September 23, 2019

The first claimant, AMS Neve Ltd, is a UK company that manufactures and sells audio equipment and is the exclusive licensee of a EU trade mark and two UK trade marks.

The first defendant, Heritage Audio SL, is a Spanish company that sells audio equipment.

AMS Neve issued trade mark infringement proceedings against Heritage in the UK claiming that Heritage had offered for sale to consumers in the UK imitations of AMS Neve products bearing, or referring to, signs that were identical or similar to the EU trade mark and the UK trade marks.

The IPEC held that it had jurisdiction to decide the claims relating to the UK trade marks. It also held that, although Heritage was established in Spain, it could be sued, under Article 7(2) of the Recast Brussels Regulation (1215/2012/EU), in the courts of the place where the damage resulting from the tortious acts had occurred and, in the case of the UK trade marks, the place where the damage had occurred was the place where the rights subsisted.

However, the IPEC held that it did not have jurisdiction over infringement relating to the EU trade mark. It found that only the courts of the Member State in which territory Heritage had put the signs in question on the website, or had taken decisions to that effect, had jurisdiction, under Article 97(5) of the Trade Mark Regulation (207/2009/EC). Article 97(5) provides that infringement proceedings can be brought “in the courts of the Member State in which the act of infringement has been committed or threatened”.

AMS Neve appealed to the Court of Appeal, which referred three questions to the CJEU.

The first question asked whether the fact that a defendant, established and domiciled in Member State A, has taken steps in the territory of that Member State to advertise and offer for sale goods under a sign which is identical to a EU trade mark on a website targeted at traders and consumers in Member State B is sufficient to establish the jurisdiction of the courts of Member State B to hear the infringement proceedings on the basis of Article 97(5) of the Trade Mark Regulation (207/2009/EC). If so, it asked which criteria should be applied to establish the jurisdiction of the courts of Member State B.

The CJEU held that, under Article 97(5), where the infringing acts complained of consist of advertising and offers for sale made online, the Member State court assessing whether it has jurisdiction or not must find that the infringing acts were committed in the territory where the consumers or traders to whom the advertising and offers for sale are directed are located, notwithstanding the fact that the defendant is established elsewhere, that the server is located elsewhere, or even that the products in question are located elsewhere.

The CJEU said that this must be the correct interpretation of Article 97(5), as to interpret it as referring to the Member State in which the person placing the adverts and offers for sale has set up his website and activated the adverts and sales offers, would mean that that person would effectively be able to prevent EU trade mark owners enforcing their rights in an alternative forum. In other words, the infringer could avoid action against him/her in other jurisdictions simply by ensuring he/she places the adverts and sales offers online in his/her own territory. Practically speaking, it may prove excessively difficult, or even impossible, for the trade mark owner to ascertain exactly where the defendant carried out the infringing acts, meaning that he/she would avoid legal action entirely.

Consequently, the CJEU said, the infringing acts must be held to have been “committed” (under Article 97(5)) in the territory where the content is made accessible to the consumers and traders to whom it is directed. Whether that advertising and sales offers result in actual sales is irrelevant. (Case C-172/18 AMS Neve Ltd v Heritage Audio SL EU:C:2019:2 (5 September 2019) — to read the judgment in full, click here).