Future company directors often choose a trademark months before their company is officially incorporated and file the trademark, “on behalf of the company in the process of incorporation”. . However, many fail to regularize the identity of the trademark owner after registration, which can have significant legal consequences, particularly in the event of litigation before the courts or trademark property offices.
A recent example illustrates the risks associated with this type of omission. Eight months before its registration, in May 2023, a company specializing in the food sector registered the trademark ‘PROPULSE’ in the name of its director, with the mention “acting on behalf of company X in the process of being formed”. However, once the company was incorporated in January 2024, no steps were taken to transfer trademark ownership to the new entity.
A few months later, this company discovered that a competitor was marketing a range of drinks under the ‘PROPULSE’ brand name and brought an action for summary judgment for trademark infringement before the Lyon Court of First Instance (Tribunal Judiciaire de Lyon).
On October 1st, 2024, the Court declared the company inadmissible.
Why? Because the trademark had never been officially transferred to the company and remained owned by the company director, “acting on behalf of company X, which is in the process of being incorporated”.
Article L. 716-4-2 of the French Intellectual Property Code indeed states that “a civil action for infringement shall be brought by the owner of the trademark or by the licensee with the consent of the owner, unless otherwise stipulated in the contract”. In this case, the company is not the trademark owner and no license agreement had been concluded.
Fortunately, the company director was also a party to the action, which enabled her to seek injunctive relief and compensation. However, the damage she suffered was much less significant than that suffered by the company. This explains the small amount of compensation obtained, i.e. 1,000 euros, compared to the 10,000 euros initially claimed by the company.
In practice, as long as the words “acting on behalf of company X, which is in the process of being formed” appear in the INPI register, the trademark is considered to belong to the people who registered it. It is therefore not part of the company's assets, despite its potential economic value and its role in identifying the company.
To avoid these pitfalls, there are two essential steps to be taken when registering a trademark on behalf of a company in creation:
1/ Include in the company's articles of association the acts carried out on behalf of the company until its registration. It is important to include information about the trademark at issue (e.g. registration number, filing date) in the appendices to the articles of association.
2/ Carrying out the formalities for regularization before the INPI: as soon as the company is registered, a rectification entry should be made before the INPI, indicating the name and legal form of the new entity.
Our firm can help you with these procedures to secure your trademarks and regularize the associated information, thereby ensuring optimum protection for your intellectual assets.
Written by Camille LAURENT, Attorney at Law
