GW Pharma v Otsuka. Moçambique rule confirmed as not being engaged in mere contractual dispute. Court of Appeal ia distinguishes direct intellectual property rights validity challenges, and proceedings “principally concerned with” validity.

In GW Pharma Ltd & Anor v Otsuka Pharmaceutical Co. Ltd [2022] EWCA Civ 1462, the Court of Appeal confirmed jurisdiction for the courts of England and Wales, confirming the first instance judgment which I reviewed here.

The first instance judgment dismissing GW Pharma’s application decided three issues: jurisdiction under the Moçambique principle, foreign act of state and a distinct application for a stay on forum non conveniens grounds.

Arguments on appeal are listed [20] ff:

GW Pharma’s grounds 1 and 2 address the Moçambique principle and its application. GW Pharma contend that the judge erred in applying an overly restrictive test for the purposes of the Moçambique principle and further erred in his application of that test to the facts.

Ground 3 addresses the foreign act of state doctrine, and the common law public policy exception. The submission is that the judge erred in law in holding that the act of state doctrine (or common law public policy) did not require the court to decline jurisdiction.

Ground 4 relates to forum non conveniens, contending that the judge erred in declining a stay on those grounds.

Otsuka’s case is that the judge was right for the reasons he gave but Otsuka also advances two additional points in support of the judge’s overall conclusion. The first point is that as well as the exception to the Moçambique rule based on whether a validity challenge is direct or not which the judge applied, there is a second exception – for claims which relate to a contract. This case would also fall within that exception. The second point is a submission that GW Pharma’s case would necessarily involve a country-by-country approach, contrary to the approach adopted by the English courts in related contexts (citing the Supreme Court in Unwired Planet v Huawei [2020] UKSC 37). The relevant principles ought not to be applied so as to prevent Otsuka from bringing its contractual royalty claim against GW Pharma in a single set of proceedings in GW Pharma’s home jurisdiction.

Birss LJ [26] notes, with common sense, that Brussels Ia authority still has relevance, despite the Regulation no longer applying

the fact the Regulation does not apply is a different thing from the question whether aspects of the thinking behind the Brussels Regulation may illuminate questions which do arise.

[29] the main point of UKSC Lucasfilm is summarised as the

modern trend [being] in favour of the enforcement of foreign intellectual property rights, particularly where there is no issue as to validity.

That modern trend of course provokes discussion as to when a claim engages validity as opposed to mere infringement, with Chugai a classic illustration. The judge here sometimes necessarily skates on thin ice for creative counsel may direct the end-result by claim formulation. Here Birss LJ offers a relevant distinction between direct challenges to the validity of a patent, as opposed to proceedings being ‘principally concerned with’ such challenges:

In Chugai there is reference to both the idea of whether a validity challenge is a direct one and also to whether proceedings are “principally concerned with” validity. These two expressions are performing different tasks and it is worth keeping them distinct. A claim consisting of nothing other than a claim for infringement, in which the defendant does not claim that the patent is invalid, but merely requires the court to ask itself, as a guide to construction, what would be the hypothetical consequences for validity if there was infringement, does not involve a direct challenge to validity. Such a claim is also not principally concerned with validity. On the other hand a claim consisting of nothing other than a request for revocation on the ground of invalidity or a declaration of invalidity would be a direct challenge to validity, and would be principally concerned with validity. However a claim raising multiple issues might well properly be said not to be principally concerned with validity, even if one of the subsidiary issues was a direct challenge to validity; but in such a case the court’s response would depend on the circumstances. The court might not decline jurisdiction over the dispute as a whole but might address individual issues separately. If the direct challenge only arises on a contingent basis then the right response might involve case management. Unlike the judge below, I would not describe this latter situation as one in which what was really a direct validity challenge was rendered not a direct challenge owing to its subsidiary nature in the action as a whole. The nature of the challenge is a direct one, but its status in the proceedings as a whole means that they are not principally concerned with it.

This is a discussion which to my mind is also useful for the A24(4) discussion in Brussels Ia, sub judice in BSH Hausgeräte v Electrolux.

[38] ff discusses the long standing exception to the Moçambique rule concerning contracts and equitable obligations. [40] There are said to be two questions in the present case about the contract exception. One is whether it depends on the existence of an exclusive jurisdiction clause in the contract  (answered [42] in the negative] and the other is about the extent of the exception itself. Would it, for example, allow the court to entertain a direct challenge to the validity of a foreign patent which the court would not have had jurisdiction to determine in the absence of the relevant contract (or equitable obligation)? : [43]:

In a way the question is whether the exception really is an exception to a rule that the court has no jurisdiction to determine a claim principally concerned with title (etc.) to foreign land or whether it is really just a manifestation of the proper application of the test for what it does or does not mean to say that a claim is principally concerned with title (etc.). Or putting it another way, can the court, when considering a contract claim, decide on title to foreign land, and by extension the validity of a foreign patent?

[46] that question is answered with reference to the classic in rem v in personam discussion that is part of the original Moçambique rule (and A24(1)BIa)

The contract exception does not allow the court to make a decision about the validity of a foreign patent in rem but it would allow the court to address the validity of a foreign patent in the course of making a decision concerning contractual rights in personam, assuming (such as if the Lear point does work in the way I have described) such a question was relevant to the contract decision.

[48] ff Lord Justice Birss summarises:

Bearing all this in mind, I would state the Moçambique rule as explained and formulated in Lucasfilm, and as it applies to patents in the following way:

First, in a case in which the courts of England and Wales have in personam jurisdiction over a defendant, then the courts have jurisdiction in proceedings for infringement of a foreign patent save where those proceedings are principally concerned with a question of the validity of that patent. The proceedings will not be principally concerned with validity only because the defendant, who does not claim that the patent is invalid, requires the court to ask itself as a guide to construction, what would be the hypothetical consequences for validity if there was infringement. However what the rule does not permit is a direct challenge to the validity of a foreign patent, and (subject to the exception below) the court has no jurisdiction to determine a claim that the foreign patent is invalid.

Second, this Moçambique principle is also subject to a contractual exception. If the case is one in which the court is asked to enforce a contract between the parties then in addition to questions of patent scope/infringement, if and only to the extent that questions of the validity of foreign patents need to be addressed in order to decide on the true nature and scope of the parties’ contractual obligations to one another, then the court can do so.

Applying this summary to the first instance judgment, that judgment is confirmed [60].

The third ground of appeal then invokes the foreign act of State doctrine, in that is is said that (certain) intellectual property rights may be said to depend on the grant or registration by the state. Birss LJ dismisses the argument [73] essentially by suggesting it harks back to bygone notions of intellectual property rights:

even absent the authorities I would hold that as a matter of principle the modern grant of a patent for an invention does not fit within the act of state doctrine as it stands today for two reasons. The first reason relates to the exercise of grant itself. The very word “grant” harks back to a past time, before the Statute of Monopolies 1623, when letters patent were granted on the whim of the Stuart monarchs (and similarly I suspect the Danish monarchy in Blad v Bamfield). Today there is no such condescension by the sovereign power in the grant of a patent by the Comptroller of the Patent Office. Once a properly constituted patent application has been examined and found to comply with the requirements of the law, the Comptroller is required by statute to grant the patent. The relevant words are in s18(4) of the Patents Act 1977 which provide essentially that if the applicant’s application is all in order then ‘the comptroller shall … grant him a patent.’ The second reason follows on from this and was given by Henry Carr J in Chugai at paragraph 68. He observed that once the patent had been granted, any party can challenge the validity of the patent and then can do so in a manner and on grounds which are quite different from an attempt to challenge legislation or government acts such as requisition.

Conclusion on this ground [75]

on grounds of authority and principle, I agree with the judge below that the act of state doctrine is not relevant to the analysis of the court’s jurisdiction in this case.

The first instance judge’s finding on forum non is also confirmed and the appeal therefore dismissed.

I do not know whether, if sought, permission to appeal to the Supreme Court will be granted, but it seems unlikely. The appeal judgment in my view includes important instruction in particular on the ‘principally concerned with’ issue however it largely applies existing UKSC authority.

Geert.

EU Private International Law, 3rd ed. 2021, 2.196 ff.

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.

Otsuka v GW Pharma. When does a tussle about intellectual property rights engage the Moçambique rule?

I tweeted the case on 4 May….slowly I am getting trough the backlog. In Otsuka v GW Pharma [2022] EWHC 1012 (Pat) Karet DJ upheld jurisdiction to hear a dispute about a patent licence in circumstances where the licensee has indicated it will challenge the validity of licensed patents granted outside the UK.

On 7 January 2022 GW commenced proceedings against Otsuka in a state court in New York. There is a significant overlap between the matters raised in the New York claim and the E&W claim (as GW have indicated they will defend it). GW seek a declaration that under the Agreement between the parties none of the relevant patents Covers Epidyolex, including because the patents are invalid. Epidyolex is a drug for the treatment of seizures associated with various conditions or epileptic syndromes. The active ingredient in Epidyolex is cannabidiol (“CBD”).

[47] ff the judge considers the Moçambique rule which means that an English court has no jurisdiction to adjudicate a claim of title to foreign land. In Lucasfilm v Ainsworth the UKSC with some reference to the CJEU’s application of Brussels Ia’s Article 24, held that there is no jurisdiction in proceedings for infringement of rights in foreign land where the proceedings are “principally concerned with a question of the title, or the right to possession, of that property” (including intellectual property). [51] Reference is also made to Chugai Pharmaceutical Co Ltd v UCB Pharma SA and to Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd.

The judge [73] holds GW’s intended challenge to a foreign patent in this case is not direct in the sense suggested in Chugai and the rule in Moçambique is not engaged. Claim formulation in the US proceedings features as a strong argument in that conclusion. [81] ff a forum non challenge is rejected.

Geert.

EU private international law, 3rd ed. 2021, 2.196 ff.

Lyle & Scott v American Eagle. The High Court holds the applicable law for passing off does not fly under IPR wings.

Lyle & Scott Ltd v American Eagle Outfitters, Inc [2021] EWHC 90 (Ch) entertains ia the question whether the governing law for passing-off claims involving an eagle trademark, fall under Article 6 or 8 Rome II. The application is for an earlier order allowing service of jurisdiction, to be set aside.

Parties had agreed a ‘memorandum’ (which may or may not be a ‘contract’ – it is further referred to in the judgment as a ‘contract’) following a disagreement on whether each corporation’s eagle (L&S’s being trademarked in the UK and various EU Member States; AEO’s not being trademarked here, I understand) incorporated in apparel involved infringement of trademark and passing off.

Image 1

AEO are domiciled in the US  and have no physical presence in the UK (or, one assumes, anywhere in the EU (the litigation was initiated pre-Brexit); their apparel is offered via online sales.

Jurisdiction is decided on the basis of the laws of E&W. Applicable law comes into the discussion for per Lord Mance at 46 in VTB v Nutritek,

“The governing law, which is here English, is in general terms, a positive factor in favour of trial in England, because it is generally preferable, other things being equal, that a case should be tried in the country whose law applies. However, that factor is of particular force if issues of law are likely to be important and if there is evidence of relevant differences in the legal principles or rules applicable to such issues in the two countries in contention as the appropriate forum…”.

Miles J discusses the governing law issue at 64 ff. Claimant argue the claim comes under A8 Rome II: infringement of intellectual property rights, English law, lex loci protectionis. Defendants argue they fall under A4 (by way of A6(2): Act of unfair competition), and that A4(3) is engaged to make the applicable law that of the state of Pennsylvania, because of the ‘contractual’ relationship.

At 72 Miles J agrees with the classification under A6, holding ia that ‘(t)he cause of action protects the goodwill of traders against deceptive conduct; goodwill is not an intellectual property right; and passing off is not the infringement of a right.’ Unlike the judge I do not think Rome II’s recital is of much help here and I suspect more can be made of the comparative law insights (common law and civil law) offered.

The next question is whether the claim falls within A6 (2). In Miles J’s succinctly expressed view it does, at 73: ‘The act of unfair competition alleged (passing off) affects exclusively the interests of a specific competitor (L&S). It follows that Art. 4 applies.’ As I have often noted, I find it very difficult to think of acts of unfair competition do not ultimately also impact the consumers of those involved.

The final hurdle then is whether A4(3) is engaged to displace E&W law as the lex loci damni, which at 75 the judge holds is not the case. Parties have not agreed on a governing law for the ‘contract’, they have conducted previous proceedings on the basis of that law being the laws of Pennsylvania. However even if the lex contractus is probably Penn law, and English law probably the lex causae for the passing off claim, Miles J holds this should not have an impact at the jurisdictional level: particularly seeing as there is no immediate reason to assume E&W courts will have great difficulty in applying Penn law to what on the contractual substance does not seem an overly complicated case.

Application dismissed, service out of jurisdiction stands.

This case once again highlights the level of complication resulting from having inserted different heads of applicable law into Rome II – a phenomenon which as I recently reported, might soon be expanded upon.

Geert.

EU private international law, 3rd ed. 2021, Chapter 4, Heading 4.5.2, 4.6.2, 4.6.4.

Jurisdiction for trademark infringement and passing off. Easygroup v Easyfly and ATR Aircraft

In [2020] EWHC 40 (Ch) Easygroup v Easyfly and ATR Aircraft the issue is the jurisdiction of the English court to hear claims of trade mark infringement, passing off and conspiracy against a Colombian domestic airline, its founder and chief executive, and a French aircraft manufacturer. As always the blog’s interest is not in the substantive issues concerning trademark and passing off, they do however make for interesting reading.

Nugee J considers the jurisdictional issues at 26 ff with respect to the first two defendants and with respect to the French defendant, in para 127 ff. Here the relationship between the EU Trade Mark Regulation 2017/1001 and Brussels Ia comes to the fore. (I continue to find my colleague Marie-Christine Janssens’ 2010 paper most informative on the issues; see also the link to Tobias Lutzi’s analysis of AMS Neve in my report of same). The relevant provisions of the Regulation (previously included in Regulation 207/2009, applied ia in CJEU AMS Neve), read

Article 125. International jurisdiction
1. Subject to the provisions of this Regulation as well as to any provisions of Regulation (EU) No 1215/2012 applicable by virtue of Article 122, proceedings in respect of the actions and claims referred to in Article 124 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.
2. If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.

3. If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where the Office has its seat.

4. Notwithstanding the provisions of paragraphs 1, 2 and 3:

(a) Article 25 of Regulation (EU) No 1215/2012 shall apply if the parties agree that a different EU trade mark court shall have jurisdiction;

(b) Article 26 of Regulation (EU) No 1215/2012 shall apply if the defendant enters an appearance before a different EU trade mark court.

5. Proceedings in respect of the actions and claims referred to in Article 124, with the exception of actions for a declaration of non-infringement of an EU trade mark, may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened, or in which an act referred to in Article 11(2) has been committed.

 

Article 126. Extent of jurisdiction
1. An EU trade mark court whose jurisdiction is based on Article 125(1) to (4) shall have jurisdiction in respect of:

(a) acts of infringement committed or threatened within the territory of any of the Member States;

(b) acts referred to in Article 11(2) committed within the territory of any of the Member States.

2. An EU trade mark court whose jurisdiction is based on Article 125(5) shall have jurisdiction only in respect of acts committed or threatened within the territory of the Member State in which that court is situated.

 

The first two defendants are not based in the EU. Here, Article 125(2) grants jurisdiction to the UK courts.

Controversially, at 36 Nugee J applies a forum non conveniens test. It is disputed whether this is at all possible in the Trademark Regulation. He decides England clearly is the appropriate forum: ‘there is no other court that can try the UK trade mark claims, and for the reasons just given [French and  Spanish courts might have partial jurisdiction, GAVC] no other court that can grant pan-EU relief in respect of the EU trade mark claims.’

At 37 ff Nugee J then also still considers with reference ia to CJEU Pammer and the discussions on ‘accessibility’ (see also ia Football Dataco) whether there is a ‘serious issue to be tried’ and answers in the affirmative. Here I am assuming this must be seen as part of case-management rather than a jurisdictional test (viz Article 8(1) BIa’s anchor defendant mechanism, a ‘serious issue to be tried’ test is said to be part of the ‘related cases’ analysis; see related discussions ia in Privatbank), unless he reformulates the application of Article 126 as a ‘serious issue to be tried’ test – the structure of the judgment is leaving me confused.

Eventually however the previous Order made by the High Court, granting permission to serve out of jurisdiction, is set aside by Nugee J on grounds of lack of full and frank disclosure at the service hearing – an issue less exciting for this blog however dramatic nevertheless.

The French defendant (who issued a relevant press release (only 11 copies of which were distributed at the Farnborough airshow; this was found to be de minimis; not as such a mechanism available under the EUTMR I don’t think; but it might be under case management) and was also responsible for organising (ia by having the logo painted) the offending branding in France), at the jurisdictional level is dealt with in para 127 ff., first with respect to the trademark claim.

‘By art. 125(1) the default position is that the proceedings shall be brought in the courts of the Member State where the defendant is domiciled: in ATR’s case this is France. Neither art. 125(2) nor art. 125(3) applies to ATR because each only applies if the defendant is neither domiciled nor has an establishment in a Member State. Art. 125(4) does not apply as it is not suggested that ATR has either (a) agreed that the English court should have jurisdiction, or (b) entered an appearance before the English court. That leaves art. 125(5) under which proceedings may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened. In the present case that would also be France (and possibly Spain). It follows that none of the provisions of art. 125 confer jurisdiction on the English court to hear actions based on acts of infringement said to have been carried out by ATR in France and Spain.’

Counsel for EasyGroup accepted ia per AMS Neve that the Trademark Regulation is lex specialis vis-à-vis Brussels Ia but that nevertheless the general spirit of BIa should blow over Regulation 2017/1001. They refer at 130 to the ‘general desirability of avoiding duplicative proceedings and the risk of inconsistent judgments (as exemplified by arts 29 and 30 of Brussels I Recast),’ and argue that ‘it followed that once the English court had jurisdiction over the Defendants for the acts taking place in France (as it undoubtedly did under art. 125(2)), then it must also have jurisdiction over anyone else alleged to be jointly liable for the same acts of infringement.’

This therefore is a makeshift joinder mechanism which Nugee J was not impressed with. He pointed to the possibility under A125(5) to sue the other defendants and the French defendants in one jurisdiction, namely France. An A7(2) BIa action is not possible: A122(2)(a) EUTMR expressly provides that in proceedings based on A124, A7(2) BIa does not apply.

Finally, a claim in conspiracy against the French defendant is not covered by the EUTMR and instead by A7(2) BIa, discussed at 142 ff with reference to (Lugano) authority [2018] UKSC 19, which I discussed here. Locus delicti commissi, Nugee J finds, is not in England: no conspiratorial agreement between ATR and the Defendants in relation to the branding of the aircraft took place in England. At 145: ‘the Heads of Agreement, and Sale and Purchase Agreement, were each signed in France and Colombia, and there is nothing that can be pointed to as constituting the making of any agreement in England.’

As for locus damni, at 148 Nugee J holds this not to have been or potentially be in England:

‘The foundation of easyGroup’s claims in relation to the branding of the aircraft is that once painted they were flown on test flights, and en route to Colombia, in full view of the public. But the public which might have viewed the planes were the public in France and Spain, not the public in the UK. That might amount to a dilution in the brand in the eyes of the French and Spanish public, but it is difficult to see how it could affect the brand in the eyes of the UK public, or otherwise cause easyGroup to sustain loss in the UK. Mr Bloch said that if such a plane crashed, the news would not stop at the Channel and it might adversely affect easyGroup’s reputation in the UK, but no such damage has in fact occurred, and it seems to me far too speculative to say that it may occur. As already referred to, Mr Bloch also relied on easyGroup having suffered damage on the user principle (paragraph 82 above), but it seems to me that damages awarded on this basis would be damages for the loss of an opportunity to exploit easyGroup’s marks by licensing them to be used in France and Spain, and that for the purposes of the first limb of art. 7(2) such damage would therefore be suffered in France and Spain as that is where the relevant exploitation of the asset would otherwise take place.’

This last element (place where the relevant exploitation of the asset would otherwise take place) is interesting to me in Universal Music (purely economic loss) terms and not without discussion, I imagine.

Conclusions, at 152:

(1) There is a serious issue to be tried in relation to each of the claims now sought to be brought by easyGroup against the non-EU defendants.

(2) There was however a failure to make full, frank and fair disclosure at the service out of jurisdiction hearing, and in the circumstances that Order should be set aside.

(3) The question of amending to bring claims against the French defendant. But if it had, Nugee J would have held that there was no jurisdiction for the English court to hear the claims based on the acts in France (or Spain), whether based on trade mark infringement or conspiracy. There is jurisdiction to hear the claims based on the issue of the Press Release in the UK, but Nugee J would have refused permission to amend to bring such claims on the basis that they were de minimis.

A most interesting and thought provoking judgment.

Geert.

 

 

 

CJEU confirms ‘targeting’ as a jurisdictional trigger for EU trademark infringement in AMS Neve.

Update 11 September 2019 Tobias Lutzi has excellent additional analysis hereUpdate 19 September 2019 Esther Noske has interesting German case-law background here and CDC are I bit more excited about the pioneering aspect of the case than I am, here – that is probably because I am not a pur sang intellectual property lawyer.

The CJEU today has held in C‑172/18 AMS Neve, confirming Szpunar AG’s Opinion which I briefly reviewed earlier. Eleonora Rosati has excellent analysis here and I am happy to refer entirely. As I note in my handbook, ‘targeting’, ‘directed at’ and ‘business models’ are a variety of jurisdictional triggers across EU law. The lack of uniform terminology does not assist the unsuspected reader or practitioner.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Heading 2.2.8.2.5; Heading 2.2.11.2.4 (quoted by the AG in his Opinion).

Szpunar AG on jurisdiction for trade mark infringement in AMS Neve.

Advocate General Szpunar opined end of March in C‑172/18 AMS Neve. The case concerns in essence, in the AG’s words, whether and, if so, under what circumstances, pursuant to Article 97(5) of Regulation 207/2009 on a Community Trade Mark, the person responsible for an alleged infringement, consisting in the advertising and offer for sale of goods bearing a sign which is identical to an EU trade mark on a website, may be sued in the courts of the Member State on whose territory the traders and consumers targeted by that website are situated.

It is clear from the rules on jurisdiction in Regulation 207/2009 on Community trade marks that the EU legislature decided to derogate in part from the rules on jurisdiction in Brussels Ia (these are fully applicable in the case of actions relating to national trade marks).

CJEU authority is varied (Case C-324/09, L’Oréal, which concerns the territorial scope of the EU’s trademark laws and revolves around websites ‘targeting’ consumers as opposed to merely being accessible to them, is a clear precedent; as is Wintersteiger; Hejduk; Pinckney; Football Dataco) but difficult to apply for all of them are so easily distinguishable: various intellectual property rights are at issue; some of them EU-wide granted, others only local; precedent on online activity generally such as Pammer /Alpenhof, ‘G’ etc. do not have the IPR context,….

The Advocate General does a highly commendable job (in my classes I tend to make things easy for myself on this section by mumbling something like ‘it’s complicated’; ‘you need to know your intellectual property rights’; and ‘there are so many rules in the secondary law on IPR’) in distinguishing and untangling authority, and he focuses his analysis on the issue of ‘targeting’. Those with an interest in IPR litigation had best read the Opinion in full.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Heading 2.2.8.2.5; Heading 2.2.11.2.4 (quoted by the AG in current Opinion).

Rulings on costs and their impact on the effet utile of EU civil procedure. The High Court in PABLO STAR re copyright infringement.

In [2017] EWHC 2541 (IPEC) Pablo Star Media v Richard Bowen the issue was one over copyright infringement relating to a photograph of Dylan Thomas. Of interest to this blog is not the copyright issue or the height of damages relating to same – I am not a specialist in that area. (As far as the jurisdictional issues are concerned, there is a slightly muddled reference to the Brussels I Recast and various other Regulations including Regulation 542/2014 which I discussed here).

What did trigger my interest, though, is the ruling on costs.

At 33-34 Hacon J quotes the District Judge’s reasoning for obliging claimant (Pablo Star) to pay part of the defendant’s cost, despite having won the case. In that cost award, the District Judge scolds claimant for having initiated proceedings in Ireland as well as the UK, and for considering (or threatening, as the case may be) litigation in the US. The High Court at 38 and 41 leaves aside the proceedings in Ireland as a factor to consider, and now limits the reasoning for the award on cost to the potential proceedings in the US.

Now, costs determination largely is within the realm of national rules of civil procedure. Sometimes, EU and /or international law has a direct impact on cost determination, such as for instance in the case of Aarhus and environmental litigation; or, importantly for the case at issue, Directive 2004/48 on intellectual property rights enforcement (the enforcement Directive). This Directive provides in Article 14 on legal costs

‘Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this.’

That Directive was applied in CJEU C-57/15 UVP v Telenet, expressly condemning Belgium’s restrictive regime on cost recovery in intellectual property cases. The High Court’s finding on cost may to my mind be at odds with that ruling.

More generally, the District Judge’s reference to claimant’s Irish proceedings contributing to the judge’s finding on cost, without a doubt is an infringement of the effet utile of the EU’s jurisdictional regimes. Claimant has a certain right to sue in Ireland and that possibility must in no way be disciplined.  Hacon J at the High Court, purposely or not, may have insulated himself from criticism at this point, by leaving the Irish proceedings outside the consideration and only referring to the threat of US proceedings as relevant for partially shifting costs to the plaintiff.

Absolute numbers in the case are not high. Yet the principle to my mind deserves right to appeal at the CA and, from there on, potentially to the CJEU.

Geert.

A v M (Austria): Copyright infringement, locus delicti commissi in case of breach of obligation to pay.

For your second conflicts reading of the day I thought I should serve something more substantial. In A (an Austrian company) v M (a company located in Luxembourg) the Austrian Supreme Court (Oberster Gerichtshof) had to decide on the determination of the locus delicti commissi in the event of infringement of copyright. M had effectively siphoned off to its website, some of A’s satellite broadcasts. Plenty of CJEU precedent is referred to (Hejduk; Austro Mechana; to name a few).

Thank you very much indeed Klaus Oblin for providing me with copy of the judgment – back in early June. Effectively, at issue was  the infringement of a duty to pay.  Klaus has excellent overview of the issues, of which the following are definitely worth highlighting. The Supreme Court justifiably of course emphasises autonomous interpretation of Article 7(2) Brussels I Recast. Yet autonomous interpretation does not provide all the answers. There are plenty of instances where locus delicti commissi is not easily identified, such as here.

The Oberster Gerichtshof seeks support in the Satellite Directive 93/83, but notes that the Directive includes no procedural clauses, let alone any regarding international jurisdiction (at 2.4.2. It refers to the German Bundesgerichtshof’s decision in Oscar). It then completes the analysis by reference to national law:

Section 42b(1) of the Act on Copyrights and Related Rights to classify breach of copyright as a tort (CJEU Kalfelis would have been a more correct reference) ; and

Section 907a(1) of the Civil Code) to identify the locus of the delicti commissi: because monetary debts in acordance with that section must be discharged at the seat of the creditor, the domestic courts at the Austrian seat of the collecting society have jurisdiction. In coming to its conclusion, the court (at 3.2) refers pro inspiratio to Austro Mechana, not just the CJEU’s judgment but also the ensuing national judgment.

Now, lest I am mistaken, in Austro Mechana the CJEU did not identify the locus delicti commissi: it simply qualified the harm arising from non-payment by Amazon of the remuneration provided for in Austrian law, as one in tort: at 52 of its judgment: it follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member state have jurisdiction to entertain Austro-Mechana’s claim. (emphasis added)

Given its heavy reliance on national law, I would suggest the judgment skates on thin ice. Reference to the CJEU seemingly was not contemplated but surely would have been warranted. Kainz is a case in point where locus delicti commissi was helpfully clarified by Luxembourg, Melzer one for locus damni.

Geert.

(Handbook of) European Private international Law, 2nd ed. 2016, Chapter 2, heading 2.2.11.2.

Hejduk: Copyright infringement and jurisdiction. The ECJ entertains much less than its AG.

I have reviewed the AG’s opinion in Hejduk here. The AG’s Opinion was exciting for it cited, even if only in a specific (IP; more specifically copyright) context, the difficulty in identifying locus damni. This, I suggested (realistically optimistic) flagged an obvious concern with the ECJ’s ruling in Bier. However the ECJ in its judgment, issued yesterday,  was not having any of this. It applied relevant precedent (all recalled in my earlier posting), did not at all entertain the AG’s concerns with the locus damni assessment, and held that in the event of an allegation of infringement of copyright and rights related to copyright guaranteed by the Member State of the court seised, that court has jurisdiction, on the basis of the place where the damage occurred, to hear an action for damages in respect of an infringement of those rights resulting from the placing of protected photographs online on a website accessible in its territorial jurisdiction. That court has jurisdiction only to rule on the damage caused in the Member State within which the court is situated.

Plaintiff’s difficulties were of no concern to the ECJ. No surprise perhaps given the Brussels I Regulation’s near-exclusive concern for the position of the defendant.

Geert.

 

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