It is trite law since Google France that adopting a competitor's brand as a keyword can land an advertiser in court. But which court? The question of international jurisdiction in the EU is governed by multiple provisions, the effect of which can vary from case to case.
Brand owners who contemplate keyword infringement actions need to educate themselves on how to determine the appropriate forum for action. Fortunately, the CJEU has offered some useful guidance recently on how to determine jurisdiction where keywords are operated through search engines run through national ccTLDs (Wintersteiger AG v Products 4U Sondermaschinenbau GmbH, Case C-523/10).
You Hold the Key(word)
This case focused on the issues arising where an action is based on a national trademark registration in one EU member state, and is brought against a defendant advertising with a keyword through a search engine accessible there, but based in another member state.
The claimant, Wintersteiger AG, was an Austrian company and manufacturer of ski equipment and accessories. The defendant, Products 4U, was a German company who also sold ski equipment and accessories, some of which were manufactured by third parties.
The German defendant registered WINTERSTEIGER as a keyword on the google.de search engine. Searches resolved to a list of results of which the claimant's own website was the first, but a link to the defendant's website also appeared in a sponsored ad to the right of the naturally occurring results. Clicking on the link took the Internet user to the defendant's website, where the defendant advertised "Wintersteiger-Zubehör" ("Wintersteiger Accessories"), which were not in fact manufactured or authorised by Wintersteiger.
The Austrian claimant sued in Austria for infringement of its registered Austrian trademark. On appeal, the court referred to the CJEU a number of questions designed to help it determine whether it had jurisdiction, or whether the case should instead, as contended by the defendant, have been brought in Germany, where the defendant was domiciled.
Got It Locked Up
The basic rules of jurisdiction in European trademark infringement matters are set out in Regulation No. 44/2001 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters.
The default rule is in Article 2 (1), which provides that persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state. There are, however, exceptions. In particular, Article 5 (3) provides that member state domiciliaries may also be sued "in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur."
By way of guidance, the recitals add that the principle of jurisdiction based on something other than domicile should be based on the existence of a "close link between the court and the action" or on the desirability of facilitating "the sound administration of justice".
In this case, the claimant sued in the Austrian courts for infringement of an Austrian trademark registration, arguing that its rights were in Austria, the google.de search engine was in German, which was also the language in Austria, and the search engine platform was fully accessible by Austrian consumers (even if they could also choose to use google.at, which the defendant had prudently left alone). Consequently, it contended that there was a sufficient nexus between the action and the Austrian courts to make Austria an appropriate forum.
The Court of Justice agreed. It examined Article 5 (3) and concluded that, following its decision on jurisdiction in a personality rights case (eDate Advertising & Ors.  ECR I-000), "the place where the harmful event occurred or may occur" could include either the place where damage arising from the harmful event occurred, or the place of the event giving rise to the damage. Either of these places could offer advantages as a forum, since the evidence would normally be easier to obtain there and the conduct of the proceedings might be facilitated by taking place where there was a direct nexus with the action rather than in the defendant's place of domicile, which might be distant from the place of the harmful event or damage.
The eDate case related to personality rights, which could by nature cross borders, rather than to registered trademark or other IP rights which are necessarily national or regional in scope. However, the Court considered that the general principles were still applicable, on the basis that jurisdiction would still be sufficiently foreseeable where IP rights related to a specific member state and trying the action there would facilitate the sound administration of justice since relevant evidence would be more easily available.
In this case, the place where the damage occurred was clearly Austria, where the claimant had registered trademark rights that could be infringed since local users could access the google.de site and, through it, encounter the defendant's alleged infringing use. Since infringement of an Austrian registered trademark and damage in Austria were in issue, the courts best suited to deal with the action were naturally those in Austria. While the Court did not refer to the claimant specifically since it was giving guidance on a general point of law, it gave a clear lead that the Austrian courts should be entitled to hear the action on the basis that Austria was the place where the damage had occurred or may occur.
There could be an alternative jurisdiction, though, in "the place of the event giving rise to the damage". This too was attractive on the basis that relevant evidence could also easily be gathered there. Where the alleged infringement involved the display, on a search engine website, of an advertisement using a keyword identical to the claimant's registered trademark, it was the advertiser's registration of the keyword and use of it through the search engine platform for commercial purposes that constituted the relevant action. The place of that action, however, would not necessarily be the place where the defendant's server is based, since there would inherently be some uncertainty about that which would undermine the principle of predictability and foreseeability in jurisdiction matters. Instead, the Court held, the place of establishment of the advertiser should be deemed the place where "the activation of the display process" was decided. That was, in this case, Germany.
The Court therefore ruled that in cases of alleged infringement of a trademark registered in a member state through the use of an identical keyword on a search engine website operating under a ccTLD, the claimant could sue in either the member state of the trademark registration, or in the member state where the defendant-advertiser was based.
Notably, the defendant in this case had not registered WINTERSTEIGER as a keyword on google.at. It may perhaps have thought, however, that Google's German platform was a sufficiently safe distance from the claimant's registered Austrian trademark rights.
Such an approach rather ignores the trickle-down nature of Internet activities, though, particularly in countries with the same language, and the Court's decision that this case was justiciable in the country of the claimant's rights, since that was where the damage would occur, is not really surprising.
Interestingly, the Court's approach tends to reflect the concern of the civil law system for facilitating the gathering of evidence, which is more commonly a judge-led process in civil law member states. In common law states, such as the UK, the burden is on the parties to support their case, and the question of where that exercise would prove easiest is only one factor among many that the courts might take into account. Nonetheless, the obvious sense of suing in a jurisdiction where a comprehensive case is easiest and cheapest to run would resonate in virtually any court.
This case dealt with the very specific question of ccTLDs and national rights, and there are unanswered questions, therefore, as to what the appropriate forum would be if suing on otherwise similar facts, but in relation to keyword use on a TLD accessible in any country, including situations where rights exist in multiple member states. It seems most likely that the same principles as applied in this case would also apply to a case where the keyword use was through a TLD-namely, the place of damage and of the event giving rise to damage would still be determinative if the claimant did not want to sue in the defendant's place of domicile.
These issues do not apply to actions based on CTMs, of course, since the cascading rules for jurisdiction in CTM infringement matters are set out wholly in the CTMR. Even there, though, it is possible to sue in the place of infringement provided the claimant is content not to seek an EU-wide injunction. The Court's guidance on the place of the event giving rise to damage is still, therefore, relevant to CTM infringements, and this decision is likely therefore to be of wide interest to parties and practitioners in IP disputes in Europe.