The importance of UK national marks

An English Court has held that it did not have jurisdiction to decide a claim relating to acts ofinfringement of an European Union Trade Mark (EUTM) under Article 97(5) of the EUTM Regulation, in circumstances where the potentially infringing acts committed by the defendant (in this instance taking steps to put a sign on a website) took place in Spain where the defendant was domiciled. The court did, however, have jurisdiction under the Brussels I Regulation (Regulation (EU) No.1215/2012) in relation to infringement of various UK national marks. This decision underlines the importance to brand holders in ensuring that they hold national trade mark registrations in key European Union (EU) markets, as these national rights are more likely to confer jurisdiction on the relevant national courts over a wide range of acts that infringe trade mark rights such as advertising/offering goods for sale on websites, which are directed at consumers within that jurisdiction.

Heritage Audio SL and AMS Neve Ltd

The defendants, Heritage Audio and its sole director, were based in Spain and sold audio equipment. The claimants were UK manufacturers of audio equipment/amplifiers and owned two UK registered trade marks and an EUTM which they claimed were infringed by the offer for sale and sale by the defendants of their own audio equipment and amplifiers in the UK under a conflicting mark. The defendants applied for a declaration that the English Courts do not have jurisdiction to try the claim. The key issue in the case was whether the defendant had carried out any act in the UK which was subject to the jurisdiction of the English Court.

Analysis

HHJ Hacon held that the English Court had jurisdiction by virtue of the Brussels I Regulation in relation to the potential infringement of the UK registered trade marks as a result of the offer for sale of goods in the UK under the signs complained of.

Conversely, whilst Article 97(5) of the EUTM Regulation confers jurisdiction on national courts over infringing acts committed within that particular Member State, the judge construed ‘infringing acts’ narrowly and determined that they require active conduct by the defendant. The judge referred extensively to the decision of the Court of Justice of the European Union (CJEU) in Case C-360/12 Coty Germany GmbH v First Note Perfumes NV to support this view. In relation to the sale of infringing goods on a website, the judge considered that the infringing act is not likely to be the display of the sign on the website, but rather the step of putting the infringing sign on the website and is therefore likely to occur in the member state where the defendant is domiciled or established. As in most instances the defendant’s active conduct is likely to take place in the member state where it is domiciled, it seems that Article 97(5) does not provide much of an exception to Article 97(1) (which states that a defendant should be sued where it is domiciled).

This approach to the issue of where an infringing act takes place can be contrasted with the decision of the CJEU in Case C-98/13 Martin Blomqvist v Rolex SA . In this case it was essentially held (in the context of a customs detention) that the sale to a customer in the EU of a counterfeit watch constituted an infringing act which entitled the goods to be seized and destroyed, despite the fact that the website from which the counterfeit watch was bought operated out of China and was not offering the goods for sale to and/or advertising the goods to customers in the EU.

The importance of registering trade marks at national level

Following this decision it seems that Article 97(5) EUTM Regulation may be interpreted narrowly and may not confer jurisdiction on national courts (other than those of the state where the defendant is domiciled) to hear claims of infringing acts as often as might have once been thought, particularly in relation to the offer for sale of infringing goods via websites directed at consumers in certain Member States (which ultimately seems somewhat surprising).

This decision reinforces the importance of registering key trade marks at national level in important EU markets (over and above any EUTM registrations) to ensure the broadest possible protection for such marks. With the UK’s decision earlier this year to leave the EU, many brands owners are filing protection for new brands as both EUTMs and UK national marks – this case confirms that they are wise to do so.

Case details at a glance

Jurisdiction: United Kingdom
Decision level: Intellecual Property Enterprise Court (IPEC)
Parties: AMS Neve Ltd, Heritage Audio S.L.
Date: 11 October 2016
Full decision: http://dycip.com/2eZ4Nha