Breaking news – Bad faith, goods and services, and trademark applications

startup-photos.jpgThe Advocate General of the European Court TANCHEV issued his opinion in the case C‑371/18 Sky plc, Sky International AG, Sky UK Limited v SkyKick UK Limited, SkyKick Inc. This case concerns one very trendy issue: to what extent the unreasonable wide scope of goods and services of one trademark application constitute bad faith. In details:

Sky is the owner of a family of SKY trademarks registered for different classes of goods and services such as  3, 4, 7, 9, 11, 12, 16, 17, 18, 25, 28 and 35 to 45.

Sky brought an action alleging that SkyKick had infringed those trade marks. For the purposes of their infringement claims, Sky rely upon the registrations of the trade marks in respect of the following goods and services (although not every trade mark is registered for all these goods and services): (i) computer software (Class 9); (ii) computer software supplied from the internet (Class 9); (iii) computer software and telecoms apparatus to enable connection to databases and the internet (Class 9); (iv) data storage (Class 9); (v) telecommunications services (Class 38); (vi) electronic mail services (Class 38); (vii) internet portal services (Class 38); and (viii) computer services for accessing and retrieving information/data via a computer or computer network (Class 38).

Sky have made extensive use of the trade mark SKY in connection with a range of goods and services, and in particular goods and services relating to Sky’s core business areas of (i) television broadcasting, (ii) telephony and (iii) broadband provision. SkyKick accept that, by November 2014, SKY was a household name in the United Kingdom and Ireland in those areas. However, Sky do not offer any email migration or cloud backup goods or services, nor is there any evidence that they plan to do so in the immediate future.

SkyKick contend that each of the trade marks should be declared (partly) invalid on the ground that they are registered for goods and services that are not specified with sufficient clarity and precision.

The referring court states that that contention raises two issues. The first issue is whether that ground for invalidity may be relied upon against a registered trade mark.

The judgment of 19 June 2012, Chartered Institute of Patent Attorneys (C‑307/10, EU:C:2012:361) established (and Article 33(2) of Regulation (EU) 2017/1001 (4) now requires) that an applicant for a trade mark must specify the goods and services in respect of which registration is sought with sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trade mark. If the applicant fails to do so, the competent authority should refuse to allow the application to proceed to registration without the specification being amended to make it sufficiently clear and precise.

According to the referring court, it does not necessarily follow that, if the applicant fails to do so and the authority fails to ensure that the applicant rectifies the lack of clarity or precision during the examination of the application, the trade mark can be declared invalid on that ground after registration. The grounds for invalidity listed in the regulation do not contain any express requirement that the specification of goods and services in an application for registration of an EU trade mark should be clear and precise. The position is, in essence, the same in relation to a national trade mark.

The second issue raised by the referring court is whether, if the ground for invalidity can be relied upon, the specifications of any of the trade marks are objectionable.

The referring court considers that registration of a trade mark for ‘computer software’ is too broad, unjustified and contrary to the public interest. However, it also states that it does not necessarily follow that that term is lacking in clarity and precision. Indeed, it appears prima facie to be a term whose meaning is reasonably clear and precise. Thus, it is sufficiently clear and precise to make it possible to decide whether SkyKick’s goods are identical to it. On the other hand, the referring court finds it difficult to see why the reasoning of the Trade Mark Offices forming the European Trade Mark and Design Network (TMDN), as set out in the Common Communication of 20 November 2013, with regard to ‘machines’ in Class 7 is not equally applicable to ‘computer software’. (5)

Moreover, the referring court queries whether the validity of the marks at issue may be affected by the applicant’s bad faith at the moment of applying for registration of the trade marks.

SkyKick contend in the main proceedings that the trade marks were registered in bad faith because Sky did not intend to use the trade marks in relation to all of the goods and services specified in the respective specifications. SkyKick accept that Sky intended to use the trade marks in relation to some of the goods and services specified. Nevertheless, SkyKick’s primary case is that the trade marks are invalid in their entirety. In the alternative, SkyKick’s secondary case is that the trade marks are invalid to the extent to that the specifications cover goods and services for which Sky had no intention to use the trade marks.

The referring court states that, in comparison with the case-law of the Courts of the European Union, UK courts and tribunals have focused more closely on the requirement of intention to use, on account of the role that section 32(3) of the United Kingdom Trade Marks Act 1994 (‘the 1994 Act’) plays in the UK trade mark system. (6)

However, the referring court queries whether that provision is compatible with EU law. Should it be held to be compatible, then the referring court also has doubts as to the scope of the requirement of intention to use the trade mark.

Therefore, the High Court of Justice (England and Wales), Chancery Division, decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Can an EU trade mark or a national trade mark registered in a Member State be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark?

(2) If the answer to [the first] question is [in the affirmative], is a term such as “computer software” too general and [does it cover] goods which are too variable to be compatible with the trade mark’s function as an indication of origin for that term to be sufficiently clear and precise to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trade mark?

(3) Can it constitute bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services?

(4) If the answer to [the third] question is [in the affirmative], is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services?

(5)  Is section 32(3) of the UK Trade Marks Act 1994 compatible with [Directive (EU) 2015/2436 (7)] and its predecessors?’

The Advocate General’s opinion:

(1)  A registered EU trade mark or national trade mark may not be declared wholly or partially invalid on the sole ground that some or all of the terms in the specification of goods and services lack sufficient clarity and precision. A lack of clarity and precision in the specification of goods and services may nevertheless be taken into account when assessing the scope of protection to be given to such a registration.

(2)  However, the requirement of clarity and precision may be covered by the ground for refusal or invalidity of marks which are contrary to public policy, as laid down in Article 3(1)(f) of First Council Directive 89/104  and Article 7(1)(f) of Council Regulation No 40/94 , in so far as registration of a trade mark for ‘computer software’ is unjustified and contrary to the public interest. A term such as ‘computer software’ is too general and covers goods and services which are too variable to be compatible with the trade mark’s function as an indication of origin for that term to be sufficiently clear and precise to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trade mark.

(3)  In certain circumstances, applying for registration of a trade mark without any intention to use it in connection with the specified goods or services may constitute an element of bad faith, in particular where the sole objective of the applicant is to prevent a third party from entering the market, including where there is evidence of an abusive filing strategy, which it is for the referring court to ascertain.

(4) In the light of Article 13 of Directive 89/104 and Article 51(3) of Regulation No 40/94, where the ground for invalidity exists in respect of only some of the goods or services for which the trade mark is registered, the trade mark is to be declared invalid as regards those goods or services only.

(5) Section 32(3) of the United Kingdom Trade Mark Act 1994 is compatible with Directive 89/104 provided that it is not the sole basis for a finding of bad faith.

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Google with a key victory regarding the right to be forgotten – an EU Court decision

pexels-photo-67112.jpegThe European Court has issued a decision on the case C‑507/17 Google LLC, правоприемник на Google Inc. v Commission nationale de l’informatique et des libertés (CNIL). In brief, this case concerns the right to be forgotten when it comes to searches on the internet. In details:

By decision of 21 May 2015, the President of the CNIL served formal notice on Google that, when granting a request from a natural person for links to web pages to be removed from the list of results displayed following a search conducted on the basis of that person’s name, it must apply that removal to all its search engine’s domain name extensions.

Google refused to comply with that formal notice, confining itself to removing the links in question from only the results displayed following searches conducted from the domain names corresponding to the versions of its search engine in the Member States.

The CNIL also regarded as insufficient Google’s further ‘geo-blocking’ proposal, made after expiry of the time limit laid down in the formal notice, whereby internet users would be prevented from accessing the results at issue from an IP (Internet Protocol) address deemed to be located in the State of residence of a data subject after conducting a search on the basis of that data subject’s name, no matter which version of the search engine they used.

By an adjudication of 10 March 2016, the CNIL, after finding that Google had failed to comply with that formal notice within the prescribed period, imposed a penalty on that company of EUR 100 000, which was made public.

By application lodged with the Conseil d’État (Council of State, France), Google seeks annulment of that adjudication.

The Conseil d’État notes that the processing of personal data carried out by the search engine operated by Google falls within the scope of the Law of 6 January 1978, in view of the activities of promoting and selling advertising space carried on in France by its subsidiary Google France.

The Conseil d’État also notes that the search engine operated by Google is broken down into different domain names by geographical extensions, in order to tailor the results displayed to the specificities, particularly the linguistic specificities, of the various States in which that company carries on its activities. Where the search is conducted from ‘google.com’, Google, in principle, automatically redirects that search to the domain name corresponding to the State from which that search is deemed to have been made, as identified by the internet user’s IP address. However, regardless of his or her location, the internet user remains free to conduct his or her searches using the search engine’s other domain names. Moreover, although the results may differ depending on the domain name from which the search is conducted on the search engine, it is common ground that the links displayed in response to a search derive from common databases and common indexing.

The Conseil d’État considers that, having regard, first, to the fact that Google’s search engine domain names can all be accessed from French territory and, secondly, to the existence of gateways between those various domain names, as illustrated in particular by the automatic redirection mentioned above, as well as by the presence of cookies on extensions of that search engine other than the one on which they were initially deposited, that search engine, which, moreover, has been the subject of only one declaration to the CNIL, must be regarded as carrying out a single act of personal data processing for the purposes of applying the Law of 6 January 1978. As a result, the processing of personal data by the search engine operated by Google is carried out within the framework of one of its installations, Google France, established on French territory, and is therefore subject to the Law of 6 January 1978.

Before the Conseil d’État, Google maintains that the penalty at issue is based on a misinterpretation of the provisions of the Law of 6 January 1978, which transpose Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46, on the basis of which the Court, in its judgment of 13 May 2014, Google Spain and Google (C‑131/12, EU:C:2014:317), recognised a ‘right to de-referencing’. Google argues that this right does not necessarily require that the links at issue are to be removed, without geographical limitation, from all its search engine’s domain names. In addition, by adopting such an interpretation, the CNIL disregarded the principles of courtesy and non-interference recognised by public international law and disproportionately infringed the freedoms of expression, information, communication and the press guaranteed, in particular, by Article 11 of the Charter.

Having noted that this line of argument raises several serious difficulties regarding the interpretation of Directive 95/46, the Conseil d’État has decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Must the “right to de-referencing”, as established by the [Court] in its judgment of 13 May 2014, [Google Spain and Google (C‑131/12, EU:C:2014:317),] on the basis of the provisions of [Article 12(b) and subparagraph (a) of the first paragraph of Article 14] of Directive [95/46], be interpreted as meaning that a search engine operator is required, when granting a request for de-referencing, to deploy the de-referencing to all of the domain names used by its search engine so that the links at issue no longer appear, irrespective of the place from where the search initiated on the basis of the requester’s name is conducted, and even if it is conducted from a place outside the territorial scope of Directive [95/46]?

(2) In the event that Question 1 is answered in the negative, must the “right to de-referencing”, as established by the [Court] in the judgment cited above, be interpreted as meaning that a search engine operator is required, when granting a request for de-referencing, only to remove the links at issue from the results displayed following a search conducted on the basis of the requester’s name on the domain name corresponding to the State in which the request is deemed to have been made or, more generally, on the domain names distinguished by the national extensions used by that search engine for all of the Member States …?

3.  Moreover, in addition to the obligation mentioned in Question 2, must the “right to de-referencing” as established by the [Court] in its judgment cited above, be interpreted as meaning that a search engine operator is required, when granting a request for de-referencing, to remove the results at issue, by using the “geo-blocking” technique, from searches conducted on the basis of the requester’s name from an IP address deemed to be located in the State of residence of the person benefiting from the “right to de-referencing”, or even, more generally, from an IP address deemed to be located in one of the Member States subject to Directive [95/46], regardless of the domain name used by the internet user conducting the search?’

The Court’s decision:

On a proper construction of Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, and of Article 17(1) of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of individuals with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46 (General Data Protection Regulation), where a search engine operator grants a request for de-referencing pursuant to those provisions, that operator is not required to carry out that de-referencing on all versions of its search engine, but on the versions of that search engine corresponding to all the Member States, using, where necessary, measures which, while meeting the legal requirements, effectively prevent or, at the very least, seriously discourage an internet user conducting a search from one of the Member States on the basis of a data subject’s name from gaining access, via the list of results displayed following that search, to the links which are the subject of that request.

Patents, pharmaceutical products and compensations

capsule-pill-health-medicine.jpgThe European Court has issued a decision in case C‑688/17 Bayer Pharma AG v Richter Gedeon Vegyészeti Gyár Nyrt., which concerns the following:

On 8 August 2000, Bayer filed an application for a patent relating to a pharmaceutical product containing a contraceptive ingredient at the Szellemi Tulajdon Nemzeti Hivatala (National Intellectual Property Office, Hungary; ‘the Office’). The Office published that application on 28 October 2002.

Richter, in November 2009 and August 2010, and Exeltis, in October 2010, began marketing contraceptive pharmaceutical products in Hungary (‘the products at issue’).

On 4 October 2010, the Office granted Bayer a patent.

On 8 November 2010, Richter filed an application with the Office for a declaration of non-infringement seeking to establish that the products in question did not infringe Bayer’s patent.

On 9 November 2010, Bayer applied to the referring court, the Fővárosi Törvényszék (Budapest High Court, Hungary) for provisional measures to prohibit Richter and Exeltis from placing on the market the products at issue. Those applications were rejected on the ground that the plausibility of the infringement had not been demonstrated.

On 8 December 2010, Richter and Exeltis submitted an application for a declaration of invalidity of Bayer’s patent to the Office.

On 25 May 2011, Bayer submitted further applications for provisional measures before the referring court, which, by enforceable orders of 11 July 2011, entering into force on 8 August 2011, prohibited Richter and Exeltis from putting the products in question on the market, and also requiring them to provide guarantees.

On 11 August 2011 Bayer initiated infringement proceedings against Richter and Exeltis before the referring court. Those proceedings were suspended until a final decision is issued in the proceedings for the declaration of the invalidity of Bayer’s patent.

Having heard appeals by Richter and Exeltis against the orders of 11 July 2011, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal, Hungary), on 29 September and 4 October 2011 respectively, set aside those orders on the grounds of procedural defects and referred the case back to the referring court.

By orders of 23 January 2012 and 30 January 2012, the referring court refused Bayer’s applications for provisional measures. Whilst it took into account that Richter and Exeltis had entered the market in infringement of the patent, the referring court held that, having regard, in particular, to the advanced stage of the proceedings for a declaration of invalidity of Bayer’s patent and for revocation of an equivalent European patent, the adoption of such measures could not be deemed to be proportionate. By decision of 3 May 2012, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal) upheld those two orders.

By decision of 14 June 2012, the Office granted in part the application for a declaration of invalidity in respect of Bayer’s patent submitted by Richter and Exeltis. Following a further application by Richter and Exeltis, the Office withdrew its decision of 14 June 2012 and, by decision of 13 September 2012, declared that patent invalid in its entirety.

By order of 9 September 2014, the referring court set aside the Office’s decision of 13 September 2012. It also varied the Office’s decision of 14 June 2012 and declared Bayer’s patent invalid in its entirety.

By order of 20 September 2016, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal) upheld that order.

On 3 March 2017, the referring court terminated the infringement proceedings between Bayer and Exeltis following Bayer’s withdrawal from those proceedings.

By decision of 30 June 2017, the referring court definitively dismissed the claim for infringement brought by Bayer against Richter on the grounds of Bayer’s patent having been definitively declared invalid.

Richter, by a counterclaim brought on 22 February 2012, and Exeltis, by a counterclaim lodged on 6 July 2017, requested that Bayer be ordered to provide compensation for the losses they claim to have suffered as a result of the provisional measures referred to in paragraph 21 of the present judgment.

Before the referring court, Bayer submitted that those claims should be rejected, arguing that Richter and Exeltis themselves caused the losses they claim to have suffered by having intentionally and unlawfully placed the products in question on the market. In accordance with Article 340(1) of the Civil Code, there is therefore no justification for their claim for compensation for these losses.

In that context, the referring court considers, in essence, that, in the absence of any provision in Hungarian law specifically governing the situations referred to in Article 9(7) of Directive 2004/48, the general rules of the Civil Code relating to liability and compensation must be interpreted in the light of that provision. However, the referring court first raises questions regarding the scope of the rule contained in Article 9(7) of that directive and asks, in particular, whether that provision merely guarantees the defendant a right to compensation or whether it also defines the content of that right. Secondly, the referring court asks whether Article 9(7) of that directive precludes the national court, applying a provision of the civil law of a Member State, from examining the defendant’s role in the losses occurring.

In those circumstances, the Fővárosi Törvényszék (Budapest High Court, Hungary) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1.  Should the expression ‘provide … appropriate compensation’ referred to in Article 9(7) of Directive [2004/48/EC], be interpreted to mean that Member States must establish the substantive rules of law on the liability of parties and the amount and method of compensation, by virtue of which the courts of the Member States can order applicants to compensate defendants for losses caused by measures which the court subsequently revoked or which subsequently lapsed due to an act or omission by the applicant, or in cases in which the court has subsequently found that there was no infringement or threat of infringement of an intellectual property right?

2. If the answer to the first question referred for a preliminary ruling is in the affirmative, does Article 9(7) of [Directive 2004/48/EC] preclude opposition to the legislation of a Member State by virtue of which the rules to be applied to the compensation referred to in that provision of the Directive are the general rules of that Member State on civil liability and compensation according to which the court cannot oblige the applicant to provide compensation for losses caused by a provisional measure which was subsequently held to be unfounded due to the invalidity of the patent, and which were incurred as a result of the defendant’s failure to act as would generally be expected in the circumstances in question, or losses for which the defendant is responsible for that same reason, provided that, when requesting the provisional measure, the applicant acted as would generally be expected in those circumstances?’

The Court’s decision:

Article 9(7) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, in particular, the concept of ‘appropriate compensation’ referred to in that provision, must be interpreted as not precluding national legislation which provides that a party shall not be compensated for losses which he has suffered due to his not having acted as may generally be expected in order to avoid or mitigate his loss and which, in circumstances such as those in the main proceedings, results in the court not making an order for provisional measures against the applicant obliging him to provide compensation for losses caused by those measures even though the patent on the basis of which those had been requested and granted has subsequently been found to be invalid, to the extent that that legislation permits the court to take due account of all the objective circumstances of the case, including the conduct of the parties, in order, inter alia, to determine that the applicant has not abused those measures.

#Distinctiveness and how to prove it – some EU Court directions

pexels-photo-1536891The European Court has ruled in case C‑541/18  AS v Deutsches Patent- und Markenamt. The case concerns the issue what trademark use can contribute to the trademark distinctive character. In detail:

AS applied to the DPMA for registration of the sign comprising the hashtag #darferdas? as a trademark in respect of goods in Class 25 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended.

The goods in respect of which registration was sought corresponded to the following description: ‘Clothing, in particular tee-shirts; footwear; headgear.’

The DPMA rejected the application, since the sign at issue was, in its view, devoid of any distinctive character within the meaning of Paragraph 8(2)(1) of the Law on the protection of trademarks and other distinctive signs.

AS brought an action against that decision before the Bundespatentgericht (Federal Patents Court, Germany).

By order of 3 May 2017, that court dismissed the action. It held that the sign at issue represented a sequence of characters and words joined together essentially composed of common German words. It was merely a stylised presentation of a discussion point. The hashtag indicated solely that the public is invited to discuss the question ‘Darf er das?’ (‘Can he do that?’). The public would understand that question — placed, inter alia, on the front of tee-shirts — for what it is, namely a simple interrogative phrase.

AS brought an appeal against that decision before the Bundesgerichtshof (Federal Court of Justice, Germany).

According to the referring court, it cannot be excluded that the use of the sign at issue on the front of clothing is one amongst several types of use. That sign could also be placed on the label sewn on the inside of garments. In that case, the public could perceive that sign as a mark, that is to say, as an indication of the commercial origin of the goods.

The referring court states that it is clear from its own case-law that, in order for a sign to be regarded as having a distinctive character and, consequently, being eligible for registration as a mark, it is not necessary that every conceivable use of that sign be use as a mark. It is sufficient that a use be plausible and there be practically significant possibilities of using the sign applied for in the case of the goods and services in respect of which protection is claimed in such a way that it is easily understood by the public as a trademark.

That court considers that that approach could be reconciled with paragraph 55 of the order of 26 April 2012, Deichmann v OHIM (C‑307/11 P, not published, EU:C:2012:254), according to which Article 7(1)(b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) could not be interpreted as requiring the Office for the Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) to extend its examination, based on the facts, of distinctive character to uses of the mark applied for other than that recognised as the most likely.

However, harbouring doubts in that connection, the Bundesgerichthof (Federal Court of Justice) decided to stay the proceedings and to refer the following question on Article 3(1)(b) of Directive 2008/95 to the Court for a preliminary ruling:

‘Does a sign have distinctive character when there are in practice significant and plausible possibilities for it to be used as an indication of origin in respect of goods or services, even if this is not the most likely form of use of the sign?’

The Court’s decision:

Article 3(1)(b) of 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 trademarks must be interpreted as meaning that in examining the distinctive character of a sign in respect of which registration as a trademark is sought, all the relevant facts and circumstances must be taken into account, including all the likely types of use of the mark applied for. The latter corresponds, in the absence of other indications, to the types of use which, in the light of the customs in the economic sector concerned, can be practically significant.

Google prevailed in a dispute against press publishers in the EU

pexels-photo-1931441The European court has rules in the case C‑299/17 VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH v Google LLC.

The case concerns the following:

VG Media is a collective management organisation, authorised in Germany, that defends copyright and rights related to copyright of television channels and private radio stations, as well as rights to digital editorial content. Against this background, VG Media concludes with rights holders the ‘administration agreement for television, radio and publishers’, in which those rights holders grant it, for exclusive administration, their current rights as well as those accruing to them during the term of the agreement, in respect of the newspapers or magazines produced by them.

Google operates several internet search engines including, in particular, the search engine of the same name, together with an automated news site (‘Google News’). On the ‘Google’ search engine, after the search term has been entered and the search function has been initiated, a short text or text excerpt (‘the Snippet’) appears with a thumbnail image that is intended to enable users to gauge the relevance of the displayed website in the light of the information they are looking for. As regards the news site ‘Google News’, it displays news from a limited number of news sources in a format akin to that of a magazine. The information on that site is collected by computers by means of an algorithm using a large number of sources of information. On that site, ‘the Snippet’ appears in the form of a short summary of the article from the website concerned, often containing the introductory sentences of that article.

In addition, Google publishes, by means of its online services, third-party advertisements on its own websites and on third party websites for a fee.

VG Media brought an action for damages against Google before the referring court in which it disputes, in essence, the use by Google, since 1 August 2013, of text excerpts, images and animated images produced by its members, without paying a fee in return for displaying search results and news summaries.

The referring court seeks to ascertain whether Paragraphs 87f and 87g of the UrhG are applicable to the dispute in the main proceedings. That court seeks guidance on whether those provisions, arising from the amendment, with effect from 1 August 2013, to the UrhG, should have been notified to the Commission during their drafting stage as foreseen in the first subparagraph of Article 8(1) of Directive 98/34. In that connection, the referring court relies on the case-law of the Court according to which the provisions adopted in breach of the duty of notification under that provision are inapplicable and are, therefore, unenforceable against individuals.

In those circumstances, the Landgericht Berlin (Regional Court, Berlin, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does a national rule which prohibits only commercial operators of search engines and commercial service providers which edit content, but not other users, including commercial users, from making press products or parts thereof (excluding individual words and very short text excerpts) available to the public constitute, under Article 1(2) and (5) of [Directive 98/34], a rule which is not specifically aimed at the services defined in [Article 1(2)],

and, if that is not the case,

(2)  does a national rule which prohibits only commercial operators of search engines and commercial service providers which edit content, but not other users, including commercial users, from making press products or parts thereof (excluding individual words and very short text excerpts) available to the public constitute a technical regulation within the meaning of Article 1(11) of [Directive 98/34], namely a compulsory rule on the provision of a service?’

The Court’s decision:

Article 1(11) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services (as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998), must be interpreted as meaning that a provision of national law, such as that at issue in the main proceedings, which prohibits only commercial operators of search engines and commercial service providers that similarly publish content from making newspapers or magazines or parts thereof (excluding individual words and very short text excerpts) available to the public, constitutes a ‘technical regulation’ within the meaning of that provision, the draft of which is subject to prior notification to the Commission pursuant to the first subparagraph of Article 8(1) of Directive 98/34, as amended by Directive 98/48.

Can we talk for digital exhaustion in the case of e-books – one important opinion.

pexels-photo-1324859.jpegThe Advocate General of the European Court M. SZPUNAR gave its position in the case  C‑263/18 Nederlands Uitgeversverbond, Groep Algemene Uitgevers v Tom Kabinet.

In brief, this lawsuit concerns one essential question – whether there is digital exhaustion over e-books or not.

The case background is as follow:

Nederlands Uitgeversverbond (‘NUV’) and Groep Algemene Uitgevers (‘GAU’), the applicants in the main proceedings, are associations whose purpose is to defend the interests of Netherlands publishers.

Tom Kabinet Internet BV (‘Tom Kabinet’), the defendant in the main proceedings, (8) is a company governed by Netherlands law. Tom Kabinet has a website which supplies an online market for used e-books. The ways in which that market operates have changed during the main proceedings. At present, in the context of that service, called a ‘reading club’ (leesclub), Tom Kabinet resells to individuals registered on its site e-books which it has bought either from the official distributors or from other individuals. The prices charged by Tom Kabinet are lower than the prices charged by the official distributors. Tom Kabinet’s site encourages individuals who have bought e-books on its site to resell them to it after they have read them, which entitles them to ‘credits’ allowing them then to buy other books. When it buys e-books from individuals, Tom Kabinet requires that they delete their own copy, (9) and it places a digital watermark on the copies which it sells in order to ensure that the copy is legal.

On 1 July 2014, NUV and GAU brought an action against Tom Kabinet before the urgent applications judge at the Rechtbank Amsterdam (District Court, Amsterdam, Netherlands), who dismissed their application on the ground that there was no prima facie breach of copyright. (10) NUV and GAU appealed against that judgment before the Gerechtshof te Amsterdam (Court of Appeal, Amsterdam, Netherlands), which upheld the judge’s decision but prohibited Tom Kabinet from offering an online service that allowed the sale of unlawfully downloaded e-books. No appeal on a point of law was lodged against the judgment of the Gerechtshof te Amsterdam (Court of Appeal, Amsterdam).

The referring court, in its interlocutory judgment, considered that the books in question must be classified as ‘works’ within the meaning of Directive 2001/29 and that the supply of downloadable e-books in circumstances such as those of the main proceedings does not constitute a communication to the public of those works within the meaning of Article 3(1) of that directive. It observes, however, that the answer is unclear to the questions as to whether making an e-book available at distance by downloading for use for an unlimited period may constitute an act of distribution within the meaning of Article 4(1) of Directive 2001/29, and as to whether the distribution right may thus be exhausted within the meaning of Article 4(2) of that directive. Furthermore, it wonders whether the copyright holder may, in the event of a resale, object to the acts of reproduction necessary for the transmission between subsequent purchasers of the copy for which the distribution right is, if such be the case, exhausted.

It was in those circumstances that the referring court decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘1. Is Article 4(1) of [Directive 2001/29] to be interpreted as meaning that “any form of distribution to the public by sale or otherwise of the original of their works or copies thereof” as referred to therein includes the making available remotely by downloading, for use for an unlimited period, of e-books (being digital copies of books protected by copyright) at a price by means of which the copyright holder receives remuneration equivalent to the economic value of the work belonging to him?

2. If question 1 is to be answered in the affirmative, is the distribution right with regard to the original or copies of a work as referred to in Article 4(2) of [Directive 2001/29] exhausted in the Union, when the first sale or other transfer of that material, which includes the making available remotely by downloading, for use for an unlimited period, of e-books (being digital copies of books protected by copyright) at a price by means of which the copyright holder receives remuneration equivalent to the economic value of the work belonging to him, takes place in the European Union through the rightholder or with his consent?

3. Is Article 2 of [Directive 2001/29] to be interpreted as meaning that a transfer between successive acquirers of a lawfully acquired copy in respect of which the distribution right has been exhausted constitutes consent to the acts of reproduction referred to therein, in so far as those acts of reproduction are necessary for the lawful use of that copy and, if so, which conditions apply?

4. Is Article 5 of [Directive 2001/29] to be interpreted as meaning that the copyright holder may no longer oppose the acts of reproduction necessary for a transfer between successive acquirers of the lawfully acquired copy in respect of which the distribution right has been exhausted and, if so, which conditions apply?’

The Advocate General’s opinion:

The foregoing considerations lead me to conclude that arguments, of both a legal and a teleological nature, are in favour of recognition of the rule of exhaustion of the distribution right with respect to works supplied by downloading for permanent use. (64) In particular, the permanent possession by the user of a copy of such a work shows the similarity of that mode of supply with the distribution of tangible copies. However, I am of the view that, as EU law now stands, the arguments to the contrary should prevail. These are, in particular, the arguments developed in points 36 to 49 of this Opinion, concerning the EU legislature’s clear intention that downloading should be covered by the right of communication to the public, the limitation of the distribution right to acts of transfer of ownership of a copy, and the right of reproduction. Those legal arguments are supported by the arguments of a teleological nature set out in points 89 to 96 of this Opinion.

For that reason, I propose that the following answer be given to the questions for a preliminary ruling referred by the Rechtbank Den Haag (District Court, The Hague, Netherlands):

Article 3(1) and Article 4 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that 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.

Where a trademark lawsuit has to be initiated in case of online sales in the EU?

buy-3692440_960_720.jpgThe European Court has ruled in case C‑172/18 AMS Netve Ltd, Barnett Waddingham Trustees, Mark Crabtree v Heritage Audio SL, Pedro Rodríguez Arribas. This case concerns the territory where a trademark lawsuit has to be initiated in case of online sales. In details:

AMS Neve is a company established in the United Kingdom which manufactures and sells audio equipment. BW Trustees, also established in the United Kingdom, is the trustee of the AMS Neve executive pension scheme. Mr Crabtree is a director of AMS Neve.

Heritage Audio is a company established in Spain which sells and supplies audio equipment. Mr Rodríguez Arribas, who is domiciled in Spain, is the sole director of Heritage Audio.

On 15 October 2015 AMS Neve, BW Trustees and Mr Crabtree brought an action against Heritage Audio and Mr Rodríguez Arribas before the Intellectual Property and Enterprise Court (United Kingdom) claiming infringement of an EU trade mark of which BW Trustees and Mr Crabtree are the proprietors and for the use of which AMS Neve is exclusively licensed.

Their action concerns, in addition, the alleged infringement of two marks registered in the United Kingdom of which BW Trustees and Mr Crabtree are also the proprietors.

The EU trade mark relied on consists of the figure 1073 and was registered for goods within Class 9 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended. The description of the goods covered is in part as follows: ‘sound studio recording, mixing and processing equipment’.

The defendants in the main proceedings are alleged to have offered for sale to consumers in the United Kingdom imitations of goods of AMS Neve bearing a sign that is identical or similar to that EU trade mark and to the national trade marks or referring to that sign, and to have advertised those products.

The applicants in the main proceedings have submitted documents in support of their action, including the contents of the Heritage Audio website and the latter’s Facebook and Twitter accounts, an invoice issued by Heritage Audio to an individual residing in the United Kingdom and correspondence between Heritage Audio and a person established in the United Kingdom concerning possible deliveries of audio equipment.

The applicants in the main proceedings have in particular submitted screenshots from that website on which they claim appeared offers to sell audio equipment bearing a sign identical or similar to that EU trade mark. They have stressed that the offers for sale are worded in English and that a section headed ‘where to buy’ lists distributors established in various countries, including the United Kingdom. Further, they claim that it is apparent from the general sale conditions that Heritage Audio accepts orders from any EU Member State.

The defendants in the main proceedings pleaded that the court before which the action was brought had no jurisdiction.

While the defendants do not deny that Heritage Audio products might have been purchased, in the United Kingdom, through other companies, they assert that they have not, themselves, either advertised in the United Kingdom or made any sales in that Member State. They further assert that they have never appointed a distributor for the United Kingdom. Last, they contend that the content displayed on the Heritage Audio website and on the platforms to which the applicants in the main proceedings refer was, by the time of the period covered by the infringement action, obsolete and ought not therefore to be taken into account.

By judgment of 18 October 2016, the Intellectual Property and Enterprise Court held that it had no jurisdiction to hear the infringement action in so far as that action is based on the EU trade mark at issue.

That court states that the applicants in the main proceedings submitted evidence capable of proving that the Heritage Audio website was directed to, inter alia, the United Kingdom. That court considers, further, that the facts of the dispute before it enable it to find that Mr Rodríguez Arribas is jointly liable for the acts of Heritage Audio and that the courts of the United Kingdom have jurisdiction to hear the case in so far as that dispute concerns the protection of national intellectual property rights.

The Intellectual Property and Enterprise Court considers, on the other hand, that that dispute, in so far as it concerns infringement of the EU trade mark, is subject, in accordance with Article 97(1) of Regulation No 207/2009, to the jurisdiction of the courts of the Member State in whose territory the defendant is domiciled, in this case the Kingdom of Spain. The Intellectual Property and Enterprise Court adds that the jurisdiction of the Spanish courts also stems from Article 97(5) of that regulation, under which infringement actions may also be brought before the courts of the Member State in whose territory the act of infringement has been committed.

As regards the latter provision, the Intellectual Property and Enterprise Court considers that the court which has territorial jurisdiction to hear an action brought by the proprietor of a mark against a third party that has used signs identical or similar to that mark in advertising and offers for sale on a website or on social media platforms is the court with jurisdiction over the place where the third party decided to place that advertising or to offer for sale products on that site or on those platforms and took steps to give effect to that decision.

The applicants in the main proceedings brought an appeal against that judgment before the Court of Appeal (England & Wales) (Civil Division).

The referring court considers that the court of first instance, while referring in its judgment to certain judgments of the Court, such as those of 19 April 2012, Wintersteiger (C‑523/10, EU:C:2012:220), and of 5 June 2014, Coty Germany (C‑360/12, EU:C:2014:1318), misinterpreted those judgments and the case-law of the Court in general.

The referring court is of the opinion that such an interpretation would lead, in essence, to a finding that ‘the Member State in which the act of infringement has been committed’, within the meaning of Article 97(5) of Regulation No 207/2009, is the Member State in which the defendant set up its website and its social media accounts. According to the referring court, it follows, however, from the wording, purpose and context of that provision that the territory of the Member State subject to that provision is that in which the consumers or traders to whom the advertising and offers for sale are directed are resident.

The referring court adds that the Bundesgerichtshof (Federal Court of Justice, Germany), in its ‘Parfummarken’ judgment of 9 November 2017 (I ZR 164/16), held that the interpretation of the wording ‘law of the country in which the act of infringement was committed’, in Article 8(2) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) (OJ 2007 L 199, p. 40), adopted in the judgment of 27 September 2017, Nintendo (C‑24/16 and C‑25/16, EU:C:2017:724), can be transposed to Article 97(5) of Regulation No 207/2009. However, the referring court has some doubts with regard to that finding of the Bundesgerichtshof.

In those circumstances, the Court of Appeal (England & Wales) (Civil Division) decided to stay proceedings and to refer to the Court the following question for a preliminary ruling, adding in its decision that that question concerns the interpretation of Article 97(5) of Regulation No 207/2009:

‘In circumstances where an undertaking is established and domiciled in Member State A and has taken steps in that territory to advertise and offer for sale goods under a sign identical to an EU trade mark on a website targeted at traders and consumers in Member State B:

(i)  does an EU trade mark court in Member State B have jurisdiction to hear a claim for infringement of the EU trade mark in respect of the advertisement and offer for sale of the goods in that territory?

(ii)  if not, which other criteria are to be taken into account by that EU trade mark court in determining whether it has jurisdiction to hear that claim?

(iii)  in so far as the answer to (ii) requires that EU trade mark court to identify whether the undertaking has taken active steps in Member State B, which criteria are to be taken into account in determining whether the undertaking has taken such active steps?’

The Court’s decision:

Article 97(5) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the [European Union] trade mark must be interpreted as meaning that the proprietor of a European Union trade mark who considers that his rights have been infringed by the use without his consent, by a third party, of a sign identical to that mark in advertising and offers for sale displayed electronically in relation to products that are identical or similar to the goods for which that mark is registered, may bring an infringement action against that third party before a European Union trade mark court of the Member State within which the consumers or traders to whom that advertising and those offers for sale are directed are located, notwithstanding that that third party took decisions and steps in another Member State to bring about that electronic display.