitism.
A standardized limitation period of 5 years for all IP rights
Prior to this new Law, the limitation periods to bring civil proceedings in cases of infringement of IP rights were not homogeneous under French law. In particular, trademark, design or patent infringement claims were forfeited unless the case was brought to court within 3 years, while this limitation period is 5 years for copyright or geographical indication.
One of the key measures of the new Law is to align the limitation period for all IP rights infringement claims to 5 years,which is the ordinary civil law limitation period.
Clarification and extension of the scope of 'right to information' injunctions
Implementing Articles 6 and 8 of Directive 2004/48, the Law of 29 October 2007 introduced a new procedure called the "right to information" into French law. This right to information allows IP rights owners to request an injunction against an infringer to communicate key information to the court (e.g., prices, quantity, distribution channels, the identity of the people or companies producing or distributing the infringing products). However, the implementation of this new right raised several difficulties in the interpretation of this right by French courts which jeopardized its effectiveness.
The new Law intends to overcome these difficulties and, in addition, significantly extends the scope of the right to information. The right to information can now:
- be requested for merely "alleged" infringing acts,and therefore may be requested at the pre-trial stage of the proceedings and prior to any court decision on the merits of the case,
- be requested in the frame of proceedings for interim measures and are therefore no longer limited to proceedings on the merits,
- apply to any information or documents deemed relevant, while the former provisions set an exhaustive list of information and documents.
Expansion of the powers granted to the judge hearing a counterfeiting action
The Law introduces a new provision applicable to all IP rights under which "the Court may order ex officio, or at the request of any person entitled to bring an infringement action, all legally permissible investigative measures, even if a seizure for counterfeiting ["saisie-contrefaçon"] has not previously been ordered"
This new procedure enables IP rights owners who bring infringement claims to obtain a pre-trial injunction for disclosure of evidence without having to file for a seizure for counterfeiting through the specific procedure of "saisie-contrefaçon".
Reinforcement of customs' means of action
- Extension of the customs' withholding measures to all IP rights
The new Law extends the customs withholdings measures to all IP rights in order to harmonize French national rules with those laid down by EU Regulation No 608/2013 of June 12, 2013, which entered into force on January 1, 2014.
The possibility for French customs to conduct undercover operations as well as to make test-purchases are also extended to all IP rights.
- Extended customs' means of action regarding goods carried by postal services
With the booming volume of counterfeiting goods carried by postal services or express freight, the new Law grants to the customs the right to access the premises of all postal operators and express freight companies in order to search for packages containing counterfeit goods. This prerogative was previously limited to the premises of the French public operator.
The new anti-counterfeiting Law also intends to create a new database aimed at facilitating searches, finding and collection of evidences of customs infringements. This database will integrate data regarding goods, means of transport and people or companies involved, and will be filled by postal services and express freight companies. It will be centralized by the General Directorate of customs. The implementing measures with regard to this new database shall be issued in a separate decree after consultation of the French Data Protection Authority ("CNIL"), in particular to specify the nature and categories of data that can be collected.
This new Law, which is already in force since March 13th, 2014, is intended to meet the expectations of right holders, in particular in terms of remedies for IP rights infringement. With these new measures, businesses and legal practitioners will be able to continue to work for better compensation for the harm caused by counterfeiting and for an increasingly deterrent case law to counterfeiting and IP rights infringement.