Suing non-UK domiciled company in online IP infringement cases?
Jurisdiction In IP cases
Suing non-UK companies
Specialist Trademark Infringement Lawyer Explains Suing Non-UK domiciled Companies
If you are a trademark infringement lawyer, then you will come across non-UK domiciled companies involved in the dispute with UK companies. This article provides a starting point for the non-UK domiciled company in online IP infringement cases.
Background
For this article, we will use the infringement of copyright works in a website as the hypothetical case study, but we could use any 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 who 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 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 a link between ‘harmful event’ and where that ‘harmful event’ ‘occurred’ or could occur in the phrasing of the law 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; and
Orders and queries from England to Company B.
All of the above conduct 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 solid 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.
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 their losses in 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 lawsuit in China is well-advised to seek local Chinese legal expertise as it is crucial to have experience of the 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 codified law and not common law.
17 05 2018
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To obtain a quotation, please contact us at (020) 7305-7491 or at peter@pailsolicitors.co.uk. We would be delighted to assist you. Mr Peter Adediran is the owner and principal solicitor at PAIL® Solicitors. Subscribe to our newsletter to get blog post updates and other information about the firm straight to your inbox.
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