CJEU rules on Member State jurisdiction over online EU trade mark infringement

AMS Neve v Heritage Audio

Summary

The CJEU has ruled that a defendant who targets customers in an EU Member State when advertising and offering infringing products for sale online can be sued in the competent courts of that Member State for infringement of EU trade marks.

Following this ruling, a trade mark owner may choose to sue a defendant for advertising and offering products online that infringe an EU trade mark in either:

• the defendant's jurisdiction of domicile or establishment, in relation to infringing acts across the whole EU (under Article 97(1) of the CTM Regulation, now Article 125(1) of the EUTM Regulation) – this was not in dispute in this case, or
• a jurisdiction to which online advertising and offers for sale are targeted, in relation to infringing acts in that jurisdiction only (under Article 97(5) of the CTM Regulation, now Article 125(5) of the EUTM Regulation).

Although this may seem like an intuitive result, it was previously unclear whether the 2009 CTM Regulation (and equivalent provisions in the 2017 EUTM Regulation) conferred jurisdiction on the courts of:

• the Member State to which infringing online advertising and offers for sale were targeted, or
• the Member State where the defendant decided to put infringing signs online and took steps to do so.

The CJEU has ruled in favour of the former.

Background

The case arose out of proceedings before the English courts against Spanish-domiciled company Heritage Audio, which advertised and offered infringing goods for sale on a website targeted at customers in the UK.

The claimants brought proceedings in the Intellectual Property and Enterprise Court (IPEC) for infringement of UK trade marks and passing off and for infringement of an EU trade mark.

While Hacon J determined that the IPEC had jurisdiction to hear the claims for infringement of national rights (the UK being the "place where the harmful event occurred" under Article 7 of the Recast Brussels Regulation), he found that it did not have jurisdiction to hear the claim for EU trade mark infringement.

Jurisdiction in relation to infringement of EU trade marks is governed not by the Recast Brussels Regulation but by the CTM Regulation and EUTM Regulation (as applicable, depending on when the infringements occurred).

These Regulations provide that claims for infringement shall be brought in the courts of the Member State in which the defendant is domiciled or, if not domiciled in any Member State, has an establishment (Article 97(1) CTM Regulation/ Article 125(1) EUTM Regulation), and "may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened" (Article 97(5) CTM Regulation/ Article 125(5) EUTM Regulation).

The CJEU judgment

The CJEU held that the "Member State in which the act of infringement has been committed" is, in circumstances where infringement occurs by advertising and offering to sell online, the Member State to which the relevant advertising and offers for sale are targeted. The CJEU based its decision on the following factors:

• a defendant should not be able to undermine the application of Article 97(5) CTM Regulation/Article 125(5) EUTM Regulation and deprive EU trade mark owners of the intended alternative forum simply by ensuring that it places advertising and offers for sale online from the same territory as that in which it is established or from outside the EU
• it would be inappropriate for the alternative forum under Article 97(5) CTM Regulation/ Article 125(5) EUTM Regulation to be the place where the defendant took decisions and technical measures to activate advertising and offers for sale, since it may be excessively difficult or even impossible for the claimant to establish where those actions took place before bringing proceedings
• the interpretation of Article 97(5)/ Article 125(5) should be consistent with the other provisions of the CTM/ EUTM Regulation with respect to infringement. In cases such as this, the relevant infringing acts of advertising and offering for sale are (under the CJEU's decision in L'Oréal v eBay) considered to take place in the territory where the relevant commercial content is accessible and to which it is targeted
• the courts of the Member State to which online advertising and offers for sale are targeted are best suited to assessing whether the trade mark has been infringed
• the "Member State in which the act of infringement has been committed" under the CTM/ EUTM Regulation and the "place where the harmful event occurred" under the Recast Brussels Regulation should be interpreted with some degree of consistency to reduce the incidence of parallel actions being brought in different Member States concerning the same parties and facts, one under EU trade marks and the other under national trade marks.

Case Ref: C – 172/18