THE COURT OF CASSATION, COMMERCIAL CHAMBER.
LexInter | November 16, 2002 | 0 Comments

THE COURT OF CASSATION, COMMERCIAL CHAMBER.

On the appeal brought by: 1 ° / the company Impax’s Diffusion, a limited liability company, whose registered office is 105, rue Jules Guesde, 92300 Levallois-Perret, 2 ° / Mlle V, coming to the rights of the company Art Medic, residing in Courbevoie, in cassation of a judgment rendered on January 29, 1998 by the Versailles Court of Appeal (12th chamber, 1st section), in favor of the company Collagen, a public limited company, whose registered office is 109/113, rue Victor Hugo, 92300 Levallois-Perret, defendant at the cassation;

The plaintiffs invoke, in support of their appeal, the four grounds of cassation annexed to this judgment;

Resources produced by SCP Boré, Xavier and Boré, lawyer advising for Impax’s Diffusion and Mlle V.

FIRST MEANS OF TERMINATION

The judgment under appeal is criticized for having condemned in solidum Mademoiselle Valérie V, coming to the rights of the Company ART MEDIC, and the Company IMPAX’S DIFFUSION, to pay to the Company COLLAGEN the sum of 500,000 Francs as damages. ,

FOR THE REASONS THAT the risk of confusion likely to exist in the mind of the public, between the product ARTEPLAST and the product ZYPLAST marketed by the Company COLLAGEN, both because of the identity of the PLAST root as a result of the similarity of composition based on collagen and the identity of properties with regard to the attenuation of wrinkles; that it follows that the marketing and advertising relating to the ARTEPLAST and ARTECOLL products, carried out under the conditions set out above, constitute faulty facts, characterizing unfair competition, committed together by the Company ART MEDIC and IMPAX’S DIFFUSION, to with regard to the COLLAGEN Company which, for its part, has submitted to the regulations in force, at least since 1987;

1) ALORS THAN the confusion founding unfair competition assumes the use or imitation of a distinctive sign characterizing a product and ensuring its notoriety with a consumer ‘moderately attentive’; whereas thus no risk of confusion exists when the name of the product is a name of scientific origin, known only to specialists in the field; that considering that a risk of confusion existed for the average consumer between the terms ‘ZYPLAST’ and ‘ARTEPLAST’, scientific terms, meaningful only for medical biologists or dermatologists, the Court of Appeal violated Articles 85 and 86 of the Treaty of Rome, as well as article 1382 of the Civil Code.

2) ALORS THAN the likelihood of confusion, founding unfair competition, is not characterized when the products in question are intended for medical specialists who can not ignore the properties of the disputed products; that in this case both the ‘ZYDERM – ZYPLAST’ that ‘the ARTECOLL – ARTEPLAST’ were intended for medical specialists; that considering that acts of unfair competition could have been perpetrated in connection with these products affecting a specialized and informed clientele, the Court of Appeal violated articles 85 and 86 of the Treaty of Rome and article 1382 of the Civil Code ;

3) WHILE, in any event, if confusion existed between the terms ‘ZYPLAST’ and ‘ARTEPLAST’ because of the suffix ‘plast’, the confusion was not characterized between ‘ZYPLAST’ and ‘ARTECOLL’, other disputed product; that by granting the right to the action for unfair competition brought by the Company COLLAGEN for all the products marketed by ART MEDIC, without distinguishing between ARTEPLAST and ARTECOLL, the Court of Appeal did not draw the consequences of its own findings, with regard to Articles 85 and 86 of the Treaty of Rome, as well as Article 1382 of the Civil Code;

4) ALORS THAN the confusion founding unfair competition is constituted by the imitation of products or distinctive signs; that thus confusion is not characterized by the sole fact that two products are composed of common substances or when the products have the same effect; that the identity of effect in the case of separate products is the very basis of competition; that by granting the right to the action for unfair competition brought by the Company COLLAGEN, reason taken from the fact that the products marketed by ART MEDIC would be composed of collagen and that their properties would be identical to those of the products marketed by the COLLAGEN Company, the Court of Appeal violated Articles 85 and 86 of the Treaty of Rome and Article 1382 of the Civil Code.

SECOND MEANS OF TERMINATION

The judgment under appeal is criticized for having ordered in solidum Mademoiselle Valérie V, coming to the rights of the Company ART MEDIC, and the Company IMPAX’S DIFFUSION, to pay to the Company COLLAGEN the sum of 500,000 Francs as damages. ,

1) ALORS THAN parasitism, founding unfair competition, can not be constituted that with regard to a product which carries a distinctive sign and which is known to the consumer moderately warned; that parasitism is not characterized when products intended for medical specialists and unknown to the general public are involved, and whose name is also scientific; whereas considering that ‘ZYPLAST’ could be the subject of unfair competition, based on parasitism, by the sole fact of an identity of suffix between ‘ZYPLAST’ and ‘ARTEPLAST’, products reserved only for doctors and unknown to the average consumer, the Court of Appeal violated Articles 85 and 86 of the Treaty of Rome and Article 1382 of the Civil Code,

2) ALORS THAN parasitism constitutive of unfair competition supposes acts by which an economic operator usurps or uses without right the notoriety of a competitor; that by limiting themselves to stating that the exhibiting companies had engaged in acts of parasitism, without noting how the use of the name ‘ARTECOLL’ or ‘ARTEPLAST’ had led the exhibitors to usurp the reputation of the COLLAGEN Company, the Court of Appeal deprived its decision of legal basis with regard to articles 85 and 86 of the Treaty of Rome, and article 1382 of the Civil Code.

3) ALORS THAN parasitism is not characterized when the product in question is more expensive than that marketed previously; that in their conclusions of appeal the exhibitors argued that the ARTECOLL was twice as expensive as ZYDERM and ZYPLAST; that by refraining from responding to this plea, the Court of Appeal violated article 455 of the New Code of Civil Procedure.

THIRD MEANS OF TERMINATION

The judgment under appeal is criticized for having condemned in solidum Mademoiselle Valérie V, coming to the rights of the Company ART MEDIC, and the Company IMPAX’S DIFFUSION to pay to the Company COLLAGEN the sum of 500,000 Francs as damages;

ON THE REASONS THAT the Company ART MEDIC and the Company IMPAX’S DIFFUSION have placed on the French market, marketed and advertised ARTEPLAST and ARTECOLL products having the nature of medicinal products, without having received the authorization or the visa of the competent administrative authorities, thus engaging in such an activity under irregular conditions with regard to the regulations in force, it does not matter, in this regard, that it was issued, subsequent to the facts in question, on September 24, 1996, by the Dutch administrative authority , a ‘CE conformity marking certificate for medical devices’ for products called ‘collagen and PMMA-based surgical implants’ when the document presented to the Court concerns a ROFIL MEDICAL INTERNATIONAL company, not involved in the dispute, and refers to the implementation by the manufacturer of an assessment procedure in accordance with a Community directive, a procedure which has not been demonstrated to be implemented for the products in dispute;

1) ALORS THAN free competition is a principle of economic public order founding the market within the European Union; that action in unfair competition, which constitutes an exception to the principle of free competition, can only succeed on proof of a fault committed by an economic operator to the detriment of another operator and supposing an infringement of the normal game of competition; that thus the mere fact for a company not to have yet obtained the authorization to market a product constitutes only an administrative irregularity; and not a maneuver directed against other operators, and undermining competition; whereas considering that the fact for the companies ART MEDIC and IMPAX’S DIFFUSION of

2) WHILE refraining, in any event from noting how the failure to obtain administrative authorization had distorted the game of competition to the detriment of the COLLAGEN Company, the Court of Appeal deprived its decision of legal basis with regard to articles 85 and 86 of the Treaty of Rome and article 1382 of the Civil Code;

3) ALORS THAN in conclusions appeal, the exhibitors argued that ‘the ARTECOLL’ had been reclassified in medical device and that its marketing no longer required a marketing authorization; that by refraining from responding to this plea, the Court of Appeal violated article 455 of the New Code of Civil Procedure.

FOURTH MEANS OF TERMINATION (SUBSIDIARY)

The judgment under appeal is criticized for having condemned in solidum Mademoiselle Valérie V, coming to the rights of the Company ART MEDIC, and the Company IMPAX’S DIFFUSION, to pay to the Company COLLAGEN the sum of 500,000 Francs as damages. ,

ON THE OWN REASONS THAT THE COLLAGEN Company does not provide any new element of assessment likely to modify the assessment made by the court of its damage resulting from the actions of unfair competition of the companies ART MEDIC and IMPAX’S DIFFUSION, as it can be estimated at having regard to the documents drawn up by its auditor; that it should be noted that the ARTEPLAST-ARTECOLL products were marketed from June 1993, as, moreover, indicated by the auditor of the respondent in his letter of April 28, 1994, and that note, dated April 6, 1993, from the director of the company COLLAGEN FRANCE already reported a significant drop in turnover from the first months of 1993, indicating the reasons;

ON THE REASONS ADOPTED BY THE FIRST JUDGES THAT the report of the Auditor Mr. HARMAN shows over the last six months of the year and for an annual turnover of around 20 million francs, a drop in sales of the ZYPLAST of 510,687 Francs (7%) whereas previously this figure increased; that globally it indicates on the annual budget a negative difference of 1.9 million francs including 1.5 million attributable to the ZYPLAST budget, that however at the same time it appears that the Company ART MEDIC has suspended its sales and its advertising actions, since January 1994 ;

1) ALORS THAN repair damage can not be granted that if a causal link exists between the alleged fault and the alleged damage; that the company COLLAGEN invokes for damage, in causal relation with the alleged unfair competition reproached to the exhibitors, a fall of its turnover; that the Court of Appeal notes that the company COLLAGEN reported a significant drop in turnover from the first months of 1993 (judgment page 12 in fine); that the Court of Appeal notes moreover that the ARTECOLL-ARTEPLAST products were marketed from June 1993 (judgment page 12) by declaring that a causal link existed between the alleged fault of the exhibitors and the drop in the figure of ‘business of the COLLAGEN Company, the Court of Appeal n’

2) WHEREAS in their conclusions of appeal the exhibitors argued that, from before 1993, and therefore before any marketing of ARTECOLL, the Company COLLAGEN had experienced financial difficulties evidenced by a significant drop in turnover and which had led her to dismiss her; that thus the marketing of ARTECOLL had no impact on the fall in the turnover of COLLAGEN; that by refraining from responding to this plea, the Court of Appeal violated article 455 of the new Code of Civil Procedure.

3) WHILE in their conclusions of appeal, the exhibitors argued that having regard to the number of products sold by the Company ART MEDIC, given the price of these products, the Company COLLAGEN could only have suffered damage amounting, at most, to the loss of 185,625 Francs; that by refraining from responding to this plea, the Court of Appeal violated article 455 of the new Code of Civil Procedure.

THE COURT, in the public hearing of February 23, 2000, where were present: Mr. Dumas, president, Mrs. Champalaune, referendum adviser rapporteur, MM. Leclercq, Métivet, Ms Garnier, Collomp, advisers, Mr Huglo, Ms Mouillard, Mr Boinot, Ms Gueguen, referendum advisers, Mr Feuillard, advocate general, Ms Moratille, chamber clerk;

Expected, according to the judgment under appeal, that the company Collagen markets injectable anti-wrinkle implants based on collagen under the names of Zyderm and Zyplast; that considering itself victim of acts of unfair competition on the part of the companies Impax’s Diffusion and Art Medic, which diffuse competing products under the name of Arteplast and Artecoll, it assigned them in compensation of its damage;

On the first plea, taken in its four branches:

Whereas the company Impax’s Diffusion and Miss V, coming to the rights of the company Art Medic, reproach the judgment for having condemned them in solidum to pay the company Collagen the sum of 500,000 francs as damages, then , according to the appeal, on the one hand, that the confusion founding unfair competition presupposes the use or imitation of a distinctive sign characterizing a product and ensuring its reputation among a moderately attentive consumer; whereas no risk of confusion exists when the name of the product is a name of scientific origin known only to specialists in the field; whereas considering that a risk of confusion existed for the average consumer between the terms Zyplast and Arteplast, scientific terms, meaningful only for medical biologists or dermatologists, the court of appeal violated articles 85 and 86 of the Treaty of Rome, as well as article 1382 of the Civil Code; then, on the other hand, that the likelihood of confusion, founding unfair competition, is not characterized when the products in question are intended for medical specialists who cannot ignore the properties of the products in dispute; whereas in this case both Zyderm-Zyplast and Artecoll-Arteplast were intended for medical specialists; whereas by considering that acts of unfair competition could have been perpetrated in relation to these products affecting a specialized and informed clientele, the court of appeal violated articles 85 and 86 of the Treaty of Rome and article 1382 of the Civil Code; then, moreover, that in any event, if confusion existed between the terms Zyplast and Arteplast due to the suffix plast, there was no marked confusion between Zyplast and Artecoll ‘, another product at issue; that by allowing the action for unfair competition brought by the company Collagen for all the products marketed by Art Medic, without distinguishing between Arteplast and Artecoll, the court of appeal did not draw the consequences of its own findings, with regard to the Articles 85 and 86 of the Treaty of Rome, as well as Article 1382 of the Civil Code; and, then, finally, that the confusion founding unfair competition is constituted by the imitation of products or distinctive signs; whereas confusion is not characterized by the sole fact that two products are composed of common substances or when the products have the same effect; that the identity of effect, in the case of distinct products, is the very basis of competition;

But given that having noted the identity of the plast root in the name of the products Arteplast and Zyplast, the similarity of their composition based on collagen and the identity of their properties with regard to the attenuation of wrinkles, the court of appeal, has, by a sovereign assessment of the facts, characterized the risk of confusion likely to exist in the mind of the public, between these products; that the means, which lack in fact in its third branch, is not founded in its three other branches;

On the second plea, taken in its three branches:

Whereas the company Impax’s Diffusion and Mlle V still make the same criticism of the judgment, then, according to the appeal, that, on the one hand, parasitism, which is the basis of unfair competition, can only be established with regard to a product which bears a distinctive sign and which is well known to moderately informed consumers; whereas parasitism is not characterized when the cause is products intended for medical specialists, and unknown to the general public, and whose name is also scientific; whereas considering that Zyplast could be the subject of unfair competition, based on parasitism, by the sole fact of an identity of suffix between Zyplast and Arteplast, products reserved only for doctors and unknown to the average consumer, the Court of Appeal violated Articles 85 and 86 of the Treaty of Rome and Article 1382 of the Civil Code; and then, on the other hand, that the parasitism constituting unfair competition supposes the acts by which an economic operator usurps or uses without right the notoriety of a competitor; that by merely stating that the plaintiff companies had engaged in acts of parasitism, without noting how the use of the name Artecoll or Arteplast had led the plaintiffs to usurp the notoriety of the company Collagen, the court of appeal deprived its legal basis decision with regard to articles 85 and 86 of the Treaty of Rome, and article 1382 of the Civil Code; and then, finally, that parasitism is not characterized when the product in question is more expensive than that marketed previously; than, in their conclusions of appeal, the plaintiffs argued that Artecoll was twice as expensive as Zyderm and Zyplast; that by failing to respond to this plea, the Court of Appeal violated Article 455 of the new Code of Civil Procedure;

But whereas the judgment not having retained faults of parasitism, the means which is without object, is inadmissible;

On the third plea, taken in its three branches:

Whereas the company Impax’s Diffusion and Mlle V still make the same criticism of the judgment, then, according to the appeal, on the one hand, free competition is a principle of economic public order which is the founder of the market within the European Union ; that action in unfair competition, which constitutes an exception to the principle of free competition, can only prosper on proof of a fault committed by an economic operator to the detriment of another operator and supposing an interference with the normal game of competition; that the mere fact that a company has not yet obtained the marketing authorization for a product constitutes only an administrative irregularity and not a maneuver directed against other operators, and undermining competition; that by considering that the fact that the companies Art Medic and Impax’s Diffusion had marketed the products in dispute without marketing authorization constituted an act of unfair competition, the Court of Appeal violated Articles 85 and 86 of the Treaty of Rome and article 1382 of the Civil Code; and then, on the other hand, that by refraining, in any event from noting how the failure to obtain administrative authorization had distorted the game of competition to the detriment of the Collagen company, the Court of Appeal deprived its decision of legal basis with regard to Articles 85 and 86 of the Treaty of Rome and Article 1382 of the Civil Code; and then, finally, that, in its conclusions of appeal, the plaintiffs argued that ‘the Artecoll’ had been reclassified as a medical device and that its marketing no longer required a marketing authorization; that by refraining from responding to this means, the Court of Appeal violated Article 455 of the new Code of Civil Procedure;

But given that having noted that the company Impax’s Diffusion had cs, from which it can be deduced from the judgment that the company Impax’s Diffusion would not have been able, without these wrongdoing, to reduce the chances of the company Collagen, which, for its part, submitted to the regulations, to sell in larger quantities its own products, which had the same indications as those put irregularly and unfairly on the market by the company Impax’s Diffusion, the court of appeal, responding to the allegedly omitted conclusions, was able to rule as it did and legally justified its decision;

But on the first part of the fourth plea:

Having regard to article 1382 of the Civil Code;

Whereas, to pronounce the condemnation of the companies Impax’s Diffusion and Miss V with damages, the judgment retains that the fall in turnover of the company Collagen is consecutive to the acts of unfair competition of the latter;

Whereas by attributing the entire drop in sales of the Collagen company relating to the Arteplast product to the sole unfair competition of the company Impax’s Diffusion and Miss V, after noting that the drop in turnover alleged by the company collagen had intervened from the first months of 1993 and that the launching of the litigious products by the companies implicated dated from the month of June 1993, the court of appeal did not legally justified its decision with regard to the aforementioned text;

FOR THESE REASONS, and without it being necessary to rule on the other branches of the fourth plea:

BREAK AND CANCELED, but only in that it condemned the company Impax’s Diffusion and Mlle V in solidum to damages, the judgment delivered on January 29, 1998, between the parties, by the Court of Appeal of Versailles; puts, consequently, as for this, the cause and the parts in the state where they were before the aforementioned judgment and, to be done right, returns them before the court of appeal of Paris;

Orders the collagen company to pay the costs;

Said that on the diligence of the Attorney General near the Court of Cassation, this judgment will be transmitted to be transcribed in the margin or following the partially overturned judgment.

On the report of Ms. Champalaune, referendum advisor, the observations of SCP Boré, Xavier and Boré, lawyer for the company Impax’s Diffusion and Miss V, coming to the rights of the company Art Medic, of Me Choucroy, lawyer for the company Collagen , the conclusions of Mr. Feuillard, Advocate General, and after having deliberated in accordance with the law; M. DUMAS, President.

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