Trade marks: online infringement of EUTM based on targeting

By Audrey Horton

11-2019

The European Court of Justice (ECJ) has ruled that a defendant who infringes an EU trade mark (EUTM) by advertising or offering counterfeit goods for sale online may be sued in the country targeted by the website.

Background

Generally, EUTM infringement proceedings must be brought before the courts of the EU member state in which a defendant is domiciled (Article 97(1), EUTM Regulation (207/2009/EC)) (EUTM Regulation) (Article 97(1)). EUTM infringement proceedings can also, as an alternative, be brought before the courts of the member state in which the act of infringement has been committed or threatened (Article 97(5), EUTM Regulation) (Article 97(5)).

The extent of the territorial jurisdiction of the court differs according to the basis chosen. When the infringement action is based on the defendant's domicile, jurisdiction potentially covers acts of infringement committed throughout the EU, whereas, when the action is based on Article 97(5), the action is restricted to acts of infringement committed or threatened within the member state where the court before which the action is brought is situated.

The ECJ has ruled that EUTM infringement acts consisting of online advertising and offers for sale were committed in the territory where the consumers or traders targeted are located, even if the defendant, online servers and products are located elsewhere (L'Oréal and Others News brief "L’Oréal v eBay: good news for brand owners", www.practicallaw.com/9-507-0026).

Facts

A is a UK company which manufactures and sells audio equipment. H is a Spanish company which sells and supplies audio equipment. 

A sued H in the UK for infringement of its EUTM, alleging that H had offered for sale to UK consumers imitations of A's goods bearing a sign identical or similar to the EUTM and had advertised those products on H's website and social media accounts.

The Intellectual Property Enterprise Court (IPEC) refused to accept jurisdiction in relation to infringement of A's EUTM (see News brief "Jurisdiction over online EUTM infringement: the ECJ hits the target", www.practicallaw.com/w-022-1254). It held that, under Article 97(5), only the courts in Spain had jurisdiction, as Spain was the country of H's domicile and also the country where the act of infringement (taking steps to put a sign on a website) was committed.

A appealed. The Court of Appeal referred the question of jurisdiction to the ECJ.

Decision

The ECJ ruled that, under Article 97(5), an EUTM owner could bring infringement proceedings against a third party for unauthorised use of a sign identical to that EUTM in advertising and offers for sale displayed electronically for identical or similar products to those for which the EUTM was registered, before an EUTM court of the member state where the consumers or traders to whom that advertising and those offers for sale were directed were located. This was the case even if the third party took decisions and steps necessary to bring about the electronic display in another member state.

If Article 97(5) was not interpreted in this way, a defendant would only have to ensure that the territory where they set up their website and activated the display of their advertising and offers for sale was the same as that in which it was established, to prevent EUTM owners from resorting to Article 97(5) as an alternative to Article 97(1).

It was for the national referring court to decide whether the advertising and offers for sale on the website and platforms in issue were targeted at UK consumers or traders, on the basis of factors such as the details about the geographical areas where the products were to be delivered.

Comment

While the ECJ has ruled on matters of international jurisdiction relating to online infringements of national trade marks and offline infringements of EUTMs, this is the first time that the court has ruled on international jurisdiction in an online EUTM infringement case. The court has extended the interpretation of Article 97(5) further than its literal wording, which does not specifically refer to a targeting requirement, although the EUTM Regulation defines infringement as acts of advertising and offers of sale which may indirectly refer to targeting. A territorial limitation to the place of the causal events would also make little sense in the light of the contrast between full jurisdiction based on the defendant's domicile and the territorially limited jurisdiction based on place of infringement.

The ECJ's reliance on L'Oreal, a case concerning the applicability of EUTM regulations to an online platform established outside the territory of the EU, rather than, as here, the determination of jurisdiction as between member states, is questionable.

Case: AMS Neve and others v Heritage Audio SL and others C-172/18.

First published in the November issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200