Comments on the judgement of Paris Court dated November 15, 2016 (How to properly manage the execution and the nature of a Trademark coexistence agreement).

CRISTALWhen, in 1988, Champagne Louis Roederer, owner of the trademark "CRISTAL" which designates the cuvée of its prestigious champagne wine, agreed to tolerate the existence and use of the trademark "CRISTAL BUISSE", conditions appear to be clearly specified. « CRISTAL BUISSE » will be able to co-exist with the prestigious trademark « CRISTAL » if that mark refers strictly to still wines (wines that do not form bubbles when opening the bottle), and if the characteristics of the tolerated sign was well delimited by its filing under number 13 99096.

It is the use of the trademark « CRISTAL BUISSE » carried out from 2012 by its owner which is contested.  To be more specific, if it is found that the marked products correspond to the terms of the agreement reached (in this case a white Sauvignon wine), on the other hand regarding the sign as it is used Champagne Louis Roederer contests precisely:

  • the reproduction on the label of the name "CRISTAL" written in large black stylized capital letters, overlapping the signature "Paul de Buisse" in copper (...) ",
  • the reproduction on the counter-label" of the name "CRISTAL" written in large stylized black capital letters (...) underneath it, are mentioned the grape variety ", and also
  • the commercial language conveyed on the website: " Guide Hachette 2014: 2 stars for CRISTAL” or “5 Euros cuvée CRISTAL "...

The Court of First Instance of Paris rejected in 2015 the action for infringement brought by Champagne Louis Roederer. The action is declared inadmissible on the ground that Champagne Louis Roederer has tolerated the use of the mark subject to the coexistence trademark agreement for more than 5 years*.

The Appeal Court takes more time to describe the uses of the mark "CRISTAL BUISSE". Thus, the Court observes that the exploitation undertaken by the beneficiary of coexistence has evolved in such a way that the sign 'CRISTAL' is clearly highlighted in all communication media and that the characteristics of the mark beneficiary of the coexistence agreement are no longer reproduced: If the marked products are still wines (ie. White Sauvignon), the association of the two contractually tolerated verbal elements "CRISTAL" and "BUISSE" has been abandoned. Indeed, the Court confirms that the use of the term "CRISTAL" alone or in a form that highlights "CRISTAL" constitutes an exploitation altering the distinctive character of the mark "CRISTAL BUISSE" number 1399096.

Consequently, the foreclosure by tolerance may not be taken into consideration and the use in this form constitutes an infringement of the mark "CRISTAL" number 1 114 613, property of Champagne Louis Roederer.

The precise delimitation of the tolerance created by a coexistence agreement is therefore binding on the holder of the earlier right not only in relation to the area of activity attached to the trademark but also in relation to the beneficiary sign of the tolerance.

It is regrettable, however, that only the moral damage is compensated for 10,000 Euros, on the grounds of the marked dilution of the luxury image of ‘CRISTAL’ of Champagne Louis Roederer.

The calculation of the economic consequences of the dilution of a trademark remains the challenge of IP Attorneys and trademark owners, especially for luxury brands.

And, it will be recalled that if such an agreement of coexistence is relevant on French territory, many foreign legislations refuse to take such agreements into account and it is therefore necessary to be extremely vigilant in a world that is becoming international, which will be the subject of a future article.

* Article L716-5 (last paragraph) of the Intellectual Property Code provides : 'No action for infringement of a registered subsequent trademark shall be inadmissible, the use of which has been tolerated for five years, unless it has been made in bad faith. However, inadmissibility is limited to the goods and services for which the use has been tolerated '