On 10th January 2017 a judgment passed by the Supreme Court was published regarding international jurisdiction, which ratified a judgment passed by the Provincial Court of Alicante (which is the competent European Trademark court) against Bayerische Motoren Werke AG (better known as BMW) for engaging in a case of forum shopping or the election of the most convenient jurisdiction.
The issue arose when BMW filed a claim against ACACIA, an Italian company which manufactures imitation wheel rims and is one of the biggest suppliers of such wheel rims in all of the EU. Said claim was filed before the Commercial Court of Alicante given that it is also the competent European Design Court and was jointly filed against AUTOHAUS, a Spanish car workshop, with which the Italian company does not have any direct corporate or commercial relationship, but did offer for sale the models of the wheel rims manufactured by ACACIA.
In the claim, which aggregated the claims brought against both companies, BMW requested that the infringement upon its registered Community models be established, which are protected by a series of registered industrial designs and that the defendants be sentenced to cease any act of trade with said wheel rims within the scope of the EU, and likewise to destroy any wheel rims still in their possession.
BMW established international jurisdiction in the Community design courts located in Spain, based upon the connection rights of article 6.1 of Regulation 44/2001, since AUTOHAUS has it’s registered address in Spain and that both defendants are linked by a very close relationship, which made it appropriate to process and make a ruling regarding the action brought against both companies at the same time, in order to avoid resolutions, which may be irreconcilable if the matters were decided separately, as established in the aforementioned article.
The Italian company ACACIO formulated a declinatory plea for lack of jurisdiction, and considered that the conduct of BMW constituted forum shopping. ACACIA did not deny having supplied wheel rims to AUTOHAUS or that the wheel rims gave the same general impression as the Community models registered by BMW. Furthermore, in its claim it invoked the must-match or repair clause of article 110 of Regulation 6/2002 on Community Designs, according to which it is understood that the product, in this case the wheel rims of a car, are considered as components of a more complex product, and that their use allows the reparation of said complex product and the return of its initial appearance, thus there is no infringement of the rights of a Community design.
The Commercial Court of Alicante admitted the claim of BMW, given that the Provincial Court of Alicante follows a consolidated line which establishes that in the case of wheel rims the must-match or repair clause is not applicable. It is important to emphasise that in its appeal ACACIA also raises questions relative to the lack of international jurisdiction through the incorrect application of article of the Brussels I Regulation (current Brussels I Regulation bis).
The Provincial Court of Alicante revoked the Commercial Court’s decision regarding international jurisdiction, finding that there was no coincidence in the legal and factual situation of both actions, given that the cited article could not be applied in such a way as to allow the claimant to formulate a claim against various defendants with the sole purpose that one of them evades the jurisdiction of the courts of the State where the company is domiciled. This posture was opposed by BMW, which considered that the infringements of both companies were the same and that the requirement of the aforementioned article 6.1 regarding related actions was fulfilled.
The Supreme Court the the Provincial Court of Alicante verified that BMW had obtained various favourable decisions from the courts of Alicante in which the exception of the must match or repair clause was not interpreted in such a way that its application was excluded in the area of wheel rims. On the other hand, at the court of the domicile of ACACIA in Italy, BMW had obtained a court judgment to the contrary.
The Supreme Court confirmed the decision of the Provincial Court deemed that BMW had purposely intended to remove ACACIA from the court corresponding to its domicile in Italy, joining the action brought against said Italian company, one of the principal suppliers of substitute wheel rims in the European Union, to the action brought against a simple car repair workshop based in Spain, with the intention of detracting from unfavourable case law criteria. Based upon both of these reasons, the Provincial Court ruled that BMW had engaged in conduct consisting of the deliberate search for a court with favourable case law, thus constituting forum shopping.
The Supreme Court established that, although the election of jurisdiction on the part of the claimant, provided for in numerous regulatory standards regarding international jurisdiction, and that said election is made in line with the claimant’s interests, it may not be classified per se as forum shopping, given that the use of a faculty envisaged in the law cannot be considered to be illegal. However, in this case the requirements for forum shopping are met, given that an attempt has been made to take the dispute to the courts of the State where the weakest link with the dispute exists, with the intention of opting for the most favourable case law.
This procedural strategy does not only infringe upon the principle character of the defendant’s domicile and the exceptional connection rights of article 6.1 of the Brussels I Regulation, but also against the call for predictability of the jurisdiction which inspires the regulation of the international jurisdiction system in Community regulations.
Hugo Ester
Vilá Abogados
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3rd of February, 2017
