Patentee Coins Favourable Ruling on Mass Mailing - International Law Office

Background
Facts
Decision

Background

Under Article L 615-1 of the Industrial Property Code, the illegal use of a patent is an infringement incurring civil liability. According to Paragraph 3 of the article, when someone other than the counterfeit manufacturer violates patentee rights, the latter must be notified before any proceedings for infringement.

Under certain circumstances an infringement by a distributor or a seller may be considered deliberate, for example, if notification has been sent to the seller or distributor by the patentee or its patent and trademark advisors. However, sending this type of notification may give rise to damages if it is unreasonable or done in bad faith, in which case it may be seen as unfair competition.

French courts are traditionally watchful of patentees (whose patents are later repealed) who, having not yet acquired an enforceable ruling, send letters to third parties warning of possible patent infringement. The patentee may be liable for damages in favour of a person falsely notified of infringement if, for example, the notification has prevented the person from accepting orders. The courts may also consider mass-mailing notifications as an offence. The French courts are therefore very careful when assessing the conditions in which notifications have been sent.

Facts

In light of the above, in June a patentee obtained an unparalleled decision from the Paris Court of Appeal.

R, the patentee of a coin machine for supermarket trolleys, initiated proceedings against S for patent infringement and seized the alleged counterfeit goods.

The court ruled that S had infringed R's patent and forbade S from selling coin machines.

The judgment was immediately enforceable. As a result R's patent and trademark advisors decided to send a letter to a large number of supermarkets.

The letter read:

"Our client, R, patentee, has asked us to inform you of the existence of its patent, a copy of which is enclosed. In accordance with Article L 615-1 of the Industrial Property Code, the present notification makes you liable if you use a coin machine model V that counterfeits patent R. Patent R has been acknowledged by judgment of the Paris first court dated September 15 1999, which ordered a ban of model V with effect from November 8 1999."

Claim for unfair competition
S and C, two trolleys manufacturers, claimed that the letter infringed their rights and claimed for unfair competition due to:

• the large number of letters sent;
  
  
• the explicit content; and
  
  
• the fact that the judgment was not yet binding.

Decision

The Paris Court of Appeal ruled that the sending of letters by counsel, appointed by R, was not a wrongful act in spite of the number involved. It was decided that because the use of supermarket trolleys equipped with coin machines is widespread, R was entitled to notify every supermarket in order to protect its litigious rights.

The court of appeal ruled that R was under no obligation to state that the judgment was not binding - in light of the appeal filed by S - because executives are aware of the right to file an appeal against a court decision. As a result, the letter informing supermarkets of the possible infringment of a court decision - deemed enforceable but not binding - on the use of trolleys equipped with coin machines is not seen as (i) unfair competition or (ii) an infringement of rights.

Until this judgment, there was no case law on this specific topic.

The court of appeal considered that the content and details in the letter were sufficiently clear, particularly as copies of the patent and the judgment dated September 15 1999 were enclosed. Therefore, mass-mailing notification was not considered unfair competition because the information provided was clear.

R and its patent and trademark advisors were entitled to disclose the judgment for notification purposes, particularly in view of its public aspect, even though the court had not ordered publication of the judgment to appear in the press.

For further information on this topic please contact Jean-Christophe Guerrini, Arnaud Casalonga or Laëtitia Gambert at Courtois Lebel by telephone (+33 1 53 04 25 25) or by fax (+33 1 53 04 25 00) or by e-mail (jcguerrini@courtois-lebel.com, acasalonga@courtois-lebel.com or lgambert@courtois-lebel.com).

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