Companies providing e-commerce services present themselves to users, and thus to consumers, through websites accessible under domain names in such a way that the domain name — which typically also appears as the name of the website accessible under the domain — effectively distinguishes the company's service from other similar services. Such businesses spend a significant part of their marketing budget on communicating the designation of their e-commerce service and its domain availability to consumers and users, so that their service becomes as widely known and used as possible. This makes it important for such businesses to protect the domain name of their e-commerce services and the designation of the website accessible under the domain.
Some of the e-commerce trademark infringement litigation arises from the basic situation where infringing websites operate under a domain similar in name to an established, trademark-protected website. These sites generally offer consumers the same or similar services, and can increase visitor numbers without engaging in serious marketing activity of their own. Such use is not only unlawful, but also harmful to the original provider, as the infringer indirectly benefits from the trademark holder's marketing spend.
E-commerce in Hungary has been developing steadily, as shown by the increasing number of Hungarian court judgments in recent years that have settled disputes in this area, including trademark infringement cases. This article reviews these judgments, summarising the issues raised and the answers given by the courts.
1. Protection afforded by a combined trademark in respect of domain names
The decision of the Metropolitan Court of Appeal No. Pf.20089/2020/7. was issued in a dispute arising from an infringing website. The plaintiff owned a colourful, figurative combined trademark containing the name of the domain ("Plaintiff's Domain") under which its classified advertising website appeared. In practice the plaintiff used its combined trademark by displaying to users only the word combination which formed its dominant part. The defendant launched a website offering classified advertising services that differed from the Plaintiff's Domain by only one character, and used a logo whose dominant word combination was the defendant's domain name.
The plaintiff's trademark was protected inter alia in respect of Class 35 of the Nice Agreement. Both parties provided classified advertising services on their websites; the services of 'advertising, online advertising, operation of online marketplaces for the buying, selling and/or exchanging of goods and/or services and/or real estate, compilation of online searchable databases' in Class 35 were relevant to the infringement. The defendant had not registered its own word combination as a trademark. The plaintiff won at both trial and appellate level. The reasoning provides useful reference points for similar disputes:
a) The dominant word combination in a figurative mark may provide trademark protection for the corresponding domain name.
The plaintiff sued under Article 12(2)(b) and (3)(c) of Act XI of 1997 on the Protection of Trademarks and Geographical Indications (the "Trademark Act"). The court held that the dominant elements of both signs were the disputed word combinations, because the figurative and textual elements were interpretative and descriptive. Visually the two signs were identical apart from one letter, and when pronounced the difference disappeared. In combined signs the word element is generally the most important; the average consumer concentrates on the essentials and selects the element apt to designate the goods or services. Case-law therefore requires that in trademark infringement cases the dominant elements be compared. The defendant's service fell within the trademark's scope of protection, and the high degree of similarity gave rise to a real likelihood of confusion. The court in effect granted trademark protection to the word combination corresponding to the Plaintiff's Domain Name by classifying it as dominant in the combined figurative mark.
b) The holder of a combined trademark is protected even where its services are available under a website name different from the dominant word combination.
Under Article 18(1) of the Trademark Act, failure to put a mark to genuine use within five years of registration triggers statutory consequences. The court examined the defendant's non-use objection: the plaintiff's domain redirected users to a different website where the word element, figure and slogan did not appear. The court held that the plaintiff had adequately justified genuine use — case-law does not primarily require proof of continuity, but that use was such as to enable consumers to perceive the trademark and the market presence of the goods or services which it designates. Screenshots from waybackmachine.com showed that classified advertising services were available under the domain during the relevant period. Redirection to another website is admissible as active trademark use; the trademark holder may decide to use the identifying domain to make another site — also belonging to it — available.
This is favourable to companies with several separately-registered domain names that, for reasons of economy, open a differently-named website under a given domain. For example, if a business offers advertising services on "aprohirdetes.hu" but owns the domain "hirdetes.hu" from which "aprohirdetes.hu" loads, its trademark protection for "hirdetes.hu" is not lost for lack of use.
c) The relevant user of a sign is the person who provides the service in the course of trade, not the whois registrant.
For the purposes of infringement it is irrelevant who is registered in the whois record; what matters is who actually engages in economic activity and publishes content on the website — because users link the information and the service provided to that person, and the domain and the website accessible under it identify that person.
2. Use as a trade name in relation to domain names and websites
The Curia's precedent-setting judgment No. Pfv.20700/2018/10 dealt with use as a trade name in relation to a domain and website. The plaintiff operated an online classified ad service for used cars with a word sign appearing both in the domain and website name, protected in figurative and word form in Class 35. The defendant launched an online car advertising service under a domain and website name identical to the plaintiff's sign, with the addition of the word "for sale". All three court levels held this to breach Article 12(3)(c) of the Trademark Act.
The defendant invoked Article 15(1)(b) of the Trademark Act, which allows use of indications concerning kind, quality, quantity, intended purpose, value, geographical origin, time of production or of rendering of the service, or other characteristics of the goods or service, in accordance with honest practices in business. The Curia held that where a sign constitutes information about a service provided via an internet website, its use does not exceed the bounds of business propriety and the defendant may include the plaintiff's sign on its website. However, use of the plaintiff's sign in the domain name serves to distinguish the defendant from other service providers and to identify it on the Internet — this constitutes name use, for which Article 15(1)(b) does not provide a defence.
The lower courts also found infringement in the use as a trade name in the website name. The Curia considered the notion of "use as a trade name" could cause enforcement uncertainty and therefore limited its ruling to infringement through domain-name use. The reasoning is arguable: in online commerce a website is typically identified not only by the domain name but also by a corresponding logo/name on the site itself. Nonetheless, the ruling does not obstruct trademark holders in practice: a website cannot operate without a domain, so ending unlawful domain use also ends the service provided under it.
3. Application of the rules of acquiescence in a trademark infringement case involving domain names
In its precedent-setting decision No. Pfv.21575/2018/8 the Curia held that under the referential rule in Article 17(5) of the Trademark Act, when the earlier-right holder relies on Article 5(2)(a), it is sufficient to establish the real possibility of action on the part of the earlier-right holder; assessing the possible outcome of that action falls outside the scope of the infringement action.
Both parties used the same word sign in their domain names with different extensions for online used-car services. The plaintiff provided the service from August 2001, the defendant from October 2001. They initially cooperated; in 2004 and 2005 the plaintiff registered its domain as figurative and word marks in Class 35. In 2017 it sued for infringement. The defendant invoked acquiescence: under Article 17(1), if the trademark holder has tolerated the use of a later trademark for five uninterrupted years despite awareness of it, the holder may no longer oppose that use, nor invoke the earlier trademark to have the later one cancelled.
The Curia made the following key findings:
- The defendant had been using the plaintiff's sign before the priority date of the marks by registering the domain and providing advertising services — the defendant's sign therefore qualifies as an earlier-used sign in the "later mark" position under Article 17(1) and (5).
- Consent to trademark use (i.e. a licence under Article 23) must be an express contractual statement of will. Alleged "consent by conduct" cannot substitute for that.
- In an infringement action the trademark holder asserts its claim on the basis of the protected trademark. Article 5(2)(a) allows the earlier-right holder to oppose registration or seek cancellation; when relying on that provision through Article 17(5), it is enough to demonstrate the real possibility of taking action — the outcome of such action is not adjudicated in the infringement proceedings.
- Article 17(1) sets a time limit on the earlier-mark holder's action for infringement. Its only requirement is the holder's knowledge of another's use for at least five years without objection.
The Curia held that the defendant successfully invoked acquiescence under Article 17(1) and (5), precluding the plaintiff's infringement claim. The judgment confirms earlier case-law on the acquiescence defence in domain-based e-commerce services. The takeaway for e-commerce providers: act carefully when registering a domain, register it as a trademark as soon as possible, and pursue competitors for possible infringement without delay.