ECJ considers jurisdiction of national courts under Regulations 40/94 and 44/2001

In Coty Germany GmbH v First Note Perfumes NV (Case C-360/12), the Court of Justice of the European Union (ECJ) has considered whether the national courts have jurisdiction over a foreign defendant in actions for infringement of a Community trademark (CTM) and for unfair competition committed together with such infringement.

Coty Germany GmbH is the proprietor of a three-dimensional CTM consisting of the shape of a perfume bottle. It markets the perfume Davidoff Cool Water Woman in such bottles. When allegedly infringing products were brought on the German market, Coty sued First Note Perfumes, a Belgian company, for infringement of its CTM and unfair competition, alleging that First Note had sold the infringing products in Belgium to a third party, which had then brought them into Germany and sold them there. Coty claimed that First Note was liable for participating in the third party’s infringing acts, and that First Note’s actions amounted to trademark infringement, unfair comparative advertising and misappropriation.

Coty’s action was dismissed at first and second instance for lack of jurisdiction over the foreign defendant, First Note. On appeal to the German Supreme Court, the following questions were referred to the ECJ:

“1. Is Article 93(5) of [Regulation 40/94] to be interpreted as meaning that an act of infringement is committed in one member state (member state A), within the meaning of [that provision], in the case where, as a result of an act in another member state (member state B), there is participation in the infringement in the first-named member state (member state A)?    

2. Is Article 5(3) of [Regulation 44/2001] to be interpreted as meaning that the harmful event occurred in one member state (member state A) if the tortious act which is the subject of the action or from which claims are derived was committed in another member state (member state B) and consists in participation in the tortious act (principal act) which took place in the first-named member state (member state A)?”

Article 93(5) of Regulation 40/94 provides for jurisdiction over a defendant in CTM infringement proceedings in the member state where “the act of infringement has been committed or threatened”, with jurisdiction limited to acts committed in that member state. Article 5(3) of Regulation 44/2001 provides that:

“a person domiciled in a member state may, in another member state, be sued… in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may ­occur.”

The ECJ gave the following answers:

“1. The concept of ‘the member state in which the act of infringement has been committed’ in Article 93(5) of [Regulation 40/94] 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.   

2. Article 5(3) of [Regulation 44/2001] must be interpreted as meaning that, in the event of an allegation of unlawful comparative advertising or unfair imitation of a sign protected by a Community trademark, prohibited by the law against unfair competition… of the member state in which the court seised is situated, that provision does not allow jurisdiction to be established, on the basis of the place where the event giving rise to the damage resulting from the infringement of that law occurred, for a court in that member state where the presumed perpetrator who is sued there did not himself act there. By contrast, in such a case, that provision does allow jurisdiction to be established, on the basis of the place of occurrence of damage, to hear an action for damages based on that national law brought against a person established in another member state and who is alleged to have committed, in that state, an act which caused or may cause damage within the jurisdiction of that court.”

The Coty judgment is unfortunate as regards the infringement of CTMs, and confirms the ECJ’s case law concerning Article 5(3) of Regulation 44/2001.

With regard to Article 5(3) of Regulation 44/2001, the ECJ, since the leading case of Bier (Case C-21/76), has consistently held that an action seeking redress for unlawful acts may be brought both in the member state where the infringement occurred, and in the member state where the damage occurred. This rule also applies to multi-state infringements of IP rights.

The first question, regarding Article 93(5) of Regulation 40/94, sought clarification as to whether the same principle should apply in CTM infringement cases, as the wording of the provision differs somewhat from the wording of Article 5(3) of Regulation 44/2001. The answer of the ECJ - which followed the opinion of Advocate General Jääskinen - is clear: jurisdiction is available only before the courts of the member state where the defendant committed the infringement, not where the damage actually occurred. Thus, the Belgian defendant cannot be sued in Germany for infringement of Coty’s trademark rights, even if the Belgian defendant participated in the infringement committed by the German party.

This outcome is unfortunate because it makes the prosecution of CTM infringements more difficult by limiting the fora in which a case based on Article 93(5) may be brought. Paradoxically, the decision renders the enforcement of CTMs more difficult than that of national trademarks: the ECJ has previously ruled, applying Article 5(3) of Regulation 44/2001, that the infringement of national trademarks may be pursued both in the member state where the mark is protected and in the member state where the infringer acted (see Wintersteiger (Case C-523/10)).

The only argument in the judgment in favour of the restrictive interpretation can be found at paragraph 35 and relates to the scope of jurisdiction:

“It should also be noted that the existence of jurisdiction under Article 93(5) [of Regulation 40/94] based on the place where the alleged infringement produces its effects would conflict with the wording of Article 94(2), which limits the jurisdiction of Community trademark courts under Article 93(5) to acts committed or threatened in the member state where the court seised is situated.”

That argument can, of course, also be made in favour of the opposite interpretation - namely that, where jurisdiction would be based on the effect rather than the action, the scope of jurisdiction would be similarly limited to the country where the damage occurred, rather than where the defendant acted.

Another consequence of the Coty judgment is that, in many cases, the member state where the defendant acted will be the member state where the defendant is domiciled, and thus the bases of jurisdiction would in fact no longer be distinct. Finally, the ECJ disregarded the situation of third-country defendants which are not subject to jurisdiction in the third country where they acted, and apparently also not in the member state where the damage occurred. This means that, de facto, third-country defendants must always be sued in a CTM court with EU-wide jurisdiction.

This situation can be corrected only through the enactment of new legislation, as it seems unlikely that the ECJ will reverse its own case law in the near future.

As regards the second question, the answer was in line with the ECJ’s previous case law. In the future, German cases may increasingly be based on unfair competition claims rather than trademark infringement claims, so as to avoid a dismissal of the action for lack of jurisdiction. This is not exactly what the legislator had in mind when creating EU-wide IP rights.

Alexander von Mühlendahl, Bardehle Pagenberg, Munich