The European Court ruled in case C‑521/17 Coöperatieve Vereniging SNB-REACT U.A. v Deepak Mehta. The case concerns the following:

SNB-REACT is a body established in Amsterdam (Netherlands), whose purpose is to ensure the collective representation of trade mark proprietors.

It has brought proceedings before the Harju Maakohus (Court of First Instance, Harju, Estonia) against Mr Mehta, seeking an injunction terminating the infringement of the rights of 10 of its members and preventing any future infringement of those rights, and seeking damages in respect of the loss caused by Mr Mehta.

In support of that application, SNB-REACT submitted that Mr Mehta had registered internet domain names which were unlawfully using signs identical to trade marks owned by its members, together with websites unlawfully offering for sale goods bearing such signs. Furthermore, SNB-REACT has argued that Mr Mehta is the owner of IP addresses corresponding to those domain names and websites. Lastly, it maintained that Mr Mehta’s liability is incurred by reason of the unlawful use of the signs at issue by those domain names and websites which, it claimed, had been brought to his attention on several occasions.

In his defence, Mr Mehta has claimed that he had neither registered the domain names and websites challenged by SNB-REACT nor used in any way signs identical to the trade marks owned by the members of that body. Furthermore, whilst acknowledging his ownership of 38 000 IP addresses, he stated that he had rented them only to two third-party companies. Lastly, he stated that, in the light of that activity, he was to be viewed solely as offering a service providing access to an electronic communications network, together with an information transmission service.

The Harju Maakohus (Court of First Instance, Harju) dismissed the action brought by SNB-REACT, ruling, first, that the latter had failed to show that it had standing to bring an action in its own name seeking to enforce the rights of its members and to recover compensation for the loss caused by the infringement of those rights. In that regard, that court found that SNB-REACT did not itself own any rights over the trade marks concerned by its application, before holding that Article 601(2) of the Law on trade marks had to be interpreted as meaning that a body such as the applicant did not have standing to bring legal proceedings for purposes other than the representation of its members.

Secondly, the Harju Maakohus (Court of First Instance, Harju) found that the evidence adduced by SNB-REACT served to establish that Mr Mehta was the owner of the IP addresses linked to the internet domain names unlawfully using signs identical to the trade marks owned by the members of that body, and to the websites unlawfully selling goods bearing such signs. By contrast, it took the view that that evidence demonstrated neither that Mr Mehta was the owner of those domain names and websites, nor that he himself had unlawfully used the signs at issue. In the light of those findings, that court concluded that Mr Mehta’s liability could not be established as a result of the unlawful activity of persons operating those domain names and websites, in accordance with Article 8(1) of the Law on information society services.

In the appeal which it has brought before the Tallinna Ringkonnakohus (Court of Appeal, Tallinn, Estonia), SNB-REACT submits, first, that it is possible to interpret Article 601(2) of the Law on trade marks as meaning that a collective representation body has standing to bring, in its own name, an action to defend the rights and interests of its members. Secondly, it submits that the court of first instance erred in excluding all liability on the part of Mr Mehta for the services that he provided to persons operating domain names and websites in the context of online sales of counterfeit goods. It is submitted that the limitation of liability set out in Article 8(1) of the Law on information society services applies in fact to service providers who act only as neutral intermediaries, but not to those who, like Mr Mehta, are aware of the infringement of intellectual property rights and play an active part in such infringement.

In its decision to refer, the Tallinna Ringkonnakohus (Court of Appeal, Tallinn) states that, bearing in mind those arguments and the doubts which it entertains as to the compatibility of national law with EU law, it considers a preliminary ruling from the Court to be necessary on two points.

In the first place, it is unsure whether a body such as SNB-REACT has standing to bring, in its own name, an action to defend the rights and interests of its members. For that reason, it requests the Court to interpret Article 4(c) of Directive 2004/48, in order to allow the referring court to determine, in full knowledge of the facts, the scope which should be given, in the case in the main proceedings, to the combined provisions of Article 3(2) of the Code of Civil Procedure and Article 601(2) of the Law on trade marks.

In the second place, the referring court is unsure whether Mr Mehta’s liability cannot be established, even if he has not used signs in breach of the rights held by the members of SNB-REACT, inasmuch as he has provided services to persons who operate the domain names and websites which use those signs unlawfully, by renting the IP addresses which he owns under conditions allowing those persons to operate anonymously. The referring court also states that the answer to that question depends on the meaning of Articles 12 to 14 of Directive 2000/31, which were transposed into national law by Articles 8 to 10 of the Law on information society services.

It is in those circumstances that the Tallinna Ringkonnakohus (Court of Appeal, Tallinn) decided to stay the proceedings and to refer to the Court the following questions for a preliminary ruling:

‘(1) Is Article 4(c) of [Directive 2004/48] to be interpreted as meaning that Member States are required to recognise bodies collectively representing trade mark proprietors as persons with standing to pursue legal remedies in their own name to defend the rights of trade mark proprietors and to bring actions before the courts in their own name to enforce the rights of trade mark proprietors?

(2) Are Articles 12, 13 and 14 of [Directive 2000/31] to be interpreted as meaning that even a service provider whose service consists in registering IP addresses, thus enabling them to be anonymously linked to domains, and in renting out those IP addresses, is to be regarded as a service provider within the meaning of those provisions to whom the exemptions from liability provided for in those articles apply?’

The Court’s decision:

1. Article 4(c) 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 Member States are required to recognise a body collectively representing trade mark proprietors, such as that at issue in the case in the main proceedings, as a person entitled to seek, in its own name, the application of the remedies laid down by that directive, for the purpose of defending the rights of those trade mark proprietors, and to bring legal proceedings, in its own name, for the purpose of enforcing those rights, on condition that that body is regarded by national law as having a direct interest in the defence of such rights and that that law allows it to bring legal proceedings to that end, these being matters for the referring court to verify.

2. Articles 12 to 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) must be interpreted as meaning that the limitations of liability for which they provide apply to the provider of an IP address rental and registration service allowing the anonymous use of internet domain names, such as that at issue in the case in the main proceedings, inasmuch as that service comes within the scope of one of the categories of service referred to in those articles and meets all the corresponding conditions, in so far as the activity of such a service provider is of a merely technical, automatic and passive nature, implying that he has neither knowledge of nor control over the information transmitted or cached by his customers, and in so far as he does not play an active role in allowing those customers to optimise their online sales activity, these being matters for the referring court to verify.