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CISG CASE PRESENTATION

France 13 November 2002 Appellate Court Colmar (Printed textile fabric case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/021113f1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20021113 (13 November 2002)

JURISDICTION: France

TRIBUNAL: Cour d'appel de Colmar

JUDGE(S): Goyet, président; Mazarin, Die, conseillers; Armspach-Sengle, greffier

CASE NUMBER/DOCKET NUMBER: 1B 98/01776

CASE NAME: SA H... MA... et Aktiengesellschaft T... K... v. SA Do... M... & Cie et GmbH Co... H... M...

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany

BUYER'S COUNTRY: France

GOODS INVOLVED: Printed textile fabric


Case abstract

FRANCE: Court of Appeal of Colmar 13 November 2002

Case law on UNCITRAL texts (CLOUT) abstract no. 491

Reproduced with permission from UNCITRAL

Abstract prepared by Claude Witz, National Correspondent

In 1994, the company HM, which owned six clothing shops in eastern France, acquired a batch of shirts from the company K, based in Germany. The shirts were made of a fabric that reproduced the features of two types of fabric to which the industrial textile group D-M & Cie had exclusive rights. Sued for infringement by D-M & Cie, HM brought warranty proceedings against its supplier K.

In its judgement of 5 March 1998, the Colmar District Court found HM guilty of infringement and ordered K to indemnify HM for the awards made against it.

In its judgement of 7 March 2001, the Court of Appeal upheld that ruling insofar as the ruling accepted that there had been an infringement of which HM was guilty vis-à-vis D-M & Cie, but it reduced the amount of damages due from HM to D-M & Cie. The Court further ordered that the warranty proceedings should be reopened. It thus invited the parties to give their views on whether CISG of 11 April 1980, particularly article 42, was applicable to the case. The two parties took the view that CISG was applicable.

The Court of Appeal of Colmar applied CISG, with particular reference to article 42, from which it quoted at length.

It ruled that the buyer, HM, "could not, in its professional capacity, have been unaware of this infringement. It therefore acted with knowledge of the intellectual property right that has been invoked and, under CISG of 11 April 1980, article 42(2)(a), the company K (the seller) was no longer required to provide goods free of all intellectual property rights (Court of Cassation, First Civil Division, 19 March 2002)".

The Court of Appeal accordingly set aside the District Court's ruling and dismissed the warranty proceedings brought by HM.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 42 [Also cited: Articles 43 ; 44 ]

Classification of issues using UNCITRAL classification code numbers:

42A ; 42C1 [Seller's obligation to deliver goods from third party claim based on intellectual property; Seller's obligation not applicable when at time of contract buyer knew of right or claim]

Descriptors: Third-party claims ; Intellectual property

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (French): CISG-France website <http://Witz.jura.uni-sb.de/CISG/decisions/131102v.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

French: Witz, Receuil Dalloz (October 2003) 2367

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Court of Appeals of Colmar 13 November 2002

SA H... MA... et Aktiengesellschaft T... K... v. SA Do... M... & Cie et GmbH Co... H... M...

Translation [*] by Melody Mathews [**]

[PARTICULARS]

COMPOSITION OF THE COURT: Mrs. Goyet, President of the Chamber ("président") Mrs. Mazarin, "conseiller", Mr. Die, "conseiller"; Clerk ("greffier") present at the pleadings and pronouncement of the verdict: Mrs. Armspach-Sengle. PLEADINGS: Before a public audience on 11 September 2002. RULING of 13 November 2002: Judgment pronounced to a public audience by the president ("président"). NATURE OF PROCEEDING: Action for cessation of unfair competition and/or damages.

APPELLANT and Defendant: SA MA... H..., having its registered office in (...) Colmar, represented by its legal representative in his official capacity to the aforesaid office, Representative: Maître Sch..., attorney at law. APPELLANT, third party Appellant, third party Appellee Aktiengesellschaft T... K..., having its registered office in (...) Bielefeld, Germany represented by its legal representative, Representative: SCP C...& associates, attorneys at law. RESPONDENT and Plaintiff: SA Do...-M...& Cie, having its registered office (...), Paris, represented by its in-house counsel in his official capacity to the aforesaid office; Representative: Maître H..., attorney at law. RESPONDENT, third party Appellee, GmbH Co...H...M, having its registered office (...) Recklinghausen, Germany, Representative: Maître B..., attorney at law. Pleading: Maître W..., attorney from Strasbourg.

The Do -M...& Cie Company ["Respondent"] is an organization that creates, manufactures, and markets fabrics. It is the holder of commercial rights for two styles of fabric (references C 12.550 and C 12.801) characterized by the combination of portions of different colors and portions representing varied patterns in which the leaves are in grey tones, and by the combination of patches representing varied stripes or dots, patches decorated with plant-like patterns and one patch consisting of an abstract pattern.

[POSITION OF THE PARTIES AND RULING OF THE COURT OF FIRST INSTANCE]

At a hearing for a complaint of infringement, [Respondent] observed that Company MA... ["Appellant" (Buyer)], who operates six clothing stores in the east of France, marketed clothes made of fabrics which slavishly copy the characteristics of the fabrics exploited under the references, C 12.550 and C 12.801.

On the basis of this hearing, the [Respondent], on 17 October 1994, served a summons upon Appellant for infringement before the commercial chamber of the civil trial court (Tribunal de grande instance) of Colmar, asking for the immediate cessation of these incriminating acts under penalty of force, for the destruction of the infringing clothing, and demanding the payment of 250,000 French francs [f] in lost sales (according to an adjuster).

Company MA of France [the Appellant (Buyer)] made a motion for non-suit and filed a third party claim for indemnification against its supplier, Company K... [Seller] of Germany, who itself filed a third party claim for indemnification against Company Co...H...M...

In a decision on 5 March 1998, the tribunal found that [Appellant (Buyer)] was guilty of artistic infringement and of unfair competition. It ordered, under threat of penalty, the payment of 400 f for each day of delay, the cessation of incriminating acts, the confiscation and the transfer to [Respondent] of all of the infringing clothes being held. Under penalty of a 2,500 f payment for each day of delay, it ordered [Appellant (Buyer)] to pay a sum of 100,000 f as damages, rejected the claim of expertise, ordered the publication of the pronouncement of judgment in three newspapers at the choice of [Respondent], and at the expense of [Appellant (Buyer)] within the limit of 15,000 f per insert, ordered [Appellant (Buyer)] to pay costs and to pay a sum of 10,000 f in accordance with Article 700 of the New Code of Civil Procedure.

As to the claims against third party defendants, the tribunal ordered Company K... [Seller] to indemnify [Appellant (Buyer)] for the pronounced judgments/penalties against it, declared inadmissible the claim for indemnification by a third party defendant made by Company K against GmbH Co...H...M..., ordered Company K [Seller] to pay as much to [Appellant (Buyer)] as to Company Co...H...M..., an indemnity for the proceedings of 10,000 f and ordered Company MA...to pay the entire costs for the third party complaint.

[Appellant (Buyer)] and Company K... [Seller] lodged an appeal from this judgment.

In a ruling dated 7 March 2001, the Court:

     -   Declared the appeals to be admissible in form;
 
     -   For the principal claim, partially invalidated the undertaken judgment in that it ordered [Appellant (Buyer)] to pay to [Respondent], the sum of 100,000 f as damages and whereas it ordered the publication of the pronouncement of judgment in three newspapers of choice.

And ruling again:

     -   Ordered [Appellant (Buyer)] to pay to [Respondent] the sum of 50,000 f (or 7,622.45 Euros) as damages for infringement and the sum of 30,000 f (or 4,573.47 Euros) as damages for parasitism;
 
     -   Non-suited [Respondent] of its request for publication of the pronouncement of judgment undertaken in three newspapers of its choice;
 
     -   Ordered [Respondent] to reimburse [Appellant (Buyer)], in the sum of 20,000 f (or 3,048.98 Euros) settled by way of a "l'execution provisoire" (provisional enforcement of a judgment pending appeal) with interest running at the legal rate from service to the present ruling;
 
     -   Confirmed the undertaken judgment for the surplus;
 
     -   Ordered [Appellant (Buyer)] to pay the entire costs of the original trial and appeal;
 
     -   Ordered [Appellant (Buyer)] to pay to [Respondent] the sum of 10,000 F (or 1,524.49 Euros) in accordance with Article 700 of the New Code of Civil Procedure;
 
     -   Non-suited [Appellant (Buyer)] of its claim in accordance with Article 700 of the New Code of Civil Procedure.

As for the third party claims:

     -   Ordered the re-opening the pleadings; and
 
     -   Invited [Appellant (Buyer)] and Company K [Seller] to reach an agreement on the application to the litigation of provisions from the Vienna Convention of 11 April 1980 and particularly of Article 42 CISG.

In its last submissions presented on 21 September 2001, Company K [Seller] requested from the court to be released from the lawsuit, and in the alternative, to be indemnified by Company Co...H...M... and to have the amount of liability limited.

Company K [Seller] claims from [Appellant (Buyer)] the sum of 5,000 f in accordance with Article 700 of the New Code of Civil Procedure as well as its costs.

Company K [Seller] submits that the Vienna Convention of 11 April 1980 should be applied and emphasizes that it was unaware of any pre-existing right over the sold merchandise, and all the more so since [Respondent] did not register a trademark at the National Institute of Intellectual Property of the infringing patterns.

In its summary of 19 October 2001, [Appellant (Buyer)] asks the court, in view of the provisions of Articles 42, 43 and 44 of the Vienna Convention of April 11, 1980:

     -   To confirm the undertaken judgment in that it declared [Appellant (Buyer)]'s third party claim for indemnification against the German Company K [Seller] to be admissible and well founded;
 
     -   Accordingly, to non-suit Company K...[Seller] of its third party claim as directed against [Appellant (Buyer)];
 
     -   To order Company K [Seller] to pay to [Appellant (Buyer)] the sum of 80,000 f as damages and the sum of 15,000 f in accordance with Article 700 of the new Code of Civil Procedure;
 
     -   To order Company K [Seller] to pay the entire costs for the original trial and appeal.

[Appellant (Buyer)] asks, on the foundation of Article 41(1)(a) of the Vienna Convention, to be indemnified by Company K... [Seller] who knew perfectly well that the incriminating merchandise was meant to be sold in France, since [Appellant (Buyer)] has no business in Germany, but operates six stores exclusively situated in eastern France.

In its plea of 15 March 2002, Company Co...H...M GmbH asks the court, in view of Articles 42 and 43 of the Vienna Convention of 11 April 1980:

     -   To declare Company K [Seller]'s third party claim against Company Co...H...M..., inadmissible, and at the very least, groundless;
 
     -   To confirm the judgment in that it declared Company K [Seller]'s third party claim against Company Co...H...M to be inadmissible, and at the very least, groundless;
 
     -   To order Company K... [Seller] to pay to Company Co...H...M...the sum of 2,286.74 Euros in accordance with Article 700 of the new Code of Civil Procedure, and to order it to pay costs.

Company Co...H...M GmbH asserts, on its behalf, that these actions for infringement and unfair competition brought by [Respondent] are founded on the criminal liability of the [Appellant (Buyer)], in conformity with the provisions of internal French law, and with regards to the third party claims for indemnification, that they are exclusively founded on the seller's warranty in accordance with the Vienna Convention;

Company Co...H...M GmbH asserts that [Appellant (Buyer)]'s third party claim against Company K [Seller] is of no avail insofar as, in accordance with Article 42(2)(a) of the Vienna Convention, Company K [Seller] is not bound by any obligation of compliance where, as in the present case, at the moment of the conclusion of the contract, the [Appellant] buyer, (Company MA...) knew or could not have been unaware of the intellectual property right of the [Respondent];

Whereas in this respect, the infringing party's knowledge of the existence of rights upon which he has infringed, is presumed.

Finally, Company K... [Seller] has not prove the applicability of the provisions of internal German law to the relations with its supplier, the Company Co...H...M...

THE COURT:

In view of the record in these proceedings, the evidence, which was properly considered at the proceedings and the written submissions of the parties, which can be referred to for further explanation.

--  As for Company K [Seller]'s third party claim for indemnification:

Whereas [Appellant (Buyer)], which operates six clothing stores in eastern France, has acquired from Company K [Seller], 360 infringing blouses, according to the bill of 10 March 1994 for a total of 5,512.30 Deutsche Mark [DM ];

Whereas the matter concerns an international sale, there is good reason to apply the Vienna Convention, which sets forth, in Article 42(1):

"The seller must deliver goods which are free from any right or claim of a third party based on industrial property or other intellectual property, of which at the time of the conclusion of the contract, the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property:

(a) under the law of the State where the goods will be resold or otherwise used, if it was contemplated by the parties at the time of the conclusion of the contract that the goods would be resold or otherwise used in that State ..."

Whereas in accordance with Article 42(2)(a):

"The obligation of the seller under the preceding paragraph does not extend to cases where, at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim ..."

Whereas the [Appellant], buyer from Company K... [Seller] of infringing blouses, the material created by [Respondent], could not, in a professional capacity, be unaware of this infringement, so that it acted with knowledge of the asserted intellectual property right, and that in accordance with Article 42(2)(a) of the Vienna Convention, Company K [Seller], is no longer bound to the obligation of delivering the merchandise free of all intellectual property rights. (Cass. civ. 1ere 19-3-2002);

Whereas it is proper, consequently, to quash the judgment and to non-suit [Appellant (Buyer)]... of its third party claim;

Whereas equity dictates granting to the Company K... [Seller], the sum of 800 Euros based on Article 700 of the new Code of Civil Procedure.

--  As for the third party claim brought by Company K... [Seller] against Company Co...H...M:

Whereas this third party claim for indemnity has become irrelevant in the absence of a judgment against Company K... [Seller] on a claim brought by [Appellant (Buyer)];

Whereas there is no good reason to force Company K [Seller] to pay the legal costs and expenses incurred by Company Co...H...M...

--  As for costs:

Whereas [Appellant (Buyer)] will bear the entire costs for bringing in third parties

FOR THESE REASONS

The court, publicly ruling, as a final judgment, after deliberation in the court of last resort .In light of the ruling of 7 March 2001:

As for the third party claims:

     -   Quashes the judgment of 5 March 1998 of the Civil Court (Tribunal de Grande Instance) of Colmar,

And ruling anew:

     -   Nonsuits [Appellant (Buyer)] of its third party claim for indemnity against Company K... [Seller];
 
     -   Finds that the third party claim brought by Company K... [Seller] against Company Co...H...M has become irrelevant;
 
     -   Sentences [Appellant (Buyer)] to pay to Company K... [Seller] the sum of 800 Euros (Eight Hundred Euros) in light of Article 700 of the new Code of Civil Procedure;
 
     -   Rejects all additional or contrary pleas and motions;
 
     -   Sentences [Appellant (Buyer)] to pay all costs for the third party claims

The ruling has been signed by Madame Goyet, president of the chamber, and by Madame Armspach-Sengel, clerk present at the pronouncement.


FOOTNOTES

* European monetary amounts are indicated as [Euros]; monetary amount in the currency of France (French francs) are indicated as [f]; monetary amounts in the currency of Germany (Deutsche Mark) as [DM].

All translations should be verified by cross-checking against the original text.

** Melody Matthews, Research Assistant of the Institute of International Commercial Law at the Pace University School of Law is a J.D. candidate at the Pace University School of Law.

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