ECJ rules on appropriate jurisdiction in keywords cases

European Union

In Wintersteiger AG v Products 4U Sondermaschinenbau GmbH (Case C‑523/10, April 19 2012), the Court of Justice of the European Union (ECJ) has ruled on the appropriate jurisdiction for proceedings brought by a trademark owner for alleged trademark infringement arising from the reservation of keywords by a competitor on an internet search engine.

Wintersteiger AG, an Austrian manufacturer and supplier worldwide of ski and snowboard servicing tools, parts and accessories, owns an Austrian trademark registration for WINTERSTEIGER. A German competitor, Products 4U Sondermaschinenbau GmbH, 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 (TLD) 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 TLD website at ‘google.at’.

Wintersteiger brought an action in the Austrian courts claiming trademark infringement, relying on Article 5(3) of Council Regulation 44/2001. Article 5(3) 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 on whether the Austrian courts had jurisdiction, the Austrian Supreme Court referred very specific questions on jurisdiction to the ECJ, as follows:

1. In the case of an alleged infringement by a person established in another member state of a trademark granted in the state of the court seised through the use of a keyword (AdWord) identical to that trademark 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 44/2001] to be interpreted as meaning that:

(a) 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;

(b) 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;

(c) jurisdiction is dependent on the satisfaction of other requirements additional to the accessibility of the website?

 2. 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 44/2001] is established where a trademark 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 ECJ referred to the fact that Article 5(3) provides for derogation from the general principle that the 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 ‘the place where the harmful event occurred or may occur’ in Article 5(3) 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 trademark registration is limited to the territory of the member state in which it is registered. However, the ECJ 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 trademark 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 ECJ 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 (ie, 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 ECJ concluded that Article 5(3) must be interpreted as meaning that an action relating to infringement of a trademark registered in a member state because of the use, by an advertiser, of a keyword identical to that trademark on a search engine website operating under a country-specific TLD of another member state, may be brought before either:

  • the courts of the member state in which the trademark is registered; or
  • the courts of the member state of the place of establishment of the advertiser.

Over the last few years, there have been a number of decisions at national level and at the ECJ relating to whether the reservation by an advertiser on an internet search engine of a keyword identical to a trademark owned by a competitor amounts to infringement of that competitor's mark if the keyword is used to advertise the advertiser's goods (whether such goods are imitations of the trademark owner's goods or genuine competing goods) (see, eg, Interflora Inc v Marks & Spencer Plc (Case C-323/09)).

While 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 trademark infringement on the internet.

Joel Smith and Laura Deacon, Herbert Smith LLP, London

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