Further developments on liability for intermediaries

There have been a few European cases recently which have considered the liability of intermediaries including a case brought against Amazon which we reported on here. These issues are worth considering further especially if you are a business which may facilitate the importation and sale of potentially infringing goods or you are a brand owner wanting to prevent such acts in the UK or EU.

The Finnish courts have recently had some questions answered by the Court of Justice for the EU ("CJEU") on the role of an intermediary in A v B (Case C-722/18). The CJEU indicated in this case that a person who did not trade in the goods himself can be liable for trade mark infringement where in respect to the particular goods, he clears customs procedures, takes delivery of them and releases them into the market place.

The latest case

An individual in Finland, referred to as B, received from China a consignment of 150 ball bearings to be used in industrial products such as generators and engines and in the construction of bridges and tramways. On the bearing there was affixed a trade mark, INA, which was registered for bearings and owned by A.

Once customs clearance was completed in B’s name, B withdrew the consignment from the customs warehouse and took them to his home. A few weeks later the goods were delivered to a third party. The only remuneration received by B was a carton of cigarettes and a bottle of brandy.

Criminal proceedings were brought in Finland against B, but the court at first instance did not find him guilty on the basis that he did not use the trade mark in the course of trade. The court considered that his activity was equivalent to storage and onward transportation of goods and he had not sought any economic benefit from that activity. Of particular relevance was an earlier CJEU decision of TOP Logistics and others where it was held that the proprietor of a tax and customs warehouse, who did no more than store goods on behalf of a third party which bore a sign which was identical or similar to a trade mark, did not use the trade mark.

The Finish Court of Appeal asked several questions to enable it to determine if the TOP logistics case could be extended to this particular case.

The CJEU provided the following guidance on the questions asked:

  1. “Use in the course of trade” entails that the exclusive rights conferred by a trade mark may be relied on by the proprietor of that trade mark only as against economic operators and only in the context of a trading business. It is irrelevant that the person does not own the goods in question. In the case in issue the ball bearings were being used in heavy industry and in its view were plainly not intended for private use; however, this would need to be determined by the referring court.
  2. A person who makes known his or her address as the place to which goods are shipped and completes directly or through an agent the customs clearance procedures and who releases the goods for free circulation is importing those goods within the meaning of the legislation. As such, the person can be liable for trade mark infringement.
  3. Such a person is acting in the course of trade and it doesn’t matter what the importer has received by way of remuneration. This is irrelevant according to the court.

Therefore, the Court considered that a person who does not engage in trade as an occupation, but takes delivery of, releases for free circulation in a member state and retains goods which are not for private use can be liable for trade mark infringement.

Paul Cox, Head of the Intellectual Property Team said that “this case highlights further that to be liable for trade mark infringement an intermediary needs to do more than just store and deliver infringing goods. B in this case did a little more as he cleared the goods in his own name and took them back to his own property to store them. Had the goods been cleared in the name of the third party who ultimately took delivery of them and traded in them, then B’s position might have been very different”.

Get in touch with our team today if you'd like to discuss liability for intermediaries, or any issues related to intellectual property.