3PLR – MECHKLERMEDIA CORP AND ANOTHER V. D.C CONGRESS GMBH

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

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MECHKLERMEDIA CORP AND ANOTHER

V.

D.C CONGRESS GMBH

CHANCERY DIVISION

[1998] 1 ALL E.R. 148

26, 27 FEBRUARY, 7 MARCH 1997

3PLR/1997/73 (CH.D)

 

BEFORE:

JACOB J

 

REPRESENTATION

Jessica Jones (instructed by Llewelyn Zietman) for DC.

Richard Hacon (instructed by Olswang) for the plaintiffs.

Cur adv vult

 

MAIN ISSUES

CONFLICT OF LAWS: TORTS; Passing off: INTELLECTUAL PROPERTY; Trade Marks: ADMINISTRATION OF JUSTICE; Courts: CIVIL PROCEDURE

Conflict of laws – Jurisdiction – Challenge to jurisdiction – Passing off – Plaintiffs bringing action in England for passing off – Trade mark infringement proceedings pending in Germany between defendant and plaintiffs’ German licensee – Whether English court having jurisdiction to hear and determine passing off action – Place where harmful event occurred – Whether proceedings involving same parties and same cause of action – Whether German court seised of a related action – Civil Jurisdiction and Judgments Act 1982, Sch 1, arts 2, 5(3), 21, 22.

The plaintiffs, a US company and its English subsidiary, brought proceedings against a German corporation, claiming that it was committing the tort of passing off. In particular, the plaintiffs alleged that they had established goodwill in the United Kingdom in the words `Internet World’ via the business activities of the English subsidiary. The writ was served on the defendant corporation in Germany. Thereafter, the defendant applied for an order setting aside the writ on the ground that the English court did not have jurisdiction to hear and determine the claim made against it, relying on arts 2a and 5(3)b of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (incorporated into English law by virtue of Sch 1 to the Civil Jurisdiction and Judgments Act 1982), which provided, respectively, that a person domiciled in a contracting state should be sued in the courts of that state and that a person domiciled in another state could, in matters relating to a tort, be sued in the courts for the place where the harmful event occurred. Alternatively, the defendant applied to have the proceedings stayed under art 21c or 22d of the construction on the grounds that a German court was first seised of a related action between the defendant and the plaintiffs’ German licensee.

________________________________________

a Article 2, so far as material, is set out at p 153 h, post

b Article 5(3), so far as material, is set out a p 153 j, post

c Article 21 is set out at p 154 b c, post

d Article 22 is set out at p 154 c to e, post

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MAIN JUDGEMENT

Held – The application would be dismissed for the following reasons-

(1)     Where art 5(3) of the convention applied, the plaintiff was given an option to sue either in the forum of the defendant’s domicile, or forum of the place where the harmful event occurred. For the purposes of the English tort of passing off, the harmful event was the harm done to the plaintiffs’ goodwill in England and its effect on their reputation in England; that was a direct effect on the plaintiffs’ claimed English property. Accordingly, although art 2 would in theory permit an action in Germany in respect of the passing off in England, it was clear that the place where the harmful event occurred was England and, as such, the case was within art 5(3)(see p 155 j to p 156 a e and p 157 b, post); Dumez France v Hessiche Landesbank (Helaba) Case C-220/88 [1990] ECR I-49 and Shevill v Presse Alliance SA Case C-68/93 [1995] All ER (EC) 289 applied.

(2)    A mere licensee who happened to be working for the plaintiff could not be regarded as the `same party’ as the plaintiff because it was a wholly different enterprise. Moreover, the causes of action were different: the cause of action in Germany was alleged infringement of the German trade mark registration and hardly any of the facts relevant to the English passing off action would be relevant to the action there. It followed that the English court would not be required under art 21 of the convention to stay the proceedings (see p 157 d to h, post); Berkeley Administration Inc v McClelland (No 2)[1995] ILPr 201 considered.

(3)     Similarly, the court would not exercise its discretion under art 22 to stay the action or decline jurisdiction. First, the German court was not seised of a `related action’ in that there was no risk of unreconcilable judgments in the infringement action in Germany and the English passing off claim. It was, moreover, clear that the most convenient forum for deciding an English trade mark or passing off case was the English court (see p 158 c d h j and p 160 b c, post); The Maciej Rataj, Tatry (cargo owners) v Maciej Rataj (owners) Case C-406/92 [1995] All ER (EC) 229 applied.

Notes

For elements of the action of passing off, see 48 Halsbury’s Laws (4th edn reissue) para 165, and for cases on the subject, see 47(2) Digest (Reissue) 190-226, 2816-3001.

For the jurisdiction of the courts in relation to the Brussels Convention, see 8(1) Halsbury’s Laws (4th edn) para 618.

For the Civil Jurisdiction and Judgments Act 1982, Sch 1, arts 2, 5, 21, 22, see 11 Halsbury’s Statutes (4th edn)(1991 reissue) 1136, 1147, 1148.

Cases referred to in judgment

Berkeley Administration Inc v McClelland (No 2)[1995] ILPr 201, CA.

Centro Internationale Handelsbank AG v Morgan Grenfell Trade Finance Ltd (3 March 1997, unreported), QBD.

County Sound plc v Ocean Sound Ltd [1991] FSR 367, CA.

Dumez France v Hessiche Landesbank (Helaba) Case C-220/88 [1990] ECR I-49.

Handelskwekerij G J Bier BV v Mines de Potasses d’Alsace SA Case 21/76 [1976] ECR 1735.

Maciej Rataj, The, Tatry (cargo owners) v Maciej Rataj (owners) Case C-406/92 [1995] All ER (EC) 229,[1994] ECR I-5439, ECJ.

Modus Vivendi Ltd v British Products Sanmex Co Ltd [1996] FSR 790.

Molnlycke AB v Proctor & Gamble Ltd [1992] 4 All ER 47,[1992] 1 WLR 1112.

Penney (J C) Co Inc v Penneys Ltd [1975] FSR 367, CA.

Shevill v Presse Alliance SA Case C-68/93 [1995] All ER (EC) 289,[1995] 2 AC 18,[1995] 2 WLR 499,[1995] ECR I-415, ECJ.

Stringfellow v McCain Foods (GB) Ltd [1984] RPC 501, Ch D and CA.

Tesam Distribution Ltd v Schuh Mode Team GmbH [1990] ILPr 149, CA.

Cases also cited or referred to in skeleton arguments

Australian Commercial Research and Development Ltd v ANZ McCaughan Merchant Bank Ltd [1989] 3 All ER 65.

British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281.

Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] 2 All ER 927,[1979] AC 731, HL.

Fortnum & Mason plc v Fortnam Ltd [1994] FSR 438.

Kalfelis v Bankhaus Schröder Münchmeyer Hengst & Co Case 189/87 [1988] ECR 5565.

Kitechnology BV v Unicor GmbH Plastmaschinen [1995] FSR 756, CA.

Marinari v Lloyds Bank plc (Zubaidi Trading Co intervening) Case C-364/93 [1996] All ER (EC) 84,[1996] QB 217, ECJ.

Minster Investments Ltd v Hyundai Precision and Industry Co Ltd [1988] 2 Lloyd’s Rep 621.

Rank Film Distributors Ltd v Lanterna Editrice Srl [1992] ILPr 58.

Summons

By a summons dated 22 January 1997 the defendants, D C Congress GmbH (DC), a German company, applied for an order striking out the writ and its service out of the jurisdiction in an action brought against them by the plaintiffs, Mecklermedia Corp, a company incorporated in Delaware, USA, and its English subsidiary, Mecklermedia Ltd, in which they alleged that DC was committing the English tort of passing off, on the ground that the English court did not have jurisdiction under the Civil Jurisdiction and Judgments Act 1982, which gave effect to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968, to hear and determine the claim. Alternatively, DC claimed that the Landesgericht München I was first seised of a related action which DC was suing the first plaintiff’s German licensee for trade mark infringement and that therefore the action should be stayed under Sch 1, art 21 or art 22. The facts are set out in the judgment.

7 March 1997. The following judgment was delivered.

JACOB J. This is an application by the defendants, D C Congress GmbH (DC), for an order setting aside the writ on the grounds that this court does not have jurisdiction to hear and determine the claim made against them under the provisions of the Civil Jurisdiction and Judgments Act 1982. Alternatively, DC seek an order staying this action or declining jurisdiction on the grounds that the Landesgericht München I is first seised of a related action in which DC is plaintiff and a corporation called Messe Berlin GmbH is defendant. Further or alternatively DC seek an order striking out the claim under the provisions of RSC Ord 18, r 19 or the inherent jurisdiction of the court.

THE CLAIM

The plaintiffs allege that DC is committing the English tort of passing off. The relief sought is in relation to the activities of DC in and from Germany said to lead to that tort being committed. It is said that the plaintiffs have a goodwill in England and Wales, that DC are making a misrepresentation within the jurisdiction and that that misrepresentation has caused and will cause the plaintiffs damage within the jurisdiction-the trinity of elements constituting passing off.

It is convenient to consider the strength of this claim first, for if DC can show that the claim has no prospect of success it should be struck out on purely English  law principles. Further, it is common ground that the strength of the claim is relevant to jurisdiction under the relevant provisions of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 which apply by virtue of the Act. In particular, it is common ground that a higher standard than that for a strike out is required-it is for the plaintiff to satisfy the court that there is `a serious question which calls for trial for its proper determination'(per Dillon LJ in Molnlycke AB v Proctor & Gamble Ltd [1992] 4 All ER 47 at 55-56,[1992] 1 WLR 1112 at 1121, quoting from Nicholls LJ in Tesam Distribution Ltd v Schuh Mode Team GmbH [1990] ILPr 149 at 158, 160). Clearly a foreign (even an EU) defendant should not be brought before our courts unless there is a serious question to be tried.

I turn to the first element of the trinity. The first plaintiffs, Mecklermedia Corp, are incorporated in Delaware. The second plaintiffs, Mecklermedia Ltd, are their English subsidiary. The second plaintiffs have, since 1994, been involved in the organisation of three trade shows in the United Kingdom. These were called `Internet World and Document Delivery World'(1994), and `Internet World International'(1995-6). It is said that these trade shows were widely advertised and attended. The trade shows were organised in conjunction with a licensee company. It is said that it was specifically agreed that all goodwill in the name `Internet World’ should vest in the first plaintiff whom I will henceforth call `Mecklermedia’.

Mecklermedia have, since 1993, published in the United States a magazine called `Internet World’. This is claimed to have some circulation within the United Kingdom, but this must be essentially of the `spill-over’ variety. In the autumn of 1996 an English version of the magazine was launched under the same name. It is published by VNU Business Publications but claims association (correctly) with the US magazine by saying:

`Internet World is already the most popular Internet magazine in the US. Now Internet World is to be published in the UK by the people who bring you Personal Computer World.’

The first edition was given away free with Personal Computer World and there was no dispute but that that magazine has a substantial UK circulation. It is claimed that VNU publish the English edition under licence from Mecklermedia and that it is specifically agreed by VNU that the goodwill in the name `Internet World’ should belong to Mecklermedia.

Finally it is claimed that Mecklermedia owns two web sites having the addresses ` http://www.internet-world.com’ and ` http://www.iworld.com’. It is said that anyone `visiting’ these sites would see prominent use of the name `Internet World’ and promotion of the plaintiffs’ trade shows and magazines. Not much information is given about these sites (for instance their date of establishment and the number of English visitors) and I do not place reliance on them.

The upshot of these activities is said to be that the plaintiffs own an `extensive goodwill’ in England. I certainly think that the plaintiffs have established that there is a `serious question’ that they do own such a goodwill. The most prominent activity has been the trade shows here. I do not see how they can have done other than create goodwill. It was suggested that the second plaintiffs may not own any part of that goodwill (by virtue of the provisions of the licence) but I do not think that matters for present purposes: one or other of the plaintiffs or  both are entitled to it. It is a goodwill which at least extends to the holding of trade shows.

The other two activities said to contribute to goodwill are much less significant for several reasons. The spill-over from the US magazine and the web site names is, on the present evidence, too shadowy. And the UK magazine is too late to be relevant to the question of whether the plaintiffs had a UK goodwill at the relevant time, namely July 1996 when DC started the activities complained of (see J C Penney Co Inc v Penneys Ltd [1975] FSR 367 at 373-375).

By way of attack on the claimed goodwill DC suggest that `Internet World’ is descriptive, so descriptive that goodwill cannot exist in the name. This sits ill with its contention that in Germany it has a valid registered mark consisting of that name. Moreover, it uses the name as a trade mark, complete with the symbol ® on brochures sent to this country. True it is that in Germany the name is in a foreign language, but that contention is of little weight having regard to the fact that most (if not all) of those likely to be interested will speak English because English is the main language of the internet. Moreover a German would not have to know much English to understand the two words-`internet’ is an international word and `world’ is far from an obscure English word.

Miss Jones, for DC, contended that the words should be regarded in the same way as the Court of Appeal regarded the words `Gold AM’ in County Sound plc v Ocean Sound Ltd [1991] FSR 367 at 373. I do not think that case assists. There the words were used by different radio stations for programmes. The plaintiffs’ use was very short and the court held that it was not proved it was recognised as an indication of source. I think here the words are to some degree descriptive though not wholly so. `Internet World’ is not so descriptive that people familiar with past trade shows under that name would not expect further `Internet World’ trade shows to be run by the same people who used that name in the past. On the contrary I think, prima facie, they would.

The next element of the trinity is misrepresentation. DC have organised their own trade shows, also calling them `Internet World’. The shows have been in Dusseldorf (26-28 November 1996) and Vienna (11-13 February 1997). To promote these shows DC, based in Germany, have prepared an English language letter and brochure and sent them out to prospective visitors and exhibitors. I have no information about other language promotional material, but I expect there is at least a German brochure. It is clear from what DC have done that they do not regard their shows as purely national affairs-they seek business internationally, including from here. DC have also established a German web site under the domain name ` http://www.internet world.de’.

So far as this country is concerned, DC specifically put onto their database the names and addresses of people and companies who appeared in the plaintiffs’`Internet World’ trade show catalogue in London. DC openly so admitted in a fax of 12 August 1996. Actually the fax is a little ambiguous (it speaks of the `congress visitors’). I was told (and there seems to be no dispute) that the trade show brochure contained a list of exhibitors and those visitors who had booked their tickets in advance. So DC have deliberately targeted those particularly interested in the plaintiffs’ shows. Moreover DC have asked the overseas department of the Department of Trade and Industry to promote their `Internet World’ exhibitions. They are clearly drumming up business from the UK.

I think there is certainly a serious question to be tried as to whether what they have been doing would mislead the interested public here. It is true that DC use  the name `dc conferences’ in small type. I cannot see how that would help those who spotted that use. The show here was organised with a local company and I rather think that quite a number of recipients of the defendant’s material would expect the two shows advertised to be connected with the plaintiffs by much the same sort of arrangement. True it is that evidence of misrepresentation at this stage does not include evidence from deceived or confused persons (I disregard the thin evidence that the second plaintiff’s managing director has received calls from confused customers as too vague). But I do not think that matters. After all the names are the same and I am entitled to form my own view of the matter.

What about the third element of the trinity, damage? Miss Jones says none has been proved. Now in some cases one does indeed need separate proof of damage. This is particularly so, for example, if the fields of activity of the parties are wildly different (eg Stringfellow v McCain Foods (GB) Ltd [1984] RPC 501, where the two fields of activity were a night-club and chips). But in other cases the court is entitled to infer damage, including particularly damage by way of dilution of the plaintiff’s goodwill. Here I think the natural inference is that Mecklermedia’s goodwill in England will be damaged by the use of the same name by DC. To a significant extent Mecklermedia’s reputation in this country is in the hands of DC-people here will think there is a trading connection between the German and Austrian fairs and the Mecklermedia fairs.

It is to be noted that all the activities of DC take place in Germany and Austria-none take place within the territorial jurisdiction of this court. But I cannot think that matters so far as the English law of passing off is concerned. To do acts here which lead to damage of goodwill by misleading the public here is plainly passing off. To do those same acts from abroad will not avoid liability. Whether the court can assume jurisdiction (in the sense of become seised of an action) over a defendant abroad, is another matter. That depends upon the extent to which the court has the power to make a person abroad party to an action. The Brussels Convention regulates that power for members of the convention.

I therefore think that there is a serious question to be tried. That disposes of the strike out application and gets the plaintiffs over the first hurdle to justify service out of the jurisdiction. I now turn to the remaining points, which concern the Brussels Convention.

IS SERVICE OUT OF THE JURISDICTION JUSTIFIED UNDER THE CONVENTION?

The convention

Article 2 of the convention sets out the basic rule:

`Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State …’

In footballing terms the plaintiff must play away. Section 2 of the convention provides for `Special jurisdiction’ under which the plaintiff is given a choice of other fora in the circumstances defined. The relevant provision here is art 5(3):

`A person domiciled in a Contracting State may, in another Contracting State, be sued … in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred …’

Section 8 of the convention deals with co-pending proceedings under the general title `Lis Pendens-Related actions’. It provides:

`ARTICLE 21

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.

ARTICLE 22

Where related actions are brought in the courts of different Contracting States, any court other that the court first seised may, while the actions are pending at first instance, stay its proceedings. A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions. For the purposes of this Article, actions are deemed to be related where they 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 contentions

The plaintiffs say that by virtue of art 5(3) that they are entitled to sue the defendants in England for the English tort of passing off. DC say they should be sued in Germany for a variety of reasons. They contend that:(a) the circumstances do not fall within art 5(3); alternatively (b) art 21 is applicable and there should be a mandatory stay of this action; alternatively (c) art 22 is applicable so the court has a discretion to order a stay and should exercise that discretion.

Is the case within art 5(3)?

It is settled (and self-evident from the convention) that where art 5(3) applies the plaintiff is given an option to sue either in the forum of the defendant’s domicile or forum (or fora) of the place(s) where the harmful event occurred. For the present I will assume that art 2 would permit an action in Germany in respect of the passing off in England (though as to this see below). That does not prevent an action in England if the `harmful event’ occurs here.

It is well settled that a plaintiff cannot rely upon mere indirect or consequential loss as a `harmful event'(Dumez France v Hessiche Landesbank (Helaba) Case C-220/88 [1990] ECR I-49). In that case the French parent company tried to sue in France in respect of losses suffered by its German subsidiaries in Germany. The court said ([1990] ECR I-49 at 79 (para 14)):

`… the damage alleged is no more than the indirect consequence of the harm initially suffered by other legal persons who were the direct victims of damage which occurred at a place different from that where the indirect victim subsequently suffered harm.’

Not surprisingly France was held not to be the place where the harmful event occurred. The court had already held in Handelskwekerij G J Bier BV v Mines de Potasses d’Alsace SA Case 21/76 [1976] ECR 1735 that the `place where the damage occurred’ may be interpreted as referring to the place where the indirect victims of the damage ascertain the repercussions on their own assets. That case was concerned with discharge of a saline waste into the Rhine in France which affected crops in the Netherlands. There the court held that the plaintiffs could sue in the Netherlands because that was the place where the damage occurred, even though the wrongful act of discharge was in France. In the Dumez France case the court went on to explain the position in more detail. It said ([1990] ECR I-49 at 79-80 (paras 17-21)):

`17.   It is only by way of exception to the general rule whereby jurisdiction is attributed to the courts of the State of the defendant’s domicile that Title II, Section 2, attributes special jurisdiction in certain cases, including the case envisaged by Article 5(3) of the Convention. As the Court has already held (Mines de Potasses d’Alsace ([1976] ECR 1735 at 1745-1746 (paras 10 and 11))) those cases of special jurisdiction, the choice of which is a matter for the plaintiff, are based on the existence of a particularly close connecting factor between the dispute and the courts other than those of the State of the defendant’s domicile, which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings.

18. In order to meet that objective, which is of fundamental importance in a convention which has essentially to promote the recognition and enforcement of judgments in States other than those in which they were delivered, it is necessary to avoid the multiplication of courts of competent jurisdiction which would heighten the risk of irreconcilable decisions, this being the reason for which recognition or an order for enforcement is withheld by virtue of Article 27(3) of the Convention.
19. Furthermore, that objective militates against any interpretation of the Convention which, otherwise than in the cases expressly provided for, might lead to recognition of the jurisdiction of the courts of a plaintiff’s domicile and would enable the plaintiff to determine the competent court by his choice of domicile.
20. It follows from the foregoing considerations that although, by virtue of a previous judgment of the Court (in Mines de Potasses d’Alsace), the expression “place where the harmful event occurred” contained in Article 5(3) of the Convention may refer to the place where the damage occurred, the latter concept can be understood only as indicating the place where the event giving rise to the damage, and entailing tortious, delictual or quasi-delictual liability, directly produced its harmful effects upon the person who is the immediate victim of that event.
21. Moreover, whilst the place where the initial damage manifested itself is usually closely related to the other components of the liability, in most cases the domicile of the indirect victim is not so related.’

DC assert that in this case Germany is the place of harmful event. I do not accept that submission. So far as the English tort of passing off is concerned, the harm is to the goodwill in England, to the effect on the reputation in England. That is a direct effect on the plaintiffs’ claimed English property.

I am confirmed in that view by the last-quoted paragraph from the Dumez France case. All the components of liability of the tort take place in England. A trial would require proof of goodwill, misrepresentation and damage in England. It would not matter whether or not what DC were doing in Germany was, so far as German law and facts was concerned, lawful or not.

I find further support for the proposition that, in relation to the English law claim, it is in England that the harmful event is occurring from the decision of Knox J in Modus Vivendi Ltd v British Products Sanmex Co Ltd [1996] FSR 790. Knox J had to consider the convention (as adapted in respects immaterial in the present case by Sch 4 to the 1982 Act) in the context of a choice between England and Scotland as the appropriate forum. The defendants were in Scotland, where they filled butane containers. These were transported through England to Hong Kong and China. The artwork was deceptive in the ultimate markets. An argument that the harmful event occurred in England failed. Knox J said that the place where the damage occurred was the place where the deception occurred, namely Hong Kong and China. Knox J said (at 802):

`If one supposes that the passing off in the present case was effected in a Convention country, say, for example, France … there would in my view be seen to be close connecting factors with France where, to put it neutrally, the illicit incursion into the plaintiff’s goodwill … occurred.’

In this case the deception alleged is in England. On that reasoning there are close connecting factors with England.

DC put their case an alternative way. Assume, they say, that the German court is prepared to consider the English passing off claim. Then there would be a risk of inconsistent judgments, the very thing that the Dumez France case says it is an object of the convention to avoid. There are, I think, several answers to that.

First, avoiding a possibility of conflict, is not a matter with which art 5(3), as such, is concerned. All one derives from the desire to avoid conflicting decisions in relation to art 5(3) is, as the court said in the Dumez France case and other cases, that the exceptions to the general principle should be recognised as such and confined accordingly. It is arts 21 and 22 which are directly concerned with the possibility of conflict.

Second, it is clear that each of the derogations from art 2 give the plaintiff the possibility of an alternative forum from that of the defendant’s domicile. If the argument were right, then there would never be alternatives. Putting the point another way, implicit in the argument, is that there is only one possible forum. Once that is made explicit one can see it is fallacious. The fallacy is even more apparent when one considers the important case of Shevill v Presse Alliance SA Case C-68/93 [1995] All ER (EC) 289,[1995] ECR I-415. The plaintiffs (an individual and some companies) sued in England in respect of an alleged libel in France Soir. France Soir had a limited circulation here and in several other European countries, but its main distribution was in France. The court accepted that there was a possible multiplicity of jurisdictions. The `place where the harmful event occurred’ was any place where damage was directly caused, namely the place where the publisher was established (France) and the place where the publication is distributed (England, and possibly other countries too). If the action was brought in state where the publisher was established, the courts of that state had jurisdiction to award damages in respect of all the harm cause by the publication. If the action was brought `locally’ the courts of the state concerned had jurisdiction to award damages for the publication in that state. The case is of  great importance if it also governs parallel infringements of intellectual property rights and governs the grant of injunctions as well as damages. It would mean that a plaintiff could not forum shop around Europe for a Europe-wide injunction. He could only seek such an injunction in the State of the source of the allegedly infringing goods or piratical activity. I say no more here. For present purposes the Shevill case is as clear a case as one could find that art 5(3) does not exclude the possibility of action in several states.

I think the plaintiffs are within art 5(3).

Article 21

This requires that there be proceedings for the same cause of action and between the same parties. DC say that is the position here. Prior to the present action, in Germany DC commenced trade mark infringement proceedings against Mecklermedia’s German licensees. It is submitted that those licensees should be regarded as the `same party’ as Mecklermedia itself. I do not see why. I can understand that a wholly-owned subsidiary might be so regarded: see Berkeley Administration Inc v McClelland (No 2) [1995] ILPr 201 at 211, where Dillon LJ said, in the context of art 21, that it was `wholly unreal’ to separate a wholly-owned subsidiary from its parent. But a mere licensee, a wholly different enterprise which happens to be working with the plaintiff, is simply not the same party. What if the licensee decided not to contest the proceedings? Or decided to fight them in some way contrary to the plaintiffs’ interest (eg attacking the trade mark on the grounds of descriptiveness when the plaintiffs contend that it is distinctive but means them). There is nothing Mecklermedia could do to stop this-because they are not the same party.

Further I think the causes of action are different. The cause of action in German is alleged infringement of the German registration. Hardly any of the facts relevant to the present action are relevant there: not English goodwill, not English reputation and not damage to goodwill or trade in or from England. And many facts (and all the law) which will be relevant to the German dispute are not relevant here. The situation is not as described by the Court of Justice of the European Communities as necessary for art 21 to apply:

`For the purposes of art 21 of the convention, the “cause of action” comprises the facts and the rule of law relied on as the basis of the action.’ (See The Maciej Rataj, Tatry (cargo owners) v Maciej Rataj (owners) Case C-406/92 [1995] All ER (EC) 229 at 254 (para 39),[1994] ECR I-5439 at 5475).

I reject the art 21 argument.

Article 22

There are a number of points here. Before the discretion to order a stay or decline jurisdiction arises, the case must come within the terms of the article. Here there are three points in issue. (i) Is the German court seised of a `related proceedings’? (ii) If so is there a German proceeding pending `at first instance’? (iii) Can the German court assume jurisdiction in respect of passing off in England?

I must first set out in more detail what proceedings are on foot in Germany. I have already said that there are infringement proceedings by DC against Messe Berlin, Mecklermedia’s licensees. DC sought provisional relief preventing Messe Berlin from advertising `Internet World Berlin 1997′ in respect of trade shows. Relief was refused and an appeal is pending. Mecklermedia here have now (on 30 January 1997) started their own German proceedings seeking an order to prevent DC from using the marks `Internetworld’ and `Internet World’ and for cancellation of the German registered trade mark. It was suggested that those proceedings included a claim to prevent passing off in England. I have been shown a rough translation of the pleading (prepared by DC’s solicitors) and am not convinced that is so. In addition (although this is irrelevant save possibly on the question of discretion) Mecklermedia have started proceedings in the US to prevent use of `Internet World’ in the US.

(1)     Related proceedings?

So the only proceedings prior to the present claim is the infringement action in Germany. Article 22 effectively defines the term `related action’ as those in respect of which it is expedient to hear them together to avoid the risk of irreconcilable judgments. I fail to see how there is such a risk. It may be (if the German registration is valid) and there is no defence of prior use made out, that DC could win in Germany. I do not know. But whether they do or not could not affect the English proceedings, concerned as they are with the goodwill here. There is no risk of conflicting decisions, that being the relevant test under The Maciej Rataj [1995] All ER EC 229 at 256 (para 58),[1994] ECR I-5439 at 5479-5480.

Miss Jones submits that this is really all about an international dispute. That is true in sense. But that does not mean that there cannot be different results in different countries. Much depends on the local goodwill and the extent to which the mark has been used locally. Indeed the argument is inconsistent with the proposition advanced earlier that the mark may be wholly descriptive in England, but not in Germany.

(2)     Action at first instance?

The evidence as to the nature of the German proceedings is as follows. The application for an injunction in Germany does not take place within the context of a `main’ action (ie legal proceedings for a final determination on the merits). It takes place outside of such proceedings. If the plaintiff obtains an injunction, then the defendant can, but does not have to, require the plaintiff to start a main action. If no injunction is obtained, that is an end of the matter. The procedure sounds quite sensible and may be worth considering for adoption here as a way of obtaining an `early view’ on the merits of some cases. Mecklermedia say that accordingly there are no first instance proceedings on foot. DC say that the possibility of full proceedings is live in Germany, though it would be premature to take any further steps towards a main hearing.

I decline to come to any conclusion on this point. It seems to me perfectly arguable that the German procedure is in substance an interim measure in an action. It would be odd if what is procedurally somewhat different but in substance not significantly different between Germany and here could really matter. Further, I am aware that the juridical nature of the Dutch kort geding (which, as I understand it, is not all that different from the German procedure as described in the evidence before me) is likely to be examined by the Court of Justice in the near future.

(3)     English passing off triable in Germany?

This takes the extreme form of an attack on `related proceedings’. It is also directly relevant to the question of whether the English court should exercise its discretion under the second paragraph of art 22 to decline jurisdiction or, under  the first paragraph, to stay the action. Mecklermedia say that although by art 2 the German court is given jurisdiction over an action against DC because DC is of German domicile, art 2 goes no further. It does not make passing off in England actionable in Germany. Their expert on German law asserts:

`The plaintiffs cannot rely in Germany on their rights generated in the UK and similarly the defendant cannot rely on the right granted by their German trade mark registration outside Germany. Accordingly the plaintiffs would be unable to bring these proceedings in Germany against the defendant because they cannot base their claim in Germany on UK trade mark rights acquired by use. The German courts are neither permitted nor competent to hear the action.’

DC’s expert on German law does not answer this as a matter of German national law. He points to the convention. He says that this not only provides for the appropriate fora, but, as a consequence, makes matters assigned to a particular forum justiciable there. Unless this is so, he argues, there would be no need for art 16, and other articles, providing for exclusive jurisdiction in limited and defined classes of case. Now all this is a matter of EU law. Unlike foreign law, which is treated by our law as a question of fact, EU law is part of our law. So this court needs no evidence and is competent and under a duty (where it necessary to do so) to decide the point itself.

The point is of considerable importance. If the DC contention is correct, the convention provides that a defendant can be sued in his state of domicile for a tort committed in another member state according to the law of that member state. The domestic law of the state of domicile would be irrelevant. In other words, art 2 is concerned with more than questions of proper service: it requires the courts of one state to apply the law of another state in relation to events in that other state. If right, then it would seem that the recent abolition of the double actionability rule of English law was irrelevant so far as convention states were concerned. It would have already been abolished by the convention, which in providing for where cases were to be heard also was conferring on the courts given jurisdiction under the convention powers and duties to consider matters which may not, prior to the convention, been within their competence. If that is so, the only qualification on a possibly wide scope for forum shopping in intellectual property cases (bearing in mind the possibilities of suing distributors as well as originators of products) would be the principles of the Shevill case, especially if applied as I indicate above.

It is clear that this point is too important to be decided without full argument. In this case it is raised only as an extra argument under art 22 and I do not think it right to decide it.

Discretion

Finally, even if the case did come within art 22 it is for the defendants to persuade the court that it should stay the action or decline jurisdiction: see Centro Internationale v Morgan Grenfell Trade Finance Ltd (3 March 1997, unreported). I certainly would not take either of those steps when I think, as I do, that normally the most convenient forum for deciding an English trade mark or passing off case is this court. In many cases a question of deceptive resemblance involving language may be involved. Then I think it would be very difficult for a court which uses a language other than English to form a reliable view on the question, especially if it was marginal. In this case the question of a deceptive resemblance  hardly arises. But even so the German court would have to import both the evidence and law, whereas neither of those things would be necessary if the action proceeds here.

It is submitted that it would be better if all questions were decided by a single court and that multiple litigation should be avoided. That as a generality is of course always true, but on the other hand when an enterprise wants to use a mark or word throughout the world (and that may include an internet address or domain name) it must take into account that in some places, if not others, there may be confusion. Here it is clear DC knew that Mecklermedia used the name `Internet World’ and I do not think it is surprising that it is met with actions in places where confusion is considered likely. So I decline to set aside service.

Application dismissed.

Celia Fox Barrister.