Finnish company Lännen MCE Oy manufactures amphibious dredgers that it sells under the EU trade mark WATERMASTER.

Lännen issued proceedings in the Finnish courts against two German companies in the same group, Berky GmbH and Senwatec GmbH & Co KG, for trade mark infringement.

In terms of Senwatec, Lännen said that it had infringed Lännen’s trade mark rights by using paid for referencing on the Finnish version of Google (Google.fi), such that when a user searched for “Watermaster”, the search page would display an ad for Senwatec’s products.

As for Berky, Lännen said that Berky had, from 2005 to 2019, used the free image referencing tool on the photo-sharing website Flickr.com to reference Berky’s products by means of a meta tag containing the keyword “Watermaster”. Thus, a search on Google.fi using the term “Watermaster” produced a link to a page showing images of Berky machines.

Lännen said that the online marketing activities of Berky and Senwatec were directed at consumers and traders in Finland, and that given that their products were sold throughout the world, the advertising in question, which was in English, was addressed to an international public, aimed at every country in which it was visible, including Finland.

Berky and Senwatec challenged the jurisdiction of the Finnish courts, claiming that the alleged infringements were not committed in Finland and that their marketing activities were not targeted at Finland, where they do not sell or market any products.

There was a dispute between the parties as to whether the map on Senwatec’s website showed that the area of supply was limited to an area that appeared to exclude Finland, as Senwatec argued. Lännen said that the market for Senwatec’s products was global and extended beyond the areas covered by the map.

The Finnish court asked the CJEU whether Article 125(5) of the EU Trade Mark Regulation (2017/2002/EU) should be interpreted as meaning that the owner of an EU trade mark can bring trade mark infringement proceedings in relation to the use of the mark in question in paid for online search engine advertising in the Member State in which consumers and traders targeted by the ads are located, notwithstanding the fact that it is not clear that the alleged infringer supplies the goods in question in that Member State.

The CJEU noted that Article 125(1) of the 2017 Regulation states that a claimant should bring proceedings in the Member State in which the defendant is domiciled. However, Article 125(5) states that the applicant may “also” bring the action in the courts of the Member State “in which the act of infringement has been committed or threatened”.

The CJEU also noted that if the proceedings are brought under Article 125(1), the court potentially has jurisdiction to consider infringement throughout the EU, whereas if the proceedings are brought under Article 125(5) the court only has jurisdiction to hear infringement claims in relation to the Member State in which the proceedings have been brought.

Here, Lännen’s claim only covered alleged infringement by way of paid for online search engine advertising in Finland. Therefore, the CJEU said, to determine whether the online search display on Google.fi was directed at consumers or traders located in Finland, the question the Finnish court had asked was whether the nature of the products concerned, the scope of the market in question and the fact that the online search display was on the website of a search engine using the national top-level domain of Finland were relevant factors for deciding whether it had jurisdiction under Article 125(5) and, if so, whether other factors should also be taken into account.

To determine this, the question was whether the alleged infringements established a sufficient connecting factor with Finland, pursuant to Article 125(5). Further, the CJEU said, given that the Finnish court was, at this stage in proceedings, simply trying to establish jurisdiction, it was not expected to carry out a detailed assessment of the substance of the action. Therefore, evidence that gave rise to a reasonable presumption that the alleged infringements might have been committed or threatened in Finland was sufficient to establish jurisdiction.

Following Case C-172/18 AMS Neve EU:C:2019:674, the CJEU also said that whether the alleged infringement is “committed or threatened” relates to “active conduct” by the alleged infringer. Further, according to the same case, where the alleged infringement consists of advertising and offers for sale displayed electronically, the alleged infringement will be “committed” in the territory where the consumers or traders to whom such ads and offers for sale are directed are located.

Therefore, where the online search display is, even if only potentially, directed at consumers or traders located in a certain Member State, bearing in mind that information on the geographic area of supply of the products in question is considered important evidence for such assessment, the owner of an EU trade mark will be entitled to bring proceedings in that Member State under Article 125(5).

In this case, the CJEU said, the geographical area of product supply was not mentioned in the online ad. Further, the map on Senwatec’s website, which according to Lännen proved that Senwatec’s market was global and therefore included Finland, did not in itself establish a connecting factor with Finland, since it did not show that Senwatec directed its marketing activities at the Finnish market. Therefore, the connecting factor with Finland had to be established by other factors.

The CJEU noted that, according to its own case law on Article 17(1)(c) of the Recast Brussels Regulation (1215/2012/EU), various indicia are capable of supporting a finding that the trader’s activities are directed at a certain Member State, namely the international nature of the activity, use of a language or a currency other than the language or currency of the Member State in question, mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States, use of a top-level domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States.

In the CJEU’s view, this list, although not exhaustive, might be relevant for the purposes of applying Article 125(5) of the 2017 Regulation. In this case, the CJEU concluded that the provision of ads and offers for sale on a website with a top-level domain other than that of the Member State in which the trader was established was relevant.

That said, however, the CJEU stressed that the mere fact that a website is accessible from the territory covered by the trade mark is not sufficient to conclude that the offers for sale displayed are targeted at consumers in that territory (Case C‑324/09 L’Oréal and Others EU:C:2011:474).

It followed, therefore, that “active conduct” included the fact that an undertaking pays the operator of a search engine using a national top-level domain of a Member State other than that in which it is established, to display to the public of that Member State a link to that undertaking’s website, thereby enabling a specifically targeted public to access its product offering.

Accordingly, in the CJEU’s view, such paid-for referencing constituted a connecting factor with the Member State in which the public was targeted for the purposes of Article 125(5).

As for the use by Berky of a trade mark as a meta tag on Flickr.com, i.e. under a generic top-level domain, the CJEU said that this was different to paid for online referencing for the purposes of “active conduct”. A website with a generic top-level domain is not intended for the public of any specific Member State, it said. Further, the meta tag is intended only to enable search engines to better identify the images on that website and, in so doing, to increase their accessibility.

In those circumstances, the CJEU said that the Finnish court could not declare that it had jurisdiction under Article 125(5) unless there were other factors proving that such referencing was intended for a Finnish public. Considering the nature of the products in question and the extent of the geographical market, the CJEU said that it was for the national court to assess the extent to which these elements were relevant in order to conclude that referencing accessible in the territory covered by the trade mark was targeted at consumers in that territory.

To conclude, the CJEU held that Article 125(5) should be interpreted as meaning that the owner of an EU can bring trade mark infringement proceedings against an alleged infringer in relation to the use of the mark in question in paid-for online search engine advertising in the Member State in which consumers and traders targeted by the ads are located, notwithstanding the fact that it is not clear that the alleged infringer supplies the goods in question in that Member State, if the alleged infringer has used the mark by means of paid referencing on a search engine website that uses the national top-level domain name of that Member State. However, that is not the case where the alleged infringer has used the referencing of images of its goods on an online photo-sharing service under a generic top-level domain with meta tags using the trade mark as a keyword. (Case C-104/22 Lännen MCE Oy v Berky GmbH EU:C:2023:343 (27 April 2023) — to read the judgment in full, click here).