German Federal Court of Justice rules on the scope of jurisdiction of national courts

In an online context, IP infringement frequently occurs simultaneously in more than one country and so the flexibility to take action where it will have the greatest impact is critical. The German Federal Court of Justice has recently ruled on the scope of jurisdiction of national courts over online infringements of EU trademarks based on the location of the infringing acts (ref. I ZR 164/16). Construing the EUTM Regulation narrowly, it held that the jurisdiction of courts of the EU Member States “in which the act of infringement has been committed” is limited to the original place of the infringing conduct which must be identified through an overall assessment.

The case

The Plaintiff manufactures and distributes perfumes globally and is the owner or exclusive licensee of a broad portfolio of national, EU and international (IR) trademark registrations. The portfolio includes the EUTM “CALVIN KLEIN”, the IR “DAVIDOFF” designating the EU and the IR “CORVET” designating Germany. The Defendant is an Italian company trading with perfumes and operating a website that presents the offered goods in various languages, including German. While the Defendant’s website presents contact details, it does not allow products to be directly ordered online. A German company contacted the Defendant via email, ordered perfumes and had the products transported from Italy to Germany through a shipping company. In the course of the transaction, the Italian Defendant sent emails on the availability and prices of the products to the German buyer. The Plaintiff claimed that the perfumes in question had not been put into circulation in the EU with its authorization and brought a trademark infringement action in Germany. The Defendant challenged the international jurisdiction of the German courts.

Findings of the Court

The Federal Court of Justice held that German Courts do not have jurisdiction regarding infringements of EUTMs such as “CALVIN KLEIN” and IR registrations designating the EU such as “DAVIDOFF” as Germany is not the EU Member State “in which the act of infringement has been committed” in the sense of Art. 125 para. 5 of the EUTM Regulation. Citing the Coty/First Note Perfumes decision of the CJEU, the Court held that this provision requires active conduct of the infringer and focusses on the EU Member State where the original act giving rise to the infringement has occurred – and not the Member State where the infringement produces its effect. The Court then turned to the recent Nintendo/BigBen Interactive decision of the CJEU on matters of jurisdiction and applicable law in an online community design infringement context. Underlining that the relevant provisions are essentially identical, the Court held that where the Plaintiff asserts trademark infringements in several EU Member States, the correct approach is not to refer to each alleged act of infringement, but to make an overall assessment of the defendant’s conduct in order to determine the place where the initial act of infringement at the origin of that conduct was committed. The Court is of the view that in an online context, the location of the infringing act is therefore the place where the infringer initiated the process of publishing the online content in question – and not the place where the respective website can be retrieved. The Court held that irrespective of whether the Defendant’s presentation of the perfumes online constituted a product offer, the Defendant initiated the relevant process in Italy. According to the Court, the same holds true for the availability and pricing information sent by the Defendant via email, as the Defendant equally sent these from Italy.

The Court solely assumed its international jurisdiction regarding the IR “CORVET” designating Germany: In contrast to the IR registrations designating the EU, jurisdiction in this context is subject to Art. 7 No. 2 of the Brussels I Regulation. Under consistent case law, the wording of this provision referring to “the place where the harmful event occurred” is construed to refer to both the place where the original acts causing the damages have occurred as well as the place where the damage takes effect – the latter being Germany.

Comments

In the context of applicable law and Art. 8 para. 2 of the Rome II Regulation – which also was subject of the Nintendo/BigBen Interactive decision cited by the Court – the identification of a unitary location for the place of the infringing conduct for unitary EU IP rights is indeed preferable. Such interpretation avoids the difficult and cost-intensive parallel application of several national laws when it comes to damages that are not governed by the respective regulations (see Blogpost of November 9, 2016). While such interpretation in the context of international jurisdiction may certainly be suited to ensure the uniform application of the respective EU regulations, it significantly weakens the EU trademark as compared to national trademarks. With its protection for the entire EU internal market, the EUTM is generally an attractive solution for companies seeking wide protection for their brands. In light of this decision, however, the enforcement of EUTMs in international online infringements becomes less flexible as compared to national trademarks, thereby rendering the unitary EU trademark less attractive and enforceable.

While the German Federal Court of Justice refused to refer the question to the CJEU in light of the CJEU decisions in Coty and Nintendo, the English Court of Appeal has recently referred questions on the proper interpretation of Art. 125 para. 5 and Art. 126 para. 2 of the EUTM Regulation to the CJEU upon its considerations of said decisions. Our Blog on that reference can be found here.