Jurisdiction in cases of Google AdWord Trademark infringement

Another episode in the line of cases before the Court concerning Google AdWords. The Intellectual Property battle over the use of trademarks as keywords for the purpose of triggering advertisements on Google’s search result pages can be seen in the cases (most notably) C-236-238/08 Google/Louis Vuitton, C-558/08 Portakabin, C-324/09 L’Oréal/eBay and C-323/09 Interflora. The recently handed down judgment in the case Wintersteiger (C-523/10) however, concerns the interpretation of the notion ‘place where the harmful event occurred or may occur’ in Article 5(3) Brussels I Regulation in cases of alleged Trademark infringement through registration of a Google AdWord.

An Austrian company, Wintersteiger, initiated proceedings in Austria for infringement of its Austrian Trademark ‘Wintersteiger’ by a German company, Products 4U. Products 4U had reserved the Trademark  ‘Wintersteiger’ as Google Adword for Google’s German top-level domain (www.google.de). Wintersteiger argued that the Austrian judge could assume jurisdiction under Article 5(3) since the website google.de is also accessible in Austria. On appeal, the Austrian Oberster Gerichtshof (OGH) asked the Court which criteria are to be used to determine jurisdiction under Article 5(3) to hear an action relating to an alleged infringement of a trademark through the use of a Google AdWord on the website operating under a top-level domain different from that of the Member State where the trademark is registered…

The Court considers that under Article 5(3) the ‘place where the harmful event occurred’ is intended to cover both the place where the damage occurred and the place of the event giving rise to it, so that the defendant may be sued, at the option of the applicant, in the courts for either of those places (established case law since Case 21/76 Mines de Potasse d’Alsace). As regards the place where the damage occurred the Court concludes:

28     It is the courts of the Member State in which the trade mark at issue is registered which are best able to assess, taking account of the interpretation of Directive 2008/95 in, inter alia, Cases C‑236/08 to C‑238/08 Google France and Google [2010] ECR I‑2417, and Case C‑324/09 L’Oréal and Others [2011] ECR I‑0000, whether a situation such as that in the main proceedings actually infringes the protected national mark. Those courts have the power to determine all the damage allegedly caused to the proprietor of the protected right because of an infringement of it and to hear an application seeking cessation of all infringements of that right.

29     Therefore it must be held that an action relating to infringement of a trade mark registered in a Member State through the use, by an advertiser, of a keyword identical to that trade mark on a search engine website operating under a country-specific top-level domain of another Member State may be brought before the courts of the Member State in which the trade mark is registered.

As regards the place where the event giving rise to the damage occurred, the Court rules:

34      In the case of an alleged infringement of a national trade mark registered in a Member State because of the display, on the search engine website, of an advertisement using a keyword identical to that trade mark, it is the activation by the advertiser of the technical process displaying, according to pre-defined parameters, the advertisement which it created for its own commercial communications which should be considered to be the event giving rise to an alleged infringement, and not the display of the advertisement itself.

(…)

36      It is true that the technical display process by the advertiser is activated, ultimately, on a server belonging to the operator of the search engine used by the advertiser. However, in view of the objective of foreseeability, which the rules on jurisdiction must pursue, the place of establishment of that server cannot, by reason of its uncertain location, be considered to be the place where the event giving rise to the damage occurred for the purpose of the application of Article 5(3) of Regulation No 44/2001.

37      By contrast, since it is a definite and identifiable place, both for the applicant and for the defendant, and is therefore likely to facilitate the taking of evidence and the conduct of the proceedings, it must be held that the place of establishment of the advertiser is the place where the activation of the display process is decided.

38      It follows from the foregoing that an action relating to alleged infringement of a trade mark registered in a Member State through the use, by an advertiser, of a keyword identical to that trade mark on a search engine website operating under a country-specific top-level domain of another Member State may also be brought before the courts of the Member State of the place of establishment of the advertiser.

After the eDate case, on which we reported earlier, this means another extensive interpretation of the notion ‘place where the harmful event occurred’ in internet-cases. At first sight, this seems at odds with the restrictive interpretation that should be given to any deviation from the principle rule laid down in Article 2 Brussels I Regulation: defendants should as a rule be sued for the Courts in the Member State in which they are domiciled. On the other hand, both Wintersteiger and eDate deal admirably with the conflict between the place-oriented rule of Article 5(3) and the global nature of the internet. Also, in Wintersteiger the Court did not indulge in an interpretation along the lines of the Pammer and Alpenhof Case (C-585/08, C-144/09), in which the Court gave a list of criteria to determine whether a website can be said to have been ‘directed’ at the Member State where the consumer was domiciled. Such an interpretation in Wintersteiger would certainly increase legal uncertainty. Whether or not the extension of heads of jurisdiction in Google AdWord cases gives rise to forum shopping remains to be seen.

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