Do online advertisements infringe trade mark rights?

In Daimler AG v Egyud Garage Gépjármujavító és Értékesíto Kft: C-179/15 [2016] All ER (D) 40 (Mar), the Court of Justice of the European Union (CJEU) discussed the issue of the publication of a trade mark on a website with respect to the violation of intellectual property law. James Sweeting, a senior associate with Lewis Silken, specialising in trade mark disputes, comments on the decision, including what IP professionals can take from this case and what they should advise their clients.

The CJEU gave a preliminary ruling concerning the interpretation of article 5(1) of the Trade Marks Directive 2008/95 (EC). The request had been made in proceedings between Daimler AG and Egyd Garage Gpjrmjavt s rtkest Kft., (Egyd Garage) concerning the continued appearance on the internet of advertisements naming the latter as an ‘authorised Mercedes-Benz dealer’ following the termination of the contract which had given it the entitlement to use that trade mark.

Very briefly, what was the background to this case?

The defendant is a Hungarian garage which specialises in the sale and repair of Mercedes cars. For over five years, the defendant was an authorised provider of after-sales care for Daimler. Daimler owns various MERCEDES-BENZ trade marks in Hungary and, as part of its agreement with the defendant, allowed it to use the trade marks for the purpose for advertising its services.

That agreement came to an end. Following termination, the claimant was no longer authorised to use the marks in the manner it had been able to while the agreement was in place. It took steps to request the removal of online advertisements which might lead the public to think that the contractual relationship was still in place, but not all online publishers complied with the request. Daimler sued the defendant in Hungary for trade mark infringement and the Hungarian court referred some questions to the CJEU concerning:

  1. the requirements for trade mark ‘use’ when bringing an infringement claim and when such ‘use’ can be said to have ceased, and
  2. the lengths a defendant must go to get the ads removed in order to absolve itself of liability

What did the CJEU decide?

When an advertiser orders that an advertisement be published containing a trade mark, it is ‘using’ that mark for the purpose of the Trade Marks Directive. However, the CJEU has said that such use can be said to cease at such time as the advertiser expressly requests the publisher of the advertisement to remove the ad. As a result, after having made this express request, the advertiser can no longer be said to be liable for infringement.

In this case, it would mean that the Hungarian garage (so long as it had made the requisite requests) would absolve itself of liability. The most obvious remedies left open to the trade mark proprietor are to go after the publisher. The court also alluded to the fact that the owner of the rights may also still be able to pursue to advertiser for any financial benefit derived from the ads while they are still online but, given there is no cause of action for infringement, I struggle to see how that would operate in practice.

Is unauthorised trade mark use following unsuccessful attempts to remove advertisements much of an issue in the UK?

Circumstances like this could crop up anywhere. As online advertising is so common (not least in the UK) there are undoubtedly circumstances where a trade mark is used unlawfully and the republication of the ad puts it beyond the control of the infringer. This is especially the case where ads go viral. In these cases, it would be hugely difficult for an advertiser to have to notify each and every re-publisher or for a trade mark owner to have to take steps against each and every re-publisher of the infringing ad.

What can UK IP professionals take from this case, what should they advise their clients?

Rights holders may not be too pleased with this decision. It has the potential to make enforcement more difficult where an infringement gets out of control. Resolutions could include making any licensees contractually responsible for third party trade mark use (although this is burdensome) or to impose restrictions in the way marks can be used by third parties. Other recent case law has also alluded to the possibility that rights owners may be able to obtain injunctions against ISPs to block infringing content but it is unclear whether such a remit would extend to cases of this nature.

James Sweeting is a senior associate with Lewis Silken, specialising in all types of intellectual property law, with a focus on trademarks, designs and copyright. James is also experienced in dispute resolution and mediation. James has represented the interests of IP owners in almost every major forum in the UK and Europe including the High Court, Court of Appeal and CJEU as well as the national and European trade mark offices. He has a postgraduate diploma in Intellectual Property from Oxford.

Interviewed by Janine Isenegger.

The views expressed by the legal interviewee are not necessarily those of the proprietor.

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