(Reuters) - France is immune from U.S. trademark infringement claims brought by the former owner of France.com, the 4th U.S. Circuit Court of Appeals ruled Thursday.

The French government didn't engage in commercial activity that would negate its sovereign immunity when it won the rights to the domain name in French court from France.com Inc., said Circuit Judge Diana Gribbon Motz, joined by Judges Henry Floyd and Allison Jones Rushing.

France.com Inc.'s attorney Ben Barlow of Dunlap Bennett & Ludwig said the opinion would have a "negative impact on intellectual property rights and unintended consequences in the area of foreign court rulings."

Jean-Noel Frydman, the owner of France.com Inc., said he was "disappointed" in the ruling but continued to "trust that the American legal system will right this wrong -- something the French legal system could not or would not do."

The French government didn't immediately respond to a request for comment. France's attorney John Michael Griem of Carter Ledyard & Milburn declined to comment.

Frydman -- a U.S. citizen and French expat -- bought the France.com domain name in 1994 and used it to sell French travel services. He incorporated France.com Inc. in California and owned U.S. and EU trademarks covering the name.

Frydman's company sued a Dutch company in French court in Paris for infringing the marks, and the French government intervened, arguing it had the sole right to use the name "France" commercially under French law.

The court ruled for the French government in 2015, finding the company's use of the domain name "infringes the rights of the French State to its name," and ordered the transfer of France.com to France. A French appeals court affirmed the ruling in 2017, and an appeal of that case to France's highest court is currently pending.

France.com Inc. later sued the French Republic in Virginia federal court for cybersquatting and trademark infringement, among other things, for allegedly hijacking and misusing his domain name to advertise to American customers. U.S. District Court Judge Liam O'Grady in Alexandria rejected the French government's request to dismiss the case under the Foreign Sovereign Immunities Act in 2019, finding the immunity question "would be best raised after discovery has concluded."

On appeal, the 4th Circuit said the U.S. Supreme Court has ruled that sovereign immunity is a threshold question that should be addressed "as near to the outset of the case as is reasonably possible," and that France was immune from the claims.

The corporation argued France must face the case because of the "commercial activity" exception to FSIA immunity, which applies when claims against a foreign government are based on its commercial activity in or affecting the United States. Motz said the company's alleged injuries were all based on the French court judgment, not France's commercial use of the website.

Motz also rejected the company's argument that the "expropriation" exception to FSIA immunity applied because France took property in the U.S. in violation of international law. The court wasn't convinced that France's conduct was a taking, and said the company didn't identify an international law that France violated.

The case is France.com Inc. v. French Republic, U.S. Court of Appeals for the Fourth Circuit, No. 20-1016.

For the French Republic: John Michael Griem and Nicholas Tapert of Carter Ledyard & Milburn, John O'Herron of ThomsonMcMullan

For France.com Inc.: Benjamin S. Barlow and David Ludwig of Dunlap Bennett & Ludwig, C. Alexander Chiulli of Barton Gilman.

Editor's Note: This story was updated to include quotes from Jean-Noel Frydman and his attorney.