Suing non-UK domiciled company in online IP infringement cases? Jurisdiction in English online copyright infringement claims

Peter Adediran’s specialist niche area of practice is copyright, trademark and patent disputes and protection relating to digital media including websites and mobile applications PAIL Solicitors. Read more on PAIL’s Resource Library
 
Background
 
For the purposes of this article we will use the infringement of copyright works in a website as the hypothetical case study, but we could use any type of digital works that are capable of copyright protection.

So, in this hypothetical situation a potential UK incorporated claimant, Company A, believes based on conclusive evidence, that copyright infringement of the works on its website has occurred. Company B is the proposed defendant which is domiciled in France. Company C is a Chinese incorporated digital agency, that amongst other things, designs and codes websites, that is retained by Company B to build and code the infringing website.

If Company A tries to sue in England, Company B could argue that it is domiciled in France and cannot be sued in English courts, Company C being domiciled in China would also seek to dismiss any proceedings against it on the basis that the English courts lack jurisdiction.

Jurisdiction

Company B being domiciled in France

The general rule under the EC Regulation No 44/2001/EC on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation) – which applies to defendants domiciled in EU member states which includes France – is that, subject to the Regulation, (Article 2) actions should be brought against defendants in the place where they are domiciled, whatever their nationality. However, art 5(3) is an exception to Article 2 and provides that a defendant to a tort claim may be sued in the courts of the place where the ‘harmful event’ occurred or may occur. Patent, copyright, or trademark are all torts.

Harmful event occurred or may occur

‘Harmful event’, in the context of intellectual property infringement proceedings, is the damage caused by the copyright infringement. ‘Occurred or may occur’ refers to the place, in which the damage took place or could take place. The precise meaning of ‘harmful’ and ‘occurred or may occur’ are important here. Exactly what prima facie evidence is enough to make up ‘Harmful’ and ‘occurred or may occur’ to satisfy the triggering of the art5(3) exception? Conclusive evidence of copyright infringement of Company A’s website should easily fulfil the ‘harmful event’ test.

As for the link between ‘harmful event’ and ‘occurred or may occur’ the prima-facie test for Company A must be enough to convince the court. Although art5(3) is to be interpreted restrictively, evidence that shows website access in England should get over the threshold to prove that there was enough connection between the ‘harmful event’ and the occurrence or possible occurrence of that ‘harmful event’ in the English jurisdiction. There is obviously a link between ‘harmful event’ and where that ‘harmful event’ ‘occurred’ or could occur in the phrasing itself.

Evidence showing UK website traffic with the infringing website, pricing of products or services from Company B’s website in £ sterling, English translation of its website including terms of business and privacy policies, a .com top level domain name indicating an international focus, orders and queries from England to Company B, would show that B is a company doing business within the UK. Alternatively actions that Company B did not take such as blocking access to its website from England would also contribute to meeting the prima-facie test.

The Pinckney Case

The leading case is – Peter Pinckney v KDG Mediatech AG, Case C-170/12, 3 October 2013. In this case Mr Pinckney, who lived in France, became aware that an Austrian company had manufactured a CD reproducing 12 songs from Mr Pinckney’s album and that two UK companies were offering the CD for sale via the internet. Mr Pinckey sued all three companies for copyright infringement in France arguing that the French Courts had jurisdiction as he was able to buy the CD from the UK websites in France.

The French court accepted jurisdiction at first instance based on Mr Pinckney’s argument. If Pinckney was able to buy the CD by accessing the UK websites from his computer in Toulouse, it was enough to establish a substantial connection between the facts and the alleged damage. However, the appellate court overturned the lower court decision deciding that the lower court lacked jurisdiction to hear the case because the defendant was domiciled in Austria, and the place where the damage occurred could not be in France. It also held that in the absence of any allegation of collusion between the UK companies and the manufacturer it would not examine the liability of any of the defendants.

Mr Pinckney appealed against the decision to decline jurisdiction, and the Court of Cassation decided to stay the proceedings and refer the matter to the ECJ for a preliminary ruling: In interpreting Article 5(3) of Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, the ECJ ruled that, when a Member State protects infringement of copyrights, the courts have “jurisdiction to hear an action to establish liability brought by the author of a work against a company established in another Member State and which has, in the latter State, reproduced that work on a material support which is subsequently sold by companies established in a third Member State through an internet site also accessible with the jurisdiction of the court seised.”

The judgment did not, however, alter the Shevill principle that the “court has jurisdiction only to determine the damage caused in the Member State within which it is situated.” Therefore, multiple sets of proceedings might be necessary for the claimant to recover its losses in the different jurisdictions.

Company C’s Involvement

We have focused on Company B above. But there is also the problem of Company C. Company C being based in China would not be subject to UK jurisdiction. Although China is a member or signatory to WIPO Berne Convention 1971, WTO (TRIPS), WIPO Copyright Treaty amongst others, it does not recognise the decisions or opinions of foreign courts. Unless Company C had a subsidiary in England then Company A would have to bring a copyright suit in China against Company C.
 
Anyone bringing a law suit in China is well-advised to seek local Chinese legal expertise as it is crucial to have experience of Chinese legal system to bring a case there. Apart from strong cultural differences such as language and custom, the Chinese legal system is very different from the English legal system not least because it is based on a codified law and not common law.
 
By Peter Adediran
17 05 2018

 
This article touches on online intellectual property jurisdiction but is by no means exhaustive. If you are seeking advice on settling an intellectual property dispute and have read this article, you must take the opportunity to go and seek professional legal advice from a solicitor or barrister. The information and any commentary on the law contained in this article is provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary interesting, accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequences of relying on it, is assumed by Peter Adediran or by PAIL Solicitors. The information and commentary does not, and is not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal advice from a lawyer about your case or matter and not to rely on the information or comments on this site. No responsibility is accepted for the content or accuracy of linked sites.

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