Trade mark infringement: No one can be legally obliged to do the impossible

One of the deciding factors in the recent trade mark CJEU decision of Daimler AG v Együd Garage was that noone can be legally obliged to do the impossible.

This shouldn't exactly be news but it was one of the deciding factors in respect of trade mark infringement in online advertising in the recent CJEU decision, Daimler AG v Együd Garage Gépjárműjavító és Értékesítő Kft (Case: C-179/15).

Facts

Együd Garage had a contract for the supply of after-sales services with Mercedes Benz Hungaria Kft, a subsidiary of Daimler (proprietors of the figurative registered Mercedes-Benz mark set out below). Under this contract Együd were entitled to describe themselves as "authorised Mercedes-Benz" dealers for the period running 2011 to 2012. During this period Együd placed an online advertisement including this description with MTT (a provider of online advertisement services).

Following termination of the contract, Együd tried to cease all use of the trade mark and requested MTT remove the mention of Mercedes-Benz in the online advertisement. However MTT did not comply with this request so the advertisement continued to be present online. Other websites also displayed this advert from MTT, although independently and not at Együd's request.

Daimler brought a claim for trade mark infringement against Együd seeking:

1.               a declaration that Együd were infringing their trade mark; and
2.               an order that Együd remove the advertisements.

Referral

The Hungarian Court referred the following question for a preliminary ruling:

Must Article 5(1)(a) of [Directive 2008/95] be interpreted as meaning that the trade mark proprietor is entitled to take action against a third party named in an advertisement on the internet, which features a sign likely to be confused with the trade mark, referring to a service of that third party identical to the goods or services for which the trade mark is registered, in such a way that the public might be given the mistaken impression that there is an official commercial relationship between the undertaking of that third party and the trade mark proprietor, even though the advertisement was not placed on the internet by the person featuring in it or on his behalf, and it is possible to access that advertisement on the internet despite the fact that the person named in it took all reasonable steps to have it removed, but did not succeed in doing so?

Decision

The CJEU held that even where a car trade mark is not registered for the particular services in question, using the mark to "inform the public that a third party carries out the repair and maintenance of authentic cars bearing that mark" will be viewed as use for identical goods and services. The sign being used in this situation was identical to the registered figurative 'Mercedes-Benz' mark. This meant that any infringement should be assessed having regard to Article 5(1)(a) of the Trademark Directive 2008/95.

The after sales contract expressly permitted placing the online advert so at the time the advert was placed there was no infringement. The question was in respect of the reference to Mercedes-Benz in the advert continuing after termination of the contract.

The court held that the "advertiser cannot be held liable for the acts or omissions of such a provider who, intentionally or negligently, disregards the express instructions given by that advertiser who is seeking, specifically, to prevent that use of the mark. Accordingly, where that provider fails to comply with the advertiser’s request to remove the advertisement at issue or the reference to the mark contained therein, the publication of that reference on the referencing website can no longer be regarded as a use of the mark by the advertiser."

In respect of the other websites showing the advertisement; "an advertiser cannot be held liable for the independent actions of other economic operators… with whom the advertiser has no direct or indirect dealings and who do not act… on their own initiative".

The court considered that 'use' under Article 5(1) must involve "active behaviour and direct or indirect control" and that "only a third party who has direct or indirect control of the act constituting the use is effectively able to stop that use and therefore comply with that prohibition". To allow this claim to succeed would "conflict with the principle that no one can be legally obliged to do the impossible".

According to the CJEU, instead of succeeding in an infringement claim in these circumstances, there was still the possibility for the proprietor to:

1.               Claim from the advertiser, where appropriate, reimbursement of any financial advantage on the basis of national law (for example for unjust enrichment); and/or
2.               Take action against the operators of the referencing websites.

In summary where a third party takes all reasonable steps, including express requests, to remove an advertisement containing an identical mark in respect of identical good or services which gives the impression that there is a commercial relationship between him and the proprietor of the trade mark, that third party does not make use of that sign that may be prohibited by that proprietor.

Comment

Commentators have welcomed this judgment as consistent with general trade mark law. It is a relief that the court took a common sense approach to find that infringement must be related to active involvement.

This means that if a company or individual finds themselves implicated in respect of potential trade mark infringement through online advertising, they may not be liable if they can show they took all reasonable steps to prevent the infringement and remove the advertisement in question.

For those hosting material which contains trade mark use, care must be taken to ensure that if consent to the use of the trade mark is withdrawn, then the previously acceptable activity becomes liable for infringement. This is in line with the E-Commerce Directive 2000/31 which sets out that internet service providers are only liable for information which they host if, when they obtain knowledge of infringing material, they act expeditiously to remove or disable access.

This is also a reminder that where a person seeks legal redress, they should consider their actual aim of litigation and pursue the party who has the power to take action and rectify the situation.