Department of Law Spring Term 2020 Master Programme in Intellectual Property Law Master’s Thesis 30 ECTS Trademark infringement online: The accountability of internet intermediaries for third-party trademark infringement in the EU and the US Author: Philip Lindell Supervisor: Kacper Szkalej 1 2 Table of contents 1. Introduction ............................................................................................................................. 5 1.1. Background ...................................................................................................................... 5 1.2. Aim ................................................................................................................................... 7 1.3. Delimitations .................................................................................................................... 8 1.4. Method and materials ....................................................................................................... 8 1.5. Structure ......................................................................................................................... 10 2. Enforcing trademark law: Cross-border issues ...................................................................... 11 2.1. Nature of trademarks ...................................................................................................... 11 2.2. Trademark infringement suits: Jurisdiction and applicable law..................................... 13 2.2.1. The EU .................................................................................................................... 13 2.2.2. The US .................................................................................................................... 16 2.3. Practical consequences ................................................................................................... 17 3. Intermediaries in the European Union ................................................................................... 18 3.1. The negative approach to liability .................................................................................. 18 3.2. Safe harbors in the ECD ................................................................................................. 19 3.2.1. Qualifying intermediaries ....................................................................................... 19 3.2.2. Neutral but reactive ................................................................................................. 21 3.3. EUTMD and EUTMR: Trademark infringement........................................................... 23 3.3.1. Intermediate “use” .................................................................................................. 23 3.3.2. Immediate “use”...................................................................................................... 24 3.3.3. Reaching the limits of harmonized law .................................................................. 24 3.4. Secondary liability as a delineated national discretion .................................................. 25 3.4.1. Accessorial liability in England & Wales ............................................................... 25 3.4.2. Störerhaftung in Germany ...................................................................................... 28 3.5. Responsibility without liability: IPRED injunctions ...................................................... 30 3.5.1. Enhancing the protection of IPRs ........................................................................... 30 3.5.2. Ex- and post-judgment relief .................................................................................. 30 3.5.3. Corrective or preventive goal .................................................................................. 31 3.5.4. Orders to monitor .................................................................................................... 31 3.5.5. Fundamental rights and the scope of injunctions .................................................... 32 3.5.6. Geographical reach ................................................................................................. 33 3 3.6. Conclusion ...................................................................................................................... 33 4. Intermediaries in the United States ........................................................................................ 35 4.1. The positive approach to liability ................................................................................... 35 4.2. Infringement according to the Lanham Act ................................................................... 36 4.2.1. Protection of registered and unregistered trademarks ............................................. 36 4.2.2. Safe harbor .............................................................................................................. 36 4.2.3. Tiffany: Intermediaries and confusing trademark use ............................................. 37 4.2.4. Dilution of famous marks ....................................................................................... 39 4.2.5. Beyond the text of the Lanham Act ........................................................................ 40 4.3. Secondary liability under US common law.................................................................... 40 4.3.1. Contributory liability .............................................................................................. 40 4.3.2. Vicarious liability.................................................................................................... 45 4.4. Conclusion ...................................................................................................................... 46 5. Keyword advertising: A case study ....................................................................................... 47 5.1. About keyword ads......................................................................................................... 47 5.2. The European Union: Google France ............................................................................ 48 5.3. The United States: Rescuecom and Rosetta Stone ......................................................... 50 6. Diverging methods, converging results ................................................................................. 55 6.1. Infringement and trademark use ..................................................................................... 55 6.1.1. Non-distinction of trademark-relevant use in the US ............................................. 55 6.1.2. Commercial communication and active behavior in the EU .................................. 56 6.1.3. Discussion ............................................................................................................... 57 6.2. Responding to notices .................................................................................................... 58 6.2.1. NTD in EU safe harbors ......................................................................................... 58 6.2.2. NTD standards in US case law ............................................................................... 59 6.2.3. Suggestions ............................................................................................................. 60 6.3. Policing infringement ..................................................................................................... 61 6.3.1. Trademark-policing in the EU ................................................................................ 62 6.3.2. Trademark-policing in the US ................................................................................ 62 7. Concluding remarks ............................................................................................................... 64 Bibliography ................................................................................................................................. 67 4 1. Introduction 1.1. Background At the heart of the debate on internet intermediaries and their role in trademark infringement is an essentially economic concern. Whereas the internet makes it easier and cheaper to offer and sell counterfeits or engage in mass advertising that piggybacks on established brands, enforcement is rendered expensive and sometimes impossible. The ease with which corrupt businesses can exploit trademarks online makes this an attractive commercial activity, which in turn entails a multiplicity of infringers. Indeed, the online environment is where the global counterfeit trade has seen the most growth.1 Trademark-owners are forced to keep track of an indefinite number of potential crime-scenes on the internet and police the behavior of numerous and often unidentifiable “bad guys”. These infringers could be anywhere in the world and the trademark-owner may have no reasonable means of putting an end to their wrongdoing. The outcome is a time-consuming, expensive and highly ineffective attempt at protecting trademark rights.2 Meanwhile, intermediate internet services are instrumental tools for the modern infringer. Through online intermediaries, counterfeiters and free riders can reach a large group of consumers with very little effort or costs.3 As a business model, the facilitation of data transactions between third parties is the central purpose of and benefit offered to users by an online intermediary. In the wrong hands, however, the service merely serves as an instrument