SATURDAY, 15 JULY 2017
CJEU confirms lex specialis status of jurisdiction under the Design Regulation
On 13 July, the CJEU handed down its judgment in Case C-433/16 BMW AG v Acacia Srl, a reference from the Italian Court of Cassation. Our thanks go to Alex Woolgar and the learned David Stone of Allen & Overy for the following summary of the judgment.
The judgment provided, which deals with six questions on the topic of jurisdiction, is not all that surprising, but gives useful confirmation of the position nevertheless.
Acacia manufactures and sells online replica car wheels which fit Audi, BMW or Porsche cars. Acacia claims that these wheels fall within the so-called “repair clause” under Article 110(1) of the Design Regulation (No. 6/2002 of 12 December 2001). In 2013, Acacia sought in the courts of Italy a declaration of non-infringement (DNI) of certain of BMW’s registered Community designs. BMW subsequently entered an appearance in the Italian courts and filed a defence. Part of this defence disputed the Italian court’s jurisdiction to hear the DNI claim.
Readers may be familiar with the jurisdictional provisions of the Design Regulation, so to summarise briefly: the thrust of Article 79 is that the Brussels Regulation will apply unless otherwise specified in the Design Regulation. (Because of the start date of the claim, in this case it is Brussels I, Regulation (EC) No. 44/2001 of 22 December 2001, and not “Brussels Recast”, which is relevant). Article 81 gives Community design courts exclusive jurisdiction to hear (among other things) DNI actions, if such an actions are permitted under national law. (DNIs are still not available under the national laws of some Member States). Article 82 provides the jurisdictional “cascade”, which requires that a defendant domiciled in a Member State must be sued in such Member State; the cascade then moves through where the defendant has an establishment, where the claimant is domiciled, where the claimant has an establishment, and finally (if none of the preceding jurisdictional “hooks” apply), in the courts of the EUIPO’s domicile i.e. Spain. Article 82(5) makes clear that certain actions (for infringement, and a counterclaim for invalidity in response to an infringement claim) may be brought in the courts of the Member State where the infringement has been committed or threatened, but no other forms of action are listed in Article 82(5).
From the Brussels Regulation, the relevant provisions are Articles 27 (lis pendens) and 28 (related actions), which trump any other jurisdictional factors, Article 23 (which allows the parties to agree a particular court should have jurisdiction), and Article 24 (which, subject to the rule of exclusive jurisdiction, gives jurisdiction to the court where the defendant enters an appearance, except where such appearance has been entered to contest jurisdiction). In matters of tort, delict or quasi-delict, the courts of the Member State where the harmful event occurred are given non-exclusive jurisdiction pursuant to Article 5(3).
With this speedy summary in mind, we can now turn to the questions referred to the CJEU:
Unusually for references relating to Community designs, the CJEU issued its judgment without the benefit of an opinion from the Advocate General. This is perhaps a clue that the law engaged was already fairly settled. The CJEU reformulated the Italian court’s questions into four broad points, and answered them as follows:
As mentioned above, this judgment is not surprising. The CJEU was right to give little credence to Acacia’s attempts to use the Brussels Regulation as a pretext to seise the Italian court of jurisdiction, and instead to confirm the lex specialis status of the jurisdictional rules under the Design Regulation.
The Brussels Regulation rules on jurisdiction over disputes regarding tort, delict and so on are acceptable when national rights are at stake, but of course Community designs are unitary rights, with special character. The exclusive and mandatory jurisdiction given to the courts of the Member State of the defendant’s domicile, pursuant to Articles 81(b) and 82, is designed to avoid forum shopping. (This also impliedly confirms the same principle in relation to EUTMs, the other current unitary EU right – the EUTM Regulation shares a similar cascade).
The CJEU’s approach in this case can be contrasted with its flawed judgment in Case C-617/15 Hummel v Nike which, interestingly, shared the same Rapporteur. In Hummel, the CJEU attempted to apply case law applicable to the Brussels Regulation (i.e. not relevant to unitary rights) to issues of whether the Düsseldorf court had jurisdiction to grant a pan-EU injunction for EUTM infringement. This resulted in an odd (to say the least) interpretation of the term “establishment”, which gave the German court pan-EU jurisdiction on the basis of an independent German subsidiary of a corporate group based outside of the EU.
The CJEU’s judgment in Acacia does of course confirm a lacuna in the remedies available to alleged infringers. As mentioned, some Member States do not allow DNIs under national law. If the relevant Community design holder is domiciled in one such Member State, the potential infringer has no choice but to wait until it is sued (in the infringer’s own domicile, or the Member State where the infringement occurs), and then prove its innocence in an infringement action. This lacuna needs to be addressed, either by way of the upcoming amendments to the Design Regulation, or the upcoming amendments to the Enforcement Directive (No. 2004/48/EC). There was no such lacuna here, however. Acacia could have sought a DNI in BMW’s native Germany, but chose not to, presumably because Acacia was hoping to use the Italian courts to slow down progress of the overall dispute, or thought that the Italian court would be more generous in relation to the DNI sought.
A final interesting point is that this case is part of a series of three claims involving Acacia that have been referred to the CJEU. The judgments in C-435/16, also involving Porsche, and C-397/16, also involving Audi, are upcoming (for background on the latter, see our earlier blog posting here). This suggests that there is still a great deal of value in the spare parts market for parties to fight over, and perhaps explains why it has been so difficult to reach political consensus of the correct long-term legislative solution.
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