July 12, 2016

The defendant, Delta Center a.s. was a tenant of the market place in Prague and sublet the pitches to market traders.

Manufacturers and distributers of certain branded goods discovered that counterfeits were regularly being sold in the market place in Prague.  They issued proceedings in the Czech courts seeking an injunction against Delta Center to stop it from renting pitches to the sellers of counterfeit goods.  The IP Enforcement Directive (2004/48/EC) gives trade mark holders the right to bring proceedings against intermediaries whose services are used by a third party to infringe their trade marks.

The claimants, including Tommy Hilfiger Licensing LLC, argued that, like the operators of online marketplaces covered by the CJEU decision in Case C-324-09 L’Oréal SA v eBay International AG, the operator of a physical marketplace can, pursuant to the Directive, be forced in law to stop trade mark infringements committed by market-traders taking place and to take measures in order to prevent new infringements.  The Supreme Court of the Czech Republic asked the CJEU whether this was correct or not.

The CJEU found that the provider of a third party service relating to the letting or subletting of pitches in a market place, and which therefore gives those third parties the opportunity to sell counterfeit products in that market place, was indeed an “intermediary” within the meaning of the Directive.  Whether the provision of a sales point was in an online marketplace or in a physical marketplace was irrelevant, it said, since the scope of the Directive was not limited to electronic commerce.  Consequently, the operator of a physical market place could itself also be forced to stop trade mark infringement by market traders and to take measures to prevent future infringements.

Similarly, the CJEU said that the conditions for ordering an injunction against an intermediary providing a sales points letting service in a market place were identical to those applicable to injunctions against intermediaries in an online market place.

Therefore, not only must those injunctions be effective and dissuasive, the CJEU said, but they must be equitable and proportionate as well.  They must not, therefore, be excessively expensive and must not create barriers to legitimate trade.  Nor can the intermediary be required to exercise general and permanent oversight over its customers.  However, the intermediary can be forced to take measures that contribute to preventing new infringements of the same nature by the same market trader.  In addition, an injunction must ensure a fair balance between the protection of intellectual property and the absence of obstacles to legitimate trade.  (Case C-494/15 Tommy Hilfiger Licensing LLC v Delta Center a.s. — to access the judgment in full, go to the curia search form, type in the case number and follow the link).