Unlimited and Unconditional Bank Secrecy Laws Fall Foul of European IP Directive

In the context of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, the CJEU has recently ruled on the need for a balancing exercise to be carried out by transposing Member States between the right to obtain information in IP infringement proceedings and the right to protection of personal data. 1

Coty was the producer and distributor of perfume holding an exclusive licence for the Community trade mark “Davidoff Hot Water”. In 2011, it purchased some perfume bearing this trademark over the internet. The perfume was counterfeit. Coty then contacted the internet auction platform and obtained the name of the holder of the account from which the perfume had been sold. The account holder denied having sold the product and refused to provide Coty with any further information. Coty had paid the purchase price into a bank account nominated by the seller and held with the Stadtparkasse Magdeburg. It contacted that bank and sought details of the account holder under paragraph 19(2) of the German Markengesetz. This provision transposed into German law Art 8(1)(c) of the Directive. The bank relied on national banking secrecy laws and declined to provide the information sought by Coty

Protection for IP rights holders

Article 8(1)(c) of the Directive provides that

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…was found to be providing on a commercial scale services used in infringing activities…

Under Article 8(2)(a) this information shall as appropriate comprise “ the names and addresses of the producers, manufacturers, distributors, suppliers and other previous holders of the goods or services, as well as the intended wholesalers and retailers…”.

Article 8(3)(e) goes on to provide that paragraphs (1) and (2) shall apply without prejudice to other statutory provisions which “govern the protection of confidentiality of information sources or the processing of personal data.”

The Directive also provides that protection of intellectual property should not hamper the protection of personal data and cannot, in particular, affect Directive 95/46.2

Preliminary ruling sought from CJEU

The dispute came before the German courts with Coty being successful at first instance but losing on appeal. A further appeal on a point of law was heard by the German Federal Court of Justice who sought a preliminary ruling on the interpretation of Article 8(3)(e). In summary, the German court asked whether Article 8(3)(e) should be interpreted as precluding a provision which, as in the case before it, allowed reliance on banking secrecy laws to justify a refusal to provide details of an account holder under Art 8(1)(c) of the Directive.

Need to reconcile protection of different fundamental rights

The CJEU first noted the need to reconcile the requirements of the protection of different fundamental rights, namely the right to an effective remedy and the right to intellectual property, on the one hand, and the right to protection of personal data on the other. In transposing Directives, Member States should take care to rely on an interpretation of them which allowed a fair balance to be struck between the various fundamental rights protected by the EU legal order. Subsequently, when implementing the measures transposing those Directives, the authorities and courts of the Member States should not only interpret their national law in a manner consistent with those Directives but also ensure that they did not rely on an interpretation which would be in conflict with those fundamental rights or with the other general principles of EU law.

Further, under Article 52(1) of the Charter of Fundamental Rights, any limitation on the exercise of recognised rights and freedoms should respect the essence of those rights and freedoms. A measure which resulted in serious infringement of a right would be regarded as not respecting the requirement that a fair balance be struck between the fundamental rights to be reconciled.

The national provision in issue

Here, the national provision allowed the invoking of banking secrecy in order to refuse to provide information. While Article 8(1) of the Directive did not recognise an autonomous right to information which individuals could exercise directly against an infringer or others, it nevertheless obliged the Member States to ensure that information could be obtained by way of measures of enquiry ordered by a court.

Although it was a matter for the referring court to determine, it appeared that the provision of national law in issue, taken in isolation, allowed an unlimited refusal, since its wording did not contain any condition or qualification. Accordingly, taken in isolation, it was liable to frustrate the right to information recognised in Article 8(1) and therefore to infringe the fundamental right to an effective remedy and the fundamental right to intellectual property.

 Also, the unlimited and unconditional authorisation to invoke banking secrecy prevented due account being taken of the specific characteristics of the intellectual property right in question and, where appropriate, the intentional or unintentional character of the infringement as envisaged by Recital 17 of the preamble to Directive. In the context of Article 8, this kind of authorisation could seriously impair the effective exercise of the fundamental right to intellectual property, to the benefit of the rights of persons entitled to protection of their personal data as a result of the bank’s obligation to respect banking secrecy. The national provision did not comply with the requirement to ensure a fair balance between, on the one hand, the various fundamental rights, and, on the other, Article 8 of the Directive.

It was, however, for the referring court to determine whether there were any other national means or other remedies which would allow the competent judicial authorities to order that the necessary information concerning the identity of persons covered by Article 8(1) be provided, in view of the specific circumstances of each individual case, in accordance with Recital 17.

Decision of the CJEU

The CJEU held that it followed that Article 8(3)(e) of the Directive must be interpreted as precluding a national provision which allowed, in an unlimited and unconditional manner, a banking institution to invoke banking secrecy in order to refuse to provide details of an account holder pursuant to Article 8(1)(c).


This decision will be welcomed by the holders of trade marks who see their brands widely exploited by counterfeiters over the internet. While it does not give them free rein to obtain banking information, they can at least be assured that national law will be obliged to achieve a reasonable balance between their right to pursue a remedy and the right to privacy of bank customers.

  1. Coty Germany GmbH v Stadtsparkasse Magdeburg, Case C-580/13, 16 July 2015
  2. Directive 95/46/EC of 24 October 1995 of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.