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Monday, 24 July 2017

French Supreme Court : End of the trade mark dispute over 'Cheval Blanc'

'How long do you have to take legal actions against a deceptive mark?' was the last question asked to the French Supreme Court in a decade-long dispute between two wine-making companies, over the trade mark rights in the household name 'Cheval Blanc' (Cour Cass, Ch. com., 8 juin 2017, decision No 15-21.357 - here in French language). 'As long as the statutory limitation' will allow, the Court said. Yet, this answer does not quite clarify the crux of this claimant's matter...what should be the starting point of this limitation period...the day the mark was registered or the day the deceptiveness ended?

Estate of Château Cheval Blanc
The claimant in this dispute is the wine-making company trading as 'Château Cheval Blanc' based in St Emilion, a region of France well-known for its vintage. The company registered the work mark 'CHEVAL BLANC' for the class of goods 33, in 1933 and renewed its registration ever since. In 2008, Château Cheval Blanc assigned a competitor, Mr Chaussié and his company "Chaussié de Cheval Blanc",  in revocation of two of their trade marks and of their company's name.

The defendant has owned the word marks "Domaine du Cheval Blanc" (reading in English " Estate of Cheval Blanc") and "Chateau Relays Cheval Blanc", as well as the graphic mark featuring a horse head (see below) for the same class of goods (33) since their registrations in 1973 and 2003, respectively. The dispute had taken them to the Bordeaux Court of Appeal in 2012 which confirmed the dismissal of Château Cheval Blanc's claim by the judgement of first instance. Both decisions confirmed the defendant's right to use the place name "Cheval Blanc" in the context of his professional activities, including trade mark registrations and the name of his registered company. However, neither lower court responded to the claimant's argument on the deceptiveness of the mark, in their respective decisions. Château Cheval Blanc advanced that, even marks relying place names may be refused or revoked if deceptive. The claimant lodged their first appeal before the Court of Cassation on this ground, which was received by the highest civil court on  1 January 2014, the French Supreme Court. The Court of Cassation quashed the Court of Appeal decision for not addressing the question of deceptiveness, and referred the case back to them to perform the relevant assessments to this end.

In 2015, a different formation of the Bordeaux Court of Appeal heard the case upon referral from the Supreme Court. The appeal judges rejected for a second time the claimant's revocation for the latter had failed to comply with the (then) 30-year statutory limitation placed on legal actions. The Court of Appeal held that the claimant should have applied for the revocation of the word mark no later than 2003, counting thirty years from the registration of Chaussié's mark.
Chaussié's graphic mark registered in 2003

Following the Bordeaux decision, Château Cheval Blanc filed for a second appeal before the French Supreme Court arguing that the appellate Court had misinterpreted the provisions of the French Intellectual Property Code by concluding their right to legal actions against a deceptive mark had lapsed. The claimant argued that Article L 711-3 provided that the deceptiveness of a mark was unaffected by neither time nor use, and is a ground for revocation at any point within the period of the mark legally registered. Château Cheval Blanc thus submitted that their action against Chaussié's deceptive mark could not have lapsed, since deceptiveness is itself declared unaffected by time by Article L 711-3 which bases their action. The claimant also dispute the starting point for the limitation period picked by the Court of Appeal. In their view, the starting point of the time limitation of their action in revocation for deceptiveness could not have been the date of the registration of the mark because the 'vice' (of deceptiveness) of the disputed mark was still ongoing at the time proceedings were introduced. This, they contended, should have prevented any time from running, for the purposes of statutory limitation. Finally, the claimant appealed the decision of the Bordeaux Court to deny them damages for the prejudice they suffered from Chaussié's use of the phrase 'Cheval Blanc', they regarded to dilute the prestige and reputation of their business name and mark.

A Kat a bit touchy about her wine...
...who would not be?
The French Supreme Court rejected all claims for a second time. The highest court held that the fact that deceptiveness was unaffected by neither time nor use should not be interpreted as lifting statutory limitations on legal proceedings relying on Article L 711-3 as a primary cause of action. This response of the Supreme Court implies that, indeed, time does not affect claims of revocation for deceptiveness when the latter are introduced as a defence against infringement, but not otherwise. The question of the starting point of time limitations for the revocation of alleged deceptive marks was left unaddressed by the Supreme Court as it was a new argument introduced in appeal, contrary to procedural rules. The Court stressed that such grounds should be been raised in previous instances and could not be reviewed upon 'cassation' at this point, as it required an assessment of both facts and law for which the Court of Cassation has no authority, and the defendant should be given the opportunity to put forward a response to such claims. Finally, the Supreme Court confirmed the Court of Appeal's decision with regard to damages. The decision stresses that the claimant's prejudice in their reputation and name was unsupported by appropriate evidence.

One may question whether this decision will indeed be the finale of the dispute, as the question of the starting point of the statutory limitation of actions in revocation of marks of deceptive marks was left unanswered by the French Supreme Court. Should we expect yet another action from Château Cheval Blanc to clarify this point in the future?

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