Historically, intellectual property rights (IPRs) have been local in nature: parallel national patents for the same invention or parallel nationally registered trade marks for the same brand have existed independently of one another in different countries. As a consequence, litigation concerning the pan-European infringement of such parallel national IPRs has therefore had to take place on a country by country basis. As it is normally not practical to litigate in every country in which such parallel national IPRs are being infringed, forum shopping has tended to be a feature of pan-European IPR litigation.
In the last 10 years or so, forum shopping has taken on an unforeseen importance in pan-European patent litigation due to the development of the cross-border or pan-European injunction by the Dutch Courts.
The introduction of the Community Trade Mark ("CTM") in 1994 and the prospect of the introduction of the Community Design and Community Patent in the near future all of which EU-wide IPRs have their their own enforcement regimes present their own forum shopping challenges for prospective litigants.
In this article, I propose to consider the following issues relating to the pan-European enforcement of each of the 3 main IPRs:
- in section 2, the development in pan-European patent litigation of the pan-European injunction by the Dutch Courts and the "Torpedo" by the Belgian Courts and then the prospects for the creation of a European Patents Court;
- in section 3, briefly the scope for cross-border injunctions in trade mark litigation concerning the infringement of national registered trade marks and then in some depth the enforcement regime of the CTM and in particular, the scope for forum shopping in CTM litigation;
- in section 4, briefly the scope for cross-border injunctions in copyright litigation, copyright being an unregistered IPR as opposed to patents and trade marks both of which are registered IPRs.
The Legal Framework of the Brussels Convention
The two main aims of the Brussels Convention on Jurisdiction and the Enforcement of Judgments are, as its name suggests, first, to allocate jurisdiction for civil disputes amongst the courts of the EU member states and second, to enable a Judgment in a civil dispute rendered in one member state to be enforced readily in a second member state.
Set out below is a summary of each of the key articles of the Brussels Convention relevant to a consideration of pan-European enforcement of IPRs.
Article 2 - a person domiciled in a member state must be sued in the courts of that state
Article 3 - a person domiciled in a member state may be sued in the courts of another member state only by virtue of the rules set out in articles 2 - 6
Article 5(3) - a person domiciled in a member state may also be sued in matters relating to tort (e.g., infringement of an intellectual property right) in the courts of the place where the harmful event occured
Article 6(1) - a person domiciled in a member state may be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled.
Article 16(4) - as regards registered IPRs, the courts of the member state in which registration of that IPR has taken place or been applied for have exclusive jurisdiction for proceedings concerned with the issue of the validity of that IPR
Article 19 - if the principal matter is one where another court has exclusive jurisdiction e.g., under article 16 (4) then the first seized court must decline jurisdiction
Article 21 - where proceedings involve the same cause of action and the same parties, any court other than the first seized court must decline jurisdiction
Article 22 - where proceedings are related, any court other than the first seized court may decline jurisdiction
Article 24 - the courts of any member state may grant interim releif even if the courts of another contracting state have jurisdiction for the main proceedings
Enforcing a Judgment:
Article 26 - the judgment of one member state shall be recognised in another member state without any special procedures
Article 27 - a judgment shall not be recognised if (1) such recognition is contrary to public policy in the member state in which recognition is sought or (2) the judgment was given in default of an appearance or (3) the judgment is contrary to the principle of res judicata
The Development of the Pan-European Injunction
By way of background, it is important to understand that there were two principal reasons why this development took place in Holland. The first was the option for a plaintiff in Holland to commence accelerated or summary proceedings known as "kort geding" as opposed to ordinary proceedings. Kort geding proceedings are designed to provide a plaintiff with a more speedy resolution of a dispute than ordinary proceedings and are not available as such in other European countries. The second was the robust interpretation of the relevant articles of the Brussels Convention by the Dutch Courts.
The factual matrix in which the Dutch Courts have been willing to seize cross-border or pan-European jurisdiction has normally involved acts of infringement of a family of nationally registered European patents in various European countries committed by various members of a group of Dutch and non-Dutch companies.
The legal justification for the Dutch Courts seizing pan-European jurisdiction in these factual circumstances has been the combined application of two international treaties: first, the Brussels Convention and in particular, articles 2 and 6(1); and second, the European Patent Convention and in particular, the Protocol to Article 69. Articles 2 and 6(1) of the Brussels Convention provide that a defendant shall be sued in the member state in which they are domiciled but in the case of a several defendants, they may be sued in the member state in which any one of them are domiciled. The Protocol to Article 69 of the European Patent Convention is intended to harmonise throughout Europe the law on the interpretation of the claims of European patents.
The high point of this form of pan-European injunctive relief was the Dutch Court of Appeal's decision in Chiron v Organon Teknika [1995 IER 15]. The approach being adopted by the Dutch Courts at this time was essentially as follows: they were justified in seizing jurisdiction over the pan-European infringement of a family of nationally registered European patents committed by various members of a group of Dutch and non-Dutch companies by virtue of articles 2 and 6(1) of the Brussels Convention provided that (1) there was a Dutch defendant alleged to be infringing a Dutch European patent and (2) there was some connection between the allegedly infringing acts of the non-Dutch and the Dutch defendants. The Dutch Courts were willing to seize jurisdiction in these circumstances notwithstanding the fact that, by virtue of Article 16(4), the courts of other member states had exclusive jurisdiction for proceeedings concerned with the validity of the non-Dutch European patents.
The need for a connection between the activities of the various defendants which has become known as "connexity" is related to article 22 of the Brussels Convention which provides that where proceedings are "related", any court other than the first seized court may decline jurisdiction and further that proceedings are "related" "where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconciable judgments resulting from separate proceedings". It is this last point, namely what constitutes related or connected proceedings which has divided opinion amongst both commentators and Judges.
The early views of the Dutch Courts appeared to be based on two underlying assumptions: first, that it was possible to divorce the issues of infringement and validity and second, that a finding of infringement by them on the Dutch European patent was equally applicable to the determination of the issue of infringement of the non-Dutch European patents. The basis for the first assumption was, inter alia, the fact that the Brussels Convention apparently treated separately proceedings for infringement from proceedings for validity. The basis for the second assumption was the fact that that even though the grant of a European patent in fact resulted in the registration of a bundle of national European patents the rights under each of which were, by virtue of Article 64 of the European Patent Convention, the same as those granted under a national patent, the law on the interpretation of the claims of a European patent had, by virtue of the Protocol to Article 69 of the European Patent Convention, been harmonised throughout Europe.
To the extent that the issue of cross-border injunctions were raised before the English Courts they took a rather different view to the Dutch Courts. Thus, in Coin Controls v Suzo International [1997 FSR 660], the English High Court held that the issues of infringement and validity of patent are so closely interrelated that they should be treated for jurisdictional purposes as one and the same issue and that therefore once the validity of a non-UK European patent had been put in issue in another European country, the fact that English Court was obliged to decline jurisdiction in relation to issues which were "principally" concerned with validity by virtue of Article 16(4) meant that it had to decline jurisdiction over the claim of infringement of that non-UK European patent. In effect, therefore, the English Court was not prepared to divorce the issues of infringement and validity. This reasoning was subsequently approved by the English Court of Appeal in Fort Dodge v Akzo [1998 FSR 222] on an application for an anti-suit injunction by the defendant to a patent infringement action which had been commenced against it before the Dutch Courts. In Fort Dodge, although the English Court of Appeal declined to grant the anti-suit releif being requested, it did refer several questions to the ECJ concerning the interpetation of the Brussels Convention and thereby the justification for the grant of cross-border injunctions in European patent actions. Unfortunately, this case was settled before the reference was heard and the issues therefore remain unsettled.
Since Chiron, there have been two further developments both of which have had an impact on the availability of pan-European injunctions from the Dutch Courts.
The first development was purely procedural and arose as a result of the lower Dutch Court's decision in Hoffman La Roche v Organon [12 September 1996]. In Hoffman, the lower Dutch Court questioned whether it was appropriate for a legally and technically complicated action such as a pan-European patent action to be decided by way of "kort geding" proceedings. One of the many criticisms of "kort geding" proceedings was that its prohibitively short time limits made it extremely difficult for defendants to put in place a proper defence and the nature of the proceedings themsleves therefore provided the plaintiff with a distinct procedural advantage. The consequence of this Hoffman La Roche decision, however, was the introduction by the Dutch Courts of new proceedings known as "accelerated proceedings on the merits". The purpose of introducing these new proceedings was to enable litigants to obtain a decision on the merits within a shorter time frame than ordinary proceedings but without the imposition of the much criticised short time limits which characterise "kort geding" proceedings. In fact, in a parallel development, the ECJ handed its decision on a question relating to the nature of "kort geding" proceedings referred to it from the Dutch Courts in Hermes v IHT [1998 ETMR 425]. In Hermes, the ECJ held that "kort geding" proceedings were preliminary proceedings and as such, ordinary proceedings had to be initiated in order not to jeopardise an injunction granted in the "kort geding" proceedings. The introduction of this new "accelerated proceedings on the merits" therefore effectively sidestepped the impact of the ECJ decision in Hermes as well as the lower Dutch Court's decision in Hoffman La Roche.
The second development was the impact of Dutch Court of Appeal's decisions in Expandable Grafts v Boston Scientific [23 April 1998] and then Cordis v Boston Scientific [26 November 1998] both of which effectively called into question the previously robust approach of the Dutch Courts to the interpretation of the relevant provisions of the Brussels Convention. In both Expandable Grafts and Cordis, the Dutch Court of Appeal qualified the power of the Dutch Courts to seize pan-European jurisdiction in European patent actions in two important respects: first, it held that it was not necessarily possible to divorce the issues of infringement and validity nor therefore to assume that a finding on the Dutch European patents was equally applicable to the non-Dutch European patents and accordingly, that where the validity of the non-Dutch European patents had been put in issue in proceedings in other countries, the Dutch Courts were obliged to stay the proceedings before them in respect of those non-Dutch European patents pending a determination of those foreign proceedings; second, it held that where the co-defendants were part of the same group of companies (as was nearly always the case), the Dutch Courts could only seize pan-European jurisdiction if the Dutch defendant was the so-called "spider in the web" of that group of defendant companies.
The so-called "spider in the web" approach begs the question as to what constitutes the spider - the head office of the holding company, the registered office of the holding company or some other office within the group which controls the marketing or distribution of the allegedly infringing products. This question remains to be explored in subsequent cases.
Since Expandable Grafts, however, further cases have come before the lower Dutch Courts in which pan-European jurisdiction has nevertheless been seized over a US based group of companies i.e., a group whose spider is based outside the EU. See for instance Baxter v Pharmacia & UpJohn [IER 1998 31] and Genetics Institute v Baxter [15 July 1998]. The rationale for this approach, despite the Dutch Court of Appeal's decision in Expandable Grafts, is that, if it were otherwise, then the application of the "spider in the web" approach would result in the courts of no European country being able to seize pan-European jurisdiction over such disputes.
Elsewhere in Europe, no cross-border injunctions in European patent actions have been issued (at least in contested proceedings) by the courts of any other country apart from Germany. In Germany, the position appears to be that although the German Courts are prepared in principle to grant such cross-border injunctions, the procedural hurdles that need to be overcome to obtain an interim injunction in a patent infringement action mean that in practice it is not normally going to be a realistic option for a plaintiff.
The Rise and Fall of the Torpedo
The "torpedo" is the name coined for the strategy open to a potential defendant to a cross-border injunction of commencing proceedings in a notoriously slow member state for not only a declaration of non-infringement and invalidity in respect of the European patent granted in that member state but also for declarations of non-infringement in respect of the rest of the family of European patents granted in other member states.
Although the "Torpedo" started out life (both in theory and in practice) in Italy, for various reasons mainly concerned with the procedural formalities of Italian litigation, it has flourished over the last few years in Belgium. See for instance SKB v Connaught [CITE], Sepracor v HMR [CITE] and NovoNordisk v DSM [CITE] to name but 3 pieces of litigation in which Belgium Torpedos have been launched by putative defendants.
The Torpedo is in effect proceedings for a pan-European declaration of non-infringement. The legal rationale for the Torpedo is similar to that for the cross-border injunction but with an opposite effect. By virtue of articles 21 and 22, the commencement of such proceedings in the courts of one member state (e.g., Belgium) effectively prevents the courts of any other member state (e.g., Holland) from seizing jurisdiction over proceedings concerned with the issue of infringement. If the courts of the member state in which the Torpedo is commenced are slow then it also has the effect of "freezing" the infringement issue in the litigation as a whole for a sufficiently long period of time for the defendant either to have successfully opposed the grant of the European patent before the EPO and/or to have successfully revoked some or all of the European patents before the courts of the member states in which they have been granted. The fact that the Torpedo in effect "freezes" the infringement issue in the litigation makes the strategy most advantageous in those actions where the putative defendant's non-infringement arguments are weak and therefore there is little to be lost in terms of the eventual outcome.
Ironically, therefore, at least in the arena of European patent litigation, the Brussels Convention which was designed to minimise the scope for forum shopping has had the opposite effect - over the past few years, jurisdictional pre-emption has become the name of the game and the Torpedo has become an important part of a defendant's armory.
Although the legitimacy of the Torpedo had in fact been recognised several years ago by a first instance court in Germany in SKB v Connaught, [27 February 1998], in the past few months (i.e., the second quarter of 2000), decisions have been handed down by the Belgium and French Courts which have denied the legitmacy of the Torpedo at least used purely as a pre-emptive procedural device.
In Rohm v DSM, [12 May 2000] a Belgium first instance court dismissed the cross-border element of the proceedings before it on the basis that, inter alia, to commence proceedings in a slow jurisdiction purely for the purpose of pre-empting the jurisdiction of the courts of another member state was an abuse of procedure. In Glaxo-Wellcome v Hoffman La Roche [DATE], a different Belgium first instance court came to a similar conclusion i.e., it dismissed the cross-border element of the before it but purely on the basis that the jurisdiction of the Belgium Courts had not in the circumstances been justified under articles 2 and 6(1) of the Brussels Convention. In a parallel development, it is understood that two French first instance courts have recently refused to recognise the legitmacy of an Italian Torpedo on the basis that, inter alia, it was an abuse of procedure. ([See Sala v LaFranchi [10 December 1999] and GHC v Bracco [28 April 200])
These various recent decisions suggest that the judicial tide is turning against the use of the Torpedo by putative defendants as a procedural device to pre-empt the Dutch or other European Courts from seizing pan-European jurisdiction and then granting a pan-European injunction and also thereby to gain time to challenge the validity of the patent.
From the point of putative defendants, however, the more cautious approach being now being followed by the Dutch Courts means that, in many cases, there will be less need in the future for such procedural devices as the Torpedo.
Future Developments - A European Patents Court
In the past couple of years, there have been two proposals to establish a European Patents Court which would be given pan-European jurisdiction over European patent litigation.
The first proposal emerged from the EU Commission in mid-1997. In its a Green Paper on the Community Patent and the Patent System in Europe, the Commission put forward various proposals designed to improve upon the enforcement regime for the Community Patent put in place by the Luxembourg Convention back in 1989. The main perceived shortcoming of this regime (at least from an industry viewpoint) was that the courts of member states perceived to have relatively unsophisticated legal systems would be given jurisdiction to revoke a Community Patent throughout the whole EU.
The main proposal put forward by the Commission in the Green Paper was that the European Patent Office would be given jurisdiction over post-grant revocation proceedings (in addition to their existing jurisdiction over post-grant opposition proceedings) and an appeal would lie to the European Court of First Instance. It is perhaps of interest to note that the Commission did not seek views on the establishment of a new European Patents Court as such on the basis that under the provisions of the existing EU Treaty, it is not possible for the EU to establish any new courts.
The response to the Commission's proposals from both industry and the professions was almost unanimously critical: the EPO was considered to be the wrong forum to be given pan-European jurisdiction over the validity of European or Community Patents not least because of EPO's failure to speed up post-grant opposition proceedings; the CFI had no body of experience in deciding patent infringement and validity disputes; and in any event, even with its existing wokload, considerable delays were being experienced in references made to the CFI.
After receiving the views of the various interested parties, the Commission published a Follow Up to the Green Paper in early 1999 in which it noted the almost universal disapproval of its proposal to expand the jurisdiction of the EPO to encompass post-grant revocation proceedings. The Commission did not put forward any alternative proposals in the Follow Up. It did however indicate that a draft Regulation would be published at the end of 1999.
On 5 July 2000, the Commisssion finally issued a press release regarding its proposal for a Community Patent. As regards litigation, the Commission has proposed the creation of a new centralised court within the European Court of Justice which would be given jurisdiction over the issues of the infringement and validity of the new Community Patent. Although the creation of a new Court requires an amendment to the Treaty, it is understood that the renegotitation of the Treaty leading up to the entry of the next round of new member states has presented the Commission with a timely opportunity to do so.
The second proposal has emerged from the EPO itself. As a result of an Intergovernmental Conference of the member states of the EPO held in Paris in mid-1999, three proposals were put forward as means to facilitate a uniform interpretation of the claims of European patents. One of the 3 proposals was for the establishement of a supra-national European Patents Court both of first instance and appeal. Since the date of the Conference, a working party has been receiving the views of the various interested parties. At present, it is understood that the major stumbling block appears to be political i.e., some member states are reluctant to ratify an international agreement to establish such a court if it would have a detrimental effect on the work presently being done by their own national courts or their own legal professionals. One possible way forward would for a core group of member states to move ahead and establish the Court in the hope that if it were to be successful, the remaining member states would be encouraged to join in the future. It will be interesting what impact the Commission proposals for a Community Patent and centralised Community Patents Court will have on the EPO backed initiative.
National Trade Marks
Although the provisions of the Brussels Convention apply equally to proceedings for infringement of trade marks as they do to patents and although the first reported cross-border injunction was granted by the Dutch Courts in a trade mark infringement action, pan-European injunctions have only rarely been granted in trade mark infringement actions. (See, however, Danone v Yakult [CITE] as an exception to this general rule.)
There are several reasons for this lack of pan-European activity but primarily the nature of and commercial background to trade mark infringement disputes.
Community Trade Marks
The CTM system was brought into force by an EU Regulation in 1996. The CTM system has its own enforcement regime, the law governing the jurisdiction and procedure of CTM related actions being based on a complicated interplay between the provisions of the CTM Regulation itself, the Brussels Convention and the national laws of the Member States.
Within that regime, the rules allocating both international (i.e., pan-European) jurisdiction and national (i.e., domestic) jurisdiction to the CTM Courts ("CTMCs") of the member states coupled with the overlapping jurisdiction of the CTMC and OHIM for the post-grant validity of CTMs provides considerable scope for forum shopping by prospective plaintiffs and defendants to CTM infringement actions.
Although many tens of thousands of CTMs have now been granted, there have to date been very few decided CTM infringement actions. It will obviously take many years before the detailed ground rules have been laid down by the national courts and OHIM and ultimately the ECJ.
I therefore set out below the legal framework of the CTM enforcement regime and, atthe same time, highlight some of the forum shopping challenges which will face prospective plaintiffs and defendants involved in the future in CTM litigation.
The starting point on jurisdiction for CTM infringement actions is the subject matter jurisdiction of the CTMCs, OHIM and the national courts. It is then necessary to consider the rules governing the territorial jurisdiction of the CTMCs i.e., whether a given CTMC has national (domestic) as opposed to international (pan-European) jurisdiction over a given dispute.
Subject Matter Jurisdiction
CTMCs - The CTMCs have exclusive jurisdiction for substantive relief (but not exclusive jurisdiction for preliminary relief) in relation to actions for:
- infringement of a CTM;
- damages for infringing acts carried out after publication but before grant of a CTM;
- declarations of non-infringement of a CTM to the extent that they are permitted under national law;
- threats of infringement of a CTM again to the extent that they are permitted under national law.
CTMCs also have exclusive jurisdiction in relation to counterclaims for revocation and declarations of invalidity of a CTM made in all of the above actions (apart from actions for a declaration of non-infringement in relation to which the validity of a CTM cannot be put in issue).
OHIM - OHIM has exclusive jurisdiction in relation to revocation and declarations of invalidity of a CTM except insofar as they are raised by way of a counterclaim or defence to any of the above actions.
National Courts - To the extent that (1) a CTM related action falls outside the jurisdiction of the CTMCs or OHIM, and (2) the courts of a Member state have jurisdiction to hear the action by virtue of the Brussels Convention then the action is heard by the national courts of that Member State which would otherwise have territorial and subject matter jurisdiction in relation to the same action but relating to a national trade mark.
To the extent that a CTM related action falls outside the scope of the Regulation and the Brussels Convention then the national courts of Spain (being the Member State where OHIM is located) have jurisdiction to hear the action.
Territorial Jurisdictions of CTMCs
As regards a CTM infringement action for substantive relief (but not preliminary relief), there are two distinct bases on which a CTMC can have personal jurisdiction over a defendant: the first is based broadly on the location of the defendant or the plaintiff (forum domicili) and the second is based on the location of the infringing act (forum delicti).
In relation to the first basis, the CTMC has international (i.e., pan-European) jurisdiction in relation to the acts of the defendant whereas in relation to the second, the CTMC only has national jurisdiction in relation to the acts of the defendant.
International Jurisdiction - To determine the CTMCs of which Member State have international jurisdiction (i.e., which CTMCs can grant pan-European injunctions), it is necessary to apply the following rules:
- in the first place, the CTMCs of the Member State in which the defendant is domiciled;
- in the event that the defendant is not domiciled anywhere in the EU, the CTMCs of the Member State in which the defendant has an establishment;
- in the event that the defendant is neither domiciled nor has an establishment anywhere in the EU, the CTMCs of the Member State in which the plaintiff is domiciled;
- in the event that neither the defendant nor the plaintiff is domiciled anywhere in the EU, the CTMCs of the Member State in which the plaintiff has an establishment;
- in the event that neither the defendant nor the plaintiff is domiciled anywhere in the EU neither of them has an establishment anywhere in the EU, then the CTMCs of Spain, Spain being the Member State in which OHIM has its seat.
It is important to understand that these rules are not apparantly alternatives but must be applied strictly in the order in which they cascade downwards.
Finally, a CTMC which would otherwise not have internional jurisdiction may be given such jurisdiction either by the express agreement of the parties pursuant to the application of Article 17 of the Brussels Convention (as modified so as to apply only to CTMCs) or, by implication, if the defendant enters an appearance before such a CTMC (save to contest jurisdiction) pursuant to article 18 of the Brussels Convention (again as modified so as to apply only to CTMCs).
National Jurisdiction - In addition to the CTMCs which has international jurisdiction by virtue of the application of the "domicile" rules, infringement actions may also be brought before the CTMCs of any Member States in which an actual or proposed infringement is taking place but such CTMCs only have national jurisdiction i.e., they can only grant national injunctions.
Again, a CTMC which would not otherwise have even national jurisdiction may be given such jurisdiction either by the express agreement of the parties or by implication if the defendant enters an appearance before such a CTMC (save to contest jurisdiction) pursuant to the application of Articles 17 and 18 of the Brussels Convention (as modified).
Choice of Jurisdiction
Whilst it seems from the mandatory language used in the Regulation that in many cases the CTMCs of only one Member State will have extra-territorial jurisdiction, there will in practice be circumstances where a plaintiff will have a choice of Member States whose CTMCs will have international jurisdiction. For example:
- the defendant not being domiciled in any Member State has establishments in more than one;
- neither the Defendant being domiciled nor having establishments in any Member State nor the Plaintiff being domiciled in any Member State, the Plaintiff has establishments in more than one;
- perhaps more common still, however, is that if (as is the case with the infringement of any IPR) the infringement is being conducted by several connected or unconnected persons each of whom is located in different Member States, then by virtue of Article 6(1) of the Brussels Convention (which is not rendered inapplicable to CTM infringement actions), a plaintiff may have the option of suing all of them in the courts of the Member State where only one of them is domiciled.
It will be interesting to see the extent to which the jurisdprudence which has been developed by the Dutch Courts in relation to the grant of pan-European injunctions in European patent actions discussed in section 2 above will be applied by CTMCs when confonted with the similar forum shopping issues in the context of CTM infringement actions.
Of course, if the plaintiff does not wish to litigate at all in the defendant's home Member State, it could always commence an action in a Member State where the infringing acts are taking place and having obtained a favourable decision in that jurisdiction rely on that decision, if necessary, in subsequent actions commenced elsewhere including the defendant's home Member State. The downside to this approach is of course that the relief granted in each case is national and not international. Whether this matters in practice would depend on the circumstances of the particular case.
Invalidity Counterclaims and Defences
One of the jurisdictional features of the CTM enforcement regime is that once a CTM has been granted by OHIM, OHIM retains jurisdiction over the validity of the CTM except insofar as validity is raised as an issue by a party to a CTM infringement action. In other words, the only forum in which a third party can commence an action to challenge the validity of a CTM is OHIM. A defendant to a CTM infringement action also has the right to challenge the validity of a CTM in suit by way of a defence. However, in this latter case, the only permitted ground of revocation that can be pleaded is non-use and the only permitted ground of invalidity that can be pleaded is an earlier right of the defendant itself.
It is important to understand that the unitary nature of a CTM means that even in the case of a CTM infringement action commenced before a CTMC having only national jurisdiction, a counterclaim for revocation or a declaration of invalidity can be based on matters other than those occuring in the Member State in which the CTMC is located and if successful, will result in the cancellation of the CTM across the EU.
Even though CTMCs have jurisdiction over the "validity" of a CTM (albeit as stated above only by way of a counterclaim or a defence to a CTM infringement action), they are also expressly given the power in relation to a counterclaim (but not a defence) on the application of the proprietor to stay the action and direct that the issue of "invalidity" be determined by OHIM. If a CTMC exercises this power and orders a stay of the action, it is also given the power to direct the defendant to submit an appropriate application to OHIM within a specified time limit. If the defendant fails to do so, the counterclaim is deemed to have been withdrawn. The CTMC is also expressly given the power to make orders for interim relief for the duration of the stay.
Related Actions (Lis Alibi Pendens)
Related CTM Infringement Actions - As explained above, it is conceivable that the CTMCs of more than one Member State will have international jurisdiction based on the application of the "domicile" rules. In practice, however, because of the inability of a prospective defendant to commence an action to challenge the validity of a CTM before the CTMCs and therefore take the initiative in any prospective CTM litigation, the problem of two related concurrent CTM infringement actions is unlikely to arise in practice. The possibility of an action to restrain unjustified threats would however appear to give a prospective defendant the opportunity in certain circumstances to take the initiative in CTM litigation.
It is, however, likely in practice that the CTMCs of more than one Member State will have national jurisdiction based on the fact that infringing acts are taking place in those Member States and in these circumstances, the proprietor of a CTM may decide for various reasons that it does not wish to sue the defendant in its home Member State but rather to commence infringement actions in some or all of those Member States in which the infringing acts are taking place. In the event that the validity of a CTM is raised by way of a counterclaim before more than one CTMC then the second CTMC seised must, unless there are special grounds for continuing the proceedings, either of its own motion (having heard both parties) or at the request of one of the parties (also having heard both parties), stay the proceedings before it pending the outcome of the action before the first CTMC seised.
Related CTM Infringement Action before a CTMC and Invalidity Action before OHIM - The CTM litigation system is complicated insofar as the invalidity of a CTM may be raised not only before the CTMCs of more than one Member State (by way of a counterclaim or a defence) but also raised on an application before OHIM. In the event that the invalidity of the same CTM is raised before a CTMC and OHIM, the following rules apply:
- the second jurisdiction seised (be it the CTMC or OHIM) must, unless there are special grounds for continuing the action, either of its own motion (having heard both parties) or at the request of one of the parties (also having heard both parties), stay the action before it pending the outcome of the action before the first jurisdiction seised;
- a CTMC may, however, (even though the first jurisdiction seised) nevertheless stay the action before it in favour of OHIM at the request of one of the parties (having heard both parties) and if it decides to do so, it may order interim relief for the duration of the stay.
In summary, therefore, although the jurisdictional framework of the Regulation allows the CTMCs of the Member States to decide the "validity" of a CTM as part of a CTM infringement action, the CTMCs are expressly given the power to refer the issue of "validity" to OHIM and stay the CTM infringement action in the meantime. The speed with which a final decision is rendered by OHIM coupled with the quality of that final decision will obviously be two factors which influence the exercise of that discretion by the CTMCs. The willingness of CTMCs to refer invalidity issues to OHIM may in turn become a factor which influences the plaintiff's choice of jurisdiction in the first place.
The first point to note is that Article 24 of the Brussels Convention does not apply to CTM infringement actions.
The position regarding preliminary releif (referred to in the Regulation as "provisional or protective relief") in a CTM infringement action is as follows:
- both the CTMCs and the national courts of the Member States have jurisdiction to grant preliminary relief regardless of the CTMCs of which Member State have jurisdiction for the substantive action;
- only those CTMCs which have international (extra-territorial) jurisdiction for the substantive action have international (extra-territorial) jurisdiction in respect of any preliminary relief.
The consequence of these provisions is that pan-European preliminary injunctions will only be available from the CTMCs whose jurisdiction in relation to the substantive dispute is based on the application of the ?domicile? rules (or the express or deemed agreement of the parties).
Declarations of Non-Infringement
Subject to 3 important differences discussed below, the jurisdictional law set out above relating to CTM infringement actions also applies to actions for a declaration of non-infringement of a CTM.
The first difference is that CTMCs have exclusive jurisdiction for declaratory judgment actions only insofar as they are permitted under national law. The second is that an action for a declaration of non-infringement must be brought before the CTMCs of the Member State whose personal jurisdiction over the defendant is based on the application of the "domicile" rules rather than any actual or proposed act of infringement within that Member State. The third is that invalidity cannot be raised by way of a counterclaim or defence in an action for a declaration of non-infringement.
The main consequence of these differences is that there appears to be much less scope for a prospective defendant in CTM litigation to take the initiative in the same way that has been developed in pan-European patent litigation. In other words, a prospective defendant will not be in a position to choose to launch an action in a notoriously slow jurisdiction asking for a declaration of non-infringement in relation to acts taking place outside that jurisdiction. He will be obliged to launch the action before the CTMCs in the Member State whose jurisdiction is based on the application of the "domicile" rules.
Again, subject to one important difference discussed below, the jurisdictional law set out above relating to CTM infringement actions also applies to actions in respect of threatened infringement of a CTM.
The only difference is that CTMCs have exclusive jurisdiction for threats actions only insofar as they are permitted under national law.
Thus, in the UK for example section 21 of the Trade Marks Act 1994 relating to groundless threats of infringement proceedings applies to a CTMs as well as national trade marks. Under section 21, a plaintiff is entitled to ask the court for an injunction to restrain the proprietor of a CTM from making unjustified threats to any person of proceedings for infringement of a CTM other than (1) the application of the mark to the goods or their packaging or (2) the importation of goods to which, or to the packaging of which, the mark has been applied or (3) the supply of services under the mark. Mere notification is permitted and the proprietor has a defence that the threat was justified on the ground that the mark is valid and was being infringed. From the point of view of a proprietor, however, there are strategic and procedural disadvantages to being a defendant in a threats action rather than a plaintiff in an infringement action.
In the context of CTM litigation, the possibility of commencing a threats action may provide a prospective defendant with the means to take the initiative in the litgation and thereby obtain a procedural advantage.
Unlike patents and trade marks, copyright is an unregistered IPR. In Pearce v Ove Arup [CITE] the one reported case on the application of the Brussels Convention to a cross-border copyright action, the English Court of Appeal endorsed the view previously held by many commentators that because article 16(4) of the Brussels Convention (i.e., the validity of registered rights must be determined in proceedings before the courts of the member state in which the right is granted) of the Brussels Convention was not applicable to coypright, there was scope for the courts of one member state to grant a cross-border injunction on the basis of article 2 and 6(1).
In Pearce, the plaintiff who was domiciled in the UK had created an architectural drawing in 1986. He claimed that the second defendant, a Dutch architect, had made copies of the drawings in 1986 in the UK and then subsequently copied them in Holland by designing a building in Rotterdam constructed between 1990 and 1993 by the first defendant, Ove Arup, a firm of civil engineers domiciled in the UK. The plaintiff subsequently commenced proceedings in the UK for infringement of his copyright subsisting in both the UK and Holland against the first and second defendants as well as the Dutch company of which the second defendant was a director, the third defendant, and the City of Rotterdam as the owner of the building, the fourth defendant. The second to fourth defendants all applied to strike out the claim being made against them on the grounds that (1) the infringement of English copyright was time barred (2) the English Courts had no jurisdiction to hear the claim for infringement of Dutch copyright against them and (3) the action was bound to fail on the facts. At first instance, although the claim was struck out on the basis of the first and third grounds, the English High Court held that it did have jurisdiction under articles 2 and 6(1) of the Brussels Convention to hear the claim for infringement of the Dutch copyright. The Court of Appeal upheld the first instance decision and also the reasoning of the first instance Judge regarding the interpretation and application of the articles 2, 6(1) and 16(4) of the Brussels Convention to a dispute involving an unregistered IPR such as copyright.
First published in the Global Counsel: Intellectual Property Handbook 2000.