New IP courts may help to reduce forum shopping
In Croci Trading Srl v Ferplast SpA (Case 43061/04, July 15 2004), the Tribunal of Milan, Specialist Intellectual Property Division has ruled that it did not have jurisdiction to hear a dispute filed against an alleged trademark infringer based in Venice. The decision highlights that the creation of Specialist Intellectual Property Divisions (SIPDs) within the Italian courts may be helping to curb the practice known as 'forum shopping'.
Under Italian law, a claimant is entitled to bring proceedings against a defendant before a court where the defendant is domiciled or where the act in question has occurred (for example, the place where an infringing product has been sold). This is often a tactical decision by the claimant designed to divert the defendant from its local court.
An overhaul of the Italian judicial system has reduced the opportunity for such forum shopping in relation to IP matters. The changes led to the creation of SIPDs - there are SIPDs in 12 Italian courts. They deal with matters relating to national and community trademarks, patents, design and copyright as well as any competition matters connected with the protection of IP rights.
The decision of the Tribunal of Milan, SIPD in Croci Trading is an example of the courts' current approach to the practice of forum shopping.
Croci Trading Srl, a manufacturer of goods for domestic pets, filed a preliminary injunction petition in the court of Milan against Ferplast SA, a producer of similar products domiciled and carrying out its business within the district of Venice (where a SIPD has been established), on the grounds of trademark infringement and unfair competition. Croci Trading claimed that the court of Milan had jurisdiction over the injunction on account of a single purchase of an alleged infringing product in Milan by Croci Trading. The purchase was made deliberately with a view to bringing proceedings before the Milanese court.
Ferplast challenged the jurisdiction of the Milan SIPD relying on case law that establishes that a producer may only be sued in the jurisdiction where the infringing products have been sold or marketed by a retailer if one of the following conditions has been met:
- the retailer is a party to the proceedings;
- the producer has cooperated in the sale or marketing of the infringing product in that jurisdiction; or
- the producer has itself carried out an infringement within that jurisdiction.
In this case, Ferplast had not itself been involved in the infringing acts that had taken place in Milan, which eliminated grounds two and three. Furthermore Croci Trading did not bring proceedings against the retailer, which eliminated the first condition. As a result, the judge decided that the court of Milan was not competent to hear the dispute. Accordingly, Croci Trading was not able to pursue the producer in the court of Milan.
The introduction of SIPDs means that a claimant has less choice as to forum in IP matters. In addition, the designation of skilled judges to the SIPDs with specialist experience in IP matters is likely to result in more decisions of this type with the procedural rules being applied strictly. In turn, we may see a decline in forum shopping in the field of intellectual property.
For background information on the creation of SIPDs, see Specialized court divisions to take charge of IP disputes, Italy sets up specialized IP courts and Magistrates' committee finds fault with new IP court system.
Elisabetta Fusar Poli and Rahul Kakkar, Bird & Bird, Milan
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