Tuesday, 2 October 2007

The French Senate voted a draft bill to implement the Directive on enforcement of IP rights

On 19 September 2007, the French Senate voted the parliamentary draft bill to fight infringement (‘Projet de loi de lutte contre la contrefaçon’, n° 135, http://ameli.senat.fr/publication_pl/2006-2007/226.html). This draft bill implements the Directive 2004/48/EC on the enforcement of intellectual property rights. The aim of the draft is in particular to reinforce the body of law to protect intellectual property creations, to create a right of information for intellectual property owners and to reinforce provisional and precautionary measures.

Three sets of provisions seem interesting to note.

1) The draft provides for a limited number of courts to specialise in the enforcement of intellectual property: litigation relating to the application of intellectual property rules may only be brought before specific High Courts of First Instance (‘Tribunaux de Grande Instance’). The text provides that a Decree will set out these courts amongst the 181 existing courts.

In the field of competition law, the absence of specialised courts for damages actions appeared to constitute a major procedural obstacle to the effective enforcement of competition law. The Law on the New Economic Regulations (‘Loi sur les Nouvelles Régulations Economiques’ - ‘Loi NRE’) of 15 May 2001 provided for the creation of specialised courts for the enforcement of competition law actions (Law n° 2001-420, published in the French Official Journal of 16 May 2001). Pursuant to Article L.420-7 of the French Commercial Code, as amended by the Loi NRE, litigation relating to the application of the domestic French competition rules contained in Articles L.420-1 to L.420-5 of the Commercial Code and the EC rules contained in Articles 81 and 82 EC Treaty, may only be brought before specific High Courts of First Instance and Commercial Courts (‘Tribunaux de Commerce’). The same idea prevails in the draft bill to fight infringement of intellectual property rights: the specialisation of the courts rationalises the training of the judges in the particular techniques of intellectual property law. These provisions also aim at making French territory an attractive legal jurisdiction. One may observe that for several years now, French procedure law has been tending towards specialisation in intellectual property cases (see for instance Article R. 631-2 of the Intellectual Property Code which designates seven High Courts of First Instance to hear cases relating to patents, utility certificates, supplementary protection certificates and certificates of topographies of semiconductor products).

2) The other interesting provisions concern the aspects that must be taken into account by the judicial authority in order to set the damages. These provisions are close (but not identical) to Article 13 of the Directive 2004/48/EC. The draft provides that to assess the damages, the court shall ‘take into consideration the negative economic consequences, including lost profits, which the injured party has suffered, the profits made by the infringer and the moral prejudice caused to the rightholder by the infringer’. The draft adds: ‘However, the court may, as an alternative, and if claimed by the injured party, set the damages as a lump sum which shall be at least the amount of royalties or fees which would have been due if the infringer had requested authorization to use the intellectual property in question’. Currently, under French law, the damages awarded by the courts must compensate the damages actually suffered and not constitute punitive sanctions. These provisions seem to introduce punitive damages into French intellectual property law. It should however be observed that the courts already tend to increase, sometimes considerably, the amount of such indemnities (see F. Siiriainen, ‘Propriété intellectuelle, préjudice et droit économique’, Colloque du 23 Mars 2001, à la Sorbonne, consacré aux "Sciences juridiques de l'économie? Un défi pour les économistes et juristes européens").

3) Finally, the draft removed the reference to acts carried out ‘on a commercial scale’, as this notion was considered to be dangerously imprecise, and since the courts will, in any case, adapt the sanctions according to the gravity of the infringement in question (see Rapport n° 420 (2006-2007) de M. L. Béteille, http://www.senat.fr/rap/l06-420/l06-420.html). The preamble of the Directive states that the ‘measures provided for in Articles 6(2), 8(1) and 9(2) need to be applied in respect of acts carried out on a commercial scale. This is without prejudice to the possibility for Member States to apply those measures also in respect of other acts’ (point 14).

The National Assembly (equivalent to the UK House of Commons or the US House of Representatives) will examine the draft bill in October 2007.