ECJ decision on trade marks gives boost to GR

Yesterday the Court of Justice of the European Union handed down its decision in a reference from the UK High Court: L’Oréal & ors v eBay International AG and ors (Case C‑324/09). Although a trade mark case, it has great significance for the Graduated Response in Europe.

The trade mark owners objected to the sale of unlicensed products on eBay and eBay’s use of their marks as Google adwords. The Court answered 10 complex questions posed by Arnold J following his decision of 22 May 2009 ([2009] EWHC 1094 (Ch)), most of them relating to the nature of trade mark infringement online.

The final question related to Article 11 of the IP Enforcement Directive 2004/48/EC, which provides that: “Member States shall … ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC." 

This provision extends to all holders of IP rights the injunctive remedy against intermediaries (such as ISPs) accorded to copyright holders under Article 8(3) of the 2001 Copyright Directive.

The Court of Justice held that Member States must provide for the grant of injunctions against intermediaries to prevent future infringement, not merely to terminate specific, existing infringements. The measures that an intermediary could be required to undertake could not amount to an obligation of general monitoring, which would be contrary to Article 15 of the Electronic Commerce Directive 2000/31/EC. However, it could involve suspending the user’s access:

141 … if the operator of the online marketplace does not decide, on its own initiative, to suspend the perpetrator of the infringement of intellectual property rights in order to prevent further infringements of that kind by the same seller in respect of the same trade marks, it may be ordered, by means of an injunction, to do so.

It is difficult to imagine that the Court would come to a different conclusion in relation to the equivalent provision in the Copyright Directive. The effect is to give a boost to EU right holders seeking to agree Graduated Response systems with ISPs. They can now say with credibility that if the ISPs will not agree to a voluntary system, they can effectively force them to operate such a system through the courts.

The fact that the UK seems to have failed to implement Article 11 of the IP Enforcement Directive is another matter (though from his judgment it does not seem as if Arnold J will let that stand in his way). The UK clearly did implement Article 8(3) of the Copyright Directive in section 97A of the Copyright, Designs and Patents Act 1988. Judgment in the pending action by the MPA studios against British Telecom for such an injunction was delayed in anticipation of this very decision of the Court of Justice.