Gaëlle Bloret-Pucci, Partner, and her team decipher the latest news in the field of intellectual property:

Mason Rothschild has created digital replicas of the Hermès Birkin bag in the form of NFTs (non-fungible tokens), and has offered them for sale on the OpenSea Market Place. The total amount of these sales is 200 Ethereum, that is $790,000 (one of the NFTs was sold for €40,000).

Hermès first sent him a cease and desist letter to request him to put an end to this project, and then sued him before a New York Court, stating that Rothschild was guilty of infringement and damage to its brand image, since it « neither authorized nor consented to the commercialization or creation of [its] Birkin bag by Mason Rothschild in the metaverse ». It added that its absence from the NFT market was justified by the fact that Hermès values « the tangible expression of handmade physical objects ».

Thus, Hermès considers that these one hundred digital replicas constitute an infringement of its intellectual property rights and its trademark rights; and that, consequently, they are an example of fake Hermès products in the metaverse. Indeed, the public is well founded to believe that these MetaBirkin are official and offered for sale by Hermès (or at least with its consent).

On the metaverse, these infringing products can be resold in a dynamic NFT secondary market. In this context, Mason Rothshild himself considered that he was a victim of copyright infringement when numerous copies of the MetaBirkin were offered for sale on the metaverse.

This case shows that the notion of “use of the trademark in the course of trade” seems to extend to the world of the metaverse as well and that in the future, brands will have to remain vigilant against digital counterfeits of which they could be victims.

To be continued…

Company ELI LILLY, owner of patent EP 1313508 (“EP508”) relating to a composition containing an antifolate (i.e. pemetrexed in disodium form) and a methylmalonic acid reducing agent (such as vitamin B12), summoned company ZENTIVA for infringement, due to the latter’s commercialization of a generic drug composed of pemetrexed diarginine. Requesting a provision on damages, the case was brought before the procedural Judge, who had to examine the merits of the case in order to determine whether infringement was likely, prerequisite for the allocation of a provision.

In its decision of November 9th, 2021, the Court of Appeal, partially confirming the order of the procedural Judge of January 7th, 2021, stated that patent EP508 was in particular targeting disodium pemetrexed among the possible antifolates. It added that the person skilled in the art understands from reading the patent that the active part of pemetrexed is its anion, independently of its disodium or other form, insofar as it is this anion that is at the origin of the therapeutic effects and the side effects linked to the drug.

The Court therefore deduced that “the invention lies in the combined administration of the active ingredient, regardless of the formula chosen to make it soluble and stable, with the other substances claimed in the patent”. Consequently, following the reasoning adopted in first instance, the Court held that the generic drug in dispute, comprising pemetrexed diarginine, administered with vitamin B12, intended to treat the same conditions, and reproducing the new function consisting of the reduction of the toxic effects of the antifolate pemetrexed without affecting its therapeutic efficiency, likely infringed patent EP508, by reproduction or at least by equivalence. The Court nevertheless rejected the claim for provisional damages, as ELI LILLY failed to demonstrate that the amount of its personal damage was not seriously disputable.

This decision, which strictly applies the doctrine of equivalence, is in line with the decisions rendered on pemetrexed, whether in France, in the decision of the High Court of Paris of September 11th, 2020 concerning company FRESENIUS KABI, or before various European courts.

Through this decision, the Court reassesses its position in light of the case law of the Court of Justice of the European Union (CJEU). The latter considers that the owner of a registered trademark can only prohibit the use of this trademark by a third party if such is made in the course of trade, without the owner’s consent, and for identical or similar goods and services. However, filing for registration of a trademark does not characterize such use, “in the absence of any commercialization of goods or services under the sign” and thus does not cause “any likelihood of confusion in the mind of the public and, consequently, no infringement of the essential function of the trademark as an indication of origin”.

This reversal is a direct consequence of the reform resulting from Ordinance No.2019-1169 of November 13th, 2019, and in particular of the opening of the proceeding of cancellation action before the French Trademark Office (INPI).
Infringement proceeding is therefore no longer the appropriate course of action when the owner of a trademark becomes aware of the filing by a third party of an identical or similar sign. At this stage, the trademark owner will therefore have to use the opposition proceeding before the INPI or the cancellation action, and the infringement proceeding will be limited to cases in which an exploitation of the sign thus registered is observed.

The significance of this Judgment is further supported by a second Judgment rendered on the same day, by the same chamber.

In our previous newsletter, we mentioned the filing at the National Assembly of a law proposal to modernize the fight against infringement. This proposal was analyzed in committee, then rectified and adopted during a public session on November 25th, 2021. It was finally transmitted to the Senate on the same day.

The text as adopted by the National Assembly provides that:
• The INPI is given a new mission aiming at collecting the data useful to quantify counterfeiting, and to proceed regularly to an objective analysis of the consequences of infringement practices, in order to allow reinforcement of the information in the fight against infringement.
• Customs officers have the ability to acquire counterfeit goods or falsified medicines. They can also make contact with the perpetrators by electronic means, under a pseudonym.
• Where the offence is likely to be committed via the Internet, customs officers may place the names of the online platform operators providing the services enabling the offence, as well as the offence concerned, on a public list, for a maximum duration of twelve months. During this period, any person who has a commercial relationship with these operators will have to make public the existence of this relationship, by publishing a message warning users of the operator’s inclusion on this list. This measure of transparency therefore aims to make online platform operators more accountable.
• The materiality of any infringement of trademark law may be established by statements made by agents sworn in by the Minister responsible for industrial property.
• The owner of a trademark may ask the judicial authority to order the removal of domain names or social network accounts infringing the trademark or any other measure likely to prevent access to them.
• The municipal police may issue an official report on the offence of selling manufactured tobacco products on the sly.

For the moment, this proposal has not been placed on the Senate’s agenda for the session of January 2022. If it is not included in the February session either, it will have to wait until July 2022 for the Senate to consider it. All parliamentary works will be suspended from February 27th, 2022 because of the presidential campaign and the legislative elections. In any case, the text will have to be adopted in the same terms by the Senate and the National Assembly, and then be promulgated, before coming into force.

On October 26th, 2021, the first French and European collective management organization dedicated to the defense of the neighboring rights of publishers and press agencies was born under the name “Société des Droits Voisins de la Presse” (DVP). Its management is ensured by the SACEM (Society of authors, composers and music publishers).

The first objective of this new organization is to gather all holders of neighboring rights who have chosen a collective management of their rights and to provide them with a tool for collective negotiation in order to guarantee them a transparent and fair framework, in particular with regard to the GAFA.

Created on the model of the SACEM, it also aims to enable these players to obtain a fair return on their investments, by offering them a tool for collecting and distributing neighboring rights.

At the moment, many representatives of publishers and press agencies (L’Equipe, Prisma Média, AFP…) and audiovisual companies (France Télévisions, M6, Altice Média …) have already joined this organization as members of the Board of Directors and the Supervisory Board.

As a reminder, the neighboring rights of publishers and news agencies are the result of a long struggle during the adoption of the Copyright Directive in April 2019; a directive that France was the first European country to transpose.