Tilman v Unilever. CJEU supports choice of court in GTCs even if no possibility of click-wrap is offered.

Update 29 November 2022 see here for questions between Marco Farina and myself re the CJEU’s discussion 28-31 of the applicability at all of Lugano, in light of the Withdrawal Agreement.

The CJEU last week held in C-358/21 Tilman v Unilever, the context of which I reviewed here. Krzysztof Pacula has initial analysis here and also refers to the application of the consent for choice of court issues in Ebury Partners.

One of the parties’ (Unilever’s) GTCs  are contained on a website, and their existence is ‘flagged’ in the written main contrac, without there bring a tickable box that click-wraps the agreement. Does that suffice to bind the parties as to the GTC’s choice of court (in favour of the English courts)? Note the courts were seized pre-Brexit; the UK’s Lugano troubles are not engaged.

The CJEU answers exactly along the lines I suggested in my earlier post: no impeding of commercial practice; need for the contracting party relying on the clause to have drawn the attention to the GTCs; need for that clause to be durably consultable and storable; finally it is the national court’s task to verify  the formation of consent in these factual circumstances. That there is no box that can be ‘ticked’ is not conclusive [52].

All in all a welcome support for commercial choice of court.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.

Grand Production v GO4YU. Szpunar AG (not, due to suggested inadmissibility) on copyright, VPNs and forum delicti for platform streaming.

Szpunar AG opined a few weeks back in C-423/21 Grand Production v GO4YU  ea. The case involves a variety of issues related to streaming and VPNs, many of which concern telecoms law yet one is of interest to the blog: namely the question whether

in the event of an allegation of infringement of copyright and related rights guaranteed by the Member State of the court seised, that court has jurisdiction only to rule on the damage caused in the territory of the Member State to which it belongs – because the territoriality principle precludes domestic courts from having jurisdiction to determine and examine the facts in relation to foreign acts of infringement – or can or must that court also rule on offences committed outside that territory (worldwide), as alleged by the author whose rights were allegedly infringed?

It transpires from the Opinion however that the case in the national court does not involve one for damages, yet rather one for a temporary injunction prohibiting distribution. To the degree this is aimed at the Serbian defendants at issue, these are domiciled outside the EU and hence not subject for actions in tort, to Brussels Ia. Against the Austrian defendants, the case is subject to full jurisdiction under A4 forum re, hence not triggering the full or partial jurisdictional issues of the relevant CJEU case-law (Bolagsupplysningen etc.).

The AG suggests inadmissibility of the Brussels Ia question.

Geert.

ROI Land Investments. The CJEU on letters of comfort and their leading to a qualification as employment cq consumer contract for jurisdictional purposes, and on more generous national rules for the protected categories.

In an interesting judgment, the CJEU yesterday held (no English edition yet) in C-604/20 ROI Land Investments Ltd v FD on protected categories suing a defendant not formally associated with the claimant by a clear contract of employment. That the defendant is not domiciled in the EU is in fact of less relevance to the issues.  I had somehow missed Richard de la Tour AG’s Opinion on same (it happens to the best of us).

Claimant in the main proceedings is FD, domiciled in Germany. Defendant is not his current employer and is not domiciled in a Member State. Yet by virtue of a letter of comfort it is directly liable to the employee for claims arising from an individual contract of employment with a third party. The gist of the case is whether an employee can sue this legal person under the employment title if the contract of employment with the third party would not have come into being in the absence of the letter of comfort.

The slightly complex three part construction, transferring relationships of employment, essentially is one of tax optimisation via Switserland. FD used to be employed by ROI Investment, a Canadian corporation, before his contract was transferred to R Swiss, a Swiss SPV created for the very purpose of the operation. ROI Investment via a letter of comfort effectively guaranteed the outstanding wages due to FD. FD’s contract with Swiss was ended, a German court held this to have been done illegally and ordered Swiss to pay a substantial sum whereupon Swiss went into insolvency. FD now wishes to sue the Canadian ’employer’.

CJEU Bosworth is the most recent case which extensively discusses the existence of ’employment’, referring to CJEU Shenavai and Holterman. In ROI Land the CJEU [34] instructs the national court in particular to assess whether there is a relationship of subordination between individual and corporation, even if subordination is actually only one of the Shenavai /Holterman criteria.

Erik Sinander has already noted here (his post came in as I was writing up mine) that this is a different emphasis from the AG: he had suggested a third party who was directly benefitting from the work performed by the employee (“un intérêt direct à la bonne exécution dudit contrat”) should be considered an employer. That to my mind is way too large a criterion and the CJEU is right to stick to the earlier ones.

[35] the CJEU suggests relevant circumstances in the case most probably confirming the relationship of subordination hence of employment: the activities which FD carried out for his two respective employers stayed the same, and the construction via the  SPV would not have been entered into by FD had it not been for his original employer’s guarantee.

The forum laboris in the case at issue is then I assume (it is not discussed quite so clearly in the judgment) determined by the place of habitual performance of the activities for the third party, the formal (now insolvent) employer, not the activities carried out for the issuer of the letter of comfort: for there are (no longer) such activities.

[37] ff the Court entirely correctly holds that more protective national rules cannot trump Brussels Ia’s jurisdictional provisions for the  protected categories: both clear statutory language and statutory purpose support that  conclusion.

[52] ff the CJEU entertains the subsidiary issue raised in the national proceedings as to whether the contract may be considered a consumer contract. It holds that the concept of ‘a purpose outside (a natural person’s) trade or profession’ does not just apply to a natural person in a self-employed capacity but may also apply to an employee. [56] seeing as FD would not have signed the new employment agreement without the letter of comfort, the employment agreement cannot be considered to be outside FD’s profession. Therefore it cannot qualify as a consumer contract.

Geert.

 

 

IRnova v FLIR. CJEU would seem casually to reject reflexivity, and confirms narrow interpretation of A24(4) BIa’s exclusive jurisdictional rule for (in casu non-EU) patents.

Lydia Lundstedt has prior review of the judgment in CJEU C-399/21 IRnova AB v FLIR Systems AB (who had been business partners in the past) here. Swedish courts are clearly busy referring the private international law elements of patent cases to the CJEU.

Of particular note is that a 3 judge chamber would seem to have ruled out reflexive effect as casually as if it were swatting a fly.

On 13 December 2019, IRnova brought an action before the Patent and Market Court seeking, inter alia, a declaration that it had a better right to the inventions covered by international patent applications, subsequently supplemented by European, US and Chinese patent applications deposited by FLIR in 2015 and 2016, and by US patents granted to FLIR on the basis of those latter applications. In support of that action, IRnova had stated, in essence, that those inventions had been made by one of its employees, meaning that that employee had to be regarded as their inventor or, at the very least, as their co-inventor. IRnova therefore argued that, as the inventor’s employer and thus successor in title, it had to be regarded as the owner of the inventions. However, FLIR, without having acquired those inventions or otherwise being entitled to do so, deposited the applications in its own name.

The court had dismissed jurisdiction viz the Chinese and US patent applications, and the US patents, on the ground, in essence, that it regarded the action concerning the determination of the inventor as being linked to the registration and validity of the patents, and it applied A24(4) BIa reflexively. The Appeals Court referred the issue on reflexive effect to the CJEU, in the following terms:

‘Is an action seeking a declaration of better entitlement to an invention, based on a claim of inventorship or co-inventorship according to national patent applications and patents registered in a non-Member State, covered by exclusive jurisdiction for the purposes of Article 24(4) of [the Brussels Ia Regulation]?’

however the CJEU reformulated [22-24] the case as not concerning reflexive effect at all, rather, enquiring about the scope of the A24(4) gateway.

The Court first of all [25] ff makes a point of confirming its broad reading of the ‘international’ element required to trigger European private international law, referring to CJEU Owusu.

It then [35] would seem to rule out reflexivity in a very matter of factly way (and as Lydia also noted, without AG Opinion) and despite as noted having earlier reformulated the question away from reflexivity:

as has already been pointed out in paragraph 26 of the present judgment, the patent applications at issue in the main proceedings were deposited and the patents concerned were granted not in a Member State, but in third countries, namely the United States and China. As Article 24(4) of the Brussels Ia Regulation does not envisage that situation, however, that provision cannot be regarded as applicable to the main proceedings.

This may have already answered a core question in  BSH Hausgeräte v Aktiebolaget Electrolux.

[36] ff it adds (‘in any event’) reference ia to CJEU Hanssen and to the exceptional nature of A24 [39]. It holds that [42]

the main proceedings relate not to the existence of the deposit of a patent application or the grant of a patent, the validity or lapse of a patent, or indeed an alleged right of priority by reason of an earlier deposit, but to whether FLIR must be regarded as being the proprietor of the right to the inventions concerned or to a portion of them.

[47] it refers ia to the fact that fact that

an examination of the claims of the patent or patent application at issue may have to be carried out in the light of the substantive patent law of the country in which that application was deposited or that patent was granted [however it ] does not require the application of the rule of exclusive jurisdiction laid down in Article 24(4) of the Brussels Ia Regulation

The operative part of the judgment refers both to the A24(4) restrictive interpretation element and to the third countries element hence once cannot simply regard the reflexivity issue as obiter.

Much relevant and surprisingly succinct on the reflexivity issue.

Geert.

EU Private International Law, 3rd ed. 2021, 2.208 and 2.548.

BSH Hausgeräte v Electrolux. An opportunity for the CJEU to clarify reflexive effect of exclusive jurisdictional rules, and stays under Article 24(4) (intellectual property law).

I mentioned the pending case C-339/22 BSH Hausgeräte v Aktiebolaget Electrolux yesterday at our excellent (if I say so myself) Max Planck Institute – EAPIL – KU Leuven workshop on Brussels Ia reform. Questions referred, are

Is Article 24(4) [BIA] to be interpreted as meaning that the expression ‘proceedings concerned with the registration or validity of patents … irrespective of whether the issue is raised by way of an action or as a defence’ implies that a national court, which, pursuant to Article 4(1) of that regulation, has declared that it has jurisdiction to hear a patent infringement dispute, no longer has jurisdiction to consider the issue of infringement if a defence is raised that alleges that the patent at issue is invalid, or is the provision to be interpreted as meaning that the national court only lacks jurisdiction to hear the defence of invalidity?

Is the answer to Question 1 affected by whether national law contains provisions, similar to those laid down in the second subparagraph of Paragraph 61 of the [Swedish] Patentlagen (Patents Law), which means that, for a defence of invalidity raised in an infringement case to be heard, the defendant must bring a separate action for a declaration of invalidity?

Is Article 24(4) [BIa] to be interpreted as being applicable to a court of a third country, that is to say, in the present case, as also conferring exclusive jurisdiction on a court in Turkey in respect of the part of the European patent which has been validated there?

BSH hold a European patent relating to a vacuum cleaner. The patent has been validated in Austria, Germany, Spain, France, the United Kingdom, Greece, Italy, the Netherlands, Sweden and Turkey. Electrolux of Sweden has subsidiaries in a number of other Member States, such as Germany. A number of disputes have arisen between BSH and companies in the Electrolux group concerning the patent in question. Inter alia, the European patent validated in Germany was invalidated in 2020 by a German court at the request of a subsidiary of Electrolux. That judgment has been appealed.

On 3 February 2020, BSH brought an action against Electrolux before the Patents and Market Court in Sweden and claimed inter alia that Electrolux should be prohibited from using the patented invention in all the abovementioned States and ordered to pay reasonable compensation for the unlawful use. BSH also claimed compensation for the additional damage caused by Electrolux’s alleged patent infringement. Electrolux argue that the Court should dismiss the action in relation to the foreign parts of the patents. In its view the foreign patents are invalid and the Swedish court therefore lacks jurisdiction to hear infringement actions concerning those patents.

End of December 2020 the court agreed, citing A24(4) viz the EU patents (the claim being issued prior to Brexit implementation day, this includes the UK) and ‘an internationally accepted principle of jurisdiction’ (in essence, the Moçambique rule) viz the Turkish patent.

BSH of course appeal.

A asked students in the August resit exams how they think the CJEU should answer. On Q1 I would expect them to cite the need to interpret A24 restrictively, with reference to one or two cases confirming same (there are plenty); and the lack of solution in the Brussels Recast. Contrary to what Electrolux contend, a proposal to allow a court to merely stay the case pending the foreign court’s decision on validity, was never rejected. Such a proposal was never made. BIa merely confirmed CJEU Gat v Luk’s holding that exclusive jurisdiction kicks in regardless of whether the argument of invalidity is introduced as a claim of by way of defence.

On Q2 I would like to seem them argue something to the effect that national CPR must not infringe the effet utile of BIa. (Only) if the effect of the Swedish rules is that it requires the defendant to initiate IPR invalidity claims in all the relevant States, or lose its possibility of an invalidity defence, this would in my view run counter BIa’s intention and scope.

Finally, on the 3rd Q they should engage with the lack of BIa clarification on reflexive effect, other than in the strict confines of A33-34 and its related recitals. Relevant case-law of course includes Ferrexpo and Central Santa Lucia L.C. v. Meliá Hotels International S.A. Interested readers may wish to consult Alexander Layton KC’s most excellent paper on same. Some students may refer to the UPC developments and the jurisdictional consequences in Article 71 BIa (operational 2023?).

Geert.

Porr Bau. Medina AG on waste and end-of-waste status of excavated soil.

Medina AG’s end June Opinion in C-238/21 Porr Bau GmbH v Bezirkshauptmannschaft Graz-Umgebung will delight waste lawyers for the case once again evolves around the definition of ‘waste’ as applied to excavated soil. Statute to be interpreted is the WFD or the Waste Framework Directive 2008/98. CJEU SAPPI is a recent judgment  often referred to by the AG.

Porr Bau, the applicant in the main proceedings, is a construction undertaking established in Austria. In July 2015, certain local farmers asked it to supply them, against payment, with excavated soil and to distribute it over their properties. The purpose of the farmers’ request was to level their agricultural land and improve their cultivation areas, thereby increasing yields. Porr Bau applied to the relevant authorities for a statement that the soil was not to be considered waste so as it could avoid a number of taxes. That authority disagreed and also held that the soil, which it considered to be waste, had not yet reached end-of-waste status.

The AG (36) opines that it should not be assumed that all excavated soil by a construction undertaking is by default to be discarded, and that it is difficult to conclude that, under circumstances such as those of the present case, the intention of a construction undertaking is to discard excavated soil that has been carefully selected, subjected to a quality control and supplied as uncontaminated top-quality material in order to attend to a specific request from local operators in need of that material. He also suggests, less convincingly in my view, (38 ff) that such soil may be considered a by-product of the construction sector. 

Should he not be followed on the waste definition issue, the AG suggests and he is right in my view that national law must not deny end-of-waste status until the holder fulfils certain formal requirements with no environmental relevance such as record-keeping and documentation obligations.

Geert.

EU Waste law, 2nd ed 2015, 1.20 ff.

 

Dutch court finds Seafarers ‘Dockers’ clause falls within European competition law ‘Albany’ collective bargaining exception.

Many thanks Ruwan Subasinghe for alerting me to the judgment: Early July the courts at Rotterdam held in ITWF, Nautilus International and FNV v Marlow Navigation Netherlands BV et al that the International Transport Workers Federation (IT(W)F) Non Seafarers’ Work Clause, also known as the Dockers’ Clause, falls within the CJEU ‘Albany’ exception of EU competition law. The case was brought against a number of shipowners who disregarded the clause.

In the interest of full disclosure, I should note I acted as expert witness for the ITWF.

The dockers’ Clause, negotiated between trade unions and employers, forms an integral part of a set of agreements primarily entered into by ITF and the Joint Negotiation Group (JNG – represent maritime owners from across the world) . In short  the clause amounts to a ban on ships’ crews carrying out work relating to securing and releasing the load on a ship (often: containers), collectively known as ‘lashing’ /’unlashing’ work. Tiredness and fatigue are some of the biggest risks for seafarers, who are expected to rest in the ports, not carry out the specialised and dangerous work of dockers. 

The Dockers’ Clause, together with the other employment conditions, was the result of an intensive and multi-year period of negotiations between a large number of social partners. Exemptions are possible under conditions.

Collective agreements of course are prima facie suspect under EU competition rules. The Albany ‘exception’ of the Court of Justice of the European Union concerns the core criteria which the CJEU employs in its competition law assessment of the activities carried out by organisations that organise social protection for workers in a given sector. The Court held (at 60) that

It therefore follows from an interpretation of the provisions of the Treaty as a whole which is both effective and consistent that agreements concluded in the context of collective negotiations between management and labour in pursuit of such objectives must, by virtue of their nature and purpose, be regarded as falling outside the scope of Article 85(1) of the Treaty.

Article 85(1) is what is now Article 101 TFEU, and by ‘such objectives’ the Court (at 59) means ‘social policy objectives’.

Note, for conflicts lawyers, the application of Article 4-4 Rome I, and, viz some of the defendants, Article 4(1) Rome II, to conclude application of Dutch law.

The Court at Rotterdam held that the seafarers clause fits squarely within the Albany exception: it is ‘entered into in the framework of collective bargaining between employers and employees’, and it improves the employment and working conditions of workers’. Note at 4.38 the reference to these agreements necessarily involving a ‘package deal’ which implies that the interest of all involved will be weighed and that as a result of the collective bargaining, some of those concerned will get a better deal than others. However both the CJEU and the Court at Rotterdam leave that assessment to the negotiation process.

Further arguments based ia on free movement of workers, services, establishment  were rejected. (A narrow Covid19 exception was accepted for a narrow set of circumstances).

An important judgment for those interested in competition law and collective bargaining.

Geert.

The São Paulo Panels. Szpunar AG on declaratory actions and the jurisdictional impact of their contractual roots.

Update 25 November 2022 Many thanks to Dr Michiel Poesen for noticing that the case has been struck off the register following withdrawal by the Belgian court of its preliminary reference.

First Advocate-General Szpunar opined in C-265/21 AB, AB-CD v Z EF a few weeks back. The case-name is a victim of the anonymisation rules and I propose we name it ‘the São Paulo Panels’, this being its ultimate subject: 20 panels exhibited at the 1977 São Paulo Art Biennial (this much information one can read in the publicly available referral decision and the AG Opinion). Tobias Lutzi has summary of the most relevant sections in the Opinion here and in the interest of disclosure I should add I am instructed for Belgium in the case.

Early in the 1980s the original German artists handed over the panels to an art gallery in Belgium. The nature of the deposit (sale or deposit) is contested. The owner of the art gallery later sold the panels to her daughter and son-in-law, who requested Christie’s of London to sell the panels. That sale has been suspended since 2013 (hence the case is subject to Brussels I, not Brussels Ia however there is no material difference) in light of one of the original artists, the wife (her husband had passed away) claiming ownership; the wife in the meantime has passed away, too, and the proceedings are continued by their son. (The CJEU may find this of note, seeing as the original proceedings at the outset involved at least one of the original contracting parties).

Current proceedings result from the Belgian-domiciled claimants having requested the Belgian courts to confirm their ownership of the objects. The Belgian courts are asking the CJEU whether the case involves A7(1) special jurisdiction for contract and if so, where the forum contractus lies. Claimants argue the claim engages A7(1) on the basis of the original contract which they argue is one in sale, with performance in Belgium. The defendant argues the original contract was one of deposit, and that a declaratory claim such as the one at issue, with the parties to the proceedings not being parties to the original contract, does not engage A7(1) at all, instead only being subject to Article 4, domicile of the defendant.

Clearly the questions will enable the Court to clarify whether its Feniks, Flight Right etc case-law, with their extended notion of ‘contract’, applies across the board, without much need to take the specific context of those cases into account; or whether there ought to be some restraint on the reach of the forum contractus. One assumes it may seek some inspiration in its approach to distinguishing contracts and torts, eg in Wikingerhof (or Sharpston AG’s earlier ‘ancestry’ test for the Rome I and II distinction in Ergo). Without restraint, CJEU De Bloos’ great window of opportunity for claim formulation hence forum shopping is likely to be reinvigorated.

The AG (44) ff explains the initial restrictive approach (leaning on predictability) to forum contractus per CJEU Handte, and (53) confesses not to be a fan of a restrictive interpretation of A7, arguing such interpretation would undermine the Regulation’s intention, in formulating the special jurisdictional rules, of ensuring that courts with a particular suitability to hear the case will have jurisdiction to do so. The alternative view is that too wide an interpretation undermines the Regulation’s DNA of predictability and the statutorily expressed view that A4 forum rei is the core principle of the Regulation, and the established case-law in support of this principle that exceptions to it need to be restrictively interpreted. The AG refers more than once in his Opinion to scholarship of one of my Doktorkinder, Dr Michiel Poesen, to substantiate the scholarly debate.

He subsequently discusses the later wider CJEU wider approach (emphasising proximity rather than predictability), starting with Engler and culminating in flight right, concludes that the current claim falls within that wider framework but does emphasise that the contract must lie at the foundation of the claim: ‘et sur laquelle se fonde l’action du demandeur’ (75).

(76) ff discusses the important question how far the judge, faced with opposition to her /his jurisdiction, must go in the consultation or interpretation of the contract, to establish whether or not the claim finds its foundation in contract. Per Kolassa and Universal Music, both the claimant’s and the defendant’s arguments to that effect are said by the AG to be of relevance. (83) Seeing as both parties argue their position with reference to a contract, the AG advises that on the facts of the case, the contractual foundation is clear; (84) that the contract which is the initial source of the rights and obligations (“la source originale des droits et obligations litigieux”) is the anchor point for the forum contractus, i.e. the disputed 1980s contract and not the later contract of sale; and (86) ff, that the judge will have to apply the classic A7(1) cascade: if the initial contract cannot be qualified as one for the sale of movable goods or a service, the CJEU Tessili Dunlop method of looking over the fence will have to be applied. (The referral decision is short on factual elements to help the AG opine on this point).

Fun with contracts…..

Geert.

EU Private International Law, 3rd ed. 2021, 2.419 ff.

The CJEU in Allianz. Among others linguistic arguments lead to the Court confirming Brussels Ia identifies territorial jurisdiction in direct action against an insurer.

In Case C-652/20 HW, ZF, MZ v Allianz Elementar Versicherungs AG, the CJEU held (no English version of the judgment is as yet available) end of June that A11(1)(b) Brussels Ia, determines jurisdiction not just of ‘the’ courts in a Member State (leaving territorial jurisdiction to be determined by national civil procedure rules) but rather of a specific court within that Member State. The judgment is a bit longer than might have been expected: that is because the referring judge did not qualify one or two elements which, particularly in an insurance context, can be quite convoluted. (Such as the nature and deliniation of ‘beneficiaries’, ‘insureds’, ‘victims’).

In accordance with the Article, ‘An insurer domiciled in a Member State may be sued: …(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the claimant is domiciled’.

[35] The Court observes that in the Romanian (the language of the case) as well as the English and Finnish version of Brussels Ia use the plural ‘courts’ while in the other language versions, the singular is used. (Regular readers of the blog may be familiar with my earlier work on languages and interpretation). Coupled with the indications of territorial jurisdiction in the relevant section of the Report Jenard, and with the similar language in A7(1) and (2) and relevant case-law there (ex multi: Kareda, Volvo), the CJEU concludes that where A11(1)(b) and all its conditions apply, the Article identifies both national and territorial jurisdiction indeed.

Geert.

 

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