How do INPI and judicial courts share trademark invalidity and lapse proceedings

23/03/22
How do INPI and judicial courts share trademark invalidity and lapse proceedings

Brand package: time for an assessment

April 1, 2022, marks the second anniversary of the effective date of the new litigation proceedings before the INPI under trademark law: invalidity actions, revocation actions, oppositions opened to new types of prior rights… It is a good opportunity to devote several articles to an assessment of the issues arising from the transfer to INPI of part of the French trademark litigation.

1. Division of competence between INPI and judicial courts

Until April 1, 2020, only the French courts had jurisdiction to rule on the revocation and invalidity of French trademarks. The implementation into French law of the “Trademark Package” has given the INPI a jurisdiction that competes with that of the courts in this area. The objective was twofold: to divert part of the invalidity and revocation litigation from the courts while preserving the uniqueness of the disputes[1] .

 

From now on, INPI is the sole competent body to rule on these applications filed on a principal basis if they are exclusively based on: (art. L. 716-5 I. of the Intellectual Property Code):

  • all grounds for forfeiture;
  • all absolute grounds for invalidity;
  • relative grounds for invalidity related to certain distinctive signs (prior trademark, corporate name, trade name, sign, domain name, name of a public entity) and territorial signs (names of territorial authorities and EPCIs, appellations of origin and geographical indications).

The judicial courts remain exclusively competent to rule on (art. L. 716-5 II. of the Intellectual Property Code):

  • claims for invalidity based on an infringement of a copyright, a design or a personality right;
  • in the context of legal proceedings, counterclaims for invalidity or lapse filed in the absence of any prior referral to the INPI, whatever the reason invoked;
  • any claim for invalidity or revocation, whatever the grounds, when such claim is related to an action falling within the jurisdiction of the court (for example, an action for infringement, unfair competition or contractual liability) or when probatory, provisional or protective measures have been ordered to stop an infringement of a trademark right and are being implemented before the commencement of an action on the merits.

Claims made in violation of these rules of distribution are declared inadmissible, whether before the INPI (art. R. 716-5 of the Intellectual Property Code) or before a court (art. R. 716-13 of the Intellectual Property Code).

2. Jurisprudential application of the jurisdictional reform

Although the reform was intended to establish a clear division of powers between the INPI and the courts with respect to applications for invalidity or revocation of trademarks, the envisaged division of competences has nevertheless raised a number of problems which the case law is endeavoring to resolve.

 

2.1. Connectedness

The notion of relatedness to any claim falling within the jurisdiction of the court is critical, to the extent that it transfer to the court alone the examination of claims for revocation or invalidity that would otherwise fall within the exclusive and special jurisdiction of the INPI. Accordingly, the INPI has relied on this concept to define its jurisdiction in a vacuum, considering that it has jurisdiction to rule on an application for invalidity or revocation of a trademark, “except when such application is related to any other action falling within the jurisdiction of the court[2] .

 

As important as it may seems, connexity is not defined by the texts. To mitigate this problem, the INPI consistently refers to a doctrinal definition and considers that connexity exists “when several non-identical applications are sufficiently closely linked to justify their being processed together[3] . A recent decision of the Paris Court of Appeal defined the concept in the light of Article 101 of the Code of Civil Procedure, considering that there is “connexity when two cases are so closely linked that it is in the interest of the proper administration of justice to have them investigated and judged together[4] .

 

To rule on the connexity of claims formulated before the INPI and a court of law obviously implies that claims have been formulated both before the INPI and the court of law. However, the connexity does not imply the identity of the said claims. In this respect, the INPI has recalled that an application for revocation filed before the Institute was inadmissible if it related to products that were also invoked in support of a legal action for infringement and unfair competition – even if no counterclaim for revocation had been filed before the judicial court on the day of the application filed before the INPI[5] . In this case, the INPI refused to consider itself partially competent to rule only on applications made in connection with trademark services not invoked in support of an action initiated before the court, in order to privilege the unity of the dispute.

 

From a chronological point of view, it should be noted that an application for invalidity or revocation filed before the court after the application has been duly filed with the INPI does not entail the Institute’s lack of jurisdiction, even when it appears to be related to the application filed with it [6] . This approach seems to be shared by the Paris Court of Appeal, which validated the reasoning according to which the INPI alone was competent to rule on the application for revocation of a prior trademark in relation to a counterclaim for invalidity (presumably related) which was before the trial judge[7] .

 

In short: if the claim falls within the exclusive jurisdiction of the INPI, the transfer of jurisdiction to the court will only occur if the related claim filed with the court predates the referral to the Institute; otherwise, the court may stay the proceedings pending the INPI’s decision (art. R. 716-14 of the Intellectual Property Code).

 

This chronological approach recalls the one prevailing in the context of European Union trademarks: the EUIPO has jurisdiction to rule on applications for invalidity or revocation of a European Union trademark, unless they are presented as a counterclaim as a defense to an infringement action (Art. 124 of the European Union Trademark Regulation 2017/1001 of June 14, 2017, or “EUMR“)[8] . In France, the Paris court has exclusive jurisdiction to consider such counterclaims in its capacity as the European Union’s trademark court. If, however, an application for revocation or invalidity of the EU trademark has already been filed with the EUIPO prior to the said counterclaim, the court shall stay the proceedings until the decision on that application is final or the application is withdrawn (Art. 128 EUMR)[9] .

 

In European Union trademark matters, however, the division of powers is simpler insofar as both the Paris court and the EUIPO are materially empowered to rule on invalidity claims based on a wide variety of prior rights (such as copyright infringement[10] , design rights or personality rights[11] ) – whereas the INPI does not enjoy such broad jurisdiction when it comes to assessing the invalidity of a French trademark based on a relative ground.

2.2. The application within the jurisdiction of a court

To operate the transfer of jurisdiction from the INPI to the judicial court, the request for invalidity or revocation must be related to “any other request falling within the jurisdiction of [the said] court“.

 

Unsurprisingly, the INPI considers that a claim falling within the jurisdiction of a court means a claim filed with a seized body and by which the claimant asserts claims against one or more persons. On the other hand, an application falling within the jurisdiction of a court does not include an amicable application prior to legal action[12] or simple reports made to an e-commerce platform[13] .

 

Similarly, a claim for breach of contractual obligations brought before the commercial court, which does not have jurisdiction to rule on the validity of a trademark and whose lack of jurisdiction in favor of the judicial court has not been raised, cannot be analyzed as a claim likely to defeat the exclusive jurisdiction of the INPI[14] .

2.3. Admissibility of applications before the INPI based on various grounds, some of which do not fall within the Institute’s exclusive competence

Some decisions take a particularly strict approach to the principle that the INPI is only competent for applications for invalidity “exclusively based” on one or more of the listed grounds.

 

Thus, some INPI decisions consider that the applicant must be dismissed from his invalidity application if his argument contains a ground that does not fall within the Institute’s competence. This was the case in one instance where the applicant made not only a request for invalidity on one of the grounds falling within the competence of the Institute, but also a request for prohibition of use of the contested trademark: the INPI considered that the request for invalidity was inadmissible since it did not appear to be exclusively basedon one of the grounds falling within the competence of the Institute, but that this request was instead made “in a way related to [other requests] falling within the competence of the court[15] . Under the guise of apparent severity, this decision was nevertheless preceded by a notice of inadmissibility, following which the plaintiff could have regularized the situation by expressly renouncing all his claims that did not fall within the exclusive jurisdiction of the INPI.

 

Other decisions of the INPI offer more flexibility, as the Institute simply declares inadmissible applications for invalidity that do not fall within its competence, after having studied the applications for which it considers itself competent[16] . These decisions seem to be more compatible with the reform’s objective of cleaning up the national trademark register, and avoid the INPI being seized of applications that do fall within its jurisdiction without being able to give a useful ruling on them.

 

To go further