Online Trademark Infringements; Jurisdiction of Courts

 

Farrukh Dall, Fatima Gilani 

Advocates

Partners at Trek Law LLP 

 

A “sign” to infringe and emboss that the rights are reserved for that particular ‘trade mark’ must be of great commercial value. This or so is believed when it comes to establishing the individuality of a product, for making sure that there must be actual sale of goods or supply of services. Exactly the opposite would be brought to consideration when it comes to infringement of the same. From the United State’s approach towards jurisdiction for trademark infringement, it is reasonable to conclude that simply placing a sign on a webpage that may be accessed by persons in a particular jurisdiction is not sufficient, per se, to further in regard to trademark usage or otherwise. It would not be too much to ask if we draw a comparative analysis keeping in mind the approach of the courts in the United Kingdom?

Not to forget that there are two major issues on trademark in electronic commerce: In one hand, trademarks infringement related to physical goods. In another side, trademarks infringement pertaining to the transaction information. Both shall be touched later at a higher stage of intellectual jurisprudence pursuit.

Let us take the example of 800-FLOWERS Trademark which was an American company applied to register 800-FLOWERS as a service mark. The motive was to receive and transfer to florists’ orders for flowers. At the first instance, Jacob J rejected counsel’s submission that placing a trademark on a website was potentially a trademark infringement. The explanation might amuse you. He said that the website’s use was in an ‘omnipresent cyberspace’ and placing a trademark on a website was ‘putting a tentacle’ into the computer of each and every person who accessed the website. Jacob J gave an example of a fishmonger from Bootle in Lancashire who advertised on his own website for local delivery. The fishmonger could hardly be said to be trying to sell his fish all over the world, or even the whole of the United Kingdom. Jacob J made the point that anyone ‘surfing the web’ will retrieve numerous irrelevant hits and someone who accessed such a website from another country would immediately realise ‘this is not for me’ and take no further interest in it. Of course, in practice it will depend on the circumstances. The most relevant of states would be to understand that the website owner’s intention and the impact on persons accessing the website will be important. This would also be brought to lime light in regard to what a person accessing the website would understand and the comprehension of the people who approached. The basic question as set out in the Zippo case, was whether the website owner targets a particular country or state for commercial purposes.

 

It was once again backed by argument that the intention of the person who is trading had manifold importance when Jacob J had another opportunity to consider the matter in Euromarket Designs Inc v Peters and Crate & Barrel. The claimant was an American company which had a chain of stores there under the name ‘Crate and Barrel’ which it had registered as a trademark in the United Kingdom and as a Community trademark. The defendant had a shop in Dublin also called Crate and Barrel and sold household items and furniture. The defendant advertised in a magazine (Home & Garden) and had a website and had, in both cases, used the Crate and Barrel name. The defendant had never sold any goods in the United Kingdom. After having a close look at the sales, it was more than obvious that the defendant’s target was not the UK market at all. When the claimant sought summary judgement for infringement of the United Kingdom trademark, the defendant argued that its advertisements were not directed to the United Kingdom market and it had no intention of trading there.

 

As regards the advertisement in Home & Garden, Jacob J noted that it had a circulation in Eire and in the United Kingdom but he accepted that the defendant had no trade in the United Kingdom and had no intention of trading there. The advertisement was for the shop and not for supplying goods by mail order. Counsel for the claimant pointed out that section 9(1) of the Trade Marks Act 1994 stated that the proprietor of a trademark has ‘… exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent’. Section 9(1) has no equivalent in the trademarks Directive. It was of concern if the statement declared that mere use of a trademark without consent would infringe, whether or not that use was in the course of trade. As Jacob J previously said in British Sugar plc v James Robertson & Sons Ltd, section 9(1) itself adds nothing to the infringing acts in section 10 except for the fact that the use must be without the proprietor’s consent. The interpretation of the provision may otherwise mean that placing an advertisement in a magazine or on a website would be to use the trademark in any jurisdiction where copies of the magazine found their way or even the website had reached.

 

In relation to the website, persons could visit the site by entering the address or through a search. Jacob J once again made the point that carrying out a search on the Internet almost always throws up lots of irrelevant hits. In whatever way a person got to the site, the question was whether the defendant was using Crate & Barrel in the United Kingdom in the course of trade. Hence it proposed to be a matter of jurisdiction rather that of establishing rights of the same. If the defendant was, bearing in mind there was no proof of actual trade or an intention to carry out trade in the United Kingdom, potentially it was using the name in every country in the world. However, the language of the Internet gives a clue as when a person accesses a website, he is said to go to the site or visit the site. It was humorous how Jacob J favoured the argument. He said that using the Internet was like the user focusing a super-telescope on the site concerned, for example, where a user had the telescope on a hill in Wales to look at the defendant’s shop in Dublin. Without evidence of commercial activity in another country the website owner can hardly be said to be using a trademark in the course of trade in that other country. Of course, some websites deliberately target other countries or even the whole world. An example favoured by Jacob J was Amazon.com, which actively seeks business on a world-wide scale.

 

In Scotland, Lord Drummond Young followed this approach in Bonnier Media Ltd v Greg Lloyd Smith and Kestrel Trading Corp in which the defender had registered domain names including variations of the names used by the pursuer. He accepted that, potentially, operating a website can result in a delict (tort) being committed in every country in the world from where the website can be seen but it does not follow that a delict is committed in every country in the world. He also stated that the website should not be regarded as having delictual consequences for example if the impact of a website in a particular country is unlikely to be of significant interest or otherwise.  Now here the commercial value is significant or endorsed when a particular party had announced an intention to offer on-line services similar to those offered by the pursuer.

 

This might recommend more or less the same approach as before where in the absence of commercial activity, there can be no use of particularizing a trade mark. If it were otherwise, the possibility of conflicting rights would arise. To take an example, imagine that a company in England has a United Kingdom registration for the trademark ‘Psorolene’ for skin care creams and an Australian company had an Australian registration for ‘Psorolens’ for a cream used to treat eczema. Neither trade in the other’s country. If both have websites and use those names on the websites, the English company would infringe the Australian trademark in Australia and the Australian company would infringe the United Kingdom trademark. That may be irrational. It might arise the situation of disrupting the single European market by causing conflicts between identical or similar trademarks registered in different Member States.

 

Coming back to the first example of 800-FLOWERS case was appealed to the Court of Appeal, where the correctness of the approach of Jacob J was confirmed. In terms of a submission that ‘publication’ of statements in a particular jurisdiction by downloading from the internet according to the rules of the law of defamation or of misrepresentation was of at least strong analogical relevance to whether a trademarkdownloaded from the internet had been ‘used’ in the jurisdiction to which it was downloaded. Buxton LJ said (at paras 137 to 139):

 

‘There is something unrealistic in saying that Party A “uses” his mark in the United Kingdom while actually he only placed the mark on the internet, from a location outside the United Kingdom.  This does not facilitate the intention of marketing in a particular area and neither does the motive is supported. Of course, if persons in the United Kingdom seek the mark on the internet in response to direct encouragement or advertisement by the owner of the mark, the position may be different; but in such a case the advertisement or encouragement in itself is likely to suffice to establish the necessary use’.

 

Thus, to infringe a trademark, one needs to place it on a website and actively pursues a commercial activity in the country concerned. To that extent, law in the United Kingdom is of approximate effect to that in the United States. However, the courts in the United Kingdom have not yet had an opportunity to develop an equivalent of the ‘Zippo sliding scale’, which has come about as a result of the nature of the United States Constitution and issues of State jurisdiction. Where a website goes beyond being merely passive, the question as to whether the owner seeks business in a particular jurisdiction probably will be treated by the courts in the United Kingdom as a question of fact, to be determined in accordance with the circumstances of the case. A good example in this relevance would be of Lord Drummond Young’s test of significance. However, there is already a useful body of case law available in relation to the grounds of revocation of trademarks for non-use under section 46(1) of the Trade Marks Act 1994. This can provide a litmus test for whether the use complained of is used within jurisdiction. The reason this is so is that, if the use in question is insufficient to save a trademark in an action for revocation, then it can hardly be said to have been used, in a trademark sense, within the relevant jurisdiction.  If the offending sign, had it been registered as a trademark within jurisdiction, this would evolve complications yet this is dependent on the fact if the rights of the same are infringed on the grounds of revocation or identical or similar trademark validly registered in that jurisdiction.

 

Outside the United States and the United Kingdom, there is little case law on trademark infringement on the Internet. In Australia, before the Australian Trade Marks Office, in Torrag Pty Ltd v Lydboots Pty Ltd and Petcure Pty Ltd, the Office accepted that an opponent to an application to register a trademark containing the words ‘Pet Vet’ had established prior use of the name, inter alia, by use on its website [2002] ATMO 6, 21 January 2002.. There was evidence that the website had regularly generated enquiries about the opponent’s veterinary practice.

 

The difficulty of international or foreign trademarks and their enforcement is still an important issue, especially in respect of trademarks registered outside Europe or the Commonwealth. It would be difficult to find legal manifestations in the same area. Enforcement will be an issue in respect of small and medium enterprises which have a presence in a European country only but which are carrying on commercial activities outside Europe by means of the Internet.Jurisprudence is still in the limbo, which could make recognition and enforcement in Europe difficult and even otherwise. With large corporations the problem is less likely to exist, as they tend to have subsidiary companies or agents in numerous other countries.

 

One way to improve the situation is to develop more provisions for reciprocal enforcement, as may hopefully be provided for by the Hague Conference. However, this could trigger other more deeper issues being evoked keeping in mind the national disparities in the registrability of trademarks. Providing improved mechanisms on a wider international scale for the recognition and enforcement of trademarks rights must be balanced.

So, the important things here to do are, to determine the source of counterfeits product, and then, decide the jurisdiction which has the authority to judge the case. It is not a straightforward task, but with the help of the site platform, or the Internet Service Providers (ISP), the seller can be located. Then, two options are available for the choice of jurisdiction: the place of domicile of the defendant; or the place where the infringement occurs. Propelling the same it is understandable that there is still a long way to go in the matters of grave concern.