Protection of trademarks and the Internet with respect to the Czech law

AuthorJUDr. Zuzana Slováková, Ph.D.
PositionThe Department of Commercial Law
Pages72-79

Key Words:

trademark, sign, infringement, Internet, WIPO

Page 72

1. Protection Of Trademark Rights And The Internet

Trademark rights are, like all intellectual property rights, based on the principle of territoriality. The territorial nature of these rights means that each state or region determines, for its own territory and independently from any other state, what is to be protected as trademark, who should benefit from such protection, for how long and how protection should be enforced. Trademarks may be granted by formal or informal proceedings. In registration-based system creation and extinction of trademark rights depends upon registration in a relevant national or regional register maintained by competent authority. In use- based systems (such as the traditional system USA), the acquisition, maintenance and enforcement of rights require use of the trademark by the owner. A trademark owner has exclusive right to use the trademark throughout the territory of a particular state and this right may have an indefinite duration. The trademark enables the owner to build goodwill and reputation in its enterprise and to prevent others from misleading consumers by false association with an enterprise, with which they are not connected.

However, another consequence of the territorial nature of trademark rights is that different persons may own rights in the identical or similar trademark or other sign for the identical or similar goods or services in different states. This can create problems if the trademark or the other sign is used on the Internet. The Internet is an interactive medium for communication, which contains information that is simultaneously and immediately accessible irrespectively of territorial location to public from any place and at any time. In this respect the development of the Internet has raised a number of new legal issue, most of which stem from its global nature.

Whoever participates in the market of a particular country must also respect the laws of that country. The question is whether this principle can also be applied to activities carried out on a worldwide-basis on the Internet. Globalization has changed the territorial scope of a producer's interests but the rules for protection of trademarks remain the same in their nature. Therefore, the source of problems is the extension of typical local trademark problems to a geographically unlimited market mediated by the Internet. These problems are not limited to trademarks and exist with regard to all kinds of distinctive signs online, including domain names, business names, geographical indications, etc.

The use of a trademark or another sign on the Internet can infringe trademark rights of a different person only if such use is deemed to have taken place in the state where the trademark enjoys protection. Many forms of conflicts may occur, e.g. between signs (domain names, business names, etc.) and pre-existing trademarks. Even in the absence of bad faith, the use of a sign on the Internet may violate the rights of a trademark owner from a different state. The requirement is priority of the trademark and danger of confusion between the sign and the trademark. Another conflict may occur between two identical or similar trademarks of different owners from different states. However, a danger of confusion exists in such cases only where the goods or services, for which the two trademarks are registered or used, are identical or sufficiently similar. Exceptions may apply for example where the trademark has a Page 73 reputation in a particular state and the sign may affect the distinctive character or reputation of the trademark.1

A trademark is infringed if a third person"uses" an identical or similar sign and simultaneously this person is not holder of a right in the sign or is not otherwise permitted to use this sign in the particular state. According to the Czech legal system claims based on trademark infringement require that the trademark be"used" as well. The question arises under what conditions the appearance of an identical of confusingly similar trademark or the other sign on the Internet might constitute"use" and give rise to infringement. This question is considered by legal systems of different states by different ways.2

Under an extensive concept of infringement, it would suffice that a sign is visible on a computer screen in the state where a conflicting right exists.3 The exclusive right in a trademark would then have an almost worldwide effect. Under this view, use of a sign on the Internet could provoke infringement claims in potentially every state in the world. For example, this concept was reflected in the case of SG 2 v. Brokat informationssysteme GmbH 4 where the Nanterre, Court of Appeals in France concluded that an infringement had occurred by mere use of the sign on the Internet. In this case a German company, with its registered seat in Stuttgart, was the owner of registered trademark"payline" in Germany for internet payment system"Brokat-payline", which was used on its web site www.brokat.de. A French company was the owner of prior trademark "payline" in France for identical services. The French plaintiff sought an injunction against the allegedly infringing use of its registered French trademark on the German web site. Although the German defendant had never sold its internet payment system in France (and even could not do so because of French cryptography regulations) and used the trademark only on a German web site, the court issued the injunction against the internet use of the trademark. The court based its decision on the finding that the German web site was worldwide accessible and an infringement had thus also occurred in France. Therefore the court assumed jurisdiction over the German defendant under Article 5 (3) of the Brussels Convention. Although the Court's injunction against the use of the trademark on the Internet had effects beyond France, the injunction was territorially unlimited in the Internet context; otherwise, the French trademark owner' rights would be continually infringing. According to German scholars, the unrestricted application of trademark-law concepts is unsuitable as a means of solving trademark disputes on the Internet.5 If such a judicial practice were to establish itself worldwide, a large number of companies would no longer be able to use the Internet as an advertising platform.

Under a more restrictive concept, the mere accessibility of a web site containing a sign from a particular state is not sufficient and the finding of an infringement would require a connection between the use of a sign on the Internet and the state in which the trademark enjoys protection.6The problem is that different states may adopt different standards as consideration factors for establishing such a connection with a particular state. This is shown by the decision of the Ontario Court of Appeal in the case of Pro-C Ltd v Computer City7 , where the court has clarified the circumstances in which advertising on the Internet originating outside of Canada can constitute use of a trademark in Canada pursuant to the Canadian Trademarks Act. In this case, a small Canadian company Pro C (plaintiff) was the owner of the trademark"WINGEN" registered in Canada and the United States for computers programs used to

Page 74 generate programs for Windows. A large American corporation, Computer City (defendant) subsequently developed an in-house line of computers that it called"Wingen". From the outset of the production of these computers, the defendant was aware of the registration of the trademark WINGEN owned by Pro C. The computers were offered for sale in all the United States outlets but not in the Canadian stores nor by means of the Internet, due to the costs in crossing the border. The court pointed out that the defendant had not used trademark WINGEN in Canada in connection with goods, which fall within the description of the goods covered by the trademark registration. Under the opinion of the court, the passive website of the defendant could not constitute use of a trademark under Canadian law, because by means of this website was not possible to transfer of ownership. The use of the trademark in Canada would require any possibility to purchase goods in its territory...

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