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avocats d'affaires paris

    22/05/2011 - Senate report (Beteille)

    In October 2009 the French Senate’s law commission decided to create a mission d’information (information mission) to assess the efficiency of Law 2007-1544, dated October 29 2007, on the fight against counterfeiting. This law implements the IP Rights Enforcement Directive (2004/48/EC) in France.

    The final report of the information mission was published on February 9 2011. Although the two rapporteurs emphasised the “significant improvements” in the fight against IP infringements, 18 recommendations were made to improve the protection of intellectual property in France.

    Most of these recommendations focus on three important issues :

    - the creation of a new status, ’service editor’, alongside the existing status of ’editor’ and ’host’ created by the E-commerce Directive (2000/31) ;
    - the specialisation of the courts and judges ; and
    - the restitution by infringers of all the profits resulting from the infringements.

    In addition, the report refers to certain procedural improvements (eg, seizures and right to information) and highlights the necessity of clarifying the EU customs regulations.

    Law 2004-575 for confidence in the digital economy (dated June 6 2004), which implements the E- commerce Directive, created a new status, that of ’host’, which is defined as an individual or entity that offers, “even on a free basis, for provision to the public by way of communication services to online users, the storage of signals, writings, images, sounds or messages of any kind provided by the users of those services” (Article 6).

    This status coexists with that of ’editor’, which is defined as a person who “edits an online communication service”. According to this distinction, the host does not have a general obligation to monitor the information that is transmitted or stored by it. Therefore, it can be held responsible only if it knew that it was storing or transmitting information which infringed an IP right and did not take the necessary measures to remove this information or block access to it. In contrast, the editor is directly responsible for the content of the website.

    Even though it was commissioned only to assess the efficiency of Law 2007-1544, the report went further : it considered online infringement and assessed the relevance of the status of ’host’ and ’editor’. The rapporteurs stated that the ’host’ category “has diversified and become less clear, leaving the courts confused and divided on the interpretation of this term”. They referred to the emergence of 2.0 websites (eg, Facebook, MySpace, YouTube and Dailymotion) and auction websites (eg, eBay and PriceMinister), which have been described either as hosts or as editors by the courts. According to the report, those websites fall in fact between the two categories : they go “beyond a simple technical hosting”, but do not “determine the content that they are hosting”. Therefore, the rapporteurs recommended the creation of a third status, ’service editor’, which would be defined as an entity “which gains a direct economic benefit from the consultation of the hosted content”.

    The ’service editor’ status would be stricter than the ’host’ status, as the service editor would have an obligation to monitor the hosted content. In particular, the service editor would have to put in place a warning system to identify potential infringements of IP rights (which is already the case in major websites such as YouTube and Facebook), and would have to take “all appropriate measures to ensure the surveillance of the content that they are hosting”.

    However, this recommendation has already been the subject of major criticism. First, the surveillance system which would have to be put in place by all service editors must “use the most advanced technologies”. This would penalise small websites which cannot afford to make such investments. Moreover, from a legal point of view, this recommendation goes against both EU and French case law. On March 23 2010 the Court of Justice of the European Union (ECJ) stated that the fact that an entity derives a commercial or economic advantage from services linked to the infringement of an IP right does not deprive it from its ’host’ status (for further details please see "Google’s use of trademarks as keywords does not constitute infringement"). This decision is openly criticised in the Senate’s report, according to which it favours the major actors at the expense of IP rights. However, the French Supreme Court recently followed the ECJ’s position, confirming that the website Dailymotion qualified as a ’host’ (Cass 1ère civ, M 09-67896, February 17 2011). Finally, another criticism is that the implementation of the ’service editor’ status would necessitate the modification of the E-commerce Directive.

    Therefore, the introduction of the ’service editor’ status would be difficult from an economic and legal point of view. Its success will depend on whether the French government relies on the position of the European and French courts and, if not, whether it would be willing to take the matter to the European courts.

    The report also states that Law 2007-1544 “seems to have led to an increase in the damages awarded to IP rights’ owners”. However, it emphasises that “this evolution is not enough” and that the infringement of an IP right still remains a “profitable fault”. It is especially the case where the infringer “has a production capacity which is superior to that of the manufacturer of the original products”. In such cases, even if the infringer pays some damages to the rights’ owner, it still gains a substantial economic advantage from the infringement.

    The report thus recommends the creation of a legal mechanism that would remove such “profitable faults” from the field of intellectual property. For example, the French IP Code could be amended to provide that, “if the profits resulting from the infringement exceed the damages and the infringer acted in bad faith, the court will return the profits to the holder of the infringed right”. This provision would be inspired by already existing articles of the French Civil Code, which state that a party that acts in bad faith must return the “fruits” of the goods to its rightful owner. The report recommends extending this principle to infringement actions.

    It would then be up to the judges to determine the exact “profits” or “fruits” resulting from the infringement. The report emphasises the difficulty of assessing the bad faith of an infringer, but points out that the concept of ’bad faith’ is already used regularly by the French civil court and exists in patent matters. Therefore, the introduction of this notion into the French IP Code, which would not require the amendment of any EU regulation, would not be a major difficulty for the French courts.

    In addition, one of the main innovations introduced by Law 2007-1455 was the specialisation of 10 French courts of first instance in IP matters. According to the information provided by the Ministry of Justice and published in the Senate’s report, 76% of IP infringement cases are now heard by those 10 specialised courts, which the rapporteurs consider to be a success. However, the rapporteurs insist that the specialisation process should go further - half of the 18 recommendations of the report concerned the issue of specialisation. For instance, the report recommends :

    - limiting the number of specialised courts to four or five ;
    - promoting a new career path focused on intellectual property ; and
    - creating, in every specialised court, a mixed chamber including both civil and criminal judges in order to harmonise the damages awarded to IP rights’ owners.

    However, the recommendations concerning the judges’ career management raised concerns during the examination of the report by the Senate’s law commission. For instance, it was said that it would be difficult for the Ministry of Justice to offer continuing education and that it would not be possible to stop a judge from being transferred to another position. The future of these 18 recommendations remains uncertain, as some of them require the amendment of European directives. However, the rapporteurs indicated that others recommendations may be included in a law proposal, which has yet to be presented.

    Richard Milchior, Granrut Avocats, Paris

    Source : World Trademark Review

        

Richard Milchior