Cross Border Trade and Infringing Goods | Legal Risks for E-Commerce Websites & Platforms
Business is fluid. For many, the course of trade means that there is ‘movement’ of goods and some services across different jurisdictions. Movement also applies to vendors who sell their products via e-commerce trading platforms. For those who do move their goods across different jurisdictions including e-commerce platforms, should pay attention to the preliminary determination decision handed down in the ongoing intellectual property dispute case of Tradeinn Retail Services S.L-v-PH (Case C-76/24).
This is a matter that appeared before the Court of Justice of the European Union (‘CJEU’) relating to trade mark rights and protections.
It has significance because in providing its preliminary determination, the CJEU held that a trade mark proprietor who has secured trade mark registration within a single member state of the EU, had sufficient standing to prohibit a third party from “stocking” infringing goods in another member state, if those infringing goods were intended to be sold in the protected territory.
It appears that the CJEU defines “stocking” as having control or direction of infringing goods, even in circumstances where the infringing goods are physically located in a different jurisdiction.
Stuart Southall of KANGS reports upon this decision.
The Dispute Between the Parties
PH is the legal and beneficial owner of two domestic German trade marks. The scope of the registrations covered diving equipment, including wet suits, gloves, masks and breathing apparatus.
The Defendant, Tradeinn Retail Services S.L. (‘TRS’), is a Spanish incorporated company that predominately traded from Spain. Its primary business was the sale of diving equipment and associated accessories.
However, in the course of its trade and its marketing materials, among other things, TRS used Marks that were according to PH, identical and confusingly similar to theirs. TRS asserted it provided TRS with an unfair commercial advantage, particularly given that TRS sought to sell its products through Amazon’s German platform.
Within its domestic Court (Paragraph 14(1) to (3) of the Gesetz über den Schutz von Marken und sonstigen Kennzeichen –Markengesetz (Law on the protection of trade marks and other distinctive signs) of 25 October 1994 (BGBl. 1994 I, p. 3082), PH applied for injunctive protection. A ‘head of claim’, as part of that injunctive application was to prevent TRS from being able to ‘stock the goods’ where the same were to be sold within the German territory under the confusingly similar PH mark.
Whilst PH won and concessions were made by TRS, on its return to the Court, PH had part of its injunction dismissed. PH considered that the Court was wrong to dismiss part of its Injunctive relief and appealed the decision. Due to the nature of the relief that PH was seeking, the Federal Court of Justice, Germany referred two distinct questions to the CJEU: -
- Is it possible for a domestic trade mark owner to prohibit a third party (in another member state) from “stocking” infringing products in circumstances where it is intended, by that third party, to sell the infringing products within the territory where the domestic Mark is registered; and
- What is the extent of “stocking” i.e. is it applicable to the goods or can it be extended to the controlling mind of the person who has access to the goods.
Following the referral, the CJEU needed to consider the two questions in isolation and applied against the relevant law, that being Article 10(3)(b) of Directive 2015/2436. In doing so, against the first referred question, i.e. whether it was possible for a domestic Mark holder to prohibit stocking of infringing goods. The Court suggested that it was appropriate for Article 10(3)(b), meaning that a trade mark owner may prohibit a third party, located in a separate member state from stocking infringing goods that are intended to be sold (and resold) within the registered owners domestic territory.
Having made its finding in respect of the capability of a domestic trade mark owner to prevent infringement by a third party, the Court then considered the extent of stocking. When considering the law, Article 10(3)(b), the Court found that it was sufficient to apply the law over the person who has direct and actual control over the infringing goods.
The CJEU’s decision
The CJEUs concluded that Article 10(3)(b) of Directive 2015/2436 should be interpreted that a domestically registered trade mark owner has the power to prevent a third party using Marks that are confusingly similar, attached to infringing goods intended to be sold domestically, within the registered trade mark owner’s territory.
The Courts Decision & What it Means
The CJEU decision has implications for all traders who sell across jurisdictional lines whether directly or indirectly through e-commerce platforms (directed specifically at domestic markets such as Amazon.de). It provides that domestic trade mark owners can prohibit third-party traders using similar or identical Marks attached to similar or identical goods, under the guise of ‘stocking,’ from being sold within the registered trade mark owners’ domestic market.
Accordingly, online sellers must exercise caution when marketing goods across borders to ensure that they are not infringing another trader’s rights and that they have all the necessary permissions. Failure to ensure this opens up a raft of possibilities to enable Trade Mark proprietors to seek Injunctions against third party registered competitors, where it can be shown that:
- there is similarity or identical goods,
- that there is no permission and so, there is the attempt to take an unfair commercial advantage and,
- that there is a genuine intent to sell such goods within the Mark proprietor’s domestic Market.
At the very least, it means that e-commerce platforms should now take the appropriate steps to ensure that greater due diligence and verifications are undertaken before a vendor can start selling.
IP protection is important for all.
How Can We Assist?
This Judgment strengthens the enforcement entitlement of trade mark proprietors to protect infringed marks against goods stored in another country, and those having possession of them, thereby re-affirming that trade mark protection is not restricted by international boundaries.
Our intellectual property lawyers specialise in IP infringements and IP disputes, providing bespoke protection strategies, expert legal guidance and effective dispute resolution to meet your specific needs.
The team at KANGS is highly experienced in handling all types of Intellectual Property disputes and is ready to provide you with immediate professional assistance and support. Please do not hesitate to contact our team using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
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