First Advocate-General Szpunar opined a the end of October in C-421/20 on the law applicable to a damages suit following infringement of Community Design rights. No English edition of the Opinion is as yet available.
The two parties had earlier been at loggerheads on the jurisdictional issues, see CJEU C-433/16 BMW v Acacia and the provisional measures implications of the relevant Regulation 6/2002 were discussed in Spin Master. Current case not only puts into the spotlight the ‘international’ dimension required to trigger EU conflict of laws (it is in this section that I was pleased to see the AG refer to the 2016 ed of the Handbook), it also discussed the relationship between the core EU Regulations Brussels Ia, Rome I and II on the one hand, and lex specialis on the other, in the case at issue: A82(5) Regulation 6/2002: ‘5. Proceedings in respect of the actions and claims referred to in Article 81(a) and (d) may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened.’ The result of the jurisdictional provisions is a cascade system which is also present in the relevant Trademark Regulation, prompting the AG to seek inspiration in CJEU AMS Neve.
BMW’s action, which was granted by the first instance German courts, seeks not just inductive relief viz Acacia’s distribution of wheel rims in Germany, but also damages for the alleged Community design infringement and (with a view to supporting the damages claim), access to documents, accounts etc. – this will have an immediate echo to readers of the blog I assume of ‘procedural’ issues to which I (and the AG) return below.
A relevant provision in the Community Design Regulation – CDR is Article 88, Applicable law:
1. The Community design courts shall apply the provisions of this Regulation.
2. On all matters not covered by this Regulation, a Community design court shall apply its national law, including its private international law.
3. Unless otherwise provided in this Regulation, a Community design court shall apply the rules of procedure governing the same type of action relating to a national design right in the Member State where it is situated.
A similar reference to national law with renvoi, is present in A89 with respect to ‘sanctions in actions for infringement’. With the inclusion of renvoi (‘a Community design court shall apply its national law, including its private international law’) inevitably reference is made to Rome II for that Regulation forms the applicable private international law in the Member States.
A first question was whether BMW’s requests re access to documentation, may be subject to lex fori processualis – answered in the negative by the AG with reference to CJEU C‑479/12 H. Gautzsch Großhandel , and to CJEU Nintendo. Whether these observations (and authorities) on the procedural issues extends to Rome I /II is not discussed. Readers will be aware that I find that an important question that remains outstanding.
The next issue is whether Rome II and /or the CDR apply at all to the litigation at issue in view of the light ‘international’ touch to the case. In view inter alia of the AG’s own Opinion in Vinyls Italia, he answers in the affirmative. For more detail on the issue please refer to the Opinion however I find among others his point convincing (43) that a restrictive view within the Community Design (and other intellectual property rights litigation) sphere, would hand a means to claimants artificially to split their claims so as to shop for the lex fori in Mozaik fashion. He rejects BMW’s alternative view based on the effet utile of A82(5) CDR.
Up next is the question whether, having established Rome II applies, A8(2) Rome II needs to be applied using AMS Neve or alternatively Nintendo, to determine the ‘country in which the act of infringement was committed’. There is much detail on this in the Opinion (readers may refer to Annette Kur’s paper which also discussed this and is referred to in the Opinion), with the AG I think opting for the Nintendo route – I am not too proud to admit as I have done before, that the specific relation between secondary IPR law and EU conflict of laws, is not my specialty.
Geert.
Opinion Szpunar AG in Acacia v BMW, on the applicable law for damages following infringement of Community Designhttps://t.co/BEGw9uR6yJ
AG opts for country of the initial counterfeit
Humbled to see the 2016 ed of the Handbook cited https://t.co/kC5qt73lwh
— Geert Van Calster (@GAVClaw) October 28, 2021
Sánchez-Bordona AG opined at the end of October on the law applicable to the Peeters /Gatzen suit (of Nk v BNP Paribas fame) in Case C‑498/20 ZK, in his capacity of successor to JM, insolvency practitioner in the insolvency of BMA Nederland BV v BMA Braunschweigische Maschinenbauanstalt AG – ZK v BMA for short. An English version of the Opinion is still not available.
Peeters /Gatzen is a tortious suit brought by a liquidator. In Nk v BNP Paribas the CJEU held it is covered by Brussels Ia, not by the Insolvency Regulation. The obvious applicable law port of call is Rome II. A first point which the AG discusses is a rather important discussion on the lex societatis exception to Rome II. The extent of that exception is important e.g. also for business and human rights cases, for the Peeters /Gatzen suit essentially engages duty of care towards third parties.
The AG emphasises (35) one of my points of attention in the BIa /Rome I/II interplay: that in accepting a certain amount of consistency in interpretation, the courts must nevertheless appreciate each instrument’s autonomy and quite different subject-matter. (46) The reasoning behind the exclusion of the lex societatis from the 1980 Rome Convention is said to be the ambition at the time to harmonise company law across the EU which, as we know from CJEU Daily Mail and all its successors, has still not come true. The AG then refers to the internal /external dimension of corporate relations such as discussed in C‑25/18 Kerr and C‑272/18 Verein für Konsumenteninformation. However he then suggests (51) that the reference to the ‘internal’ dimension of the life of a corporation does not suffice to justify 2 of the examples which Rome II explicitly lists in A1(2)d as being part of the corporate exception: the
personal liability of officers and members as such for the obligations of the company or body and the personal liability of auditors to a company or to its members in the statutory audits of accounting documents.
At (52-53) he then posits his way out of the conundrum, immediately acknowledging that the criterion he suggests may not be easily applicable: all contractual and non-contractual elements for which a specific solution exists which emanates from the relationship between those elements and the internal life and mechanisms of a corporation (whether they relate to the internal workings or the external relations), are covered by one statutory corpus, namely the lex societatis. Put differently, they are excluded insofar as and because their corporate law element absorbs all other. Specifically viz non-contractual obligations, if the relevant rule is so ‘drenched’ with elements specific to the corporate law context that it looses its meaning outside that context, that rule qualifies as being part of the lex societatis exception.
He immediately acknowledges (56) that this kind of litmus test is not easy to apply in practice and suggest (57 ff) to employ the ratio legis of the liability at stake to assist with the exercise. If that ratio lies in the general neminem laedere rule, Rome II is engaged. If that ratio however immediately follows from corporate law considerations, such as a director’s loyalty to the corporation, the exception is engaged. The AG lists examples (63), including the scenario at stake in CJEU OFAB. At (66) the AG concludes, albeit not directly, that the Peeters Gatzen suit in all likelihood is not covered by Rome II and he discusses the other questions in subsidiary fashion.
(67ff) with reference ia to CJEU Lazar the CJEU refers to the tricky characterisation of damage as (in)direct and opts in cases such as these that the direct damage occurs in the insolvent (or otherwise facing liquidity issues) corporation: the diminishing impact on the creditors is indirect, ricochet. Locus damni therefore is The Netherlands if the referring judge finds that the insolvent corporation’s estate is based there. (76) Whomever initiates the suit (the insolvency practitioner and /or the creditors) is irrelevant, as is (80) the fact that some of the creditors are located outside the EU.
(83ff) then follows the discussion of A4(3) Rome II’s escape clause (most recently discussed in Scott v AIG). A pre-existing contractual relationship (which the AG suggests (95ff) may also be called upon by claimants that are not party to that relationship) is just one among many factors that may play a role – not a particularly dominant one: (93-94) particularly where such relationship (such as here, taking the form of a credit facility) is one where choice of law was made: A4(3) RII is directed at situations where the non-contractual relationship has a closer connection to a law other than the locus damni. Lex voluntatis does not necessarily reflect the tort’s closer relationship but rather the parties’ voluntary expression.
An important Opinion.
Geert.
EU Private International Law, 3rd ed 2021, para 4.22., para 4.39 ff.
Opinion Sánchez-Bordona AG re applicable law for the Peeters/Gatzen #insolvency suit (citing ia @JanvonHein1)
Rome II:
scope of application: lex societatis exclusion
A4(1) determining locus damni
A4(3) factors feeding into proper law of the tort analysishttps://t.co/YzZih7VYRQ
— Geert Van Calster (@GAVClaw) October 29, 2021
I did say I was mopping up the queue this week so here’s a post reminding us of the Paris Court of Appeal overturning an earlier judgment which had held that an arbitrator’s liability falls within Brussels Ia. I have analysis and further reference to the first instance judgment here, and Gilles Cuniberti’s approving view on the Court of Appeal’s decision is here.
The ruling means the court of the locus arbitri, the curial seat as agreed between the parties, is the natural home for any subsequent disputes involving liability of the arbitrators. I agree with Gilles that this makes a lot of sense from a consolidation and neutrality point of view. I do not however feel for a moment that it clearly follows from Brussels Ia, including its arbitration recital (which has the trimmings of an encyclopaedia, weighing in at more than half a page and 4 paragraphs).
Geert.
EU Private International Law, 3rd ed. 2021, Heading 2.2.3.4, para 2.110 ff..
Paris CA holds arbitrator's liability falls within VIa #arbitration exception
For the judgment overruled, see https://t.co/GSKX4qA6W7 https://t.co/sZZLu6FQ6h
— Geert Van Calster (@GAVClaw) June 28, 2021
I posted the Tweet below in October, and am posting mostly to report that I do not as yet have more to go by. The suit is against James Finlay and follows in the footsteps of one brought in 2017, pre-Brexit therefore. The 2017 action per CJEU Owusu v Jackson cannot be subject to a forum non conveniens challenge, and I am as yet not aware of an Article 33-34 Brussels IA ‘forum non light’ defence. This new, 2021 action has already been said to be met with a forum non challenge. It will be interesting to see first of all whether the forum non challenge in the latest suit will be impacted by the unavailability in principle of forum non in the 2017 suit; additionally, whether defendants are aiming to have the 2017 suit thrown out on the basis of A33-34 BIa (so far I have not seen indications that they will).
As I point out in the Tweet, had the UK been allowed to join Lugano, forum non would not be available to this newest suit.
Geert.
EU Private International Law, 3rd ed. 2021, Chapter 7.
An initial 2017 suit it seems under Brussels Ia and a current one under Scottish rules, in the ancestral home of forum non conveniens.
Note had the UK joined Lugano, forum non would not have been an option #bizhumanrights #CSR https://t.co/7mMcwYwegm
— Geert Van Calster (@GAVClaw) October 16, 2021
I am trying to catch up with blog posts this week and Robbins v Buzzfeed UK LTD (Approved) [2021] IEHC 433 goes back to the start of exam time at Leuven (early June). Claimant resides in California and is domiciled in the United States. Defendant has its registered office in London. The proceedings concern articles which were posted in May, June and November 2019 on the website “BuzzFeedNews.com” which related to claims of sexual misconduct, bullying and harassment, by the plaintiff, of certain employees and attendees at his events, alleged to have occurred between the 1980s and 2009 in the United States and in Canada.
Heslin J reviews the usual CJEU suspects, including Shevill and e-Date /Olivier Martinez, with [36] an interesting discussion of the impact of the applicable law. The substantively applicable law will always of course be a national law (additionally, Rome II exempts defamation from its scope of application). The Irish common law requires publication to at least one other, for there to be defamation. This would, so the argument goes, require claimant to prove the extent of consultation so as to establish jurisdiction. The judge holds that Shevill is not authority
for the proposition that, in order to successfully invoke jurisdiction pursuant to Article 7(2), a plaintiff has an obligation to prove publication or that, having regard to the facts in the present case, a plaintiff must prove that articles which he says were defamatory and which were in fact available to readers in this jurisdiction were downloaded or read by specific numbers of persons in this jurisdiction.
However he also holds claimant has proved readership figures of more than 13,000 as at the date the proceedings were instituted. I agree that as the passerelle to applicable law is noli sequitur in the application of A7(2) BIa. However the Mozaik findings in Shevill do mean that if such as here, jurisdiction is only based on locus damni, actual readership does need to be shown. A spanner in those works is CJEU Martinez at 51, where the CJEU uses the term “ accessible”, not the term “ accessed” [42]. In the light of claimant having proven actual downloads, the issue is of no relevance to the case [43] albeit it is yet more discussed and indeed at length, ia [57 ff] with reference to Ryanair v Fleming [2016] 2 IR 254 (a non-BIa case).
[79] a forum non application is of course rejected with reference to CJEU Owusu v Jackson despite a suggestion [83] that the principle in Owusu only applies to A4 BIa domicile jurisdiction.
Geert.
EU Private International Law, 3rd ed. 2021, Heading 2.2.12.2.5.
The UK Supreme Court in Lloyd v Google [2021] UKSC 50 held a few weeks back. It allowed the appeal, meaning the Court of Appeal‘s judgment is no longer good law and the High Court‘s approach is now the rule. The judgment essentially means that loss of control over private data is not considered ‘damage’ within the data protection Act 1998. The issue is one of statutory interpretation: on its proper interpretation, the SC understands the term “damage” in s. 13 to mean material damage (financial loss for instance) or mental distress, and not just unlawful processing. Loss of control therefore may still play a role in the common law tort of misuse of private information, and ‘damage’ was of course also considered flexibly in the context of consequential losses (Brownlie).
On class actions, the SC’s judgment is a set-back, too, with the judgment [80] holding
What limits the scope for claiming damages in representative proceedings is the compensatory principle on which damages for a civil wrong are awarded with the object of putting the claimant – as an individual – in the same position, as best money can do it, as if the wrong had not occurred. In the ordinary course, this necessitates an individualised assessment which raises no common issue and cannot fairly or effectively be carried out without the participation in the proceedings of the individuals concerned. A representative action is therefore not a suitable vehicle for such an exercise.
Geert.
The UK SC has allowed the appeal in Lloyd v #Google, restoring the first instance judge's narrower concept of damage (viz loss of control of personal data) under UK's implementation of the precursor to the #GDPR https://t.co/U5UToXDITq
For background see https://t.co/LOlbmKOolF pic.twitter.com/XkW97N4vVN
— Geert Van Calster (@GAVClaw) November 10, 2021
London Steam-Ship Owners’ Mutual Insurance Association Limited v Kingdom of Spain & Anor (M/T ‘Prestige’ Nos. 3 and 4) [2021] EWCA Civ 1589 is yet another judgment in the Prestige series on which I have reported before (use of the search tag ‘Prestige’ brings you to 4 earlier posts). I often refer to the comparative advantage of civil procedure in England and Wales, inter alia relating to the speed of procedures. Current litigation most certainly does not fit that bill: it is slow, opaque and dense with issues, arguments have been allowed to run in a convoluted way, and a certain amount of consolidation would have been in order, I submit.
The judgment in this post is the appeal against the judgment of Henshaw J on arbitration and State immunity, and the judgment of Butcher J on service, state immunity and the insurance title of Brussels Ia.
In summary, Henshaw J’s judgment stands (he had held Spain does not have immunity in respect of these proceedings; that the permission to serve the arbitration obligation our of jurisdiction, granted earlier to the Club should stand; and that the court should appoint an arbitrator); Butcher J’s judgment also largely stands, but for his decision on the ‘Award Claims’ (the Club seeking liability and damages for breach of the State’s obligation to honour the arbitration award which had declared the State bound to pursue its claims in London arbitration). The Court of Appeal held, as did Butcher J, that the arbitration exception applies to the Award Claims (an unlikely analogy featured with CJEU Assens Havn) and that jurisdiction for them must be determined in accordance with domestic law principles [84], however unlike the first instance judge it found [126] there is no serious issue to be tried on the award claims.
Geert.
EU Private international law, 3rd ed. 2021, 2.84 ff.
London Steam-Ship Owners' MIA v Spain [2021] EWCA Civ 1589 (4/11/2021)
Various appeals, partially allowed, re the Prestige oilspill. State immunity, #arbitration etc. Background here https://t.co/LgOFOXsRmo
Six complex findings, see below. More next weekhttps://t.co/ItT0tFTO3U pic.twitter.com/LrxhXIRPLy
— Geert Van Calster (@GAVClaw) November 5, 2021
Ditto Ltd v Drive-Thru Records LLC [2021] EWHC 2035 (Ch) discusses the contract and tort gateways for jurisdiction in England and Wales (they need to be met for claimant to hold onto an earlier granted permission for ‘service out’ of the jurisdiction). The dispute concerns the world of music catalogues, advance royalties and (marketing) services rendered, or not, in regard to the catalogued artists. Defendants are both based in California, claimant is England-incorporated. Concurrent proceedings are underway in New York.
Of interest to the blog is firstly the contractual gateway, which is to some degree assessed under retained EU law, for as part of its argument, claimant argues the lex contractus is English law. That determination of the applicable law is done under (retained( EU law and Francis DM holds that it is not English law. No choice of law had been made per Article 3, which (in the absence of any protected categories) brings us into the cascade of A4 Rome I. It is worthwhile to repeat counsel argument in full [56-57]
Ms Lacob [for defendants] contended that the law of the agreements should be determined in accordance with paragraph (2) as being that of the State of California. That was on the basis that the party which was required to effect the characteristic performance of each of the agreements was Drive-Thru and War Road respectively, and their country, or (in this case) territorial unit, of habitual residence, being the place where they had their central administration, was California. She identified the performance which was characteristic of each of the agreements as being Drive-Thru and War Road’s obligations to licence the exploitation of their portfolio works, to remaster and remix their recordings or the release new recordings, as the case may be, and (in the case of War Road) to sign up new bands; in contrast, Ditto’s only obligation was to pay money which was not the performance which was characteristic of the agreements.
Mr Kitson for Ditto [claimant] took issue with this. He pointed to the fact that Drive-Thru and War Road themselves contended in the New York proceedings that Ditto was in breach of its obligations (whether express or implied) under the agreements to take possession of the recordings and to distribute the same so as to earn royalties for the parties’ joint benefit. Thus, he argued, the performance characteristic of the agreement was not all on the side of Drive-Thru and War Road.
The reference to the arguments in the New York proceedings is interesting for it suggests ‘form’. However the judge agreed [58] with defendants that
these agreements are ones under which there were substantial performance obligations (other than simply the payment of money) on both sides. In reality, the agreements were joint ventures for the development and exploitation of Drive-Thru’s and War Road’s existing and future portfolio works for their mutual benefit. They are the type of agreements which Mann J refers to in his judgment in Apple Corps at paragraph 54 where it is not possible to identify a characteristic performance provided by one only of the parties.
Even the centre of gravity rule (recital 19, which the judge does not refer to) does not assist here hence the analysis needs to jump to A4(4)’s ‘proper law of the contract’ rule. [59]
What then is the country or territorial unit with which the agreements are most closely connected? On the evidence before me, I am satisfied that it is the State of California. That was where Drive-Thru and War Road were based and where for the most part they would perform their obligations under the agreements. In contrast, Ditto’s own obligations relating to the digital distribution of the portfolio works were not ones which, on the evidence, fell to be performed in England to any particular extent, even if Ditto’s central administration was based in England. Instead, Ditto’s rights to exploitation of the portfolio works, and any corresponding obligations relating to the distribution of such works, were worldwide, reflecting the global reach of the Ditto Music brand.
Conclusion is that California law is the lex contractus.
The contractual gateway was however found to have been fulfilled on the basis of CPR PD6B paragraph 3.1 ‘contract made within the jurisdiction’. The judge finds that the contracts were ‘made’ both in CAL and in E&W [54] although he does lament [48] the artificial nature of the issue as the law currently stands: were contracts are ‘made’. I find this is especially relevant in a contemporary context of electronic correspondence, Zoom meetings and the like. Where a contract is ‘made’ seems fairly nugatory these days.
The tort gateway is discussed without reference to UKSC Brownlie for that was en route at the time of the discussions in current case. It is at any rate held to be met [[71] for claimant has quite clearly sustained damage in England as a result of the alleged misrepresentations.
At [72] ff follows an interesting, brief discussion on the location of intellectual property with finally the curtain drawn on English proceedings as a result of forum non [80 ff].
Geert.
1/2 Ditto v Drive-Thru Records [2021] EWHC 2035 (Ch) (17 November 2021)
Permission to serve out set aside
Contract gateway discussed viz retained EU law, A4(4) Rome I (leading to CAL law)
Tort gateway upheld: damage sustained in E&W
Obiter discussion of…
— Geert Van Calster (@GAVClaw) November 18, 2021
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