Tuesday, 8 July 2014

Appearance before a national office and subsequent determination of jurisdiction

Future New Developments Ltd v B & S Patente Und Marken GmbH [2014] EWHC 1874 (IPEC) is a 9 June 2014 decision of the England and Wales Intellectual Property Enterprise Court (Judge Hacon).

In brief, by Article 5 of Council Regulation 44/201 on the Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968:
"A person domiciled in a Member State may, in another Member State, be sued: … (3) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur".
Article 23(1) adds:
"If the parties, one or more of who is domiciled in a member state, have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; or (b) in a form which accords with practices which the parties have established between themselves..."
And, by Article 24:
"Apart from jurisdiction derived from other provisions of this regulation, a court of a member state before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22".
A German-domiciled company, B&S, was the registered proprietor of a European patent for energy-saving technology for use with fluorescent tubes. The application, filed in September 1999, was assigned to FND in October 2001. It appeared from a written declaration of March 2009 that FND had assigned the patent to B&S, this alleged assignment being registered by the United Kingdom Intellectual Property Office (UKIPO). Following a subsequent dispute before the UKIPO as to whether the patent had been assigned FND issued proceedings in the Intellectual Property Enterprise Court (IPEC), maintaining that the person who signed the declaration had no authority to do so.

At this point B&S challenged the jurisdiction of the courts of England and Wales on the basis that Article 22(4) of the Convention did not apply to a dispute about the ownership of registered intellectual property rights. Since it was domiciled in Germany, the dispute should be brought there. FND disagreed, arguing that Articles 5(3), 23(1)(b) and 24 of the Convention applied.

Judge Hacon ruled that the courts of England and Wales did indeed have jurisdiction.

* The words "matters relating to a tort, delict or quasi-delict" in Article 5(3) embraced all actions which sought to establish the liability of a defendant and which were not related to a contract. In this case FND was relying on the torts of misrepresentation or fraud.

* On the meaning of "liability" of a defendant, FND's claim was to the entitlement of the patent; it was not alleged, nor could it be alleged, that the patent was owned by B&S through any misrepresentation on the part of B&S itself.

* Article 23(1)(b) allowed for an agreement on jurisdiction to be validated even where there was an absence of writing to record the assent of the party to be bound, so long as there was evidence of a practice having been established between the parties.

* In this case the litigation was not based on any agreement between the litigating parties and it was likely that, before the UKIPO, B&S had expressly abandoned any challenge to the jurisdiction of the courts of England and Wales. That would have been a concession by B&S in the course of the proceedings, not an agreement between the parties by way of a course of conduct or, more exactly, an agreement in a form that accorded with practices which the parties had established between themselves. The submission that the court had jurisdiction by agreement under Article 23(1)(b) would therefore be dismissed.

* The Convention had however undoubtedly been engaged. On the evidence, the overall conduct of B&S before the UKIPO could only be interpreted as its willingness for the dispute with FND to be heard in England, initially by the UKIPO and subsequently by the Patents Court or IPEC. Because B&S had entered an appearance before a court of the UK within the meaning of Article 24 of the Convention, the IPEC had jurisdiction.

All of this leaves parties such as B&S in a difficult position when contemplating the issue of jurisdiction. They must measure their response to any legal claim not just from the point of view of what they say but how their actions are likely to be construed.

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