Where and when you bring your claim can make all the difference in intellectual property claims and the right move can give you an advantage from the beginning.
No-one likes to play away from home, in what may not be your native language. Further, different jurisdictions across Europe run at very different paces. When dealing with European trade marks and design rights strategy will be important.
Certainly it is the case that the EU rules have been fashioned to ensure that the potential for parallel proceedings and conflicting judgments across the EU is minimised, if not removed altogether. Generally speaking once one Court in an EU state has accepted a case, then all proceedings regarding that action must be brought in front of that Court. A litigating party ignores this at its peril. For example, recently the English Court of Appeal judges in the Samsung v Apple tablet wars, voiced their displeasure at Apple’s decision to bring infringement proceedings in Germany, despite the fact that infringement proceedings had already commenced in the English High Court.
The EU Regulations in respect of registered designs and trade marks contain specific provisions in relation to jurisdiction, which are similar in form.
The general position is:
Defendant plays at home
As is usual under EU law, if the Defendant has its domicile (broadly its registered office) in an EU state then it should be sued in that state. For instance, an English limited company should be sued in the English Courts.
Defendant plays away
If the Defendant does not have any presence in an EU state then the location and domicile of the Claimant comes into play. For example, if the Defendant is a Korean based company with no subsidiaries within the EU then a Claimant based in France could sue this Defendant in France for infringement of its Community Trade Mark.
Neither party’s in the European Union
If neither Claimant or Defendant have any presence in any EU state then any action should be brought in the Spanish Courts (where the Office for Harmonisation of the Internal Market (“OHIM”) is based), although such a situation is fairly unlikely to arise.
However, a jurisdiction can be agreed by the parties. Alternatively, if one party is served with proceedings and takes steps in those proceedings then it will be deemed to have agreed that the Court in that EU state has jurisdiction.
If you think an action has been brought in the wrong place then you should say so quickly and at the start of an action. If you don’t, you may be left regretting that you didn’t!
A third way?
Any actions brought as set out above will be pan-EU and deal with all acts of infringement committed or threatened within the EU. However, even if your Defendant is based in the EU, it is possible to bring an action in your home state or another EU state where the Defendant is not based, provided you can show that an infringement has been committed or threatened in that EU state.
In these circumstances, any action will only relate to those infringements and will not have pan-EU effect. So you can have a French Defendant that is selling infringing products across the EU, you can sue it in England. However, any English Judgment would have no effect outside of England and Wales. This could be an acceptable way forward if the sales of an infringing product are located mainly in one member state. Alternatively, even if the sales are minimal in your home state, you may be able to press the infringer for a compromise, if they are locked into proceedings outside of their home state. This does need, however, to be balanced against the potential cost of pursuing an infringer, when you know the action will not address the full, or even a substantial part of the problem. Further, even if you do get a Judgment, if the Defendant is based in a different EU state, you will still need to get that Judgment recognised and enforced. Of course, an injunction, even if limited to one EU state, may, in the right circumstances, be worth the trouble.
One way to wrong foot a party claiming infringement against you may be to file an invalidity action with OHIM.
If an application for invalidity is filed at OHIM, then other than an action for a declaration of non-infringement, no other EU Court will be able to consider the matter until OHIM has reached a decision unless “special grounds” exist. This can have a critical impact, given that OHIM is currently taking between 2-3 years to consider applications (without even factoring in appeals) and there is no procedure for expediting decisions.
If the issue of validity is already before OHIM then a national Court can stay proceedings and make protective orders. However, for example in the English Courts, even if they are prepared to grant an interim injunction pending the decision of OHIM, a Claimant is unlikely to want to give a cross undertaking in damages to cover all damages suffered by the Defendant in the intervening 2 – 10 years if it is shown that the injunction was wrongly granted.
However, while this approach can succeed in frustrating a potential claim, it does transform you from being the hunted into the hunter, with all the associated costs and obligations to push the action forward. Ultimately, as a Defendant you rarely want to be involved in litigation in the first place so may want to sit back and see what a Claimant threatening action will do rather than jumping in headfirst. But this is fact dependent and if costly litigation is almost inevitable (see Samsung v Apple) then you may want to go for it anyway.
The key point with jurisdiction is to think first, jump later. When you take steps you cannot step back. Each matter will be different and sometimes you are stuck with what you have got but sometimes there are options which can make life easier for you whilst causing difficulties for someone else.