From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Tuesday, 17 February 2015

Jurisdiction in online Community trade mark infringement cases: what's the story?

There is probably no need to state the obvious, ie that online IP infringements are becoming increasingly frequent. Another obvious observation is that, besides issues of substantive law, something that has proved fairly controversial to determine in these cases is jurisdiction. 

With regard to copyright, the Court of Justice of the European Union (CJEU) - or rather, its Advocates General - has struggled determining what courts are competent under the special rule of jurisdiction in Article 7(2) of Brussels I Recast [formerly, Article 5(3) of Brussels I], which states that a person domiciled in a Member State may be sued in another Member State "in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur". 

The latest installment in this string of cases has been the decision in Hejduk [here], in which the Court confirmed the 'precedential' [note however that in the EU judicial system there is officially no such thing as stare decisis, or a system of binding precedent] value of its earlier decisions in Pinckney [herehere and hereand Hi Hotel [here], by stating that accessibility - rather than targeting - is the criterion to employ to determine jurisdiction according to the special rule in Article 7(2) of Brussels I Recast. In other words, according to the CJEU one could be potentially sued before the courts of any Member State in which the allegedly infringing content is accessible, with the (significant) limitation that those courts could only determine and award the damages occurred in that very territory.

Some people may think that jurisdiction in online copyright infringement cases is so complex because of the unregistered nature of everybody's favourite IP right. 

But is copyright the only case? How about trade marks: are things any easier there?

Haunting-mode: clear evidence
of a recent trip to the CJEU
Since 2012 this Kat's mind has been haunted by many things, notably the CJEU decision in Wintersteiger [Katposts here]. As trade mark-oriented readers will promptly recall, that was a case concerning alleged online infringement of a national trade mark by means of keyword advertising, in which the CJEU had been called upon by an Austrian court to interpret the meaning of the special rule of jurisdiction in what at that time was still Article 5(3) of Brussels I. The CJEU held that that provision must be interpreted as meaning that an action relating to infringement of a national trade mark may be brought before either the courts of the Member State in which the trade mark is registered or the courts of the Member State of the place of establishment of the advertiser.

The CJEU provided a heavily fact-specific response, leaving the issue of what may happen with Community trade marks unaddressed [but, hey, why should have the Court gone into that?]

With regard to jurisdiction in infringement actions the Community Trade Mark Regulation, while derogating from the special rule of jurisdiction in Article 7(2) of Brussels I Recast, contains a specific provision on international jurisdiction, Article 97(5), which provides that - among other things - infringement actions "may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened". 

Jurisdiction issues?
They surely raise more curiosity
than other things ...
As far as this Kat is aware, the CJEU has not yet been asked how this provision should be interpreted in online infringement cases. A few months ago, however, the Court provided some guidance in Coty [here], a case concerning 'analogue' infringement. There the CJEU said that, first of all, this provision must be interpreted independently of Article 7(2) of Brussels I Recast [para 31]. Then the Court clarified that "the concept of ‘the Member State in which the act of infringement has been committed’ implies ... that that linking factor relates to active conduct on the part of the person causing that infringement. Therefore, the linking factor provided for by that provision refers to the Member State where the act giving rise to the alleged infringement occurred or may occur, not the Member State where that infringement produces its effects." [para 34]. Consequently, jurisdiction under Article 97(5) "may be established solely in favour of Community trade mark courts in the Member State in which the defendant committed the alleged unlawful act."

In the case of alleged online trade mark infringements, where would this place be located? 

If we take, as an example, the background proceedings in Wintersteiger, ie the case of an undertaking that reserves a registered Community trade mark as a Google AdWord [let's also assume that the resulting advertisement is of the non-OK type identified by the CJEU in Google France], or any other case involving the creation of an advertisment (eg to sell counterfeit goods) this place would likely be that where the defendant is domiciled/established, as this could possibly be the place where the infringing act takes place. 

Since Article 7(2) of Brussels I and its accessibility criterion would not be available, would not this result in a significant compression of the possible jurisdiction choices available to the trade mark owner? In other words, in online infringement cases, Article 97(5) could not set any real alternative to the other rules in that provision. Did the CJEU in Coty do the right thing in separating the concept of "the Member State in which the act of infringement has been committed or threatened" from that of "the place where the harmful event occurred or may occur"? Should a distinction be made between online and offline trade mark infringements? 

2 comments:

Anonymous said...

There is another issue with on-line infringement that keeps buzzing in my head. Methods of processing data representing a physical entity are patentable. A computer programme product for programming a computer to execute the method may be protected with such patent as well. The results of such methods - the product - may not always be patentable. Because they are already known. Or because a signal, as a transitory medium, is not patentable in certain jurisdictions.

The field of software has evolved and is continuously evolving: from local processing to cloud processing, from being provided on a floppy disk you buy in a store to being offered in a saas environment - software as a service - you pay for per processing step or per year. More and more companies offer a gateway for you to provide data, the companies handle the data on their servers and the results - the product - is sent to your local computer (tablet, smartphone) that only requires to display the results.

With servers running the software being located in a far and distant country you never even considered filing for patent protection, how well is your invention protected in your home country or home region? If you only have a European patent, offering protection in the largest countries (DE, FR, GB, ES, IT, NL, TR, PL), how to address your invention being used on a server in Belize?

Yes, one could say the offering on the European market of the processing in Belize would constitute infringement. But does it? Is the method actually being offered on the European market? Or in Belize? In the end, the method is not executed in Europe. And the software is not available in Europe.

Next, there is the question of enforcement. One cannot shut down the server in Belize. I have no knowledge at all of the IP enforcement in Belize, but I'd say that is not relevant: there is no patent in Belize that is being infringed. Would the courts in Europe order blocking of the IP address of the server running the software? We have seen this before, but it appeared not to be very effective.

Any thoughts?

Anonymous said...

In my view, Coty is clearly limited to offline infringement "in the event of a sale and delivery of a counterfeit product in one Member State, followed by a resale by the purchaser in another Member State" (cited from the headnote of Coty).

Separating the concept of "the act of infringement" from the broader concept of "the harmful event" is sensible when national laws are concerned . Allowing both forums ( at the place where the event giving rise to the damage occurred and at the place of occurrence of damage) in Community trademark cases, allowing would entail legal uncertainty and forum shopping without there being any advantage.

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