The matter at hand

SNB-React is a Dutch association assigned with the collective representation of numerous trade mark proprietors. On behalf of ten trade mark proprietors, SNB-React initiated proceedings in its own name before the Harju Maakohus (Court of First Instance, Estonia) against Mr. Deepak Metha on the grounds of trade mark infringement, since Mr Deepak Metha was renting IP addresses that were linked to several domain names using identical or similar signs to the trade marks concerned.

The court found that SNB-React had not demonstrated proper standing to bring forth legal actions in its own name since it did not itself own any rights on the trade marks at issue. Additionally, the court held that on the basis of the evidence adduced by SNB-React, the liability of Metha could not be established.

In appeal before the Tallinna Ringkonnakohus (Court of Appeal, Estonia), SNB-React argued that national Estonian law allowed the standing of a collective representation body to bring, in its own name, an action to defend the rights and interests of its members. It also asserted that the limitation of liability of neutral intermediaries under Articles 12 to 14 of the E-Commerce DirectiveDirective 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market, did not apply to domain name holders that are aware of the infringing nature of the domains they merely are renting or not actively using themselves.

Having doubts as to the compatibility of the national Estonian law with EU law, the referring court decided to stay the proceedings and refer to the ECJ two questions for a preliminary ruling. The first question essentially entailed whether Article 4(c) of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights requires the Member States to allow for the ability of collective representation bodies to bring legal proceedings in their own name. The second question was whether Articles 12 to 14 of the E-Commerce DirectiveDirective 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market must be interpreted as such that service providers, whose services consist of merely renting IP addresses, are exempted from liability under these provisions.

The judgment of the ECJ

The ECJ first recalls that under Article 4(c) of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, Member States are required to recognise intellectual property collective rights-management bodies as persons entitled to seek application of measures, procedures and remedies, in so far ‘as permitted’  by and in accordance with the provisions of the ‘applicable law’ .

With regard to the ‘applicable law’ the ECJ holds that this term refers to both national and EU law. With regard to ‘as permitted’, the ECJ underlines that Article 4(c) of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights “cannot be interpreted as meaning that it affords unlimited discretion to the Member States as to whether or not to recognise intellectual property collective rights-management bodies as persons entitled to seek, in their own name, the application of the remedies laid down by that directive, for the purposes of defending those rights. Such an interpretation would, in fact, render entirely ineffective that provision, which is intended to harmonise the laws of those States.” (paragraph 32).

As it is apparent from recital 18 of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, so the ECJ proceeds, this directive intends that both trade mark holders and other persons with a direct interest in the defense of intellectual property rights, including professional organizations charged with defending such rights, be recognized as entitled to seek application of measures.

Due to Article 4(c) of the Enforcement DirectiveDirective 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights having to be read in light of recital 18, the ECJ sums up that the Articles must be understood as meaning that “(i) where a body in charge of the collective management of intellectual property rights and recognised as having standing to represent the holders of those rights is regarded by national law as having a direct interest in the defence of those rights, and (ii) that law allows that body to bring legal proceedings, the Member States are required to recognise that body as a person entitled to seek application of the measures, procedures and remedies provided for by that directive, and to bring legal proceedings for the purpose of enforcing such rights.” (paragraph 34).

It is for the national courts to observe whether such standing is provided for under national legislation. In absence thereof, no obligation is imposed on the Member States to allow collective bodies to bring legal proceedings in its own name.

Concerning the second question, the ECJ, referring to its previous rulings in Google France (C-236/08 to C-238/08), Mc Fadden (C-484/14) and L’Oréal/eBay (C-324/09), repeats that exemptions of liability under the E-Commerce DirectiveDirective 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market only apply if the activities of a service provider are mere technical, automatic and passive of nature. No exemption of limitation of liability can be invoked if the service provider has an active role, allowing its consumers to optimize their (infringing) online sales activity.

Applied to case at hand, the referring court assessed that Metha provides a rental and registration service of IP addresses, allowing his customers to use domain names and websites anonymously. The ECJ finds that the referring court itself should ascertain whether Metha has neither knowledge of nor control over the information transmitted or cached by his clients, and whether he has no active role in optimizing their online sales activity. If that examination is in the affirmative, the ECJ remarks that limitation of liability does not preclude to “address to the person concerned, in the case where the existence of an infringement or risk of infringement of an intellectual property right has been established to the requisite legal standard, a targeted measure intended to bring an end to that infringement or to prevent that risk” (paragraph 51).