No criminal liability for trademark infringement when application is pending
The Tallinn District Court has dismissed an appeal by Holz Prof OÜ against a decision of the Office of the Prosecutor General to terminate criminal proceedings for alleged trademark infringement (Case 1-13-18, January 16 2013).
Estonian company Holz Prof used the trademark HOLZPROF to market its goods. The company’s owner, Irina Nikolajeva, applied for registration of the mark as a Community trademark on April 24 2010 for goods in Classes 1 and 2 of the Nice Classification. The trademark was registered on September 14 2010. The company also operated a website at ‘www.holzprof.ee’.
The defendant, another Estonian company, used the trademark HOLZPROF and the domain name ‘holzprof.ee’ in its website’s html code (with the following parameter: div id=“invisible”). Therefore, such use was not visible to internet users, but search engines displayed the defendant’s website when users searched for ‘HolzProf’. It was documented that this code was used during the period from May 3 2010 to June 30 2010.
A criminal case was initiated on April 25 2011 based on §226 of the Estonian Penal Code, which reads as follows:
“Violation of the exclusive rights of the owner of a patent, utility model, trademark, industrial design or layout design of integrated circuit –
(1) A person who knowingly violates the exclusive rights of the owner of a patent, utility model, trademark, industrial design or layout design of integrated circuit shall be punished by a pecuniary fine or up to three years’ imprisonment.
(2) The same act, if committed by a legal person, is punishable by a pecuniary fine.
(3) The court shall confiscate the object which was the direct object of commission of an offence provided for in this section.”
The Office of the Prosecutor General investigated the matter and found that criminal sanctions could not be applied, since use of the trademark had occurred when the trademark application was pending. The criminal case was closed and Holz Prof appealed to the Tallinn District Court (final instance).
The court ruled that, although civil liability for trademark infringement arises from the date of the filing of the application (assuming that the mark will mature into registration), the same principle does not apply to criminal liability.
The court referred to the explanatory memorandum of the Estonian Trademark Act, which clearly indicates that it was the legislative intention that criminal liability should arise only after the registration of the trademark.
The court explained that a different interpretation – ie, criminal liability arises from the date of application - would be contrary to the general principle of criminal law that a person may not be convicted based on an act that was not an infringement at the time the act was committed.
Holz Prof sought to argue that search engines continued to display its competitor’s website even after the trademark was registered, but the court ruled that a search engine’s cached copy could not be a basis for the liability of the defendant.
The issue of the defendant’s use of the trademark in html code was not discussed by the court.
Almar Sehver, AAA Legal Services, Tallinn
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