The former Bankruptcy Statute of 1997 included a principle that a natural person could be discharged of their remaining and outstanding debts – a so-called 'waiver' – at the moment of a bankruptcy's closure. The discharge's beneficial effects were extended to the bankrupt person's spouse. However, for bankruptcies that have happened since 1 May 2018, and so fall under the new legal framework, this situation has changed.
The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. To determine whether companies are in financial difficulty, the courts gather information from various (digital) sources. However, the focus remains on preventive mechanisms – namely, identifying companies in financial difficulty and following up with court action.
The Belgian insolvency law's scope was recently broadened. As of 1 May 2018, all entities that are involved in commercial or entrepreneurial activities can be declared bankrupt (or enter into court-supervised reorganisation proceedings). Discussion has started about whether company administrators can also be seen as being 'involved in an entrepreneurial activity' and thus declared bankrupt.
In a high-profile trademark infringement case involving Moët Hennessey Champagne Services and a Belgian painter, the courts were asked to strike a balance between the right to property, including intellectual property, and artistic freedom of expression. The decision is expected to set an important precedent on how to strike a fair balance between freedom of speech and the protection of trademarks when these two concepts conflict.
The digitisation of different insolvency proceedings (ie, bankruptcies, judicial reorganisations and company voluntary agreements) recently reached a new milestone. All new insolvency files must now be commenced through the Central Solvency Register (Regsol) and followed up on the same system. Regsol offers a number of new features, including the electronic storage of insolvency files and a new declaration of debt form.
If reorganisation proceedings are unsuccessful and lead to bankruptcy proceedings, creditors with new claims resulting from services performed during the reorganisation proceedings often find it difficult to receive payment of their privileged claims when they are in competition with a general pledge on the debtor's estate that is held by a bank. The Supreme Court's recent judgment in this regard will help such privileged creditors to receive payment from the bankrupt estate.
The legislature recently took steps to improve the follow-up monitoring of companies in financial difficulty and strengthen the fight against inactive companies. Companies that fail to pay their social security or value added tax debts, file their annual accounts or fulfil other administrative obligations on time will now appear on the radar of the Commercial Court's Investigative Services much earlier. The services' recently extended powers of action could lead to unfortunate surprises for some companies.
Merck Sharp & Dohme (MSD) recently sued PI Pharma before the Brussels Commercial Court for the parallel import and repackaging of one of MSD's medicinal products. MSD based its claim on the alleged violation of the first, third and fourth Bristol-Myers Squibb conditions. Although this is not the first time that the Brussels Commercial Court has been involved in a dispute over the parallel importation of medicinal products, the judgment further refines the scope of certain Bristol-Myers Squibb conditions.
Parliament recently voted into law the federal government's proposal to introduce a new chapter on insolvency into the Code of Economic Law. Among other things, the new chapter concerns the potential liability of former directors of a bankrupt company. Some of the new principles already partially existed in Belgian law, but have been amended by the new chapter, which also broadens certain concepts which will thus apply to a wider range of entities.
The Business Continuity Act aims to enable debtors in difficulty to continue their activities by restructuring their debts. One of the proceedings that the act introduced is the reorganisation of debt pursuant to a restructuring plan. The restructuring plan may consist of several measures, including the waiver of certain debts. However, none of these measures (with the exception of a temporary stay on the enforcement of claims) may be imposed on secured creditors, unless they expressly agree to it.
The government recently undertook steps to modernise and broaden its insolvency legal framework and submitted a proposal to Parliament intended to introduce a new chapter to the Code of Economic Law. The proposal will update the Bankruptcy Act and the Business Continuity Act. The government proposal will be discussed in Parliament in the coming weeks and could be accepted before the summer recess.
In a recent judgment, the Brussels Court of Appeal ordered two parallel traders to pay provisional compensation of €3 million to the Mitsubishi Corporation for illegally importing hundreds of Mitsubishi forklift trucks which had been on the Asian market into the European Economic Area via parallel trade routes. The court held that the parallel traders had failed to provide conclusive evidence that Mitsubishi, the proprietor of the Benelux and EU trademarks, had consented to the parallel trade.
Franchisees are often unable to fulfil their payment obligations. The special cooperative relationship between a franchisor and its franchisee usually leads to negotiations and contractual agreements between the parties regarding the repayment of accumulated debts. However, the franchisee may still become insolvent. A key question is whether showing leniency in the context of insolvency proceedings will be beneficial or detrimental to a franchisor.
The Business Continuity Act of January 31 2009, amended in 2013, provides for specific (court-supervised) restructuring proceedings, during which the company (or debtor) is protected against its creditors' claims so that it can reorganise its business. For debtors, one of the act's major advantages is its 'open-gate' approach. In essence, this approach means that court protection is granted if the company's continuity is threatened and the debtor files a request in this regard.
Suppliers are often surprised by their customers' insolvency and only at that moment discover that the goods that they delivered are unpaid. Even when a reservation of title has been inserted into the contract, the repossession of goods can be difficult in practice. Measures that can help the recovery process include ensuring that a reservation of title clause is clearly drafted and that each single good is identifiable.
Historically, Belgian insolvency legislation has applied only to entities involved in commercial activities. However, recent jurisprudence and upcoming legislative changes will result in important amendments that are intended to broaden the scope of existing legislation. As a result, entities that are involved in commercial or entrepreneurial activity will be eligible to benefit from bankruptcy legislation.
The Mons Court of Appeal recently issued a judgment in a dispute between Verabel, holder of a complex trademark, and Verandas Confort, which used the word VERABEL as a Google AdWord. The court found that the AdWord VERABEL created likelihood of confusion between the goods concerned and infringed the trademark's function of origin. As a result, Veranda Confort was ordered to cease using the AdWord.
The Supreme Court recently issued a judgment in a dispute between a European patent holder and Swiss-based medical and dental equipment manufacturer Nouvag. The court confirmed that Nouvag had failed to comply with an order not to offer an infringing product in Belgium, as the product was presented on its website as being available throughout Europe. The judgment provides clarity on 'offering' as an act of patent infringement in Belgium.
The Potpourri I reform of civil procedure has made the suspensive effect of an appeal the exception rather than the rule. This could change the stakes of first-instance patent revocation cases. A literal reading of the relevant provisions suggests that, as a rule, a first-instance judgment revoking a patent is now enforceable pending an appeal. It thus makes sense to request the first-instance court to exclude the provisional enforcement of patent invalidity decisions.
A number of Belgian IP cases have involved the famous Le Pliage handbag. The majority of case law to date has recognised that this product can be protected under copyright law. However, the Ghent Court of Appeal recently decided that the handbag was not eligible for copyright protection as it had resulted in a trend. The court argued that the basic features of a style or trend are not eligible for protection under copyright law.