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Who is responsible for the deletion of infringing ads that are placed by the trademark infringer on third party websites? How much efforts are to be made by the trademark infringer to have such ads deleted? The European Court of Justice (ECJ) had to answer this question in its decision of 3 March 2016 (Az. C-179/15).
When the honeymoon in a service agreement is over
The company Együd Garage was an authorized service provider of the car company Daimler in Hungary. Együd was permitted to use the trademark „Mercedes-Benz“ and to market itself as „authorized Mercedes-Benz service provider“. Együd placed such ads also online.
After five years of cooperation the service agreement was terminated. It was the clear understanding of both parties that Együd was not anymore permitted to use the trademark „Mercedes-Benz“ and the term „authorized Mercedes-Benz service provider“ upon termination of the agreement.
Deletion of online ads
Consequently, Együd tried to and put much effort into deleting any online ads containing the trademark „Mercedes-Benz“ or the term „authorized Mercedes-Benz service provider“.
It was, however, not entirely successful. Even though Együd asked operators of websites on which it has placed online ads to delete them, search engines still continued to display respective ads. Apparently, the third party website operators did not follow the deletion request. In addition, the search engines also disclosed respective ads on websites on which Együd did not place itself any ads at all.
Deletion request is sufficient
Daimler was not willing to accept the continued display of these online ads and filed a trademark infringement claim against Együd.
The court in Hungary asked the ECJ on whether a deletion request is sufficient or on whether additional measures are to be taken by Együd.
The ECJ decided that the deletion request is sufficient. When the company placing an ad explicitly asked an operator of a third party website to delete it and when the third party does not follow to this request, the company is not anymore responsible for the ad – the ad is not anymore considered as ad of the company that initially placed it and the trademark use is not anymore to be attributed to the advertiser.
Legal implications – who should be responsible?
The decision affects the trademark owner negatively. The trademark owner may not rely on its contract partner – in the case at hand Együd – in order to have online ads placed by that company deleted. If a third party that is displaying such ads does not follow a deletion request of the contract partner, the trademark owner must claim directly against the third party. This is often not practicable when various third parties are involved, which is often the case in online constellations.
With respect to the online constellation, one might argue that the court has taken a pragmatic approach – even though it is still to the disadvantage of the trademark owner. As in this case, it is often not possible for content creators to control how the content is distributed online. Often the party that is generating and placing content online may not have an established contractual relationship with third parties further displaying that content. The party that initially created the content may then not be able to easily enforce a deletion. The assessment of the court on whether the continued use of the trademark following to the deletion request is still attributed to the advertiser is also reasonable.
Though, the court should have taken into account the specific facts of the case. In the case at hand, there were two groups of third parties displaying infringing ads. One group displayed the ads on behalf of Együd, the other group displayed the ads without knowledge or consent of Együd. With regard to the first group it must be assumed that there is an oral or written contract between Együd and those third parties. In that constellation an economic analysis would lead to the conclusion that Együd is the better risk taker than the trademark owner. Együd voluntarily placed the ads on that third party website. Együd should therefore have been asked by the court to enforce the deletion – if necessary by litigation. With regard to the second group that is displaying the ads without knowledge of Együd, the trademark owner is the better risk taker. Együd has often no easily enforceable claim for deletion against that group of third parties.
In Switzerland, it is accepted that a trademark owner may ask to delete infringing online content based on art. 55 lit. b of the Swiss Trademark Act. Yet, there is, as far as publicly available, no case law dealing with a similar constellation than the one to be assessed by the ECJ.
There is, however, offline case law dealing with the involvement of third parties in trademark infringements. In that cases the third party is usually a contract partner of the trademark infringer and possesses infringing goods. In such constellations it is accepted practice that the court may ask the trademark infringer to recall the infringing goods. This approach should also be possible in online constellations if there is a contractual relationship between the “trademark infringer” and the third party.
It is also accepted in Switzerland that a trademark owner may directly claim against a third party, such as a hosting provider, in order to have infringing online content deleted.
Business implications of the decision
The decision and the facts involved clearly demonstrate how important trademark protection in online constellations is – and how difficult trademark enforcement may be.
In order to reduce issues – trademark issues may never be entirely excluded –, much more focus should be based on the online use of trademarks in service, distributor and similar agreements. Such agreements should contain explicit rules about the online use of trademarks by contract partners.
Furthermore, the case demonstrates – and Daimler did obviously do this – that the online monitoring of trademark uses by trademark owners is essential. Trademark owners must monitor by whom and how their trademarks are used online.
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