Where Do You Sue for Infringement of an EU Trademark?

In reference to a recent case that sought to clarify the right for domestic courts to hear an EU wide trademark dispute, below experts at Clarke Willmott LLP explain the resolution, and point towards an answer to the question: Where do you sue for infringement of an EU trademark?

The Court of Appeal recently (1 February 2018) decided to seek further clarification from the Court of Justice of the European Union (CJEU) about whether or not the Courts of England and Wales have jurisdiction to hear a trade mark dispute concerning an EU trade mark where the defendant was based in Spain and the alleged infringing acts were carried out in Spain and not in England and Wales.

The Judgment in the case of AMS Neve Ltd & Ors v Heritage Audio S.L. & Anor [2018] EWCA Civ 86 has been handed down.

This aspect of the case concerns an Appeal in relation to a successful challenge to the jurisdiction of the Courts of England and Wales in relation to an EU trade mark infringement claim in the Intellectual Property Enterprise Court (IPEC). The claim was issued by the owners of the trade mark and AMS Neve, an English company which makes and sells a range of audio equipment in the UK, against Heritage Audio SL, a Spanish company which sells and supplies audio equipment in Spain. Proceedings in Spain for alleged infringement of the same EU trade mark have been stayed as the mark is the subject of cancellation proceedings at the EUIPO. Clarke Willmott act for Heritage Audio SL in these proceedings.

In the Judgment under appeal His Honour Judge Hacon determined that the Courts in England and Wales did not have jurisdiction to hear the EU trade mark infringement case.

Under Art. 125(5) of the EU Trade Mark Regulation (formerly Art. 97(5)) jurisdiction is restricted to “the Member State in which the act of infringement has been committed or threatened”. The CJEU held in the case of Coty Germany GmbH v First Note Perfumes NV (C-360/12), which His Honour Judge Hacon referred to in his judgment, that the “linking factor relates to active conduct on the part of the person causing that infringement”. Jurisdiction is therefore established “…in the Member State in which the defendant committed the alleged unlawful act.”

His Honour Judge Hacon decided that the “active conduct” in this case related to the decisions about the website where the alleged offers and advertising were found, as it was arguable that the website was targeted at UK customers. There was no finding of any sales in the UK. It was common ground that this conduct took place in Spain. Accordingly, there was no jurisdiction for the Courts of England and Wales to determine AMS Neve’s claims for infringement of its EU trade mark.

At the Court of Appeal, AMS Neve Ltd sought to overturn the judgment of His Honour Judge Hacon or, in the alternative, requested that the Court of Appeal make a reference to the CJEU for a preliminary decision. Heritage Audio SL’s position was that His Honour Judge Hacon’s judgment was correct and should be followed in light of recent similar decisions of both the CJEU (Nintendo Co. Ltd. v BigBen Interactive GmbH and BigBen Interactive SA (C-24/16 and C-25/16) and of the Federal Court of Justice of Germany (Bundesgerichtshof) (Parfummarken (BGH, I ZR 164/16), both of which supported the interpretation of the provision by Heritage Audio SL.

The Court of Appeal decided that a reference to the CJEU was necessary as, although the decision of the Bundesgerichtshof was persuasive (as it is the highest civil court in Germany), the meaning of “the Member State where the act of infringement has been committed” in Art. 97(5)/ 125(5) of the EU Trade Mark Regulation had not been decided by the CJEU, and it considered that the decision not to allocate jurisdiction in circumstances where there was activity in Country A which led to infringement of the EU trade mark in Country B, would give rise to there being no jurisdiction at all for such infringement. It is, however, always open for a claimant in such situations to issue proceedings against a defendant in the defendant’s Member State, which is what the claimants’ in this case have recently done by issuing proceedings in Spain.

The Court of Appeal has requested that the CJEU gives a preliminary ruling on the following three questions: –

“In circumstances where an undertaking is established and domiciled in Member State A and has taken steps in that territory to advertise and offer for sale goods under a sign identical to an EU trade mark on a website targeted at traders and consumers in Member State B:

(i)            does an EU trade mark court in Member State B have jurisdiction to hear a claim for infringement of the EU trade mark in respect of the advertisement and offer for sale of the goods in that territory?

(ii)           if not, which other criteria are to be taken into account by that EU trade mark court in determining whether it has jurisdiction to hear that claim?

(iii)          In so far as the answer to (ii) requires that EU trade mark court to identify whether the undertaking has taken active steps in Member State B, which criteria are to be taken into account in determining whether the undertaking has taken such active steps?”

The case will now be transferred to the CJEU who will determine the answers to the above questions. Once this happens the case will go back before the Court of Appeal who will make their final judgment based on the answers given by the CJEU.

Andrew Stone, a Senior Associate in the Intellectual Property Team of Clarke Willmott LLP said: “By referring these questions to the CJEU the Court of Appeal is seeking clarity on the issues of jurisdiction especially concerning businesses which are not in the UK but could be said to be ‘targeting’ customers in the UK through their websites. As sales online continue to increase trade mark owners need certainty and clarity about where they can enforce their rights. The recent decisions by the CJEU in Nintendo and that of the German Supreme Court appear to support the judgment of His Honour Judge Hacon. The response of the CJEU to the questions raised by the Court of Appeal will determine whether or not the Courts in England and Wales will have jurisdiction to deal with such cases in the future.”

Roy Crozier and Andrew Stone of Clarke Willmott LLP and Jacqueline Reid of 11 South Square act for Heritage Audio SL in these proceedings.