The matter at hand
Finnish dredgers company, Lännen, is the proprietor of an EU trade mark for WATERMASTER. Lännen filed a trade mark infringement action at the Markkinaoikeus (Market Court, Finland) against two German companies, Berky and Senwatec. Both companies belong to the same group of undertakings.
Lännen complained that both companies conducted infringing activities that were directed on the territory of Finland:
Lännen claimed Senwatec infringed its trade mark rights by using paid referencing in a search engine operating under the national top-level domain of Finland. When users searched for ‘Watermaster’, an advertisement for Senwatec's products was displayed. However, neither the advertising link nor the associated text contained any reference to Finland. Furthermore, Finland was excluded from the list of countries where Senwatec claimed to be active, although it was indicated on the website that Senwatec’s products were used worldwide.
Lännen accused Berky of using the natural referencing of images of Berky’s machines, accessible on the website Flickr.com, by means of a meta tag containing the keyword ‘Watermaster’. As a consequence, searches for ‘Watermaster’ on Google Finland displayed images of Berky machines with English captions and model numbers, accompanied by Berky's logo.
Berky and Senwatec challenged the Finnish court's jurisdiction, stating that the alleged infringing acts did not occur in Finland. The referring court sought clarification on the interpretation of Article 125(5) of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark, which grants alternative, albeit only national, jurisdiction to EU Trade Mark Courts for acts committed in that member state. The main question was whether a proprietor of an EU trade mark can bring such an infringement action against a third party in a Member State where consumers and traders are targeted by online advertisements, even if the third party does not expressly include that Member State among the territories for potential supply of goods.
The judgment of the ECJ
The ECJ establishes that under Article 125(1) of Trade Mark Regulation 2017, the applicant must bring the action before the courts of the Member State where the defendant is domiciled. However, Article 125(5) allows the applicant to “also” bring the action in the court of the Member State where the act of infringement has been committed or threatened. The applicant cannot, however, bring simultaneous actions for the same acts of infringement based on both (1) and (5) of Article 125 of Trade Mark Regulation 2017, despite the option provided by the word “also” in Article 125(5) (paragraph 31). If the action is based on Article 125(5) of Trade Mark Regulation 2017, the action is limited to acts of infringement committed or threatened within a single Member State, specifically the Member State where the court before which the action is brought is located.
In this case, the focus is on whether the use by the defendants was specifically directed at consumers or traders located in Finland. It is necessary to determine whether the alleged acts of infringement by the two companies establish a sufficient connection with the Member State where the court has jurisdiction under Article 125(5) of Trade Mark Regulation 2017. The ECJ states that “the criterion for jurisdiction expressed by the words ‘Member State in which the act of infringement has been committed or threatened’, in Article 125(5) of that regulation, relates to active conduct on the part of the person causing the infringement” (paragraph 40).
The ECJ states that the court needs to determine the jurisdiction based on factors such as the nature of the products, the market scope, and the use of a search engine operating under Finland's top-level domain. It is sufficient to establish a reasonable presumption of infringement within a Member State for the court to have jurisdiction. The court should consider factors like active conduct by the infringing party and the geographic areas of product supply. If the display is potentially directed at consumers in a Member State, the trade mark owner can file an infringement action in that Member State. However, mere accessibility of a website from a particular territory is not enough to establish targeting. This results in the assessment of the ECJ that paid referencing, where an undertaking pays a search engine to display a link to its website for the public of a specific Member State, constitutes active conduct directed at that Member State and establishes jurisdiction under Article 125(5). However, the use of a trade mark as a meta tag on an online photo-sharing service under a generic top-level domain does not fulfil the condition of active conduct directed at a specific Member State in so far that “a website with a generic top-level domain is not intended for the public of any specific Member State and, secondly, the meta tag is intended only to enable search engines better to identify the images contained on that website and, in so doing, to increase the accessibility thereof” (paragraph 51).
The ECJ concludes that article 125(5) of Trade Mark Regulation 2017 should be interpreted that “the proprietor of an EU trade mark who considers that he or she has been prejudiced by the use, without his or her consent, by a third party, of a sign identical with that mark in online advertisements and offers for sale in respect of goods identical with, or similar to, those for which that mark is registered, may bring an infringement action against that third party before an EU trade mark court of the Member State in which consumers and traders targeted by those advertisements or offers for sale are located, notwithstanding the fact that the third party does not expressly and unambiguously list that Member State among the territories to which a supply of the goods in question might be made, if that third party has made use of that sign by means of paid referencing on a search engine website which uses a national top-level domain name of that Member State. By contrast, that is not the case simply because the third party concerned has used the natural referencing of images of its goods on an online photo-s” (paragraph 54).