The meeting of intellectual property law and enforcement law, i.e. seizures, is surprising.
Article R. 241-1 3° of the Code of Civil Enforcement Procedures states that it is the Intellectual Property Code that sets out the rules for seizure of literary, artistic and industrial property rights.
However, the Intellectual Property Code does not provide much information:
- nothing on how to seize copyright (at least economic rights, moral rights being inalienable, they cannot be seized), except to provide for the conditions under which the author can obtain the payment of part of the sums resulting from the exploitation of the rights that would have been seized and the partial unseizability of these sums (Articles L. 333-1 to L. 333-4 of the Intellectual Property Code) ;
- barely a passing mention of the seizure of trademarks (in Article R. 714-4 of the Intellectual Property Code, to indicate that a seizure is an act that modifies ownership and that it can be registered with the IPI);
- two articles on the seizure of patents.
If this quasi-silence were not enough, the patent seizure procedure is reminiscent of a dinosaur that has escaped extinction!
The texts are indeed as follows:
- “The seizure of a patent shall be effected by an extrajudicial act served on the owner of the patent, on the National Institute of Industrial Property and on the persons having rights in the patent; it shall render unenforceable against the seizing creditor any subsequent modification of the rights attached to the patent.
- “On pain of the seizure being declared null and void, the seizing creditor must, within the prescribed time limit, appeal to the court for the validity of the seizure and for the purposes of putting the patent up for sale” (Article L. 613-21 of the Intellectual Property Code);
- “the time limit provided for in paragraph 2 of Article L. 613-21 is fifteen days from the date of notification of the seizure provided for in paragraph 1 of the said Article” (Article R. 613-51 of the Intellectual Property Code).
Contrary to the logic of enforcement law, the seizure of patents is therefore not conditional on the prior existence of a writ of execution benefiting the seizing party, i.e. typically a judgment ordering the patent holder to pay certain sums to the seizing party.
On the contrary, the seizure must be followed by a judicial validation procedure leading to the auction.
That is to say, it is possible to seize a patent out of hand, without any judicial authorisation as is the case for ordinary protective seizures, and then to bring an action before a court in order to obtain a judgment condemning the patentee, validating the seizure and organising the sale!
In reality, this is the same as the old seizure before the 1991 reform of the law of enforcement.
There is no justification for this survival, which is more likely the result of an oversight by the legislator.
The disadvantages of the old system are well known: it added litigation to litigation since, once a judgment of condemnation had been obtained (few people risking a garnishment out of hand), it was again necessary to obtain a judgment in order to carry out the seizures.
The 1991 reform therefore aimed to divert the enforcement of movable property by reserving the intervention of the judge to disputes over the regularity of the seizures made.
Is it the outdated nature of patent seizures that explains their rarity?
In any case, the Inpi has only registered 13 patent seizures on 32 titles since 2014, 2019 being an exceptional year, with 5 seizures on 14 titles:
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 (Jan-Sept) | |
| Number of patent entry requests registered | 3 | 2 | 0 | 0 | 3 | 5 |
| Number of titles covered | 4 | 5 | 0 | 0 | 9 | 14 |
Logically, procedures for validating seizures before the courts are even rarer since it is easy to imagine that a certain number of cases are settled and stop once the seizure has been made.
For those that continue before the courts, the few decisions found show that the archaic nature of patent seizures leads to a certain amount of uncertainty, both on the part of lawyers and judges.
In an expeditious judgment, the Tribunal de grande instance de Paris thus annulled a patent seizure, as the seizing party had failed to prove that it had been served with the conviction judgment it had previously obtained and that the patentee had been notified of the seizure following its execution at the Inpi (TGI Paris, 3rd Chamber, 1st Section, 27 March 2012, RG n° 11/12041).
But if these conditions have a meaning in matters of seizure and sale of intangible movables in the law resulting from the 1991 reform, they have none in matters of patent seizure.
The Court of Appeal overturned this judgment and validated the seizure, but only because the seizing party had finally proved that it had completed all these formalities and not because they were unnecessary, which they were (CA Paris, Pôle 5 Chambre 1, 25 November 2014, RG n° 14/00222).
In a 1997 judgment, the Bobigny District Court referred to an authorisation on request from the enforcement judge to carry out a patent protective seizure, while referring to the texts of the Intellectual Property Code (JEX Bobigny, 19 November 1997, PIBD 1998, 647, III, 72).
The Paris Tribunal de Grande Instance did the same in a 2010 judgment (TGI Paris, 3rd Chamber 4th Section, 6 May 2010, RG n°09/14876).
However, such an authorisation, which the 1991 reform introduced in the context of protective measures, i.e. before obtaining an enforcement order, had no place in the former garnishment and therefore in the patent seizure as it survives today.
It is therefore just as unnecessary as the service of the judgment of conviction that would have been obtained.
But one may think that the lawyer who requested it wanted to reassure himself by following the well-trodden paths that have been known since the 1991 reform nearly 30 years ago.
However, he then runs the risk of having the procedure declared null and void, because the system of authorisation before the enforcement judge has nothing to do with the system of patent seizure, particularly in terms of procedure.
In the first case, the creditor has one month from the date of the seizure to summon his debtor (Articles L. 511-4 and R. 511-7 of the Code of Civil Enforcement Procedures).
This is only fifteen days in the case of patent attachment.
The survival of garnishment through patent seizure therefore appears to be a source of confusion for the practitioner, in particular one specialising in intellectual property.
The latter is not necessarily aware of engaging in a procedure whose logic is foreign to what has prevailed in the field of enforcement for nearly thirty years now and his possible reflexes may turn into a trap for him.
Above all, an examination of the proceedings brought before the courts shows the time lost between the seizure of the patent and its validation:
from ten months (TGI Paris, 3rd Chamber 2nd Section, 2 October 2009, RG n°08/17860);
to more than five years (TGI Paris, 3rd Chamber 1st Section, 11 May 2005, RG n°03/15662);
through more than three and a half years, after an appeal (TGI Paris, 3rd Chamber 1st Section, 5 February 2008, RG n°06/06836; CA Paris, Pôle 5 Chamber 2, 25 September 2009, RG n°2008/09737);
However, this is only during the judicial phase.
This is because validation by the court only allows the actual sale to be initiated.
This will itself take several months to complete, notably due to the need to draw up specifications and to proceed with advertising.
This lost time (and money…) has immediate consequences on the realisable value of the seized patent, given that the total life of a patent is twenty years.
The validation procedure can therefore reduce it by up to a quarter.
This lost time can even render the seizure totally ineffective if the patent falls into the public domain while the validation procedure is still in progress…
The development of patents is now a theme of interest to the public authorities, in particular through the France Brevets investment fund.
It would therefore be opportune, 28 years after the 1991 reform, to dust off their seizure, in order to bring it into line with the current logic of the law of execution in movable property: diversion but also protection of the debtor.
For in addition to harming the creditor by the time it needlessly wastes, the procedure as it exists today does not even provide for the seized patentee to be able to propose the amicable sale of the patent to a third party whom he would present, which is less uncertain than an auction as regards its outcome.
If the amicable sale is of course always possible with the agreement of the creditor, within the framework of a transaction on execution, the seized patentee is today subject to the goodwill of his creditor and cannot even plead abuse of rights in the event of refusal of the proposal as is possible in the current regime of seizure and sale.
However, the practice of seizures shows that the parties are not always motivated by the best intentions towards each other.
From whatever angle one looks at it, a reform of patent seizure is therefore necessary.
I would like to thank the services of the Inpi for providing me with the statistics on patent seizures registered with them.
Charles Simon
Avocat (Paris Bar)
The opinions expressed in this article are those of the authors and do not reflect the position of the Institute.