Trademark use online – the case of SaaS and e-commerce companies

by | Jun 21, 2023 | Insights | 0 comments

Trademark rights and trademark use are territorial. If you protect your trademark in Sweden, it has no validity in Norway. If you use your trademark Germany, you cannot infringe on someone’s trademark rights in France. With the rise of the internet and especially SaaS services, it is increasingly difficult to establish where trademark use takes place. After all, the service is typically available for everyone regardless of their location. 

The same is true for online commerce in general. If you buy Oakley branded sunglasses in a local shop in Spain, the trademark Oakley is clearly used in Spain. But if you are based in Spain and buy Oakley sunglasses from a German online store, is the trademark Oakley used in Spain, Germany, or in both countries? If you buy a subscription service to Dropbox or monday.com, are those trademarks used in a country where you (the buyer) are based. 

Why does this matter?

The answers to the above questions are hugely important for all companies that sell goods or services online for two reasons. If the trademark use takes place where the buyer is, then it means that if another company has registered a similar trademark in that country, there could be an infringement. 

Secondly, if the trademark use does not take place in that country, then the company must be aware that if it has registered their trademark there, the registration may be vulnerable for non-use cancellation by third parties. 

In other words, each possible interpretation (trademark is used in that country or trademark is not used in that country) carries at least one significant potential risk.

To add one more layer of uncertainty, every country decides for themselves whether online use of a trademark constitutes use in their country. If a SaaS company sells their services to a Swedish or Ugandan client, it is for Swedish and Ugandan courts to decide whether the trademark of the SaaS company has been used in Sweden and Uganda. It is also possible that these countries come to completely opposite decisions.

The European view

This question seems to be in a constant development stage. In the early days the EU court held that if a website where the mark is in use can be accessed from an EU country, then that mark is used in that country. The current approach is more limited and sensible. Mere accessibility is no longer enough to find trademark use, the website or other measures taken to promote the website must “target” a country in order for there to be trademark use in that country. 

There is no all-exhaustive list of when a particular country is “targeted”, but here are some considerations that are typically taken into account.

    • The language of the website: If the website is only available in the language of the targeted country, this is a strong indication that the website is targeted at consumers in that country. If a website is in Romanian, it is a strong indicator that it is targeted at Romanian consumers. English is more difficult because it’s more universal. The fact that a website is in English does not necessarily mean that a) it is targeted for UK and US consumers, or b) it is not targeted at Romanian consumers. That said, language is generally an important factor.

    • The currency of the website: If the website only accepts payments in the currency of the targeted country, this is another strong indication that the website is targeted at consumers in that country.

    • The shipping and payment options offered on the website: If the website offers shipping and payment options that are only available in the targeted country, this is another indication that the website is targeted at consumers in that country. Shipping instructions can also be relevant.

    • The website’s marketing materials: If the website’s marketing materials are specifically targeted at consumers in the targeted country, this is a strong indication that the website is targeted at consumers in that country.

    • The website’s traffic data: If the website’s traffic data shows that a significant portion of the website’s visitors are from the targeted country, this is a strong indication that the website is targeted at consumers in that country.

Other relevant considerations include the website operator’s intent, the actual use of the website by consumers in the targeted country and the economic impact of the website on consumers in the targeted country. Also, if you advertise your product or service in a particular country, that constitutes trademark use. Targeting a Google Ads campaign (or a print campaign) to Berlin and Paris means that your trademark is used in these countries. Use of a trademark in advertising is a clear case of trademark use.

Whether a website targets a specific country is an overall assessment of all facts. Many countries have a similar approach in determining whether a trademark that is available online is used in their country. 

Wrap-up

Here’s a general description of your situation, but bear in mind that there may be some differences in different countries. 

If you have a SaaS company or an e-commerce site, your trademark is not used in every country just because your website is accessible everywhere, or even because it is possible that your products or services can be purchased anywhere in the world. 

The good news is that if somebody has registered a similar trademark in a particular country, your SaaS service or e-commerce does not automatically infringe those rights. If you take specific measures to target that country for example by advertising there or localising your website, that prior trademark starts posing risks for you.

Another question you must decide is where to protect your trademark. This is not so different for SaaS companies or other companies. You should protect your trademark in the most important countries. Usually this means countries where you use your mark, your clients are and where you are marketing your products and services. Just because your service can be accessed from anywhere in the world, it does not mean that you have to protect your trademark in every country. In fact, that would be cost prohibitive, even big global brands do not protect their trademarks in every country of the world.

Finally, remember that trademark registrations can be canceled for non-use after three or five years (depending on the country) if the mark has not been used in that country. If somebody challenges your trademark rights, you must be able to demonstrate the use of the mark in that country. This means that you must show that you have taken concrete steps to target your website and service for that particular country.

See related posts:
Can you use another company’s trademark as a keyword in online advertising?
Common classification mistake that many software companies make
Booking.com trademark in the USA and the EU

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