A "Supreme" transfer of ownership

On 20 December 2018, the Nanterre court of first instance handed down an interesting decision regarding fraudulent filings and actions for recovering the ownership of trade marks.Chapter 4 Corp, an American company (also referred to as "Supreme") specializes in the marketing of clothing and more specifically of streetwear or urban wear clothing.

Supreme is the holder of numerous SUPREME trade marks, including the word and design trade marks seen below:

Supreme has been using this sign since 1994 in the United States and is the holder of several US trade marks. In France, Supreme filed two SUPREME word trade marks respectively in 1999 and 2015 covering goods and services in classes 9, 16, 25, 28, 38, 41 and 42 as well as classes 18 and 35 goods and services.

Supreme also filed the red SUPREME logo in France in 2015 covering classes 18, 25 and 35. Supreme claimed to have marketed its goods under this name in France since 2013.

At the very beginning of April 2015, Mr Cheikh, "an entrepreneur passionate about art and culture", filed a French trade mark consisting of an identical SUPREME red logo in classes 16, 25 and 32. On 3 March 2016, he filed a trade mark for the same logo in classes 2, 14 and 33. On 6 August 2016, Mr Cheikh filed a further application for the word trade mark SUPREAM for goods and services in classes 18, 25 and 35.

Following an opposition filed by Supreme against the French word and design trade mark designating classes 16, 25 and 32, the French Trade Mark Office (INPI) rejected the trade mark in relation to class 25 goods and the applicant withdrew his trade mark in relation to the goods in classes 2, 32 and 33. The trade marks filed by Mr Cheikh were however still valid for classes 14 and 16 goods so Supreme filed an action based on fraud to claim the ownership of the defendant's trade marks or alternatively to obtain their cancellation.

More specifically, Supreme notably relied on article L. 712-6 of the Intellectual Property Code ("IPC") regarding fraudulent filings and the "Fraus omnia corrumpit" principle ("fraud corrupts everything"). To obtain the cancellation of the trade marks, the claimant based its action notably on articles L. 711-4 of the French IPC and 6 bis of the Paris Convention regarding well-known trade marks.

The court acknowledged that Supreme has been making continuous and intensive use of the SUPREME sign abroad since 1994 and in France since 2013 via the claimant's website and since March 2016 in a Parisian store and that the SUPREME signs are known by a wider public than the one initially targeted by Supreme.

The first instance judges also considered that Mr Cheikh could not ignore the use of the signs at issue by Supreme especially in view of "his displayed interests which strictly coincide with those defended under the 'SUPREME' sign" (Mr Cheikh showed a significant interest for street art by opening a cultural venue and publishing a review dedicated to this topic) and that he did not demonstrate any need to use the signs for his activity. The court highlighted the fact that the defendant necessarily knew Supreme's trade marks in view of his "insistence" to file identical trade marks "without any necessity".

Applying CJEU case law, the court then assessed the issue as to whether or not it was useful for Supreme to hold the trade marks in question for goods that it had not included in its own trade marks, that is classes 14 and 16 goods.

The court acknowledged that the claimant did not show that it was using its signs in relation to these goods. However, it indicated that this should not lead to the automatic rejection of Supreme's claim.

Referring to CJEU case law, the court indicated that the criteria determined by European judges to analyze goods and services in the context of infringement or cancellation actions should apply to the goods concerned by Supreme's activities in France and to the goods and services covered by the defendant's trade marks.

The court concluded that despite the absence of similarity between certain goods:

"the significant reputation of the 'SUPREME' sign, the complete identity of the signs at issue and the clear competition between the parties in view of the sole activity that Mr Cheikh claims to operate implies a serious likelihood of association between the latter and that one for goods that it does not market".

The first instance judges thus ordered the transfer of the defendant's trade marks based on fraud.

Case Ref. Paris Court of First Instance – 20 December 2018 – case No. 17/01027 – "Chapter 4 Corp/ d/b/a Supreme vs Majid Cheikh"