ROLE OF A PHYSICAL MARKETPLACE OPERATOR IN TRADEMARK PROTECTION. TOMMY HILFIGER CASE.
On July 7, 2016, the Court of Justice of the European Union (“CJEU”) in Case C-494/15 ruled that the tenant of market halls who sublets the various sales points situated in those halls to market-traders, some of whom use their pitches in order to sell counterfeit branded products, falls within the concept of “intermediary”, against whom such injunctions may be addressed as provided for in the national law of the Member States. Put differently, and setting the case against the Polish legal backdrop for a change and effect, protection of claims and injunctions aimed at prohibiting the continuation of intellectual property (trademark related or otherwise) infringement may be applied or issued against the operators of a physical marketplace, based on Article 422 of the Polish Civil Code.
The main proceedings leading to the issuance of the herein commented CJEU judgment involves Delta Center, being the tenant of the marketplace and subletting to market-traders the various sales areas situated in that marketplace. The applicants in the main proceedings, including without limitation Tommy Hilfiger Licensing LLC, manufacture and distribute brand products, and seek legal protection against the sale of counterfeit branded products in those sales areas.
The application for an injunction was dismissed by domestic courts of first and second instance, and it had not been until the case was finally brought before the Supreme Court of the Czech Republic that the need for a preliminary ruling was recognized and duly acted upon. As a result of questions referred by the Supreme Court, the CJEU was afforded the opportunity to establish proper interpretation of the third sentence of Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property (“Directive”) which is as follows:
- within the concept of ‘an intermediary whose services are being used by a third party to infringe an intellectual property right’ (within the meaning of the interpreted provision) falls the tenant of market halls who sublets the various sales points situated in those halls to market-traders, some of whom use their pitches in order to sell counterfeit branded products; and
- the conditions for an injunction within the meaning of that provision against an intermediary who provides a service relating to the letting of sales points in market halls are identical to those for injunctions which may be addressed to intermediaries in an online marketplace, set out by the Court in the judgment of July 12, 2011, in L’Oréal and Others (C‑324/09, EU:C:2011:474).
The legal standpoint of the CJEU as cited above is quite significant in the sense that it precludes the interpretation of the Directive restricting its scope exclusively to electronic commerce. The judgment passed by the CJEU in Case C-494/15 confirms the existing opportunity on the part of manufacturers and distributors of branded products to effectively engage intermediaries in combatting trademark infringements (in the form of preventing or bringing the trade in counterfeit goods to an end), under pain of liability for aiding and abetting (or for incitement, or for deliberate use of the damage inflicted). A word of caution though: the injunctions sought must not be excessively expensive or create barriers to legitimate trade.