A decision from the Paris court of appeal (issued on 12 September 2012) features two aspects that deserve some attention and these are not related to the comparative size of the protagonists –which led the media to refer to this case as (another) David vs Goliath case. This cliché might indeed be the first thing that comes to mind when one knows that Apple Inc was accused of infringing the prior mark of a comparatively modest French company: Circus, incorporated in 2008 and developing visual effects software, has a capital which is 22 million times smaller than Apple Inc’s.

But in this case, what seems relevant to mention here is first the validity of the acquisition of prior rights after being accused of trademark infringement. The second point deals with the nature of the sanction of trademark infringement.

The chronology of the facts is rather simple:

• 6 April 2010: Circus applied for a French trade mark for the word LION (in class 9 it covers inter alia : software in the field of visual creation, of post-production, of special effects for theater movies, videos and other visual presentations)
  
• 6 April 2011: Apple applied for a CTM for the term LION (in class 9 it designates inter alia: computer software; computer software for authoring, downloading, transmitting, receiving, editing, extracting, encoding, decoding, displaying, storing and organizing text, graphics, images, and electronic publications)
  
• 18 May 2011: Circus sent a cease and desist letter to Apple
  
  
• June 2011: Apple started using the LION mark on its website
  
  
• 7 and 8 July 2011: Circus filed a request before the Paris civil court for a preliminary injunction, invoking article L. 716-6 of the French IP Code.
  
  The relevant part of Article L716-6 of the French IP Code could be translated as follows: “any person having quality to file infringement action can request a preliminary injunction before the competent civil court to obtain an injunction, under financial compulsion when relevant, against the alleged infringer (…) ordering any measure aimed at preventing an imminent infringement of the rights conveyed by the [registration] title or at preventing the continuation of allegedly infringing actions (…)”.
  
  
• 2 September 2011: Apple acquires IR 781933 (designating France), consisting in a paw print with the term LION (it covers inter alia: computer software, especially for scientific and industrial purposes, including chemical, medical, diagnostic and biological, especially biochemical, immunological and microbiological purposes, in class 9).

The decision issued on 12 September 2012 finds that the acquisition of IR7181933 by Apple is fraudulent and that Apple infringed Circus’ prior right over the French mark LION. The court order states that: “the acquisition of a mark, during litigation, for the sole purpose of defeating an action for infringement characterizes a fraudulent response”.

Such solution is not a complete surprise. Previous French courts decisions also found that the acquisition of trade marks rights is fraudulent when it is made for the sole purpose of defeating an infringement action (CA Versailles, 14 June 2001; CA Paris 2 July 2004; CA Paris 7 December 2011). It appears that such acquisition is suspicious when it takes place after a suit has already been brought. The solution might be quite different in case an acquisition was made to consolidate rights, before any litigious context arose.

Even if Apple is found to have been infringing Circus’ prior rights on the LION trade mark, the judge refuses to forbid Apple to use the infringing trade mark, as “interdiction [to use the mark] would be disproportionate compared to the prejudice suffered by Circus”. According to the court, this seems to be justified by Circus not having launched any product under the Lion brand yet and (oddly, we believe) by the lack of establishing that “the filing of an application for the LION mark by Circus has had any influence on the decision of consumers to buy the new version of Apple OS which is not aimed at the same audience as the one targeted by Circus, specialized in the graphic software”.

A provision on damages amounting to 50000 euro as well as an equal amount aimed at covering lawyer fees were awarded to the plaintiff.