The author of this post is Lydia Lundstedt, a Senior Lecturer at the Stockholm University.
By a ruling of 17 May 2023 (No 13504), the Corte Suprema di Cassazione (Italian Supreme Court) held that the Italian courts lacked jurisdiction over an action concerning the non-infringement of an international design right. The decision raises several interesting issues concerning the application of the rules on jurisdiction set out in the Brussels I bis Regulation to infringements of intellectual property rights.
The German company Bulthaup is the holder of an international design right for a tap valid for inter alia Germany and Italy. Bulthaup sent a warning letter to another German company, Nobilia-Werke, demanding that it cease selling the tap “Alila” claiming that it was a copy of Bulthaup’s design. The Alila tap is manufactured by an Italian company, Gessi. When Gessi learned that Bulthaup had sent a warning letter to its customer, Nobilia-Werke, Gessi wrote to Bulthaup and denied infringement. After communication between Gessi and Bulthaup’s lawyers, Gessi sued Bulthaup and the related company Bulthaup Italia Srl (Bulthaup Italia) before the Tribunale di Milano (Court of Milan). In addition, Nobilia-Werke was made a party to the proceedings.
Gessi requested that the Court of Milan declare that the Italian part of the international design was invalid. In addition, Gessi requested inter alia a declaration that the production and marketing of the Alila tap did not infringe the industrial property rights of Bulthaup and/or Bulthaup Italia and that its and Nobilia-Werke’s activities did not constitute acts of unfair competition. Bulthaup and Bulthaup Italia objected to the Court of Milan’s jurisdiction on the basis that the claims “concern German territory only”, with the exception of the invalidity claim concerning the Italian part of the design. Nobilia-Werke did not contest jurisdiction. The Court of Milan set a hearing to clarify and Gessi appealed to the Supreme Court.
The Supreme Court’s decision
The Supreme Court held that the Court of Milan had jurisdiction over the invalidity claim concerning the Italian part of the design in accordance with Article 24(4) of Brussels I bis Regulation. With regard to the other claims concerning inter alia a declaration of non-infringement of design rights and a declaration of non-violation of unfair competition rules, the Supreme Court held that the Court of Milan did not have jurisdiction.
First, the Supreme Court held that Article 4 of the Brussels I bis Regulation could not provide a basis for jurisdiction because both Bulthaup and Nobilia-Werke were domiciled in Germany, not Italy.
Second, the Supreme Court examined whether Article 7(2) of Brussels I bis Regulation could provide a basis for jurisdiction. With references to the case law of the Court of Justice of the European Union (CJEU), the Supreme Court observed that Article 7(2) was applicable to actions for negative declarations and that a plaintiff could sue either at the place of the causal act or the place of (direct) damage. The Supreme Court recalled the CJEU’s decision in Wintersteiger (C‑523/10) holding that in cases of trademark infringement, damage occurs in the Member State where the right is protected. The Supreme Court observed that this ruling was relevant for infringements of design rights. The Court found however that this decision did not provide a basis for jurisdiction because the right at issue was the German part of the international design.
In addition, the Supreme Court rejected Gessi’s assertion that damage occurred in Italy in accordance with the CJEU’s interpretation of Article 7(2) in Bolagsupplysningen (C-194/16). It can be recalled that the CJEU held that a legal person claiming that its personality rights have been infringed by the publication of incorrect information on the internet can sue where it has its centre of interests because that is where the damage to its reputation is most keenly felt. The Supreme Court stated that Bolagsupplyningen concerned “a completely different” situation specific to internet, whereas in the case at hand, the damage alleged by Gessi, namely, interference with its contractual relationship with Nobilia-Werke, occurred in Germany. Indeed, the Court explained that damage from a warning letter sent by a German company (Bulthaup) to another German company (Nobilia-Werke) about activity in Germany in alleged violation of a right protected in Germany could only occur in Germany. In addition, the Court rejected Gessi’s assertion that Bulthaup had sent another warning letter addressed to Gessi concerning Gessi’s conduct in Italy. The Supreme Court explained that this so-called warning letter was in fact a letter from Bulthaup’s lawyer in reply to a letter from Gessi’s lawyer concerning a possible settlement. As a lawyer’s letter seeking an amicable settlement could not be a basis for damage, the Supreme Court held that the Court of Milan did not have jurisdiction on the basis of Article 7(2).
Lastly, the Supreme Court examined whether Article 8(1) of the Brussels I bis Regulation could provide a basis for jurisdiction in light of the fact that Gessi had also sued Bulthaup Italia, which is domiciled in Italy. Pursuant to Article 8(1), a defendant domiciled in a Member State may be sued, when he or she is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
The Supreme Court recalled the CJEU’s decision in Roche Nederland (C-539/03) that the application of Article 8(1) does not apply to alleged infringements of different parts of a European patent because each part is a separate and independent right which must be assessed under national law so there is no risk for irreconcilable judgments. Thus, the Supreme Court noted that the claim concerning the invalidity of the Italian part of the design was not relevant for establishing jurisdiction over for the claims for non-infringement.
Thereafter, the Supreme Court noted that while Gessi’s action for negative declaratory relief was justified in so far as it related to Bulthaup’s accusation of infringement in Germany of the German part of the design right, the Supreme Court held that jurisdiction could not be fictitiously established by bringing a claim against a “silent” and “disinterested” defendant (Bulthaup Italia). The Supreme Court explained that Bulthaup Italia was not the holder of the design right and had not asserted the right so there was therefore no plausible reason for involving it in the dispute. Consequently, the Supreme Court held that the Court of Milan did not have jurisdiction on the basis of Article 8(1).
The Supreme Court’s ruling does not clearly separate the question of jurisdiction from the question of admissibility under national procedural law. As the defendant Bulthaup Italia is domiciled in Italy, it may be sued in Italy for any claim within the scope of the Brussels I bis Regulation except for where there is exclusive jurisdiction. Thus, the Court of Milan should have jurisdiction over Bulthaup Italia in accordance with Article 4 Brussels I bis Regulation in respect of the negative declaratory claims concerning infringement and unfair competition. It is a separate question that these claims are inadmissible under national procedural law because Gessi had no legitimate interest in bringing a claim against Bulthaup Italia.
In addition, while I agree with the Supreme Court that Article 7(2) would not provide a basis for jurisdiction over Bulthaup for the negative declaratory claims concerning Germany, Gessi’s claims appear to refer also to Italy. Indeed, Gessi requests a declaration that “the production and marketing” of the tap does not infringe industrial property rights. The production of the tap, which likely takes place in Italy, concerns the Italian part of the international design. As the Supreme Court rightly noted, in Wintersteiger, the CJEU held that jurisdiction lies in the Member State where the right is protected, and Bulthaup’s right is protected (also) in Italy. Thus, the Court of Milan should have jurisdiction over Bulthaup in accordance with Article 7(2) Brussels I bis Regulation in respect of the claim for non-infringement of the Italian part of the international design. Again, it is a separate question whether this claim is admissible under national procedural law in light of the fact that Bulthaup had not sent any warning letter to Gessi concerning Italy.
Concerning Article 8(1) of the Brussels I bis Regulation, I agree with the Supreme Court that the invalidity claim was not relevant for establishing jurisdiction over the non-infringement claims, but for an additional reason not mentioned by the Court. The invalidity claim was brought against Bulthaup, not Bulthaup Italia. Clearly, Bulthaup cannot be used as an anchor defendant to bring additional claims against Bulthaup.
In contrast, the negative declaratory claims were brought against both Bulthaup and Bulthaup Italia so the latter could serve as an anchor defendant. That said, the Supreme Court’s conclusion that Article 8(1) was not applicable in cases of abuse is arguably in line with Freeport (C‑98/06). In that case, the CJEU held that if the requirements of (what is now) Article 8(1) are fulfilled, there is no further need to establish separately that the claims were not brought with the sole object of ousting the jurisdiction of the courts of the Member State where one of the defendants is domiciled. This decision has been understood to mean that the claims are either sufficiently connected or there is abuse. In this case, the Supreme Court found that there was abuse because there was no plausible reason for involving Bulthaup Italia in a dispute concerning the German part of the design right.
As noted above, however, Gessi’s negative declaratory claims appear to concern Italy as well. There would be a plausible reason for involving Bulthaup Italia in a dispute concerning the Italian part of the design right. This raises two issues. First, could Bulthaup Italia be used as an anchor defendant even though the claims against Bulthaup Italia were likely inadmissible under Italian procedural law for lack of a legitimate interest? In Reisch Montage (C‑103/05), the CJEU held that (what is now) Article 8(1) applies even when an action brought against the anchor defendant (here Bulthaup Italia) is inadmissible pursuant to a provision of national law already at the time it is brought.
Second, are the negative declaratory claims against Bulthaup Italia concerning Italy connected to the claims against Bulthaup concerning Germany in the meaning of Article 8(1)? The CJEU’s decision in Roche Nederland which was cited by the Supreme Court, deals with patents. In a later case, Painer (C-145/10), which deals with copyright infringement, the CJEU did not exclude the application of article 8(1) in relation to defendants accused of infringing copyright protected in different Member States when the national laws on which the claims were based were “substantially identical”. In light of the fact that national design rights have been harmonized in accordance with Directive 98/71/EC on the legal protection of designs, the question arises whether the approach in Roche or Painer should be followed.