Wednesday, 18 September 2019

New paper: What does the European Commission make of the EU copyright acquis when it pleads before the CJEU? The Legal Service’s Observations in digital/online cases

What happens behind the scenes?
In the IP field, the role of the Court of Justice of the European Union (CJEU) has gained increasing centrality over time. In certain instances, the Court has even pushed harmonization beyond the very wording of relevant EU directives and contributed substantially to shaping and construing key concepts.

All this has certainly been true in the copyright field, where Opinions of Advocates General (AGs) and CJEU decisions in referrals for a preliminary ruling are keenly [yes!] awaited.

But what happens behind the scenes, not just when the judges of the CJEU decide on a case but even before that, when relevant parties and interveners participate in proceedings and submit their observations to the Court, proposing - similarly to what an AG does - their own responses to the questions referred by a national court?

Usually, this is just a big black box: regrettably, in fact, there is no requirement for observations filed in CJEU referrals to be public.

Article 23 of the CJEU Statute allows inter alia the European Commission (or rather: its Legal Service) to intervene. At times, reference to the content of the Legal Service’s observations is found in the Opinion of the appointed AG in a certain case and/or (sporadically) in the resulting judgment. 

From the references found in AG Opinions and CJEU judgments, the impression is that, rather than following the analysis proposed by the European Commission, the CJEU has actually disregarded it when answering the questions referred in a number of topical instances. In cases concerning digital and online issues, this has been notably so with regard to the construction of economic rights, in particular the right of communication to the public under Article 3 of the InfoSoc Directive

In this new paper of mine, which will be published in European Law Review soon, I have reviewed the observations filed by the European Commission in copyright referrals with a digital/online dimension, whereby 'digital’ refers to situations in which protected subject matter is, or the doing of relevant acts relates to subject matter, in a digital (intangible) format and ‘online’ refers to situations in which the doing of relevant acts relates to subject matter available on the internet.

The cases selected are those concerning: 
  • the construction of economic rights in an online/digital context, with a particular emphasis on the rights of reproduction, distribution and communication to the public; 
  • exceptions and limitations as applied in online/digital contexts; 
  • enforcement, particularly with regard to injunctions against online intermediaries and jurisdiction in online cases. 
Other referrals have been also considered when the subject and/or the content of the observations would help place the Legal Service’s approach within a broader context. 

All observations were read in their original language version and analyzed both on their own and in parallel with relevant AG Opinions and resulting CJEU decisions. The analysis focuses, in particular on: (a) issues in respect of which the position endorsed by the European Commission substantially differs from the resulting CJEU decision; or (b) areas in which the CJEU has yet to rule substantially and for which the observations of the European Commission in past cases may prove particularly valuable.

A courtroom at the CJEU
The paper seeks to detect, first, whether there is any common thread in the Legal Service’s approach to the construction of copyright under EU law, in particular whether there has been a tendency towards adopting a certain, recurring reading of copyright provisions. 

Second, it considers the observations in light of international and EU provisions, as well as case law existing at the time of the relevant intervention, in order to assess the appropriateness of the conclusions reached therein, as well as whether a remark often made with regard to the CJEU – this being that the Court would pursue its own ‘agenda’ – can be also formulated in relation to the Legal Service of the European Commission. 

It answers the latter in the affirmative. 

It is maintained that, with particular regard to the rights of distribution and communication to the public, the observations presented by the European Commission have failed to take into proper account the existing legal framework, as interpreted by the CJEU in a number of earlier decisions. However, in other cases, eg exhaustion of the right of distribution, the Commission has provided articulated guidance. 

It can thus be concluded that policy considerations – occasionally, yet visibly, in contrast with initiatives taken in parallel by the European Commission’s own policy arm – appear to have informed the content of the observations of the Legal Service in a number of referrals.

You can download the paper from SSRN here. Any feedback is welcome!

[Originally published on The IPKat on 18 September 2019]

Tuesday, 17 September 2019

The Cofemel decision well beyond the ‘simple’ issue of designs and copyright

G-Star Elwood,
a style of jeans that G-Star claims
Cofemel to have copied
in the background Portuguese proceedings
As announced on The IPKat, last week the Court of Justice of the European Union (CJEU) issued its Cofemel, C-683/17 [not yet available in English]. It ruled that, as far as designs are concerned, no other requirement is mandated for copyright protection to arise under the InfoSoc Directive, but the sufficient originality of the design at issue.
much awaited judgment in 

Earlier case law 

The ruling is not surprising, considering earlier CJEU case law, most notably the decision in Flos, C-168/09. This was a reference from Italy asking about the compatibility with EU law of certain Italian provisions that the Court of First Instance of Milan had deemed potentially incompatible with the principle of cumulation envisaged under EU law. The Italian approach to copyright protection of designs has been traditionally rooted within the principle of scindibilità (separability). The CJEU held that EU law prohibits Member States from denying copyright protection to designs that meet the requirements for copyright protection – including designs other than registered ones (subject to Article 17 of the Design Directive) – and suggested that Member States cannot set any particular requirements as to how protection is to be secured. 

The implication of all this appeared to be that – if a design is eligible for protection under the InfoSoc Directive and is, as such, original in the sense clarified by the CJEU – then Member States cannot deny such protection. 

Such a reading of the Flos case is the one that, long before the Opinion of Advocate General (AG) Szpunar in Cofemel [Katpost here], AG Jääskinen had proposed in Donner, C-5/11 (at [31]): 
[T]he judgment in Flos indicates that the items here in issue, although unprotected under Italian copyright law during the relevant period, were entitled to protection under EU copyright law. 
The Flos decision has given rise to contrasting interpretations, and in the UK – for instance – it culminated in the repeal of section 52 of the Copyright, Designs and Patents Act 1988

In all this it is worth noting that the ‘seeds’ of both Flos and Cofemel were sown long before these cases were decided. 

As early as Infopaq, C-5/08, in fact, the CJEU removed the possibility of envisaging different standards of protection for different subject matter. If a work falls within the scope of application of the InfoSoc Directive, then protection only arises upon satisfying the requirement that it is its ‘author’s own intellectual creation’, that is the result of ‘free and creative choices’ (FAPL, C-403/08 and C-429/08) and something that carries the ‘personal touch’ of the author (Painer, C-145/10). As recently summarized by the Court in Funke Medien, C-469/17 (at [23]), 
[I]t is for the national court to ascertain whether […] the author was able to make free and creative choices capable of conveying to the reader the originality of the subject matter at issue, the originality of which arises from the choice, sequence and combination of the words by which the author expressed his or her creativity in an original manner and achieved a result which is an intellectual creation (see, to that effect, judgment of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraphs 45 to 47), whereas the mere intellectual effort and skill [is] not relevant in that regard (see, by analogy, judgment of 1 March 2012, Football Dataco and Others, C‑604/10, EU:C:2012:115, paragraph 33). 
The Cofemel decision 

In its Cofemel judgment, the CJEU proceeded along the very lines set by these earlier rulings. It may be worth noting that the Judge Rapporteur was Mr Malenovský, ie the same judge who – besides acting as rapporteur in over 50% of the copyright referrals today, was also the rapporteur in Infopaq

The key question referred by the Portuguese Supreme Court was whether EU law (specifically: Article 2(a) of the InfoSoc Directive) prevents Member States from granting copyright protection to designs subject to requirements other than originality, eg, a high level of artistic value, as per the traditional Italian scindibilità and German Stufentheorie). 

In order to answer, the CJEU moved from the notion of ‘work’ in Article 2(a), and recalled that this – like all those concepts that do not refer to the laws of individual EU Member States – is an ‘autonomous’ notion of EU law, which requires uniform interpretation across the EU. The Court referred to both Infopaq and the recent judgment in Levola Hengelo, C-310/17 [Katpost here(at [33] and [35]-[37]) to note that the notion of work presupposes the fulfilment of two cumulative requirements: 
  1. It implies the existence of an original object, in the sense that said object is the intellectual creation of its author in the sense clarified above. This means that the originality criterion “is not satisfied when the setting up of the database is dictated by technical considerations, rules or constraints which leave no room for creative freedom” (Football Dataco, C-604/10, at [39]); 
  2. The notion of work is reserved to those elements which are the expression of such creation. As the CJEU stated in Levola Hengelo, this necessarily implies that the subject matter “must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form” (at [40]). There should be “no element of subjectivity –– given that it is detrimental to legal certainty –– in the process of identifying the protected subject matter” (at [41]). 
"Mirror, mirror on the wall, 
who's the fairest of them all?":
a question that no longer needs to be asked 
post-Cofemel ...
Also considering a fundamental rights angle (Article 17(2) of the EU Charter of Fundamental Rights), the CJEU noted that “it does not follow that said objects or categories of objects shall all benefit from an identical protection” (at [38], my own translation from Italian). So, in this sense, in line with the Berne Convention (which does not preclude rights cumulation), different ‘objects’ might fall under the InfoSoc Directive, the Design Directive, and/or the Community Design Regulation, which pursue fundamentally different objectives. 

All this said, however, if a design falls within the scope of the InfoSoc Directive, then the only requirement for copyright protection under this piece of legislation is that the design is a ‘work’ fulfilling requirements 1. and 2. above. 

The Court also added that, if a national law were to require some sort of ‘aesthetic’ value for a design to be eligible for copyright protection, this would contradict the requirement of objectivity as mandated under EU law. 

Implications 

The Cofemel judgment is yet another landmark ruling of the CJEU with far-reaching consequences, both for designs and other ‘objects’ protected by copyright. 

Designs

As far as designs are concerned, the judgment brings to its natural consequences the evolution already signalled by earlier case law: copyright protection simply arises upon fulfilment of the originality requirement. Nothing further is required. 

Whilst this ‘throws out of the window’ those national approaches that have traditionally made copyright protection dependent on an artistic, aesthetic, etc value, it also makes it clear that the assessment of originality is to be a thorough one. In this sense, national courts will need to identify what makes a design an original work, also bearing in mind the CJEU’s considerations re technical features. 

For those countries with an extra set of criteria that need to be fulfilled for a design to be eligible for copyright protection, the judgment clearly mandates a change of approach. 

... as is the question of artistic intention
(and value!)
Other works

Moving on to other copyright subject matter, the implications of Cofemel are equally profound. 

First, the judgment suggests that only the objective criteria indicated therein need to be satisfied: hence, there is no (longer) room for any requirement of artistic value or intent, as is instead still the case in certain jurisdictions. So, if we take the UK, the category of works of artistic craftmanship needs to be seriously re-considered. Furthermore, approaches like the one adopted by the UK Supreme Court in Lucasfilm (the Stormtrooper Helmet case) in relation to artistic works appear even more questionable than what could have possibly been the case so far. 

Second, in line with earlier case law up till the Levola Hengelo ruling, Cofemel indicates that exhaustive lists of protectable subject matter (as is the case of, eg, the UK) are really incompatible with EU law. Protection only arises when there is a work in the sense clarified by the Court: no other requirements are needed. And, in line with the point above, copyright protection cannot arise at different conditions depending on the ‘category’ the object at issue belongs to. 

Finally, as a follow up to Levola Hengelo, the Cofemel decision also questions the fixation requirement. It is true that the Berne Convention leaves it to individual signatory countries to decide on their own approach to fixation, but is that true also for EU Member States? It appears that the answer is in the negative: what EU law or, rather, the CJEU approach to EU copyright, requires is a harmonized approach to fixation across the EU. This means that there cannot be different choices are regards and understandings of fixation: the approach should be uniform across the EU and be the one mandated in Levola Hengelo and Cofemel.

[This contribution was first published on the Bird & Bird's DesignWrites blog: follow it for updates on relevant developments in the design and copyright world!]

Tuesday, 10 September 2019

AG Szpunar advises CJEU to rule that internet downloads of ebooks are covered by right of communication to the public, not distribution (so, no, there is no digital exhaustion under InfoSoc Directive)

Is it possible or not to create second-hand digital marketplaces for, say, audio and ebooks, digital music, games, etc?

This is the question at the heart of the referral to the Court of Justice of the European Union (CJEU) in Tom Kabinet, C-263/18 [here].

As readers know, the CJEU has already found - in UsedSoft - that there is such thing as 'digital exhaustion' in relation to software under the Software Directive. However, that piece of legislation is both lex specialis and has a rather narrow field of application (for instance, it does not cover videogames, as the CJEU clarified in Nintendo).

Hence, in the aftermath of the UsedSoft ruling, it has remained unclear whether the same consequences envisaged in relation to the first lawful sale of the copy of a computer program could extend to subject matter protected under the InfoSoc Directive.

Certain national courts have attempted to tackle all this, though have done so with diverging outcomes. 

For instance, in 2014, the Court of Appeal of Hamm in Germany excluded that the right of distribution under the InfoSoc Directive, as transposed into German law, could be exhausted in the case of audiobooks (OLG Hamm, 22 U 60/13). 

Taking a different view, in that same year the District Court of Amsterdam concluded that the right of distribution would be exhausted following the first lawful sale of copies of ebooks (Rechtbank Amsterdam, C/13/567567 / KG ZA 14-795 SP/MV, NL:RBAMS:2014:4360). The decision of the Amsterdam court was appealed to the Court of The Hague. This court held that the provider of second-hand e-books, Tom Kabinet, would not be liable for unauthorized acts of communication to the public under the Dutch equivalent of Article 3(1) of the InfoSoc Directive. However, it is unclear whether it could invoke the digital exhaustion of the right of distribution in relation to its e-book trade. Hence, the court in The Hague decided to seek guidance from the CJEU.

This morning, Advocate General Szpunar issued his much-awaited Opinion in this case, in which he advised the CJEU to rule that, despite the presence of arguments - of both a legal and teleological nature - that support the availability of digital exhaustion under the InfoSoc Directive, "as EU law now stands, the arguments to the contrary should prevail." As such, 
the supply of e-books by downloading online for permanent use is not covered by the distribution right within the meaning of Article 4 of that directive but is covered by the right of communication to the public within the meaning of Article 3(1) of that directive.
The conclusion of the AG, as it will be discussed further in what follows, appears correct. He divided his analysis into two parts: first, he considered the objective, wording and context of relevant legislative provisions; second, he reviewed earlier CJEU case law.

The law

Distribution or, rather, communication to the public? A teleological interpretation

The AG noted nearly at the outset that this referral goes beyond the right of distribution, as it requires consideration of whether the supply of ebooks by online downloads is something else in the first place, ie an act of communication to the public, which - under Article 3(3) - shall not be subject to exhaustion. 

After recalling the differences in the public's possible enjoyment of protected subject matter, the AG turned to the WIPO Copyright Treaty to recall how its drafters were well aware of the "mixed nature of downloading". As a result, an umbrella solution was adopted, "which, while giving priority to the right of communication to the public, does not preclude the application of the distribution right." The AG also noted the wording of the agreed statement to Article 6 and 7 therein, which limits the application of those provisions to ‘fixed copies that can be put into circulation as tangible objects’.

In all this, the InfoSoc Directive is the implementation into the EU legal order of, inter alia, the WIPO Copyright Treaty. According to the AG, 
In adopting that directive, the EU legislature seems to have clearly taken a position in favour of the right of communication to the public being applicable to the supply of works by downloading online and also of the right of distribution, and therefore of the exhaustion of that right, being limited solely to tangible copies. More specifically, downloading is covered by the right to make works available to the public, provided for in Article 3(2) of that directive.
In support of all this, the AG recalled the wording (as well the ambiguities thereof) of recitals 24, 25, 28 and 29 in the preamble to the directive. From them it would appear "clearly" "the demarcation line which the EU legislature intended to draw between the right of public communication (in the form of making available to the public) and the right of distribution. Thus the right of communication to the public applies to all forms of online exploitation of the works, as much to those not linked to a copy as to those based on the creation of such a copy."

This said, would there be a communication 'to the public' if only a single copy could be purchased? AG Szpunar noted that "[w]hat matters is not the number of persons to whom the communication is made but the fact that the person at the origin of that communication addresses his offer to persons not belonging to his private circle. In that case, a single acquirer may therefore constitute a public."

Will Luciano be able to sell
the content of his Kindle after all?
Concepts in Article 4 of the InfoSoc Directive: a literal interpretation

According to the AG, not only would a teleological interpretation like the one above prevent the application of Article 4 to the scenario at issue, but also a literal interpretation thereof would lead in the same direction.

In fact, authors have the right to authorize the distribution of their work 'by sale or otherwise', ie by a transfer of ownership. However:

  1. It is difficult to speak of ownership in the context of a digital file;
  2. The making available of works by downloading online requires a multitude of conventions specifying the parties’ rights and obligations: "Those conventions come within the scope of freedom of contract and I do not think that any recognition of the rule of the exhaustion of the distribution rule could limit that freedom. Thus, unlike the situation that prevails for tangible objects, in the case of dematerialised works supplied online it would never be easy to state with certainty whether or not there has been a transfer of ownership and therefore exhaustion of the right of distribution, as the parties to the contract are able to define in different ways the modes of use of the copy of the work."


The right of reproduction: contextual interpretation

Finally, also the right of reproduction would prevent application of exhaustion in a case like the one at issue:
Any downloading of a digital file consists in the creation of a copy of that file on the receiving computer. The creation of that copy constitutes an act of reproduction subject to the exclusive right of the copyright holder over the work contained in the file in question. 
More specifically:
In the case of the supply of works by downloading online, the copy of the work by its original purchaser is made with the consent of the copyright holder, as an essential element of that form of making available to the public. However, that consent does not cover the reproductions that would be necessary for the subsequent transmission when the copy of the work is resold.
Nor can those reproductions be considered to be covered by the rule of the exhaustion of the right of distribution. Such a conclusion would be tantamount to recognising the exhaustion of the right of reproduction. But that right cannot be exhausted. Thus, any reproduction that accompanies the resale of a work in digital form must either be authorised by the holder of the exclusive right of reproduction or come under an exception to that exclusive right. 
In all this, Article 5 does not contain any exception that would apply in a case like the one at issue, not even Article 5(1).

Case law

The AG reviewed earlier case law, notably the UsedSoft decision and noted how, not only the legislative instruments at issue (Software and InfoSoc directives), but also the peculiarities of relevant subject matter would be different.

First, unlike for computer programs, for subject matter like literary or musical works the medium in which they are made available is not irrelevant. Second, while a computer program is a tool, InfoSoc-type works are not. Third, while for literary, musical or cinematographic works the usefulness is often exhausted, so to speak, after a single reading, hearing or viewing, the same is not true for computer programs. Finally, computer programs are subject to rapid obsolescence, which is not the case of InfoSoc-type works.

In all this, the Software Directive - unlike the InfoSoc Directive - does not contemplate a right of communication/making available to the public, nor does it mention that the rule of exhaustion should be limited to copies incorporated in a tangible medium. Finally, Article 5(1) of the Software Directive contains an exception to the right of reproduction which the InfoSoc Directive does not envisage.

The AG also considered Vereniging Openbare Bibliotheken and case law on linking.

He rejected the idea that CJEU case law is inconsistent, noting that:
in the absence of full regulation by means of legislation as regards that rule, the diversity of judicial solutions is justified, and even inevitable, in the case of different factual situations, governed by different legislative acts and pursuing specific objectives. To my mind, the desire for consistency cannot on its own serve as a basis for judicial recognition of the rule of exhaustion.
Even if there are "many arguments" that can be advanced in favour of digital exhaustion, EU law is not there, and likely there is no need for it go there either:
By recognising the rule of exhaustion of the right of distribution in the internet environment, the Court would thus resolve a problem that does not really need to be resolved and that to a large extent belongs to the past.
The CJEU should thus rule in the sense that the activities of an undertaking like Tom Kabinet are not covered by Article 4(2) of the InfoSoc Directive.


Sadly stuck with all these games to play ...
Comment


As mentioned, the Opinion of AG Szpunar appears absolutely correct, and the CJEU should follow it unless it opts for a policy-driven response to a problem which, as the AG himself acknowledged, "to a large extent belongs to the past". In fact, with streaming on the rise, the role of internet downloads might be progressively fading in the (technological) past.

In all this, there are two main points worth noting.

The first is that, similarly to what AG Szpunar had done in his Opinion in VCAST (a case concerning - formally - private copying) [here and here], the referral has now somewhat mutated from being all about to distribution to being about communication to the public. 

The second is that, as the AG correctly discussed, the analysis under the InfoSoc and Software directives cannot be the same, for a number of reasons:
  1. Recital 28 in the preamble to the InfoSoc Directive appears to link the right within Article 4 of the InfoSoc Directive to the ‘right to control distribution of the work incorporated in a tangible article’. 
  2. Recital 29 clarifies that ‘[t]he question of exhaustion does not arise in the case of services and on-line services in particular’. 
  3. In relation to the right of communication/making available to the public, Article 3(3) of the InfoSoc Directive rules out that this right be subject to exhaustion. 
  4. It should be recalled once again that, by adopting the InfoSoc Directive, EU legislature transposed into the EU legal order the WIPO Internet Treaties. The agreed statements to Article 6 of the WIPO Copyright Treaty provide that the expressions ‘copies’ and ‘original and copies’ in the context of the right of distribution exclusively refer to fixed copies that may be put into circulation as tangible objects. 
  5. Since its early case law, the CJEU has been careful in drawing a distinction between the right of distribution, which would be subject to exhaustion, and other rights for which no exhaustion would occur. For instance, as early as 1982, in Coditel, the Court did not find that requiring payment of a fee for each public performance of a film would be contrary to EU law. A similar distinction between the consequences of the first sale of a copyright work or a copy thereof for the exhaustion of the right of distribution and other economic rights was also made in Metronome and Tournier
Let's now see what the CJEU decides.

[Originally published on The IPKat on 10 September 2019]

Thursday, 5 September 2019

International jurisdiction in online EU trade mark infringement cases: CJEU rules that targeting may serve to establish jurisdiction

Will this Kat be competent to judge?
When it comes to determining international jurisdiction in proceedings resulting from the alleged online infringement of an EU trade mark, where is the place of infringement, as per Article 97(5) of the 2009 EU Trade Mark Regulation (EUTMR, now Article 125(5) of the 2017 Regulation), located? 

This was the question at the heart of the referral in AMS Neve, C-172/18, which the Court of Justice of the European Union (CJEU) decided today. 

More specifically, the question referred by the Court of Appeal (England and Wales) related to a situation in which the defendant is established and domiciled in Member State A (in this case, Spain) and advertised and offered for sales infringing goods on a website targeted at traders and consumers in Member State B (in this case, the UK). Could courts in Member State B have jurisdiction to hear a claim for infringement of an EU trade mark? 

In line with the Opinion of Advocate General Szpunar last March, today the CJEU answered in the affirmative. 

In the background proceedings, at first instance the Intellectual Property and Enterprise Court held that it had no jurisdiction to hear such action. The Court of Appeal was unsure, so it referred the matter to the CJEU for guidance. 

It should be observed that, while the CJEU has already rule on matters of international jurisdiction relating to online infringements of national trade marks (Wintersteiger) and offline infringements of EU trade marks (Coty), the Court had not been given the chance - until AMS Neve - to rule on international jurisdiction in online EU trade mark infringement cases. 

Let’s see more in detail how the Court reasoned. 

Inapplicability of the Brussels I Regulation recast 

The CJEU recalled at the outset that the EUTMR excludes application of the jurisdiction rules contained in the Brussels I Regulation recast (which were instead interpreted and applied in Wintersteiger in relation to national trade mark infringement proceedings). In this sense, the jurisdiction rules in the EUTMR have the character of lex specialis

The basic rule under Article 97/125 is that the defendant is to be sued where they are domiciled/established. Paragraph 5 also allows to bring an action before courts of the Member State "in which the act of infringement has been committed or threatened". However, choosing one route instead of the other (they are alternative, not cumulative options) is not devoid of consequences, as the extent of the territorial jurisdiction of the court seized differs. When the infringement action is based the former criterion, jurisdiction potentially covers acts of infringement committed throughout the EU, whereas, when the action is based on paragraph 5, the action is restricted to acts of infringement committed or threatened within the Member State where the court before which the action is brought is situated. 

The effects of L’Oréal 

Recalling earlier case law, the CJEU noted that an EU trade mark court “must, when it is called upon to review its jurisdiction to give a ruling on whether there is an infringement in the territory of the Member State where that court is situated, be satisfied that the acts allegedly committed by the defendant were committed in that territory.” (para 46) 

In a case like the one at issue, the ruling in L’Oréal prompts the conclusion that the infringing acts (advertising and offering for sale) “were committed in the territory where the consumers or traders to whom that advertising and those offers for sale are directed are located, notwithstanding the fact that the defendant is established elsewhere, that the server of the electronic network that he uses is located elsewhere, or even that the products that are the subject of such advertising and offers for sale are located elsewhere.” (para 47) 

No activity here, whether infringing or not
Rejection of a narrow interpretation 

The Court also noted that, if the wording "Member State in which the act of infringement has been committed" were to be interpreted as meaning that it refers to the Member State in the territory of which the person carrying out those commercial acts set up his website and activated the display of his advertising and offers for sale, “parties established within the European Union committing an infringement, operating electronically and seeking to prevent the proprietors of infringed EU marks from resorting to an alternative forum, would have to do no more than ensure that the territory where the advertising and offers for sale were placed online was the same territory as that where those parties are established.” (para 50) This would mean that this alternative jurisdiction criterion would “deprived of any scope constituting an alternative to that of the rule on jurisdiction laid down in Article 97(1)”. 

The CJEU also considered that an interpretation of the jurisdiction criterion in the sense that the place of infringement is where the defendant took decisions and technical measures to activate a display on a website would be “all the more inappropriate given that it may, in many cases, prove excessively difficult, or even impossible, for the applicant to identify that place.” (para 51) 

Finally, the CJEU excluded that an interpretation like the one adopted would not be at odds with the holding in Nintendo, on consideration that the legislative instrument at issue in that case (Rome II Regulation) is fundamentally different from both the EUTMR and the Brussels I Regulation recast. 

Comment 

The issue of international jurisdiction in online EU trade mark infringement cases is something that I have also found interesting (and problematic) for some time. In an article I wrote three years ago, I reviewed case law as existing at that time. 

Among other things, I considered that L’Oréal would not constitute a good ‘precedent’ to identify the competent court(s). First, that case concerned the applicability of EU trade mark legal instruments to an online platform established outside the territory of the EU, rather than the determination of jurisdiction in such cases. Second, similarly to Article 7(2) of the Brussels I Regulation recast (as interpreted by the CJEU in PinckneyHi Hotel and Hejduk) there is nothing in Article 97/125 that appears to require targeting/intention to target to determine judicial competence. 

I thus concluded that the place of infringement should be located where the activation process for the display of content (goods or services) that infringes a EUTM has occurred. In most cases such place is likely to coincide with the Member State where the defendant is domiciled/established and, therefore, with the criterion of jurisdiction indicated at paragraph 1. There may, however, be instances in which this will not be the case. 

In light of this, I considered that, if the CJEU were to endorse such an interpretation, there would be some unwanted consequences. 

On the one hand, the choices for the claimant would be reduced, in the sense that the criterion at paragraph 5 would probably be the same (even if not always) as that of the place of domicile/establishment of the defendant. In addition, unlike Article 7(2) of the Brussels I Regulation recast and in light of the CJEU stance in Coty, the place where the damage occurred could not represent a valid criterion to determine jurisdiction. The shortcomings of limiting jurisdiction only to the courts located in the place of the causal event have been highlighted both by Advocates General Darmon and Léger and the CJEU in Shevill, when it considered that this place would like coincide with the place where the defendant is domiciled or established, and limiting jurisdiction only to this ground would make the special rule in Article 7(2) of the Brussels I Regulation recast (and consequently also Article 97(5) EUTMR) "meaningless". Finally, with particular regard to online infringement cases, determination of the defendant’s domicile/establishment may not always be a straightforward process.

On the other hand, in Article 97(5) situations, jurisdiction would subsist even without the need to prove that the allegedly infringing activities of the defendant where directed at consumers located in that Member State. However, the fact that targeting would not be expressly required to establish jurisdiction might have implications with regard to the damages that the claimant would be realistically able to seek and obtain in that particular Member State. For a claimant to be able to rely effectively on paragraph 5 —and make it worthwhile for him/her to start proceedings in a certain Member State—it would be in fact necessary to demonstrate not only that the defendant has acted in that territory by activating the relevant display process, but also that the activity at issue may be considered as having been directed to consumers on that specific territory. 

With today’s ruling, the CJEU has pushed the interpretation of Article 97(5)/125(5) EUTMR further than what its wording, origin and context alone would have allowed. This was motivated by the need to provide a helpful solution to issues of interpretation. To this end, the Court relied on L’Oréal in a dynamic fashion that helped it construe a purpose-driven interpretation of the provision.


[Originally published on The IPKat on 5 September 2019]