Strengthening the position of Union trademark owners

In its judgment in Case C-172/18, delivered on 5 September 2019, the European Court of Justice (ECJ) made clear which court has jurisdiction for actions concerning the infringement of an European Union trade mark (EUTM) by advertising and offering products online. The specific question involved was whether the proprietor of an EUTM which has (allegedly) been infringed can bring an action against a third party before a court in Member State A (where the consumers and traders are located) even though the third party made decisions and took steps in another Member State (B) to bring about the electronic display. The ECJ’s reply is: Yes, it can (even if this alternative forum has consequences).

Background

The background of the request for a preliminary ruling is a dispute between the company AMS Neve, domiciled in the United Kingdom (UK), and Heritage Audio, domiciled in Spain. Heritage Audio is accused of having offered consumers in the UK imitations of goods sold by AMS Neve and advertising them for sale on its website and social media platforms. AMS Neve brought an action before the Intellectual Property and Enterprise Court in the UK for infringement of its EUTM “1073”. Following a plea by Heritage Audio, the court declared that it lacked jurisdiction for the infringement claim filed on the basis of the EUTM; it said that the courts of the Member State where the defendant is domiciled (in this case Spain) have jurisdiction. Heritage Audio appealed to the Court of Appeal (England and Wales) (Civil Division), which suspended the proceedings and referred the matter to the ECJ for a preliminary ruling.

In principle, Article 97(1) of Regulation (EC) No 207/2009 (now Article 125(1) of Regulation (EU) 2017/1001) states that the courts of the Member State where the defendant is domiciled or in which he has an establishment have jurisdiction. Under Article 97(5) of Regulation (EC) No 207/2009 (now Article 125(5) of Regulation (EU) 2017/1001), the plaintiff can “also” bring its action in the courts of the Member State “in which the act of infringement has been committed or threatened”. As a result of its decision, the plaintiff determines the territorial extent of jurisdiction of the seized court at the same time. If the infringement action is based on Article 97(1) of Regulation (EC) No 207/2009, it potentially covers acts of infringement committed in the entire territory of the EU, whereas if it is based on Article 97(5) of Regulation (EC) No 207/2009, it is restricted to acts of infringement committed or threatened in a single Member State, namely the Member State where the seized court is located. Thus the judgment focuses on the interpretation of Article 97(5) of Regulation (EC) No 207/2009 and how the location of the act of infringement is to be defined for online advertising and offers for sales.

Interpretation of Article 97(5) of Regulation (EC) No 207/2009

In this respect, the ECJ starts by making clear that jurisdiction under the above provisions has the character of a lex specialis when compared to the provision of Regulation (EC) No 44/2001 (Brussels I Regulation) and Regulation (EU) No 1215/2012 (Brussels Ia Regulation). It holds that the forum provided for in Article 97(5) of Regulation (EC) No 207/2009 is alternative (and not cumulative) and is intended to give the proprietor of the EUTM the possibility to bring targeted actions each of which relates to acts of infringement committed within a single Member State. It says that as these actions do not relate to the same territory and therefore do not have the same subject matter, they are not subject to the rules on lis pendens.

The ECJ also points out the existing case law, including its judgment in Case C-324/09 [L'Oréal and Others] which states that it has to be assumed that the acts in question (consisting of advertising and offers for sale of goods displayed electronically with respect to products bearing a sign identical or similar to an EUTM without the consent of the proprietor of that mark) were committed in the territory where the consumers or traders to whom that advertising and those offers for sale are directed are located. The purpose of this is to prevent an infringer from evading the application of the European Union Trade Mark Regulation and undermining its effectiveness by relying on the fact that that advertising and those offers for sale were placed online outside the European Union.

This is also intended to apply in a similar way for Article 97(5) of Regulation (EC) No 207/2009 in situations where the infringer relies on the place where its advertising and offers for sale were placed online in order to exclude the jurisdiction of any court other than the court of that place and the court with jurisdiction for its place of establishment. If the location of the infringing act were to be interpreted as meaning that it relates to the Member State where the infringer created the website and activated the display of its advertising and offers for sale, the infringer would have to do no more than ensure that the territory where the advertising and offers for sale were placed online was the same territory as that where its establishment is located, so as to deprive the owner of the EUTM of the possibility of an alternative forum. Interpreting the place of the act of infringement as being the place where the infringer made decisions and took technical measures to place the advertisement on the internet would also not be appropriate, since in many cases it would make it excessively difficult, or even impossible, for the owner of the mark to ascertain where this place is.

If it is apparent (as in the main proceedings) that the advertising and offers for sale on the website in question were directed at consumers or traders situated in a different Member State (A) than the Member State where the infringer is domiciled or has its establishment (B), then according to the ECJ the proprietor of the EUTM may bring its infringement action before a court of Member State A. It maintains that this is confirmed by the fact that the EU trade mark courts at the place of domicile of the consumers or traders are best able to assess whether the mark has been infringed (the ECJ had already taken this factor of proximity into account in its judgment in Case C-523/10 [Wintersteiger]). Incidentally, the ECJ believes that this interpretation of the place of infringement is also consistent in relation to the interpretation of Article 5(3) of Brussels I Regulation (the place where the harmful event occurs), which applies to proceedings regarding infringements of national trade marks and allows the owner of an EUTM to bring an infringement action before the courts of the Member State where it wishes to seek a declaration of the infringement (see the ECJ’s judgment in Case C-360/12 [Coty Germany]). Otherwise, the owner would be forced to bring proceedings alleging infringement of an EUTM and proceedings alleging infringement of parallel national trade marks before courts of different Member States, which would defeat the object pursued by those regulations of reducing the number of cases pending before courts.

Conclusion

This judgment is especially important for German proprietors of EUTMs. In its “Parfummarken” judgment (I ZR 164/16), the German Federal Court of Justice (BGH) held that the international jurisdiction of a German court cannot be established by the fact that Germany is the place where the damage caused by a trade mark infringement was realised. The BGH held that if an economic operator offers goods for sale on its website that are targeted at buyers in another Member State and that can be viewed on the screen and ordered on the internet, infringing the rights arising from an EUTM in the process, the place relevant for international jurisdiction, where the event leading to the damage under the terms of Article 97(5) of Regulation (EC) No 207/2009 took place, is the location where the process of publishing the offer by the economic operator on its website was launched, and not the place where the website can be accessed. The ECJ now contradicted this.

The ECJ left open the question of when it can be assumed that the advertising or offers for sale are directed at the consumers or traders. Is it sufficient for an order to be possible on the website although the actual delivery is made from a different country? In the spirit of this latest judgment, this should be irrelevant, because otherwise there would again be a threat that the alternative forum is evaded (by delivering the goods from a country outside the EU). Only time will tell how European case law further defines this matter.