Partners in Crime: The notion of “close connection” & international jurisdiction in EU trade mark infringement cases

15th November 2023

In its judgment of 7 September 2023, the CJEU clarified that an EU trade mark holder can sue multiple defendants, domiciled in different Member States, before the same EU trade mark court in the Member State of one of these defendants, insofar the trade mark infringement claims are closely connected. This is for instance the case when these defendants are merely connected by means of an exclusive distribution agreement.

Background

Beverage City Polska, a Polish company with its managing director also domiciled in Poland, manufactures, advertises and distributes an energy drink under the name DIAMANT VOGUE. Beverage City Polska concluded an exclusive distribution agreement for Germany with Beverage City & Lifestyle GmbH, a German company with its managing director domiciled in Germany as well. Despite the similarity in their name, these two companies do not belong to the same group or have any other corporate link. They are only connected by means of an exclusive distribution agreement.

Advance Magazine Publishers Inc., owner of several EU trade marks containing the word element VOGUE, initiated trade mark infringement proceedings against both companies and their managing directors before the Regional Court of Düsseldorf, Germany, seeking injunctive relief throughout the European Union.

The German Court upheld the claim and based its jurisdiction on Article 8(1) of the Brussels I bis Regulation (Regulation 1215/2012) which provides that, in case there are multiple defendants, a claim can be brought in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

Beverage City Polska and its managing director however challenged the international jurisdiction of the German Courts, alleging in substance that (i) they only operated in Poland and (ii) that no relevant connection exists between them and Beverage City & Lifestyle GmbH.

Against that background, the CJEU was interrogated on whether the existence of an exclusive distribution agreement between the defendants was sufficient to meet the requirement of ‘closely connected claims’ as set out in Article 8(1) of the Brussels I bis Regulation.

Decision

As a preliminary point, the CJEU confirmed that the rules of Article 8(1) of the Brussels I bis Regulation are applicable in the context of EU trade mark law.

In line with its earlier case-law, the CJEU held that claims are “closely connected” insofar the risk exists that divergent judgments would arise if these claims were tried separately. The test is thereby whether a divergence would arise in the same situation of fact and law:

• In the case at hand, the condition of ‘same situation of law’ was satisfied as the claim was based on EU trade mark rights, an exclusive right that has an equal effect throughout the EU.
• As far as the condition of ‘same situation of fact’ is concerned, the CJEU emphasized that the pertinent criterion is to assess whether the defendants are each separately accused of the same acts of infringement with respect to the same goods. The ‘organisational or capital connections’ (i.e., corporate – be it structural or financial – links) between the concerned companies are thus less relevant than the relationship between the acts of infringement. In that context, the CJEU held that the exclusive contractual relationship between the two companies made it more foreseeable that the acts of infringement of which they are accused may meet the condition of ‘the same situation of fact’. Another relevant circumstance was that the companies sold the goods at issue through two websites, of which the domains belong to only one of the two co-defendants.

By way of conclusion, the CJEU ruled that claims are so ‘closely connected’ in case they have been brought against multiple defendants, domiciled in different Member States, that are each accused of having committed a materially identical trade mark infringement and are connected by an exclusive distribution agreement.

Practical implications

The CJEU further elaborated in the present case on the notion of ‘close connection’, as interpreted in its earlier Nintendo judgment (C-24/16 and C-25/16). In the latter case, infringement claims were found to be ‘closely connected’ since the defendants belonged to the same corporate group. Here, the CJEU goes one step further, holding that the existence of an exclusive distribution agreement also meets that requirement.

The question therefore arises whether other types of distribution or sales agreements could lead to a conclusion of the existence of such a ‘close connection’ between trade mark infringement claims. The CJEU left this option open, as it emphasized that claims are connected insofar they concern the same acts of infringement regarding the same goods, which may be adduced by the existence of a contractual relationship between the concerned parties. Therefore, theoretically speaking, a non-exclusive distribution agreement or even a sales agreement could also indicate that the customer and the supplier have contributed to the same infringement concerning the same goods (covered by the same EU trade mark).

The judgment further clarified that insofar EU trade mark holders can demonstrate that claims against multiple defendants, domiciled in different Member States, are closely connected in the sense of Article 8 (1) of the Brussels I bis Regulation, they can bring their EU trade mark infringement claims before the EU trade mark Court (Article 125 (1) EUTMR), that will have a pan-European jurisdiction to rule on the infringement (Article 126 (1) EUTMR).

In a nutshell, the present judgment of the CJEU paves the way for EU trade mark owners to obtain a pan-European decision on infringement, even where defendants are domiciled in different Member States and are merely linked through a contractual relationship, without any corporate link.

Reference: CJEU 7 September 2023, Beverage City & Lifestyle GmbH, MJ, Beverage City Polska Sp.7.o.o., FE / Advance Magazine Publishers Inc., C-832/21, EU:C:2023:635.