ECJ Confirms that Brand Owners can Seek Remedies for IP Infringement Against Owners and Operators of Physical Marketplaces Selling Counterfeit Goods as “Intermediaries”

On 7 July 2016, the Court of Justice of the European Union (ECJ) announced its judgment in case C-494/15, Tommy Hilfiger Licensing LLC and Others v Delta Center a.s.

The case concerned claims for trade mark infringement against Delta Center, the tenant of the “Prague market halls” marketplace, which rented sales spaces to sellers of counterfeit goods. Tommy Hilfiger and other trade mark owners brought an action before the Czech courts seeking an injunction under Article 11 of Directive 2004/48/EC, which states that: “Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC”.

The action, now pending before the Czech Republic Supreme Court, aims to establish the nature of intermediary of physical marketplaces such as Delta Center. The ECJ was asked whether or not the conditions for an injunction addressed to online marketplaces are applicable to offline contexts.

In the previous ECJ judgment in C-324/09 L’Oréal v eBay in 2011, the Court held that national courts are able to order the operator of an online marketplace, not only to put an end to intellectual property infringements by its users, but also to take measures to prevent further infringements. The Court stated that these injunctions must be effective and dissuasive, but also equitable and proportionate so that no obstacles to legitimate trade were introduced.

In the Tommy Hilfiger case, the ECJ for the first time stated that the Directive is not limited to electronic commerce. The fact that a marketplace is online or physical was irrelevant to the application of Article 11 in question and the conditions set out in case C-324/09 are applicable to physical intermediaries. By contrast, trade mark holders must take into account that the intermediary cannot exercise a general and permanent oversight over its costumers.

In anticipation of the full judgment and reasoning of the Court which will be released soon, it appears that new doors have been opened in the EU to allow brand owners to enforce their rights effectively against counterfeits.

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By: Serena Totino