CJEU clarifies the position on online trade mark jurisdiction

After much anticipation, the Court of Justice of the European Union (CJEU) has clarified the position on cross-border jurisdiction for online trade mark infringements.  In a decision which will be welcomed by trade mark owners, the Court has confirmed that EU trade mark owners can sue in the Member State at which a website is targeted.

The case – AMS Neve Ltd & Others v Heritage Audio & Another[i]

The case concerned UK based Company, AMS Neve, which makes and sells audio equipment under the mark 1703, and Spanish company, Heritage Audio (Heritage), which sells and supplies similar products. AMS Neve is the exclusive licensee of an EU trade mark for the number 1703. It complained that Heritage’s website offered for sale audio products bearing an identical or similar sign and that the descriptions of these products were written in English with distributors listed as established in various countries, including the UK.  Taking the view that these advertisements and offers were directed at UK customers, AMS Neve commenced proceedings claiming trade mark infringement of the EU trade mark as well as two other UK marks in the UK Intellectual Property Enterprise Court (IPEC).

We are Spanish, sue us in Spain

Heritage argued that under Article 97 of the EU Trade Mark Regulation (EC) No 207/2009, IPEC did not have jurisdiction to decide the case as they were a business established in Spain. They argued that where a defendant is established in another Member State and all of the allegedly infringing actions were taking place in that Member State, the claim could only be heard in that particular Member State.

Article 97 provides that a defendant may be sued in the courts of the Member State in which it is domiciled or established or in a Member State in which the ‘act of infringement has been committed or threatened’. The key question was, therefore, where the acts of infringement had been committed or threatened - was it Spain, where the defendants had taken steps to put the marks onto the website, or could the act of infringement also be regarded as taking place in the UK, where customers would see the infringing advertisements and offers? This question was eventually referred to the CJEU by the English Court of Appeal.

The decision

The CJEU delivered their decision on 5 September 2019 confirming that a trade mark owner may bring an infringement action in the court of the Member State in which consumers are being targeted by the relevant advertisements and offers, notwithstanding the fact that the infringer had made decisions and taken steps in another Member State to bring about the display of the advertisements and offers on the website. It will be for the court in the relevant Member State (here the UK) to decide whether consumers in the Member State are in fact targeted.

Implications

The decision will be welcomed by trade mark owners because it avoids a situation where the rule on jurisdiction for EU marks is different from that for UK marks. So in a situation (as in this case) where the trade mark owner owns both EU trade marks and also UK marks, action against the infringer will be able to be taken in the UK in relation to both types of mark if the website targets the UK.  The alternative interpretation would have produced a rule whereby the infringer of an EU trade mark could only be sued either in the courts of domicile or in the place where it has taken steps or made decisions about the display on the website; in practice this would mean in many cases that the infringer could only in fact be sued in its home court as those steps and decisions will often have been taken in its home country.