Cross Border Litigation: Tech 21 UK Ltd v Logitech Europe SA

Logitech Europe SA is a Swiss company which makes a protective case for iPads called "Big Bang". This YouTube video shows how it works. Tech21 is a British company on Eel Pie Island which is not far from where I grew up which makes something very similar called an "Impact Folio". Here's their video. Spot the difference if you can.

Between Jan 2013 and Jan 2014 the two companies tried to work together to develop a range of cases to be sold by Logitech but they fell out. Shortly afterwards Logitech started to sell Big Bangs and Tech21 Impact Folios. On 10 Sept 2014 Tech21 received the following letter from Jonas Rechtsanwaltsgesellschaft mbH of Cologne in the Federal Republic of Germany:

"We are representing our client Logitech Europe S.A., Daniel Borel Innovation Center, CH-1015 Lausanne, Switzerland in matters of Intellectual Property.
We have been informed that you entered into a manufacturing and sales agreement with our client dated October 11, 2013 that covers inter alia the development, manufacturing and sale of tablet products for and to our client. You were asked to develop for manufacturing the products based on our client's designs that were presented to you by Logitech and by Design Partners, a partner company of our client. Furthermore it was agreed that our client will maintain exclusive ownership rights to the design and product intellectual property. Moreover, you have undertaken not to take our client's designs, IP and/or discussions and reproduce a Tech21 or other branded version of the product and that such rights will survive termination (see Schedule G, "IP Rights").
Therefore, our client is the exclusive owner of all IP rights including design rights that have been implemented in its protective Pad Air/ Ipad mini cases "Big Bang" which is based on the design of our client and has been put on the European market some months ago. Moreover, considering the innovative and unique design of the Big Bang products our client has become the owner of an unregistered Community Design accordingly.
Our client noticed recently that you are distributing a protective case for iPad Air/ Ipad Mini named "IMPACT FOLIO" in Germany through various Apple stores. Your products are nearly identical to the product of our client and give the same overall impression. Hence, your products are a clear infringement of our client's unregistered Community Design. Our client therefore asserts claims for injunction, rendering of accounts and damages. Moreover, you are obliged to compensate our client for any legal costs so far accrued from our services.
With its request to sign a cease and desist declaration, our client hereby gives you the opportunity to avoid a legal dispute. In the name and on behalf of our client we hereby ask you to sign the enclosed cease and desist declaration we have already prepared or sign a cease and desist declaration that covers the claims cited above. We look forward to receiving the enclosed cease and desist declaration — duly signed — at the latest until 15 September 2014.
The receipt of the signed declaration via fax by this time will be deemed in due time if the original document is then received without further notice.
If you do not comply with the before-signed claims not fully or not in due course our client will reserve its rights to take legal action against you which would cause further costs."

The letter was accompanied by a draft undertaking that had been settled by the German lawyers.

Tech21's solicitors asked the Germans for an extension of time which was granted until the 17 Sept. In the meantime the solicitors issued a claim form seeking declarations that

• Tech21 had not infringed and would not infringe any unregistered Community unregistered design owned by Logitech by making, processing, offering, putting on the market, importing, exporting or using protective iPad Air and/or iPad mini cases sold under the name "Impact Folio" within the European Community, nor any UK unregistered design right or other rights subsisting in the same designs; and 
• Logitech has made unjustifiable threats to bring proceedings for infringement of an unregistered Community design right in respect of Tech21's possessing, offering, putting on the market, and/or using such cases. 

Tech21 also claimed an injunction to restrain further such threats, dissemination of the judgment and costs.

The German lawyers responded by applying to the Düsseldorf district court  for an interim injunction to restrain further infringement of their client's designs. Tech21 lodged evidence that it had designed the Impact Folio which was accepted by the court. The presiding judge refused Logitech's application and advised that company to withdraw its claim which it did. Immediately after it discontinued the German proceedings Logitech applied to set aside Tech21's claim form and a declaration that the court had no jurisdiction to grant the relief that had Tech21 sought.

Logitech's application came on before Mr Stephen Jourdan QC sitting as a deputy judge of the High Court. At paragraph [124] of his judgment in Tech 21 UK Ltd v Logitech Europe SA [2015] WLR(D) 389, [2015] EWHC 2614 (Ch) Mr Jourdan concluded that:

"(a) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any Community unregistered design right vested in Logitech.
(b) This Court has jurisdiction to hear the claim under regulation 2 of the UK Regulations in respect of the threat made by the Letter to bring infringement proceedings in the UK courts.
(c) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any UK unregistered design right vested in Logitech."

The learned deputy judge decided that the court had no jurisdiction to hear a claim for a declaration of non-infringement because art 82 (1) of the Community design regulation (Council Regulation (EC) No 6/2002of 12 December 2001 on Community designs (OJ EC No L 3 of 5.1.2002, p. 1)) provides:

"Subject to the provisions of this Regulation and to any provisions of the Convention on Jurisdiction and Enforcement applicable by virtue of Article 79, proceedings in respect of the actions and claims referred to in Article 81 shall 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 any Member State in which he has an establishment."

Actions for declarations of non-infringement are referred to in paragraph (b) of art 81.

Reg. 2 (1) of the Community Designs Regulations 2005 provides:

"Where any person (whether entitled to or interested in a Community design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of a Community design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in paragraph (2)."

The remedies provided by paragraph (2) include declarations that the threats are unjustifiable, injunctions against the continuance of the threats and damages. Paragraph (5) provides:

"Proceedings may not be brought under this regulation in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything."

Tech 21 argued that

• Jonas's letter made a threat to sue in the UK which is a statutory tort under art under reg. 2 of the Community Design Regulations 2005; and
• art 5 (3) of the Lugano Convention entitles Tech21 to sue Logitech in "the place where the harmful event occurred or may occur";  and 
• that place was the UK as Logitech threatened to sue in the UK, the threat was received in the UK, and if the threat had been carried out, the litigation would have taken place in the UK. 

Logitech contended that:

"First, the Letter did not make a threat to sue in the UK courts. Second, in any event, the Lugano Convention does not apply at all, because it is implicitly excluded by the terms of the EC Designs Regulation. Third, even if the Lugano Convention applies, it is subject to the specific jurisdiction provisions in the EC Designs Regulation, and this claim is within article 81(b), as an action for a declaration of non-infringement of Community designs."

It also argued that it was within the exception provided by reg. 2 (5) since Tecg21 was a primary infringer.

Mr Jourdan considered and dismissed each of those contentions in turn. As to the first, he said at paragraph [81] of his judgment:

"Accordingly, in my view a reasonable reader of the Letter in Tech21's position would clearly have understood it to indicate that proceedings in the UK were likely or, at the very least, that there was a realistic possibility of UK proceedings in respect of alleged infringement of Logitech's claimed Community design right, either immediately or in the future."

As to the second, he said at paragraph [85]:

"The Lugano Convention is a treaty binding on the EU and on the UK and its jurisdiction rules will apply to proceedings relating to a Community design, save to the extent that those jurisdiction rules are inconsistent with specific provisions of the EC Designs Regulation."

 As to the argument that Tech21 was a primary infringer, Mr Jourdan relied on the Court of Appeal's decision in Cavity Trays v RMC Panel Products [1996] R.P.C. 361. Finally, the deputy judge decided that a threats action was altogether different from an application for a declaration of non-infringement and therefore fell outside the scope of art 82 (1) and art 81 (b) of the Community Design regulation.

Mr Jourdan held that he had no jurisdiction to grant a declaration of non-infringement of national unregistered design right because Logitech had never complained of infringement of such right.

Should anyone wish to discuss this case or registered design law in general he or she should call me during office hours on 020 7404 5252 or send me a message through my contact form.