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Wednesday, 30 March 2016

CJEU on taser, ahm, tacit prorogation of jurisdiction

This judgment of 17 March 2016 concerning a referral from Romania concerns primarily civil procedural law, but since it has arisen in the context of a trade mark assignment agreement, is worth reporting here.

The facts of the case are rather simple. In 2008, Taser International concluded an agreement with the Romanian company Gate 4 which obliged Gate 4 to assign to Taser International the Taser trade marks which Gate 4 had registered, or for which it had applied for registration, in Romania. The agreement contained a clause conferring exclusive jurisdiction on a court in the United States. Gate 4 refused to fulfil its obligations and Taser International sued it before the Tribunalul Bucureşti (District Court, Bucharest). Gate 4, despite the jurisdiction clause, entered an appearance before the Romanian court without challenging its jurisdiction. The Romanian court found for Taser and ordered Gate 4 to execute the formalities necessary to transfer the trade marks.

Gate 4 appealed and lost the appeal, too. Following the Curtea de Apel Bucureşti’s (Court of Appeal, Bucharest) decision to uphold the judgment of the first instance court, Gate 4 brought an appeal before the Înalta Curte de Casație și Justiție (High Court of Cassation and Justice). Although the jurisdiction of the Romanian courts to decide this case had never been challenged by the parties, the High Court considered it necessary to refer questions to the CJEU. Namely, the High Court wondered whether Article 24 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I Regulation") applied in case where one party was domiciled in a non-EU Member State (Brussels I has been replaced by "Brussels I Regulation (Recast)" in January 2015. Article 24 of Brussels I corresponds to Article 26(1) Brussels I Regulation (Recast)). Article 24 Brussels I Regulation reads:
Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22.

The Court of Justice had no difficulties answering the question: The only exceptions to the rule that an appearance confers jurisdiction are put down in the second sentence of Article 24 Brussels I Regulation. Since the prorogation of jurisdiction by an agreement on jurisdiction for the purposes of Article 23 of Brussels I Regulation is not included amongst the exceptions, neither the general scheme nor the objectives of that regulation provide grounds for the view that the parties are prevented from submitting their dispute to a court other than that stipulated in the agreement. This reasoning applies both to agreements conferring jurisdiction on the courts of a Member State and to those in favour of the courts of a third country, since the tacit prorogation of jurisdiction by virtue of the first sentence of Article 24 of Brussels I Regulation is based on a deliberate choice made by the parties to the dispute regarding jurisdiction.

The CJEU had no need to address the second - more interesting - question of the Romanian court, namely whether a dispute over  a contractual obligation to assign trade mark registrations/applications was a "proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered", for which the courts of the Member State in which the deposit or registration has been applied for have exclusive jurisdiction (Art. 22(4) Brussels I / Art. 24(4) Brussels I (Recast)). The question was moot since the Court of Justice found that the Romanian court had jurisdiction based on the defendant's appearance. The consensus view is that obligations to transfer the ownership of a trade mark do not fall within the scope of the exclusive jurisdiction of Article 22(4) Brussels I (see also Case 288/82 - Duijnstee v Goderbauer).

I guess the frustrating thing in this case is that it took Taser International over five years to enforce the rather straightforward obligation of Gate 4. The positive aspect is that it seems, finally, to be sucessful.

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