Hummel Holding A/S v Nike, Inc: establishing an establishment

Article 125(1) of Council Regulation 2017/1001/EU (EUTMR) provides that a defendant should be sued in the member state in which it is domiciled or has an establishment. Pan EU relief is available in such circumstances (Article 126(1) EUTMR). The CJEU has provided clarification on the meaning of an “establishment” for the purposes of Article 125(1) (previously Article 97(1) of Council Regulation 207/2009).

Background

Hummel Holding (Hummel) sued Nike Inc (a US company) in Germany for trade mark infringement on the basis that Nike Deutschland GmbH (located in Frankfurt, but not a party to the proceedings) is an establishment of Nike Inc. The Nike parties argued that the German Court lacked jurisdiction over Nike Inc in the absence of clarity as to what constituted an “establishment” in the context of Article 97(1) (now Article 125(1)). The German Court referred the matter to the CJEU for a ruling.

CJEU ruling

The CJEU concluded that Article 97(1) (now Article 125(1)) “must be interpreted as meaning that a legally distinct second-tier subsidiary, with its seat in a Member State, of a parent body that has no seat in the European Union is an ‘establishment’…of that parent body if the subsidiary is a centre of operations which, in the Member State where it is located, has a certain real and stable presence from which commercial activity is pursued, and has the appearance of permanency to the outside world, such as an extension of the parent body.”

This decision increases the likelihood of pan-EU injunctions being granted against non-EU parent companies and opens the door to forum shopping for such purpose.

Nintendo Co Ltd v BigBen Interactive GmbH, BigBen Interactive SA: defendant domiciled in a different member state

In this case the CJEU provided guidance on (1) when a national court will have jurisdiction to grant pan-EU relief against a defendant domiciled in a different member state, and (2) how the concept of ‘the country in which the act of infringement was referred to’ in Article 8(2) of Regulation No. 864/2007 (Rome II) should be interpreted.

Background

BigBen Interactive SA (BB France) was selling remote controls and accessories compatible with the Wii video game console via its website directly to consumers in France as well as to its subsidiary, BigBen Interactive GmbH (BB Germany). In turn, BB Germany sold the goods via its website to consumers in Germany and Austria. Nintendo owned various Community designs for the Wii console accessories and brought infringement proceedings against both BB France and BB Germany in Germany, in which it sought, amongst other things, supplementary orders for the provision of accounting documents, financial compensation, reimbursement of legal fees, publication of judgment and the destruction and recall of infringing goods.

CJEU ruling

The German Court asked whether it had jurisdiction over BB France and the ability to grant pan-EU relief in relation to the same, including the supplementary orders sought. The CJEU confirmed that it did.

The German Court also sought guidance on how to determine where the act of infringement was committed for the purpose of establishing the law applicable to the supplementary orders sought. The CJEU concluded that the Court should conduct an overall assessment of the defendant’s conduct to determine the place where the initial act of infringement was committed or threatened.

Decision of the German Court in Parfummarken: an overall assessment

In this case the German Federal Court of Justice (BGH) conducted an overall assessment of the infringing activities of the defendant in order to determine whether it had jurisdiction over the infringement claim brought by the claimant.

Background

The defendant is a perfume distributor based in Italy which used the claimant’s trade marks on its Italian .it website (which featured a German language version) and sold goods to a company based in Germany. The claimant sued the defendant for trade mark infringement in Germany.

Decision of the BGH

The BGH, influenced by the decision of the CJEU in Nintendo, conducted an overall assessment of the defendant’s conduct and concluded that the initial infringing act ie, the placing of the offer to purchase the infringing goods on the defendant’s website, took place in Italy. Consequently the German Court lacked jurisdiction over the claim.

This decision recalls that of the English Court in AMS Neve v Heritage Audio in which it was held that where infringing goods are sold on a website, the infringing act was the step of placing the infringing sign on the website. Such action is likely to occur in the member state where the defendant is domiciled or established.

These cases confirm that where infringing goods are bought online, Article 125(5) EUTMR may not provide much of an alternative in practice to the rule in Article 125(1) EUTMR (that a defendant should be sued in the member state of its domicile/establishment). The cases also underline the importance of registering national trade marks in key jurisdictions.