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Monday, 2 October 2017

Community registered designs & the CJEU - Nintendo v Big Ben

Other games are available (but few are as fun as Mario Kart)
The CJEU has recently given a preliminary ruling (following a reference from a German court - the Oberlandesgericht Düsseldorf) on questions of jurisdiction and Community registered designs.  The decision is Joined Cases C‑24/16 and C‑25/16 Nintendo Co., Ltd v Big Ben Interactive (EU:C:2017:724, 27 September 2017).

For those of you who don't know who have never had the pleasure of playing Mario Kart, Tetris or Zelda, Nintendo is a Japanese gaming company which creates both consoles and associated controllers (e.g. the Wii and Switch) and games (e.g. Donkey Kong).

Nintendo owns many registered Community designs, including several relating to Wii accessories, such as the Wii remote (the Wii's main controller), the ‘Nunchuck’ an additional controller which can be used in combination with the Wii remote control and the Balance Board, an accessory that allows the player to control the game through weight changes - it latter is an essential component in the popular Wii Fit games.

BigBen France makes remote controls and other accessories compatible with the Wii video games console and sells them (i) via its website to consumers in France, Belgium and Luxembourg etc, and (ii) to its subsidiary, BigBen Germany.  The German subsidiary sells the goods, via its website, to consumers in Germany and Austria.

BigBen Germany does not have its own stock of goods and effectively acts as a "drop shipper" by forwarding the orders it receives from consumers to BigBen France. Supply of the allegedly infringing goods is therefore carried out from France. As the court noted, "BigBen Germany and BigBen France also use images of goods corresponding to the protected designs held by Nintendo in the course of the lawful sale, including for the purposes of publicity, of certain other goods they sell [26]."

You can never have too many accessories
Nintendo alleges infringement of its registered Community designs through the sale of the products and use of the images.  It sued both BigBen Germany and BigBen France in the Dusseldorf for infringement.  The German court found infringement of the designs (but not for use of the images of the goods) by BigBen and slapped the German company with a pan-European Union injunction.  In addition it ordered to disclose information, accounts and documents, as well as to destroy/recall infringing stock, publish the judgment and pay damages and costs (the "Supplemental Claims").

The German court held that it had international jurisdiction in respect of BigBen France and ordered a similar pan-European Union injunction. Concerning the Supplementary Claims, it limited the scope of its judgment to BigBen France’s supplies of the goods at issue to BigBen Germany, but without limiting the territorial scope of its judgment. It considered the applicable law to be German, Austrian and French (i.e. the law of the place of infringement).

Both Nintendo and the defendants appealed the judgment.

Not to be confused with Big Ben Tower 
BigBen France argued that the German courts lack jurisdiction to grant pan-EU injunctions against it.
Nintendo disputed the limitation to the goods within the supply chain between the defendants in the main proceedings and claimed that the injunction should extend to the images of the goods corresponding to its registered Community designs. It also argued that German law should be applied to BigBen Germany and French law to BigBen France.

Nintendo therefore requests the referring court to order the defendants in the main proceedings to cease to make, import, export, use or stock for those purposes the goods at issue within the European Union and/or reproduce those goods or, as the case may be, use the images of those goods corresponding to Nintendo’s Community designs, throughout the European Union. Nintendo’s claim relating to ceasing the production of the goods that, in its view, infringe the registered Community designs held by it concerns solely BigBen France.

As a result of this appeal, the German court referred three questions to the CJEU:
(1)      In connection with a trial to enforce claims under a Community design, can the court of a Member State whose jurisdiction with respect to a defendant is based solely on Article 79(1) of [Regulation No 6/2002] in conjunction with Article 6(1) of [Regulation No 44/2001], on the basis that this defendant, which is domiciled in another Member State, supplied the defendant domiciled in the pertinent Member State with goods that may infringe intellectual property rights, adopt measures against the first mentioned defendant that are applicable throughout the EU and extend beyond the supply relationships on which jurisdiction is based
(2)      Is [Regulation No 6/2002], particularly Article 20(1)(c), to be interpreted as meaning that a third party may depict a Community design for commercial purposes if it intends to sell accessory items for the right holder’s goods corresponding to the Community design? If so, what criteria apply to this? 
(3)      For the purposes of Article 8(2) of [Regulation No 864/2007], how is the place “in which the act of infringement was committed” to be determined in cases in which the infringer:
(a)      offers goods that infringe a Community design on a website and that website is also directed at Member States other than the one in which the person damaged by the infringement is domiciled; and/or
(b)      has goods that infringe a Community design shipped to a Member State other than the one in which it is domiciled?
Is Article 15(a) and (g) of the Rome II Regulation to be interpreted as meaning that the law determined in this manner is also applicable to participatory acts of other persons?
NB Regulation No 6/2002 is now replaced by Regulation No 1215/2012.

Jurisdiction 

The CJEU noted that the Community registered design has unitary character (i.e. any changes to it apply across the EU) and there is nothing in Article 6(1) of Regulation No 44/2001 (Recast, or the relevant case law) to prevent the court seeing their territorial jurisdiction limited in respect of a defendant from a different Member State.

Therefore, the territorial jurisdiction of a Community design court seised of an action for infringement within the meaning of Article 81(a) of Regulation No 6/2002, (such as the Dusseldorf court), extends throughout the EU also in respect of a defendant who is not domiciled in the Member State of the forum (i.e. BigBen France).

This extension of jurisdiction includes orders for remedies such as the provision of information, accounts and documents by defendants, orders to pay damages and costs etc (all of which are matters of national law).

Use of images of goods corresponding to the designs

A 2D image of a 3D design may be an "act of reproduction" subject to various exceptions including  "for the purpose of making citations" (Article 20(1)(c) of Regulation No 6/2002)

Any provisions which limit the rights granted to the design holder must be interpreted strictly.  The court concluded that a party makes "citations" when it lawfully sells goods intended to be used with specific goods corresponding to Community designs and reproduces images of the latter goods "in order to explain or demonstrate the joint use of the goods it sells".  

This limitation is subject to three cumulative conditions: (i) fair trade practice, (ii) absence of undue prejudice to the normal exploitation of the design and (iii) mention of the source.

Infringement on a website outside the court's jurisdiction

When the infringement is committed using a website outside the court's jurisdiction, the ‘country in which the act of infringement was committed’ is the country where the event giving rise to the damage occurred.


"The place where the event giving rise to the damage occurred within the meaning of Article 8(2) of Regulation No 864/2007 is the place where the process of putting the offer for sale online by that operator on its website was activated" [108].

Where the same defendant is accused of various acts of infringement in various Member States, "the correct approach for identifying the event giving rise to the damage is not to refer to each alleged act of infringement, but to make an overall assessment of that defendant’s conduct in order to determine the place where the initial act of infringement at the origin of that conduct was committed or threatened by it" [111].

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