On 5 June 2014, the European Court of Justice (the “ECJ”) ruled on a preliminary reference from the German Supreme Court regarding the interpretation to be given to the rules of international jurisdiction for Community trade mark infringements and unfair competition actions (Case C-360/12).
The questions arose in proceedings between First Note Perfumes (“FNP”), a Belgian perfume wholesaler, and Coty Germany GmbH (“Coty”), a German producer and distributor of perfumes and cosmetic products. Coty claimed that FNP had infringed its trade mark and the law on unfair comparative advertising and unfair imitation by selling perfumes in bottles similar to the bottles falling under Coty’s trade mark to a person in Belgium who resold these bottles in Germany. Both at first instance and on appeal, the German Courts held that they did not have jurisdiction to handle this case. Coty appealed to the German Supreme Court, which referred a number of questions to the ECJ on the interpretation of the rules of jurisdiction contained in Article 97(5) of the Community Trade Mark Regulation 207/2009 (“CTM Regulation”) and Article 5(3) of Regulation 44/2001 (“Brussels I Regulation”).
Article 97(5) of the CTM Regulation provides that trade mark infringement claims may be brought in the courts of the Member State in which the act of infringement was committed or threatened to be committed.
For its part, Article 5(3) of the Brussels I Regulation contains a special rule in favour of the courts of the place where the harmful event occurred (or may occur). Under Article 5(3) of the Brussels I Regulation, these local courts have jurisdiction to hear matters concerning tort, delict or quasi-delict. This rule of jurisdiction derogates from the general principle of the Brussels I Regulation which provides that the courts of the place where the defendant is domiciled have jurisdiction. Under Article 5(3) of the Brussels I Regulation the place where the harmful event occurred or may occur includes both the place of the event giving rise to the damage and the place where the damage occurred. The ECJ referred to these two locations as the ‘duality of linking factors’.
Trade mark infringement
In its judgment of 5 June 2014, the ECJ first recalled, with regard to the interpretation of the rule of jurisdiction of Article 97(5) of the CTM Regulation, that the application of Article 5(3) of the Brussels I Regulation has been explicitly excluded from CTM cases. The rule of jurisdiction of Article 97(5) of the CTM Regulation should thus be interpreted independently from the jurisdictional rules of Article 5(3) of the Brussels I Regulation. As a result, the ‘duality of linking factors’ under Article 5(2) of the Brussels I Regulation cannot automatically be applied to Article 97(5) of the CTM Regulation. According to the ECJ, it can be derived from both the wording and the purpose and context that the ‘duality of linking factors’ must not be applied to this rule and that Article 97(5) of the CTM Regulation must be applied independently from Article 5(3) of the Brussels I Regulation.
On this basis, the ECJ went on to hold that the relevant requirement under Article 97(5) of the CTM Regulation, i.e., “the Member State in which the act of infringement has been committed”, must be interpreted solely in favour of the courts of the Member State in which the defendant actually committed the unlawful act. As a result, the courts of the Member State in which the harmful effects of the infringement occurred, but where the defendant himself did not act, cannot hear the case.
Unfair competition
The ECJ recalled that notwithstanding the above exclusion of CTM cases, Article 5(3) of the Brussels I Regulation applies to questions regarding jurisdiction for actions brought under national law, such as allegations of unlawful comparative advertising and unfair imitation of a sign, even when this sign concerned is a Community trade mark. According to Article 5(3) of the Brussels I Regulation, the court of the Member State in which “the place where the harmful event occurred or may occur” must have jurisdiction to hear the case. The ECJ held that this concept includes both “the place of the event giving rise to damage” and “the place where the damage occurred or may occur”.
The ECJ continued by saying that the rule of jurisdiction of Article 5(3) of the Brussels I Regulation constitutes a derogation from the general principle that the courts of the Member State of the defendant’s domicile have jurisdiction. Article 5(3) of the Brussels I Regulation must thus be interpreted restrictively, on the basis of the existence of a close linking factor between the dispute and the court of the Member State in which the harmful event occurred. Whether such a close link exists is then determined on the basis of either the place of the event giving rise to damage or the place where the event occurred.
