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CISG CASE PRESENTATION

France 23 November 2004 District Court Versailles (Counterfeit furniture case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/041123f1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20041123 (23 November 2004)

JURISDICTION: France

TRIBUNAL: Tribunal de grande instance de Versailles

JUDGE(S): Mmes Lataulade, DeMortiere (vice présidentes); Mme Castermans-Xerri (juge); Mme Foulon (greffier)

CASE NUMBER/DOCKET NUMBER: 01/08276

CASE NAME: La Fondation le C... et al. v. Société Grandopt... France, Société Les Opticiens E... et al.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Spain

BUYER'S COUNTRY: France (defendant)

GOODS INVOLVED: Counterfeit furniture


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 42

Classification of issues using UNCITRAL classification code numbers:

42C1 [Third-party claims based on intellectual property (seller's obligation to deliver goods free from third-party claim based, e.g., on copyright, patent, trademark): seller's obligation not applicable where at time of contract buyer knew of right or claim]

Descriptors: Third-party claims

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=998&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (French): CISG-France website <http://witz.jura.uni-sb.de/CISG/decisions/231104v.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=998&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Tribunal de grande instance) Versailles

23 November 2004

Translation [*] by Nathalie Hofmann [**]

CLAIMANTS: The Foundation Le C... [of France] ,,, Mrs. Claude Marie Charlotte M...-B... [of France] ... Mrs. Jacqueline Emilie Hélène J...-G... [of Switzerland] ... and Company C... S.p.A [of Italy] [...] DEFENDANTS: Company Grandopt... France [Buyer One] ... and [Buyer Two], Company Les Opticiens E... [also of France] [...] NECESSARY PARTICIPANT AND GUARANTOR: [Seller], Company I.C. & Assoc... [of Spain]

[...]

PLEADINGS: In the public hearing of 5 October 2004 the pleadings of the attorneys in this case have been heard; deliberation took place on 23 November 2004.

FACTS, CLAIMS AND SUBMISSIONS OF THE PARTIES

Charles Edouard J... (hereinafter "Le C") created furniture at the end of the 1920s in collaboration with Pierre J...and Charlotte P... . Since his death in 1965, his shares are held by the Foundation Le C.... Mrs. J...-G... and Mrs. M...-B... have inherited the shares of Pierre J...and Charlotte P.... The exclusive right to manufacture and sell "Le C" furniture has been assigned to Company C.... In November 1998, the existence of counterfeit "Le C" furniture was discovered in stores of [Buyer One] and [Buyer Two]. A search and seizure of forgery took place on 10 and 11 July 2001 in Storehouse R... leading to the detection of 66 pieces of counterfeit furniture.

By summons delivered on 9 August 2001, Foundation Le C... Mrs. M...-B..., Mrs. J...-G... and Company C... cited [Buyer One] and [Buyer Two] and Storehouse R... before this court.

[Claimants' submissions]

In their written submissions of 26 April 2004, they request certain documents communicated by [Buyer One and Buyer Two] to be excluded from the hearing and the search and seizure of forgery of July 2001 to be validated. Furthermore, they request that [Buyer One and Buyer Two] be prohibited from exhibiting counterfeit "Le C" furniture under "astreinte" [1] of 150 € per infraction and that the furniture at Storehouse R...should be confiscated. Moreover, [Buyer One] and [Buyer Two] should be condemned in solidum [2] to pay to Foundation Le C... the amount of 80,000 € in reparation of the violation of intellectual property rights and the amount of 130,000 € to Company C in reparation of its moral and commercial damage.

The claimants also request that the judgment to be rendered shall be published in five newspapers or magazines of their choice, that the provisional enforceability of the decision shall be declared and that [Buyer One] and [Buyer Two] have to pay 7,000 € to Foundation Le C... and to Mrs. M...-B... and Mrs. J...-G..., on the one hand, and 7.000 € to Company C..., on the other hand, for unrecoverable fees.[3]

According to the claimants, the exhibition of the counterfeit furniture constitutes forgery in the sense of the provisions of the Code of Intellectual Property.

By summons delivered on 17 July 2002, the claimants cited Maître C..., in his function as representative of the creditors in the pre-insolvency proceedings against Mr. Pierre R..., before this court. This procedure was consolidated with the main procedure by order of the procedural judge [4] on 23 September 2002.

[Submissions of Buyer One and Buyer Two]

In his written submissions of 25 November 2002, Maître C... demands that it shall be recorded that no claim for damages against Mr. R... exists and that the losing parties shall be ordered to pay 2,500 € in solidum for unrecoverable fees.

In their written submissions of 24 May 2004, [Buyer One] and [Buyer Two] request the rejection of the claims and that the claimants shall be ordered to pay the amount of 4,000 € to [Buyer One] and the amount of 2,200 € to [Buyer Two] on the basis of Art. 700 New Code of Civil Procedure.[5] They underline their good faith, given that they were not aware that the furniture in dispute was counterfeit.

By summons delivered on 7 February 2003, [Buyer One] called the party that sold the furniture to them [hereinafter referred to as the Seller], to join the proceedings as guarantor and necessary third party.[6] This impleader procedure.[7] was consolidated with the main procedure by order of the procedural judge on 16 June 2003.

In their written submissions of 22 March 2004, [Buyer One] and [Buyer Two] claim in addition to the guarantee from the [Seller], that the contract for the sale of the furniture should be annulled and that the [Seller] reimburses the amount of 24,980 € plus legal interest and pays the amount of 15,000 € on the basis of Art. 700 New Code of Civil Procedure.

[Seller's submissions]

In its written submissions of 11 February 2004 the [Seller] contests the jurisdiction of this court, claiming that a court in Sevilla [Spain] would be competent, and requests that [Buyer One] shall be ordered to pay the amount of 1,500 € for unrecoverable fees. Subsidiarily, it requests the rejection of the impleader claim and the payment of 20,000 € by [Buyer One] for abusive proceedings and 15,000 € on the basis of Art. 700 New Code of Civil Procedure.

The [Seller] bases its submissions on the legal force [res judicata] [8] of the judgment of the Commercial Court of Nantes [9] of 9 February 2000 and on the provisions of the CISG.

The order closing the pre-trial stage [10] was rendered on 13 September 2004.

REASONING OF THE COURT

Preliminarily, documents no. 12 and 17 communicated by [Buyer One] and [Buyer Two] are excluded from the procedure since they contain company secrets as well as documents no. 7 and 8 which are written in a foreign language.

Concerning the principal claim:

[Buyer One and Buyer Two] do not contest the validity of the rights invoked by the claimants resulting from the provisions of Art. L. 111-1 Code of Intellectual Property nor the fact that the furniture in dispute is counterfeit, nor that they have exhibited this counterfeit furniture in their stores. In defense, they submit that the mere exhibition is not part of the illicit acts referred to by Art. L. 335-1 and L. 335-2 Code of Intellectual Property and that they bought this furniture ignorant of the forgery.

However, according to Art. L. 122-4 Code of Intellectual Property, every presentation of a work of someone else which is subject to protection by the law constitutes forgery, if there is no consent of the creator. The offense of presentation is covered by Art. L. 335-3 of the code. According to the jurisprudence, the exhibition of a protected work is considered as unauthorized presentation of this work. The exhibition of counterfeit furniture thus constitutes forgery. Concerning the good faith [Buyer One and Buyer Two] try to plead, the Court recalls that this is without effect for what concerns questions of forgery before civil courts and in any case [Buyer One] and [Buyer Two] being responsible for a major chain of stores necessarily consult with professionals in the field of interior decoration knowing the furniture "Le C". In fact, for several years already this furniture has been featured in articles of magazines and in specialized catalogues as well as in exhibitions organized by museums. Frequently, judicial decisions condemning the forgery of this furniture have been published in various newspapers and magazines.

In addition, [Buyer One] has not withdrawn the counterfeit furniture until almost nine months after having received the reminder of Company C....

[Buyer One and Buyer Two] thus cannot claim good faith. They committed forgery of the furniture types LC3 (canapé), LC7 (swivel chair), LC8 (swivel stool). The search and seizure of forgery of 10 and 11 July 2001 is legitimate since it took place regularly in execution of an order of the president of the District Court [11] of Nice.

The confiscation of the furniture will be ordered; the furniture is to be found in the rooms of Company Trois C... in Arcachon according to the records. For the purpose of destruction, it is to be handed over to Company C... at [Buyer One and Buyer Two]'s charge.

As necessary, [Buyer One] and [Buyer Two] will be prohibited from exhibiting counterfeit furniture of the type LC3, LC7 and LC8 without imposing an "astreinte"[12] since the infraction was stopped.

The acts of forgery committed caused damage to all the claimants since spreading furniture of this renowned brand contributes to a trivialization in the eyes of the customers and leads to a loss of chance for Company C... to sell its furniture and for Foundation Le C... as well as for Mrs. M...-B... and Mrs. J...-G...to receive copyright fees for those sales.

It should be noted that the amount of counterfeit furniture could not be established, notably because the [Buyer One and Buyer Two] did not provide any documents relating to the purchases from the [Seller]. The search and seizure of forgery in July 2001 only gives a minimal indication of that amount. Company C... has evaluated its commercial damage at amount to 70,500 €, calculating its gross profit rate to be 55.70 % without justifying this rate in an accountable manner and without taking into account that the defendant might not necessarily have bought the same number of pieces of furniture from it given the price it charges in comparison with the Spanish company [Seller]. It also has to be remarked that the claimants have not sued the Spanish company as principal creator of the forgery.

Consequently, considering all those elements together, it is proper to order [Buyer One] and [Buyer Two] in solidum to pay 21,000 € to the Foundation Le C...and to Mrs. J...-G... and Mrs. M...-B... for infringement of intellectual property rights and 30,000 € to Company C... for damage to its image and for its commercial damage.

The claimants not having sued the [Seller], the Spanish company which played an essential role in selling the counterfeit furniture, while [Buyer One and Buyer Two], who principally deal with eyeglasses, only exhibited this furniture, it seams inequitable to order the publication of the present decision. The claim to that effect is therefore rejected.

Concerning the impleader of the [Seller] by[Buyer One] and [Buyer Two] :

1) With regards to the jurisdiction of the Court of Versailles

On 7 February 2003, [Buyer One] called the [Seller] into the proceedings as guarantor and [Buyer Two] joined the impleader claim in its subsequent submissions. The [Seller] invokes the legal force of the judgment of the Commercial Court of Nantes [France] of 9 February 2000 which declared itself incompetent in favor of the court in Sevilla [Spain]. The action brought before that court by [Buyer One] aimed at the restitution of the price paid for the furniture in dispute. The incidental claim by [Buyer One] in the present instance aims at the guarantee for the orders pronounced against it concerning the reparation of the violation of intellectual property rights. The object of the disputes being different, the judgment of 9 February 2000 does not make this a case of "res judicata".

The [Seller] is of the view that [Buyer One], in violation of the EC Regulation 44/2001, only impleaded it before this court in order to avoid having to sue it as defendant before its home court. Nothing allows assuming such intent of the impleading party, which in fact thought the principal claim to be inseparable from the incidental claim.

Furthermore, the [Seller] believes that in international disputes Art. 333 New Code of Civil Procedure is inapplicable, which does not permit a third accountable participant to contest the jurisdiction of the seized court with regards to the principal claim by invoking a forum selection clause. This analysis is correct but it does not lead to the incompetence of this court, since no forum selection clause was identified by the [Seller].

Consequently, this court has jurisdiction over the impleader claim of [Buyer One and Buyer Two].

2) Concerning the merits of the impleader claim

The [Seller] invokes Art. 42 CISG to defend itself against the guarantee claim. According to this provision 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, unless at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim.

The CISG applies because, in accordance with its Art. 1, the contracts between [Seller]

and [Buyer One] and [Buyer Two] are contracts for the sale of goods between parties having their places of business in different States. From the documents provided by the [Seller], it is evident that [Buyer One] made the orders in perfect knowledge of the identity of the creators of the purchased furniture. It was already demonstrated that this company and [Buyer Two] consult with professionals in the field of interior decoration and could not have been unaware that the furniture bought from the [Seller] was counterfeit "Le C" furniture. Because of this knowledge of the buying companies at the moment of the contract conclusion, their guarantee claim is rejected.

Consequently, the subsequent claims are also rejected.

Concerning the claim for damages by the [Seller]

The impleader claim by [Buyer One] and [Buyer Two] cannot be considered as abusive since it is evident from the record that the [Seller] is the principal creator of the counterfeit furniture. The claim for damages for abusive procedure amounting to 20.000 € is rejected.

Concerning the summons of Storehouse R...

Maître C..., legal representative of the storehouse, will be notified that no claim for damages against Mr. R... exists.

Concerning provisional enforceability

Provisional enforceability shall be declared as having been requested by the Foundation Le C... , Mrs. M...-B... and Mrs, J...-G... as well as by Company C...since it is not incompatible with the nature of the case.

Concerning Art. 700 New Code of Civil Procedure:

Given that the claimants win this case, it would be inequitable to leave the unrecoverable fees at their charge. [Buyer One] and [Buyer Two] have to pay in solidum the amount of 2,000 € to Foundation Le C..., Mrs. M...-B... and Mrs. J...-G..., on the one hand, and the amount of 2,000 € to Company C..., on the other hand.

It seems equally equitable to order these two companies in solidum to pay the amount 300 € to Maître C... and the amount of 1,500 € to the [Seller] for unrecoverable fees, in addition to the full legal expenses including the fees of SCP N... R...-N... and SCP M..., who are attorneys entitled by law to recover their fees.

ON THESE GROUNDS:

The court, deliberating publicly, by way of judgment after oral hearing [13] and in first instance,

   -    Orders the removal from the procedure of the documents no. 7, 8, 12, 17 presented by [Buyer One] and [Buyer Two];
   -    Notifies Maître C... of the inexistence of any claims against Mr. R.;
   -    According to Art. L.111-1, L.112-1, L.112-2, L.113-2, L.335-2 and L.335-3 Code of Intellectual Property, declares that [Buyer One] and [Buyer Two] have committed acts of forgery.;
   -    Validates the search and seizure of forgery of 10 and 11 July 2001;
   -    Orders the confiscation of the seized furniture to be found in the rooms of Company Les Trois C... in Arcachon and its handing-over to Company C... for the purpose of destruction at the charge of [Buyer One] and [Buyer Two];
   -    Prohibits, as far as necessary, those two companies to exhibit counterfeit furniture of the types LC3, LC7, LC8;
   -    Orders [Buyer One] and [Buyer Two] to pay in solidum the sum of 21,000 € (twenty one thousand €) to Foundation Le C... , to Mrs. J...-G...and to Mrs. M...-B..., amounting to 7,000 € for each (seven thousand € each) and the amount of 30,000 € (thirty thousand €) to Company C...;
   -    Rejects the request for the publication of this decision;
   -    Rejects the guarantee claim against the [Seller] and the subsequent claims;
   -    Rejects the claim for damages of the [Seller] for abusive proceedings;
   -    Orders the provisional enforceability of this decision;
   -    Orders [Buyer One] and [Buyer Two] to pay in solidum the amount of 2,000 € (two thousand €) to Foundation Le C..., Mrs. M...-B... and Mrs. J...-G... and the amount of 2,000 € (two thousand €) to Company C..., the amount of 300 € (three hundred €) to Maître C and 1,500 € (one thousand five hundred €) to the [Seller] on the basis of Art. 700 New Code of Civil Procedure in addition to the full legal expenses.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Defendants Company Grandopt... France and Company Les Opticiens E... are referred to as [Buyer One] and [Buyer Two], respectively; and Company I.C. & Assoc... of Spain is referred to as [Seller].

** Nathalie Hofmann is a law student at Humboldt University Berlin studying at the University of Geneva in the "Certificat du droit transnational" program during the academic year 2007-2008. She participated as a member of the Geneva team in the 15th Willem C. Vis International Commercial Arbitration Moot.

1. "astreinte": French remedy developed by jurisprudence: The judge can impose a monetary penalty in case of non-compliance with an injunction or order for specific performance. This penalty is to be paid to the court, not the other party.

2. "in solidum": Latin term, similar to "joint and several liability"; in other words, where there are several debtors, each is liable in full payment or performance and the creditor may choose which he will sue.

3. French term: "frais irrépetibles" = legal fees not included in the court costs generally recoverable by the winning party, for example some attorney fees. The French judge has discretion to order the losing party to pay a certain amount to cover such fees according to Art. 700 of the French New Code of Civil Procedure.

4. French term: "juge de mise en état" = judge responsible for the procedure at a pre-trial, instruction phase.

5. For unrecoverable fees, cf. fn. 3.

6. French term: "assigner/appeler en garantie" = French procedural act by which a third party is called to automatically participate in legal proceedings because it might be liable towards the defendant in the proceedings. The American English common law term "implead" is similar.

7. French term: "appel en garantie", cf. fn. 6.

8. French term: "autonomie de la chose jugée" = doctrine of res judicata, i.e. a matter already judged is no longer subject to appeal or second proceedings.

9. Tribunal de Commerce de Nantes.

10. French term: "Ordonnance de clôture" = order that closes the phase of instruction of a case by the procedural judge ("juge de mise en état", cf. fn. 4).

11. Tribunal de Grande Instance.

12. cf. fn. 1.

13. Fench term: "jugement contradictoire": judgment rendered after an oral hearing in which both parties have been heard, as opposed to a default judgment where one party was absent or a trial by the record without oral hearing.

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