What has happened?
- The ECJ has relaxed the principle of territoriality under trade mark law in the Tradeinn case – a ruling which should make it easier for trade mark owners to take action against infringing and counterfeit goods in the EU.
- We know that possession (stocking) of infringing goods can be prohibited by the trade mark owner under EU law but only where that possession is for the purpose of supply and distribution (qualified possession).
- The court ruled that the owner of a national trade mark in member state A can rely on that national trade mark to prohibit the qualified possession of infringing goods in member state B (where those goods are intended for sale/offer in member state A). This is so even though the trade mark owner does not have any trade mark rights in member state B.
- It means that a trade mark owner's arm now extends beyond the border. The trade mark owner can intervene in the logistics chain of a trade mark infringer much earlier. In concrete terms: the proprietor of, for example, a German trade mark can obtain an injunction in Germany on the basis of that trade mark to access warehouses containing infringing goods in other EU member states (where those goods are intended for sale/offer in Germany).
- This will be particularly important for disrupting supply chains around counterfeit and other infringing goods.
Want to know more?
In the case, a reference for a preliminary ruling from the German Federal Court of Justice, the ECJ had to answer a simple question: can the owner of a German trade mark obtain an injunction in Germany based on that mark to access warehouses containing infringing goods in other EU member states (where those goods are intended for sale/offer in Germany)?
The facts
PH is the proprietor of certain trade marks in Germany but not in Spain. Tradeinn Retail Services ("TRS") is based in Spain. From Spain, TRS offered goods for sale in Germany via an online platform and had sold goods into Germany. Those goods clearly infringed PH's German trade marks.
What is clear...
In this scenario, it is perfectly clear what claims/remedies the trade mark owner is entitled to against TRS under the German Trade Mark Act (and the corresponding EU Trade Marks Directive):
- PH can have the offering of the infringing goods in Germany prohibited, since the offering of the goods by TRS in Germany, although initiated from abroad, constitutes a trade mark infringement in Germany.
- PH is also entitled to an injunction against TRS in respect of the placing (or threatened placing) of the goods on the German market. PH would be entitled to preventive injunctive relief against the placing of the infringing goods on the German market because that placing is imminent.
It is, however, worth noting that the acts which the trade mark owner can prevent are acts committed in Germany or threatened to be committed in Germany.
... and what is unclear
Possession of infringing goods is also an infringing act, but only where that possession is for the purpose of supply and distribution (qualified possession). German legislation (which mirrors the EU Trade Marks Directive) provides for injunctive relief in such circumstances. The expectation would be that PH would only be able to take action against TRS for qualified possession if the infringing goods are stored (possessed) in Germany.
In the present case, however, PH also applied for an injunction against the qualified possession of infringing goods abroad (in Spain) for the purpose of offering them for sale or placing them on the market in Germany. The German Federal Court of Justice had doubts as to whether this was permitted under the EU Trade Marks Directive given that a German trade mark is only effective in Germany.
These doubts are justified, as an extraterritorial title to prohibit is difficult to reconcile with the territoriality principle of trade mark law. The principle of territoriality stipulates that the scope of protection of a trade mark is confined to the country of protection, ie a German trade mark is only effective in Germany. Only if infringing acts occur, or are threatened to occur, in Germany (such as offering, advertising or selling in Germany) can they be prohibited on the basis of a German national trade mark registration.
The ECJ decision
The ECJ was seemingly unconcerned by such systematic and fundamental considerations. It considered the principle of territoriality to be upheld if the purpose of the possession is the offering or placing of the infringing goods on the market in the country of protection, even if the possession itself takes place abroad. The consequence is that the act to be prohibited need not occur in the territory of protection but can occur outside that territory and can be prohibited there.
What does this mean for you?
For trade mark owners fighting against the supply of infringing goods from abroad, the ECJ ruling is really good news. The ECJ gives the trade mark owner extraterritorial injunctive powers. It strengthens the position of the trade mark proprietor.
This is significant in practical terms. Previously, a trade mark proprietor could only obtain injunctive relief with effect in the country of protection. As a result, goods infringing trade mark rights on their way to the country of protection could only be subject to injunctions at the border of the country of protection at the earliest. Customs surveillance measures also took effect at the border at the earliest.
Now, the trade mark proprietor's arm extends beyond the border and abroad. The trade mark proprietor can intervene in the logistics chain of a trade mark infringer much earlier. In concrete terms: on the basis of a, for example, German injunction order, the proprietor of a German trade mark can access warehouses abroad in accordance with local enforcement rules. It is as if the trade mark owner has an EU trade mark registration as opposed to just a national trade mark registration.
If you would like to discuss protecting your brand from counterfeiting or parallel imports, please get in touch. For the UK, you can also consult our comprehensive Anti-counterfeiting Guide.
