Half of the world’s population is now online. That’s around 4 billion people worldwide with access to the internet. Little wonder then that intellectual property rights holders are having to take active steps to respond to the infringement challenges that this multi-territorial digital marketplace presents.
Occasionally, governments respond directly to curb infringement online. For example, on 1 October new legislation came into force in the UK increasing the custodial sentence for criminal online copyright infringement offences from 2 to 10 years, matching the sentence for the same offences with physical goods. Also within the last few days, Europe’s highest civil court, the European Court of Justice (ECJ), handed down a judgment which could make it easier for owners of Community registered designs to tackle online infringement across multiple EU member states.
Jurisdiction for Pan-European Relief
In this case, Nintendo alleged that BigBen, a company selling gaming accessories online, was infringing the Community registered designs protecting its various Wii products. BigBen’s parent company was based in France and its subsidiary in Germany. BigBen Germany (BBG) and BigBen France (BBF) each had its own website, and both were accessible in multiple EU countries. BBG and BBF also sold accessories which were compatible with Nintendo’s Wii products and included images of the Wii products on their websites to demonstrate that compatibility to customers.
Nintendo issued Community registered design infringement proceedings in Germany. The ECJ was satisfied that, pursuant to the Community Designs Regulation (6/2002), the German Community Design Court had jurisdiction over BBG (a company located in the same Member State) and that the German court could grant a pan-European injunction against BBG, requiring it to cease online infringement across all EU Member States. The ECJ’s ruling is of interest, however, in holding that the German court also had jurisdiction over BBF, a company based in France, and that the court could also grant a pan-European injunction against BBF, bringing an end to further online infringement across the entire EU. The court accepted that the claims brought by Nintendo against BBG and BBF had a connection of such a kind that it was expedient to determine the actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings. The binding element in this case was the fact that the two subsidiaries were accused of similar, if not identical, acts that infringed the same protected designs and related to identical allegedly infringing goods. In short, the two companies and their infringing acts were so closely intertwined that the ECJ found it just for the referring court to grant a pan-European injunction against both defendants.
Some of the sanctions that a Community Design Court can order in respect of registered design infringement (such as damages, costs orders and the destruction of the infringing goods) depend on the national law of the Member State in which the act of infringement has occurred. Which national law applies is never a straightforward question where the IP infringement is online and the website is accessible in multiple EU countries. The ECJ gave some helpful guidance on this and said that the relevant national law would be the place where the process of putting the offer for sale online by the operator of the website was activated.
The ECJ’s ruling was not entirely pro-Community registered design owner. BBG and BBF argued that their use of the images of the Wii products on their websites was authorised under Article 20(1)(c) of the Community Designs Regulation as a ‘citation’. The ECJ acknowledged that use of images to demonstrate compatibility between products was entirely legitimate provided such use was compatible with fair trade practice, did not unduly prejudice the normal exploitation of the designs and the source of the images was mentioned. The ECJ went on to explain what must be shown for each of these criteria to be satisfied, bringing some clarity for businesses on the extent to which they can engage in this relatively common practice of image use.
This ruling will be welcomed by Community registered design right holders, confirming as it does that in one set of proceedings they can obtain pan-European relief against related infringers based not only in the territory of the court seised but also other EU member states. It has now become easier for Community courts to exercise jurisdiction either through a broad interpretation of the term “establishment” (CJEU in Hummel v Nike [C-617/15]), or by providing pan-EU jurisdiction for foreign, but related, companies (Nintendo). That opens up a greater choice for owners of EU trade marks or Community designs, but also a greater risk of claimants taking advantage of the different procedural systems in the EU to their benefit (classic forum shopping). However, it should be borne in mind that, absent contrary agreement, post-Brexit any pan-European relief will continue to cover the EU27 but no longer the UK.