PACTE law and trademarks. Ready - On your mark - Go!

Paris, December 11, 2019 – Law no. 2019-486 of May 22, 2019 relating to business growth and transformation, known as the “PACTE Law,” has finally kept its promises regarding the provisions relating to trademark law. Ordinance No. 2019-1169 of November 13, 2019, implementing decree N°2019-1316, the order relating to fees of the same day, and two INPI decisions Nos. 2019-157/158 will significantly modify French trademark law, while also bringing it into conformity with European law.

Will this law achieve its goal of giving businesses the means to innovate, secure and create jobs? Only time will tell. However, the modifications aim to strengthen trademark and patent rights, enable their owners to more easily enforce their rights through more comprehensive opposition procedures, and facilitate their defense through invalidity and revocation procedures which may be brought before the INPI. The principle of the imprescriptibility of actions for the cancellation of national industrial property titles is also established.

A WIDER RANGE OF TRADEMARKS!

Licensees now benefit from a wider range of possibilities to protect their trademarks, thanks in particular to:

• the elimination of the requirement of graphical representation of the sign, which paves the way for all new forms of unconventional trademarks (sound, multimedia, animation). These may be submitted in the form of an electronic audio, audiovisual or video file. Keep in mind that to be registered, a trademark must still remain “clear, precise, self-contained, easily accessible, intelligible, durable and objective.”
• the possibility of filing already used and not very distinctive trademarks, as soon as it is possible to prove the acquisition of distinctive character as a result of its use prior to filing.
• the overhaul of the collective mark regime creating two separate regimes, one for guarantee marks (formerly “certification” marks) and the other for collective marks. Both, although subject to grounds for rejection, invalidity, loss of rights in specific circumstances, must be subject to regulations governing use.

PRICING BY CLASS

Filing and renewal fees are now collected per class rather than as a single fee for the first 3 classes. While filing fees are now more advantageous for 1 class, they are higher as of the 2nd class. With regard to renewal fees, taxes are higher as of the 1st class. All trademarks must be renewed at their anniversary date, within a time period of one year prior to this date (and no longer in the 6 months prior to the last day of the month in which the trademark was first filed). However, a transitional period allows for renewal of trademarks until the last day of the month for renewals coming due until December 10, 2020.

STRENGTHENED RIGHTS

French opposition procedure aligns with European procedure for all requests filed after December 11, 2019 with:

• the possibility of invoking several prior rights by opposition provided that they belong to the same rightholder;
• the possibility of invoking not only trademarks, but also denomination or legal form, name and image or reputation of a public organization, the fact that the trademark was filed by an agent or representative without authorization;
• the possibility of filing an initial formal opposition with few elements, and completing it later;
• a strengthening of the adversarial procedure with exchanges between parties and possibilities for suspension, with, as a counterpart, an increase in procedural duration from 6 months to 1 year; note that the opposition fee is slightly increased, and each ground will be subject to an additional fee.

WARNING: The INPI now has the power to exercise total control over proof of use. At the request of the applicant, it will therefore be necessary to provide proof of use before filing a contested mark, for all goods and/or services invoked for each of the marks on which the opposition is based.

EASIER LITIGATION

Litigation will be facilitated and made less costly by the possibility of bringing certain invalidity and revocation actions before the INPI as of April 1, 2020.

The INPI will have exclusive jurisdiction for actions principally concerning trademark revocation and invalidity actions based on certain grounds (i.e. those listed in articles L711-1 to L711-3 and relating to: trademark law, reputed trademark, corporate name, trade name, signage, domain name, designation of origin and geographical indication, name of a public entity, name, image or reputation of a local authority or a public establishment of inter-municipal cooperation, filing by an unauthorized agent). A legitimate interest to act is no longer necessary to bring revocation or invalidity actions.

The courts of law will remain competent for invalidity actions based on copyright, designs & models, personality rights, in cases where a request for invalidity or revocation is associated with an infringement or unfair competition action, and in the case of a counterclaim; as well as for appeals for annulment or reversals of INPI decisions rendered with regard to invalidity or revocation as of April 1, 2020.

These appeals will have a devolutive effect allowing the entire case to be re-examined and suspending execution of the court judgement. The invalidity action becomes imprescriptible subject to the provisions on extinction of rights due to acquiescence. An invalidity action on the basis of a well-known mark within the meaning of Article 6 bis of the Paris Convention lapses five years after the date of registration.

When an invalidity or revocation counterclaim of a mark is lodged with a court after a claim has been made between the same parties and for the same facts before the National Institute of Industrial Property, the court stays proceedings until the invalidity or revocation decision is no longer subject to appeal.

THE FIGHT AGAINST COUNTERFEITING FACILITATED

The notion of counterfeiting is broadened:

• With regard to its subject-matter: by including, in particular, infringement of reputed trademarks, infringement of corporate names, trade names and signage, preparatory acts and external transit if the counterfeit trademark is protected in the destination state;
• With regard to its duration: as trademark infringement actions will no longer be prescribed by five years “from the facts which are the cause”, but “from the day when the rightholder knew or should have known the latest fact allowing him to exercise it”
• With regard to applicants: the non-exclusive licensee (with the consent of the owner and unless otherwise stipulated in the contract) and persons authorized to exploit a certification or collective mark can now initiate an infringement action.

These new provisions result in many positive modifications for trademark owners who exploit them fully and are able to prove it. The establishment of rules of obligation of use and conservation of proof by companies is now imperative to undercut adversaries who will not fail to raise these arguments in opposition proceedings or bring revocation actions against other classes than those concerned by the proceedings, or even possibly against other unused trademarks of the holder, all for the purpose of applying pressure.