Trade marks: jurisdiction over infringement by non-EU defendant

By Audrey Horton

03-2020

The High Court has refused permission to serve outside the jurisdiction a claim for trade mark infringement, passing off and unlawful means conspiracy.

Background

Jurisdiction over defendants domiciled outside the EU is governed by the common law, in particular Civil Procedure Rules (CPR) 6.36 and 6.37, and Practice Direction (PD) 6B. Permission is required to serve English proceedings on a non-EU defendant outside the jurisdiction and will only be granted if:

• There is a good arguable case that the claim is covered by one of the gateways in paragraph 3.1 of PD 6B. This means that one side has a much better argument on the material available.

• There is a serious issue to be tried on the merits of the claim.

• England and Wales is clearly the appropriate forum for the trial of the dispute, and in all the circumstances the court should exercise its discretion to permit service of the proceedings out of the jurisdiction.

In Pammer v Reederei Karl Schluter GmbH & Co KG, the European Court of Justice set out a number of non-exhaustive criteria to determine whether a business's activity is directed towards a particular EU member state (C-585/08).

Facts

E was an English company that owned UK and EU trade marks.

E issued proceedings against a Colombian company, F, which provided domestic flights in Colombia and F's president, A. E alleged that F had adopted its name in order to take advantage of E's brand. 

E applied to serve F and A outside the jurisdiction, in Columbia, arguing that:

• F's website was available in the UK and EU.

• F sent direct marketing and electronic tickets to UK and EU consumers.

• F-branded aircraft had been made by a French aircraft manufacturer, G, and publicly flown in France and Spain before delivery.

• A press release had been made available at a UK air show by G announcing its agreement to supply aircraft to F.

E obtained permission to serve F and A outside the jurisdiction.

F applied for the order granting permission to serve the proceedings outside the jurisdiction to be struck out.

E applied for retrospective validation of its original service of the proceedings in the event that the court found that service was defective, and to join G as a third defendant.

Decision

The court granted F's application to set aside the order for permission to serve the proceedings outside the jurisdiction. It dismissed E's applications to retrospectively validate service and to join G.

The most relevant issue as to jurisdiction under CPR 6.36 was whether there was a serious issue to be tried. Trade mark rights were territorial. The court had to consider whether the website was targeted at the UK or EU. There was a serious issue in that respect. Although many of the features listed in Pammer as evidence that activity was directed towards a particular state were missing, that list was non-exhaustive, and the activity was likely to be of interest to visitors to Colombia. The fact that F's services were supplied in Colombia did not negate this.

Similarly, there was a serious issue to be tried regarding infringement through electronic tickets and direct marketing. The use of F's company name in G's press release was a relevant trade mark use. While not all references to a company name were trade mark use, the critical question was whether a party used a sign in such a way that a link was established between the name of the party and the services it provided. It was seriously arguable that F's use in the press release of the sign established a link, although it might be de minimis.

There was a serious issue regarding branding the aircraft. Flying a plane in France and Spain branded with F's logo in public view arguably infringed the EU marks.

Regarding passing off, there were triable issues as to misrepresentation of association with E, and whether that diluted the brand. Regarding conspiracy, there was a sufficient basis to infer that A had personally ordered the acts complained of.

E had failed to give full and frank disclosure when applying for permission to serve out. It had not explained that its claim in England was against a Colombian airline only offering internal flights in Colombia. Instead, E had presented the case as a Colombian airline offering services in the UK and EU, without clearly stating that F's services were actually provided in Colombia. No detail had been provided as to the specific acts relied on to show that F was offering services in the EU and UK.

The court had discretion either to set aside the order for service or treat the claim form as valid. F would be better off if E were required to begin proceedings again, in that E could only claim damages from six years before the start of the new claim; F would escape liability for two years' damages. The causes of action and facts E now relied on were different from those pleaded. E would be required to start again.
As the order against F and A was to be set aside, there were no proceedings to which to join G as a third defendant.

Comment

The decision is interesting when considering jurisdictional requirements, including in particular what amounts to targeting of UK consumers by websites operated by non-EU defendants, bearing in mind that in the future following Brexit these considerations will also apply in respect of EU, as well as non-EU, defendants.

Case: Easygroup Ltd v Empresa Aerea De Servicios Y Facilitation Logistica Integral SA (Easyfly SA) and another [2020] EWHC 40 (Ch).