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Friday, 6 June 2014

International jurisdiction for CTM infringement and unfair competition -- the CJEU speaks

Following the Advocate General’s opinion [on which see Jeremy’s post here], yesterday the Court of Justice of the European Union (CJEU) rendered its decision in Case C-360/12 Coty Germany GmbH v First Note Perfumes NV. It is about a reference from Germany's Bundesgerichtshof concerning international jurisdiction for Community trade mark infringement and unfair competition actions, respectively under [now] Article 96(5) of the Community Trade Mark Regulation 207/2009 (CTMR) and Article 5(3) of the Regulation 44/2001 (Brussels 1).

The defendant of the main proceedings was the Belgium company First Note Perfumes NV (FNP). In 2007, it sold bottles of perfumes infringing Coty Germany GmbH (Coty)’s 3-D trade marks in Belgium to a guy that later resold such products in Germany. A few months later, Coty commenced proceedings in Germany against FNP alone, claiming trade mark infringement and unfair competition. In Coty’s view, FNP would have been liable for the distribution of the infringing products in Germany because the initial sale in Belgium would have amounted to a material participation to the original purchaser’s infringement. As to unfair competition, Coty alleged that Germany was the place where the damage derived from FNP’s conducts occurred under Article 5(3) of the Reg. 44/2001.

Both the German District Court and the Court of Appeal dismissed Coty’s actions, declaring their lack of jurisdiction. Coty appealed to the German Supreme Court, which decided to stay proceedings and to refer to the CJEU the following questions:

- Whether the concept of “the Member State in which the act of infringement has been committed” in Article 93(5) of Regulation No 40/94 [now Article 96(5) of the Community Trade Mark Regulation 207/2009] must be interpreted as meaning that, in the event of a sale and delivery of a counterfeit product in one Member State, followed by a resale by the purchaser in another Member State, the courts of the latter State have jurisdiction to hear an infringement action against the original seller which did not itself act in the Member State where the court seised is situated;

- Whether, in the event of unfair advertising or imitation of a Community trade mark prohibited by unfair competition law of the Member State in which the seised court is situated, Article 5(3) of Reg- 44/2001 attributes jurisdiction to hear an action for damages based on that national law against one of the presumed perpetrators who is established in another Member State and is alleged to have committed the infringement in its State of domicile.

As to the first question, the Court observed that jurisdiction for Community trade mark infringement and non infringement actions shall be established on the sole basis of the CTMR provisions.

Indeed, the CJEU pointed out that the EU legislator consciously considered Article 5(3) Reg. 44/2011 unfit to respond to problems that Community trade mark proceedings may pose. Consequently, [now] Articles 94(2) and 96 CTMR exclude Article 5(3) application for CTM cases, and Article 96(5) CTMR makes specific reference to the place where the alleged infringement occurred or may occur, not the Member State where that infringement produces its harmful effects.

Consequently, the Court concluded, jurisdiction under Article 96(5) CTMR “may be established solely in favour of Community trade mark courts in the Member State in which the defendant committed the alleged unlawful act”. Applying such principle to the case at issue, the CJEU concluded that “where a sale and delivery of a counterfeit product in one Member State, followed by a resale by the purchaser in another Member State, Article 96(5) CTMR does not allow jurisdiction to be established to hear an infringement action against the original seller who did not himself act in the Member State where the court seised is situated”.

As to the second question, the CJEU acknowledged that jurisdiction for actions brought under national law must be determined on the basis of provisions of Reg. 44/2001 even when they concern protection of signs registered as Community trade mark [via, eg, unfair competition or other tort claims]. In such cases, Article 5(3) Reg. 44/01 may apply. 

In this regard, the CJEU noted that the expression “place where the harmful event occurred or may occur” that Article 5(3) provides covers both

(i)            The place of the event giving rise to damage; and

(ii)          The place where the damage occurred or may occur.

Consequently, the plaintiff is allowed to sue the defendant in the courts for either of those places.

However, the Court continued, Article 5(3) constitutes exception to the general rule according to which a plaintiff shall sue a defendant in the place where the latter is domiciled. Accordingly, it must be interpreted restrictively, and its application should be allowed only when a close linking factor between the dispute and the courts of the place where the harmful event occurred or may occur exists.

As to “the place of the event giving rise to damage”, such close link does not subsist where the alleged perpetrator is sued before a court within whose jurisdiction he has not acted.
Damage occurred.

Nonetheless, such link could exist with reference to the “place where the damage occurred or may occur”. In this respect, the Court recalled that such expression is to be intended as “the place where the event which may give rise to liability … resulted in damage”, and that the principle according to which “the occurrence of damage in a particular Member State is subject to the protection, in that State, of the right in respect of which infringement is alleged” [established with reference to Intellectual Property rights in Case C-523/10 Wintersteiger and C-170/12 Pinckney] shall apply to any case “in which the protection of such a right by means of a national law against unfair competition is at issue”.

Accordingly, the Court concluded that Article 5(3) of Reg. 44/2001 could allow the plaintiff to establish jurisdiction in a Member State where the alleged unlawful act did not take place, provided that:

(a) The unlawful act, although committed in another Member State, infringes national law of the State of the Court seised;

(b) The unlawful act committed in another Member State caused or may cause damage within the jurisdiction of the court seised.

Thus, the CJEU concluded that:

“Article 5(3) of Council Regulation (EC) No 44/2001 … must be interpreted as meaning that, in the event of an allegation of unlawful comparative advertising or unfair imitation of a sign protected by a Community trade mark, prohibited by the law against unfair competition … of the Member State in which the court seised is situated, that provision does not allow jurisdiction to be established, on the basis of the place where the event giving rise to the damage resulting from the infringement of that law occurred, for a court in that Member State where the presumed perpetrator who is sued there did not himself act there. By contrast, in such a case, that provision does allow jurisdiction to be established, on the basis of the place of occurrence of damage, to hear an action for damages based on that national law brought against a person established in another Member State and who is alleged to have committed, in that State, an act which caused or may cause damage within the jurisdiction of that court”.





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