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EU’ve No Right To Be Heard – UK Trade Marks Held To Trump EU Trade Marks Pre-Brexit

03 Nov 2016

A recent decision by His Honour Judge Hacon in the Intellectual Property Enterprise Court has brought to the fore a stark distinction in the enforceability in the United Kingdom of intellectual property rights holder’s trade mark portfolios between their UK registered trade marks and their EU registered trade marks.

In the case of AMS Neve Limited & Others v Heritage Audio S.L. & Others the Defendants who were based in Madrid and traded in audio equipment issued an application that the English Courts did not have jurisdiction to try a claim for infringement of UK and EU trade marks and for passing off brought by the Claimants who were UK based manufacturers of audio equipment.

 

The Issues In The Case

AMS Neve alleged that Heritage Audio offered for sale and sold via a website audio equipment by reference to signs confusingly similar to three trade marks. One was an EU registered trade mark which takes the form of the digits '1073'. The other two were UK registered trade marks for logos incorporating a stylised sine wave. All three trade marks were registered for goods in Class 9, being goods associated with sound recording and processing. AMS Neve asserted that such offers and sales occurred, among other places, in the United Kingdom. They argued that such acts constituted infringement of the three trade marks and also passing off.

Use of the signs in question was not in dispute. The primary point at issue in the application was whether Heritage Audio carried out any act in the UK which is subject to the jurisdiction of the English courts.

 

The Law on Jurisdiction

The jurisdiction of the court with regard to both the UK trade marks and passing off is governed by Regulation (EU) No. 1215/2012 of 12 December 2012, referred to in the Civil Procedure Rules as (“the Judgments Regulation”) and sometimes called 'the Re-cast Brussels I Regulation'.

Article 4(1) of the Judgments Regulation states that “persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”, however, Article 7(2) goes on to state that “a person domiciled in a Member State may be sued in another Member State in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”

The jurisdiction to hear claims in relation to EU Trade Marks is governed not by the Judgments Regulation, but by Council Regulation (EC) No. 207/2009 (“the Trade Mark Regulation”), as amended by Regulation (EU) 2015/2424.

Article 97(1) of the Trade Mark Regulation provides that proceedings should “be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.” Article 97(5) goes on to state that proceedings “may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened”.

 

UK Trade Marks & Passing Off

Under the Judgments Regulation proceedings may be brought in the courts for the place where the harmful event occurred or may occur and this has been held to cover both (a) the place where the damage occurred and (b) the place of the event giving rise to the damage. The Defendant may therefore be sued, at the option of the Claimant, in the courts of either of those places.

Interpreting the relevant case law of the Court of Justice of the European Union (“CJEU”) the judge held that, in the context of an alleged infringement of an IP right, the place where the damage occurred will always be the Member State (or the part of a Member State) in which the IP right subsists.  Therefore the courts of that Member State will always have jurisdiction over the claim. The court seized must assess whether there has been damage within its jurisdiction. This could generally only arise from an act committed within the jurisdiction but it is possible for an act done outside the jurisdiction to give rise to damage within it.

In light of this the Judge held that the English courts had jurisdiction to consider the claims for infringement of the UK registered trade marks and passing off.

 

EU Trade Marks

While the judgment does not address the merits of the substantive case, the judge held that the Claimants had a good arguable case for the proposition that the Defendants advertised and offered for sale in the UK its goods under the signs complained of.

The Claimants argued that that jurisdiction conferred under Article 97(5) of the Trade Marks Regulation is one of the two places to which jurisdiction is allotted under Article 7(2) of the Judgments Regulation.  They argued that there could be more than one event giving rise to the damage.  One of them was the act of setting up or alternatively the decision to set up the website in Spain. The other event was the appearance of the offending signs on Heritage Audio's website and that happened in England. The Claimants argued that this second event was sufficient to confer jurisdiction on the English courts.

The Judge noted that the allocation of jurisdiction under the Trade Mark Regulation is similar to that of the Judgments Regulation, however, in considering the relevant EU case law he held that, the concept of “the Member State in which the act of infringement has been committed or threatened” under Article 97(5) of the Trade Mark Regulation is to be interpreted independently of the notion of “the place where the harmful event occurred or may occur” under Article 7(2) of the Judgments Regulation.

In the Judge’s view, and relying upon the CJEU’s decision in the German case Case C-360/12 Coty Germany GmbH v First Note Perfumes NV, the CJEU has drawn a conscious distinction between, on the one hand, the event of taking steps to put a sign on a website or alternatively the event of taking a decision to that effect and, on the other hand, the event of the display of the sign on the website.  Only the courts of the place where the former event(s) take place have jurisdiction, in particular where locating the action in that place is most likely to facilitate the taking of evidence and the conduct of the proceedings for infringement of the EU Trade Mark.

 

Implications

Intellectual Property Rights owners in the UK should already be considering their portfolios in light of the uncertainty as to how EU Trade Marks will be treated in the UK after Brexit eventually comes into effect.  In the meantime, however, this judgment has crystalized the fact that there is a difference in the nature of the protection afforded in the UK to the holders of UK and EU trade marks.

On the positive side, EU trade marks provide their proprietors with the benefit of protection in all 28 current EU Member States and, in certain circumstances, EU wide injunctive relief may be sought and obtained should they be infringed.  However, it is now clear that the UK courts will not entertain proceedings for infringement of EU trade marks through the sale of goods over the Internet by a potential Defendant domiciled in another EU Member State where the putting of the allegedly infringing sign on a website or alternatively the event of taking a decision to that effect takes place in the other Member State notwithstanding there being an arguable case that the potential Defendants are advertising and offering for sale goods under the signs complained of in the UK.

If Intellectual Property Rights owners currently hold only EU trade marks for some or all of their portfolio of marks and they wish to ensure that they have the ability to bring infringement proceedings in the UK in respect of online infringements over the Internet into the UK from other EU Member States, they should therefore consider obtaining separate UK trade mark registrations for their key marks in addition to the EU trade marks they already hold.

 

DMH Stallard have a dedicated team of intellectual property specialists who can advise on this and other IP related matters. For more information contact:

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