Claiming right to information injunction at pre-trial stage: Supreme Court gives the green light

When France finally implemented the EU IP Rights Enforcement Directive (2004/48/EC) by enacting the Law Against Counterfeiting (2007-1544), it led to some criticism regarding the fact that French legislation was undermined by procedural issues taking over in court and by the introduction of heavier penalties for counterfeiting, thus focusing the debate on the production and processing of evidence.

On 13th December 2011 the Supreme Court demonstrated that the courts have made progress regarding these procedural issues in a decision regarding the application of the right to information contained in Article L716-7-1 of the IP Code, which implemented into French law Articles 6 and 8 of the directive. These articles were inspired by Articles 43, 44 and 47 of the World Trade Organisation Agreement on Trade-Related Aspects of IP Rights.

This new provision introduced a right to information, thereby allowing trademark owners to request an injunction against an infringer to communicate key information to the court (eg, prices, quantity, distribution channels, the identity of the people or companies producing or distributing the infringing products). This provision was specifically aimed at helping rights holders to dismantle counterfeiting networks. Identical provisions have also been inserted into the IP Code regarding copyright infringement (Article L331-1-2), design infringement (Article L521-5) and patent infringement (Article L615-5-2).

However, the enforcement of these new provisions against counterfeiters has raised procedural issues before several courts. Indeed, since 2007 and the promulgation of the Law Against Counterfeiting, various courts have considered whether a court can grant an application for the right to information even where the court has not yet ruled on the alleged infringement.

Therefore, the main question at stake before the Supreme Court was whether this right to information could be applied for and granted to trademark owners against alleged infringers at pre-trial stage and by the pre-trial judge.

A first interpretation followed by a majority of judges was based on the aim of the statutory provision, which was to allow rights holders to request an injunction in order to obtain information that they could use in the ongoing procedure. As a consequence, this meant that the provision was intended to apply at all stages of the trial, including before a decision on the infringement was handed down. This also meant that such injunction in no way prejudged the outcome of the case and the liability of the defendant.

This interpretation is in direct line with the whereas clauses of the directive, which state at Clause 20 that:

“For infringements committed on a commercial scale it is also important that the courts may order access, where appropriate, to banking, financial or commercial documents under the control of the alleged infringer.”

Applying this reasoning, several injunctions have been issued against alleged infringers at pre-trial level since 2007. For example, in a decision of 25th June 2008 a pre-trial judge considered that eBay, as the provider of a service used in the frame of counterfeiting activities, could be ordered to communicate information to the plaintiff under Article L716-7-1 of the IP Code.

A second interpretation which was strongly relied on by defendants to infringement actions was also based on the wording used in Article L716-7-1 of the IP Code. Indeed, this article refers to cases of “infringing products” and “infringing activities”, and not to “allegedly infringing products” and “allegedly infringing activities”. Defendants argued that this drafting meant that as a necessary pre-requisite to the grant of such an injunction, a final decision had to be handed down by a court declaring on the merits that the products and the activities were indeed infringing.

This argument was followed by several pre-trial judges, and especially by the judges of one of the sections of the Paris Court of First Instance specialised in IP matters. The pre-trial judges in this section considered that the wording of Article L716-7-1 of the IP Code necessarily implied that a prior decision must be handed down on the infringement before an injunction could be granted against a defendant. Therefore, the claim for an injunction could be only an additional claim, which would be decided on only once the decision on the merits had been rendered, and not at the pre-trial stage.

In the case before the Supreme Court, the claimant, sportswear producer and retailer Puma, had been ordered by a pre-trial judge under Article L716-7-1 of the IP Code to provide the court and the plaintiff with a number of documents at the pre-trial stage. Following confirmation of this injunction by the Court of Appeal in 2010, Puma brought the case before the Supreme Court.

Puma mainly relied on the second interpretation of Article L716-7-1 to argue that such an injunction could not be granted before a final decision was handed down on the merits of the case. Therefore, Puma argued that the pre-trial judge had exceeded its powers by ordering the communication of information on the basis of this article.

The Supreme Court put an end to the controversy and to the resulting uncertainty. The judges stated that the “provisions of Article L716-7-1 of the IP Code allow the pre-trial judge to order the measures that it provides for before any decision has been taken on the reality of the infringement”.

The court thereby confirmed that such injunctions could be granted at any stage of proceedings, including at pre-trial stage, and that the pre-trial judge had not exceeded his powers by granting an injunction against Puma.

This expressly confirms that information regarding, for example, the origin and distribution networks of the goods or services, the quantities, the state of stocks and the profit margin may be requested by the plaintiff in an infringement case, even at pre-trial level. This interpretation of Article L716-7-1 can be mirrored in the identical provisions which apply to copyright, design and patent infringement.

While this decision must be approved since it is in strict line with the aim of the law, despite the ambiguous drafting of the provision, it grants strong powers to pre-trial judges, thereby also giving these judges the responsibility of balancing the legitimate interests of both parties.

Article L716-7-1 provides that the communication of information may be ordered in any infringement case except where there is a "legitimate hindrance". This raises an additional question for the French courts to answer: what is a "legitimate hindrance"? In a ruling of 21st March 2008 a pre-trial judge of the Paris Court of First Instance has considered that the risk of disclosure of a trade secret did not constitute a legitimate hindrance. No doubt much attention will be paid to future decisions to find out what might constitute such a hindrance.