FACULTY OF LAW Lund University Astrid Andersson The distinction between primary and contributory trademark infringement in the EU JAEM03 Master Thesis European Business Law 30 higher education credits Supervisor: Ulf Maunsbach Spring semester 2015 Contents SUMMARY 1 SAMMANFATTNING 2 PREFACE 3 ABBREVIATIONS 4 1 5 2 3 4 INTRODUCTION 1.1 Background 5 1.2 Purpose and question formulation 6 1.3 Limitations 6 1.4 Method and material 7 1.5 Disposition 8 EU TRADEMARK LAW – THE LEGAL FRAMEWORK 9 2.1 Introduction to EU trademark law 9 2.2 EU trademark Regulations 11 2.3 The Paris Convention and the TRIPS Agreement 12 THE FUNCTIONS OF TRADEMARKS AND SCOPE OF PROTECTION 15 3.1 The functions of trademarks 15 3.2 Rights conferred by a trademark 16 3.3 Special protection for well-known trademarks 20 3.4 Restrictions on the trademark right 23 3.5 Rights conferred by a copyright and related rights 25 CONTRIBUTORY INFRINGEMENT AND EU LAW 27 4.1 Contributory liability for trademark infringement 27 4.2 What do the Directives say? 28 4.2.1 The E-Commerce Directive 29 4.2.2 The Enforcement 30 4.2.3 The Infosoc Directive 30 4.3 Contributory infringement on the internet 31 4.2.1 The Google France and Google case 32 4.2.2 The L’Oréal v eBay case 34 4.2.3 The UPC Telekabel case 36 4.4 6 38 4.4.1 The UDV North America case 38 4.3.2 The Red Bull case 40 4.3.3 Opinion of AG Kokott in Red Bull 42 4.5 5 Real life contributory infringement Contributory infringement in Germany, the United Kingdom and France 4.4.1 Germany 43 4.4.2 The United Kingdom 44 4.4.3 France 44 ANALYSIS 43 46 5.1 The distinction between primary and contributory trademark infringement 46 5.2 Towards harmonisation? CONCLUSION 50 53 BIBLIOGRAPHY 55 TABLE OF CASES 59 Summary There are two different kinds of trademark infringement: primary and contributory. Primary infringement is regulated in Article 5 TMD, and this Article has been subject to numerous judgments from the CJEU. On the other hand, contributory infringement is still a national matter and there is no common definition throughout the EU of what a contributory infringement actually is. With the CJEU’s judgments in Google France and Google and L’Oréal v eBay, it has been discussed whether an ISP such as Google or eBay can be liable for trademark infringement. The CJEU has come to the conclusion that an ISP such as those at issue cannot be liable for primary infringement, for example when allowing use of keywords that correspond to other parties trademarks. However, an ISP can still be liable for contributory infringement if it does not fulfill the conditions in the E-commerce Directive. The CJEU has in its judgments concerning primary trademark infringement, Article 5 TMD, focused on whether there has been “use” by the alleged infringer, and whether the alleged “use” of the trademark has been detrimental to the functions of the trademark. In cases such as Google France and Google and L’Oréal v eBay, the CJEU has held that for an ISP to avoid contributory liability in accordance with the E-commerce Directive, the ISP must only provide with the technology and have a neutral and passive role. The distinction between primary and contributory infringement, taken by the CJEU, can hence be “use” on the one hand and “active role” on the other. What differs “active role” from being neutral and passive might lie in a prerequisite such as negligence. Different interpretations of contributory infringement might be detrimental to the legal certainty, and can in the long run harm the free movement of goods and services. Therefore, a common definition would be appreciated. Factors to take into account when defining a contributory infringement might be whether the alleged infringer has acted negligent, what role it has played, the nature of the service (whether the service provider is neutral or active) etc. 1 Sammanfattning Det finns två olika sorters varumärkesintrång: primära och sekundära. Primära intrång regleras i Artikel 5 i varumärkesdirektivet, vilken har varit föremål för flertalet domar från EUdomstolen. Det finns idag ingen allmän definition av ett sekundärt intrång, eftersom medverkansansvar regleras i nationell rätt. EU-domstolens domar i Google France and Google och L’Oréal v eBay, har föranlett en diskussion om huruvida en söktjänstleverantör såsom Google och eBay kan hållas ansvariga för varumärkesintrång. Enligt EU-domstolen är så inte fallet när en söktjänstleverantör, såsom Google, tillåter sina kunder att använda andras varumärken i så kallad ”keyword advertising”. Detta till trots, en söktjänstleverantör kan åläggas medverkansansvar om denne inte uppfyller de krav som ställs upp i E-handelsdirektivet. EU domstolen har i sina domar gällande primära varumärkesintrång, Artikel 5 i varumärkesdirektivet, fokuserat på huruvida det har förekommit ”användning” av varumärket och i så fall huruvida detta har skadat varumärkets olika funktioner. I rättsfall såsom Google France and Google och L’Oréal v eBay, har EU domstolen klargjort att för att undvika medverkansansvar i enlighet med E-handelsdirektivet, måste söktjänstleverantören endast tillhandahålla med tekniska hjälpmedel samt utöva en roll som är i sin natur neutral och passiv. Gränsdragningen mellan primära och sekundära intrång kan därför rimligtvis ligga mellan rekvisiten ”användning” och att ha en ”aktiv roll”. Vad som skiljer mellan att spela en ”aktiv roll” jämfört med en passiv och neutral roll kan ligga i rekvisit såsom oaktsamhet. Olika tolkningar av sekundära intrång och dess medverkansansvar kan leda till en situation då rättssäkerheten ställs på sin spets, och kan i det långa loppet vara ett hinder mot den fria rörligheten av varor och tjänster. En gemensam definition av sekundära intrång skulle därför troligtvis vara mycket uppskattad. Vid utformandet av en sådan definition finns det flera faktorer som måste tas i beaktande, exempelvis vilken roll medverkaren har haft (dvs neutral eller aktiv), huruvida denna har handlat oaktsamt etc. 2 Preface Eleven semesters have come to an end. Realizing that this thesis is the last one, that there will be no more exams, is very hard. Even though it is a bit scary, I am longing to start working as a lawyer, to be able to practice what I have learnt. I would like to thank my supervisor, Ulf Maunsbach, for his support and valuable input, as well as for all interesting conversations we have had. Thank you. Flyinge, May 2015 Astrid Andersson 3 Abbreviations AG Advocate General CFI Court of First Instance CJEU Court of Justice of the European Union CTM Community Trade Mark CTMR Community Trade Mark Regulation EU European Union GC General Court IPR Intellectual Property Right ISP Internet Service Provider TFEU Treaty on the Functioning of the European Union TMD Trademark Directive TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights UK United Kingdom WIPO World Intellectual Property Organization WTO World Trade Organisation 4 1 Introduction 1.1 Background The national dispute between Google and Louis Vuitton1 lasted for several years but finally, in 2010, the CJEU gave its ruling. An internet service provider (ISP) does not use a trademark within the meaning of Article 5 of the Trademark Directive (TMD), when it allows its customers to use other trademarks in keyword advertising. An ISP can therefore not be liable for trademark infringement based on the Article mentioned. However, that does not necessarily mean that Google could not be liable for contributory infringement, which was up to the referring court to determine. Infringement of intellectual property can be either primary or contributory. A primary infringement is rights specific, meaning that the infringement depends on the rights conferred by the specific intellectual property. These rules are harmonised. With contributory infringement, it is different. There is no specific definition of what a contributory infringement actually is, so contributory infringement is not harmonised to the same extent as primary infringement. However, several Directives (such as, for example, the E-commerce Directive and the Enforcement Directives that will be discussed in chapter 4) state that a right holder should be able to apply for an injunction against an “intermediary”. The Ecommerce Directive also contains some provisions which describe when an ISP cannot be held liable for contributory infringement. There is hence no need to, when it comes to contributory infringement, distinguish the different kinds of intellectual property from each other. The determination of what is a contributory infringement is thus a national matter, and the different Member States all have different tort law. Since there are different views of what a contributory infringement is, this might lead to a threat against the legal certainty for companies that act on different markets. If we go back to the Google France and Google case, the CJEU said that Google could avoid liability if its role was passive and if Google only provided its customers with the technology. 1 Google v Louis Vuitton Melletier et al, C-236/08, C-237/08 and C-238/08, EU:C:2010:159. This case will be analysed in chapter four of this thesis. 5 But how far reaching are these requisites, and when do they become “use” instead? It is this distinction, between primary and contributory infringement, that will be analysed in this thesis. 1.2 Purpose and question formulation The purpose of this thesis is to analyse the distinction between primary and contributory infringement of intellectual property. Primary infringement is rights specific, since each type of intellectual property has different rights conferred by it. On the other hand, there is no need to distinguish contributory infringements from each other depending on what type of intellectual property the infringement concerns. The thesis will, however, focus on trademark law, but since contributory infringement is a general issue, it will also include some aspects of copyright and related rights law. The main question analysed is “What is the view taken by the CJEU, on the distinction between primary and contributory trademark infringement?” The author will also analyse the question: Does the view differ depending on whether it is an internet related or a real life contributory infringement? Finally, since there are today no common definition in the EU on what is a contributory infringement of intellectual property, the third question discussed is: Do we need a common definition on contributory infringement of intellectual property rights in the EU? 1.3 Limitations Primary infringement depends on the rights conferred by the specific intellectual property law, but contributory infringement does not has to be distinguished in that way. Therefore, it would have been interesting to make a comparison of the judgments from the CJEU on the different areas, to see whether the judgments differ depending on what specific intellectual property right it concerns. However, due to lack of space this thesis will focus on trademark law but will, as already stated, include some aspects of copyright and related rights law. The relationship between intellectual property law and competition law is interesting, and the protection of intellectual property rights does raise competition concerns, and can be harmful 6 to the internal market. But, for the same reasons as above, the author has decided not to make an in-depth analysis of these concerns. 1.4 Method and material The author has used an EU legal method when writing this thesis. The different sources of law that can be used when working with this method are, among others, the Treaties2, the Charter of Fundamental Rights, case law from the CJEU, general principles, international agreements etc.3 The Treaties are at the top of the hierarchy of norms in the EU, followed by general principles (such as proportionality, legal certainty and fundamental rights) and the legislative acts (such as Directives, Regulations and decisions).4 According to Article 19(1) TEU, the CJEU shall ensure that in the interpretation and application of the Treaties the law is observed. The CJEU has been entrusted with the functions of a constitutional court, so case law from the CJEU is hence fundamental and of great importance for legal arguments.5 Case law is central to this thesis. The author is of the opinion that for problems concerning trademark law, case law is the most valuable source of law. There are no specific Articles in the Treaties that deal with this field of law in a practical way (compared to, for example, competition law where Articles 101 and 102 TFEU are extremely important). Further, emphasis has been given to provisions in different Directives that are important for trademark law as well as intellectual property law in general, such as the TMD, the Enforcement Directive, the Infosoc Directive and the E-commerce Directive. Many cases (that concern trademark law) referred to the CJEU for preliminary ruling concern an interpretation of the provisions in the TMD, and for Internet related cases the E-commerce Directive has been of great importance. The author is of the opinion that opinions from the advocate generals are interesting and a good complement to judgments from the CJEU. However, in this thesis they have not been used very much as valuable sources of law but rather as a contribution to the legal discussion. 2 The Treaty of the European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU). Hettne- Otken Eriksson, 2011, p. 40. 4 Craig – de Búrca, 2011, p. 109, 112. 5 Ibid. p. 49 and Eckes, 2013, p. 173. 3 7 Lastly, reputable scholars have written the doctrine used in this thesis. Doctrine does not have a high hierarchal status so the author has therefore obviously not given it the same status as a source of law as with the cases from the CJEU. However, the doctrine has still been very valuable and useful. It has helped the author with the interpretation of different cases, and has been useful in balancing judgments. Further, doctrine has been of great importance for the more theoretical chapters. The author has chosen to analyse the material from the rightholder’s point of view. There is a trend in the EU that goes towards a strong legal protection, and it can be discussed whether the judgments from the CJEU referred to in this thesis are in line with that trend. 1.5 Disposition The thesis consists of six chapters. The second chapter gives the reader an insight into the legal framework of EU trademark law, and also information about how the views on trademarks have evolved over time. Since this thesis intends to analyse the distinction between primary and contributory trademark infringement, the third chapter discuss the rights conferred by a trademark and different forms of primary trademark infringement. A brief comment on primary infringement in copyright and related rights will also be given in this chapter. The following chapter will then discuss contributory infringement. Contributory infringement is a general issue, so this chapter will discuss both contributory infringement of trademark rights as well as contributory infringement of copyright and related rights. However, due to lack of space emphasis will be given to trademark cases. In chapter five the author will analyse the material from the previous chapters followed by a short conclusion in chapter six. 8 2 EU trademark law – the legal framework 2.1 Introduction to EU trademark law The view on intellectual property within the EU is, in general, positive. Intellectual property has great economic value, so it is not surprising that the Regulations surrounding it have gone in the direction towards a stronger legal protection. However, this legal protection must be balanced with one of the core objects with the union; the importance of the internal market and the free movement of goods and services. Differences in national trademark legislation might lead to difficulties for the internal market to function correctly, and it will especially lead to restrictive practices for some companies. Therefore, the Regulations concerning intellectual property in the EU build upon several objects. One of the most important objects is the “level playing field”, meaning that the legal protection of intellectual property in the different Member States shall be harmonised to the extent that the companies can compete on similar conditions (which will encourage the free movement of goods and services). Another core object is to strengthen European companies’ competitiveness against companies from, for example, the USA and China.6 Therefore, the efforts to harmonize trademark law in the EU build upon the need and wish to create a proper functioning internal market, and not on a desire to overcome conceptual divergences.7 However, the first judgments from the CJEU on trademarks were, for trademark owners, disastrous. The CJEU showed lack of comprehension of even the basic functions of a trademark, and trademarks were looked down on as “second-class industrial property rights”.8 Patents and copyright were seen by the CJEU as intellectual property that stimulated and rewarded scientific process and literary creativity. Trademarks, on the other 6 Ibid. p. 14. Kur, 2008, pp. 151-152. For example, when the Treaty of Rome came into force 1958, the views on intellectual property were quite different between the Member States. In France the rights conferred by a trademark were not essentially different from the rights concerning patents and copyright. In Germany, on the other hand, the focus laid on the origin function of the trademark. The origin function was the sole and mandatory guideline regarding the protection, and acquisition, of trademarks. 8 Keeling, 2003, p. 153. 7 9 hand, “were despised as vulgar commercial rights hardly worth of protection”.9 In the Sirena v Eda case10, Advocate General Dutheillet de Lamothe stated: “Both from the economic and from the human point of view the interests protected by patent legislation merit greater respect than those protected by trade marks”.11 “From the human point of view, the debt which society owe to the “inventor” of the name “Prep Good Morning” is certainly not of the same nature, to say at least, as that which humanity owes to the discoverer of penicillin”.12 Later on, in the Hoffmann- La Roche v Centrafarm case13, the CJEU took another approach. In para. 7 of the judgment, the CJEU said that: “…regard must be had to the essential function of the trade mark, which is to guarantee the origin of the trade-marked product to the consumer or ultimate user, by enabling him without any possibility of confusion to distinguish that product from products which have another origin”. The judgment in Hoffmann- La Roche v Centrafarm was the beginning of a very different view on trademarks.14 Finally, in the HAG II case15, the CJEU once again made clear the value and importance of trademarks by saying: “Trade mark rights are, it should be noted, an essential element in the system of undistorted competition which the Treaty seeks to establish and maintain. Under such a system, an undertaking must be in a position to keep its customers by virtue of the quality of its products and services, something which is possible only if there are distinctive marks which enable customers to identify those products and services. For the trade mark to be able to fulfil this role, it must offer a guarantee that all goods bearing it have been produced under the control of a single undertaking which is accountable for their quality.”16 9 Keeling, 2003, p. 153. Sirena SRL v Eda SRL, C-40/70, ECLI:EU:C:1979:236. 11 Sirena SRL v Eda SRL, C-40/70, Opinion of AG Dutheillet de Lamothe, p. 87. 12 Ibid. 13 Hoffmann- La Roche v Centrafarm, C-102/77, ECLI:EU:C:1978:108. 14 Keeling, 2003, p. 156. 15 SA SNL- SUCAL NV v HAG GF AG, C-10/89, ECLI:EU:C:1990:359 16 Ibid. para. 13. 10 10 The judgments from the CJEU have changed radically, and as Keeling says “…the Court can only be applauded for admitting to past errors and recognising the importance of trademarks in the clearest of terms”.17 2.2 EU trademark Regulations EU Trademark law builds upon the Trademark Directive (TMD)18 and the Community Trademark Regulation (CTMR)19. They have been developed together, side by side, as two means to remove barriers of trade within the internal market.20 The discussion on whether there should be a community trademark system started in 1958. The legislators saw this as a prerequisite for a well-functioning internal market, and as a way to improve integration throughout the community. However, it took more than 30 years before the first CTMR was presented21.22 The CTMR has three characteristics. It is an autonomous, supranational and independent system, meaning that it exists along with the national trademark legislation in the Member States. It is directly applicable, so every citizen has the right to invoke it. Further, the CTMR is unitary. A CTM enjoys the same protection and legal effect in all Member States, with one single application. It is a form of “all or nothing” – if you file for a CTM, that application will be processed in all Member States, meaning that it is not possible to only choose some Member States when filing an application. The third characteristic is coexistence. A CTM does not replace national trademark rights. The CTMR and the national legislation exist alongside each other, and on an equal basis.23 17 Keeling, 2003, p. 157. Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks. Henceforth: The TMD. 19 Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark. Henceforth: The CTMR. Note that the name “Community trade mark” will change to “European trade mark”. 20 Max Planck Institute for Intellectual Property and Competition Law in Munich, 2011, p. 49. 21 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark. The first draft was presented in 1964. 22 Levin, 2011, p. 381. 23 Tsoutsanis, 2010, p. 110. Note that a CTM can only enjoy protection through registration. 18 11 The TMD aims at harmonising the provisions of national trademark law that are most likely to affect the internal market. Recital 4 of the TMD: “It does not appear to be necessary to undertake full-scale approximation of the trade mark laws of the Member States. It will be sufficient if approximation is limited to those national provisions of law which most directly affect the functioning of the internal market.” However, according to some scholars, in practice, this recital has not been interpreted in a very strict manner by the CJEU. With help from the TMD, the CJEU has more or less harmonised almost the complete body of trademark law in the Member States. 24 The case law from the CJEU is, compared to other fields of intellectual property law, exceptionally rich. This development has evidently led to a situation where the case law from the CJEU is of crucial importance for trademark law.25 2.3 The Paris Convention and the TRIPS Agreement The World Intellectual Property Organization (WIPO)26 administers 26 treaties, and the Paris Convention is one of them.27 The Paris Convention for the Protection of Industrial Property28 applies to industrial property in its widest sense and includes, among other things, patents and trademarks. 29 The Paris Convention has established minimum standards, and it builds upon three categories: national treatment, right of priority and common rules. National treatment means that each Contracting State must grant the same protection to nationals of other Contracting States that it grants to its own nationals, and they shall enjoy the same legal remedy against any infringement of their rights30. The right of priority means that any person who has duly filed an application for, e.g., a trademark in one of the countries of the Union shall enjoy 24 Dinwoodie, 2013, p. 6. Kur, 2008, p. 155. 26 WIPO is the global forum for intellectual property services, policy, information and cooperation. It manages the Madrid system, which is a one stop solution for registering trademarks worldwide. It also manages the International Patent System (WIPO PCT) and the International Design System (WIPO HAGUE). Further, WIPO offers alternative dispute resolution in IP and technology disputes, such as arbitration and mediation. See WIPO, WIPO is the global forum for intellectual property services, policy, information and cooperation. 27 WIPO, WIPO-Administered Treaties. 28 Henceforth: The Paris Convention. 29 WIPO, Summary of the Paris Convention for the Protection of Industrial Property (1883). 30 Article 2(1) of the Paris Convention (1967) and Abdulqawi, 2008, p. 41. 25 12 a right of priority for filing in the other countries for a period of six months31. The Paris Convention also includes some common rules. For example, one of the common rules is that an application for registration of a trademark filed by a national of a country in the Union may not be refused (in any other country of the Union) on the ground that filing, registration or renewal has not been effected in the country of origin. A registration may not, on the same grounds, be invalidated.32 Articles 6 and 6bis-6septies of the Paris Convention are the Articles that specifically deal with matters concerning trademarks. In the Paris Convention, trademarks have rights beyond those of patents and designs. The rights concerning patents and designs are territorial, meaning that they are only valid and have only legal effect in the countries in which they have been registered. This is not the case with trademarks.33 In Article 6bis of the Paris Convention, wellknown marks have special and extended rights. This Article states that a trademark that has not been registered in a specific country will still enjoy legal effect there if it is considered to be well known by the competent authority. However, this right is limited to identical or similar goods. The WTO’s TRIPS agreement of 1994 brings the different laws and standards surrounding intellectual property around the world under international rules. The agreement establishes minimum levels of protection of intellectual property that the WTO signatories must follow.34 The TRIPS agreement builds upon the Paris and Berne Conventions, but with more concrete and far-reaching principles. The principle of national treatment in the Paris Convention is still of importance, but has been accompanied with the most-favoured-nation-treatment principle.35 This principle means that, with regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members.36 Articles 15 and 16 of the TRIPS Agreement are the most interesting when it comes to trademark infringement. Article 15 concerns what is a protectable subject matter. According to the TRIPS 31 Article 4(a)(1) of the Paris Convention (1967). The periods of priority depends upon what industrial property the application concerns. For example, for patents and utility models the period of priority shall be 12 months and for industrial designs the period is six months, stated in Article 4(C)(1). 32 Article 6(2) of the Paris Convention (1967). 33 Levin, 2011, p. 387. 34 WTO, Intellectual Property: protection and enforcement. 35 Bernitz-Karnell-Pehrson-Sandgren, 2013, p. 15 and Article 4 of the TRIPS Agreement (1994). 36 Article 4 of the TRIPS Agreement (1994). 13 Agreement, any sign capable of distinguishing the goods or services of one undertaking from those of other undertakings shall be capable of constituting a trademark.37 Article 16(1) states the rights conferred by a trademark. The owner shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services, which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. Further, the specific right given to well-known trademarks in Article 6bis of the Paris Convention has been extended. In the Paris Convention, the right was limited to similar or identical goods. In the TRIPS Agreement, it says that Article 6bis of the Paris Convention shall apply, mutatis mutandis, to goods or services which are not similar, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark.38 To make sure that WTO signatories comply with the rules and principles set out in the TRIPS Agreement, the WTO has instituted a dispute settlement body. The CJEU has gained the competence to give preliminary rulings regarding the interpretation of the TRIPS Agreement in the EU.39 37 Ibid. Article 15(1) Ibid. Article 16(3). 39 Bernitz-Karnell-Pehrson-Sandgren, 2013, p. 16. 38 14 3 The functions of trademarks and scope of protection 3.1 The functions of trademarks The trademark has at least three different functions: the identifying or origin function, the quality function and the advertising and investment function.40 Among those three, the identifying or origin function is considered the most “essential”, since it informs the consumer about the source of the goods bearing the mark.41 This view was first established by the CJEU in Hoffmann- La Roche v Centrafarm42. It is also emphasised in recital 11 of the TMD, where it states that the protection afforded by the registered trademark, the function of which is in particular to guarantee the trademark as an indication of origin, should be absolute in the case of identity between the mark and the sign and the goods or services. Second, the trademark is associated with the quality of the product. The trademark communicates information to the consumer. For example, the consumer can associate the trademark with certain quality standards that the product fulfils. It has even been argued that today, the quality function has a greater value than the origin function.43 The third function that the trademark performs is advertising and investment. This function serves to both persuade and inform consumers. The best way for the producer to reach the consumer is with advertising and the trademark functions as a bridge between advertising and purchasing.44 The quality and identifying functions of a trademark are often analyzed together from the law and economics perspective. To give legal protection to a trademark is an incentive and will encourage the trademark owner to produce products of a high quality, and also to reduce consumer costs. If the consumer is pleased with the product, he or she will come back to the producer and buy more (and also be willing to pay more, if the consumer knows that the quality 40 Pak, 2013, p. 159. Ibid. 42 See Chapter 2.3 above. 43 Pak, 2013, p. 159f. 44 Ibid. p. 160. 41 15 is consistent), which will help the producer to receive returns to his investments. A satisfied consumer will also gain from the fact that their search costs will be reduced.45 Even though the origin function might be the most important, the CJEU made clear in its judgment in the very famous L’Oréal v Bellure case46 that for trademarks with a reputation, all functions are equally important. This case will be further discussed in chapter 3.2 as well as in chapter 3.3. In his opinion in HAG II, AG Jacobs stated that a trademark right must be exclusive. If the trademark proprietor has to share the mark with a competitor, he or she will lose control over the goodwill associated with the trademark. It would also be harmful to the consumers, since there is a possibility that they will be misled if there is no clarity about the origin of the trademark.47 3.2 Rights conferred by a trademark Article 5 TMD describes the rights conferred by a trademark. It states that the proprietor shall have the exclusive right to the trademark, and that he shall be entitled to prevent all third parties, not having his consent, from using the trademark in the course of trade. The use prohibited is either use of an identical mark to the same kind of goods or services offered by the rightholder (meaning, identical with those for which the trademark was registered for), or use of a similar mark to the same kind of goods or services, that can create a likelihood of confusion on the part of the public. For there to be a trademark infringement there are, as stated in Article 5 of the TMD, several prerequisites to take into consideration. In Canon v Metro-Goldwyn-Mayer Inc.48, Canon opposed an application by Metro-GoldwynMayer of the wordmark “CANNON”, claiming that it infringed its earlier registered trademark 45 Ibid. p. 160 and Landes-Posner, 1987, p. 269 ff. L’Oréal SA v Bellure NV, C-487/07, EU:C:2009:378. 47 SA SNL-SUCL NV v HAG GF AG, C-10/89, Opinion of AG Jacobs, para. 19. 48 Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc., C-39/97, EU:C:1998:442. 46 16 “Canon”.49 The CJEU stated that the assessment on whether there is a likelihood of confusion implies some interdependence between the relevant factors and in particular between the similarity between the trademarks and between the goods or services. The CJEU said: “Accordingly, a lesser degree of similarity between these goods or services may be offset by a greater degree of similarity between the marks, and vice versa.” It continued: “…the more distinctive the earlier mark, the greater risk of confusion…marks with a highly distinctive character, either per se or because of the reputation they possess on the market, enjoy broader protection than marks with a less distinctive character”.50 For there to be an infringement, there has to be “use” by a third party. In the case of Arsenal Football Club plc v Matthew Reed51, the CJEU stated that use of a trademark as a “badge of allegiance” or “badge of loyalty”, was no defense for a trademark infringement. The facts of the case were as follows. Arsenal is a well-known football club in the English Premier League, which has for a long time been associated with two emblems; a cannon device and a shield device. Arsenal is also nicknamed “the Gunners”. Arsenal had, since 1989, the words “Arsenal” and “Arsenal Gunners” together with the figurative marks (the cannon device and the shield device) registered as trademarks in the category for outer clothing, sports clothing, footwear etc. Arsenal uses the trademarks for merchandising; the club designs and supplies its own products or via approved resellers. The commercial activity with merchandisers has extended greatly, and is of great value for the football club.52 Mr. Reed sold unofficial football souvenirs marked with signs referring to Arsenal. The products were marked, in large letters, that they were unofficial souvenirs. Also, on one of his stalls there was a disclaimer saying that the products he offered for sale were not official Arsenal merchandise, and that his business had no relationship with the official manufacturers and distributors. Mr. Reed also sold a small amount of official merchandise, but these products were distinguished from the unofficial ones and were also more expensive. 53 49 Ibid. para. 3. Ibid. paras. 17-18. See also Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV, C-342/97, EU:C:1999:323, paras. 19-20, 28. The CJEU confirmed the judgment in Canon, and stated also that a mere aural similarity between trademarks may create a likelihood of confusion and can hence infringe the rights conferred by the registered trademark. 51 Arsenal Football Club plc v Matthew Reed, C-206/01, EU:C:2002:651. 52 Ibid. paras. 12-14. 53 Ibid. paras. 15-18. 50 17 One of the questions referred to the CJEU for preliminary ruling was whether a party, which used in the course of trade a sign identical with a registered trademark and had no defense to infringement by virtue of Article 6 of the TMD, could have a defense to infringement on the ground that the use complained of does not indicate trade origin (i.e. a connection in the course of trade between the goods and the trademark proprietor)?54 The CJEU started by saying that the use of a sign identical to the mark is use in the course of trade, since it takes place in the context of commercial activity with a view to economic advantage and not as a private matter. The use of the registered trademark hence falls within Article 5 (1)(a) of the TMD.55 Regarding the functions of the trademark, the CJEU said that the essential function of a trademark is to guarantee the identity of origin of the marked goods to the consumer or the end user of the product, without any possibility of confusion to distinguish the goods from others which have another origin.56 Even though Mr. Reed gave notice to his customers, there could still be a possibility that consumers who came across the product outside Mr. Reed’s stall could interpret the sign as designating Arsenal FC as the undertaking of origin.57 The CJEU concluded that Mr. Reed’s use of the sign could jeopardize the essential functions of the registered trademark (the guarantee of origin). Hence the trademark proprietor should be entitled to prevent all such use and rely on Article 5(1)(a) of the TMD.58 In Adam Opel AG v Autec AG59, Adam Opel discovered that Autec (owner of the trademark “Cartronic”) marketed a toy that was a 1:24 remote-controlled scale model of the Opel Astra V8 coupé, bearing the Opel logo (registered and owned by Adam Opel for, inter alia, vehicles and toys). Opel sought an order that prohibited Autec from commercially affixing the Opel mark to its toys. According to Opel, the use of the Opel mark on scale models vehicles by Autec constituted an infringement of that trademark, since the mark was being used for products 54 Ibid. para. 27. Ibid. para. 40. 56 Ibid. para. 48. 57 Ibid. para. 57. 58 Ibid. paras. 60, 62. It should be mentioned that in para. 54, the CJEU said that a trademark proprietor cannot prevent use by a third party if that use cannot affect his own interests as a proprietor, having regard to its functions (for example use for purely descriptive purposes and not for commercial sales to consumers). The CJEU here referred to the Michael Hölterhoff v Ulrich Freiesleben case (C-2/00, EU:C:2002:287). Mr. Hölterhoff was a dealer of precious stones, and used some registered trademarks in his oral negotiations with a lady running a jewelry business. The CJEU said that a trademark proprietor were not affected when a third party orally referred to his marks when offering goods for sale. This was though under the conditions that the third party made clear that he did not produce the goods and that the trademark was not perceived in trade as indicating origin. 59 Adam Opel AG v Autec AG, C-48/05, EU:C:2007:55. 55 18 identical with those it has been registered for. Autec claimed that the use of the “Cartronic” and “AUTEC” marks on the toy, the user instructions and on the remote control transmitter would not mislead the public about the origin of the product.60 The CJEU basically repeated the judgment in Arsenal, and stated that the trademark proprietor could prevent a third party from affixing the mark on its products, if that use could affect or was liable to affect the functions of the trademark, which was for the national court to determine.61 The rights conferred by a trademark (in this case the rights under Article 5(1) (a)), were further extended in the case of L’Oréal v Bellure et al62. The facts of the case were as follows. L’Oréal is the owner of several trademarks, such as the fine fragrances Trésor and Miracle. Bellure is a company that produces imitations of these fragrances. When marketing the imitations, the retailers are provided with comparison lists which indicate the word mark of the fine fragrance of which the perfume being marketed is an imitation. L’Oréal brought proceeding against Bellure et al, claiming trademark infringement.63 Several questions were referred to the CJEU. One of the questions referred concerned Article 5 of the TMD. The referring court asked whether Article 5(1)(a) or (b) of Directive 89/10464 must be interpreted as meaning that the proprietor of a registered trademark is entitled to prevent the use by a third party, in comparative advertising, of a sign identical with that mark in relation to goods or services which are identical with those for which that mark was registered, where such use is not capable of jeopardizing the essential function of the mark, which is to indicate the origin of the goods or services.65 The CJEU started by saying that comparison lists such as those at issue should be treated like comparative advertising when they, explicitly or by indication, identify a competitor or goods or services offered by a competitor. However, the lists could also be considered to be “use” and fall under Article 5 (1) (a) of the TMD. The CJEU said, and referred to the Arsenal case66, that the rights conferred to the trademark proprietor in Article 5 (1) (a) shall enable the proprietor to ensure that the trademark can fulfill its functions. Not only the essential function of the 60 Ibid. paras. 4-10. Ibid. para. 37. 62 L’Oréal SA v Bellure NV, C-487/07, EU:C:2009:378. 63 Ibid. paras. 14-22. 64 Replaced by today’s TMD. 65 Ibid. paras. 30, 51. 66 Arsenal Football Club plc v Matthew Reed, C-206/01, EU:C:2002:651, para. 51. 61 19 trademark, which indicates origin, but also the other functions such as guaranteeing the quality of the goods, communication, investment and advertising.67 The protection conferred in Article 5 (1) (a) is thus broader than that provided in Article 5 (1) (b). Further, the CJEU concluded that the use of the trademark did not fall within the scope of descriptive use, since they are used for the purpose of advertising. So basically, the CJEU concluded that a trademark proprietor shall have the right to prevent use by a third party (in comparative advertising that does not fulfill all conditions) even when the use is not liable to affect the essential function of the trademark.68 This case will be further discussed in the next chapter, regarding the special protection for well-known trademarks. 3.3 Special protection for well-known trademarks In Article 5 (2) of the Trademark Directive (as well as in Article 6bis of the Paris Convention), a special right is given to well-known marks. Article 5 (2) states that a Member State can extend the protection to goods or services which are not similar to those for which the trademark was registered if the trademark at issue has a reputation. The use of such a sign by a third party must take unfair advantage of, or be detrimental to, the distinctive character and the repute of the trademark. It is essential to clarify when a trademark is well known or has a reputation. In General Motors v Yplon69 (also called the Chevy case), the dispute concerned the trademark Chevy, a Benelux trademark registered (in 1961) for in particular motor vehicles, owned by General Motors. Yplon is also the owner of the Benelux trademark Chevy, registered in 1988 for detergents and various cleaning products. The latter trademark is also registered in several other Member States.70 In 1995, General Motors started proceedings against Yplon. General Motors claimed that the use of the trademark Chevy entailed dilution of its own trademark and thus damaged its advertising function. Yplon, on the other hand, claimed that General Motors had not showed that their trademark had a “reputation” in the Benelux countries (within the meaning of the The CJEU’s position regarding this discussion has been endorsed in several other cases. See, for example Google v Louis Vuitton Melletier et al, C-236/08, C-237/08 and C-238/08, EU:C:2010:159, and Portakabin Ltd v Primakabin BV, C-558/08, EU:C:2010:416. 68 L’Oréal SA v Bellure NV, C-487/07, EU:C:2009:378 paras. 52-65. 69 General Motors v Yplon, C-375/97, EU:C:1999:408. 70 Ibid. paras. 7-8. 67 20 Benelux law).71 The referring court stopped the proceedings and asked the CJEU to give a proper construction to the term “repute of the trademark”, and also to determine whether that condition must be satisfied throughout the Benelux countries or if it is sufficient for it to be satisfied in a part of the region.72 The interpretation made by the CJEU was quite short. First, the CJEU stated that a specific percentage cannot be required since that cannot be inferred from either the letter or the spirit of Article 5 (2) of the Trademark Directive. When the trademark is known by a significant part of the public concerned by the products or services covered by that trademark, it has a “reputation”. With the “public”, the CJEU means the people that are concerned with the trademark (e.g. traders in a specific sector). When determining this, the court must take into consideration all relevant facts of the case. Some of the most important factors are the market share held by the trademark, geographical extent and duration of its use, intensity and the size of the investment made by the trademark proprietor when promoting it. Further, the CJEU stated that the trademark must not necessarily have a reputation throughout the territory; it is sufficient if the trademark has a reputation in a substantial part of it. The CJEU also emphasized the need for the earlier mark to be detrimentally affected without due cause by the use of the trademark. The stronger the earlier trademark’s distinctive character and reputation, the easier will it be to accept that the use has been detrimental.73 In 2000, the CJEU handed down its judgment in the case Davidoff v Gofkid.74 Davidoff use its registered trademark Davidoff when distributing gentlemen’s cosmetics, cognac, ties glasses, cigars, pipes and pipe tobacco (all with related accessories) etc. Gofkid is the owner of the registered trademark Durffee, registered after Davidoff. Under the trademark Durffee, Gofkid distributes ashtrays, cigar and cigarette cases, cigar holders etc. Davidoff brought proceedings against Gofkid, claiming that there was a likelihood of confusion between the trademarks (Gofkid used the same script, with the “D” and “ff” presented in the same distinctive manner) and that Gofkid tried to take advantage of the high prestige mark Davidoff.75 71 Ibid. paras. 9-10. Ibid. para. 11. 73 Ibid. paras. 24-31. 74 Davidoff v Gofkid, C-292/00, EU:C:2003:9. 75 Ibid. paras. 6-9. 72 21 The referring court asked the CJEU whether Articles 4 (4) and 5 (2) of the Trademark Directive are to be interpreted as entitling the Member States to provide specific protection for registered trademarks with a reputation in cases where the later mark or sign, which is identical with or similar to the registered mark, is intended to be used or is used for goods or services identical with or similar to those covered by the registered mark.76 The CJEU started by saying that the question would only be examined under Article 5 (2), but that the response would apply mutatis mutandis to Article 4 (4)77.78 The CJEU made clear that for marks with a reputation, the protection given in 5 (2) is stronger than that given in 5 (1) since it entitles the trademark proprietor to prevent use of a sign which is identical or similar to the mark at issue even for goods or services that is not similar or identical to those at issue. The protection is given when the use takes unfair advantage of or is detrimental to the distinctive character or the repute of the mark.79 Article 5 (2) must not be interpreted by its strict wording, but rather by the objectives of the system; it is not reasonable that a mark with a reputation shall enjoy less protection where a sign is used for similar goods or services than for non-similar goods or services. Hence the CJEU concluded that the answer to the question was that the Articles at issue should be interpreted as entitling the Member States to provide specific protection for trademarks with a reputation towards use of a similar or identical sign for goods or services that are identical with or similar to those at issue.80 In L’Oréal v Bellure, the CJEU introduced a broad function theory in EU trademark law. In para. 49 of the judgment, the CJEU made clear that an attempt from the third party to ride on the coat-tails of the mark was enough for the action to be considered to be an advantage taken unfairly of the distinctive character or the repute of that mark. The CJEU had for a long time focused on the origin function as the “essential” function, but with this judgment the CJEU made clear that also the other trademark functions should enjoy absolute protection under Article 5 (1) (a) of the TMD. The quality, communication, investment and advertising functions are all functions that a trademark with a reputation can fulfill. In protecting these functions, the 76 Ibid. para. 14. In its proceedings against Gofkid, Davidoff searched for invalidity of the trademark Durffee. Article 4 of the TMD concerns “Further grounds for refusal or invalidity concerning conflicts with earlier rights”. 78 Davidoff v Gofkid, C-292/00, EU:C:2003:9 para. 17. 79 Ibid. paras. 19-21. 80 Ibid. paras. 23-25, 30. 77 22 law protects the investment made by the proprietor for the creation of the brand image. With this judgment, the CJEU lowered the threshold under Article 5 (2) of the TMD.81 3.4 Restrictions on the trademark right The trademark protection must not extend beyond what can be justified by the nature of the trademark right.82 For example, in the case Adidas v Fitnessworld83, the CJEU stated that if the public concerned only see the mark as an embellishment, the use by a third party of that mark cannot constitute an infringement of the proprietor’s rights. However, the situation is different if the public concerned establishes a link with the registered mark and the third party.84 Therefore, the legislator has formulated restrictions that will enable third parties to use signs similar to registered trademarks in a manner that is not detrimental to the functions of the trademark or to the other interests that the TMD and the CTMR are meant to protect.85 Some of these restrictions are already included in Article 5 of the TMD, but Article 6 contains specific restrictions, relevant to all articles on trademark infringement. The restrictions in Article 6 of the TMD are also meant to unite the interests of the protection of the trademark rights and those of the internal market and the free movement of goods and services.86 Article 6 of the TMD states that a trademark proprietor cannot prohibit a third party from using his own name or address, nor from using the trademark if it indicates the kind, quality, intended purpose etc. The Article is especially important for third parties that sell spare parts; they must be able to actually inform their customers about the intended purpose. For this to be possible, the third parties must have the right to use the sign, provided that such use is in accordance with honest practices. For example, if your last name is Philips you are entitled to use your name in a business, but you are not entitled to open an electronics shop under the name Philips Electronics etc.87 81 Senftleben, 2014, p. 518 f and Senftleben, 2011, p. 384. Cohen Jehoram – van Nispen – Huydecoper, 2010, p. 347. 83 Adidas v Fitnessworld, C-408/01, EU:C:2003:582. 84 Ibid. para. 41. 85 Cohen Jehoram – van Nispen – Huydecoper, 2010, p. 347. 86 Ibid. See also BMW v Ronald Karel Deenik, C-63/97, EU:C:1999:82 para. 62. 87 Ibid. p. 348. 82 23 The case The Gillette Company v LA- Laboratoires Ltd88 concerned razors marketed in Finland. Both companies marketed razors. LA-Laboratoires also sold blades under the trademark “Parason Flexor”. Affixed to the packaging of the blades was a sticker with the words “All Parason Flexor and Gillette Sensor handles are compatible with this blade”. Gillette brought an action against LA-Laboratoires, claiming that they had infringed Gillette’s registered trademarks “Gillette” and “Sensor”.89 According to Article 6(1)(c) of the TMD, a trademark proprietor is not entitled to prevent a third party from using the mark in trade where it is necessary to indicate the intended purpose of a product, in particular spare parts and accessories. However, as the CJEU said, that Article does not lay down any criteria for determining whether a given intended purpose falls within its scope. According to earlier case law from the CJEU90, it has been stated that use of a trademark to inform the public that the advertiser is specialized in the sale of products bearing the mark at issue constitutes use indicating the intended purpose of a product and hence falls within the scope of Article 6(1)(c) of the TMD. The same applies to advertisers that carry out repair and maintenance of the products bearing that mark. Further, the CJEU said that use of the mark at issue as a means to provide the public with the information necessary as to the intended purpose of the product which it markets falls within the scope of that article unless the third party can provide the public with that information without using the mark. This was for the national court to evaluate.91 The CJEU also touched upon the question of what is ‘honest practice’ in trade and commerce. Use of a trademark will, for example, not be in accordance with honest practice if it takes unfair advantage of the mark’s repute or distinctive character, if it gives the impression that there is a commercial link between the trademark proprietor and the third party or if the third party presents his products as an imitation or replica of the product bearing that mark.92 Article 6(1) of the TMD is important when it comes to cases regarding comparative advertising. The provisions in Article 4(f) of the Directive on Comparative Advertising93 are basically the 88 The Gillette Company v LA-Laboratoires Ltd, C-228/03, EU:C:2005:177. Ibid. paras. 13-14, 16. 90 BMW v Ronald Karel Deenik, C-63/97, EU:C:1999:82 paras. 54, 58-63. 91 The Gillette Company v LA-Laboratoires Ltd, C-228/03, EU:C:2005:177, paras. 30-31, 33-35, 37. 92 Ibid. paras. 40, 49. 93 Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising. 89 24 same as in Article 6(1)(b and c) of the TMD. According to the former Article, use of a trademark in comparative advertising must not be detrimental to the repute of the mark nor take unfair advantage of it etc. The comparative advertising will otherwise not fall within the scope of honest practices in industry and commerce. The judgment in Gillette can hence, to some extent, be adapted in cases regarding comparative advertising. However, use of a trademark in comparative advertising is permitted if it does not discredit or denigrate the trademark, if it compares goods or services meeting the same needs or intended for the same purpose etc. 94 The L’Oréal v Bellure judgment mentioned in Chapter 3.2 is of great importance (or, most probably, the most important judgment) when it comes to the question whether use of a trademark in comparative advertising can constitute trademark infringement.95 3.5 Rights conferred by a copyright and related rights Copyright is the term used when describing the exclusive rights conferred to authors, composers, publishers, musicians etc. The rightholders are divided into three categories: the creators, the performers and the entrepreneurs (hence “related rights”).96 Whilst trademark protection is generally dependent on registration, copyright protection is not. Because of agreements such as the Berne Convention97, literary and artistic works are given a similar level of protection in large parts of the world. However, copyright protection is still subject to national law and the harmonization is still only partial, which is apparent not least when it comes to the enforcement of rights.98 The granting of exclusive rights to authors, performers and entrepreneurs builds on two major objects. First, the grantor wants to reward the persons who enrich cultural heritage. Secondly, 94 95 Ibid. Article 4(b and d). Grigoriadis, 2014, p. 163. 96 Keeling, 2003, p. 263. Berne Convention for the Protection of Literary and Artistic Works of September 9 1886, amended on September 28 1979. Copyright is protected under several other treaties, such as the TRIPS Agreement. 98 Keeling, 2003, pp. 265-266. 97 25 there is the economic interest.: for there to be creative work made available to the general public, there must be a financial incentive for the creators.99 In the Joined Cases C- 92/92 and C-326/92 Phil Collins, the CJEU gave a definition of the specific subject matter of a copyright when saying, “The specific subject-matter of copyright and related rights, as governed by national legislation, is to ensure the protection of the moral and economic rights of their holders. The protection of moral rights enables authors and performers, in particular, to object to any distortion, mutilation or other modification of a work which would be prejudicial to their honour of reputation. Copyright and related rights are also economic in nature, in that they confer the right to exploit commercially the marketing of the protected work, particularly in the form of licenses granted in return for payment of royalties”.100 The CJEU said, in para. 28 of the Magill case, that the essential function of a copyright “…was to protect the moral rights in the work and ensure a reward for the creative effort”.101 99 Ibid. p. 266. Phil Collins and Imtrat Handelsgesellschaft mbH v Patricia Im-und Export Verwaltungsgesellschaft mbH and EMI Electrola GmbH, C-92/92 and C-326/92, ECLI:EU:C:1993:847, para. 20. 101 Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v The Commission of the European Communities, C-241/91 P and C-242/91 P, ECLI:EU:C:1995:98. 100 26 4 Contributory infringement and EU law 4.1 Contributory liability for trademark infringement Contributory liability is liability imposed on a party that did not directly commit the trademark infringement, but who nonetheless is responsible for the injuries caused by the infringement.102 However, this liability is not labelled in a universally accepted manner, leading to the conclusion that there is no common understanding of what is “indirect”, “secondary”, “contributory” and “vicarious” infringement. Further, the distinction between primary infringement and the different forms of secondary liability is unclear; that depends on the different national laws. 103 The view on contributory liability in the US and in the EU differs. In the US, the term “secondary liability” is a term that covers many different types of trademark infringement claims, and can be both participant-based and relationship-based. Participant-based liability occurs when the contributory infringer induces or contributes to or facilitates the harmful behaviour of the primary infringer. Relationship-based liability occurs, on the other hand, when the defendant benefits from the harm caused by the primary infringer and when their relationship is close enough for the law to treat them as one unit.104 The essence of the term “secondary liability” in the US is not to hold liable the alleged contributory infringer for using the plaintiffs trademark, but rather to hold the alleged contributory infringer liable for infringements made by the third party’s use of the plaintiff’s trademark. For trademark owners it can therefore be better, strategically, to bring a contributory liability claim instead of suing the third party infringer. In this way, one single proceeding may be enough to secure relief against a party who enables several acts of infringement by a number of primary infringers.105 102 Oswald, 2007, p. 38. Kur, 2014, pp. 529-530. 104 Dinwoodie, 2014, p. 463 and note 1. 105 Ibid. The benefits of suing for contributory liability have been enhanced since the entry of the internet. The efficiency gains are obviously magnified since the number of infringements that the defendant contributes to are 103 27 In the EU, there is no common definition of what a contributory infringement is. There are however, as will be discussed in the following subchapter, provisions in, for example, the Ecommerce Directive that deal with this matter106. However, the pertinent provisions apply horizontally, meaning that they do not distinguish between the different IPRs, which is not the case in the US.107 Even though there has not been a comparative study on this subject that covers all of the 28 Member States, it is a safe assumption that they all have some principles regarding contributory liability, either in general principles or as provisions in civil and tort law.108 The case law from the CJEU concerning contributory trademark infringement is limited, a fact that is not surprising since contributory infringement is governed by national law and is not specific for the different intellectual property. This chapter will therefore also discuss some aspects of copyright and related rights on the subject. Further, a brief commentary will be given on how contributory infringement is dealt with in Germany, the United Kingdom and France. 4.2 What do the Directives say? As discussed above, there is no harmonised definition of what is a contributory liability for intellectual property infringement in the EU. Contributory liability is for the national courts to determine on a case-by-case basis. What is certain is that each Member State must ensure that there is effective enforcement and protection of intellectual property.109 There are, however, some guidelines for the national courts regarding contributory liability in the E-Commerce Directive, the Enforcement Directive and the Infosoc Directive. way higher. Because of the problems that arise online, an international solution to potential liability for contributory trademark infringement has been demanded for. 106 In the 1980s, a group of scholars commenced a preparatory work on harmonization and unification of European Civil Law, but the work concerned mainly contract law. See Kur, 2014, p. 525, note 2. 107 Kur, 2014, p. 527. Ibid. p. 525 and Leistner, 2014, p. 75. 109 This is not just within the EU. Article 41 of the TRIPS Agreement states as follows: “Members shall ensure that enforcement procedures as specified in this part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement including expeditious remedies to prevent infringements…” 108 28 4.2.1 The E-Commerce Directive The E-Commerce Directive110 aims to contribute to the proper functioning of the internal market by ensuring the free movement of information society services between the Member States. It approximates certain national provisions on, inter alia, information society services relating to the internal market, the establishment of service providers, commercial communications, electronic contracts and the liability of intermediaries111 (emphasis added).112 The E-Commerce Directive deals with the central issues regarding electronic commerce, and therefore it is also known as “the legal framework Directive”.113 Recital 40 of the E-Commerce Directive states “Both existing and emerging disparities in Member States’ legislation and case-law concerning liability of service providers acting as intermediaries prevent the smooth functioning of the internal market, in particular by impairing the development of cross-border services and producing distortion of competition (…) this Directive should constitute the appropriate basis for the development of rapid and reliable procedures for removing and disabling access to illegal information (…)”. Section 4 of the E-Commerce Directive, Articles 12-15, concerns the liability of intermediary service providers. Article 12 states, in essence, that a service provider cannot be held liable for the content of information transmitted if he is passive. Article 13 deals with “caching”, meaning copies that are stored only temporarily.114 The service provider is not liable if five conditions are met. For example, he must not alter the information or else he will no longer be considered an intermediary. Article 14 concerns storage of information. A service provider is not liable for the information stored at the request of a recipient under the condition that the service provider does not have actual knowledge of illegal activity or information. Also, upon obtaining knowledge or awareness the service provider must expeditiously remove or disable access to the information. Finally, Article 15, states that Member States shall not impose any obligation on the service provider to actively seek facts or circumstances indicating illegal activity. Further, Article 15 entitles the Member States to establish obligations for information service providers to inform the competent public authority of alleged illegal activities. 110 Directive 2000/31/EC of the Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market. Henceforth: The ECommerce Directive 111 In this thesis I have chosen to use the term “contributory”. However, in case law from the CJEU and in the Directives, the term “intermediary” is being used. 112 Article 1 (1 and 2) of the E-Commerce Directive. 113 Lodder, 2002, pp. 67-68. 114 Ibid. p. 87. 29 4.2.2 The Enforcement The object of the Enforcement Directive115 is to require that all Member States provide for the measures, procedures and remedies necessary to ensure the enforcement of intellectual property rights. These measures must be effective, proportionate and dissuasive.116 In recital 23 of the Enforcement Directive it says that “Without prejudice to any other measures, procedures and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary whose services are being used by a third party to infringe the rightholder’s industrial property right. The conditions and procedures relating to such injunctions should be left to the national law of the Member States (…)”. Further, in Article 9 (1), it says that the Member States shall ensure that judicial authorities may issue an interlocutory injunction against an intermediary whose services are being used by a third party to infringe an intellectual property right. Finally, Article 11 states that Member States must ensure that rightholders can apply for an injunction against intermediaries. 4.2.3 The Infosoc Directive There are today several Directives that harmonise different aspects of copyright and related rights in the EU.117 One of the most important of these is the Directive on copyright in the information society (Infosoc).118 Infosoc and the E-Commerce Directive complement each other, as the E-Commerce Directive harmonises issues relating to the functioning of the internal market and Infosoc deals with aspects of copyright law. Infosoc also supplements the liability provisions in the E-Commerce Directive by allowing injunctive relief against intermediaries when third parties that infringe copyright and other related rights use their services.119 Recital four of Infosoc says that “[a] harmonised legal framework on copyright and related rights, through increased legal certainty and while providing for a high level of protection of intellectual property, will foster substantial investment in creativity and innovation, including 115 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights. Henceforth: The Enforcement Directive. 116 Article 3 of the Enforcement Directive. 117 For example, Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases and Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art. 118 Directive 2001/29/EC of the European Parlianent and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (henceforth: Infosoc). 119 “Commission welcomes adoption of the Directive on copyright in the information society by the Council”, 2001. 30 network infrastructure and lead in turn to growth and increased competitiveness of European industry…”. Further, in recital six, it says that without harmonisation at a Community level, there can be substantial differences in the legislative activities of Member States leading to legal uncertainty. These differences might lead to restrictions on free movement or hinder economies of scale for new products and services containing copyright and related rights. The second Article of Infosoc defines the reproduction right. In this Article, it is expressly stated that Member States shall provide for the exclusive right to authorise or prohibit direct or indirect (emphasis added), temporary or permanent reproduction by any means and any form, for authors, performers etc. Article 5 states the exceptions and limitations. For example, some temporary acts of reproduction shall be exempted from the exclusive reproduction right in Article 2. However, in recital 59 there is an “exception from the exception”, which states that in a digital environment, the services of intermediaries may increasingly be used by third parties for infringing activities. Therefore, the rightholder should have the possibility of applying for an injunction against an intermediary who carries a third party’s infringement of a protected work or other subjectmatter in a network, even though the act carried out by the intermediary can be exempted under Article 5. It is then left to the Member States to decide upon the conditions relating to the injunctions. Lastly, in Article 8(3), Sanctions and remedies, the legislator states that Member States shall ensure that rightholders are in a position to apply for injunctions against intermediaries whose services are used by a third party to infringe a copyright or related right. 4.3 Contributory infringement on the internet The CJEU’s judgments in the Google France and Google case and L’Oréal v eBay case are of great importance. In these judgments, the CJEU stated that ISPs such as Google and eBay could not be liable for primary trademark infringement. Nevertheless, the CJEU did not say that search engines or auction sites could not be contributory infringers.120 120 Kur, 2014, pp. 530- 531. 31 4.2.1 The Google France and Google case In 2010, the CJEU (Grand Chamber) gave its judgment in the joined cases C-236/08 Google France SARL and Google Inc. v Louis Vuitton Malletier SA, C-237/08 Google France SARL v Viaticum SA and Luteciel SARL and C-238/08 Google France SARL v Centre national de recherce en relations humaines (CNRRH) SARL, Pierre-Alexis Thonet, Bruno Raboin and Tiger SARL.121 The case concerned the use, in an internet referencing service, of keywords corresponding to trademarks of other persons. The keywords at issue were chosen by clients of the referencing service provider (Google) and accepted and stored by Google. The clients of Google either marketed imitations of the products of the trademark proprietors or were competitors to them. The national court referred three questions to the CJEU and asked, in essence, whether Google could be prohibited from using trademarked keywords and whether Google could be held liable for trademark infringement.122 First of all, the CJEU reiterated that a trademark proprietor is entitled to prevent use by a third party, in relation to the goods or services for which the trademark is registered, if that use is liable to affect the functions of the trademark.123 Secondly, the CJEU stated that use of an identical sign constitutes “use” according to the Trademark Directive if that use is in a commercial context which gives the user an economic advantage. In this case, the selection of keywords paid for by the advertiser has the object of displaying his advertising link that will lead the consumers to his website where he offers his goods or services. It is therefore obvious, according to the CJEU, that the advertiser uses the keywords in a commercial activity and not for a private matter.124 Further, regarding the referencing service provider, it is clear that storing keywords for its customers which are identical to a registered sign and arranging the display of ads connected 121 Google France SARL and Google Inc. v Louis Vuitton Malletier SA, C-236/08, Google France SARL v Viaticum SA and Luteciel SARL, C-237/08 and Google France SARL v Centre national de recherce en relations humaines (CNRRH) SARL, Pierre-Alexis Thonet, Bruno Raboin and Tiger SARL, C-238/08, ECLI:EU:C:2010:159. The author will henceforth in this subchapter refer to the joined cases as “the case”. This case is referred to as the Google France and Google case in the other parts of the thesis. 122 Ibid. paras. 32, 37, 41-42. 123 Ibid. para. 49. 124 Ibid. paras. 50-52. 32 with these keywords is a commercial activity. However, even if the service provider operates in the “course of trade”, that does not have to mean that its behaviour constitutes “use” within the meaning of Article 5 of the Trademark Directive and Article 9 of the CTM.125 For there to be use, the third party should at least use the sign in its own commercial communication. In this case, Google allowed its customers to use signs similar or identical to registered trademarks, without getting itself involved in the factual use. Google solely created and offered the technical conditions necessary for the use of a sign, and the extent to which Google has permitted its customers to make use of trademarked/protected signs should be examined under other rules of law than the Trademark Directive and the CTMR. The CJEU concluded that Google was not involved in use in the course of trade within the meaning of the Trademark Directive and the CTMR.126 The second question referred to the CJEU was whether the trademark proprietor was entitled to prohibit an internet referencing service provider from using a trademark with a reputation, within the meaning of Article 5(2) of the Trademark Directive and Article 9(1)(c) of the CTMR. The CJEU responded that even though Google admitted advertisers to use keywords like “imitation” and “copy” together with the registered trademarks, Google could not be held liable for use of these trademarks (for the same reasons as above).127 The question of whether Google could fall within the scope of Article 14 of Directive 2000/31 was also referred to the CJEU. For a referencing service provider to enjoy protection under this Article, he must be regarded as an “information society service provider”. The CJEU stated that Google fulfilled the requisites for being viewed as an information society service provider. However, to avoid liability Google had to play a neutral role and the services offered had to be of a solely “technical, automatic and passive nature”.128 The fact that Google was being paid for the services provided and that Google set the payment terms and drafted the commercial message etc. was not enough to deprive Google from the exemptions for liability provided for in Directive 2000/31.129 125 Ibid. paras. 53, 55. Ibid. paras. 56-58. 127 Ibid. paras. 101, 104- 105. 128 Ibid. paras. 106, 113-114. 129 Ibid. paras. 115-118. 126 33 The CJEU therefore concluded that provided that Google did not play an active role, it could not be held liable within the meaning of Article 14 of Directive 2000/31. However, this was under the condition that Google, after having obtained knowledge of the unlawful nature of the advertiser’s activity, expeditiously removed access or disabled access to the data concerned. This was for the national court to assess.130 4.2.2 The L’Oréal v eBay case In July 2011, the CJEU (Grand Chamber) handed down its judgment in the case L’Oréal v eBay.131 L’Oréal, manufacturer and supplier of perfumes, cosmetics and hair-products, started proceedings against the online marketplace eBay claiming that eBay (as well as some individual defendants), inter alia, were liable for sales of items that infringed their trademark rights.132 On eBay, a person can register a seller’s account and then offer goods for sale on displayed listings. When creating an account with eBay, sellers must accept eBay’s online-market user agreement in which it says that sale of counterfeit goods or other trademark infringements are prohibited.133 eBay can, upon request, assist the sellers in order to enhance their offers for sale, to set up online shops, to promote themselves and increase their sales. eBay can also assist its sellers by advertising some of the products sold on its marketplace using search engine operators such as Google.134 Several questions were referred to the CJEU. The referring court asked, inter alia, if the proprietor of a trademark, within the meaning of the Trademark Directive and the CTMR, could prevent an online marketplace provider from advertising – on the basis of a keyword which is identical to his trademark – the marketplace and goods bearing that trademark which are offered for sale on it. The referring court also wanted to know whether the service provided by the operator falls within Article 14 (1) of the E-Commerce Directive. Further, the referring court 130 Ibid. paras. 119-120. See also recital 45 of Directive 2000/31. L’Oréal SA, Lancôme parfumes et beauté & Sie CNC, Laboratoire Garnier & Sie and L’Oréal UK Ltd v eBay International AG, eBay Europe SARL, eBay UK Ltd, Stephen Potts, Tracy Ratchford, Marie Ormsby, James Clarke, Joanna Clarke, Glen Fox and Rukhsana Bi, C-324/09, ECLI:EU:C:2011:474. 132 Ibid. paras. 26, 28, 34. 133 Ibid. paras. 28, 30. 134 Ibid. para. 31. 131 34 asked whether Article 11 of the Enforcement Directive requires the Member States to afford proprietors of intellectual property rights the right to obtain injunctions against the operator of a website requiring said operator to take measures to prevent future infringements of those rights. 135 Firstly, the CJEU restated what was said in Google France and Google: keywords are used as advertising, since the object of them is to trigger the display of the seller’s advertisement. Therefore, there was no doubt that this was use “in the course of trade”. Further, two other conditions had to be met to enable the trademark proprietor to prevent the advertising at issue: (i) the advertisements by eBay had to be in relation to the goods or services identical with those for which the trademark is registered and (ii) the advertisements at issue had to, or be likely to, have an adverse effect on the functions of the trademark. 136 The CJEU said that eBay’s use of keywords corresponding to L’Oréal’s trademarks as a means to promote its own services as a marketplace did not fulfil these conditions. However, insofar as eBay used the keywords to promote its seller’s offers for sale of goods bearing L’Oréal’s trademarks, that should be sufficient to fulfil the condition “in relation to goods or services”. The court said that “[i]n that regard, the words “in relation to goods or services” do not relate solely to the goods or services of a third party which is using signs corresponding to the trademarks but may also refer to the goods or services of another person”.137 The CJEU continued and said that for there to be an adverse effect on the functions of the trademark, the advertising at issue should not enable reasonably well-informed and reasonably observant internet users, or enable them only with difficulty, to ascertain the origin of the goods in question. The answer to the question was therefore that a trademark proprietor is entitled to prevent an online marketplace operator from advertising its sellers’ goods bearing the proprietors trademark if, as a result, there will be difficulties for a reasonably well informed consumer to ascertain the origin of the goods.138 135 Ibid. paras. 86, 106, 125. Ibid. paras. 87-88. 137 Ibid. paras. 89, 91. 138 Ibid. paras. 94, 97. 136 35 Article 12-15 of the E-Commerce Directive aims to restrict the number of situations in which intermediary providers of information society services can be held liable for infringement pursuant to the applicable national law. Even though it is for the national court to determine whether eBay shall be held liable for contributory trademark infringement, the CJEU must still consider whether an operator of an online marketplace may rely on the exemption from liability in Article 14 of that Directive.139 First of all, to fall within the scope of Article 14 the provider must be an intermediary provider. This means, basically, that the provider must have taken a neutral role by a merely technical and automatic processing of the relevant data. If an operator assists its sellers by optimising the presentation of the offers for sale, the operator can gain knowledge of, or control over, the data relating to those offers for sale. This is, according to the CJEU, an example of taking an active role and the operator should therefore not be exempted from liability under Article 14 of the ECommerce Directive. However, this was for the national court to determine.140 Finally, the CJEU stated that even if an ISP could be exempted from liability, the Member States had to ensure that the national courts should be able to order an ISP to take measures against present infringements as well as preventing future infringements of the same kind. This as a means to ensure the effective protection of intellectual property rights.141 4.2.3 The UPC Telekabel case In November 2011, the CJEU gave its judgment in the SABAM case.142 Scarlet Extended, an ISP which provided its customers access to the internet (without offering other services such as downloading or file sharing), was according to SABAM best placed to take measures to bring to an end copyright infringements committed by its customers.143 The CJEU’s ruling was not, however, in SABAM’s favour. According to the CJEU, a court injunction against an ISP to install global and preventive filtering systems with a view to prevent copyright infringements 139 Ibid. paras. 107-108. Ibid. paras. 112-113, 116. 141 Ibid. paras. 131, 144. 142 Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM), C-70/10, EU:C:2011:771. 143 Ibid. paras. 16, 18. 140 36 should be precluded. Such an injunction would result in a serious infringement in the ISP’s right to conduct business, as well as potentially undermining the freedom of information.144 In the recent UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH case145, the CJEU ruled in line with its judgment in the SABAM case. Two film production companies, Constantin and Wega, claimed for an order against UPC Telekabel to block the access of its customers to cinematographic works over which they hold a right related to copyright.146 One of the questions referred to the CJEU was whether an ISP such as USP Telekabel should be regarded as an intermediary within the meaning of Article 8(3) of Infosoc, since it allows persons to make protected subject-matter available to the public without the rightholder’s consent while using the services offered by the ISP.147 The services of intermediaries are often used to infringe copyright and related rights, hence the possibility in Article 8(3) of Infosoc for the rightholders to apply for an injunction against an intermediary. Recital 59 of Infosoc states that the term “intermediary” covers any person who carries a third party’s infringement of a protected work or other subject-matter in a network. Not regarding an ISP such as USP Telekabel as an intermediary would, according to the CJEU, be wrong since it is the ISP that makes the transmission possible and is therefore an inevitable actor in the process. The objective of Infosoc is to give rightholders a high level of protection. If ISPs should be exempted from the scope of Article 8(3) of Infosoc, this would diminish the protection of the rightholders and therefore go against the objectives of Infosoc.148 The CJEU continued by saying that there is no need for a special relationship, such as a contractual link, between the ISP and the infringing third party. First of all, there is no provision in Article 8(3) of Infosoc that indicates that there has to be a link between them. Secondly, if such link should be required it would go against the overall objective of Infosoc since a requirement such as this would diminish the legal protection of the rightholders.149 144 Ibid. paras. 48, 52, 55. UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH, C-314/12, EU:C:2014:192. 146 Ibid. para. 11. 147 Ibid. para. 23. 148 Ibid. paras. 27, 30, 32, 33. 149 Ibid. paras. 34-35. 145 37 The CJEU also discussed the relationship between the fundamental rights of EU law and the interpretation of the provisions of Infosoc. When implementing Infosoc in the Member States, there must be a balance between the two and the national court must also respect other principles of EU law, such as the principle of proportionality. In the present case, the national court must take into consideration (i) that intellectual property is protected under Article 17(2) of the Charter150 (ii) the freedom to conduct business, which an ISP does, under Article 16 of the Charter151 and (iii) the freedom of internet users, protected under Article 11 of the Charter152. Even though all three of these are to some extent restricted, an injunction does not infringe the very substance of the freedom of an ISP to conduct a business. The CJEU concluded by saying that an injunction such as that at issue in the main proceedings which leaves it to the addressee to determine the specific measures which should be used to stop the infringing activities (the intentions of Infosoc), shall not be prohibited. The national court must not, with respect to the fundamental principles of EU law, require unbearable sacrifices on the addressee (especially since it is not the addressee who is the author of the infringement of the fundamental rights of intellectual property which has led to the injunction). If the addressee can show that he has taken all reasonable measures to stop the infringing activity, he can avoid liability. 153 4.4 Real life contributory infringement 4.4.1 The UDV North America case The UDV North America case differs from the case law earlier cited in Chapter 4. This case is about “use” of a trademark by a trade intermediary, so it is not a case concerning contributory trademark infringement as such. However, the CJEU cited this case several times in the Google France and Google case, in the L’Oréal v eBay case and, of course, in the Red Bull case. Therefore, the author is of the opinion that this case is interesting and deserves to be mentioned. Charter of Fundamental Rights of the European Union. Article 17: “Right to property”. Article 16: Freedom to conduct a business. 152 Article 11: Freedom of expression and information. 153 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproduktionsgesellschaft mbH, C-314/12, EU:C:2014:192, paras. 50-53, 59, 64. 150 151 38 The dispute in the case between UDV North America Inc. and Brandtraders NV 154 concerned, among other things, use of a trademark and the rights conferred by a trademark.155 UDV North America is the proprietor of the CTM “Smirnoff Ice”. Brandtraders operates a website where member companies can anonymously place advertisements, negotiate transactions and reach agreements in accordance with the general terms and conditions of the website. When Brandtraders receives information about an agreement, it starts to act as the vendor’s broker. Brandtraders concludes with the purchaser a contract of sale for commission in its own name, but on behalf of its vendor.156 The relation that Brandtraders had to its vendors laid the ground to one of the questions referred to the CJEU: can a trade intermediary who acts in his own name, but not on his own behalf, be regarded as a third party who uses the sign within the meaning of Article 9(1)(a) and 2(d) of the CTMR?157 The CJEU said that for there to be “use” of a trademark, it must be in the course of economic activity with the view of an economic advantage and not just as a private matter. It was clear that Brandtraders fulfilled this requisite, and it is therefore irrelevant that Brandtraders only acted on behalf of the vendor. There was no affixing of the sign at issue on the goods of the third party, but it was still clear that the use was in relation to goods within the meaning of Article 9(1)(a) of the CTMR. The use of the sign on business papers established a link between the sign and the goods provided by the third party, and it was therefore once again irrelevant that Brandtraders did not have title to the goods. The use could be interpreted by the public targeted as the third party being the undertaking from which the goods originated and could hence create the impression that there was a material link in trade between the goods at issue and the factual undertaking from which the goods originate.158 So, the CJEU came to the conclusion that the concept of “use” in Articles 9(1)(a) and 2(d) of the CTMR covers a situation where a trade intermediary that acts on behalf of a vendor (without 154 Henceforth: Brandtraders UDV North America Inc. v Brandtraders NV, C-62/08, ECLI:EU:C:2009:111. 156 Ibid. paras. 5-8. 157 Ibid. para. 27 (2). The trademark appeared on business papers between Brandtraders and the vendor. 158 Ibid. paras. 44-49. 155 39 having title to the goods at issue) uses a sign which is identical to a registered CTM on its business papers.159 4.3.2 The Red Bull case In December 2011, the CJEU (first chamber) handed down its judgment in the dispute between Frisdranken Industrie Winters BV and Red Bull GmbH160.161 Red Bull is the owner of the world famous trademark RED BULL, which has numerous international registrations. The registrations are, inter alia, valid in the Benelux countries. Winters is an undertaking that is involved in the filling of cans with drinks, produced by itself or by others. Smart Drinks Ltd162 is one of Winters’ customers, as well as a competitor of Red Bull.163 Winters filled cans with fizzy drinks on the instructions of Smart Drinks. Smart Drinks supplied Winters with empty cans together with matching lids, all bearing various signs, decorations and text. The cans bore, inter alia, the sign “BULLFIGHTER” (see picture). After filling the cans, Winters placed them at the disposal of Smart Drinks. Smart Drinks then exported the filled cans to countries outside the Benelux. Winters was thus only engaged in the filling procedure.164 Red Bull started proceedings against Winters, seeking an order that Winters should cease using the sign which Red Bull considered to be similar to its own trademarks. By filling the cans, Winters were infringing Red Bull’s trademark rights. The CJEU was asked whether the mere 159 Ibid. para. 54. Henceforth: Winters, Red Bull. 161 Frisdranken Industries Winters BV v Red Bull GmbH, C-119/10, ECLI:EU:C:2011:837. 162 Henceforth: Smart Drinks 163 Frisdranken Industries Winters BV v Red Bull GmbH, C-119/10, ECLI:EU:C:2011:837 paras. 4-6. 164 Ibid. paras. 7-8. 160 40 “filling” of packaging which bears a sign is to be regarded as using that sign in the course of trade within the meaning of Article 5 of the Trademark Directive, even if that filling takes place as a service provided to and on the instructions of another person, for the purposes of distinguishing that person’s goods?165 The judgment from the CJEU was highly influenced by the judgments from the Google France and Google case and the L’Oréal v eBay case. The CJEU stated that even though Winters, the service provider, is engaged in a commercial activity when filling the cans, that does not have to mean that the service provider itself actually “uses” the signs within the meaning of Article 5 of the Trademark Directive. The CJEU here referred to the judgment in the Google France and Google case, where it was stated that: “…the fact of creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses that sign”. A service provider in Winters’ position does not “use” the sign “for goods or services” which are identical to, or similar with, those for which the sign was registered for, even though that expression generally applies to third parties. However, as was stated in, inter alia, UDV North America, third parties can still be liable for trademark infringement if a link can be established between the service provider and the trademark proprietor. However, the filling of cans bearing signs similar to the registered trademark is not a service aimed at marketing and promoting the goods at issue, meaning that a link cannot be established in this case.166 Even though the CJEU found that Winters did not “use” the sign as described in Article 5 (1)(b) of the Trademark Directive, they did not preclude the possibility of secondary liability. In para. 35 of the judgment the CJEU said: “Inasmuch as such a service provider enables its customers to make use of signs similar to trade marks, its role cannot be assessed under Directive 89/104 but must be examined, if necessary, from the point of view of other rules of law. So, the CJEU made clear that a service provider like Winters is not a primary infringer, but can still be a contributory infringer under other rules of law. 165 166 Ibid. paras. 9, 14(1)(a). Ibid. paras. 28-33. 41 4.3.3 Opinion of AG Kokott in Red Bull This judgment was in line with the opinion of AG Kokott.167 Kokott was of the opinion that Winters did not commit any trademark infringement, since Winters did not use the sign in its own commercial communication (compared to the UDV North America case, developed above). The service provided by Winters was solely to fill the cans, and was therefore totally independent of the signs and marks of Red Bull.168 In cases where the third party has been held liable for “use”, the service provided has been targeted towards a specific brand of goods or used in comparative advertising to distinguish brands from each other. In situations like these, the sign has been used for commercial communication. If, as a consequence of the foregoing, the consumer establishes a link between the third party and the sign, that is according to case law from the CJEU “use” of a mark. A filling plant can therefore not be linked to the mark, since it appears only vis-à-vis the customers.169 AG Kokott thought that this case gave an opportunity to discuss whether there should be a specific exception for trademark infringements for filling plants. Kokott said that for service providers such as Winters, it is practically impossible to ensure that signs chosen by a customer do not infringe rights conferred to other trademarks. Firstly, there is a large number of trademarks on the market without a reputation. For a service provider like Winters it would be impossible to investigate whether there is a possibility of infringement for every single job. Secondly, it would be even harder for the service provider to determine whether there are signs that are sufficiently similar (like in the present case). This would expose service providers to disproportionate risks.170 167 Frisdranken Industrie Winters BV v Red Bull GmbH, C-119/10, Opinion of AG Kokott. See para. 37 of the judgment and para. 62(1) of the opinion. 168 Ibid. paras. 25-26. 169 Ibid. paras. 26, 28. 170 Ibid. paras. 30, 33-34. 42 4.5 Contributory infringement in Germany, the United Kingdom and France Contributory trademark infringement in France is regulated in the Code Civil and in the UK, liability can be imposed on a contributory infringer either under the general rules of tort law or under the limited statutory protection for so-called “secondary infringement”. In Germany, the doctrine of Störerhaftung (“interferer liability”) makes available special remedies against contributory infringers that operate on the internet.171 4.4.1 Germany The German case law on contributory infringements of IPRs depends on the specific kind of IPR. Contributory infringement in trademark and in copyright and related rights are dealt with under the doctrine of Störerhaftung, while cases regarding patents are dealt with under tort law. Contributory patent infringement is, according to German case law, an independent tortious infringement and does not fall within the scope of Störerhaftung.172 The doctrine of Störerhaftung means that “…any person who has wilfully made a causal contribution to the direct infringement of an IPR by third parties can be held liable for injunctive relief if the contributor has violated a reasonable duty of care to prevent such directive infringements”.173 An action for an injunctive relief against a contributory infringer, based on Störerhaftung, thus has three requisites: a wilful, adequate causal contribution to the infringing acts of any third party; the legal and factual possibility of preventing and resulting direct infringements and the violation of a reasonable duty of care to prevent these infringements. Case law from the German Federal Court of Justice says that what is “reasonable” depends on the specific facts of each and every case, for example the role and function of the interferer (the “Störer”) and the intensity of the danger of the direct infringement. In an internet context, this basically means that an ISP shall not be required to control every piece of content that its users want to make available on its platform. If the ISP receives information from a rightholder about an infringement it has to remove the infringing content and take measures against future, similar infringements. However, these measures must not be 171 Bentley-Sherman, 2014, p. 1058. Leistner, 2014, p. 78. 173 Ibid. 172 43 too far reaching; the ISP is not obliged to prevent all future infringements at any cost; the measures must be reasonable and economically feasible.174 An action against a contributory infringer, based on Störerhaftung, gives the rightholder the right to an injunction but not to damages. This means that that the legal consequences from cases regarding contributory infringement in trademark and copyright and related rights cases differ from contributory infringement of patent cases.175 4.4.2 The United Kingdom Trademark infringement in the UK is regulated in section 10 of the Trade Marks Act 1994. Section 10(5) says: “A person who applies a registered trade mark to material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, shall be treated as a party to any use of the material which infringes the registered trade mark if when he applied the mark he knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.”. Contributory trademark infringement in the UK differs from primary trademark infringement, since the requisite “…knew or had reason to believe…” in section 10(5) is irrelevant in primary infringement cases.176 Aside from the Regulations in the Trade Mark Act 1994, contributory infringement (accessory liability) is also dealt with under the law relating to joint tortfeasance. Contrary to German legislation, all kinds of IPR fall within the scope of this law, since it is based on the general principles of tort law. 4.4.3 France In France, there is a specific statutory provision for contributory patent infringement but not for trademark infringement. Contributory trademark infringement is governed by general principles of tort law. According to Article 1382 of the Code Civil, there are three requisites for there to be tortious liability; damage to the claimant, caused by an act of the defendant and intent/negligence (in French: faute). The concept of contributory infringement, which applies to all kinds of IPRs, is hence quite broad in France. It is basically enough that the defendant 174 Ibid. p. 79. Ibid. p. 82. 176 Bently-Sherman, 2014, p. 1058. 175 44 negligently failed to prevent direct acts of infringement for there to be liability. Remedies are not limited to injunctions. Since negligence, faute, is considered to be tort, the same remedies shall apply to contributory infringers as well as primary infringers. A contributory infringer can therefore be subject to damage claims.177 177 Leistner, 2014, p. 86. 45 5 Analysis 5.1 The distinction between primary and contributory trademark infringement The case law from the CJEU on primary trademark infringement is substantial, and it is clear that the protection of trademarks has extended over the years. In 2014, Apple was #1 on the list of the world’s most valuable brands, with a brand worth $124,2 billion.178 It is no wonder that companies put substantial resources on the enforcement of their rights, and why the case law is so substantial. For there to be a primary infringement, there has to be “use” of the trademark in a commercial activity that can harm the essential functions of the trademark. These are the requisites that make the discussion on contributory infringement interesting. Without “use” there cannot be a primary infringement under the provisions of the TMD, but there can still be a contributory infringement. Let us go through some of the arguments from the cases cited above again. The keyword advertising offered by Google was definitely a commercial activity, but since Google did not use the trademarks in its own communication (emphasis added) there was, according to the CJEU, no “use” of the trademarks. Providing the third party with the technical conditions necessary was not the same thing as “use” of the trademark by Google. When eBay used keywords that corresponded to L’Oréal’s trademarks, as a means to promote its own services as a marketplace, that was indeed use in relation to the goods for which the trademark was registered. However, the CJEU was of the opinion that that use did not have an adverse effect on the functions of the trademarks, so there was no primary infringement. According to the E-commerce Directive, an ISP must be neutral and passive to avoid liability. The CJEU here said that assisting its customers in setting up shops is not neutral and passive, since the ISP then can gain knowledge of and control over the information. Red Bull’s trademark is also on the “Top 100 list”, with a brand worth $7,5 billion. See Apple, Google and Microsoft are world’s most valuable brands and The World’s most valuable brands. 178 46 The CJEU stated that Brandtraders did use the registered trademark “Smirnoff Ice”, even though it acted on behalf of its customers. Since Brandtraders used the trademark in its business papers, there was a possibility that a third party could establish a link between Brandtraders and the trademark proprietor, leading to a possible adverse effect on the trademark’s functions. And then, in Red Bull, Winters did not use the trademark since all it did was fill cans and put them at the disposal of the customer. They did not affix the sign to the cans, and they did not distribute them further. Third parties could hence not establish a link between Winters and the trademark proprietor, so the service provided by Winters could not harm the origin function. For an ISP to avoid liability, the conditions in the E-commerce Directive must be met. The ISP must be passive and have a neutral role, only provide the technical conditions and not control the material processed at the internet platform. If these provisions could, analogously, apply to the facts in the Red Bull case, would Winters be able to avoid contributory liability? What Winters did was fill cans, on which the infringing sign was already affixed. They did not distribute them further. The service provided by Winters was hence of a technical character. However, an interesting question is whether Winters’ role is of a passive and neutral nature. To be able to fill the cans, the cans must be put in some kind of machine. It is likely that the staff saw the cans when performing this task, or during the actual filling process. Let us say that the staff at the production site saw that the “BULLFIGHTER” can was not identical, but similar, to the original “Red Bull” can, but continued to provide the service (which itself is technical). The “Red Bull” trademark is a mark with a reputation. Winters still does not use the trademark, but the staff are most likely aware of a potential trademark infringement. This can be compared to the ISP situation: once the ISP becomes aware of the infringing activity, it must take all reasonable measures to put the infringement to an end to avoid liability. In this situation, the staff should stop the filling process. If not, they are acting negligently and Winters’ role as a service provider is no longer passive and neutral. It can also be discussed whether Winters’ role is passive and neutral at all, since it does control the information (in this case, the cans). The CJEU has stated, quite clearly, that from the moment an ISP becomes aware of any infringing activity on its internet platform, measures must be taken to put an end to the infringement and, to some extent, prevent further similar infringements. If that should apply to a real life service provider as well, it would probably be easier to impose liability on a real life 47 service provider than on an ISP. A real life service provider controls the production, and is naturally aware of the material entering its production site. However, it cannot be required from a service provider to actively search for potential trademark infringements on all material that enters the production site but it will probably be difficult to avoid liability if the trademark infringed is well-known with a reputation. It is difficult to give an answer to the question on the distinction between primary and contributory infringement since contributory infringement it is still a national matter. One could say that the view taken by the EU and the CJEU is that when a third party uses an identical or similar mark in a commercial activity, which could harm the essential functions of a trademark, it is infringing the rights conferred by that mark and is consequently a primary infringer (Article 5 TMD). A service provider that does not itself use the trademark, but who induces another to infringe a trademark shall be contributory responsible for that trademark infringement if it knew that its customer were engaging in trademark infringement. The services provided must be technical, and the role of the service provider must be passive and neutral to avoid liability. So basically, what the CJEU says is that the distinction between primary and contributory infringement lies in whether there is “use” or whether there is an “active role”. However, the minimum requirement we have from harmonised EU trademark law for there to be a primary infringement is that there has to be “use” of the trademark. After that, it is up to the Member States to decide whether it is a primary or a contributory trademark infringement. Recital 4 of the TMD states that a full-scale harmonisation of the national laws is unnecessary, and that only those provisions that affect the internal market should be harmonised. The author finds it hard to believe that only primary infringement, and not contributory infringement, might affect the internal market in a negative way. It can be discussed whether the view taken by the EU and CJEU makes it too easy for an ISP, and in the long run probably for a real life service provider as well, to circumvent liability. It all depends on the interpretation made by the Member States, but in Google France and Google the author is of the opinion that it is not reasonable that an ISP can “hide” from liability to such a great extent. Fiona McBride, partner and head of the Trademark group at the law firm Withers & Rogers LLP, said about the Google France and Google judgment that "This is a setback for brand owners and seriously limits the scope of their trade mark rights when it comes to challenging 48 use of their trade marks in online advertising". McBride continued saying that "Only rarely will the internet user be unable to ascertain the origin of the goods and services and it will therefore be easy for advertisers to circumvent the law and use third party trade marks as keywords. This means that advertisers can secure a commercial advantage by piggy-backing on the reputation of the trademarks."179 Dr. Obhi, senior litigation counsel at Google was of course of another opinion and wrote in the official Google blog “We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts. For instance, if a user is searching for information about a particular car, he or she will want more than just that car’s website. They might be looking for different dealers that sell that car, second hand cars, reviews about the car or looking for information about other cars in the same category.” Dr. Obhi continued, “Some companies want to limit choice for users by extending trade mark law to encompass the use of keywords in online advertising. Ultimately they want to be able to exercise greater control over the information available to users by preventing other companies from advertising when a user enters their trade mark as a search query. In other words, controlling and restricting the amount of information that users may see in response to their searches.”180 To some extent, the author is willing to agree with Dr. Obhi. If the outcome of the Google France and Google case would have been different, there would be a possibility that users or consumers could have been harmed. But as McBride said, "Only rarely will the internet user be unable to ascertain the origin of the goods and services…”181, so the origin function of the trademark is not very likely to suffer from substantial harm. However, has the CJEU forgotten the judgment in L’Oréal v Bellure? Today, the origin function is no longer alone on the top of the hierarchy of the trademark functions. In fact, at least in the author’s opinion, there is basically no hierarchy left. The other functions are extremely important as well, and especially since Louis Vuitton is a trademark with a reputation, it would not be right to focus on the origin function solely. 179 See Google wins Louis Vuitton trademark case. See European Court of Justice rules in Google’s favor. 181 See Google wins Louis Vuitton trademark case. 180 49 5.2 Towards harmonisation? The harmonisation of the laws of the Member States of the EU has been in process since the entry of the Treaty of Rome in 1957. While many areas of law have been harmonised, tort law is still seen as an area of law which should be up to the Member States themselves to regulate. The fact that we in Europe have both common and civil law systems is perhaps one of the reasons why a harmonisation of tort law is too complicated and far-reaching. Today, when the EU is facing many challenges, the discussion on the Member States’ sovereignty is of great importance. On the other hand, since we want a strong internal market and free movement of goods and services, legal certainty is of great importance. If the differences in the Member States’ tort law are substantial, that will create an insecure market for the companies. However, in the brief presentation about how contributory infringement is dealt with in Germany, the UK and France, I did not see any substantial differences (even though their systems varied). It seemed like all three of them saw an act of contributory infringement as a serious matter. In the Infosoc Directive, the legislator states that a harmonised legal framework on copyright and related rights will increase legal certainty and the protection of the intellectual property, which will lead to a substantial investment in creativity and innovation. 182 The legislator also states, in Article 2, that the rightholder shall have the exclusive right to prohibit direct or indirect reproduction. Further, in Article 8(3), the legislator states that the Member State shall provide for that the rightholder has the ability to apply for injunctions against intermediaries whose services are used by a third party to infringe a copyright and related right. These Articles show that in the field of copyright and related rights law, the legislator has taken the problems with intermediaries seriously. In the TMD, intermediaries are not even mentioned. Even though I am not of the opinion that the national tort law in general should be harmonised, I think that there should be a provision in the TMD defining what a contributory infringement actually is, and what remedies that should be available. After having read the case law, the author is of the opinion that the intentions with, and the provisions in the E-commerce Directive should be interpreted analogously to real life contributory infringement cases. However, even if that might be the case, a specific provision in the TMD that defines a contributory 182 Recital 4 of the Infosoc Directive. 50 infringement (and the remedies available) would surely be appreciated, not least for the sake of legal certainty. A real life contributory infringer can be just as harmful to the trademark proprietor as an ISP can, and contributory infringement is also a threat to the strong protection of intellectual property rights. To give a proper definition of what is a contributory infringement, of intellectual property, is of course not easy. Such a definition must comply with the general principles of EU law and it must be balanced with the objectives of the EU. The author is of the opinion that it is more difficult to define a contributory infringement than a primary infringement. A primary infringement is obvious in the sense that it is, for example, a threat against a well-functioning internal market and an abuse of the right to property. Contributory infringement, on the other hand, is vague and not so obvious. The right to property and the freedom to conduct business, which one should prevail? The author is convinced that contributory infringement is also a threat against a well-functioning internal market, but it is difficult to say to what extent. However, if there should be a common definition of contributory infringement, negligence would probably be an important element. If the distinction between primary and contributory infringement lies in “use” or “active role”, negligence would probably be an important element in a potential common definition. If a service provider does not fall within the scope of Article 5, it may be held liable for contributory infringement if it acts negligently. For example, the CJEU has stated that (according to the E-commerce Directive) the service provider’s role must be neutral and passive. If it acts negligently, it will automatically become active since a party that acts negligently is not neutral and/or passive. There is also a possibility that the legislator chooses to only impose contributory liability when the infringement concerns (in this case) trademarks with a reputation, since it is not reasonable to require from a service provider that it must search for potential infringement. A requirement like that would probably not be in balance with the fundamental principles of EU law. Matthias Leistner concludes, very articulately: “Thus, a European system of common principles could ideally establish certain structural elements for the assessment of secondary liability in IP cases: elements of such principles could comprise the listing of certain relevant assessment factors, such as, inter alia, the role and function of the alleged secondary infringer (active or neutral), the degree of control as to the allegedly infringing content and the relevance of the right holder’s specific need for an action against the secondary infringer in certain categories of cases (according to the principle of cheapest cost-avoider). Moreover, it seems 51 that non-compliance with a reasonable (or proportionate) duty of care to prevent direct infringements, represents a common central element of civil law secondary liability for direct IP infringements throughout the Member States. If the element of a reasonable duty of care can indeed be identified as a common denominator in the laws of most European Member States, this element should certainly be specified in prospective common principles of secondary liability by providing relevant and more specific assessment factors for the flexible adjustment of the standard of reasonableness (or proportionality) for certain categories of cases.”.183 183 Leistner, 2014, pp. 89-90. 52 6 Conclusion When the CJEU gave its judgments in Google France and Google and L’Oréal v eBay, it stated that an ISP such as those at issue cannot be a primary infringer. An ISP does not, or should not, control or have knowledge of the information stored and transferred on and via its internet platform. Nor does the ISP “use” the trademark in a way that corresponds to the requisites set out in Article 5 of the TMD. Even though there was no “use”, the ISP could still be liable for contributory infringement. From what can be read in the judgments and in the E-commerce Directive, it is stated that as long as an ISP only provided the third party with the technical conditions and had a role that was passive and neutral it could not be liable for contributory infringement. Does this means that as soon as the ISP plays an active role, it will be liable for contributory infringement? The distinction between “use” and “active role” is an evaluation that is left to the Member States to make, but that is likely how the CJEU distinguishes between “use” and contributory infringement. If the judgments in the Internet related cases shall apply analogously to real life contributory infringement cases that would probably mean that it will be easier to impose liability on a real life contributor than on an ISP. A real life service provider is by its very nature active, since it has knowledge of the material that enters the production site. However, as AG Kokott stated in her opinion in Red Bull, a service provider such as that at issue in Red Bull must not be forced to search for potential trademark infringements in each single case. It is however the authors opinion that it will be difficult for a real life service provider to prove its passive nature and unawareness of the material (which should correspond to the information in the E-commerce Directive). Since there is no common definition of contributory infringement in EU law, the outcome of the cases will differ since the different Member States have different views on the liability that should be imposed on the contributory infringer. Even though a harmonization of tort law is not necessary, a common definition of what is a contributory infringement of an intellectual property right would be appreciated. To be able to secure a strong protection of intellectual 53 property, a common definition would be an important element. 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