2017/05 > The rule of Lis Pendens as applied by the EU Regulations for European Trademarks

Infringement actions based upon European trademarks are handled by the national courts designated by each Member State as having exclusive jurisdiction to hear them.

The purpose of the lis pendens rule lain out in Article 109 of EU Regulation No 207/2009 is to avoid contradictory judgments being rendered in cases in which claims of infringement are decided concurrently by Courts of different Member States with regards to a national trademark of an EU member country and a European trademark, when the parties in both court cases are the same, and the same facts are involved.

In such situations, the second seized Court must, of its own motion, decline jurisdiction in favor of the first seized Court, namely where the marks in question are identical and valid for identical goods and services.  The Court may stay the proceedings only if the jurisdiction of the first court is contested or if the mark and/or the goods or services are only similar (rather than the same).

In Case C-231/16 the European Court of Justice will have to rule on the application of Article 109 of the Regulation  in response to a referral from the (Landgericht Hamburg) Regional Court for European Trademarks in Germany for a preliminary ruling in relation to the use of “MERCK.”

It should be noted that following the split between the German pharmaceutical group and its American subsidiary, two separate and distinct companies exist under the name “MERCK” and the use of the name has been regulated by a coexistence agreement since 1970.

The German company, Merck KGaA (A), the owner of the European trademark “MERCK”, brought an action before the German Court on March 8, 2013, against the two American companies Merck & Co. Inc. and Merck Sharp & Dohme Corp (B) and their German subsidiary MSD Merck Sharp & Dohme GmbH (C) in order to obtain an injunction against them prohibiting the use of the “MERCK” sign on Internet sites which -by definition- are accessible without geographical limits, as well as for platforms such as Facebook, Twitter and YouTube.  On March 11, 2013, A also brought an action for infringement relating to use of the same sign on the basis of a national mark in the United Kingdom, before the High Court of Justice, against B and three other companies of the same group.

Defendants B and C then argued before the German Court that, pursuant to Article 109 (1) the latter had to decline jurisdiction, to which A replied that because its action in the United Kingdom was based on a national trademark, against acts of infringement committed in a single national territory, Article 109 (1) of the regulation was inapplicable. Subsequently, A withdrew its claim before the UK Court.

In order to answer the question of Lis Pendens raised in these particular circumstances, the Advocate General, M. Maciej Szpunar noted that the first action was based on a national trade mark and concerned infringement within the territory of a Member State, and the second was brought on the basis of an EU trade mark and concerned infringement in the European Union as a whole. Thus, they coincide only partly, to the extent that they relate to the territory of the Member State in which that national mark is protected.

He has then proposed that the court should reply as follows: “where simultaneous actions brought on the basis of a national and an EU trade mark overlap in part, as regards the territory in which the national trade mark is protected, the EU trade mark court, where it is the second court seised, must of its own motion decline jurisdiction as regards the part of the action which concerns the territory common to both actions”.

This case leads one to ask the question under which circumstances will the defense of lis pendens apply.

According to the Advocate General, the “identical party” criterion is fulfilled if the litigation involves companies that, while not necessarily the same are, for example, parent companies, or affiliates and related companies.

The actions need not be ‘identical’ in the strict sense, but must coincide as regards their cause of action and object.

Whilst keeping in mind that the purpose of Article 109 is to avoid contradictory judgments being rendered, to not apply this disposition against the holder of an EU trade mark when he has started a national action based on an identical national trademark risks bringing about precisely the opposite result to that which is intended.

In the case at hand, the two actions only coincide partly, to the extent of the territory where the national trade mark is protected.

However, according to the Advocate General, the EU trademark court must decline jurisdiction when it is the second court seized, with regards to the part of the action which concerns the national territory common to both actions.

In closing, with regards to the withdrawal of the UK action, the Advocate General notes that the result of this withdrawal is that the actions for infringement at stake can no longer be considered to be the same.