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10-03-2014 » The fight against counterfeiting: the law passed by the French Senate

While the new Regulation (EU) n° 608/2013, concerning customs control of intellectual property rights, has been in force since January 1st, 2014, the French Senate had a 2nd and final reading, on February 26th, of a draft law strengthening the fight against counterfeiting - which was then adopted. This text had already been approved by the French National Assembly on February 4th during its 1st reading (with some modifications).

Thus as regards infringement actions,  the new law provides for the improvement of civil damages awarded to victims of infringement, taking into account to a greater degree the profit made by the infringer (article 2), thereby including the savings that he could make due to the infringement. It should be noted that a lump sum can be allocated instead. In this case, the amount is higher than the amount of royalties/fees that would normally have been paid if authorization had been requested from the rights holder. 

The implementation of the right to information about counterfeiting (article 3) is clarified and can be obtained before a condemnation on the merits. The infringement seizure proceeding for copyright is harmonized with those for industrial property rights (article 4). Furthermore, the different limitation periods in the French Intellectual Property Code are harmonized with the normal limitation period of five years.

Next, a long chapter (Chapter V, articles 6 to 13) is devoted to the strengthening of the means given to the customs authorities for fighting against counterfeiting.

Thus, article 6 provides that the customs authorities are empowered to retain goods under the customs procedure of export, import or transhipment as well as goods owned for these purposes. The customs authorities can now operate on the basis of all intellectual property rights, including geographical indications. Consequently, for the sake of harmonization with European law, article 7 provides that the procedure for detention under customs control is extended to patents, plant-variety rights and geographical indications, with the same wording for all these rights.

However, it is systematically specified that the procedure does not apply to goods in internal transit, neither to goods for export to a non-Member State or the European Union. No provision is made for the particular case of goods coming from “third countries”, i.e. non-members of the European Union, and circulating in transit within the European Union to another third country (transit between third parties).

Moreover, article 7 formalizes the communication of certain information by the customs authorities to the rights holder for the purpose of filing lawsuits, namely: the identity of the shippers, the importers, the recipients, the goods registrants and the images of these goods as well as the information about their quantity, their origin, their provenance, and their destination. The 10-business-day period provided for initiating those actions may be extended by the customs administration for 10 additional business days upon receipt of a duly motivated request by the applicant. 

The law also formalizes, in this same article 7, the goods-destruction procedure that is usually carried out by the customs authorities when the rights holder does not initiate legal action, even in the absence of a decision. Thus, all suspected counterfeit goods can be destroyed, under customs control, if the applicant for customs detention confirms in writing, and with a detailed expert report, within 10 days from the date of notification of the detention (3 days for perishable goods) the counterfeiting character of the goods and agrees with this destruction. The holder of the goods also has to approve this destruction. If the goods-holder remains silent, during the same 10 or 3 day period, he shall be deemed to have approved the destruction.    

In addition, article 10 extends to industrial property rights other than trademarks, and to copyright the French procedure of “coup d’achat”, in which a customs officer may establish evidence of infringement by purchasing goods. This procedure is particularly useful to fight counterfeiting on the Internet.

Moreover, articles 12 and 13 of the law simplify customs control in particularly sensitive premises.  On the one hand, the access to postal operators and express freight companies’ premises is facilitated if it is likely that they hold packages containing or seeming to contain counterfeit goods or related sums, titles or values. On the other hand, the customs authorities have access to the databases of these postal operators and express freight companies. Nevertheless, guaranties are provided in order to ensure that the purpose of these measures remains the search for customs offenses. 

The provisions of the law lead to changes in the Intellectual Property Code and the Customs Code as well as the Homeland Security Code and the Post and Electronic Communications Code.

Certainly, this law is the result of a determination to develop the legal arsenal for fighting counterfeiting and of the need to harmonize our national legislation with Community law. However, the question is whether it is a genuine legislative reform or only a mere clarification of the law of 29 October 2007, harmonizing French law with Directive 2004/48/EC of 29 April 2009 on the enforcement of intellectual property rights.

It is noteworthy  that the law is silent on the issue of transit between third parties.

Nevertheless, on this same date of 26 February 2014, in the context of discussions on the draft amendments to the Trademark Directive and the Community Trademark Regulation, the European Union Parliament passed, some provisions to allow customs authorities to detain, under some conditions, goods which are from third countries and which travel in transit through the territory of the European Union.

Therefore, French law will have to be revised once again to take this into account, unless the French legislature considers that, as no provision was made for or against the detention of merchandise in transit between third parties, it is implicitly permitted.

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