What to do in the event of confusion or counterfeiting?
Practices contrary to fair competition include the creation of confusion or counterfeiting. These two concepts may seem similar, but in law they are different. The expertise of an unfair competition lawyer is invaluable in cases of both counterfeiting and confusion.
Extensive similarities between your products and those of a competitor may constitute infringement or confusion.Infringement proceedings are governed by precise rules and often interact with unfair competition proceedings. In many legal actions, unfair competition proceedings are brought alongside infringement proceedings. While many experts and judges still argue over this concept, it is important to call on a lawyer with recognised expertise in both sectors to have complete control over the case.
First and foremost, the role of alawyer specialising in competition law is to identify the prejudicial acts. He then determines the various amicable, pre-litigation or litigation actions required. All of this is done in accordance with the client’s objectives: to put an end to the acts and obtain compensation for the damage caused.
What are the differences between counterfeiting and confusion?
Counterfeiting involves an infringement of a prior intellectual property right. This includes trademark, design, patent and copyright infringement. The laws governing counterfeiting are set out in the French Intellectual Property Code.
Confusion requires similarities between products, services, marketing methods and business processes. Confusion between companies is a matter of unfair competition. It is therefore subject to liability under ordinary law.Article 1240 of the Civil Code (formerly article 1382 of the Civil Code) defines civil liability as “Any act of man whatsoever which causes damage to another person obliges the person through whose fault it occurred to make reparation for it“. This presupposes fault, damage and a causal link between the two.
In both French and European law, the likelihood of confusion is an important concept. It is required in certain actions for counterfeiting (by imitation) as well as in actions for unfair competition.
For example, the Court of Cassation has required that an unfair competition action for infringement of a trade name requires proof of the existence of a likelihood of confusion between the disputed names and the said trade name (Court of Cassation, 26 April 2017).
Very often, the two actions for infringement and unfair competition are brought at the same time. When infringement is recognised, only separate facts constituting a fault can make it possible to win on the grounds of unfair competition. This is the application of the general legal principle of ne bis in idem: the same facts cannot be punished twice. When the infringement action fails, the courts tend to examine the unfair competition action more flexibly. The existence of wrongful conduct is required in all cases.
Infringement action
In an infringement action, the court verifies the existence and validity of the intellectual property right claimed. For your opponents, this will be an opportunity to :
- challenge the validity of a trade mark that has no distinctive character ;
- bring an action for revocation for non-use of the trademark.
Owning an intellectual property right does not mean that it can withstand legal action. Your intellectual property lawyer will therefore begin by verifying the validity of the right claimed. He will require a complete and coherent file of proof of use for the goods and services targeted in the infringement action.
Next, when the prior right has not been reproduced identically, the case is referred to asimitation. Judges then look to see whether the similarities create a likelihood of confusion in the minds of the relevant public. This is in line with European law, which requires the use of a right and a high degree of freedom of competition.
Be careful, however, as the likelihood of confusion in the case of imitation is assessed differently from the likelihood of confusion in the case of unfair competition. Without the support of a lawyer experienced in defending companies, you run the risk of failing, given the complexity of the cases involved and the subtleties of French and European rules.
Our counterfeiting law firm is also adept at mastering the rules of unfair competition. We are committed to identifying the wrongdoing and infringements of intellectual property rights from the outset of the proceedings, so that you can approach the defence of your company with confidence.
Unfair competition action for confusion
Anaction for unfair competition is more difficult. The company must prove that there has been an abuse of the freedom to trade. Customers are free to prefer another brand at any given time, unless they are attracted to a new company for the wrong reasons.
The Court of Cassation has ruled that the two actions can only be combined if there is a fault constituting unfair competition that is distinct from participation in the infringement. Moreover, it does not accept that an action for confusion should result in the maintenance of a monopoly, after intellectual property rights have been lost. The principle of free competition is subject to derogations only in the case of a monopoly that is restricted in space and time. Only an abuse of rights, characterised by a fault, allows a third party to be convicted of unfair competition.
Here are a few examples of confusion: the competitor simply copies, or is clearly inspired by, a company’s trademark, trade name or commercial documents such as catalogues, invoices or order forms.
If theunfair competition action is related to an infringement action, the main action is brought before the judicial court, rather than the commercial court. The court’s jurisdiction is part of the defence strategy.
Similarly, an action for unfair competition on the grounds of confusion cannot be brought at the same time as an action for parasitic competition. Some plaintiffs do not hesitate to multiply the legal grounds, hoping to see at least one of them succeed. This is a mistake, as infringement, unfair competition for confusion and parasitism are subject to different conditions and procedures.
Why call in a lawyer in the event of confusion?
The concepts of likelihood of confusion are complex and subject to debate in the legal literature and the courts. As a company director, you don’t have to master these issues. A company lawyer assists his clients in their day-to-day business. Even when a competitor acts aggressively.
In a tough competitive market, any means is good for capturing market share, but some are illegal. Gaining a competitive advantage over another company can be done in compliance with the principle of fair competition. Otherwise, the company is abusing its entrepreneurial rights and incurring liability.
Any aggressive behaviour on the market is not grounds for legal action. Your lawyer should therefore examine the facts objectively. This enables the acts to be properly qualified so that the right action can be taken. Infringement action, unfair competition action or both?
Once the facts have been classified, anunfair competition lawyer will quickly know how to act. But time is your most precious ally in preventing confusion from taking hold in the minds of consumers and your customers.
To prove confusion, your lawyer will detail each instance of confusion: aural similarities (rhythm of the company names of the businesses concerned), phonetic similarities, olfactory similarities or intellectual similarities, etc. Everything must be taken into account. As experts in this field, our lawyers will be able to assist you in your efforts and advise you on how to settle the dispute as quickly as possible.
A competition lawyer gathers all the evidence. He will draw up bailiff’s reports to establish the materiality of the facts. He will assist you throughout the legal proceedings. Your lawyer will provide you with the information the courts need to assess the actual loss suffered.
What to do in the event of confusion
As soon as a competitor commits a confusing act, consult a lawyer. Time is a precious ally. Your competition lawyer can immediately assess the facts and propose the appropriate strategy.
For example, he can issue a formal notice. A formal notice sent by a lawyer has a much greater impact. If the formal notice remains without effect, an action for unfair competition should be brought before the Commercial Court. Your lawyer can consider pre-trial investigation measures if necessary. Attempts at amicable resolution and negotiation are still possible.
Summary proceedings may be considered in urgent or obvious cases. Interim prohibition measures can be taken to put an end to the disturbance.
Proceedings on the merits take time, but make it possible to put together a solid case to obtain compensation for the damage suffered.
What are the penalties?
Your lawyer will demand that the acts be stopped immediately, possibly subject to a fine. You can also demand preventive measures to prevent such acts from being repeated.
Your lawyer will also seek damages in line with the seriousness of the harm established. If you are unable to establish material damage, you may seek compensation for non-material damage.
Finally, don’t overlook the appeal of legal publication. In competition matters, publicising unfair competition practices is part of the game. The image of the competing company is impacted by this publicity.
Examples of confusion
First of all, the Court of Cassation recently reiterated that infringement by reproduction exists by the mere fact of infringement of the private right (Court of Cassation, 11 May 2017). However, therelationship between infringement and unfair competition is more subtle.
For example, the marketing of a variation of counterfeit products does not constitute an act of unfair competition distinct from the infringement action (Cour de cassation, 24 October 2018).
Unfair competition by confusion may be upheld in cases where a graphic design used is repeated in the marketing of the products. This will also be the case when a competitor uses the characteristics of a product’s packaging, which is not necessarily protected by an intellectual property right. In this case, the elements taken from the packaging must not be imposed by a technical nature (the size imposed by the size of the product or the format imposed by the fragility of the product). The same applies to the shape of the product, provided it is not dictated by technical considerations.
There are a multitude of court decisions relating to actions for unfair competition through the creation of confusion. Only expertise and daily practice can give you an overview of the most recent case law that is most relevant to your situation.
Confusion and unfair competition
Confusion is one of the 4 forms of unfair competition created by the courts, alongside :
The Goldwin law firm defends the interests of companies suffering from acts of unfair competition. It does everything in its power to put a rapid end to the facts and re-establish conditions of normal competition. Our lawyers are also committed to obtaining damages to compensate for the harm suffered.
They will work with you and advise you on the best strategy to adopt. They put their expertise and experience in competition law at the service of your company’s long-term survival. Our unfair competition lawyers develop creative and innovative strategies to protect your efforts and investments. They have an entrepreneurial and business sense.
Every day, the Goldwin law firm works with businesses on a day-to-day basis to get to know them better. In this way, we can provide a better defence, give better advice and define the right strategy when faced with an act of unfair competition. Contact us for an expert opinion on counterfeiting or risk of confusion.
