This post is about an interesting case relating to the use of the trade mark “MERCEDES-BENZ” by Együd Garage Gépjárműjavító és Értékesítő Kft. (‘Együd Garage’) in advertisements on the internet. The garage stated that it is an authorized Mercedes-Benz dealer. This case is filed by Daimler AG (‘Daimler’), an automobile manufacturer which is the proprietor of the international trade mark “MERCEDES-BENZ” which is also protected in Hungary. The defendant is Együd Garage, a Hungarian company specializing in the retail sale of Daimler automobiles and parts and their repair and servicing. The background of the facts which led up to this case, in 2007 are as follows. Mercedes Benz Hungaria Kft., Daimler’s subsidiary company and the Defendant entered into a contract for the supply of after-sales services, which expired on 31 March, 2012. As per this contract the Defendant was entitled to use the above mentioned trade mark and to describe itself as an ‘authorized Mercedes-Benz dealer’ in its own advertisements. While the after-sales services contract was in force, the Defendant ordered Magyar Telefonkönyvkiadó Társaság (‘MTT’), a company which provides online advertising services, to publish an advertisement which names them as an authorized Mercedes-Benz dealer, for the period covering the years 2011 to 2012.
After the expiration of this contract, the Defendant began to end all use of the trade mark, on the basis of which the public may assume that there is still a contractual tie between it and Daimler. In particular the Defendant asked MTT to change the advertisement and stop referring them as an authorized Mercedes-Benz dealer. The Defendant also wrote to several other websites owners, requesting them to remove any online advertisements which had been published without its consent, and which represented them as an authorized Mercedes-Benz dealer. Even after taking such measures, many online advertisements continued to be distributed. Thus Daimler brought an action before the Budapest Municipal Court, Hungary for trade mark infringement of the trade mark “MERCEDES-BENZ” by the mentioned advertisements and ordered the Defendant to remove the said advertisements and refrain from further infringements and publish a corrigendum in the national and regional press.
The Court decided to stay the proceedings and ask the CJEU whether the law in question, Article 5(1)(b) of [Directive 2008/95], should be interpreted as meaning that the trade mark proprietor is entitled to prevent a third party named in an advertisement on the internet from making use, for services of that third party identical to the goods or services for which the trade mark is registered, of a sign likely to be confused with the trade mark, in such a way that the public might be given the mistaken impression that there is an official commercial relationship between the undertaking of that third party and the trade mark proprietor, even though the advertisement was not placed on the internet by the person featuring in it or on his behalf, or it is possible to access that advertisement on the internet despite the fact that the person named in it took all reasonable steps to have it removed, but did not succeed in doing so?
In the analysis by the Court, firstly with respect to the act of publishing the said advertisement after the Defendant requested MTT to change the advertisement, the Court said that the Defendant could not be held liable for the acts or omissions of the service provider who, intentionally or negligently, disregards the express instructions given by the advertiser who is seeking, specifically, to prevent that use of the mark. Since the service provider failed to comply with the advertiser’s request, the publication of the trade mark on the referencing website cannot be regarded as a use of the mark by the advertiser.
Secondly, regarding the publication of the advertisement on other company referencing websites, the Court stated that “this fact can be explained by the practice of some operators of such sites, which consists of picking up advertisements published on other advertising sites, without the knowledge or consent of the advertiser, to promote the use of their own site, in order to suggest to potential paying users that they are dealing with a popular website with a solid basis.”
The Court held that an advertiser cannot be held liable for independent actions of other economic operators, such as those of referencing website operators with whom the advertiser has no direct or indirect dealings and who do not act by order and on behalf of that advertiser, but on their own initiative and in their own name. Additionally, regarding the scheme of Article 5 of Directive 2008/95, it lists the types of use which the proprietor of a trade mark may prohibit, deals exclusively with the active behavior of the third party. Also it is clear from the interpretation of Article 5(1) of Directive 2008/95 that it is intended to provide the proprietor with a legal instrument allowing him to prohibit, and to prevent, any use of his trade mark by a third party without his consent. This is however restricted only to a third party who is in direct or indirect control of the act constituting the use and is accordingly capable to stop that unauthorized use and therefore comply with that prohibition.
Authored by Ryan Mendonca.
Image Source/ Attribution here, this image is in public domain.