Infringement of Community Design Rights
EU Member State courts held to be competent in issuing measures against co-defendants established in other EU Member States
18 July 2019
Infringements of intellectual property ("IP") rights are often committed by entities established in different European Union Member States. Faced with the prospect of enduring a "court marathon" (i.e. bringing actions in all the EU Member States where infringers are established), right holders are sometimes dissuaded from enforcing their rights.
For many years, holders of Community Design (CD) rights were further dissuaded by the absence of a common position of the courts in the EU regarding the territorial scope of judicial measures against a co-defendant established outside the forum where the court sits.
In its Nintendo Co. Ltd versus BigBen Interactive GmbH and BigBen Interactive SA decision dated 27 September 2017, the Court of Justice of the European Union (CJEU) finally fixed an approach for all the courts in the EU to follow. CD right holders are now assured of finding a court that is competent to issue measures against a co-defendant established outside the EU Member State where the court sits. The measures will have effect across the entire EU territory.
This article focuses on the CJEU ruling regarding the territorial scope of the measures issued by a court of an EU Member State against a co-defendant established in another EU Member State, when CD rights have been infringed.
1. The context: cacophony of the courts and forum shopping
When a defendant is domiciled in an EU Member State, the court which sits in this Member State has jurisdiction in respect of acts of infringement committed or threatened within the territory of any of the Member States (article 83, paragraph 1, EU Regulation n° 6/2002 on Community designs). On the contrary, when a defendant is brought before a court of a Member State where it is not domiciled, such court has jurisdiction only in respect of acts of infringement committed or threatened within the territory of the Member State in which the court is situated (article 83, paragraph 2, EU Regulation n° 6/2002).
EU Regulation n° 6/2002 does not address the situation where a defendant domiciled in Member State A and a co-defendant domiciled in a Member State B are brought before a court in Member State A on the basis of article 6, paragraph 1 of EU Regulation n° 44/2001 (today article 8, paragraph 1 of EU Regulation n° 1215/2012) . A typical example of this (frequent) situation is the following: entity X established in Member State A sells infringing goods in Member State A. However, X has been supplied by another entity Y (generally of the same group) established in Member State B, which distributes them in Member State A but also in other EU countries. In such circumstances, the claimant who brings an action in Member State A against X and Y wants to save time and money and obtain judicial measures with effect across the whole EU territory with respect to X but also Y (regardless of the fact that Y is not domiciled in Member State A).
With EU Regulation n° 6/2002 silent on this issue, national court case law has resulted in being inconsistent. For instance, French courts tended to rule that judicial measures against a co-defendant established outside France were to be limited to the French territory. Alternatively, Belgian courts tended to rule that judicial measures against a co-defendant established outside Belgium had effect in the entire EU territory.
This lack of consistency across jurisdictions led holders of CD rights facing infringers established in different EU Member States to practice forum shopping and to choose courts that were willing to issue measures with the broadest geographical scope. Such a situation was detrimental to the unity of the protection of CD rights in the EU, and called for a unifying jurisprudence from the CJEU.
2. The CJEU's ruling: a court located in a Member State is competent to issue measures with effect in the whole EU territory against a co-defendant established in another Member State.
To reach such a ruling, the CJEU reasoned in two stages, with a view to facilitate the enforcement of IP rights:
- First, it stated that two defendants, while not being domiciled in the same EU Member State, can be brought before the same court provided that the related claims are connected in such a way that they should be determined together to avoid irreconcilable judgments. This was the case here: the two defendants, established in France and Germany, made a joint effort to infringe the same IP rights (one was the parent company that manufactured and sold the infringing products, the other was the subsidiary that bought the products from the parent company to market them). The parties could thus be tried together.
- Second, the CJEU ruled that the scope of the measures issued by a German court against a co-defendant established in France extends to the entire territory of the EU. The CJEU justified its decision with the following reasons: (i) CD rights - due to their "unitary character" - are protected against infringements in the whole EU, and (ii) the court before which an infringement action is brought is competent to rule on all acts of infringement "committed or threatened" in the EU. The German court could therefore order measures sanctioning the acts of infringement committed by a co-defendant established in France, for the acts of infringement it had committed in both Germany and France.
The CJEU's reasoning is very good news for IP right holders. It concretely means that they can enforce their rights against several entities which have committed infringing acts in different EU Member States, but which are not domiciled in the same EU Member State. Right holders can bring an action before a single EU Member state's court - thus avoiding a dreaded "court marathon". This signifies another step toward the unified protection of IP rights in the EU.
Key Take-Away Points
- While it was clear that the territorial jurisdiction of an EU Member State court towards a defendant domiciled in the same Member State extended to the entire EU territory, the question of the territorial jurisdiction of such EU Member State court towards a co-defendant domiciled in another Member State was more uncertain.
- There were two possible approaches the CJEU could take: (i) rule that the court's jurisdiction to issue EU-wide measures against a defendant also extends to the co-defendant, or (ii) rule that the court's jurisdiction vis-à-vis such a co-defendant was limited to the court's national territory in application of article 83, paragraph 2 of EU Regulation n° 6/2002.
- In its Nintendo decision, the CJEU took a global approach to the issue, rather than a "mosaic approach" which would force CD right holders to approach multiple courts to enforce their rights against transnational infringers.