Assignment of a Trademark Without Written Form: The Court of Cassation Recalls the Rule of Formality

Imagine: you have been running a bakery in Oloron-Sainte-Marie for years. Your sign, "Le Pain Doré", is known to everyone. One day, you discover that a competitor has registered exactly the same name with the INPI (National Institute of Industrial Property). You cry infringement (unauthorised use of a protected sign). But he retorts that he bought the rights from your former partner, without any signed paper. Who is right?

This is exactly the type of dispute the Court of Cassation decided in 1988. A case that still resonates today for any owner of a trademark, sign or business name.

In its judgment of 20 December 1988 (No. 87-13.118), the high court recalled a simple but often ignored rule: to assign or grant a trademark licence (authorisation to use the mark), a written document is essential. No signed document? No transfer of rights. Even if the mark is well known (very famous). Analysis.

The facts: a story that happens every day

Mr Pierre X ran a bakery in rue du Cherche-Midi in Paris. He contributed his business assets to a company, then sold his shares. Later, his former bakery was taken over by Mr Max Y and his sister Madeleine. They registered the trademark "..." (the name of the sign) with the INPI. Mr X, claiming he was the true owner of this mark due to his prior use, sought cancellation of the registration.

To justify his claim, Mr X alleged a "transfer" of the mark to him. But he produced no written document: no assignment contract, no licence, not even a simple signed letter. He relied solely on the notoriety of his sign and on verbal agreements.

The Paris Court of Appeal rejected his claim. It found that, under Article 13 of the Law of 31 December 1964 (now codified in the Intellectual Property Code), the assignment or grant of a trademark licence must be evidenced in writing. Failing that, it is void. The Court of Cassation upheld this reasoning.

The twist? Mr X tried to rely on the well-known use of the mark to circumvent the formality. But the judges were inflexible: notoriety does not replace a written document. Without a signed document, no transferable rights exist.

The reasoning of the court — dissected

The judges relied on Article 13 of the Law of 31 December 1964. This text, still in force in its principles, provides that "the assignment or grant of a trademark licence must be evidenced in writing". Why such a requirement? Because intellectual property rights are valuable assets. Their transfer must be clear, certain and enforceable against third parties (i.e., valid against everyone). A written document helps avoid later disputes.

The Court of Cassation therefore held that the Court of Appeal had correctly applied this text. It noted that Mr X produced no written document establishing an assignment or licence. Consequently, he could not rely on a transfer in his favour. It did not matter that the mark was well known: formality prevails.

Note that the decision does not question the possibility of acquiring a mark through use (the famous "well-known mark" or "de facto mark"). Indeed, French law recognises that public and unequivocal use of a sign can, under certain conditions, create rights. But here, Mr X did not claim acquisition by use. He claimed to have received the mark by transfer. However, for a transfer to be valid, the law requires a written document.

The arguments of the parties? Mr X argued that the absence of a written document should not be an obstacle, because the mark was well known and the intention to transfer was clear. The defendants (the new owners) retorted that without a written document, no assignment was established, and that the registration with the INPI gave them ownership of the mark. The Court followed the latter reasoning.

What this means for you — concretely

This decision has major implications for trademark owners, traders and craftsmen. Here is what to remember depending on your situation.

If you own a trademark (or a sign): never rely on a verbal agreement to assign your rights. Even if you know the buyer well, insist on a written contract. Without it, the assignment is void. You could lose your rights, or conversely, be unable to prove that you acquired the mark. Example: in Billère, a baker assigned his business with his sign "Le Croissant d'Or" without a written document. The buyer then registered the mark. The former owner could do nothing to recover the exclusive use of the name.

If you are a tenant of commercial premises: check that the lease mentions the right to use the landlord's sign. Without a written clause, you may be prohibited from using it after the end of the lease. A concrete example: a restaurateur in Oloron-Sainte-Marie invested €15,000 in communication around a sign that the landlord had "lent" him verbally. Upon termination of the lease, the landlord registered the mark and prohibited him from using it. The restaurateur lost his investment.

If you are a buyer of a business: ensure that the assignment of the trademark is included in the sale deed. Otherwise, you will have no rights to the name. A buyer in Pau bought a bakery business without mentioning the mark in the deed. The former owner continued to use it in another town. The buyer had to change the sign, costing him €8,000 for new signs and advertising.

Time limits and procedure: if you face a dispute, you have 5 years from the registration of the mark to bring a nullity action (Article L. 716-2 of the Intellectual Property Code). After this period, the mark is deemed valid. The procedure can last 12 to 18 months at first instance, then 2 to 3 years on appeal. Legal fees range from €3,000 to €10,000 depending on complexity.

Four tips to avoid this type of dispute

• Have a written trademark assignment contract drawn up, signed and dated. Specify the exact name, classes of goods/services, effective date and price. Register it with the INPI to make it enforceable against third parties.
• If you use a sign without owning the rights, have a clause inserted in your commercial lease. This clause must expressly authorise the use of the sign and specify the conditions (duration, exclusivity, etc.).
• Before buying a business, check that the trademark is included in the deed. Ask your lawyer to consult the INPI register to see if the mark is registered in the seller's name.
• In case of a dispute, keep all evidence of use of the mark (invoices, advertisements, photos). Well-known use can be useful to challenge a fraudulent registration, but it does not replace a written document for an assignment.

Further reading: related case law and developments

This decision is part of a consistent line of the Court of Cassation. It has been confirmed several times. For example, in a judgment of 10 July 2007 (No. 06-15.894), the Court held that an unwritten assignment of a trademark is void, even if the mark has been used for a long time by the assignee. Similarly, the Court of Justice of the European Union (CJEU) has recalled that EU law requires formality for trademark assignments.

The trend is therefore towards strengthening formality. Courts are increasingly strict: no written document, no right. This protects legal certainty, but may seem rigid for small businesses that often operate on trust. A notable development: the Law of 11 March 2014 simplified some formalities for European Union trademarks, but in French law, the writing requirement remains firm.

For the future, it can be expected that judges will continue to require a written document for any transfer of a trademark. Professionals must therefore be particularly vigilant. In Oloron-Sainte-Marie as elsewhere, a simple verbal agreement will never suffice.

Key points to remember

FAQ:

1. Can I assign my trademark without a written contract? No, the law requires a written document. Without it, the assignment is void.

2. What if I have used a mark for years without a contract? You may be able to claim a right of use through notoriety, but that does not amount to an assignment. To be the owner, a written document is needed.

3. What are the time limits for challenging a trademark registration? You have 5 years from the registration to bring a nullity action. After that, the mark is deemed valid.

4. Can an email or SMS replace a written document? Yes, provided it is electronically signed and clearly identifies the parties and the mark. But a paper contract is best.

5. What if my former partner registered the mark without my consent? Consult a lawyer promptly. You may be able to seek cancellation of the registration if you prove prior use or a written transfer.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →