Use of trade marks on the Internet without the trade mark owner‘s permission is a hot topic not only on a European level but also in Hungary. The extensive use of the Internet has triggered the use of trade marks on websites, in domain names, as keywords, as well as in meta tags and similar identifiers. In this article we highlight relevant Hungarian rulings made in trade mark infringement cases involving different types of such use. These rulings show that Hungarian courts endeavor to keep pace with the developments of the online era and its effects on trade marks. While Hungarian courts still tend to consider trade marks as legal tools providing their owners exclusive rights, the courts are also beginning to implement guidelines of the Court of Justice of the European Union (CJEU) in this field.
On a statutory level, the protection of trade marks is regulated by Act XI of 1997 on the Protection of Trade marks and Geographical Indications (“Trade Mark Act”), the provisions of which are highly similar to both the Community Trade Mark Regulation (207/2009/EC) and the EU Trade Mark Directive (2008/95/EC). According to the Trade Mark Act, the owner of a trade mark has exclusive rights in respect of the use thereof. On the basis of the exclusive right of use, the owner can prevent any person not having its consent from using any sign identical with or similar to the trade mark in the course of trade. The Trade Mark Act also provides protection for trade marks with reputation. There are certain limitations: thus the owner is not entitled to prohibit a third party from using a trade mark to describe the goods or services in question, or characteristics of the product or service or where it is necessary to indicate the intended purpose of the goods or services, particularly in the case of spare parts. Furthermore trade mark protection does not entitle the proprietor to prohibit the use of the trade mark in relation to goods which have been put on the market by the proprietor or with its express consent.
In the Polycom-case (8.Pf.20.493/2011) the Metropolitan Appeal Court ruled – following the guidelines of the ECJ established in the BMW-case (C-63-97, exhaustion of the rights) – that a distributor’s use of a word mark on a website may be legitimate to inform the customers about the origin of the products which have been put on the market by the proprietor, provided that the use does not (i) tarnish the trade mark’s reputation, (ii) suggest a special relationship between the trade mark owner and the distributor, and finally (iii) suggest that the distributor is part of the trade mark owner’s distribution chain. In this case that court held that the defendant’s use of the word mark met the above criteria. This means that a trade mark proprietor cannot object to “fair use” of its word mark on a distributor’s website for the promotion of goods which have been subject to exhaustion of rights.
The registration of trade marks and the registration of domain names are independent from each other both as to the organization and as to the rules of procedure. However, the two procedures have points where there are overlaps. The rules of domain registration are embodied in the dotHU Domain Registration Rules and Procedures (“Rules”), the provisions of which are also mandatory for applicants and registrants of domain names. The criteria relating to the selection of a domain name are set out in the Rules, namely the applicant shall act with utmost care in selecting the domain name so that the name selected and the use thereof shall not violate the rights of other persons and entities. From the point of view of trade mark law, the mere registration of a domain name does not result in legal protection similar to the case of trade marks. Furthermore, according to the Rules, domain applicants are expected to check both the online company register and online trade mark databases for possible earlier rights. It is settled case law that the registration of a domain name identical with or similar to a trade mark, even if the owner did not object thereto at the time of its registration, does not mean that the owner consented to the use of the domain name.
In the Satel-case (Pfv.IV.21.187/2011) the Supreme Court clarified the interpretation of acquiescence. According to the Trade Mark Act where the proprietor has acquiesced, for a period of five successive years, in the use of a later trade mark then it shall no longer be entitled either to oppose the use of the later trade mark or request the cancellation thereof. The Supreme Court’s decision elaborates that if a mark has been extensively used without registration then the owner of this unregistered mark may also refer to acquiescence, not only if the earlier mark is entirely identical to, but also when it is only similar to the later registered trade mark. According to the Supreme Court trade mark owners should take actions against infringers in due time and therefore it is an unfair practice which cannot be tolerated if a trade mark owner waits more than eight years to take action against an infringer.
Since one of the prerequisites for establishing trade mark infringement is the alleged infringing trade mark’s = use in the course of trade, it is of the utmost importance whether such use has taken place in the framework of economic activity. The nature of the alleged activity cannot always be easily specified, especially if there is no content under a domain name or it is simply redirected to another domain name. The Metropolitan Appeal Court stressed in the puder.hu-case (8.Pf.20.495/2011) that the use of a domain name is to be considered as a continuous activity, including registration, maintenance and use. The mere registration of a trade mark as a domain name and its technical maintenance cannot be considered use in the course of trade, in the absence of additional circumstances. Such additional circumstance can be for instance the redirection to another domain name or website. According to this ruling it is irrelevant if the content under a domain name is genuine or not since an average user will not have the technical background to assess whether the content is genuine.
In connection with use in the course of trade the Hungarian courts also stressed that the preparatory activities on a website cannot serve for the establishment of infringement. The Metropolitan Appeal Court’s decision in the Decathlon-case (8.Pf.20.965/2010) stressed that as long as there is no actual economic activity on a website, e.g. advertisements, there is no evidence for use in the course of trade. This appeal ruling also provides that even if there is some content and therefore consumers may have expectations or impressions as to the future activities under the website, this is not enough to substantiate trade mark infringement. However, the ruling also states that the plaintiff did not refer to imminent threat of infringement, in which case the court would have been able to examine such preparatory activities. While the court did not expressly state that in latter case there would have been infringement, this is a clear instruction for trade mark owners to assert imminent threat of infringement in relation to preparatory activities.
The use of a trade mark in online advertisements without the permission of the trade mark owner is a controversial issue, especially if the trade mark is used only as a meta tag or as an advertising keyword. In such cases the trade mark itself usually does not appear on the actual advertisement or any website. Whether such use, pursuant to the Trade Mark Act, may be considered as on the one hand use of the trade mark or on the other hand use in the course of trade, is usually analyzed by courts on a case by case basis. In relation to the use as meta tags the Metropolitan Appeal Court made a judgment in the Bremer-case (8.Pf.20.237/2009) where the court ruled that use of a trade mark as a meta tag – as being part of the source code of a website – is in fact infringement since the search engine establishes the connection between the trade mark and the infringing meta tag by listing the website containing the meta tag if the user searches for the trade mark in a search engine. In this case however the court did not provide a thorough analysis of adverse effects on certain functions of the trade mark, as did the CJEU in similar cases, especially in C-558/08 Portakabin v. Primakabin and C 323/09 Interflora v. Marks & Spencer.
In relation to use of trade marks as meta tags or advertising keywords Hungarian case law has not yet been settled. However it is likely that Hungarian courts will follow CJEU’s guidelines laid down in the rulings mentioned above as well as in C-324/09. L’Oréal v. eBay.