CJEU clips the wings of Red Bull

The IPKat was alerted earlier today by Sven Klos (thanks, Sven) about a trade mark decision from the Court of Justice of the European Union (CJEU). It's a decision which will please companies who, when providing behind-the-scenes services to businesses, might handle packaging and goods which could infringe third party trade mark registrations. By the same token, it will dismay trade mark owners by reducing the number of potential targets to sue from among all those who may have contributed to the production of infringing goods. The decision (which you can access here) is Case C-119/10 (Frisdranken Industrie Winters BV v Red Bull GmbH).

Winters, a Dutch company, received branded soft drink cans and lids from a customer, Smart Drinks Limited, and filled those cans with soft drink concentrate and fizzy water. Winters then placed the filled cans at the disposal of Smart Drinks, who exported them to countries outside the Benelux. Winters only performed the filling services on the instructions of Smart Drinks, and did not send the filled cans to that company. Nor did Winters deliver or sell the cans to third parties.

The empty cans supplied to Winters were branded with marks including BULLFIGHTER, PITTBULL, RED HORN, LONG HORN, and LIVE WIRE. You can see where this is going: Red Bull believed there to be infringement of its trade mark rights, but sued Winters rather than Smart Drinks (a British Virgin Islands company).

At first instance, an injunction was granted, but only in respect of the BULLFIGHTER mark. The judgment was upheld on appeal and was extended to the PITBULL and LIVE WIRE marks. A further appeal to the Hoge Raad (Netherlands Supreme Court) resulted in this referral to the CJEU, essentially asking if the mere filling of packaging bearing potentially infringing marks constitutes trade mark infringement. (The full text of the referred questions can be found in this earlier IPKat post http://ipkitten.blogspot.com/2010/05/two-new-ip-references-for-cjeu-any-news.html.)

The CJEU started from the premise that creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses that sign. This observation was made by analogy with the decision in Google France and Google (joined cases C-236/08 to C-238/08).

The Court held that a service provider who merely fills, under an order from and on the instructions of another person, cans already bearing signs similar to registered trade marks does not itself ‘use’ those signs within the meaning of the Trade Mark Directive ‘for goods or services’ which are identical with, or similar to, those for which the trade mark was registered. It had been established that in the main action the service provided by Winters consists of the filling of cans and that this service does not have any similarity with the product for which Red Bull’s trade marks were registered.

So a service provider who merely executes a technical part of the production process of the final product without having any interest in the external presentation of the cans and in particular in the signs thereon and thus only creates the technical conditions necessary for the other person to use them, does not infringe.

The Court acknowledged that it had already held, in the context of the provision of services online, that a service provider using a sign corresponding to the trade mark of another person in order to promote goods which one of its customers is marketing may infringe when that use is carried out in such a way that it establishes a link between that sign and that service (citing Google France and Google, paragraph 60; L’Oréal, paragraphs 91 and 92; and UDV North America, paragraphs 43 to 51) .

However, the filling of cans bearing signs similar to registered trade marks is not, by its very nature, comparable to a service aimed at promoting the marketing of goods bearing those signs and does not imply the creation of a link between the signs and the filling service. The undertaking which carries out the filling is not apparent to the consumer, which excludes any association between its services and the signs.

Concerns had been expressed both by Red Bull and by the European Commission (who filed observations) that, if the Court were to find that a trade mark proprietor could not act against a service provider, this might allow the customer of that service provider to circumvent trade mark protection, by dividing the production process and by awarding different elements of the process to service providers. The Court dismissed these concerns saying “suffice it to state that those services may be attributed to the customer who therefore remains liable under [the Trade Marks Directive].”