Case C-580/13, Coty Germany – does fake toilet water flush bank confidentiality down the pan? [judgment 2015, ECLI:EU:C:2015:485]

If someone sells fake perfume and puts a bank account number on the internet in order to receive payment for what is purchased, then can the trade mark holder on the perfume require the bank to provide the name and address of the bank account holder? The EU’s ‘enforcement’ Directive 2004/48/EC contains a ‘right to information’ but does this rule of intellectual property law trump a German legal principle about the confidentiality of banking?

Facts
The claimant is licensed to make and sell perfumes. One of its products is Davidoff’s Hot Water – a perfume protected by a Community Trade Mark.

In 2011, it became apparent that the perfume could be bought via the Ebay internet auction platform. The claimant decided to buy some and sent off its money to a specified bank account run by Sparkasse Magdeburg. The perfume was duly sent to the claimant. However, it turned out that the perfume was fake. Indeed, it was such a poor fake that even a layman could have spotted it was a counterfeit. Enquiries were made and the claimant learned that in the four weeks over the Christmas period, turnover in the fake Davidoff Hot Water was estimated to be just shy of 11 000 euro.

But the claimant believed that it was unable to ascertain who was actually selling the fake pong, and therefore decided to invoke Article 19(2) of the German Trade Mark Act. Consequently, they hauled the German bank up before the Magdeburg District Court, and demanded the name and address of the account holder.

At first instance, the Magdgeburg District Court found for the trade mark holder but that judgment was overturned on appeal at the OLG Naumburg, which felt that the principle of confidentiality in banking should prevail.

At the German Supreme Court
The Supreme Court believed that success of the appeal turned on the correct interpretation being given to the EU’s ‘enforcement’ Directive; that is to say, Directive 2004/48/EC on the enforcement of intellectual property rights (OJ [2004] L157/45–86).

The Directive has an entire Article devoted to ‘the right to information’. In this case, the salient provisions were Article 8(1)(c) and Article 8(3)(e), which stipulate:

1.Member States shall ensure that, in the context of proceedings concerning an infringement of an intellectual property right and in response to a justified and proportionate request of the claimant, the competent judicial authorities may order that information on the origin and distribution networks of the goods or services which infringe an intellectual property right be provided by the infringer and/or any other person who:
…
(c) was found to be providing on a commercial scale services used in infringing activities;
…
3.Paragraphs 1 and 2 shall apply without prejudice to other statutory provisions which:
…
(e) govern the protection of confidentiality of information sources or the processing of personal data.

Before contemplating what this meant, the German Supreme Court recalled that the aim of the Directive, as it was expressed in Recital 10, was to provide a high level of protection for intellectual property in the internal market.

Consequently, the German Supreme Court took Article 8(3)(1) to mean that the right to information might well allow for an exclusion to exist in national law but the scope of the exclusion would still have to be read in conformity with EU law. Given that the bank was in effect providing services which were being used in infringing activities, if the aim of the Directive was to achieve an effective enforcement of IP law, then the German Supreme Court was minded that this aim should prevail over the German Supreme Court’s own  judgments about confidentiality in banking.

Nevertheless, fundamental rights were at stake. In that context, the German Supreme Court recalled that the CJEU had already interpreted the wording of Article 8 of the Enforcement Directive in two earlier judgments, namely, Case C-275/06, Promusicae, and Case C-461/10, Bonnier Audio. In these judgments, the CJEU had emphasised the need to ensure a fair balance between the various applicable fundamental rights.

Hence, in this case, there were three fundamental rights. There was the claimant’s property right which was protected in Article 17 of the EU Charter. And there were the defendant’s (and customer’s) data processing and rights to a private life that were enshrined in Articles 7 and 8 of the EU Charter.

In light of the CJEU’s fundamental rights case law, the German Supreme Court was still minded to protect the trade mark holder’s rights. However, it decided to ask a question of the CJEU about this.

Question Referred
My unofficial translation of the question asked by the German Supreme Court reads:

Is Article 8(3)(e) of Directive 2004/48/EC to be interpreted as precluding a national rule which is based on banking secrecy and permits a financial institution, such as the one in the present case, to refuse the right of information in Article 8(1)(c) of the Directive to the names and address of a bank account holder?