Following a 2016 decision in the UK Courts that had the potential to weaken enforcement strategies against online infringements of EU trade marks (EUTMs), the European Court of Justice (CJEU) has issued a decision that will reassure brand owners. In AMS Neve v Heritage, the CJEU confirms that a claim for infringement of an EUTM arising from advertising or the offer of products on a website may be brought in a Member State where the consumers or traders to whom that website is targeted are located. This reverses the finding of the English court, that the claim for infringement of an EUTM (as opposed to a UK trade mark) had to be brought in the Member State where the defendant committed the alleged wrongful acts, and not where it had an effect.
AMS Neve is an English company making and selling audio equipment. It brought infringement (and passing off) proceedings in the Intellectual Property Enterprise Court relying upon both UK and EU trade marks against Spanish company Heritage, which sells and supplies audio equipment – in Spain and via its website. The Heritage website is written in English, has a 'where to buy' section including a UK distributor, and its terms of sale make it clear it will accept order from EU member states.
The outcome in the IPEC was divergence between jurisdiction over the UK trade mark (and the passing off claim), and enforcement of the EU trade mark. The IPEC decided it could hear the UK infringement and passing off claim, arising out of use of an alleged infringing sign on Heritage's website, which was arguably targeting the UK. However, it concluded it did not have jurisdiction to hear the EU trade mark infringement claim, even though it said there was a good arguable case for use of an identical or similar sign in the UK. That claim had to be heard in Spain.
Clearly this outcome would lead to significant procedural inefficiency and no doubt the risk of irreconcilable decisions – parties would be arguing over the same activities in relation to the same territories, but before different courts in different jurisdictions. On appeal, the Court of Appeal, whilst doubting the correctness of the IPEC's approach, did recognise it had some support in recent CJEU case law. According, it referred questions to the CJEU on this point.
Under the EUTM Regulation, the default rule is that a trade mark owner should sue an alleged infringer for EU trade mark infringement in the EU Member State where that alleged infringer is domiciled (there are then a cascade of provisions that will apply where the defendant is not domiciled in a Member State). However, a trade mark owner can alternatively bring proceedings in the Member State where the act of infringement has been 'committed or threatened'. Importantly, in that scenario, any remedies awarded will be limited to acts of infringement occurring in that territory, i.e., there will be no pan-EU relief.
The CJEU concluded that, in the case of website advertising and offers for sale, there will be relevant acts committed in the territory where the consumers or traders who are the target of that advertising or offer for sale are located, regardless of where the defendant or its server is established, or of the location of its products. Jurisdiction in relation to EU trade mark infringement is not limited to where the operator of the website set it up and activated its display. This was the only outcome that would preserve the effectiveness of the provision of an alternative forum under the EU trade mark regime.
Accordingly, in online infringement scenarios, there must be an assessment based on the content of the website as to whether the advertising and offers for sale target consumers or traders situated in the relevant Member State. The CJEU's decision will assist rights holders in their enforcement strategies against online infringers, including where those websites are based outside of the EU.