CJEU in Brite Strike disagrees with Advocate-General, but comes to the same conclusion

Yesterday CJEU published its decision in the case Brite Strike (C-230/15), a case regarding the Benelux Trademark "BriteStrike" in which the US mother company BrightStrike brought proceedings about a Luxembourg-based former licensee that had registered the mark.

Brite Strike "tactical lighting"

It brought those proceedings before the Rechtbank Den Haag (Court of The Hague). Based on the so called Brussels I regulation (Regulation 44/2001 at the time; now 1215/2012) that court would have jurisdiction based on article 22.4 of the regulation (which gives -amongst others- jurisdiction to the courts of the country where registration has taken place) as the Benelux trademark is administered by the Benelux Organisation for Industrial Property located in The Hague.

Jurisdiction rules within the 2005 Benelux Convention for Industrial Property (BCIP) however explicitly disallow the place of registration as a connecting factor leading to jurisdiction. In the case of disputes regarding validity of marks, it grants jurisdiction to the location where the seat of the trademark owner is: Luxembourg.

A few years ago the Dutch Hague Court of Appeal decided that not the Benelux Convention, but the Brussels I convention was relevant for determining jurisdiction, after which Dutch courts would evaluate jurisdiction on both conventions, and -in case of a conflicting conclusion- would suggest to ask CJEU.

The discussion in Dutch courts was almost a philosophical one. Since entry into force of the Brussels I regulation new conventions on jurisdiction between member states are not allowed anymore. The 2005 BCIP was clearly newer and thus was not allowed to take precedence (as the Hague court of appeal held), but it took its jurisdiction rules directly from the much older Benelux Convention on Trademarks and the Benelux Convention on Industrial Designs that it replaced. In other words, there were "old" jurisdiction rules about "old" Benelux IP rights, copy pasted in a "new" BCIP convention.

Advocate General

Advocate General Henrik Saugmandsgaard Øe

The AG opinion took this as the most important issue to be settled and concluded that the convention should be deemed a continuation of the old conventions, and thus an "old" convention within the meaning of Brussels I. It only added one extra requirement for the Benelux rules to be allowed to take precedence: they must not go against the fundamental principles of EU law. To me a surprise in itself, as that would amount to a non-literal interpretation of the Brussels I regulation, which has been the rule in the past years. The AG took Article 350 (see below) of the TFEU as an additional argument for choosing such an interpretation

Court decision

The Benelux, a Union to be allowed "completion"

The Court took its decision only 2 months after the AG decision and added a point to the discussion that was previously not part of the debate: the fact that Benelux trademarks are.. Benelux trademarks. As the AG already had alluded, The Benelux Union has a special place in Article 350 of the Treaty on the Functioning of the European Union: 

The provisions of the Treaties shall not preclude the existence or completion of regional unions between Belgium and Luxembourg, or between Belgium, Luxembourg and the Netherlands, to the extent that the objectives of these regional unions are not attained by application of the Treaties.

Based on this article, the court decided it had to establish whether:
1) Rules can only remain in force to the extent the Benelux "is further advanced than the internal market"
This was the case according to CJEU, when it compared the regulations regarding harmonisation of national trademarks with the Benelux trademarks (one could however also say that the Benelux is not more advanced, because with the Union Trademark, the EU is just as advanced!) 
2) The rules are indispensable for the proper functioning of the Benelux system
The court found an argument for this in the fact that the EU regulator had also deemed Brussels I unsuitable for the unitary EU Trademark (where jurisdiction is governed by the EU Trademark Regulation), and also by the fact that multiple languages exist in the Benelux thus making a jurisdiction system necessary where the defendant can be heard in his own language.
3) the rules cannot "compromise the principles which underlie judicial cooperation in civil and commercial matters in the European Union"
This last requirement (also suggested by the AG) was held to be fulfilled, especially because the system is place of the defendant-based, which is also a corner stone of the Brussels I regulation.

conclusion

So
-the AG tries to fit the BCIP within te exception of Article 71 of the Brussels I regulation by regarding that treaty as an "older" treaty because it is part of an older system of conventions, using Article 350 TFEU (the "Benelux exception") as an argument
-The Court starts of with Article 350 TFEU (the "Benelux exception") and looks whether article 71 in this case is in conflict with that, and thus should be put aside.

That is quite a different reasoning boiling down to the same conclusion: Benelux rules govern jurisdiction in Benelux Trademarks. 

Especially with regards to point one above, it would be easy for the court to come to the opposite conclusion, which would have required the court to see if it would follow the AG opinions reasoning regarding article 71. 

For the Benelux, this decision is more welcome than the AG decision as it reinforces (or at least confirms ) the rights of article 350 TFEU regarding IP rights, even if they are already unified. The Benelux thus could come up with a unitary copyright (or even European patent ;-)) if they wanted to. Whether that is really helpful is a different matter: there seems not much political will to further "complete" the Benelux Union...

CJEU Case C 230/15: Advocate General advices interpretation "à caractère non formaliste"

On 26 May, European Court of Justice Advocate-General Saugmandsgaard Øe delivered his opinion in case C 230/15 (ECLI:EU:C:2016:366). The case may sound trivial: the The Hague court asked (in ECLI:NL:RBDHA:2015:5716) whether the Dutch courts and/or the Luxembourg courts have jurisdiction regarding the validity of Benelux mark 0877058 "Brite-Strike"?

The case is however relevant to put to rest a difference of judicial opinion on which jurisdiction rules apply regarding Benelux marks (and Benelux industrial designs): those in the Benelux Convention on Intellectual Property (BCIP) or those in the Brussels I regulation (EC 44/2001 when this case started, presently EU 1215/2012). See earlier posts on the exact questions referred to CJEU and how Belgian and Dutch judges have treated the matter in the past years.

Saugmandsgaard Øe is a new CJEU AG, so we have not seen much about him. In this opinion he is -in my opinion- sensible, his opinion can easily be followed, but it seems also slightly activist. Despite the wealth of judgements calling for a literal interpretation of Brussels I, Øe here strongly relies on the intention of the regulation. But I am getting ahead of myself, let's examine his points first:

This is a general problem

While the case at hand may be solved by giving a narrow answer regarding jurisdiction (focussing on a trademark invalidity rather than infringement of rights etc), the AG agrees with the Dutch court that the general problem is the hierarchy between BCIP and Brussels I and suggests the questions is treated that way (few! any narrowing down would give rise to more questions!). 

Two formal requirements; and one more...

The AG first notes that the conflict between other conventions is treated in Article 71.1 and 71.2(a)

1. This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments. 

2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner:

1. (a)  this Regulation shall not prevent a court of a Member State, which is a party to a convention on a particular matter, from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another Member State which is not a party to that convention. The court hearing the action shall, in any event, apply Article 26 of this Regulation; (...)

and that thus -unlike other private international law EU regulations- it does not explicitly replace all pre-existing conventions between EU states. He concludes that 3 requirements have to be met for conventions to have precedence over Brussels I:

1. It should govern a particular matter
2. the Member States should already be a party to the other convention
3. The jurisdiction rules cannot go against the objectives of EU law.

Point 1: A particular matter

The first point is relatively easy: the jurisdiction rules only govern Benelux Trademarks and Designs (the AG can't stop himself from pointing out that despite the wide scope suggested by the name of the convention on Intellectual Property, it only governs those two types), that that's clearly a particular matter. 

Point 2: EU countries should already be a party

This rule was new in the Regulation compared to the Brussels convention it replaced. So from around 2001 (approval of the regulation) or 2003 (entry into force) no new conventions could take precedence anymore. The BCIP is from 2005 and thus clearly a younger (or: posterior) convention and thus the European Commission argued that the convention should not take precedence. Saugsmandsgaard however notices the special character of the 2005 convention: it was a new convention merging and modernising  2 conventions regarding Benelux trademarks (1971) and industrial designs (1975). The jurisdiction rules in those conventions were essentially the same and were merely copied into the 2005 convention. Saugsmandsgaard thus concludes (in an approach he considers "à caractère non formaliste") the jurisdiction rules in relation to the matter they governed (trademarks/designs) should be considered older: the BCIP should thus NOT be regarded a posterior convention. 

point 3: The jurisdiction rules cannot go against the objectives of EU law

The third point doesn't stem from an interpretation of the text of article 71 per se, but from CJEU case law. The AG refers to C 533/08 (ECLI:EU:C:2010:243, TNT Express v AXA), requires those rules not to be applied against the objectives of EU law:

 While it is apparent from the foregoing considerations that Article 71 of Regulation No 44/2001 provides, in relation to matters governed by specialised conventions, for the application of those conventions, the fact remains that their application cannot compromise the principles which underlie judicial cooperation in civil and commercial matters in the European Union, such as the principles, recalled in recitals 6, 11, 12 and 15 to 17 in the preamble to Regulation No 44/2001, of free movement of judgments in civil and commercial matters, predictability as to the courts having jurisdiction and therefore legal certainty for litigants, sound administration of justice, minimisation of the risk of concurrent proceedings, and mutual trust in the administration of justice in the European Union.

In evaluating whether in BCIP this criterion is met, the AG notes that unitary intellectual property rights (the EU Trademark, the Community Design, the unitary patent, but even the European patent as far as proceedings for the EPO are concerned) are always treated specifically as the general Brussels I rules are not adapted to it. The AG thus argues that using the BCIP obtains a better result than applying 44/2001. 

Conclusion

The AG thus concludes that BCIP jurisdiction rules should govern Benelux trademarks and designs and thus dismisses decision ECLI:NL:GHDHA:2013:4466 of the Hague Court of Appeal of 2013 that started the confusion: before that case BCIP was always applied without discussion, but that court came to the opposite conclusion (Brussels I prevails) and was so certain that it explicitly remarked that it deemed CJEU questions not necessary. If followed, that is a welcome and sensible outcome!

Did Benelux trademark and design legislation become younger than the Brussels Regulation (and does that matter?)?

In 2005, the Benelux countries (Netherlands, Belgium, Luxembourg) did some long overdue house keeping. They merged their separate Trademark and Designs treaties into a single "Benelux Treaty for Industrial Property", BCIP (beware, while this suggests "all IP" is in, only the Trademark and design IP has been unified in the Benelux, and patents, copyright etc are not included) which thus became the legal basis for the Benelux Trademark and the Benelux Industrial Designs.

As is the case with new treaties on the same subject, much of the subject matter was copy-pasted from the previous treaties, which probably both saves negotiation time, and also allows the new treaty to benefit from the case law already available for the provisions. The merger may have an important (and certainly unintended) consequence: because the convention has been concluded after entry into force of the Brussels I regulation  (which governs which EU court has jurisdiction in international cases, Regulatation 44/2001: Council Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) it may need to be classified as a "posterior" (later) treaty. Unlike similar instruments (Article 57 of the Brussels convention that preceded the Brussels Regulation) there is a difference  anterior (earlier) and posterior treaties. In cases of conflict between the Brussels I regulation and a posterior treaty, the Brussels I provisions prevail and in Article 71 only anterior conventions can be applied when governing specific subjects.

So the basic question is: should the same provisions (jurisdiction in Benelux IP), with respect to the same IP forms (Benelux Trademarks/Benelux Designs) in a different treaty be prevailing over the Brussels I regulation (as is the case with amended conventions), or should Brussels I be prevailing over them (as is the case with posterior treaties)?

The Court of Appeal of The Hague (Gerechtshof Den Haag) was sufficiently convinced that Brussels I prevailed, and decided that it was thus not necessary to request a preliminary ruling. In its December 2013 decision in H&M v. G-Star (ECLI:NL:GHDHA:2013:4466) regarding infringement of a Benelux trademark of jeans it based its jurisdiction on Article 5(3) of Brussels I as there was a (treat of) infringement in the Netherlands. In line with the Pinckney decision (ECLI:EU:C:2013:635), in infringement proceedings of IP rights, the value of the claim was to be determined there based on the infringement in the member state of the court concerned (and not in the rest of the EU). Without further argumentation, the court stated that as the Benelux Trademark is a unitary right in 3 countries, the "member state concerned" was to be understood as the three Benelux countries.

In April 2014, the the Court of First Instance of The Hague (Rechtbank Den Haag) ECLI:NL:RBDHA:2014:5078, based its jurisdiction-argument on the reasoning of the verdict of the Gerechtshof (prevalence of Brussels I) in PT Mitra Prodin (commercially acting as "JWARE" (Indonesia) v Vandenberg Special Products BV, in combination with (to the extent that Brussels I would be fully determine jurisdiction within the Benelux) BCIP. The case concerned the use of the word mark "Cones"; a Benelux and Community Trademark of Vandenberg, considered not valid according by JWare. JWare  used the term cones for its pre rolled cigarette paper. The judge didn't seem fully convinced as he indicated that using this reasoning also because it was not contested by JWare, and that it was no problem that the defendant had not reacted, as the decision to apply Brussels I resulted in a for him favourable judgement. The case moved to the location of the defendant (the Court of Rotterdam) as the court didn't consider to be relatively competent; both if relative competence would need to be based on the BCIP and on the Dutch Civil Procedure Law (note that Brussels I does only confer international competence, but not within a country).

The same reasoning (international competence for the Dutch court based on Brussels I, and no explicit decision on whether relative competence should be based on either Dutch Civil Procedure Law or BCIP) was followed by
*the The Hague court in BNP Paribas v Binckbank (ECLI:NL:RBDHA:2014:11184) regarding use of the word "Turbo".
* Brunel v Brunet (ECLI:NL:RBDHA:2014:7854, Article 2)
*"Het ijs van Columbus" case (ECLI:NL:RBDHA:2014:7508) (Article 2)
*Daamen v Vanguard (Python grade mark in safety shoes, ECLI:NL:RBDHA:2014:7104, which included both Article 2 and Article 6(1) jurisdiction)...
*Paperclip (stichting Paperclip v NCRV, ECLI:NL:RBDHA:2014:5261, Article 2). The court here stated it saw no reason to give the parties the possibility to comment whether Brussels I or BCIP would apply, as it would give the same result

Also in the Rummicub case (ECLI:NL:RBDHA:2014:9918) of the The Hague court, Brussels I was taken as a basis for NL-jurisdiction, in combination -to the extend needed to confer jurisdiction on the court- with 4.6 BCIP (the implicit question seemed to be: IF with Brussels I the judges of the (all?) Benelux have jurisdiction, BCIP may be needed to decide wether within that territory the Dutch judge has jurisdiction).

In August 2014, the Court of Rechtbank Den Haag ECLI:NL:RBDHA:2014:10760) in Bacardi v Seva based jurisdiction on Article 2 (jurisdiction of the state where the defendant is domiciled) of the Brussels I regulation (it would seem however that, as Bacardi is domiciled in non-member state Liechtenstein, not the Brussels I regulation, but the Lugano convention 2007 would apply. Article 67 of that treaty does however allow for specific conventions on specific matters to prevail; which in my assessment would have required the judge to basis its judgement on the Benelux Convention on Intellectual Property (BCIP)! Liechtenstein is not a party to Lugano, so that doesn't apply... Why does Brussels I apply? In H&M v Gstart the reasoning was followed that the international character of Benelux Trademarks made the case international and thus Brussels I would apply. However, article 4.6(1) of BCIP also gives jurisdiction to the court of the residence of the defendant, so there is no different effect here).

In Sojuzplodoimport v Spirits (ECLI:NL:RBDHA:2014:9739 (in a continuing saga of who became the rights holder to Vodka related IP rights in the wake of the collapse of the Soviet Union), the Court of First Instance of The Hague did not know how to determine its jurisdiction in relation to two related defendants and had options (while considering that article 22(4) of Brussels I rendered jurisdiction on the courts of the Benelux) determining jurisdiction within the Benelux:
*Brussels I, Article 6(1), for which there was not sufficient relation between the defendants, and jurisdiction should be denied
*BCIP, Article 4.6(5): which would lead to jurisdiction
*Rv109, the Dutch article, based on Article 6(1), but which -in the opinion of the judge- would allow for jurisdiction, as the court saw no reason to render the case law of the Brussels regulation fully applicable on the Dutch article.
The situation is complicated because of the interplay between absolute and relative and absolute competence and the possibility to use national law along Benelux/EU law in determining relative competence. The court therefore considered asking preliminary questions regarding jurisdiction to the  European Court of Justice (regarding Brussels I) and/or the Benelux Court of Justice (regarding BCIP). While we don't know how the case was resolved, but the court has made it clear last week that questions will not be asked in this matter...

The The Hague Court of First Instance may well have a second chance to ask preliminary questions, in Brite Strike ("Two police officers started Brite-Strike Technologies Inc. because they were simply not satisfied with what the "top makers" of tactical lights offered for the needs of police officers") Technologies Inc v Brite Strike Technologies SA (ECLI:NL:RBDHA:2014:13187). The matter concerns the use of a Benelux trademark with Brite Strike Technologies being domiciled in Luxembourg. Article 4.6(1) BCIP did render the Luxembourgian judge competent, while article 22(4) of the Brussels I regulation points to the judges of the Benelux (at least, that is one interpretation). The court therefore suggested the following questions (translation is from me):

I. Dient het BVIE (op de in het arrest van het gerechtshof Den Haag van 26 november 2013, overwegingen 28 - 34 genoemde gronden) te worden aangemerkt als een posterieur verdrag zodat artikel 4.6 BVIE niet kan worden aangemerkt als een bijzondere regeling in de zin van artikel 71 EEX-Vo?
Should BCIP (based on the reasoning in 28-34 in ECLI:NL:GHDHA:2013:4466) be considered a posterior treaty, so that Article 4.6 BCIP can not be regarded as a particular matter in the sense of Article 71 Brussels I?

Indien deze vraag bevestigend wordt beantwoord:
If this question is answered in the affirmative:II. Volgt uit artikel 22 lid 4 EEX-Vo dat zowel de Belgische, als de Nederlandse en de Luxemburgse rechter internationaal bevoegd zijn van het geschil kennis te nemen?
Does it follow from Article 22(4) Brussels I that both the Belgian, Dutch and Luxembourgian judge are internationally competent to hear the dispute?

III. Zo nee, hoe dient dan in een geval als het onderhavige te worden vastgesteld of de Belgische, dan wel de Nederlandse of de Luxemburgse rechter internationaal bevoegd is? Kan voor deze (nadere) vaststelling van de internationale bevoegdheid artikel 4.6 BVIE (wél) worden toegepast?
If not, how should in such a case be determined whether the Belgian, the Dutch or the Luxembourgian judge is internationally competent? Can in such a case Article 4.6 BCIP be applied?

IV. Voor zover met vaststelling van de internationale bevoegdheid niet tevens de relatieve bevoegdheid is vastgesteld, dient dan de relatieve bevoegdheid te worden bepaald aan de hand van het nationale (Belgische, Nederlandse respectievelijk Luxemburgse) recht of dient daarvoor artikel 4.6 BVIE (wél) te worden toegepast?

To the extent that in determining the international competence, the relative competence has not also been determined, should the relative competence be determined using national (Belgian, Dutch, Luxembourgian respectively) law or should article 4.6 BCIP be applied?

The parties have until 19 November to give there opinion regarding these questions and advice the judge whether to ask them to the Benelux Court of Justice (the preliminary reference system is very similar to the ECJ system) or to ECJ.  It seems to me that the first 3 questions (except for the last sentence of question III) should be addressed to ECJ and questions III and IV to BCJ. The court could however also decide to ask all questions to BCJ (its a Benelux trademark matter), which in turn is allowed (and as a highest court required) to ask prejudicial questions to ECJ (as determined back in 1997 in Dior v Evora ECLI:EU:C:1997:517; the court did so in 2002 in Melkunie v Benelux Trademark Office, ECLI:EU:C:2004:87) in order to answer (part of) its own questions.

It is hard to evaluate what the answers of ECJ and/or BCJ will be, but indeed, the questions posed seem indeed to be the relevant questions. If I had to give my best guess of the answers I'd say:
I: This is a clash between following the letter of Brussels I (rendering BCIP posterior) or the intent of the EU and Benelux legislator (rendering BCIP anterior). Most clarity will be given if the answer is in the negative: when Brussels I is to prevail, a regulation should be applied which was never written with the peculiarities of the Benelux territory in mind, which is bound to result in more questions. However, the ECJ is known to favour the literal interpretation of Brussels I for the sake of predictability, so I think the answer will be: YES
II: The second question is regarding Brussels I 22(4) and gives jurisdiction to the courts of the Member State in which the deposit or registration has been applied for (this can be: the Benelux, rendering all courts competent; or where the physical application took place: at the trademark office in The Hague, Netherlands, rendering always NL competent), has taken place (idem) or is under the terms of a Community instrument (not applicable?) or an international convention (BCIP) deemed (the convention explicitly excludes the location of registration as a determinant in jurisdiction, and would point to the Benelux courts in general) to have taken place. I would assume that because of the last part of the sentence, courts from all 3 countries are competent.
III: This may be the trickiest question... IF the Benelux is to be regarded a separate territory for the application of Brussels I, then the internal law of Benelux (BCIP?) should determine jurisdiction. However, if multiple courts have international jurisdiction (in this case NL, BE, LU) under Brussels
I, normally they all have jurisdiction, and the lis pendens doctrine will render the court first seized competent to hear the case. Again, I don't see much reason why ECJ would not take a literal meaning of 22(4), render all courts competent, and the location within Benelux dependent on the court first seized.
IV Here I am lost; this would much depend on how the questions I-II-III are answered...

One thing seems clear however: while the court was quite confident in 2013 regarding the relationship between Brussels I and BCIP, several questions remain with the Dutch judiciary, so let's hope a case will soon find its way to ECJ/BCJ in order to obtain the much wanted clarity. Does anyone know about how this is played out in Belgium and Luxembourg? Are they following a divergent approach or did the matter not come up? IF a divergent approach is followed there, it is also possible that the Dutch desire to ask ECJ questions is not because it doubts the interpretation of EU/BX law, but because it wants Belgium (and Luxembourg) to comply. But that's only wild speculation!