29 October 2016

Where can you sue for trade mark infringement or passing off: AMS Neve v Heritage Audio

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AMS Neve Ltd and Others v Heritage Audio S.L. and Another [2016] EWHC 2563 (IPEC)

Mark Vallance Crabtree and Barnett Waddingham Trustees Limited are the registered proprietors of three trade marks for sound recording and processing equipment that are used by AMS Neve Ltd. in its business. Two of those are UK trade marks and the third is an EU mark. Heritage Audio SL is a Spanish company that trades in audio equipment. AMS Neve and the trade mark proprietors have brought proceedings against Heritage Audio and its sole director, Pedro Rodriguez Arribas, in the Intellectual Property Enterprise Court for trade mark infringement and passing off on the grounds that they have offered for sale and sold equipment by reference to signs confusingly similar to each of those marks in the United Kingdom and other places.

Heritage and Mr Arribas applied for an order that the English courts do not have jurisdiction to try the claim under CPR Part 11. The application came on before His Honour Judge Hacon on 27 July and 11 Oct 2016. His Honour granted the application with regard to the EU trade mark but dismissed it with regard to the rest of the claim. The reason why the application in relation to the EU trade mark was allowed but not the rest of the action is that the jurisdiction to try claims for infringement of national trade marks and passing off is determined by Regulation (EU) No. 1215/2012 of 12 December 2012 ("the Jurisdiction and Judgments Regulation") while the jurisdiction to try claims for infringement of EU trade marks is determined by Council Regulation (EC) No. 207/2009 ("the EU Trade Mark Regulation") as amended by Regulation (EU) 2015/2424.

The acts that were alleged to have infringed the trade marks were the advertisement, offer for sale and sale of goods under or by reference to signs that were said to resemble the registered marks. Those acts were also said to amount to passing off as did certain statements on Heritage's website and in social media that were said to imply a connection between Heritage and AMS. Evidencing those acts was an invoice for €1,260 plus €40 for shipping to a customer in London, emails between Mr Arribas and a distributor in London, an Engish language website listing distributors in England and phone conversations by the claimant's solicitors with one of those distributors. The defendants argued that all transactions were concluded in Spain and the website contained invitations to treat.

Applying art 7 (2) of the Jurisdiction and Judgments Regulation which provides that
"A person domiciled in a Member State may be sued in another Member State:

(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;"
the judge held that the harmful event that was alleged to have occurred would have taken place in England. He referred to Case C-523/10 Wintersteiger AG v Products 4U Sondermaschinenbau GmbH ECLI:EU:C:2012:220, [2012] EUECJ C-523/10, [2012] WLR(D) 117, EU:C:2012:220, [2013] Bus LR 150 where the Court of Justice  held:
"Article 5(3) 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 must be interpreted as meaning that an action relating to infringement of a trade mark registered in a Member State because of the use, by an advertiser, of a keyword identical to that trade mark on a search engine website operating under a country-specific top-level domain of another Member State may be brought before either the courts of the Member State in which the trade mark is registered or the courts of the Member State of the place of establishment of the advertiser."
With regard to EU trade mark infringement, Judge Hacon noted that art 97 (1) of the EU Trade Mark Regulation provides:
"Subject to the provisions of this Regulation as well as to any provisions of Regulation (EC) No 44/2001 applicable by virtue of Article 94, proceedings in respect of the actions and claims referred to in Article 96 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 which he has an establishment."
One of the exceptions to this rule was provided by art 97 (5):
"Proceedings in respect of the actions and claims referred to in Article 96, with the exception of actions for a declaration of non-infringement of a Community trade mark, may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened, or in which an act within the meaning of Article 9(3), second sentence, has been committed."
The Court of Justice had considered the predecessor to art 97 (5) in Case C-360/12 Coty Germany GmbH v First Note Perfumes NV  [2014] EUECJ C-360/12, ECLI:EU:C:2014:1318, [2014] BUS LR 1294, [2014] WLR(D) 243, EU:C:2014:1318 which concluded:
"The concept of ‘the Member State in which the act of infringement has been committed’ in Article 93 (5) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark 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, that provision 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."
This issue before the Court in Coty was whether the German courts had jurisdiction over a Belgian reseller who sold infringing goods in Belgium to a German importer. Judge Hacon discerned from the above ruling that the place where the infringement had been committed or was threatened for the purposes of art 97 (5) of the EU Trade Mark Regulation was not necessarily the same as the place where a harmful event had occurred or might occur within the meaning of art 7 (2) of the Jurisdiction and Judgments Regulation. In his view, there would have to be an infringing act as prohibited by art 9 (2) of the EU Trade Mark Regulation.

Referring to Coty His Honour stated at paragraph [67] of his judgment that the scope of art 97 (5) exception would be limited in many cases. He continued that the Court had 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."
Applying that principle to the facts of the case  before him, Judge Hacon held that the proper forum was Spain since that was the place of the defendant's domicile as well as the Member State in which the allegedly infringing acts had occurred.

Both the Jurisdiction and Judgments and EU Trade Mark Regulations will cease to apply once the negotiating period provided by art 50 (3) of the Treaty on European Union has expired. As there will be many businesses holding British and EU or other national trade marks it is to be hoped that HM Government will negotiate something like the Lugano Convention for the UK after we leave (see What Sort of IP Framework do we need after Brexit and what are we likely to get? 3 July 2016). Ironically, if we were able to negotiate something like Lugano for our country, the jurisdiction of our courts in respect of infringements of EU trade marks could in some circumstances be broader than it is at present since art 97 (5) would not apply but something like art 7 (2) of the Jurisdiction and Judgments Regulation would.

Should anyone wish to discuss this case, the Jurisdiction and Judgments Regulation or trade mark law generally (see Trade Marks FAQ he or she should call me on +44 (0)20 7404 5252 during office hours or use my message form.

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