The Court of Justice of the European Union has ruled on the appropriate jurisdiction for proceedings brought by a trade mark owner for alleged trade mark infringement arising from the reservation of keywords by a competitor on an internet search engine

Summary

The owner of an Austrian trade mark registration brought proceedings in the Austrian courts against a German advertiser using a keyword identical to that trade mark on the .de version of Google. Following a referral by the Austrian court relating to the appropriate jurisdiction for such proceedings, the CJEU has held that an action for infringement of a trade mark registered in one Member State against an advertiser using a keyword identical to that trade mark on a search engine operating under the country-specific top-level domain name of another Member State may be brought in either:

  • the courts in the jurisdiction where the trade mark is registered; or
  • the courts in the jurisdiction where the advertiser is established.

Business Impact

The internet is a worldwide market place and issues relating to the international jurisdiction of national courts in relation to actions arising from the alleged mis-use of intellectual property rights over the internet may well arise. Whilst the decision of the CJEU is limited to the specific question referred to it, as summarised above, the decision may indicate that the relevant rules on jurisdiction may be interpreted to give the courts in the Member State where a trade mark is registered, jurisdiction over infringement claims in relation to activities originating in another Member State even in circumstances where the alleged acts of infringement are not directed to or intended to take place in the Member State where the national trade mark is registered.

The Facts

An Austrian manufacturer and supplier worldwide of ski and snowboard servicing tools, parts and accessories, Wintersteiger AG, owns an Austrian trade mark registration for "WINTERSTEIGER". A German competitor, Products 4U sells worldwide, including in Austria, accessories for tools made by other manufacturers including Wintersteiger, although these are not produced or authorised by Wintersteiger.  Products 4U reserved the Adword "Wintersteiger" on Google's German top-level domain website. Thus, when a user typed "Wintersteiger" into "google.de", an advertisement for Products 4U appeared on the right hand side of the screen. If the user clicked on the word "Skiwerkstattzubehör" (ski workshop accessories) in the advertisement it took the user to Wintersteiger accessories for sale on the Products 4U website. Products 4U did not have any advertisement linked to a similar search on the Austrian top-level domain website at "google.at".

Wintersteiger brought an action in the Austrian courts claiming trade mark infringement by Products 4U, relying on Article 5(3) of Council Regulation (EC) 44/2001 which provides that

"A person domiciled in a Member State may, in another Member State, be sued… in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur."

Products 4U challenged the international jurisdiction of the Austrian courts on the basis that since "google.de" is directed to German users, the advertisement was intended only for German users and there was no cause of action in Austria.

Following conflicting decisions at first instance and on appeal in the Austrian courts on whether the Austrian court had jurisdiction, the Austrian Supreme Court referred a very specific question on jurisdiction to the CJEU (Case C-523/10) as follows:

  1. In the case of an alleged infringement by a person established in another Member State of a trade mark granted in the State of the court seised through the use of a keyword (AdWord) identical to that trade mark in an internet search engine which offers its services under various country-specific top-level domains, is the phrase ‘place where the harmful event occurred or may occur’ in Article 5(3) of [Regulation No 44/2001] to be interpreted as meaning that:
  1. jurisdiction is established only if the keyword is used on the search engine website the top-level domain of which is that of the State of the court seised;
  2. jurisdiction is established only if the search engine website on which the keyword is used can be accessed in the State of the court seised;
  3. jurisdiction is dependent on the satisfaction of other requirements additional to the accessibility of the website?
  1. If question 1(c) is answered in the affirmative:

which criteria are to be used to determine whether jurisdiction under Article 5(3) of [Regulation No 44/2001] is established where a trade mark granted in the State of the court seised is used as an AdWord on a search engine website with a country-specific top-level domain different from that of the State of the court seised?

The CJEU made reference to the fact that Article 5(3) provides for derogation from the general principle that place with jurisdiction should be the place of domicile of the defendant.  The jurisdiction provided for by Article 5(3) is based on the close connection between the dispute and the courts of the place where the harmful event occurred on the basis of sound administration of justice and the efficacious conduct of proceedings. Further, the expression in Article 5(3) to "the place where the harmful event occurred or may occur" covers both the place where the damage occurred and the place of the event giving rise to it. The defendant could be sued, at the claimant's option, in the courts for either of those places and each of those jurisdictions could be helpful in relation to the evidence and the conduct of the proceedings.

The protection given by a national trade mark registration is limited to the territory of the Member State in which it is registered. However the CJEU considered that, given the objectives of foreseeability and of sound administration of justice, jurisdiction should be conferred, in respect of the damage incurred, on the courts of the Member State in which the right in issue is protected. Thus the courts of the Member State in which the relevant trade mark is registered will be best able to assess whether there has been infringement of that mark. It has also been established that the place where the event giving rise to the alleged damage occurred may constitute a significant connecting factor relating to jurisdiction since it could be helpful in relation to evidence and the conduct of proceedings.

The CJEU also confirmed that the event giving rise to the possible infringement is the action of the advertiser using the referencing service (rather that the provider of the referencing service - i.e. Google), and that the place of establishment of the advertiser is the place where the activation of the display process is determined.

After considering these criteria to be taken into account when determining jurisdiction, the CJEU concluded that Article 5(3) must be interpreted as meaning that an action relating to infringement of a trade mark registered in a Member State because of the use, by an advertiser, of a keyword identical to that trade mark on a search engine website operating under a country-specific top-level domain of another Member State may be brought before either:

  1. the courts of the Member State in which the trade mark is registered; or
  2. the courts of the Member State of the place of establishment of the advertiser.

Conclusion

Over the last few years, there have been a number of decisions at national level and at the CJEU relating to whether the reservation by an advertiser on an internet search engine of a keyword identical to a trade mark owned by a competitor amounts to infringement of that competitor's trade mark if the keyword is used to advertise the advertiser's goods (whether such goods are imitations of the trade mark owner's goods or genuine competing goods). For example, please see here our IP newsflash which summarises and comments on the decision of the CJEU in Interflora v Marks and Spencer.

Whilst the Wintersteiger decision is limited to the specific facts of this case it may give an indication of the approach that the national courts may take in relation to jurisdiction when considering the appropriate forum for proceedings relating to alleged acts of trade mark infringement on the internet.