Advocate general considers issue of jurisdiction in AdWord case

European Union

Advocate General Pedro Cruz Villalón has delivered his opinion in Wintersteiger AG v Products 4U Sondermaschinenbau GmbH (Case C-523/10, February 16 2012), a request for a preliminary ruling which raises an interesting jurisdiction issue relating to the interpretation of Article 5(3) of Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The reference for a preliminary ruling was submitted by the Supreme Court of Austria.

The plaintiff in this case, relying on its Austrian trademark WINTERSTEIGER, sued the defendant before an Austrian court on the grounds that the latter had registered the word 'Wintersteiger' as an AdWord in the German version of the Google search engine; the advertisements appearing among the search results on 'google.de' contained a link to the defendant's website. The plaintiff manufactured and distributed ski and snowboard servicing tools, and the defendant also developed and distributed ski and snowboard servicing tools, including accessories for the tools manufactured by the plaintiff. The plaintiff never supplied its product to the defendant or authorised the sale of its products by the defendant.

The question in this case was whether the Austrian courts had jurisdiction to hear the case - and, in particular, how the phrase “place where the harmful event occurred or may occur” in Article 5(3) of the regulation was to be interpreted.

The court of first instance decided that the plaintiff's application was inadmissible because the court did not have international jurisdiction: 'google.de' targeted only internet users in Germany, but not Austria. In contrast, the court of second instance held that the Austrian courts had jurisdiction, finding that 'google.de' could also be accessed by Austrian consumers and was also in the German language. However, it dismissed the action on the merits. The Supreme Court, seeking to establish whether it had jurisdiction to hear the case, referred questions to the Court of Justice of the European Union (ECJ).

The advocate general established the following guidelines for the ECJ to decide the case:

  • Article 5(3) of the regulation applies to conduct that is liable to infringe a trademark. The crucial issue is where the damage occurred or may have occurred.
  • If the place of origin of the damage and the place of its outcome are different, Article 5(3) of the regulation establishes the jurisdiction of two separate courts: the court for the place where the damage actually occurred and the court for the place of the event giving rise to that damage. The plaintiff is entitled to choose the court which best suits its interests (see, in particular, Mines de Potasse d’Alsace SA (Case 21/76)).
  • However, the scope of jurisdiction of the competent courts may differ (see Shevill (Case C-68/93)). The court of the place where the damage originated allows the plaintiff to bring a claim for the entire damages suffered, whereas the court of the place where the damage actually occurred may only decide on the damages suffered in that state.
  • Nevertheless, the cases above concerned only personality rights, which are different from IP rights, so these principles could not apply entirely.
  • Applied to conduct carried out via the internet, this cannot mean that any country where the internet is accessible would qualify as a place where the damage occurred or may have occurred.
  • The place where the damage originates will always be the state of registration of the infringed trademark.
  • In order to establish jurisdiction in another country where the damage occurred, the fact alone that the content of the information leads or may lead to a risk of infringement is not sufficient. The ECJ should establish objective criteria, including:
    • the language;
    • the accessibility of the information; and
    • the commercial presence of the defendant on the market.
  • According to these criteria, the ECJ should establish whether the case “involves the means necessary for producing, a priori, an actual infringement of a trademark in another member state via the internet”. Although this involves an examination of the substance of the case, the analysis of the facts for the “necessary means” criterion shall not be confused with the assessment of the substance of the case.

Based on these considerations, the advocate general concluded that the registration of an AdWord identical to the allegedly infringed trademark, although limited to the top-level domain '.de', which uses the German language and is accessible in Austria, constitutes a set of facts which is clearly indicative of an actual infringement of the trademark in Austria. An additional indication of infringement was that the AdWord ‘Wintersteiger’ includes a link which takes the internet user directly to the defendant’s website.

It is expected that the ECJ will follow the approach of the advocate general.

Hans Georg Zeiner, Zeiner & Zeiner, Vienna

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