© 2010 Dechert LLP Internet Trademark Infringement Overview of European and French situations AIPLA / APRAM meeting - 6 March 2012 Marianne Schaffner

Table of contents 1.Introduction 2.Use of a trademark in referencing services 3.Use of a trademark in auction websites 4.Injunctions against ISPs 5.Conclusions 2

© 2010 Dechert LLP Introduction

What’s infringement on the internet? (1/2) Nothing special : Use of a trademark is infringement irrespective the author of the infringement and his/her domicile –No specific status to the actors: direct or indirect infringers –Jurisdiction of French Courts as long as website where infringement committed is accessible to internet users ! French Supreme Court, 9 December 2003 –In general, Use in the course of trade, ECJ, 12 November 2002, C-206/01, Arsenal Football club v. Matthew Reed Beginning of a (r)evolution… 4

What’s infringement on the internet? (2/2) Internet is special –No borders v. territorial protection of IPRs: Access to global economy New jurisdictional rules : criteria of true link to France i.e are the goods/services on the website intended to and available to French market –French Supreme Court, 11 January 2005, Hugo Boss v. Reemstma Cigarettenfabriken –French Supreme Court, 20 September 2011, Marithé et François Girbaud v. eBay Inc., and 29 March 2011, Maceo v. eBay Inc –Variety of actors –Advanced technical features new types of infringement Need of adaptation of the existing legal sytem 5

The actors on the Internet Trademark owners Advertisers ISPs –Internet access providers –Hosting service providers, search engines –Online marketplace operators –Social networks –Online price comparison service providers Internet users All of them can be liable, but their regime will differ depending on their activity 6

Applicable law (1/2) General law in… –Trademark Directive 2008/95 of 22 October 2008, Articles 5 § 1 a) and b) and 5 § 2 Implemented under Articles L.713-2, L.713-3, L of the French Intellectual Property Code –Community Trademark Council Regulation 207/2009 of 26 February 2009, Articles 9 § 1 a), b) and c) Prevents the use of… –An identical sign for identical goods or services –An identical sign for similar goods or services if likelihood of confusion –A similar sign for identical/similar goods or services if likelihood of confusion –An identical or similar sign for similar goods or services which are not if the trademark has a reputation 7

Applicable law (2/2) Specific regime in… –Directive 2000/31/EC of 8 June 2000 on electronic commerce, (Article 14 § 1) –Implemented by French law No of 21 June 2004 for trust in digital economy, Article 6-I-2°) …Applicable to hosting service providers: No liability for information stored, as long as : –No actual knowledge of illegal activity or information and –Upon obtaining such knowledge or awareness, expeditious removal or disabling access to illegal information 8

© 2010 Dechert LLP Use of a trademark in referencing services The Adwords Saga Application by French courts

The AdWords saga - First season Once upon a time… –Liability of Google for misuse of the reputation of trademarks in offering its adwords services –Liability of Google under tort law as playing an active role by offering means to purchase keywords containing trademarks the advertisers are not the owners of… Paris CFI, 20 March 2007 Free v. Google Versailles Court of Appeal, 24 May 2007, Méridien v. Google 10

The AdWords saga - End of First Season French Supreme Court, 20 May 2008, in Google v Louis Vuitton Malletier; Google v Viaticum; Google v CNRRH referred preliminary ruling to the ECJ –Does Google use trademarks in the course of trade when making available keywords containing trademarks in a manner entitling their proprietors to act? –Is Google an information society service consisting of storage of information provided by the recipient of the service within the meaning of Article 14 Directive 2000/31? In other words, has Google a defense, if –It does not have actual knowledge of illegal activity or information; and –Upon obtaining such knowledge or awareness, it acts expeditiously to remove or to disable access to the information –Is the advertiser liable for trademark infringement? 11

The AdWords saga - Second Season (1/3) ECJ decision of 23 March 2010 (C-236/08 to C-238/08) Internet referencing service providers’ liability? –No trademark infringement as no use in the course of trade –Exemption from liability under Article 14 Directive 200/31, if Neutral role i.e. merely technical, automatic and passive conduct No active role leading to knowledge or control of the data it stores –But liability under tort law if, After becoming aware of the infringing nature of the data No expeditious removal of such data 12

The AdWords saga - Second Season (2/3) Advertisers liabilty? –Use of the trademark in the course of trade in relation to identical/similar goods and services (Article 5 § 1 a) Directive 2008/95 and Article 9 §1 a) Council Regulation 207/2009) –BUT trademark infringement only if use of the trademark has an adverse effect on Function of indicating origin Advertising function 13

The AdWords saga - Second Season (3/3) Consequences, –For brand owners No action against Google No action against advertisers if end user can ascertain whether goods/services in the ad do not originate from TM owner –For advertisers? No risk if their ads clearly show that they are not the trademark proprietor. But to be explored by national courts –For Google? No liability if no involvement with choosing keywords and text of the advertisements otherwise no defense under Article 14 Removal of infringing material upon notice 14

The AdWords saga - Epilog? Reaffirmation of the Adwords ruling by ECJ –In the context of trademark infringement by imitation (ECJ, 8 July 2010, Portakabin Ltd and Portakabin BV / Primakabin BV, C-558/08) –In the context of infringement of a trademark with a reputation (ECJ, 22 September 2011, Interflora / Marks & Spencer plc and Flowers Direct Online Ltd, C-323/09) 15 Trademark owner has to evidence an adverse effect on the function of indicating origin, i.e. the function of indicating origin, the advertising function or the investment function.

The AdWords saga - Epilog? Critics –ECJ imposes a new criteria for trademark owners : evidence of likelihood of confusion in the situation Where the keywords are identical to the trademarks To designate identical goods –Let’s hope the ECJ will come back to reason… To be continued… 16

France: Application of the Adwords ruling (1/5) Application by French Supreme Court of the ECJ guidelines in decisions of 13 July 2010 (RG No , No and No ) –Liability of the advertisers for trademark infringement, as end user could be confused –No use of the trademark in the course of trade by Google –Role played by Google to be re-examined by Paris Court of Appeal Decision of the Paris Court of Appeal still expected. 17

France: Application of the Adwords ruling (2/5) Paris Court of Appeal, 2 February 2011, RG No , Google v. Auto IES, Car Import and others: –No infringement by reproduction against the advertisers: No reproduction of the trademark in the ad Clear separation on the search results page between “sponsored links” and “natural links” enabling the reasonably attentive internet user to make difference between trademark’s owner goods and advertiser’s goods Function of indicating origin of the trademark not affected. -No liability under tort law against referencing service provider -Use of the trademark as a keyword by advertisers not unlawful 18

France: Application of the Adwords ruling (3/5) Paris Court of Appeal, 30 November 2011, RG No , Google v. Pomovacances and Karavel –No liability of Google under article 6-I-2° of French Law of 21 June 2004 Even if upon notice sent by trademark owners Google had not promptly removed the commercial link Because, trademark owners had not previously evidenced the infringing nature of the advertiser’s commercial link Commercial link is not an infringement as such A mere notice not sufficient Evidence of adverse effect on function of indicating origin required. 19

France: Application of the Adwords ruling (4/5) Paris First Instance Court, 15 December 2011, RG No , JM Weston v. shopping Epinions and others: application of Adwords ruling to price comparison online website –No liability exemption: active role of Shooping epinions: By choosing the information which is shown to the internet users By making a prior selection of information provided by the advertiser (in the product form) in the purpose of its reproduction on the website –But, No infringement as a referencing service provider: No use of the Weston trademark by Shopping epinions as a key word for its own promotion but only for the purpose of displaying on its website the ad of another advertiser –But, Infringement by using the Weston trademark as a key word to promote its own website on the search engines Google and Yahoo Thorough analysis of every act committed by the Internet actor 20

© 2010 Dechert LLP Use of a trademark in an auction website The eBay Saga Application by French courts

The eBay saga (1/4) Once upon a time… Irreconciliable decisions within the EU…and with the US –France: No exemption from liability: eBay is not only a web hoster, has an active role and controls the offers for sale –Paris Commercial Court, 30 June 2008 ; Reims Court of Appeal, 20 July 2010: eBay a web hoster + editor –Paris Court of Appeal, 3 September 2010, Active role i.e. not a merely functional and technique role, knowledge and control of data –Germany: No exemption from liability and liable for “Störerhaftung” i.e. contributory infringement –German Supreme Court, Rolex v. Ricardo, 11 March 2004 ; Rolex v. eBay, 19 April 2007 –Belgium: Exemption from liability –Bruxelles Commercial Court, Lancôme Parfums et Beauté v. eBay, 31 July 2008 –UK: Not joint liable for infringement (preliminary ruling to the ECJ) –English High Court of Justice, L’Oreal and others v. eBay, 22 May 2009 –US: No liability for contributory infringement: (application of the well-known “Inwood” test of contributory infringement) –Second Circuit Court, Tiffany v. eBay, 13 September (Appeal before Supreme Court not admitted) 22

The eBay saga (2/4) English High Court of Justice, 22 May 2009, referred preliminary ruling to ECJ (L’Oréal, Lancôme v. eBay) –Does the use of trademarks by customers of an auction website amount to infringement? –Can the auction website enjoy from the exemption from liability under Article 14 Directive 2000/31? –Can trademark owners apply for interim injunctions against the auction website? If yes, which interim injunctions are available? 23

The eBay saga (3/4) ECJ decision of 12 July 2011 (C-324/09) –Trademark infringement? Use of the signs in offers for sale displayed on eBay is made by the sellers … and not by auction website itself No use in the course of trade Use of keywords by eBay –To promote offers for sale of its customers Use in the course of the trade For identical/similar goods/services If indicating of origin function affected (confusion) Infringement –To promote its own auction plateform Use in the course of the trade But for dissimilar goods/services No infringement 24

The eBay saga (4/4) –No exemption from liability under Article 14 Directive 200/31 If auction website plays an active role of such a kind as to give it knowledge of, or control over the data stored –Assistance provided by eBay to sellers consisting in “optimizing the presentation of the litigious offers for sale or promoting them” Upon awareness of infringement, no prompt removal from website Application of the Adwords ruling 25

Application by French courts Worth noting that prior to the the eBay ECJ decision, Paris Court of Appeal, 3 September 2010, eBay v. Parfums Christian Dior, Kenzo Parfums, Givenchy Parfums et Guerlain: Application of the Adwords ruling –Ruled that eBay activity is not of “a mere technical, automatic and passive nature” –No exemption from liability under Article 6-I-2° of French law of 21 June 2004 Pending trademark infringement action against eBay before the Paris CFI, in Boutique 38 Marithé François Girbaud et Wurzburg Holding v. eBay France, eBay US, eBay Switzerland, eBay Europe. 26

© 2010 Dechert LLP Injunctions against ISPs

Injunctions against ISPs (1/2) Article 11 of Directive 2004/48/EC In the eBay case, ECJ ruled: –National courts can grant interim injunctions against the online-marketplace from taking measures to cease infringement and to prevent future infringements –Injunctions must be “effective, proportionate, and dissuasive” but must not create barriers to legitimate trade and not consist in a general and permanent prohibition on selling Ex. A general monitoring obligation would not be proportionate 28

Injunctions against ISPs (2/2) Are not proportionate injunctions imposing on ISPs to install a system for filtering e-communications in order to prevent file sharing which infringes copyright: –Against an Internet access provider: ECJ, 24 November 2011, C-70/10, Scarlet Extended v. SABAM: Requiring installation of a system for filtering all e-communications passing via its services, in particular those involving the use of peer-to- peer software Applying indiscriminately to any customers as a preventive measure At the ISP exclusive expense For an unlimited period –Against a hosting service provider ECJ, 16 February 2012, C-360/10, Sabam v. Netlog Same ruling 29

© 2010 Dechert LLP Conclusions

The 3 main criteria of infringement liabilities Use of the trademark in the course of trade –Adverse effect on the indicating origin function incl. Advertising and investment functions –Evidence of likelihood of confusion even when identical signs for identical goods/services Status of the internet providers –Liability of the editor as it has a control over the data stored –Exemption from liability of web hosting providers No actual knowledge of the infringing nature Expeditious Removal of the infringing data –Exemption from liability of referencing service providers (Google) If no active role 31

Expected rulings to address other uses (1/3) Use in Meta Tags –Reproduction in the source codes of website of a trademark amounts to infringement Paris Court of Appeal 12 October 2005 RG No 04/10455 Blue Acacia –No infringement by use of meta tags Paris CFI, 29 October 2010, Free v. Osmozis Meta tags are invisible information located in a document, so it may not perform the function of a trademark which shall be discernible by the public in order to guarantee the origin of the products 32

Expected rulings to address other uses (2/3) Use in User names on Social networks “username squatting or namesquatting”, registration of a username corresponding to a third party’s corporate name or trademark –User names No qualification by law Not proprietary rights but have significant assets and could constitute a distinctive sign May the use of a user name corresponding to a trademark be analyzed as the use of a trademark in the course of trade? How to protect the trademark and e-reputation against “namesquatting”? –Liability of ISPs (Facebook, Twitter…)? 33

Expected rulings to address other uses (3/3) Use in domain names –In the old times: Infringement when a trademark filed in Class 38 was reproduced irrespective the content and suject-matter of the website at issue –Then, infringement provided that litigious webiste promotes goods/services identical/similar to goods/services of the prior trademark –Finally, Use of the sign in the course of the trade as a mark Exception to infringement: Freedom of expression –French Supreme Court, Greenpeace v. Areva, 8 April 2008 –Paris Court of Appeal, 30 April 2003, Danone v. Association réseau Voltaire (Jeboycottedanone.com). –… Finally finally, domain name is a shop sign so there is no use as a trademark! Paris CFI, 2 March 2010 Kindy vs. Dominique Hebert – Kindy Création To be continued… 34

Thanks for your attention 35

Marianne Schaffner Partner, Dechert (Paris) LLP Tel.: Mob.: Mail: 36