Transnational Aspects of Trademark Litigation on the basis of National Trademarks

• Nationality-principle of Trademark Law
• Nationality -principle of Procedural Law Nationality-principle means that a country cannot legislate outside its own territory.
• Jurisdiction and Enforcement Aspects under National and International Law The competence of national courts is given under national procedural law; international rules issuing from treaties form part of national law.

Does one have a choice whether or not to apply national trademark law or CTM law?

No, a CTM one enforces through the special Community Courts of each EU country, which have exclusive jurisdiction (art. 92 CTMR). If the CTM is identical to a national mark one can also enforce the national mark. A positive judgement means that a party cannot try the case again under CTM law (art. 105 par. 2 CTMR).

Jurisdiction Principles:

• Basic and primary rule: competent is the court of the place where the defendant is established (forum rei)
  
  
• Once there is more than one defendant, the claimant may chose: the court that is competent in respect of one of the defendants is also competent in respect of the others.
  
  This can give a court jurisdiction in respect of a defendant, established outside the national territory.
  
• Secondary rule: competent is the court of the place where the infringement took place (forum delicti)

These principles apply under national and international law. See articles 2, 5 (3) and 6 of the Brussels Convention.[Where is being referred to the Brussels Convention it implies the Lugano Convention of 1988, with which the Brussels Convention was extended to the EEA.] The fact that one can chose between these three rules opens the door for forum shopping. Forum shopping happens at the national and international level. Most EU countries did not create courts with exclusive jurisdiction in TM matters (contrary to patent matters).

Once a defendant is domiciled outside the country where the litigation takes place, international law becomes involved. If no treaty rules differently, the main principle is that the national court competent for the place of establishment of the claimant has jurisdiction. For the enforcement of the judgement we need an enforcement treaty between the country of the litigation and that of the defendants country of domicile. This main rule can be set aside by a treaty. The Brussels Convention does so for defendants domiciled within a EU country.

Be aware that this has consequences when some of the defendants are domiciled within and one or more others are domiciled outside the EU.

Can a competent national court give a judgement which has effect outside its country?

Yes, this follows from the fact that it is competent to hear the case against the foreign defendant.

But does this also mean that it can order a defendant not to infringe the TM of the claimant in another country?

That is a different matter. In most countries the courts accept that they can do so where the defendant is domiciled in their country. But more and more countries in Europe are accepting that this is also possible in respect of foreign defendants.

The first country to accept this was the Netherlands, where the Hoge Raad (the Dutch Supreme Court) rendered its Lincoln v. Interlas decision of 1989.[HR 24-11-1989 NJ 1992, 404] This was a TM case, which inspired the Dutch patent court of The Hague to develop their cross border injunction practice [The Benelux Court of Justice in its Barbie doll decision of 26-3-1993 BIE 1993, 66 held that Benelux Trademark Law allows the court to give an injunction with extraterritorial effect.].

The argument is a practical one: it is an efficient way of maintaining a right in a time of increased internationalisation of the commercial contacts. The only requirement is that the case is connected with the Dutch jurisdiction, e.g., that the goods concerned are being offered for sale in the Netherlands.

Outside the Netherlands this possibility is also accepted by the Dusseldorf court (in patent cases) [See e.g. "Cross-border Jurisdiction in Europe from a German Perspective" by Meibom & Pitz in Patent World 1998 p. 28 and from the same authors EIPR 1997 p. 469. See also von Rospatt in IIC 1998 p. 504. For France see Mousseron, Raynard and Véron in IIC 1998 p. 884] and the London court (in a copyright case) [Decision of Lloyd J. in Pearce v. Ove Arup (incl. 3 Dutch defendants).] after the abolition of the "Double Actionability" rule.

Here again, what has been accepted under national law can be restricted or set aside by a treaty. And indeed the cross border decisions are heavily influenced by the Brussels Convention and the interpretation of it by the ECJ and the national courts.

Be aware again, that these restrictions do not apply if the defendants are domiciled outside the EU.

The above mentioned possibilities for forum shopping in the EU are restricted by art. 16 (4), 19, 21, 22 and 23 of the Brussels Convention.

Art. 16 (4) provides for exclusive jurisdiction in respect of claims for the validity of (patents and) trademarks for the courts of the country where the registration of the right has been applied for, has taken place or is deemed to have taken place.

Art. 19, 21, 22 and 23 are meant to avoid contradictory decisions...The basic rule is that when more than one court is competent the first adhered court has preference over the other court(s). The second court must refer the case to the first one. Art. 22 sees to the connexity of cases.

Art. 24 broadens the competence of the national courts in that it allows them to give provisional measures even if the court of another country is competent to hear the basic case. It is this article which formed the basis for the cross border hausse in patent cases in the Netherlands where the president of the patent court of The Hague, mr. Willems, in summary proceedings ("Kort Geding") gave injunctions not to infringe the parallel patent in other EU countries thereby even provisionally considering the merits of the invalidity arguments, raised by the defendants.

So far, the ECJ has not given any decision regarding the transborder aspects of the enforcement of IP rights. Two decisions, however, are of importance.

Kalfelis v. Schroeder of 1988 [ECJ 27-9-1988 NJ 1990, 425, [1988] ECR 5565] says that the provisions of art. 6 represent an exception to the general principles of forum rei and must therefore be interpreted narrowly. The ECJ acknowledges that the principle of art. 2 means to protect the defendant. For that reason the ECJ demands a connection between the claims against the various defendants at the time that the proceedings commence.

Shevill v. Press Alliance of 1995 [ECJ 7-3-1995 Jur 1995 p. 415, [1995] ECR I-415] confirms the restrictive attitude of the ECJ and introduces in the context of art. 5 (3) the notion of the place of the headquarters from where the harmful event is directed.

It are these two decisions that caused the Court of Appeals of the Hague to restrict the until then very generous interpretation of art. 6. Until then the only obstacle was that the Dutch defendant was merely involved in order to create competence against the foreign defendants.

In its Expandable Grafts v. Boston Scientific decision of 1998 [23-4-1998 IER 1998, 30 obviously influenced by the criticism of fellow European judges. See also [1998] EIPR N-132 and Ebbink in Patentworld 1999 p. 24. Sometimes the case is being referred to as Boston v. Cordis.], the Court of Appeals cites the arguments of the ECJ in Kalfelis v. Schroeder and reads in them an instruction to interpret connection broadly so that the chance of contradictory decisions is limited. This means, e.g., that there is insufficient connexity if the claims are directed against a defendant in the Netherlands and a defendant in France with no other common element than the fact that it concerns the same European patent. There is more connexity if the defendants belong to the same concern.

But even then the Court of Appeals feels that a further restriction is necessary, i.e., that the Dutch defendant should be the "spider in the web". In addition, the Court of Appeals held that consequence of art. 19 is that also in summary proceedings the court has to refrain from an injunction in respect of a territory where an invalidity claim has been raised that is not prima facie unfounded.

Translated to a trademark case, this would mean that if the owner of a mark would adhere a Dutch court against a Dutch and a French party who both are selling the same product with the infringing mark, but who between them have no relation, the Dutch court cannot give an injunction against the French party.

But if the Dutch defendant is the spider in the web, organising the distribution of the infringing product i.a. in France through the French defendant, the Dutch court can give an injunction against the French defendant.

If in the course of these proceedings a nullity action against the French trademark would be commenced which is not prima facie unfounded, no injunction for France can be given.

Earlier in 1996 [Pres. Rotterdam Court 28-3-1996 IER 1996 p. 162 in Molnlycke v. Kimberly Clark] the president of the Rotterdam Court held that he had jurisdiction over Kimberly Clark Ltd who was co-defendant in a trademark case (FLEXIFIT) together with Kimberly Clark Benelux B.V. and he based the order to refrain from infringing the mark in the UK on art. 5 (3), because Ltd was manufacturing the product in the UK and distributing it to the Netherlands.

Soon thereafter [Pres. The Hague Court 7-11-1996 IER 1997 p. 20 in Schellens v. Velouta] the Court of the Hague in patent proceedings found that a restrictive interpretation of art. 5 (3) means that a jurisdiction based on this article should not be extended to redress harmful events in other countries.