Montres Breguet SA & Ors v Samsung Electronics Co Ltd & Anor

An online marketplace operator uses a third party’s sign in its own commercial communication where a well-informed and reasonably observant user would link the operator’s services with the sign. The assessment is holistic. It includes the presentation of third-party content and the nature and scope of the operator’s services.

Trade mark use may occur after sale. Dial branding displayed on a smartwatch can distinguish the smartwatch’s origin to third parties even though its owner knows the true manufacturer.

The hosting safe harbour applies only where the provider’s role is merely technical, automatic and passive. An operator whose active involvement gives it knowledge of and control over infringing content falls outside that protection.

Members of the Swatch group alleged that third-party watch-face apps available through Samsung’s Galaxy App store infringed their trade marks. The apps displayed identical or similar signs in the conventional dial-branding position on Samsung smartwatches.

Falk J held in [2022] EWHC 1127 (Ch) that most of the apps infringed and that Samsung was primarily liable. Samsung appealed on whether it had itself used the signs, whether the signs were used in relation to smartwatches as well as apps, and whether regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002, implementing article 14(1) of the e-Commerce Directive, protected it from financial remedies.

1. Appeal dismissed. The judge was entitled to find that Samsung used the disputed signs in its own commercial communications. The correct inquiry was whether a well-informed and reasonably observant user would establish a link between Samsung’s services and the signs. The presentation of the apps and the nature and scope of Samsung’s services were particularly important. Samsung operated the store, mixed its own and third-party apps, reviewed every app, promoted the availability of watch faces, assisted developers, shared revenue and provided support. Its role went beyond creating technical conditions for third-party use.

2. The judge correctly considered circumstances which, although not themselves known to consumers, affected their perception of the signs. Her multifactorial assessment was consistent with the approach in Louboutin. The presence of a developer’s name did not require a different conclusion because consumers might neither see it nor understand it as identifying a separate trade origin.

3. The signs were also used in relation to smartwatches. Trade mark use is not confined to the point of sale. A sign can function after sale as a badge of origin for third parties encountering the goods. Dial branding on a realistic digital watch face could lead an observer to understand the sign as identifying the smartwatch’s origin. The infrequency or short duration of such encounters did not alter that conclusion.

4. Article 9(3) of Regulation 2017/1001 contains an open-ended description of acts of use. It was unnecessary to establish that Samsung itself “affixed” the signs. It was sufficient that Samsung used the signs contained in the apps in relation to smartwatches.

5. Samsung’s acts fell outside article 14(1) of the e-Commerce Directive. Its active role gave it knowledge of and control over the disputed content. Its conduct was not merely technical, automatic and passive. The hosting exemption therefore did not protect Samsung from financial remedies.

6. The court did not decide the separate question whether Samsung was aware of facts or circumstances from which illegality was apparent under article 14(1)(a). Lewison LJ, expressly obiter, considered that this inquiry requires actual awareness of particular facts or circumstances, followed by an assessment of whether illegality was readily identifiable to a diligent economic operator from those facts alone. Elisabeth Laing LJ expressed no view on that issue.

1. Court of Appeal (Civil Division): The appeal was dismissed. The court upheld the findings that Samsung used the signs in relation to the apps and smartwatches and that article 14(1) of the e-Commerce Directive did not apply.
2. High Court, Intellectual Property List: Falk J held in [2022] EWHC 1127 (Ch) that most of the disputed apps infringed the claimants’ trade marks and that Samsung was primarily liable. She granted an injunction and rejected Samsung’s defence to financial remedies.