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The seizure of partners' rights and securities is often highlighted in enforcement law. It deserves particular attention. But other intangible assets can also be seized by a creditor with an enforcement order.
These "other intangible rights" constitute a vast and complex universe. They have gained major importance in our economy but remain little known. For more information, visit understand the legal definition and the essential distinctions with other types of seizureHowever, the Code of Civil Enforcement Procedures (CPCE) devotes a specific article to them, article R. 231-1.
A residual but essential category
Other intangible rights" are defined by exclusion. These are all intangible assets that are not shareholder rights, securities or receivables. They must have economic value and be transferable.
These rights sometimes represent strategic assets for their holders. A patent, a trademark or a domain name can form the core of a company's business.
Technological developments have multiplied these rights. Traditional intellectual property is now being joined by new digital assets such as cryptocurrencies and virtual goods. This expansion of attachable assets is a good illustration of how the history and development of enforcement law have made it possible to extend seizure to a multitude of intangible rights.
Intellectual property rights
Copyright
There are two aspects to copyright:
- Moral attributes (elusive)
- Attributes of a proprietary nature (seizable)
The seizure may only relate to the exploitation right, provided that the work has been disclosed. If the artist has entrusted the management of his rights to a third party, the seizure must be served on that party.
Proceeds generated by the exploitation of works benefit from a protective regime. They may be partially exempt from seizure if they are used for food.
Patents
Patents are subject to a special procedure described in article L. 613-21 of the French Intellectual Property Code. The writ of seizure must be served simultaneously on the owner of the patent, the Institut national de la propriété industrielle (INPI) and the persons with rights in the patent.
An important feature is that the seizing creditor must, within a period of fifteen days, apply to the court to validate the seizure. This procedure is similar to the old garnishment procedure.
Brands
The seizure of trademarks does not benefit from a specific regime. It is therefore governed by the ordinary law governing the seizure of intangible rights. The document is served on the INPI and then notified to the debtor.
After the seizure, the creditor has one month in which to proceed with an amicable sale. If he fails to do so, he may proceed with a forced sale by auction.
Operating licences
Licensing of public houses
These licences, particularly IV licences, can fetch significant sums (up to €50,000 in major cities). As the creation of new licences is generally prohibited, their value remains high.
The Court of Cassation confirmed their seizability in an opinion dated 8 February 1999. The seizure deed must be served on the mayor of the place where the business is run or, in the case of Paris, on the Prefect of Police.
Parking permits for taxis
Commonly referred to as "taxi licences", these permits can be worth between €30,000 and €300,000 depending on where they are held. Please note, however, that only licences issued before 1 October 2014 can be seized, as new licences are non-transferable.
For these licences, the document is also served on the competent administrative authority.
The special case of ministerial offices
Ministerial offices (notaries, court commissioners, etc.) are a special case. Although in theory they can be seized as intangible rights, in practice they cannot be seized.
The Court of Cassation explained this paradox in a ruling dated 4 November 2003: the requirement for prior approval of the transferee by the Minister of Justice is incompatible with a forced sale on seizure.
Only the price of a voluntary transfer can be subject to seizure and sale, once ministerial approval has been obtained.
Domain names and digital assets
Domain names
A domain name is a unique Internet address that can have significant economic value. To register a domain name, the document must be served either on the registrar or directly on the Association française pour le nommage internet en coopération (AFNIC) for French domains.
The terms and conditions of the sale must include evaluation elements such as traffic statistics or the length of time the name has been in existence.
Cryptoactives
In theory, non-fungible cryptocurrencies and tokens (NFTs) can be seized. In practice, there are major obstacles to their seizure:
- Difficulty in locating these assets
- No centralising third party
- Need for a cryptographic key
To overcome these problems, the court commissioner can ask the enforcement judge to order the delivery of the cryptographic key under penalty. These challenges, at both national and international level, call for compare national and international approaches to the capture of new digital assets (cryptoassets, NFT).
Virtual goods
These digital objects only exist in video games or metaverses. Although their legal status is debated, they are the subject of transactions with real value.
To seize them, the deed must be served on the publisher of the game or metaverse. The publisher must then collaborate to provide the necessary information and facilitate the transfer of the virtual asset.
There is one major obstacle: the publisher must have a registered office or branch in France for the procedure to apply.
A procedure that can be adapted to suit the law concerned
The seizure of "other intangible rights" is based on a simple principle: apply the rules for the seizure of shareholders' rights and securities "insofar as their specific nature does not prevent this".
In practical terms, to understand the key procedural stages, consult the general instructions for entering intangible rights which also applies to these more specific rights, comprises three main stages:
- Service of the attachment order on the third party who centralises the information
- Notification of seizure to the debtor
- Amicable or forced sale depending on the case
The adaptations mainly concern the third party to whom the deed is addressed and the conditions of sale.
A practice faced with contemporary challenges
There are a number of obstacles to seizing "other intangible rights":
- Legal uncertainties regarding the transferability of certain rights
- Traditional rules not adapted to new digital assets
- Technical limitations for certain intangible assets
These difficulties explain why this procedure is still little used by practitioners. However, with the evolution of assets towards more intangible assets, its development is necessary.
Legislative intervention would be welcome to clarify the rules governing these specific seizures. In the meantime, it is up to the court commissioners and enforcement judges to adapt the existing rules. For expert legal advice on the seizure of company shares and other complex intangible rights, our lawyers are here to defend your interests.
Sources
- Code of Civil Enforcement Procedures, article R. 231-1
- Intellectual Property Code, articles L. 613-21, L. 622-7, R. 714-4
- Opinion of the Court of Cassation of 8 February 1999, No. 98-00.015
- Court of Cassation ruling of 4 November 2003, no. 99-13.965
- Répertoire de procédure civile, "Saisie des droits incorporels" by Rudy Laher, Dalloz, July 2023
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