Infringement of EUTMs: issues of jurisdiction and the geographical scope of injunctions
13 January 2017
In this article we review two recent decisions which consider the jurisdiction of national courts over infringement of European Union Trade Marks (EUTM(s)) and the geographical scope of injunctions to be granted in cases of infringement of an EUTM.
AMS Neve v Heritage Audio: English court determines it has no jurisdiction over infringement of an EUTM where there was no infringing act in the UK
An English court has held that it did not have jurisdiction to decide a claim relating to acts of infringement of an EUTM under Article 97(5) of the EUTM Regulation, in circumstances where the potentially infringing acts committed by the defendant (in this instance taking steps to put a sign on a website) took place in Spain where the defendant was domiciled. The court did, however, have jurisdiction under the Brussels Regulation (Regulation (EU) No.1215/2012) in relation to infringement of various UK national marks.
This decision underlines the importance to brand holders in ensuring that they hold national trade mark registrations in key European Union (EU) markets, as these national rights are likely to confer jurisdiction on the relevant national courts over a wide range of acts that infringe trade mark rights such as advertising/offering goods for sale on websites which are directed at consumers within that jurisdiction.
AMS Neve Ltd and Heritage Audio SL
The defendants, Heritage Audio and its sole director, were based in Spain and sold audio equipment. The claimants were UK manufacturers of audio equipment/amplifiers and owned two UK registered trade marks and an EUTM which they claimed were infringed by the offer for sale and sale by the defendants of their own audio equipment and amplifiers in the UK under a conflicting mark. The defendants applied for a declaration that the English courts did not have jurisdiction to try the claim. The key issue in the case was whether the defendant had carried out any act in the UK which was subject to the jurisdiction of the English court.
Analysis of AMS Neve v Heritage Audio
HHJ Hacon held that the English court had jurisdiction by virtue of the Brussels Regulation in relation to the potential infringement of the UK registered trade marks as a result of the offer for sale of goods in the UK under the signs complained of.
Conversely, whilst Article 97(5) of the EUTM Regulation confers jurisdiction on national courts over infringing acts committed within that particular member state, the judge construed 'infringing acts' narrowly and determined that they require active conduct by the defendant within the jurisdiction.
In relation to the sale of infringing goods on a website, the judge considered that the infringing act is not likely to be the display of the sign on the website, but rather the step of putting the infringing sign on the website and is therefore likely to occur in the member state where the defendant is domiciled or established. As in most instances the defendant's active conduct is likely to take place in the member state where they are domiciled, it seems that Article 97(5) does not provide much of an exception to Article 97(1) (which states that a defendant should be sued where they are domiciled).
This approach to the issue of where an infringing act takes place can be contrasted with the decision of the CJEU in Case C-98/13 Martin Blomqvist v Rolex SA. In this case it was essentially held (in the context of a customs detention) that the sale to a customer in the EU of a counterfeit watch constituted an infringing act which entitled the goods to be seized and destroyed, despite the fact that the website from which the counterfeit watch was bought operated out of China and was not offering the goods for sale to and/or advertising the goods to customers in the EU.
This decision highlights the importance of registering trade marks at national level.
Following this decision it seems that Article 97(5) EUTM Regulation may be interpreted narrowly and may not confer jurisdiction on national courts (other than those of the state where the defendant is domiciled) to hear claims of infringing acts as often as might have once been thought, particularly in relation to the offer for sale of infringing goods via websites directed at consumers in certain member states (which ultimately seems somewhat surprising).
Combit Software v Commit Business Solutions: geographical scope of injunctions
The CJEU has confirmed that national courts are entitled to hold that an EUTM has been infringed, even where the likelihood of confusion exists only in part of the EU. However, where the role of an EUTM in indicating origin is only adversely affected in part of the EU, the scope of any injunction granted should be limited to that part.
Background to combit v Commit
This case involved a reference from the Regional Court of Dusseldorf in Germany. The claimant, combit, was a software company based in Germany and the owner of German national marks and EUTMs for COMBIT in relation to goods and services in the computer industry. The defendant, Commit, was an Israeli company selling software in a number of countries (including Germany) via its website.
Combit sued Commit in Germany for trade mark infringement and sought an EU-wide injunction against Commit, based on its EUTM rights. In the alternative, combit sought an injunction in Germany based on an infringement of its German trade mark. At first instance, only the alternative claim succeeded and Combit was granted an injunction in relation to Germany only. The appeal court in Germany decided that use of COMMIT was liable to cause a likelihood of confusion on the part of the average German speaking consumer, but not on the part of the average English speaking consumer, as the latter would draw sufficient conceptual distinctions between COMMIT (to commit to something) and COMBIT (a contraction of the words 'computer' and 'binary digit').
The reference to the CJEU
Given the unitary character of EUTM rights, the appeal court referred to the CJEU the question of whether, where there is only a likelihood of confusion in some member states, the EUTM is infringed only in those member states or whether the EUTM is infringed across the whole of the EU.
In its response, the CJEU confirmed that the German court was entitled to find infringement of the EUTM where a likelihood of confusion existed only in part of the EU. However, following on from the decision in Case C-235/09 DHL Express France SAS v Chronopost, where an EUTM's function of indicating origin was only adversely affected in part of the EU, the scope of the prohibition should be limited to that part.
The CJEU confirmed that the German court should limit the geographical scope of the injunction granted, provided the court was sufficiently clear about what was meant by the term the 'English speaking' parts of the EU and could clearly exclude these parts from the order made. It will be interesting to see how the German court defines the 'English speaking' part of the EU and whether areas such as Scandinavia will be included in this definition.