Neutral Citation Number: [2014] EWHC 1874 (IPEC)
Case No: IP 14 M 00027
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 09/06/2014
Before :
HIS HONOUR JUDGE HACON
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Between :
FUTURE NEW DEVELOPMENTS LIMITED / Claimant- and -
B & S PATENTE UND MARKEN GmbH / Defendant
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Malcolm Chapple (instructed by Briffa solicitors) for the Claimant
Ulick Staunton (instructed by Lupton Fawcett Denison Till) for the Defendant
Hearing dates: 2nd June 2014
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Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
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HIS HONOUR JUDGE HACON
HIS HONOUR JUDGE HACONApproved Judgment / FND v B&S Patente
Judge Hacon :
Background
HIS HONOUR JUDGE HACONApproved Judgment / FND v B&S Patente
1. The Defendant (“B&S”) is a company domiciled in Germany. It is the registered proprietor of European Patent (GB) 1 095 541 (“the Patent”) which relates to energy saving technology for use with fluorescent tubes. The application for the Patent was filed on 30 September 1999 by Inotec GmbH (“Inotec”). On 27 October 2001 Inotec assigned the application to the Claimant (“FND”), a company domiciled in the Cayman Islands. The Patent was granted by the European Patent Office on 17 July 2002.
2. On the face of a written declaration of assignment dated 23 March 2009 the Patent was assigned from FND to B&S. The declaration is signed by Alois Steiert who, at least until 21 February 2009, was a director of FND. The assignment was registered by the UK Intellectual Property Office (“IPO”) so that B&S is recorded as the registered proprietor of the Patent.
3. FND claims that on 23 March 2009 Mr Steiert had no authority to assign the Patent and that the purported assignment is of no legal effect. On 17 September 2012 FND filed a reference in the IPO under section 37 of the Patents Act 1977 (“the Act”) claiming entitlement to the Patent.
4. There was a hearing on 23 October 2013. In a Decision dated 23 December 2013 the Hearing Officer, Julyan Elbro, directed that the claim would be more properly dealt with by the court and therefore declined to deal with the reference, pursuant to section 37(8) of the Act.
5. On 7 January 2014 FND issued a claim form in this court (“the IPEC”) claiming entitlement to the Patent. An acknowledgment of service dated 20 February 2014 was filed by B&S in which B&S indicated its intent to challenge the jurisdiction of the court. By an application notice dated 4 March 2014 B&S sought a declaration that the court has no jurisdiction to hear the dispute and an order setting aside the claim form. That application is now before me.
Grounds for the jurisdiction of the court
6. The jurisdiction of the court is governed by Council Regulation (EC) 44/2001 (“the Brussels I Regulation”). B&S’s initial skeleton argument in support of this application challenged jurisdiction on straightforward grounds. Art.22(4) does not apply to a dispute about the ownership of registered intellectual property rights, see Case 288/82 Djuinstee v Goderbauer [1983] ECR 3663. Therefore art.2 of the Regulation applies. B&S is domiciled in Germany, accordingly the present dispute must be brought there.
7. FND’s skeleton argument disputed none of this, save the final conclusion. It was argued that this court has jurisdiction on four alternative grounds. It is convenient to deal with them in the following order:
(1) The English courts are the forum conveniens;
(2) art.5(3) of the Brussels I Regulation applies;
(3) art.23(1)(b) applies;
(4) art.24 applies.
Forum conveniens
8. This ground was not pursued at the hearing, I think with good reason. The doctrine of forum non conveniens, and by extension an argument that England is the forum conveniens, is incompatible with the Brussels I Regulation and can have no application where the Regulation is engaged (see Case C-281/02 Owusu v Jackson [2005] ECR I-1383).
Article 5(3)
9. Art.5(3) states
“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.”
10. FND argued that the claim to ownership of the Patent related to a tort, namely the misrepresentation by Mr Steiert of his authority to assign the Patent on behalf of FND. That had happened in Germany but FND submitted that the place where the harmful event occurred, namely the registration of the Patent in B&S’s name, was England. Case 21/76 Handelswerkerij GJ Bier BV v Mines de Potasse D’Alsace SA [1976] ECR 1735 was cited.
11. Originally this argument was put on the basis that the tort was fraud on the part of Mr Steiert. When it was pointed out that FND had abandoned any allegation of fraud in the proceedings before the IPO, to the extent of striking out parts of its Statement of Grounds, misrepresentation was relied on instead as the relevant tort.
12. I do not accept that art.5(3) applies, the tort relied on being misrepresentation (or fraud). It has long been established that the expression ‘matters relating to a tort, delict or quasi-delict’ comprehends all actions which seek to establish the liability of a defendant which are not related to a contract within the meaning of art.5(1), see Case 189/87 Kalfelis v Bankhaus Schröder Münchmeyer Hengst & Co [1988] ECR 5565. Since Kalfelis there has since been considerable discussion by the courts of what constitutes the ‘liability’ of a defendant (see, for example, Briggs and Rees, Civil Jurisdiction and Judgments 5th ed., at ¶2.173 to 2.174). The claim is to the entitlement of the Patent; it is not alleged, and so far as I am aware could not be alleged, that the Patent is owned by B&S through any misrepresentation on the part of B&S. Mr Steiert is not a defendant.
Article 23(1)(b)
13. Art.23(1) of the Brussels I Regulation is in the following terms:
“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; … ”
14. FND submitted that in the IPO proceedings B&S had entered into argument regarding the merits of FND’s claim and that, while nominally reserving its right to challenge jurisdiction, it had in effect conducted itself in a manner indicating abandonment of that challenge. This constituted a practice which the parties had established between themselves within the meaning of art.23(1)(b) on which FND could now rely. Pursuant to that article the English courts have exclusive jurisdiction.
15. It is important to bear in mind that paragraph (1)(b) falls within an article (art.23) concerned with the choice of jurisdiction by agreement between the parties. Briggs and Rees give a helpful summary of the history and purpose of art.23(1)(b) (at ¶2.116):
“The wording which now appears as Article 23(1)(b) was introduced into the Brussels Convention on the accession of Spain and Portugal, to loosen the grip of the formality requirement of writing or evidence in writing [required by art.23(1)(a)]. It goes beyond the liberalisation of the requirement of writing, in that it allows for an agreement on jurisdiction to be validated even where there is an absence of writing recording the assent of the party to be bound, so long as there is evidence of a practice having been established between the parties. The reference to practices which the parties have established between themselves has in mind, no doubt, a situation in which the history of past dealings would suggest that it would be bad faith on the part of a party who sought to rely on the lack of writing to challenge the formal validity of the agreement, or to argue that there was no notice of the proposed agreement on jurisdiction.”
Litigation, including that in the IPO, is not centred on any agreement between the litigating parties – rather the opposite. Of course it is possible that parties may agree about particular matters during the course of litigation, such as an agreement that for the purposes of the dispute an identified assertion will be taken to be unchallenged, but nothing of that sort happened between these parties in the IPO. I will hypothesise for this purpose that in the IPO B&S had expressly and unequivocally abandoned any challenge to the jurisdiction of English courts. 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 which accorded with practices which the parties had established between themselves.
16. I therefore reject the submission that this court has jurisdiction pursuant to art.23(1)(b).
Article 24
17. Article 24 of the Brussels I Regulation is as follows:
“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.”
18. It was common ground that if the proceedings before this court were considered in isolation, B&S did not enter an appearance. In the acknowledgment of service the box for challenging jurisdiction was crossed and within 14 days of filing the acknowledgment B&S made its application disputing the court’s jurisdiction supported by evidence pursuant to CPR 11(4).
19. FND’s skeleton argument based its case in relation to art.24 on the same facts as, and by way of alternative to, the argument in relation to art.23(1)(b). In short, B&S had entered into what FND characterised as protracted proceedings before the IPO, B&S had engaged in those proceedings without first seeking to challenge jurisdiction and thus committed itself to the jurisdiction of the English courts. There was said to be a ‘seamless connection’ between the IPO proceedings and those currently before this court, such that they can be deemed to be the same. It was now too late to challenge jurisdiction.
20. The primary response of counsel for B&S when opening the application before me was that the IPO was not ‘a court of a Member State’ within the meaning of art.24 and therefore no question of entering an appearance could arise. No authority has been found by either counsel which touches on what ‘a court of a Member State’ and ‘the courts of a Member State’ mean in the Brussels I Regulation. I suggested that a potential difficulty with this argument was that those articles which confer jurisdiction in the Brussels I Regulation, such as arts.2, 5 and 6, could never confer jurisdiction on the IPO because it is neither a court of a Member State (nor ipso facto a court of a place in a Member State). Counsel for B&S submitted that the IPO could have jurisdiction if it was conferred by English law (or presumably the law of any other part of the UK), but not if jurisdiction was conferred pursuant to the Brussels I Regulation.
21. I think this is a false distinction. It seems to me that it is wrong to treat the Brussels I Regulation as either applying or not applying to a question of jurisdiction as if it were alternatively turned on or off. The Regulation always applies but in some purely local circumstances, take for instance whether an intellectual property case should be heard by the general Chancery Division, the IPEC, the IPO or an Appointed Person, the Regulation has nothing to say and is therefore not engaged. In other local circumstances, such as whether English or Scottish courts have jurisdiction, or whether this or that county court has jurisdiction, it might be engaged (see arts.5 and 6).
22. On the present facts, when FND started proceedings there was necessarily a question as to whether such proceedings should be started in England, Germany or elsewhere, irrespective of whether the parties in fact gave the issue much attention. The Brussels I Regulation was undoubtedly engaged; identifying which courts had jurisdiction depended on the application of its provisions. If B&S’s submission were right, the proceedings could and should never have been started in the IPO, leaving aside other possible reasons, because it is not a ‘court’. The IPO is forever excluded from jurisdiction where the Brussels I Regulation is engaged. I note that this was not a point taken at the time, i.e. before the IPO, but in any event I do not accept it. If at the start of the IPO proceedings the Regulation awarded jurisdiction to the English courts (I make that hypothetical assumption solely for the purpose of this paragraph) then the proceedings were properly started in England. In my view identifying the tribunal or tribunals in England which were entitled to hear the case was then a matter concerning which the Regulation was indifferent. It was consequently determined solely according to English domestic law. In other words, ‘the courts of the Member State’ in arts.2, 5, 6 and ‘a court of a Member State’ in art.24 of the Regulation encompass any tribunal of the relevant Member State, or tribunal of a place within the Member State as the case may be, which may lawfully hear the proceedings.