Sometimes it’s not easy to decide which tribunal to bring an action when a party breach contract related to industrial property rights. At least in France, it seems to be.
However, a recent decision by the “court de cassation” made it clear that the business court, aka “Tribunal de commerce” is not the right venue to dispute a patent license matter. But the reason for the original change of venue to a commercial court request and the subsequent argument which led to this decision is quite interesting.
Here is what happened:
- A is a GIE (Economic Interest Group).
- A grants B the right to sell genetically modified animals using a patented technique.
- B agrees to pay A an advance on the fees paid by third-party buyers.
- A does not receive the expected royalties from B.
- A assigns for payment B before the “Tribunal de Grande Instance de Lyon”.
- B opposes the incompetence of this court in favour of the “Business Court of Lyon”.
- The Pre-Trial Judge of the Lyon Tribunal de Grande Instance dismissed this objection of incompetence.
- The Lyon Court of Appeal confirms the order.
Nothing unusual so far, except what B claimed for requesting the tribunal change. B argued that the GIE carried on a rental business of movable property, the patent license contracts being rental contracts of intangible furniture.
The French “court de cassation” rejected the request by declaring that : If the patent license is a rental contract whose object is an invention, the conclusion of this type of contract by a GIE owning a patent. That the GIE itself has filed does not constitute a furniture rental business within the meaning of article L. 110-1 4 ° of the commercial code.
So here you go, licensing patent is not a furniture rental business.
April 16, 2020