Acts of Trademark Infringement may also Constitute Acts of Unfair Competition!

It is commonly accepted that the acts of infringement may not also constitute acts of unfair competition or parasitism.

It is commonly accepted that the acts of infringement may not also constitute acts of unfair competition or parasitism. Thus, according to settled case-law, for an infringer to also be found guilty of unfair competition or parasitism, it must be demonstrated that he has committed separate acts of infringement.

However, this rule is experiencing adjustments in cases of joint actions filed by the right holder and the licensee. In effect, as the Commercial Chamber of the Supreme Court recently recalled in a 24 September 2013 judgment: “…the operator (licensee) of a trademark is entitled to obtain compensation for his own prejudices, regardless of whether the elements on which he bases his claim for unfair competition are materially the same as those for which the proprietor of the trademark has obtained a conviction for infringement”.

Thus, in the case of a joint action by the trademark owner and the licensee, the same actions may be objectionable on the grounds of infringement for the owner of the trademark and of unfair competition for the licensee.

This principle had already been recognized by the same Supreme Court Chamber in its judgments of 22 March and 13 December 2005 which foresaw then, that the licensee, “who does not have an exclusive right to the industrial property title, is entitled to bring an action for unfair competition, regardless of whether the elements on which he based his claim are the same as those that the trademark owner could oppose under counterfeiting “.

According to article L. 716-5 § 1, of the French Intellectual Property Code: “Civil infringement proceedings shall be instituted by the owner of the trademark. However, the beneficiary of an exclusive right of exploitation may institute infringement proceedings, unless otherwise laid down in the contract, if after formal notice the owner does not exercise such right”. In this application of the article, the exclusive licensee has claimed against infringement, and therefore cannot obtain damages on the basis of unfair competition by citing the same facts as in the infringement action.

On the other hand, according to the second paragraph of this article, “Any party to a licensing contract is entitled to participate in the infringement proceedings brought by another party in order to obtain damages for the prejudice he has himself sustained”. In this case, and under the above case-law, the licensee may seek compensation on the grounds of unfair competition for acts constituent of trademark infringement when in respect to the trademark owner.

In the case of a joint action by the trademark owner and the licensee(s) it is therefore also important to seek damages in the field of unfair competition or parasitism.

REGIMBEAU has a team specialising in infringement / unfair competition at your disposal to advise and guide you in the protection and defence of your rights.

Published by

Nicolas Demilly

Conseil Senior