Next Retail Ltd. (Next Retail), an English company operating in the clothing sector, is the owner of two French nominative trademarks "Next". The trademarks are registered for, inter alia, clothing. Philip Morris Products (Philip Morris), the well-known tobacco manufacturer, is the owner of a subsequent identical French trademark "Next" to cover goods in connection with tobacco. In 2005, Philip Morris requested the revocation of Next Retail's trademarks on the grounds of lack of use. In defense, Next Retail requested the cancellation of Philip Morris' trademark. It based its claim on its two earlier trademarks "Next", arguing that Philip Morris' filing of the trademark "Next" for goods related to tobacco infringed its earlier rights since French law prohibits direct or indirect advertising in favor of tobacco or tobacco products.
The Court of First Instance rejected Philip Morris' claim, ruling that the filing of the trademark "Next" for tobacco and tobacco products deprived Next Retail of the ability to promote its own products. The court cancelled the registration of Philip Morris' trademark "Next" and stated that Philip Morris had no legitimate interest in requesting the forfeiture of Next Retail's trademarks.
The decision was upheld on appeal. The Court of Appeal of Paris ruled that the mere filing of the trademark "Next" for goods in connection with tobacco infringed Next Retail's prior rights even if the trademark has never been used by Philip Morris.
On further appeal, the French Supreme Court overturned the decision of the Court of Appeal of Paris and ruled in favor of Philip Morris. The court said that Philip Morris had a legitimate interest in requesting the revocation of Next Retail's trademarks. The revocation would allow Philip Morris to use the trademark "Next" in its business activity. The harm caused to the earlier trademark needs to be examined with regard to the way in which the sign has been used. The court also ruled that the registration of a subsequent trademark - in the present case the trademark "Next" by Philip Morris - could not be cancelled on the basis of a trademark which has not been genuinely used for a continuous period of five years, i.e. on the basis of Next Retail's trademark.