Subsidiary, parent company and an EU Court decision

111The European Court issued a decision to what extent a subsidiary company can be responsible for action taken by its parent company. The case C‑617/15 Hummel Holding A/S  v Nike Inc.,  Nike Retail BV concerns the following:

Hummel Holding is an undertaking with its seat in Denmark which manufactures sports goods, sports and leisure clothing and sports and leisure footwear. It is the proprietor of the international figurative trade mark registered under No 943057 with effect in the European Union for goods in Class 25 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, corresponding to the following description: ‘Clothing, footwear, headgear’.

Nike, which has its seat in the United States, is the ultimate holding company of the Nike Group, which sells sports goods across the world. Nike Retail, which has its seat in the Netherlands, also belongs to that group. Nike Retail operates the website on which Nike goods are advertised and offered for sale, in Germany in particular. In addition to online sales on that website, Nike goods are sold in Germany through independent dealers supplied by Nike Retail. Wholesale or retail sales in Germany are not directly conducted by the companies in the Nike Group.

Nike Deutschland GmbH, which has its seat in Frankfurt am Main (Germany) and is not a party to the main proceedings, is, according to the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany), a subsidiary of Nike Retail. Nike Deutschland does not have its own website and does not sell goods to end consumers or intermediaries. However, it negotiates contracts between intermediaries and Nike Retail, and supports Nike Retail in connection with advertising and the performance of contracts. Nike Deutschland also provides aftersales service for end consumers.

Hummel Holding claims that some Nike products, in particular, basketball shorts, infringe the trade mark referred to in paragraph 13 above and that most of the infringements took place in Germany. It brought an action against Nike and Nike Retail before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany), which ruled that it had jurisdiction on the ground that Nike Deutschland was an establishment of Nike, but dismissed the action on the merits. Hummel Holding appealed to the referring court against that decision.

Hummel Holding seeks an order that the defendants cease from importing, exporting and advertising those goods, offering them for sale, placing them on the market and allowing them to be placed on the market, in the European Union (in the alternative, in the Federal Republic of Germany) as regards Nike and in the Federal Republic of Germany as regards Nike Retail.

Nike and Nike Retail object that the German courts lack international jurisdiction.

The referring court considers that the international jurisdiction of the German courts to hear the action in respect of the European Union as a whole, brought against the companies in the Nike group, can be based only on Article 97(1) of Regulation No 207/2009. It states, however, that the scope of the concept of ‘establishment’ within the meaning of that provision, with regard to distinct first and second-tier subsidiaries, is disputed and has not been clarified by the Court.

In those circumstances, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Under which circumstances is 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 to be considered as an “establishment” of that undertaking within the meaning of Article 97(1) of [Regulation No 207/2009]?’

The Court’s decision:

Article 97(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark must be interpreted as meaning that a legally distinct second-tier subsidiary, with its seat in a Member State, of a parent body that has no seat in the European Union is an ‘establishment’, within the meaning of that provision, of that parent body if the subsidiary is a centre of operations which, in the Member State where it is located, has a certain real and stable presence from which commercial activity is pursued, and has the appearance of permanency to the outside world, such as an extension of the parent body.

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Brief IP news

briefs_1131. Fact Sheet. Domain names and cybersquatting. For more information here.

2. EUIPO announces the second edition of the DesignEuropa Awards. For more information here.

3. A Decision Guide for Filing International Patent Applications for Multiple Inventions. For more information here.

 

Information from Intellectual Property Center at the UNWE. More information can be found here

A Black Friday trademark case in Germany

addtext_com_MDQ0MzQxMzUyMQOliver Löffel published an interesting article for Lexology which concerns a case for a Black Friday trademark registered in Germany by a Hong Kong company that licensed this mark to a Vienne based company.

In a nutshell, the later company started to threaten every other company that tries to use this expression in advertisement campaign related to the well-known US day for bargain-sales.

It is no surprise that in this case many cancellation actions were been initiated against the mark on absolute grounds – lack of distinctiveness and a term which have become customary in the current language or in the bona fide and established practices of the trade. The reason for this is the fact that this mark was registered in 2013 whereas the use of the expression in Germany started back to 2006 when Apple use Balck Friday for its promotional campaign.

More information here.

New electronic trademark registration service in Qatar

doha-2366127_960_720The Ministry of Economy and Commerce of Qatar announced the launching of its new electronic trademark registration service. Its main purpose is to improve the conditions for making business in the country adopting the best international practices in the field of intellectual property and in that way facilitating all entrepreneurs which operate in Qatar.

More information here.

An EPO proposal for patent registration fee reductions

onzo-patentThe European Patent Office has put forward a proposal to reduce the fees for registration of European patents.  The new proposals will reduce both the PCT search fee and the examination fee by EUR 100 each. For applicants using the EPO as ISA for search and examination and entering the European phase, the PCT fee proposals would result in a considerable fee reduction: a decrease of EUR 656.

In addition, there are proposals for fees reduction for SME’s and universities.

More information here.

Trademark enforcement in Benelux

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LYDIAN published an interesting article for Lexology which discuss how you can enforce rights over a trademark in Benelux. The article covers the following:

  • Which courts are empowered to hear trademark disputes?
  • What actions can be taken against trademark infringement and what are the key features and requirements of each?
  • Who can file a trademark infringement action?
  • What is the usual timeframe for infringement actions?
  • What rules and procedures govern the issuance of injunctions to prevent imminent or further infringement?
  • What remedies are available to owners of infringed marks? Are punitive damages allowed?
  • What customs enforcement measures are available to halt the import or export of infringing goods?
  • What defenses are available to infringers?

More information here.