In a ruling delivered on 20 January 2015[1], the commercial division of the Cour de Cassation drew attention to the application of the limited liability regime of technical service providers in relation to their hosting services and on the absence of any infringement of third party trademarks if used as keywords on the Internet.
SNCF found that eight of its trademarks were used as keywords on the Internet in order to draw the attention of clients towards the websites of competing companies. The Paris Court of Appeal grants the pleas of SNCF which first claimed that the company leasing the servers on which the competing websites are hosted, should be held liable as it was not merely passively involved in the hosting of data. SNCF then claimed that its well-known trademarks were infringed as they were used as keywords leading Internet users to competing websites. Finally, it claimed that this qualified as misleading commercial practice as it suggested that there was a business relationship between SNCF and the defendants to the dispute.
However, the Cour de Cassation disagreed and rejected the three grounds admitted by the Paris Court of Appeal.
Entitlement to the limited liability regime
Article 6, I, 2 of the Law on Confidence in the Digital Economy (LCEN) states, as a matter of principle, that technical service providers are not liable for their data storage activities on the Internet. In fact, the assumption that these technical service providers could monitor all the contents placed online by web surfers would be deceptive. However, there is a risk that they consistently raise their capacity as hosts, even for their publishing or business activities, in order to benefit from the limited liability regime. This would grant them a protection which would go beyond that intended by French law. Therefore, courts must assess each service in order to determine whether the limited liability regime applies.
In our matter, the Court of Appeal held the technical service provider liable by characterizing its services as publishing activities. According to the Court of Appeal, the service provider did not only store the data, but was also actively involved in inserting and removing the keywords. The Cour de Cassation disagreed and held that the technical service provider acted as a host. The inserting and removing of keywords are not enough to account for an active involvement.
The use of trademarks as keywords on the Internet
On this matter, the Cour de Cassation refers to the leading case law of the Court of Justice of the European Union of 23 March 2010 (Aff. Google France; C-236/08). It is now settled that the trademark holder is entitled to forbid the use of the trademark when such use infringes the trademark’s functions.
Dismissal of any misleading commercial practice
The Cour de Cassation dismissed the last ground based on a misleading commercial practice considering that the clients were not misled by the fact of knowing that they were on a business relationship with SNCF.
Parasitism?
Unfortunately, SNCF failed to claim any parasitic action, which may have existed as the use of trademarks as keywords on the Internet could provide a benefit from their recognition and their attractiveness.
Finally, this judgement is in line with earlier decisions and the case law on this matter may be deemed to be as settled.
[1] Cass. Com., 20 janvier 2015, n°11-28567