Consequences Of The PACTE Act On IP Litigation In France
The Background: The Action Plan for the Growth and Transformation of Enterprises Act ("PACTE"), adopted on April 11, 2019, and promulgated on May 23, 2019, amends the statute of limitations applicable to industrial property rights litigation to the benefit of rights holders.
The Result: The new wording of the limitation period for infringement actions will prevent the limitation period from starting to run when the claimant is unaware of the infringement and seems to allow compensation to be obtained over the entire duration of the infringement. The reform also provides that the invalidity action of the various industrial property rights is not subject to any limitation period.
The new PACTE Act significantly modifies the French statute of limitations applicable to industrial property rights infringement actions, to the benefit of claimants, and corrects a French "oddity" regarding the limitation period for industrial property rights invalidity actions.
Modification of the limitation period for infringement actions
Article 121 of the PACTE Act amends the statute of limitations for industrial property rights infringement actions by providing that "civil proceedings for infringement shall be barred after five years from the day on which the holder of a right knew, or should have known, the last fact enabling him to exercise it."
The limitation period is not modified (Act No. 2014-315 of 11 March 2014 increased the limitation period from three to five years), but the starting point and the limitation mechanism are modified; it should be recalled that the previous text made the limitation period run "from the facts that caused it."
The reform has two consequences that will certainly have to be interpreted by case law.
The first consequence of the reform is to avoid the limitation period for infringement proceedings initiated more than five years after the acts of infringement when the plaintiff was not aware of the existence of these acts of infringement and could not be aware of them. This is often the case in patent infringement actions concerning a product or process used in the secrecy of a factory, or when the infringement is of a small extent or carried out in circles or places that the rights holder cannot monitor.
Indeed, with the new text, the limitation period does not begin to run until the rights holder knows, or should have known, of the existence of the infringement.
The second consequence seems to be that an action...
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