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Market operators liable for sale of counterfeit products

© Ahmad Faizal Yahya, shutterstock.com

The European Court of Justice ruled on 07.07.16 that the operator of a marketplace can be forced to take measures to stop and prevent trademark infringement(Ref.: C-494/15).

The case submitted to the European Court of Justice concerned the company Delta Center, which is the tenant of the Prague market halls. This market is known for selling various counterfeits of different brands. Delta Center leases booth space at the market to merchants under. Some well-known trademark owners now tried to get the Czech courts to stop Delta Center from subletting to retailers who commit trademark infringements. There is a directive on legal action against intermediaries whose services are used by third parties to infringe trademark rights (Directive 2004/48/EC). In this regard, the European Court of Justice had ruled in 2011 that operators of online marketplaces are obliged to terminate and further prevent the infringements on the basis of the Directive (“L’Oreal” Ref.: C-324/09). In the present decision, the European Court of Justice has now applied these considerations to offline market operators. Accordingly, an economic operator who offers a rental service to third parties on a marketplace, thereby offering the third parties the opportunity to sell counterfeit goods, constitutes an “intermediary” within the meaning of the Directive. Whether the marketplace is online or offline is irrelevant in the case of this directive, as its scope is not limited to e-commerce.

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The orders issued against an intermediary for this purpose must be just and proportionate. Thus, they must not be too expensive and must not restrict legitimate trade. Constant, general monitoring of dealers cannot be required. However, measures must be taken to prevent a retailer from repeatedly committing trademark infringement. A balance must be achieved between protecting intellectual property and protecting legitimate trade from restrictions.

If you have any questions regarding trademark law, please feel free to contact us by phone at 0221-4201074, by e-mail at info@rehkatsch.de or make an appointment with our office.

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