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Unauthorized use of the mark DIVX: 350,000 euros in damages

American society DIVX filed June 20, 2003 the French word mark "DIVX" in the relevant classes, in particular, to apparatus for recording, transmission or retransmission of sound or images or software.

The company has developed a codec (used to compress video files and unzip them to allow reading a CD or DVD) with its own technology: the famous DivX. Consequently, a DVD encoded with DIVX codec to be used in a DVD player with DIVX decoder.

The company DivX has established a licensing system: only the licensees are authorized, subject to finance, equip their readers with the DIVX codec and affix the label DIVX.

In May 2006, it is seen by a bailiff and the APA that the company AKAI, distributed in France by DEMS, offers DVD players, home cinema and Hi-FI but not including the codec by including DIVX logo. She decides to take legal action against the manufacturer and its French distributor in the field of counterfeiting.

At trial, the company DIVX is successful and is awarded, as a reserve, 200,000 euros in damages. Corporations convicted decided to appeal.

Before the Court of Appeal sentenced the companies are trying to find that the mark "DIVX" was even before June 20, 2003, the date of filing the trademark, the generic and common name of any compression format / decompression of video files and, by extension, to any medium or reading materials compatible with this format .

Judges are in Paris, on the contrary that:

"The codec company DivX, a pioneer in the field of compression / decompression video files, was very well-established in 2003, (then) that was found on the market, however, by that date, codecs marketed by competing companies such as Real Networks, Microsoft, Apple and meeting different names such as MPEG-2, REAL , QUICK TIME;
(...)
that the term was always DIVX products from the eponymous company, or the codec in particular is generally all products from the technology of compression / decompression video files up to developed by this company, and in no case, as was just up the court, was the term used to refer to DIVX the products of competing companies;

(...) the sign was not contested at the time of trademarking the name necessary, generic or usual products covered by the registration and he was able, by Consequently, to maintain the function of indicating origin of the mark by allowing consumers to distinguish products from the company DIVX or similar products distributed by companies competing "

Because they could demonstrate that the term DIVX had, from its origin, a wildcard, the appellant companies have tried to demonstrate that term has lost its distinctive character through use. The Court of Appeal in Paris rejected the argument. It notes, however that:

"at the end of the analysis that the court has delivered all the documents in the debates, particularly extracts from the press or general economic and websites specializing in high technology, as the court aptly chosen by accurate and sufficient grounds that the court adopts the corporate appellants, nor have they been able to do at the time of filing to demonstrate that the sign DIVX is now, after the filing of the mark, designation in the current language of the codec and its associated products "

On the merits, the judges felt that the company and its distributor AKAI have committed acts of counterfeiting

" sign is DIVX, in the Here, placed on devices that implement AKAI technology compression / decompression video files different from the one developed by the company DIVX and, in particular, these devices are not equipped with the DivX codec, it is otherwise established as follows from the foregoing, the term DivX is not the necessary, generic or common codec that, consequently, the corporate appellants are not entitled to based constraints DIVX affixing the sign on their products as a necessary reference for the public that its products are able to read formats encoded with the DIVX software so that, finally, they all show that what they have taken steps to prevent confusion in the minds of the public who would be inclined to believe that its products are implementing technology DIVX.

In the end, both companies are sentenced to pay the company 350,000 euros DivX in damages and 50,000 euros under section 700 CPC.

Source: CA Paris, 01.12.2011, SAS Demsa, Akai Sales Pte Ltd c / DIVX Inc. Company. (Unpublished)

Author: Benoit Tabaka - http://tabaka.blogspot.com