Intellectual property issues

Paris Convention

Is your jurisdiction party to the Paris Convention for the Protection of Industrial Property? The Patent Cooperation Treaty (PCT)? The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?

France is party to the Paris Convention for the Protection of Industrial Property 1884 (since its inception), the Patent Cooperation Treaty 1970 (since 25 February 1978) and the Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (since 1 January 1995).

Contesting validity

Can the licensee be contractually prohibited from contesting the validity of a foreign licensor’s intellectual property rights or registrations in your jurisdiction?

In principle, clauses by which the licensee agrees not to contest the validity of the licensed IPRs are valid in France. However, they do not prevent the licensee from challenging the validity of his or her own licence agreement by invoking a prior decision invalidating the right upon a third party’s request.

Nonetheless, the validity of such clauses may be contested under EU and French competition law because they could possibly procure an undue competitive advantage and protection for the licensor. Regulation (EU) No. 316/2014 of 21 March 2014 on the application of article 101 of the Treaty on the Functioning of the European Union (TFEU) to categories of technology transfer agreements considers such a prohibition as an ‘excluded restriction’ (which excludes the benefit of the exemption provided by the said regulation). However, the licensor is entitled to terminate a licence agreement in the event that the licensee challenges the validity of one or more of the licensed IPRs.

Invalidity or expiry

What is the effect of the invalidity or expiry of registration of an intellectual property right on a related licence agreement in your jurisdiction? If the licence remains in effect, can royalties continue to be levied? If the licence does not remain in effect, can the licensee freely compete?

Where a trademark, patent, design or model registration is declared invalid, all licences granted over such registered right automatically become null and void.

If the registration of the IPR expires, the object of any related licence agreement disappears. The agreement therefore becomes null and void, and the licensor may no longer levy royalties. However, except for trademarks that can be indefinitely renewed, the licence must not be granted for a term that extends beyond the expiration of the term for which the underlying right is legally protected. If the trademark expires before the end of the licence agreement as a result of a failure of the licensor to renew the trademark, the licensee may claim for damages.

In the case of termination or expiration of a licence agreement, the licensee may freely compete unless the licence agreement provided for a post-contractual non-compete clause (which must comply with legal and case law requirements.

Requirements specific to foreigners

Is an original registration or evidence of use in the jurisdiction of origin, or any other requirements unique to foreigners, necessary prior to the registration of intellectual property in your jurisdiction?

No. A foreign national can register an IPR in France without original registration or evidence of use in the jurisdiction of origin. However, the registrant must designate a representative if the registrant is not established or domiciled in France or in a member state of the European Union or of the European Economic Area. If the registrant is not established or domiciled in France and is neither a national of a member state of the World Trade Organisation nor the Paris Union, it must provide the National Institute for Industrial Property (INPI) with evidence that its country grants protection to French trademarks. If such documents are in a foreign language, they must be accompanied with a French translation.

Unregistered rights

Can unregistered trademarks, or other intellectual property rights that are not registered, be licensed in your jurisdiction?

A trademark does not exist unless it has been duly registered and cannot therefore be validly licensed if unregistered. Nothing would prevent the parties from entering into a licence agreement for a trademark application (ie, a trademark that has been applied for but not yet registered), but such a licence will be effective only once the trademark has been registered, meaning that no third party has opposed the registration of the trademark within two months from the publication of the trademark application. It is therefore highly inadvisable to license a trademark that is not registered or subject to a trademark application.

Rights attached to a patent application can be transferred in whole or in part. A patent application may therefore be granted under licence, on an exclusive or non-exclusive basis.

A design or model does not exist under French law unless it has been registered. However, an unregistered design may exist at the EU level (Community design). Pursuant to article 1 of Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community designs, a design that meets the requirements for protection provided for by said regulation shall be protected by an unregistered Community design for a period of three years as from the date on which the design was first made available to the public within the European Union. Article 32 of Regulation (EC) No. 6/2002 provides that such a design may be licensed for the whole or part of the European Union (including France).

Copyright and know-how are not subject to registration or other official formality in order to be protected. They can nevertheless be licensed.

Security interests

Are there particular requirements in your jurisdiction to take a security interest in intellectual property?

Validity

Patent licences must be established in writing to be valid (article L613-8 of the IPC).

With respect to copyright, the IPC expressly mentions specific kinds of agreements that must be established in writing (performance, publishing and audiovisual production agreements, as well as free performance authorisations) (article L131-2 of the IPC). In addition, the transfer of copyright is subject to each of the assigned rights being separately mentioned in the assignment agreement and the field of exploitation of the assigned rights being defined as to its scope, purpose, place and duration (article L131-3 of the IPC). Last, the assignment of audiovisual adaptation rights must be established in writing in an instrument separate from the contract relating to publication of the printed work (article L131-3 of the IPC).

For other kinds of intellectual property licences, there are no particular legal validity requirements, but it is advisable to enter into a written licence agreement to set forth the terms and conditions under which the licence is granted and for evidence purposes.

Opposability to third parties

Licence agreements relating to trademarks (article L714-7 of the IPC), patents (article L613-9 of the IPC), and designs and models (article L513-3 of the IPC) must be registered with INPI to be opposable to third parties. However, before its registration, a licence is nevertheless opposable to third parties that acquired rights after the date of the licence and that were aware of such licence when they did.

Security interest

Pledges over patents, trademarks, designs and models, software and cinematographic works are subject to certain formal conditions. In order to be valid and enforceable against third parties, pledges must be established in writing, registered with INPI (and, for films, with the public register of cinematography and audiovisual works), and published in the official bulletin of industrial properties.

Pursuant to article L142-1 of the Commercial Code, pledges may be taken over an ongoing concern. Thus, IPRs may also be affected by a commercial pledge covering an entire business activity.

Proceedings against third parties

Can a foreign owner or licensor of intellectual property institute proceedings against a third party for infringement in your jurisdiction without joining the licensee from your jurisdiction as a party to the proceedings? Can an intellectual property licensee in your jurisdiction institute proceedings against an infringer of the licensed intellectual property without the consent of the owner or licensor? Can the licensee be contractually prohibited from doing so?

Those issues will generally be agreed between the parties in the licence agreement. In the absence of specific contractual provisions to that effect, the following rules are applicable.

The IPC confers to the owner of the infringed IPR the right to institute infringement proceedings. Therefore, a foreign licensor that has granted a licence in France can institute infringement proceedings in France without joining the French licensee as a party to the proceedings.

Unless otherwise set forth in the agreement, the licensee that has been granted an exclusive right may institute infringement proceedings if, after prior written notice to the owner of the infringed right, the owner does not institute such proceedings. With respect to patents specifically, the same rule applies to the holder of a compulsory or automatic licence.

In any case, each party to a patent, trademark, design or model licence agreement remains entitled to intervene in the infringement proceedings instituted by the other party to obtain compensation for its own prejudice.

Sub-licensing

Can a trademark or service mark licensee in your jurisdiction sub-license use of the mark to a third party? If so, does the right to sub-license exist statutorily or must it be granted contractually? If it exists statutorily, can the licensee validly waive its right to sub-license?

The right to sub-license does not exist statutorily and must necessarily be granted contractually to the licensee.

Jointly owned intellectual property

If intellectual property in your jurisdiction is jointly owned, is each co-owner free to deal with that intellectual property as it wishes without the consent of the other co-owners? Are co-owners of intellectual property rights able to change this position in a contract?

For patents and patents applications (articles L613-29 and L613-31 of the IPC) the following states:

  • each co-owner may exploit the invention for its own benefit, subject to an equitable compensation of the other co-owners who do not personally exploit the invention or have not granted a licence;
  • each co-owner may initiate an infringement claim, subject to prior notification of the other co-owners;
  • each co-owner may grant a non-exclusive licence to a third party, subject to an equitable compensation of the other co-owners who do not personally exploit the invention or have not granted a licence. If no agreement is found, this indemnity is fixed by the High Court (first instance civil court). The draft licence agreement must nonetheless be notified to the other co-owners together with an offer to sell the would-be licensor’s share in the IPR at a determined price. Each co-owner may object to the licence grant within three months, provided that it purchases the share of the co-owner who intended granting the licence. If no agreement is found within such a period of time, the price is fixed by the High Court;
  • an exclusive licence is subject to the agreement of all co-owners or by a court decision;
  • each co-owner may assign its share at any time. The other co-owners may exercise their pre-emption right within three months of the notification of the assignment project. If no agreement is found within such a period of time, the price is fixed by the High Court; and
  • each co-owner may notify the other co-owners that he or she is abandoning his or her share to their benefit.

Patent co-owners may contractually change this position (L613-32 of the IPC).

Each co-owner of a trademark or a design and model must obtain the consent of the other co-owners to exploit that intellectual property, unless otherwise agreed contractually.

A collaborative work (ie, a work created by several individuals) is the common ownership of the co-authors who shall exercise their rights by mutual agreement. Where the participation of each co-author is of a different type, unless otherwise agreed, each co-author may individually exploit its personal contribution provided that it does not prejudice the exploitation of the common work (L113-3 of the IPC).

First to file

Is your jurisdiction a ‘first to file’ or ‘first to invent’ jurisdiction? Can a foreign licensor license the use of an invention subject to a patent application but in respect of which the patent has not been issued in your jurisdiction?

France is a ‘first to file’ jurisdiction. However, if a patent application has been filed either for an invention that has been stolen from the inventor or in breach of a legal or contractual provision, the injured party may claim the ownership of the application or the patent (article L611-8 of the IPC).

The exclusive right of exploitation over a patentable invention is effective as from the filing of the patent application. However, a licence may be validly granted for the use of an invention in respect of which a patent application has been filed but the patent has not been issued yet (articles L613-1 and L613-8 of the IPC).

A non-patented or non-patentable invention can nonetheless be protected by the rules applicable to know-how as long as it meets the requested conditions.

Scope of patent protection

Can the following be protected by patents in your jurisdiction: software; business processes or methods; living organisms?

New inventions that are the product of an inventive activity and are capable of industrial application are patentable in France, in all technological domains (article L611-10 of the IPC).

Plans, principles and methods for the performance of intellectual activities, for games or economic activities, as well as computer programs, are not considered as patentable inventions, to the extent that the patent application or the patent concerns only one of these elements as such.

As a general rule, living organisms are not patentable. More specifically, the human body and the discovery of one of its elements, including the sequence or partial sequence of a gene, cannot be patented. Only an invention consisting of the technical application of a function of an element of the human body may be protected by a patent. This protection covers the element of the human body only to the extent necessary to the conception and the exploitation of this specific application (article L611-18 of the IPC). Animal pedigrees and plant varieties (as defined in article 5 of Regulation No. 873/2004) cannot be patented either. However, inventions relating to plants or animals are patentable if the technical feasibility of the invention is not confined to a particular plant or animal variety (article L611-19 of the IPC).

Trade secrets and know-how

Is there specific legislation in your jurisdiction that governs trade secrets or know-how? If so, is there a legal definition of trade secrets or know-how? In either case, how are trade secrets and know-how treated by the courts?

There is no French legal definition of trade secrets or know-how.

No specific legislation governs know-how in France, but know-how is enforceable as long as it is original, secret, economically valuable and protected from any form of involuntary disclosure. Although the wrongful use or disclosure of know-how to third parties does not constitute a proprietary right infringement, damages may be claimed before courts under the general mechanisms of civil liability and, more specifically, unfair competition proceedings.

In addition to the protection afforded to ordinary know-how, specific criminal provisions relate to the disclosure of trade secrets: a manager or employee of a company who communicates or attempts to communicate to a third party a trade secret owned by the company may be sentenced to two years in prison and a €30,000 fine. Such an employee may also be deprived of certain civic and civil rights (article L621-1 of the IPC and article L1227-1 of the Labour Code).

Does the law allow a licensor to restrict disclosure or use of trade secrets and know-how by the licensee or third parties in your jurisdiction, both during and after the term of the licence agreement? Is there any distinction to be made with respect to improvements to which the licensee may have contributed?

A licensor is entitled to contractually restrict disclosure or use of trade secrets and know-how by the licensee, both during and after the term of the agreement.

Such restrictions may, however, be sanctioned under both French and EU competition law if the protected elements are no longer secret (through no fault of the licensee) and therefore unduly restrict competition.

It is up to the parties to the licence agreement to decide whether to include improvements to which the licensee may have contributed in the non-disclosure obligation. In practice, it will generally depend on whether the improvements may or may not be used independently from the pre-existing know-how or trade secrets.

Copyright

What constitutes copyright in your jurisdiction and how can it be protected?

French copyright protects intellectual works of any kind, as long as they are original and expressed in a medium (whatever the medium). The IPC provides a non-exhaustive list of works that are entitled to copyright protection: books, brochures and other literary, artistic or scientific writings, conferences, speeches, pleadings, dramatic works and musicals, choreographic works, musical compositions with or without lyrics, cinematographic and other audiovisual works, designs, paintings, architectural works, sculptures, graphic and typographic works, photographs, illustrations, maps, software and creations of the seasonal fashion industry.

Without prejudice to the rights of the author of the original work, translations, adaptations, transformations or arrangements of original works also benefit from copyright protection, as well as anthologies or collections of works or data, including databases, which constitute intellectual creations by virtue of the choice or presentation of their contents.

The title of an intellectual work is protected by copyright in the same way as the work itself, as long as it is original.

The author of an intellectual creation automatically benefits from the copyright protection as from the creation of the work. No registration, publication or other formality is required as copyright is a sui generis right.

Copyright is protected through the legal provisions that sanction copyright infringement and allow the injured party to initiate infringement proceedings against any copyright infringer.