The global reach of trade mark law?

Whenever an alleged IP infringer is not domiciled in the country where the IP right is protected and did not commit all infringing acts in that country, questions of jurisdiction, commercial effect and the territoriality principle arise.

A case tackling some of these issues is now pending before the German Supreme Court and the judges found it necessary to ask the Court of Justice of the EU (‘CJEU’) whether the possession of goods abroad constitutes trade mark infringement if the goods are held for the purpose of offering them in the country where the trade mark is protected (Extreme Durable, I ZR 205/22).

Background

The plaintiff owns German trade marks nos. 30426551 

and 30426550 

both registered, inter alia, for ‘diving apparatus, diving suits, diving gloves, diving masks and breathing apparatus for diving’.

The defendant is domiciled in Spain and offered diving accessories, inter alia, on www.amazon.de using the plaintiff’s trade marks. The defendant stored the goods in Spain. One of the offers concerned a trim lead bag, which the plaintiff ordered as a test. The plaintiff’s trade marks were used neither on the product nor its packaging.

The plaintiff filed an infringement action before a German court requesting the defendant to be ordered to cease and desist from using the plaintiff’s trade marks for diving accessories in Germany, including from possessing them for the purpose of offering or putting them on the market.

The German Supreme Court’s request for a preliminary ruling

The German Supreme Court asked the CJEU the following questions (translated from German):

1. Can the owner of a national trade mark by virtue of Art. 10(3)(b) Trade Mark Directive (‘TMD’) prevent a person from possessing trade mark infringing goods abroad for the purpose of offering or putting them on the market in the country for which the trade mark is protected?

2. Is it necessary for the concept of possession in the meaning of Art. 10(3)(b) TMD that the defendant has access to the trade mark infringing goods or is it sufficient that the defendant can exercise control over the person who has access to the goods?

The Supreme Court held that the German courts have international jurisdiction (because the defendant did not contest jurisdiction under Art. 26(1) Brussels I recast) and that German law applies (Art. 8(1) Rome II).

The judges also found that the infringing acts complained of had a ‘commercial effect’ in Germany. The website www.amazon.de targets German consumers and the goods were shipped to Germany.

The plaintiff’s trade marks were used identically in the course of trade for identical goods, resulting in the finding of trade mark infringement.

The question remaining was whether the defendant could also be ordered to cease and desist from possessing the goods in Spain for the purpose of offering or putting them on the market in Germany under the German implementation of Art. 10(3)(b) TMD.

I. As regards the first question, the Supreme Court considered the following:

1. According to the opinion of Advocate General Campos Sánchez-Bordona in Coty (case C‑567/18, IPKat here), Art. 10(3)(b) TMD has two conditions, namely:

(1) A material element: Possession of the goods.

(2) An element of intent: The volitional nature of the possession for the purpose of bringing the goods to market by means of any legal transaction, including by offering them.

2. The territoriality principle could speak against a prohibition of possession in Spain. According to this principle, the law of the country where protection of a trade mark is sought determines the conditions of that protection. Moreover, national law can only provide relief in respect of acts performed on the national territory in question (CJEU, IHT Internationale Heiztechnik v Ideal-Standard, case C-9/93, at para. 22).

3. The CJEU’s Donner decision (case C-5/11) could speak in favour of prohibiting the possession of the goods in Spain for the purposes of offering and placing them on the market. The CJEU found that national copyright can be infringed by acts abroad, in particular where a dealer based abroad directs advertising towards the country for which copyright protection is claimed and creates or makes available a specific delivery system and specific payment methods and allows purchasers to have the infringing goods delivered in the country for which copyright protection is claimed. However, the Donner judgment concerned the distribution of copyright protected works from abroad but not if the possession in a foreign country can be also infringing.

4. The CJEU judgment in Pinckney (case C-170/12, IPKat here, here and here) dealt with the question whether the court seized in the country in which an IP right enjoys protection can also grant protection for this right if the damage is based on actions taken abroad that could cause damage in the country of protection. The CJEU answered the question in the affirmative but the court seized will only have jurisdiction to decide on the damage caused in the territory of the Member State to which it belongs. This decision only dealt with the question of international jurisdiction.

II. On the second question, the Court dwelled on the concept of ‘possession’ in German property law, despite noting that Art. 10(3)(b) TMD must be interpreted autonomously. The judges referred to the Advocate General’s opinion in Coty (case C‑567/18), noting that the term ‘possession’ does not appear in all the language versions of Art. 9(3)(b) EUTMR (the equivalent of Art. 10(3)(b) TMD). The French (‘détenir’) and the German (‘besitzen’) versions use vocabulary that is directly related to the legal concept of possession. Others, such as the Spanish, Italian, Portuguese, English and Swedish versions, use verbs or nouns denoting the act of storing goods.

The latter fact suggests to the Court that ‘possession’ requires the infringer to have direct access to the infringing goods. Thus, handing over the goods to a freight carrier would end the ‘possession’ of the infringer.

Comment

Art. 10(3) TMD and its equivalent Art. 9(3) EUTMR are quite odd provisions. First of all, they are mere non-exhaustive examples of uses (CJEU, Audi, case C-334/22, at para. 33, IPKat here) that may be infringing and can, if they are found to be infringing, be prohibited. Therefore, the acts mentioned in Art. 10(3) TMD/Art. 9(3) EUTMR are not infringements in themselves in the sense that there is an infringement where the conditions of these provisions are fulfilled. As the wording suggests, it is necessary that the requirements of Art. 10(2) TMD/Art. 9(3) EUTMR are fulfilled. This means, for instance, if a likelihood of confusion is asserted, the origin function, and in the case of double identity, any of the trade mark functions must be affected. If the conditions of Art. 10(2) TMD/Art. 9(2) EUTMR are not met or an exception applies (e.g. Art. 12 EUTMR), the examples in Art. 10(3) TMD/Art. 9(3) EUTMR are irrelevant.

Thus, even the ‘classic’ trade mark infringement committed by offering the goods with the trade mark (Art. 10(3)(b) TMD/Art. 9(3)(b) EUTMR) need not be an infringement, e.g. when affixing a car manufacturer’s sign to a model car (see here) or when selling exhausted goods.

The mere affixing of a third party sign to the goods or their packaging (Art. 10(3)(a) TMD/Art. 9(3)(a) EUTMR) is a mere internal act. Such internal acts are not (at least not according to German scholarly literature) considered to constitute ‘use in the course of trade’. It is also difficult to see how the act of affixing a sign in itself affects or is liable to affect a trade mark function or constitutes communication to the public (as required for the concept of 'use'). Or is this a case where the defendant ‘threatened to infringe’ the trade mark (Art. 130(1) EUTMR), depending on the further intentions of the defendant?

Use of a trade mark as a trade or company name or part thereof (Art. 10(3)(d) TMD/Art. 9(3)(d) EUTMR) as such has been found not to be trade mark infringing as it does not constitute use ‘in relation to goods or services’ (CJEU, Céline, case C-17/06, IPKat here). It can only be infringing if the company name etc. is used to indicate the commercial origin of goods or services (cf. Recital 19 TMD and Recital 13 EUTMR).

If Art. 10(3) TMD/Art. 9(3) EUTMR do not add any additional requirements to Art. 10(2) TMD/Art. 9(2) EUTMR, is there a need to interpret the ‘conditions’ mentioned in Art. 10(3) TMD/Art. 9(3) EUTMR at all? If the contested use of the trade mark fulfills the requirements of Art. 10(2) TMD/Art. 9(2) EUTMR it can be prohibited and if not, then not. What role do Art. 10(3) TMD/Art. 9(3) EUTMR play?

If the premises above are correct, should the German Supreme Court not have asked the CJEU whether the possession of goods in Spain (which are not branded with the plaintiff’s trade mark) infringes a German trade mark under Art. 10(2) TMD if the goods are possessed in order to be offered in Germany by using the plaintiff’s trade marks, if (a) the defendant has access to the goods or (b) the defendant does not have access to the goods but can exercise control over the person who has access to the goods?

It will be interesting to see what the Advocate General and the CJEU make of the questions.