October 04 2007
In direct contradiction of established High Court precedents, the Paris Court of Appeal has ruled once again that courts do not have jurisdiction over trademark infringement claims brought against foreign websites.
In the recent Axa Case(1) three insurance companies - Axa, Avanssur and Direct Assurance - sued Google Inc and Google France before the Paris Tribunal of First Instance for trademark infringement, unfair competition and misleading advertising. According to the plaintiffs, Google Inc infringed the plaintiffs' trademarks in connection with its Adwords advertising program by inciting its clients to purchase key words such as 'Axa' and 'Direct Assurance' through its key words generator tool. The plaintiffs also claimed that results of searches run on these terms on the www.google.ca, www.google.de and www.google.co.uk websites brought up advertisements from the plaintiffs' competitors.
In accordance with High Court jurisprudence, which relies on the 'accessibility' of a website in France, the Paris Tribunal of First Instance held that it had jurisdiction over the case.(2) Google Inc appealed this decision on the grounds that the connection between the alleged damage resulting from the Adwords sponsored links and the French territory was insufficient to justify the jurisdiction of the French courts.
The Paris Court of Appeal overturned the decision, adopting the same approach it took in the Normalu Case of April 26 2006(3) in connection with an alleged trademark infringement by a foreign website. In the earlier case, departing from the High Court jurisprudence, the appeal court ruled that the mere accessibility of a website in France cannot alone determine the competence of the French courts, and that a "sufficient, substantial or significant connection between the litigious facts and acts and the alleged damage" (the 'significant connection' criterion) is necessary in order to determine jurisdiction. For this purpose, the court applied a 'destination' test to establish whether the defendant website was targeting the French public.(4)
In the present case the Paris court of Appeal immediately staked out its position. After summarizing the facts the court stated that, unless seeking systematically to confer jurisdiction on the French courts for all cases involving the Internet, it is necessary to establish whether the significant connection criterion is met. In a thinly veiled criticism of the High Court's position, the Paris Court went on to state that, given the universality of the Internet, to simply determine whether a foreign website is accessible in France would necessarily, as a consequence, institutionalize the practice of forum shopping.
The Paris court, in applying the destination test, analyzed the following factors:
The court thus concluded that the websites did not have an economic impact on the French public and, therefore, that the trial-level court did not have jurisdiction over the suit against Google Inc.
The plaintiffs argued that the court also had jurisdiction over Google Inc pursuant to Article 42 of the Code of Civil Procedure which states that, in tort matters, where there are several defendants the plaintiff may, at its option, bring its case before the court of the place of residence of any of the defendants.(5) The court, however, countered that Article 42 is applicable only if there is a close connection between the claims against the various defendants, and the claim against the French party to the suit is real and serious and not simply a pretext to drag a foreign defendant before French courts. In this regard, the court observed that Google Inc owned the offending websites and the Adwords technology, and exploited the advertising spaces available on these websites. The court noted that Google France was simply a subcontractor of Google Inc and was prohibited by contract from acting as an agent of Google Inc. The judges thus considered that a connection between the claims against Google France and Google Inc was not characterized and that the factual and legal situations of both defendants were not identical. The court thus concluded that the requirements of Article 42 of the Civil Procedure Code were not fulfilled.
Pursuant to well-established jurisprudence, the High Court traditionally applies the 'accessibility' test, under which a foreign-based website is subject to the jurisdiction of French judges insofar as it is accessible from France, regardless of whether the French public is targeted by the website.(6)
Recently, the High Court once again reasserted this approach in the HSM Case.(7) In that case, a French company, Gep, brought an action against a German company, HSM, for unfair competition, claiming that HSM had displayed and offered for sale on its website a pair of shoes similar to those marketed by Gep. The Angers Court of Appeal exercised jurisdiction over the case, relying on the fact that French web users could access the website and order products online.(8) The Supreme Court upheld this decision on the grounds that "the alleged facts of commercialization of the products on the French territory were likely to cause harm", although the website was available only in German and that there was no proof of any purchase by French consumers.
This judgment is in line with the jurisprudence of the High Court based on the accessibility criterion. Unlike the Paris Court of Appeal, the High Court does not require proof that the foreign website actually targets the French public; the competence of the French judges is established as long as harm is likely to occur within French territory.
The HSM judgment, which followed the decision of the Paris Court of Appeal in the Normalu Case, makes it clear that the High Court is not yet convinced by the lower court's reasoning. The fact that the Paris Court of Appeal in the Axa Case persisted in its opposition to the High Court's broad view of jurisdiction in internet matters makes it equally clear that the latter is not backing down and still hopes to change the High Court's view.
While this battle continues, foreign website operators are left in an uncomfortable state. They will, in all likelihood, continue to be sued before the French courts for acts committed outside France unless and until the High Court adopts the reasoning of the Paris Court of Appeal.
For further information on this topic please contact Bradley L Joslove or Vanessa De Spiegeleer-Delort at Franklin by telephone (+33 1 45 02 79 00) or by fax (+33 1 45 02 79 03) or by email (firstname.lastname@example.org or email@example.com).
(5) Although Article 42
is overridden by the Brussels Convention, the United States is not a party to
that convention or any other relevant bilateral treaty with France on the issue
of jurisdiction. As a result, Article 42 can apply to the suit against Google
ILO provides online commentaries as specialist Legal Newsletters. Written in collaboration with over 500 of the world's leading experts and covering more than 100 jurisdictions, it delivers individually requested information via email to an influential global audience of law firm partners and international corporate counsel. Please click here to register for the service.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.