Reproduction of infringing content online: who's liable?

Keyword advertising, search engine optimisation and liability for infringement via online marketplaces: In recent years, there has been a plethora of cases concerning the various ways that trade marks may be infringed, through use on the internet.

On 2 July 2020, following a referral from the Düsseldorf High Court, the CJEU gave a preliminary ruling in another such case, this time concerning the reproduction of an infringing advert. Here, the key question for the Court to consider was whether the originator of an advert had used an infringing sign, in circumstances where the ad had been independently reproduced by a third-party website operator.

The background

The litigation began in the Düsseldorf Regional Court, when, in 2016, German law firm 'MBK Rechtsanwalte' (MBK) took action against another law firm, 'mk advokaten' (MKA). MBK claimed that by trading under the names 'mbk rechtsanwälte' and 'mbk advokaten', MKA had infringed its 'MBK' trade mark, which was registered in Germany for legal services. The Düsseldorf Regional Court found in MBK's favour and ordered that MKA was prohibited from using the letters 'mbk' for legal services, "under pain of fine".

MBK later discovered that when its name was entered into a Google search, some of the results led to certain directory websites, including one, in Das Örtliche, which advertised the legal services of MKA. MBK therefore asked the Court to fine MKA for breaching the 2016 prohibition. In its defence, MKA explained that although it had originally advertised with Das Örtliche using the infringing mark, that advert had been removed, at MKA's request, following the 2016 trial. It therefore appeared that other directories had picked up the listing and linked the 'MBK' search term with MKA, without its knowledge.

The question for the CJEU

At first instance, the Düsseldorf Regional Court found in MBK's favour and fined MKA for non-compliance. MKA appealed to the Düsseldorf High Court, which in turn referred a question to the CJEU, regarding the meaning of "using" under Article 5(1) of Directive 2008/95 (Article 5(1)).

Specifically, the CJEU was asked:

"Is a third party referenced on a website in an entry that contains a sign identical with a trade mark "using" that trade mark, within the meaning of Article 5(1), if the entry was not placed there by the third party itself, but was reproduced by the website’s operator from another entry that the third party had placed in infringement of the trade mark?"

In plain language: Does a person who has arranged for an infringing advert to be placed on a website 'use' a sign which is identical with the infringed trade mark where third-party website operators reproduce that advert on other sites?

The CJEU's ruling

On 2 July 2020, the CJEU issued its preliminary ruling, concluding as follows:

• Offering goods or services under a sign which is identical with or similar to another person's trade mark and advertising those goods or services under that sign constitutes 'use' of that sign;
• It is settled case-law that 'use' of a sign that is identical or similar to another person's trade mark exists where that sign is selected by an advertiser as a keyword in an online referencing service and is used as the trigger to display an advert, even where that sign does not appear in the advert itself;
• It follows that if someone directs an operator of a directory website to publish an ad, which contains, or is triggered by, a sign that is identical with or similar to a registered trade mark, that conduct constitutes 'use', for the purposes of Article 5(1);
• However, by contrast (and relevant to this case), a person cannot be liable for the independent actions of other economic operators with whom it has no direct or indirect dealings and who act on their own initiative and in their own name. If the website operators are acting on their own initiative then the economic operator whose goods or services are promoted (in this case, MKA) cannot be regarded as their customer, and is not the 'user' of the sign; and
• In the context of Article 5(1), "using" involves active conduct and direct or indirect control over the use. On that basis, Article 5(1) cannot be interpreted as meaning that a person 'uses' a sign, irrespective of their conduct, simply because the use provides them with a financial benefit.

It is now for the referring Court to determine, on the facts, whether MKA's conduct indicates that it had a direct or indirect relationship with the operators of the third-party websites in question. If no such relationship is found to exist then MBK's claim under Article 5(1) looks set to fail. However, MBK may still have a claim in restitution under local German law and/or be able to bring an action against the website operators direct.

The ruling should offer some comfort to online advertisers: It suggests that as long as steps are taken to procure the removal of any infringing ads that advertisers have placed, or directed someone else to publish, they will not be held liable for infringement, based on independent republications. The logic behind this seems sound: in a world where content can be reproduced many times over with only a few clicks, it would seem harsh to hold content originators liable for reproductions that they had no knowledge of, or involvement in.

In Germany however, the position appears to be more onerous for advertisers. It is settled German case-law that, where an online advert infringes another person’s rights, the person who ordered the ad must not only arrange for it to be deleted but also, "with the help of the usual search engines", ascertain whether other website operators have reproduced it. If they have, then the person who ordered the ad must also make a "serious attempt" to have subsequent referencing deleted. The rationale behind this is that any display of an infringing ad benefits the person whose goods or services it promotes and that it therefore falls on that person to procure the removal of all instances of the advert. In the present case, this prompted the referring Court to question the compatibility of German case-law with certain principles of EU law.

The CJEU's preliminary ruling can be read, in full, here.