The author of this post is Lydia Lundstedt, who is a Senior Lecturer at the Stockholm University.
On 27 April 2023, the Court of Justice delivered its judgment in Lännen MCE (C-104/22) (no written opinion by the Advocate General) (also mentioned here on this blog) on factors relevant for establishing international jurisdiction over an infringement action pursuant to Article 125(5) of Regulation 2017/1001 (EU Trade Mark Regulation) when advertising, displayed on a website accessible from a territory covered by the trade mark, does not unambiguously specify the geographical area of supply.
Article 125(5) is a lex specialis rule on jurisdiction in relation to the rules in Regulation 1215/2012 (Brussels I bis) that allows the proprietor of a EU trade mark to bring a targeted action in the courts of the Member State in which the ‘act of infringement’ has been committed or threatened in respect of acts committed or threatened within the territory of that Member State. As the concept of ‘act of infringement’ in Article 125(5) relates to active conduct on the part of the alleged infringer, the CJEU held in AMS Neve and Others (C-172/18) that acts of infringement are committed in the territory where the consumers or traders to whom advertising and offers for sale are directed are located. In that case, the CJEU specifically stated that a relevant factor for the national courts to consider is whether the advertising contained details of the geographical areas of supply. The CJEU did not however provide guidance on other possible relevant factors.
This lacuna was addressed in Lännen MCE (C-104/22), where the CJEU held that a proprietor of a EU trade mark may bring an infringement action if an alleged infringer has paid for referencing on a search engine website which uses a national top-level domain name of the Member State in which the court seised is situated, but not if an alleged infringer has merely used meta tags to organically reference images of its goods on an online photo-sharing service under a generic top-level domain.
Lännen, a company established in Finland that sells amphibious dredgers under the EU trade mark WATERMASTER, brought an action before the Finnish Market Court against two companies established in Germany (Senwatec and Berky) both of which belonged to the same group. Lännen alleged that Senwatec committed an act of infringement in Finland by purchasing its trademark as an Adword on Google’s search engine website operating under the Finnish top-level domain to sell competing products. While neither the link nor Senwatec’s website specifically mentioned Finland or specified the geographical area of supply, the website indicated that Senwatec’s products are used worldwide and included a world map highlighting the countries in which Senwatec claimed to be active. The map did not highlight Finland. Lännen alleged that Berky infringed its trade mark by using it as a meta tag to enable internet search engines to identify images of Berky’s machines accessible on the internet.
Lännen argued that because Senwatec and Berky’s products are sold throughout the world, the advertising, which is in English, is addressed to an international public which extends beyond the areas covered by the map, and is directed at every country in which it is visible. In contrast, Berky and Senwatec, who objected to jurisdiction of the Finnish court, argued that there must be a relevant connecting factor with Finland and that the accessibility of the allegedly illegal content in Finland is not decisive. They maintained that they do not offer their products for sale in Finland and their marketing activities did not target Finland as evidenced by the map.
The Finnish Market Court asked the CJEU what factors were relevant, and specifically whether the nature of the products concerned, the scope of the market in question and the fact that that display occurred on the website of a search engine operating under the national top-level domain of that Member State were relevant factors for determining jurisdiction pursuant to Article 125(5).
The Court’s ruling
The CJEU recalled its previous case law holding that the determination of jurisdiction does not amount to an examination of the substance of that action (see e.g. Universal Music International Holding (C‑12/15)). It thereafter held that evidence which gives rise to ‘a reasonable presumption’ that acts of infringement may have been committed or threatened on the territory of a Member State is sufficient to establish jurisdiction under Article 125(5) (para 39). The CJEU stated that ‘where the display of online content is, even if only potentially, directed at consumers or traders located in the territory of a Member State’, the proprietor of an EU trade mark is entitled to bring an action pursuant to Article 125(5) as these courts are particularly suited to assessing whether the alleged infringement exists (para 42).
The CJEU stated that the map on Senwatec’s website cannot, in itself, establish a connecting factor with Finland, since the context of which that map forms part does not support the conclusion that Senwatec directs its activity towards the Finnish market (para 43).
With regard to other relevant factors, the CJEU stated that its judgment in Pammer and Hotel Alpenhof (C 585/08 and C 144/09) interpreting what is now Article 17(1)(c) Brussels Ia Regulation on jurisdiction over consumer contracts may be relevant. In that case the CJEU held that the international nature of the activity, use of a language or a currency other than the language or currency generally used in the Member State in which the trader is established, mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States, use of a top-level domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States were relevant factors (paras 46-47). The CJEU emphasized however that the mere fact that a website is accessible from the territory covered by the trade mark is not a sufficient basis for establishing jurisdiction (para 48).
Accordingly, the CJEU held that an undertaking that pays the operator of a search engine website with a national top-level domain of a Member State other than that in which it is established, in order to display, for the public of that Member State, a link to that undertaking’s website, directs its activity to the public of that Member State in the meaning of Article 125(5). In contrast, the CJEU stated that the use of the trade mark as a meta tag on an online photo-sharing service under a generic top-level domain was not sufficient to establish jurisdiction. The CJEU noted that this situation was different because a website with a generic top-level domain is not intended for the public of any specific Member State and, also, that the meta tag is intended only to enable search engines better to identify the images contained on that website so as to increase their accessibility.
As regards the nature of the products in question and the extent of the geographical market, the CJEU stated that it is for the court hearing the infringement action to assess on a case-by-case basis the extent to which those matters are relevant in order to conclude that referencing accessible on the territory covered by the trade mark is targeted at consumers in that territory.
As an initial matter, one might ask whether the CJEU lowered the threshold for establishing jurisdiction from ‘if it is apparent … ’ as stated in AMS Neve and others to ‘a reasonable presumption’ as stated in Lännen MCE. What, if anything, this means in a specific case is difficult to say.
Under either threshold, it seems clear that buying a Adword on a search engine website with a national top-level domain of a Member State is sufficient evidence to establish a connecting factor with that Member State. Likewise, it seems clear that using a meta tag on an online photo-sharing service under a generic top-level domain is of itself not sufficient evidence to establish a connecting factor with any specific Member State under either threshold.
However between these two extremes exist a number of fact constellations that are not as clear. For instance, would it be sufficient if the alleged infringer buys an Adword on a search engine website which uses the top-level domain for the European Union (.eu)? What about if a trademark is used as a meta tag on an online photo-sharing service under a national top-level domain?
In addition, while the CJEU made clear that ‘mere accessibility’ of a website in a territory covered by the EU trademark was not sufficient, it did not specifically answer the referring court’s question whether the fact that that display occurred on the website of a search engine operating under the national top-level domain of that Member State was a relevant factor. If a search in Finland on http://www.google.fi using the term ‘Watermaster’ produced an organic search result whereby links to Senwatec’s website and images of Berky’s products were displayed first in the list, might this not create a reasonable presumption that acts of infringement may have been committed or threatened on the territory of that Member State?
As I have stated elsewhere, it seems reasonable that in cases of ambiguity the burden is placed on a trader to take steps to ‘exterritorialise’ its websites by making clear that it is not directing its advertising and offers for sale to certain Member States. Failing this, the trader should be deemed to have targeted those Member States. A generous approach will minimise the risk that jurisdiction is foreclosed even though the right holder – if given a chance – would have been able to prove that an infringement occurred in the forum Member State. At the same time a clear threshold will exclude the cases where the right holder is making a frivolous claim.