Friday, 8 July 2016

The lessors of physical premises also infringe trademark rights

If you are going to let premises or a sales point in a market hall to a trader who could be infringing intellectual property rights, bear in mind that you could end up being sued by the rightholders.

The CJEU, in a judgment published yesterday (7 July 2016) in case C-494/15, considers lessors as an “intermediary” against whom an injunction can be issued.

The judgment stems from legal proceedings brought by Tommy Hilfiger, Lacoste and Burberry against Delta Center.  The defendant is the tenant of the marketplace ‘Pražská tržnice’ (Prague market halls), which sublets to market-traders the various sales areas in that marketplace.

The plaintiffs basically asked Prague City Court to order Delta Center to refrain from concluding or extending contracts for the rental of sales areas in the market halls with persons who infringe intellectual property rights.

The judgment concludes as follows: “The third sentence of Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as meaning that the tenant of market halls who sublets the various sales points situated in those halls to market-traders, some of whom use their pitches in order to sell counterfeit branded products, falls within the concept of ‘an intermediary whose services are being used by a third party to infringe an intellectual property right’ within the meaning of that provision.”

The judgment goes on to specify that the conditions established for action against intermediaries in an online marketplace also apply to action against intermediaries in a physical marketplace, i.e., “injunctions must be equitable and proportionate. They must not therefore be excessively expensive and must not create barriers to legitimate trade. Nor can the intermediary be required to exercise general and permanent oversight over its customers.  By contrast, the intermediary may be forced to take measures which contribute to avoiding new infringements of the same nature by the same market-trader from taking place.


Although the judgment calls for a fair balance to be struck, the subjective extension of the concept of “intermediary” to actions for intellectual property infringement in the physical marketplace seems clear.


Author: Antonio Castán


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