Jurisdiction over a distribution agreement between infringers from different EU member states
On 7 September 2023, the CJEU ruled in Case C-832/21 on a motion for a preliminary ruling under Article 267 of the Treaty on European Union filed by Oberlandesgericht Düsseldorf (the Higher Instance National Court in Düsseldorf, Germany).
The Higher Instance National Court in Düsseldorf required a ruling as to whether an exclusive distribution agreement between entities was sufficient to satisfy the condition set forth in Article 8(1) of Regulation (EU) No. 1215/2012 of the European Parliament and of the Council. According to the below-cited provision:
A person domiciled in the territory of a member state may also be sued:
1) if sued jointly by several persons – before the court of the place where one of the defendants is domiciled, if there is such a close link between the cases that it is desirable to hear and decide them jointly in order to avoid conflicting judgments in separate proceedings.
The answer to the above question was of particular importance due to the fact that, given the facts of the case at hand, trademark infringement was committed by entities linked by an exclusive distribution agreement and, at the same time, entities that originate from different EU member states.
Advance Magazine Publishers headquartered in New York, the owner of several EU trademarks containing the word element “Vogue”, brought an action before Landgericht Düsseldorf (the national court in Düsseldorf, Germany), a court competent for EU trademarks, for an injunction against infringement throughout the European Union against:
1) Beverage City Polska (a Polish law company) producing energy drinks under the name of “Diamant Vogue”; and
2) Beverage City & Lifestyle (a German law company) which is bound by an exclusive distribution agreement with in Germany under which it purchased the above-mentioned energy drinks from Beverage City Polska.
Landgericht Düsseldorf (the national court in Düsseldorf) based its international jurisdiction over Beverage City Polska on Article 8(1) of Regulation No. 1215/2012 and upheld the action brought by Advance Magazine Publishers.
However, the Polish company appealed the verdict to Oberlandesgericht Düsseldorf (the Higher Instance National Court in Düsseldorf, Germany) by arguing that the German courts lacked international jurisdiction to hear the claim, and emphasizing that the company operated and delivered goods to its customers exclusively in Poland.
With this in mind, Oberlandesgericht Düsseldorf (the Higher Instance National Court in Düsseldorf, Germany) decided to suspend the proceedings and refer the case to the CJEU with a request for a preliminary ruling.
The CJEU stressed that:
1) as a general rule, infringement actions are brought before the courts of the Member State in which the defendant is domiciled;
2) Article 8(1) of Regulation (EU) No. 1215/2012 of the European Parliament and of the Council applies to infringement actions relating to EU trademarks;
3) the infringement action brought by Advance Magazine Publishers seeks to protect the company’s exclusive right – which means that the prerequisite for the existence of the same legal status is satisfied; and
4) there is a strong relationship between the parties due to an exclusive contractual relationship and the conduct of sales by the two companies through websites that contain mutual cross-references.
With this in mind, all the prerequisites of Article 8(1) of Regulation No. 1215/2012 have been satisfied. The provision must be interpreted as meaning that several defendants, each domiciled in different EU Member States, may be sued before the court of the domicile of one of them, before which claims have been brought by the owner of an EU trademark in an action for infringement against all of these defendants if there are any allegations that each of them has committed a materially identical infringement of the rights to that trademark, in a case where those defendants are bound by an exclusive distribution agreement.
The CJEU’s judgment should be considered as justified. In order to ensure the proper operation of the system of justice, including the avoidance of parallel proceedings and, by the same token, avoid handing down conflicting judgments in separate proceedings, the CJEU justifiably concluded that the exclusive distribution agreement between the infringers is sufficient for the application of Article 8(1) of Regulation (EU) No. 1215/2012 of the European Parliament and of the Council, and, consequently, sufficient for the applicability of international jurisdiction.
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