As summer ends, now is as good a time as any to be reminded of an indispensable precautionary measure that should be taken by all entrepreneurs!
Unlike in the American system, under French law, your company is not automatically the owner of the creations (such as artwork, design or photo) that you order from and which are developed by external service providers, or those developed in-house by your company’s own employees.
In order to be allowed to use those creations freely, within the framework of your employment contracts or your service contracts concluded with external service providers, your company must make sure to include a transfer of rights clause adapted to your business sector, scrupulously complying with the provisions set forth in the French Code of Intellectual Property. If such a transfer has not been set up – or in the event of a poorly prepared transfer – the property rights regarding the creation will remain in the ownership of the creator who can object to the said creation being used by your company, in any form whatsoever.
That negligence is not without consequences for your company, whose entire business could, in extreme cases, be jeopardised.
The absence of a transfer of invention rights to your company might also delay action by certain investors or buyers, or even cause them to reconsider their planned acquisition or investment.
As a result, it would be especially unfortunate to be confronted with this complication when, in fact, it can be avoided beforehand, by making simple, albeit specific and adapted, arrangements in advance.
The Court of Justice of the European Union has decided on Tuesday 12 June and has sided with Christian Louboutin: a colour, when placed on a product or part of a product, may be registered as a trademark in the European Union insofar as it allows the consumer to identify the origin of the purchased product.
Court of Justice of the European Union, Grand Chamber, 12 June 2018, C-163/16, EU:C:2018:941, Mr. Louboutin and Christian Louboutin SAS vs. / Van Haren Schoenen B.V.
Christian Louboutin will therefore retain its trademarks in the European Union, consisting exclusively of colour 18-1663 TP of the Pantone colour chart, placed on the sole of its high-heeled shoes.
Among its numerous trademarks, the Benelux trademark was registered in 2010 in the “shoes” class and, as of 2013, in the “high-heeled shoes” class. This trademark is described as consisting of “the colour red (Pantone 18-1663 TP) applied on the sole of a shoe as represented (the contour of the shoe does not form part of the trademark but is used to show the placement of the mark)”.
In 2013, Mr. Louboutin and his company filed a lawsuit for trademark infringement against a Dutch company named Van Haren, which had marketed high-heeled shoes with red soles in 2012.
In its defence, Van Haren argued that the trademark invoked was invalid due to the fact that this trademark was solely constituted of the shape of the product in question (in this case, the sole of a high-heeled shoe).
Having been called upon by the Hague Tribunal, the Court of Justice of the European Union (CJEU) responded to its interlocutory question regarding the validity of the colour trademark (Pantone red 18-1663TP) invoked by Christian Louboutin.
According to its decision of 12 June 2018, the Court decided that the term ”shape” mentioned in the law must be construed according to its common meaning. However, a colour in itself, when not delineated in space, does not constitute a shape.
This applies even if the shape of the product (or part of the product) plays a role in delineating the colour in its space: the sign for which trademark protection was sought cannot be considered to consist of its shape, for which no registration was requested, but rather only as the application of a colour on a specific area of the product, in this case, a positional mark.
While this decision is a legal decision, the work and investments of Mr. Louboutin to ensure the monopoly of Pantone 18-1663 TP red soles have also ensured this favourable decision. Indeed, the impact of the considerable investments made by Mr. Louboutin and his Company to promote his “colour trademark” and their communication efforts on their red-soled shoes should not be downplayed. They have largely contributed to giving a strongly distinctive characteristic to the red-coloured soles as a result of constant use.
In addition, given the numerous decisions of the European Union Intellectual Property Office (EUIPO) refusing to register positional marks for “lack of distinctive character”, we can only temper the future enforcement of the general rule set by the CJEU.
A drawing or model is considered new if, on the date of filing the application for registration or on the date of the claimed priority, no identical model or design has been disclosed, i.e. made accessible to the public (ex: publication, use, exhibition at a trade show or by any other means).
Are you, or your employees, creating a product that has a new appearance or a specific feature? A shoe? A piece of furniture? A handbag? Apparel? A pattern? Do not disclose it before having filed a registered design application. If you shared, released, or presented your product to the public less than 12 months ago, you should apply for protection of the design and model as soon as possible and do so, before the 12-month time period expires. Failing that, your registered model and design risks being cancelled for lack of novelty.
As such, Crocs, Inc.’s rights on the community model of its clogs did not survive the application for declaration of invalidity filed against them. Their novelty was destroyed due to the disclosure of the product more than 12 months prior to filing the registered Community design application.
In its decision of March 14, 2018, the EGC considered that disclosure was constituted by: showing the clogs at issue at an international boat show in Fort Lauderdale, Florida; putting the clogs on sale in the United States (for which sales trends are substantial for the EU market) and featuring them on the internet (which, by nature, is accessible everywhere in the world).
By doing so, and therein is the importance of the court ruling, the EGC took into account the evidence of disclosure having occurred outside of the European Union in order to rule on the invalidity of a community model.
The company Crocs, Inc. could have avoided its model being invalidated if it had managed to prove that the invoked evidence did not constitute disclosure, i.e. that its model could not reasonably have been known, according to normal business practices in the industry concerned, in this case, shoe manufacturing and sales professionals operating within the European Union.
The EGC specified elements that might have convinced the Court not to retain disclosure of the community model: proof that the website was not – in practice – consulted, or very little, by users from the EU; proof that the boat show had not been attended by exhibitors or participants from the EU; proof that the distribution and sales network of the clogs to which the disputed model or design had been applied was not, in actual fact, operational and that no orders had been placed via that network.
This ruling strongly reminds the caution that creators and right holders must exercise before any disclosure of their product. The actual international means of communication inevitably leads to more easily take into account evidence having occurred outside of the European Union even when protection had been requested for the EU territory.