Domicile rule: pan-European relief for injunctions and damages, but not for penalties?
The Community trademark and design regulations(1) provide for uniform IP rights with effect throughout the European Union: Community trademarks and Community designs.
Pursuant to Article 95 of Regulation 207/2009 and Article 80 of Regulation 6/2002, each EU member state has designated competent Community trademark and Community design courts. In Belgium, the Brussels Court of Commerce and Brussels Court of Appeal fulfil this role.
Jurisdiction can be based on one of two sets of rules:
- the domicile rule, which refers to the domicile or establishment of the parties;(2) and
- the location rule, according to which territorial jurisdiction is established with reference to the location of the infringing activities.(3)
The extent of the injunction that may be granted by a Community trademark/design court depends on the basis on which its jurisdiction has been asserted. If the jurisdiction of the court is defined on the basis of the domicile rule, a pan-European injunction can be imposed; however, if jurisdiction is accepted on the basis of the location rule, injunctive relief can be obtained only with respect to acts committed or threatened within the territory of the court's member state.
The same set of rules applies regarding damages claims in European trademark law. Although the regulations do not provide for any specific rules applicable to damages claims, the Articles 94 and 79 of the respective regulations state that Regulation 44/2001(4) shall apply to proceedings relating to Community trademarks/designs, where the domicile rule – on the basis of which pan-European damages can be granted – is foreseen in Article 2, and the location rule – where the competent court may in principle only grant damages for the tort occurred in its country – is provided for in the much debated Article 5(3).
Advocate General Cruz Villalón has stated that an injunction issued by a national court acting as a Community trademark court has effect, as a matter of law, throughout the entire European Union area.(5) The Community trademark/design courts in some member states are more willing to grant such a pan-European injunction than others.
In Belgium, the transposition of the EU Enforcement Directive(6) in 2007 broadened the scope of the cease and desist procedure to virtually all IP rights. In Community trademark matters, the Brussels Court of Commerce (in particular its president) and the Court of Appeal have, on several occasions, awarded pan-European injunctive relief.
In its judgment of May 28 2008 in John Player & Sons Limited v BVBA Savelux, the president of the Brussels Commercial Court considered that there was, among other things, infringement of the claimant's Community trademark under Article 9(1)(b) of the regulations, and therefore ordered the prohibition of the infringing acts for the whole European Union under a penalty payment of €500 for each infringing product.
In its judgment of April 22 2009 in Honda v NV Imexpan, the president ruled that the acts of parallel import by the defendants constituted an infringement of the claimant's Community trademark HONDA under Article 9(1)(a) of the regulations and therefore ordered a pan-European injunction under a penalty payment of €10,000 for each infringing product. An interesting point in this case is that the injunction was also ordered against the intermediary whose services were used to infringe the IP rights concerned.
The president confirmed its point of view in its recent judgment of June 24 2010 in Swarovski v Dom, where infringement of the Community trademark SWAROVSKI under Article 9(1)(a) of Regulation 207/2009 was withheld and the injunction of the infringing acts was ordered under a penalty payment of €10,000 for each infringing product. In this judgment the president explicitly confirmed that its injunctive order had, in accordance with Article 103(2) of EU Regulation 207/2009, a pan-European character.
The Brussels Court of Appeal followed the aforementioned pan-European reasoning of the president, for example, in its judgment of May 5 2009 in Charles SAS v Amari Trade, where the infringement on the appellant's Community trademarks was withheld and therefore the pan-European injunction was ordered under a penalty payment of €5,000 per infringing act and of €2,500 a day that the injunctive order was not complied with.
All of the above mentioned Belgian cases featured a penalty payment in case of non-compliance with the imposed injunction. According to Villalón, such coercive measures have effect in the territory in which the infringement was made – a pan-European injunction has effect in the European Union. However, if the court order is infringed and a penalty payment needs to be applied, the quantification and the enforcement of the coercive measure take place at a later stage. Therefore, the Community trademark court which imposed the penalty payment will have jurisdiction on quantification and enforcement only if, and to the extent that, non-compliance with the injunction occurred in the court's member state. If the prohibitive injunction is infringed in another member state, the quantification and enforcement of the penalty payment will be a matter for the court of that member state.
Villalón further considered that the court of the member state in which the injunction is infringed is obliged to recognise the effects of the penalty imposed by the Community trademark court of the other member state, according to the rules on recognition laid down by Brussels I Regulation.(7) The coercive measures subsequently must be adjusted to the specific features of each legal system, which means that the court of the member state – if its national law so permits – in which the injunction is infringed, can simply recognise the penalty as imposed by the Community trademark court and apply it to the specific case before it. However, if its national law does not provide for such a measure, the order must achieve enforcement in accordance with the national provisions having similar effect.
This seems perfectly logical in light of the lack of harmonisation within the European Union of the instrument of the penalty payment. Article 11 of the Enforcement Directive indeed provides that "where provided for by national law, non-compliance with an injunction shall, where appropriate, be subject to recurring penalty payment, with a view to ensuring compliance".
Contrary to the European Union, in the Benelux countries, the instrument of the penalty payment was harmonised in 1973, namely in the Benelux Convention containing a uniform law relating to penalty sums, concluded at The Hague on November 26 1973. Although this harmonisation led to uniform legislations in the three Benelux countries, it remains impossible to obtain pan-Benelux penalty sums.
For further information on this topic please contact Sofie Cubitt at ALTIUS by telephone (+32 2 426 1414), fax (+32 2 426 2030) or email (sofie.cubitt@altius.com).
Endnotes
(1) EU Regulation 207/2009 of February 26 2009 on the Community trademark (codified version) and EU Regulation 6/2002 of December 12 2001 on Community designs (consolidated version).
(2) See Article 97, Sections 1 to 4 of EU Regulation 207/2009 and Article 82, Sections 1 to 4 of EU Regulation 6/2002.
(3) See Article 97, Section 5 of EU Regulation 207/2009 and Article 82, Section 5 of EU Regulation 6/2002.
(4) EU Regulation 44/2001 of December 22 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
(5) In his opinion, delivered on October 7 2010 in DHL Express (France) SAS v Chronopost SA (C-235/09).
(6) 2004/48/EC.
(7) EU Regulation 44/2001 of December 22 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.