An end to unrestricted banking secrecy when investigating online sales of counterfeit goods

In its judgment of 16 July 2015 (Case C-580/13) the Court of Justice of the European Union (CJEU) placed limits on national laws protecting banking secrecy. In response to a request from Germany's Bundesgerichtshof (Federal Court of Justice) for a preliminary ruling on whether Germany's national banking secrecy law contravened Directive 2004/48/EC on the enforcement of intellectual property rights, the CJEU held that the Directive precluded a national provision which allows, in an unlimited and unconditional manner, a banking institution to invoke banking secrecy in order to refuse to provide the judicial authorities with information concerning the name and address of an account holder in the framework of proceedings dealing with the infringement of an intellectual property right.

In 2011 Coty Germany, exclusive licensees to the Community trademark for Davidoff Hot Water, purchased a bottle of perfume bearing that mark from an Internet auction platform and paid the purchase price into the seller's bank account with Stadtsparkasse Magdeburg. On observing that the perfume was counterfeit, Coty Germany asked the auction platform for the real name of the holder of the account from which the perfume had been sold under an assumed name. The party in question admitted to being the account holder but denied having sold the perfume and refused to furnish any additional information, relying on her right not to give evidence.

Coty Germany then asked the bank, Stadtsparkasse Magdeburg, to furnish the name and address of the holder of the bank account in which it had deposited the purchase price for the counterfeit perfume, but the bank refused to do so, invoking banking secrecy.

Coty Germany therefore instituted civil proceedings with the Landgericht Magdeburg (Regional Court, Magdeburg), which ordered the Stadtsparkasse to supply the information requested. This order was overturned by the Oberlandesgericht Naumburg (Higher Regional Court, Naumburg), ruling that under German civil law the bank was entitled to refuse to give evidence in civil proceedings. Coty Germany appealed this decision to the Bundesgerichtshof (Federal Court of Justice), which stayed the proceedings and referred a question to the CJEU for a preliminary ruling.

The question highlights the need to reconcile the right to an effective remedy and the right to intellectual property, on the one hand, and the right to protection of personal data, on the other.

Essentially the CJEU has held that, taken in isolation, the provision of national law that allows unlimited refusal by a banking institution to furnish information concerning the name and address of an account holder who engages in activities infringing an intellectual property right, inasmuch as the wording of the provision contains no condition or qualification, is liable to frustrate the fundamental right to an effective remedy and the fundamental right to intellectual property by preventing the competent national authorities from ordering the release of personal data pursuant to Article 8.1 of the above-mentioned Directive.

This ruling furnishes explicit support for national laws ensuring a fair balance between the different fundamental rights in question and clearly places limits on banking secrecy in investigations of cases of infringement of intellectual property rights. Given the invisibility available to sellers of counterfeit goods on the Internet, identifying the holder of the bank account into which payments are made can be critically important – in many cases the only way to uncover an infringer. The CJEU's ruling can be expected to have greater impact on civil matters in Spain, since it limits the banking secrecy that can be invoked in civil proceedings, and less on criminal matters, in which examining judges already enjoy broad powers to investigate crimes and set aside fundamental rights. In any case, the ruling is a big step forward in being able to combat the runaway scourge of sales of counterfeit branded goods on the Internet.

Author: Juan José Caselles

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Algeria joins the Madrid Protocol

Algeria deposited its instrument of accession to the Madrid Protocol on 31 July 2015, and the Protocol is to enter into force for Algeria on 31 October 2015.

Algeria was the only one of the 95 current member States of the Madrid System that was a party to the Madrid Agreement alone.

The Madrid Agreement is much less streamlined and up to date than the Protocol. For instance, international filings have to be based on a granted trademark registration, and certain procedures can only be carried out through the home Office. Not only do these sticking points give rise to delays and complications, but the Agreement does not allow the designation of States that are parties only to the Protocol, which include such major jurisdictions as the OHIM, JPO, and USPTO. This has no doubt been a stumbling block for Algerian trademark owners, who up to now have not been able to use the Madrid System to extend their rights to members that are parties to the Protocol alone.

Although the Madrid System comprises the Agreement, the Protocol and the Common Regulations, since the amendment of article 9 sexies of the Protocol (the safeguard clause) it is the Protocol alone which applies between States bound by both the Agreement and the Protocol. The accession of Algeria therefore represents a milestone for the Madrid System, given that from 31 October 2015 all international registrations of marks will be governed exclusively by the Protocol and the system as a whole will, as a result, be greatly simplified.

Author: Cristina Arroyo

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Recent entry into force of the new Rules of Procedure of the EU General Court

Back in March the European Union's General Court (GC) agreed to reform its Rules of Procedure. The revised legal text introduces some important new rules in the section relating to industrial and intellectual property cases (court proceedings relating to Community trademarks and Community designs). Some of the most significant new rules adopted are as follows:

• In direct appeals the language of the proceedings shall be that chosen by the plaintiff among the official EU languages. In the event of an objection to the language of the appeal by a party to the proceedings, the language of the decision of the Board of Appeal of the OHIM that is contested before the GC shall become the language of the proceeding.
• The possibility of supplementing the initial briefs of the parties via briefs of reply or rejoinders has been removed. 

• A cross-claim by a party to the proceedings must be submitted in a document separate from the brief of response to the appeal. 

• A cross-claim shall be deemed to be devoid of purpose when the applicant in the main appeal discontinues the main action and when the main action is declared manifestly inadmissible. 

• In terms of costs, under the new rules the General Court may order the OHIM to bear only its own costs where an appeal is successful (with the successful applicant paying its own).

• The possibility of appeals of this type being resolved by a single judge has been introduced.

In addition, under the new rules the Advocate General may intervene in appeals of this type whenever the difficulty or complexity of the case requires it.

The new rules of procedure entered into force on 1 July 2015.

Author: Enrique Armijo Chávarri

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