One-minute read
Trademark owners in Europe whose rights have been infringed in two or more of the EU’s 27 member states have plenty of choice when it comes to deciding where to enforce their rights. Although the Community trade mark (CTM) gives trademark owners one EU-wide IP right, that right is enforced by individual member states—and each has its own rules and practices on issues such as costs, timing, procedure and remedies. IP owners need to weigh the legal and commercial pros and cons of litigating in some of the EU’s key jurisdictions. Today’s workshop WT50 will look at strategies to consider when enforcing trademark rights in the EU.
For many IP practitioners, forum shopping is a term associated with patents. In the US, plaintiffs often choose to have their patent disputes heard by the decidedly property owner-friendly juries of the Eastern District of Texas, while in Europe litigants frequently consider asking the UK’s notoriously sceptical patent judges to declare their rivals’ IP rights invalid.
But trademark owners in Europe are increasingly aware of the advantages of doing some forum shopping of their own. The EU—with its single economic market on the one hand, and its system of national enforcement of Europe-wide Community trade marks (CTMs) on the other—makes an ideal supermarket for IP litigants looking for a bargain when it comes to protecting their rights in court.
But that means that IP owners who believe that their CTM has been infringed in more than one EU member state have to spend time weighing the pros and cons of litigating in one country over another. To do so, they need to take into account a range of legal—and commercial—factors when deciding where to file their lawsuit.
Rules on venue
The rules that govern the CTM set out a cascading list of venues where plaintiffs should bring their disputes (see box). Put simply, these rules say that proceedings should be brought in the member state in which the defendant is domiciled; if not, in the member state in which he has an establishment; if not, in the member state in which the plaintiff is domiciled; if not, in which he has an establishment; or, if not, in Spain, where OHIM in based.
Although the Regulation also allows litigants to reserve their right to bring an action in any member state where the infringement has taken place, plaintiffs will only be able to benefit from relief that covers the whole of the EU, rather than just the member state in which they brought the case, if they follow the Regulation’s strict rules on cascading jurisdiction.
That can be an important consideration, says Morag Macdonald, a partner with Bird & Bird in London: “If you follow the rules, you can get relief for the whole of the EU. I think that there are many people who don’t appreciate just how powerful that is. Say that you are launching a new product and you discover a lookalike version, you can get an injunction and damages to cover all of the markets in the EU where you do business. You can stop your rival in every EU country at one stroke, and you can get damages on all of the products that they have already sold across the whole of the EU.”
Although following the cascading rules on venue may appear to limit trademark owners’ litigation options, in practice many plaintiffs will be able to exploit flexibilities in the system by choosing carefully who they sue. For example, if the manufacturer of the allegedly infringing product is based in one member state and the distributor is in another, then the plaintiff can choose to sue either the manufacturer or the distributor in their home jurisdiction and bring in the other party as an additional defendant in the case.
Commercial concerns
When deciding where to litigate, rights owners have to weigh whether the procedural rules and remedies available in each jurisdiction meet their commercial needs. As outlined above, trademark owners who want an EU-wide remedy may be best advised to follow the jurisdictional rules set out in the CTM Regulation. Other plaintiffs have the option of suing in any one of the EU’s 27 member states—as long as trademark infringement has been committed or threatened there.
The factors they need to take into account include the options that are available to them in summary proceedings, whether they can ask the court to issue an order allowing them to carry out further investigations, timing, differences in substantive trademark law and remedies on the merits as well as costs.
These are some of the issues that trademark lawyers will discuss during session WT50—Forum Shopping in the EU today. Karina Dimidjian-Lecomte, a partner with Casalonga in Paris who is chairing the session, says that it will take the form of a corporate strategy meeting, in which the CEO of a large company (played by Dimidjian-Lecomte herself) is meeting her in-house counsel in Germany, the UK, Italy and Austria to discuss the relative merits of taking legal action against a suspected counterfeiter in each of their respective jurisdictions. “Then we plan on asking the audience to take on the roles of in-house counsel elsewhere to explain the rules in their own countries,” she says.
The hypothetical scenario involves the company discovering direct copies of its own products. It has been kept deliberately simple—no discussions about whether two trademarks are confusingly similar will take place during in this session—to highlight the issues that the CEO needs to take into account when deciding where to sue. Is it more important for the company to win large damages than to get a speedy decision, for example? Or would a quick decision in one jurisdiction better enable the company to force the infringer to negotiate an EU-wide settlement? Says Dimidjian-Lecomte: “Even though national courts in Europe are not bound by decisions in other countries’ courts, [a victory in one] may be an influencing factor, especially if the facts are the same.”
Weighing the pros and cons
Some jurisdictions offer speedy decisions—at a price. Others have specialist IP courts whose judges are able to provide full, well-reasoned decisions that can have persuasive influence on counterparts in other countries. Here is a brief guide to the advantages and disadvantages of bringing trademark litigation in some of Europe’s key markets:
France
“France’s real advantage is that cases relating to infringement of CTMs are heard by the third chamber of the Paris Court of First Instance,” says Dimidjian-Lecomte. “It has specialized judges who usually issue very coherent decisions, and that can be very useful.”
Another potential advantage of using the French system is that plaintiffs can apply to the court for an order allowing them to enter the defendant’s premises with a bailiff to seize invoices, accounting documents and material from computers. “The French courts have had this procedure for a long time, so they have lots of experience and there is plenty of case law explaining the boundaries,” says Dimidjian-Lecomte.
Court proceedings can also be relatively quick. In clear-cut cases of infringement, plaintiffs can request a decision on the merits in less than three months.
Germany
The relatively low cost of litigation combined with the speed of proceedings are key factors that make Germany attractive to litigants, says Simone Schäfer of Vossius & Partner, one of the panelists in today’s session. “Litigants can get a preliminary injunction in less than seven days—or even in a few hours in the case of a trade fair,” she adds. “In clear-cut cases of infringement the court will hold an ex parte hearing, which speeds the matter up.” The main proceedings generally take less than 12 months.
When it comes to assessing costs, the German courts use a sliding schedule for calculating court fees and attorney fees. In a case worth up to e250,000, the total cost risk for the plaintiff is around e17,500. If the case is worth e50,000, then the costs are likely to be less than e8,000. The losing party is liable for costs. If the plaintiff hires an attorney on an hourly rate, and his or her bill exceeds the amount set out in the court schedule, the IP owner will have to pay the difference himself, even if he wins the case. “It’s a very transparent system,” says Schäfer.
In summary proceedings, plaintiffs can ask the court to issue a cease and desist order to stop the infringer using the disputed mark immediately. In clear-cut cases of infringement, the courts may also issue an order for information, which requires the defendant to provide details such as the number of products they have sold, and the names and addresses of distributors. “This allows you to take action against other parties and to hinder the distribution process,” says Schäfer.
When it comes to remedies in the main proceedings, German courts offer successful plaintiffs injunctive relief and damages. The judge can also order the destruction of infringing products and equipment exclusively used for the production of infringing goods.
UK
The advantages that the UK offers would-be plaintiffs are speed, the treatment of evidence and the relatively generous way in which damages are calculated, says panelist Macdonald.
The UK rules on discovery, which differ from those in most of the rest in Europe, can prove useful to plaintiffs who suspect that the defendant is trying to keep information from them. The UK also offers a specialist IP court in the form of the Patents Court. “It helps to have specialized judges,” says Macdonald. “As I always say, trademark law is actually harder than patent law because there is more law involved.” She says that although the technology in patent cases can be difficult to understand, if courts are unfamiliar with trademark law then the legal concepts—as well as the marketing and branding concepts that are often involved—can be difficult to understand. “That’s why I always like to have a judge that does their own shopping,” she says.
The downside to the UK courts, of course, is relatively high costs. But even here, IP owners should be aware that bringing trademark litigation in the UK is generally much cheaper than litigating complex patent disputes. “And you do get significant awards for costs,” adds Macdonald. N
Jurisdiction under the Community trade mark Regulation
Article 93: International jurisdiction
1. Subject to the provisions of this Regulation as well as to any provisions of the Convention on Jurisdiction and Enforcement applicable by virtue of Article 90, proceedings in respect of the actions and claims referred to in Article 92 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.
2. If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.
3. If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where [OHIM] has its seat.
4. Notwithstanding the provisions of paragraphs 1, 2 and 3:
(a) Article 17 of the Convention on Jurisdiction and Enforcement shall apply if the parties agree that a different Community trade mark court shall have jurisdiction;
(b) Article 18 of that Convention shall apply if the defendant enters an appearance before a different Community trade mark court.
5. Proceedings in respect of the actions and claims referred to in Article 92, with the exception of actions for a declaration of non-infringement of a Community trade mark, may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened, or in which an act within the meaning of Article 9 (3), second sentence, has been committed.
