Geo-blocked but still infringing? The CJEU will tell us
Marcel Pemsel
Geo-blocked but still infringing? The CJEU will tell us
Can a domain name infringe a national trade mark where nobody in the
protected territory can and is supposed to see website connected to the
domain name? In the new reference Fassbinderei
(case C-584/26) from Austria, the Court of Justice of the EU (“CJEU”)
is asked to determine whether a geo-blocked website operating under a
.at domain name and expressly excluding Austrian customers, is
nevertheless infringing an Austrian trade mark.
Background
Both
parties operate a cooperage business in Austria. The claimant,
Fassbinderei Klaus Pauscha GmbH, is the proprietor of the two Austrian
trademarks “PAUSCHA” and “KLAUS PAUSCHA”, registered inter alia for
“wooden barrels” (class 20) and similar goods and services.
The
defendant, PA. FASSBINDEREI GmbH, uses the sign “Pauscha” to designate
wooden barrels and related goods and services of its cooperage business,
offering them in direct competition with the claimant in numerous
countries. The defendant also advertises its wooden barrels through the
domain name pauscha.at. The defendant does not, however, have customers
in Austria. It supplies neither goods nor services to customers with
delivery addresses in Austria.
After a preliminary injunction
obtained by the claimant against the defendant’s use of “pauscha”, the
defendant implemented geo-blocking on its website to block Austrian IP
addresses from accessing its website. If an Austrian user is
nevertheless able to access the website, the following disclaimer
appears (translated from German):
“THIS WEBSITE IS NOT INTENDED FOR THE AUSTRIAN MARKET”
When
the term “Pauscha” or “pauscha.at” is entered into a search engine,
both the defendant, identified as “PA. Fassbinderei” with a link to
https://pauscha.at, and the claimant, identified under the designation
“Klaus Pauscha Austria/Wolfsberg”, appear in the search results. The
defendant also uses email addresses for employees at its Austrian
location consisting of the respective employee’s name combined with
“@pauscha.at”.
The claimant specifically requested an injunction
against the use of the domain “pauscha.at” inside and outside of
Austria as well as the use of “@pauscha” in email addresses for emails
sent to people inside and outside of Austria.
The reference for a preliminary ruling
The referring Court asked the CJEU the following question (translated from German):
“Do the principle of territoriality in trade mark law and Art. 10(2) and (3) of Directive (EU) 2015/2436 [EU
Trade Mark Directive, “EUTMD”] preclude an injunction prohibiting a
defendant domiciled in that Member State from using, as a domain name
incorporating the country-code top-level domain of the country in which
protection is granted, and on the corresponding website, a sign
protected as a national trade mark for the claimant, who is likewise
domiciled in that Member State, where the website hosted under that
domain name is not accessible within the territory of protection due to
geo-blocking and, moreover, contains a disclaimer stating that the offer
is not directed at customers in that territory?”
The referring Court's reasoning
The
referring Court had no doubt that the defendant infringed the
claimant’s trade mark if the defendant’s website were accessible in
Austria. It was unsure, however, which effect the use of geo-blocking
and the disclaimer on the website have, in particular whether it still
constitutes “use” in the meaning of Art. 10(2) EUTMD.
The judges referred to the CJEU’s Daimler
decision (case C‑179/15), holding that “use” requires active behaviour
and direct or indirect control of the act constituting the use. The use
of “Pauscha” by the defendant may be infringing in Austria simply
because the defendant designs and operates the website under the
Austrian domain name from its place of business in Austria. Such use
could constitute use of the protected sign in business papers and
advertising within the meaning of Art. 10(3)(e) EUTMD, even if the
content is ultimately directed at foreign markets.
The referring Court drew on Tradeinn,
where the CJEU held that, besides the principle of territoriality, the
trade mark functions must be considered when assessing the geographical
reach of a national trade mark. In order to safeguard those functions,
it may be necessary to extend the protection afforded by a national
trade mark to acts carried out abroad which are, in their effects,
directed at the domestic market. The judges noted that the present case
concerns the converse situation. However, they posed the question
whether those considerations may nevertheless be applied.
If
injunctive relief were limited to websites accessible within Austria
under pauscha.at, this could potentially impair the origin and guarantee
functions of the claimant’s trade mark. Prospective customers abroad
targeted by the defendant would find, under pauscha.at, advertising and
an offer of goods and services from the Austria-based defendant which
are confusingly similar to the goods and services covered by the
claimant’s trade marks registered in Austria. This could give rise to
confusion as to commercial origin and could potentially lead to an
erosion of the claimant’s rights as trade mark proprietor. It is
questionable whether such a result would be compatible with the general
objective pursued by EU trade mark law of maintaining undistorted
competition.
Regarding the geo-blocking measures and the use of
the disclaimer, the referring Court pondered whether they could preclude
an injunction. The CJEU has held in L’Oréal v eBay
(case C‑324/09) that for online advertising to be infringing, it must
be targeing consumers in the territory of protection of the national
trade mark. However, this line of case law was developed in
circumstances where the allegedly infringing conduct occurred abroad.
The referring Court would like to know whether it applies to the
converse situation here. If it were, the inaccessibility of the
defendant’s website in Austria and the use of the disclaimer could cast
doubt on whether the website is “directed at” consumers in Austria.
The
referring Court also wondered whether the defendant’s geo-blocking is
contrary to the prohibition in Art. 3(1) and (2) of the Geo-Blocking Regulation, or whether it instead falls within the exception provided for in Art. 3(3) Geo-Blocking Regulation.
Comment
There are many angles to this reference, so here are just a few thoughts:
1. The relevance of geo-blocking measures has recently been addressed in Anne Frank (IPKat here)
with respect to copyright. The CJEU found that effective geo-blocking
measures prevent the finding of a communication to the public. Similar
considerations could apply to trade mark law.
2. If the
defendant were not based in Austria and all other facts remained the
same, the case would be considerably easier to decide: The only
connecting factor would be the Austrian top-level domain, which would
hardly be sufficient to justify a finding of “use in Austria”. So the
question it comes down to is if the defendant’s business seat in Austria
is decisive. The EU trade mark regime suggests that it is:
a. The defendant’s export of its branded goods would constitute genuine use of a trade mark in Austria (Art. 16(5)(b) EUTMD). This means that the defendant could own an Austrian trade mark and it would be genuinely used by its sales and marketing activities abroad if the goods are branded in and shipped from Austria - without targeting the Austrian market.
b. Likewise, the export of goods is explicitly mentioned
as an exemplary infringing act in Art. 10(3)(c) EUTMD. Even the affixing
of the trade mark to the goods in the territory of protection is an
example of an infringing act (Art. 10(3)(a) EUTMD).
c. Regarding
the trade mark functions, one can argue that the claimant’s trade mark
is affected by an identical sign used for identical goods, even where
the defendant’s website is not accessible in Austria. Austrian
consumers, who mistakenly believe that the defendant is the claimant,
may believe that the defendant’s domain is that of the claimant. Since
the latter’s website is not accessible for them, they can be discouraged
from buying from the claimant and turn to a third party. Austrian
consumers are not targeted intentionally but the defendant’s domain name
is still of interest to them if they mistakenly believe that it leads
to the claimant’s website.
Overall, it can be argued that
targeting consumers in the market of protection is only necessary where
the infringing acts are carried out abroad. Let us see what the Advocate
General thinks.
The picture is by Denis Larzul and used under the licensing terms of pexels.com.