Industrial property governs various rights which cannot coexist without any clash. Indeed, conflicts between different IP rights are quite usual and a trademark legal value, even more when it is notorious, often imposes its preeminence. That is what a new jurisprudence has confirmed.
The company Société des Hôtels Méridien (Méridien), important chain of hotels throughout the world, is the owner of two trademarks in France, a word trademark “MERIDIEN” and a word and device one “LE MERIDIEN”.
Mr Stéphane H, in 2004, registers the domain name “hotel-meridien.fr” and proposes to sell it for the price of 10 000 Euros, by the way of the website of the SEDO company (SEDO), specialized in the sales of domain names.
Méridien requests from Mr H the transfer of the said domain name.Due to the silence of Mr H, the company assigns Mr H and SEDO on the basis of infringement against its trademarks and its commercial name.
Méridien bases its action on infringement by imitation of its trademarks. But the first instance French Court was going to precise the grounds on which the condamnation is justified. According to the article L 713-3 of the French Intellectual Property Code (French IPC), trademark infringement by imitation is qualified when somebody uses a sign similar to a registered trademark to designate similar products or services. Which products and services have to be taken into account for the exploitation of a sign when the said sign is a domain name ?
The first instance French Court is going to make an interesting analyse and, by this way, to precise the previous jurisprudence.
The judge makes a difference between the trademarks filed in class 38 to designate services related to information circulation on a network and those which do not designate such services. Initially, the jurisprudence was saying that a trademark filed in class 38 for services related to information circulation on a network was protected against cybersquattors due to the specification of the trademark itself.
Then, the jurisprudence was looking for the activity of the cybersquattor’s website in order to determine whether it was proposing products or services similar to the registered trademark.Unfortunately, in the case at issue, Mr H does not exploit the website registered under the litigious domain name.The case-law previously established could not be applied. T
he French Court takes into account the fact that Mr H has registered the domain name and offers to sell it in order to consider that there is a use of this domain name for services related to information circulation on a network.The trademark infringement by imitation (article L 713-3 French IPC) of one of Méridien’s trademarks (the one registered in class 38) is qualified.
Concerning the trademark not registered in class 38, the French Court bases its judgement on the article L 713-5 of the French IPC to condamn Mr H. This article sets that the use of a notorious trademark to designate products and services different from the registered trademark involves civil liability of its author in the case the use is not justified or if it is prejudicial to the trademark owner. The tribunal recognises that the two trademarks belonging to Méridien are notoriously known since they are exploited in an intensive way in relation to the hotel industry.
The judge adds that the litigious domain name registration and its offer for sale are constitutive of an unjustified use of the notorious trademark MERIDIEN, given that Mr H has no right on this denomination, the fact that Mr H does not exploit the website being irrelevant. Finally the French Court recognises the harm caused to the commercial name of Méridien. Consequently, the judge condamns, in solidum with Mr H, the company SEDO for personal fault as it is an intermediary in the sale of the domain name. Surprisingly, Méridien appealed from this judgement. It has to be specified that, during the first instance and after the judgement of September 23rd 2005, the company SEDO has proposed to sell several domain names integrating the word « meridien» or a very similar word. The Court of Appeal of Paris has mostly confirmed the first judgement but has integrated the new facts and has precised the grounds of the condamnation. The Court firstly reminds that all the litigious domain names are quasi-identical reproductions of the prior trademarks belonging to Méridien, by justifying this point with the notion of dominating elements.
Furthermore, the Court bases its argumentation on the article L 713-5 of the French IPC, which leads to think that the precise distinction made by the first instance French Court is not the one to follow (registration of the trademark in class 38). Do we have to come back to the verification of the content of the website in order to qualify the trademark infringement ?
As a last point, the Court refuses to apply a new French law* to SEDO, indicating that its activity is not limited to an Internet provider. Even if we could have qualified SEDO as a technical provider, this company was anyway aware of the existence of the trademarks belonging to Méridien because it indicated to the potential buyers that the purchase of the domain names was insecure. The Court adds that the free competition and loyalty principles impose on professionals to make sure that «its activity does not generate illegal acts to the prejudice» of others. Thus, the SEDO fault implies its civil liability. Mr H and SEDO are consequently condamned in solidum and for half each (contrary to the first judgement) for the domain name registered by Mr H ; SEDO is fully and solely responsible for the other domain names.
Will there be an appeal before the French High Court so as to clarify the grounds on which a condamnation can be pronounced for infringement in a case of an inactive website ?