Commentary on French Supreme Court, Commercial Chamber, 7 January 2026, No. 24-18.085
In a decision dated 7 January 2026 and published in the Bulletin, the Commercial Chamber of the French Supreme Court provides an important clarification regarding the characterisation of disparagement as an act of unfair competition. The Court firmly reiterates that disparaging statements may give rise to liability under Article 1240 of the French Civil Code only if they have been made public, internal circulation of critical statements being insufficient to constitute a fault.
The full decision of the French Supreme Court is available by clicking on the link below.
The dispute arose between Procomm-MMC, a company active in the sale, design and implementation of IT hardware and software solutions, and Full Motion Video Systems (FMVS), a competing company operating in the same market.
The conflict originated from the departure, in 2015, of a key employee of Procomm, Mr [W], who subsequently joined FMVS and became both a shareholder and a managing director of that company.
Considering that it had been the victim of several acts of unfair competition, Procomm initiated proceedings against both its former employee and FMVS, alleging in particular the misappropriation of confidential information, customer diversion and disparagement.
By a judgment dated 3 April 2024, the Paris Court of Appeal partially upheld Procomm’s claims and ordered FMVS to pay EUR 40,000 for moral damage linked to commercial disturbance and EUR 12,000 in respect of litigation handling costs, relying in particular on allegedly disparaging internal emails.
FMVS argued that the alleged statements could not qualify as disparagement since they had not been made public, but were confined to internal communications. Procomm challenged the dismissal of its claims for material damage.
The Supreme Court draws a clear distinction between the existence of unfair competition and the proof of compensable damage.
While confirming that the misappropriation of confidential information necessarily gives rise to at least moral damage, the Court recalls that material damage must be specifically proven.
As regards disparagement, the Court partially overturns the judgment, holding that disparaging statements may constitute unfair competition only if they are made public. As the Court of Appeal failed to establish that the internal emails had been disclosed to third parties, its decision lacked a legal basis.
The case is therefore referred to the Versailles Court of Appeal on those limited points .
This decision usefully reiterates that public dissemination is a necessary condition for disparagement in unfair competition law. Internal criticisms, even when harmful or accurate, do not in themselves amount to a fault
