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21-02-2017 » About the international jurisdiction of European Trademark Courts

Council Regulation No 207/2009 on the Community trade mark provides its own rules of competence for judicial action, including regarding violations of rights in a European mark.

Therefore, each Member State has designated a "European Court" competent for infringement actions undertaken on the basis of a European mark or against a European mark. Under article 94 of this regulation, in the first placeratione loci, the European Court on whose territory the defendant has his domicile is competent. However, pursuant to article 97, if the defendant is domiciled outside the EU, but has an establishment in a Member State, the dispute is brought before the relevant court of the Member State of this establishment.

For the first time, the ECJ will pronounce on a definition of 'establishment' within the meaning of this article to determine if a Danish applicant, Hummel Holding A/S, may sue a defendant, Nike Inc., not at the headquarters of the company in the United States, but in Germany where the latter has a Nike Retail B.V. establishment.

In his brief of January 12, 2017, the Advocate General Tanchev recommends to the ECJ to answer thus:

« In circumstances such as those in the main proceedings, a legally distinct second-tier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the European Union is to be considered an ‘establishment’ of that undertaking within the meaning of Article 97(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1) if that legally distinct second-tier subsidiary is a centre of operations which, in the Member State where it is situated, has the appearance of permanency, such as an extension of the third State parent body. »

After having emphasized the autonomy of the European definition of the term 'establishment', and noted the legal independence of Nike Retail A/B. with regard to its parent company located in the United States, the Advocate General comments that the German company saves third parties from having to negotiate directly with the parent company and is, taking everything into account, the extension of the latter in Germany. Its essential function is not only the management of sales but also identification and representation of its parent, whose projection it is and whose same name, "Nike", it uses conspicuously. 

According to the Advocate General these are material factors, verifiable by third parties, which lead one to consider that the German subsidiary of Nike is an operations centre and therefore constitutes an establishment.

He points out, moreover, that, if a defendant/third party to the European Union wishes to avoid the extended international jurisdiction provided by article 97, they must clarify the legal and commercial relations that bind them to a possible establishment: by public and explicit messages, or by restructuring the commercial organization or restricting the use of the mark by this establishment.

(Opinion of Advocate General Tanchev of 12 January 2017, Case C-617/15)

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