Fight against counterfeiting: Publication of new draft law in France

The fight against counterfeiting remains as topical as ever [IPKat here, here or here]. Dematerialisation is speeding up and facilitating inter alia access to products that could be described as counterfeits [IPKat here]. Against this backdrop, this Kat has taken note of a new French draft law dated 28 May 2024 aimed at supplementing the existing enforcement arsenal.

Kats selling fake goods

Analysis

The “draft law aiming at optimising civil penalties for counterfeiting” (“Proposition de loi visant à optimiser les sanctions civiles pour contrefaçon”) is marked by its brevity. It contains a single article. Its purpose is to add a new paragraph to article L. 716-10 of the CPI. This new paragraph states that ‘For the offence of possession without legitimate reason of goods presented under an infringing sign provided for in this article, except in the event of a repeat offence or in the cases provided for in the penultimate paragraph, the public prosecution may be withdrawn, under the conditions provided for in articles 495-17 to 495-25 of the Code of Criminal Procedure, by payment of a fixed fine of 200 euros. The amount of the reduced fixed fine is 150 euros and the amount of the increased fixed fine is 450 euros’. This new paragraph must therefore be read in conjunction with article L. 716-10 paragraph a) of the CPI, which provides that ‘It is punishable by three years imprisonment and a fine of 300,000 euros for any person to hold without legitimate reason, import or export goods presented under an infringing sign’.

The wording of this new paragraph of article L716-10 of the CPI has the merit of being clear. It introduces an optional fixed fine which, if paid, would extinguish the public prosecution. If we take a closer look, this fixed fine cannot be applied in cases of repeated possession of goods presented under an infringing sign without a legitimate reason.

Thoughts

As with any draft law, it is not enough simply to read the legal provisions to grasp its essence. Reading the preamble to this bill, which is also brief, is informative. The draft law is intended to follow on from the draft law to modernise the fight against counterfeiting, which dates back to 2021 and whose legislative process seems to have ground to a halt. Both come against a backdrop of pessimism about the current state of the fight against IPR infringements and counterfeiting, illustrated by alarming reports and figures on the impact on jobs, tax losses and, above all, the inadequacy of the resources currently allocated to contrast them.

This said the previous draft law was much more comprehensive, and as such ambitious (i.e. it provided for the suspension of domain names and social network accounts). However, as mentioned in the preamble to the new draft law, the legislative process seems to have ground to a halt. Comparing the two, it can be seen that the new proposal repeats article 2 of the old draft law almost identically, or at least in a refined version. The preamble to the new draft law explicitly states that its aim is ‘to extract one of the proposals most eagerly awaited by those involved in the fight against counterfeiting, namely the creation of a fixed fine for a criminal offence’.

Furthermore, the question arises as to who is targeted by this new article. Insofar as the new draft law is silent on this point, reference should be made to the previous proposal. This was aimed directly at sellers of counterfeit goods. Consequently, as far as the new draft law extracts the central provision of the old one, it is legitimate to think that the target of the new paragraph would be the same, namely sellers of counterfeit goods.

While the notion of ‘detention without legitimate reason’ might raise questions, we should no doubt refer to the explanations given by the Cour de cassation which explicitly referred to trade mark directives (e.g. here).

In any case, such a bill is commendable and even welcome given the need to combat counterfeiting. But in reality, is it really sufficient, given the relatively low amount envisaged for first-time owners of counterfeit products? Can a civil fine of €200 really be considered a deterrent? That remains to be seen, and nothing is less certain on this point. In this respect, when it comes to combating counterfeiting, particularly online counterfeiting, it seems that the “follow the money” approach can go some way to stemming the tide, or at least curbing it somewhat [IPKat here]. This draft law therefore seems to be a step in the right direction.

All in all, the proposal has the merit of reactivating part of a draft law that had come to a standstill in the adoption process. But wouldn't it be better to move forward on the old text rather than propose a new one, insofar as the first one was much more comprehensive (e.g. creation of an inter-ministerial delegate for the fight against counterfeiting and the promotion of intellectual property rights) and was not a stopgap measure or a more than truncated version? In any event, it would be disappointing if this new, more streamlined version were to suffer the same fate. The future of this draft law is therefore one to watch.