The matter at hand

This matter concerns the jurisdiction of the German court in an international trade mark infringement case between two sport products manufactures, Hummel and Nike.

Hummel, based in Denmark, claimed that certain Nike products infringed Hummel’s international trade mark and that most of the infringements took place in Germany. Hummel brought this claim before the Regional Court in Düsseldorf, Germany, suing both the Nike Holding company based in the US (which sells the Nike goods across the world) and the Nike Retail company based in the Netherlands (which operates the online webshop that focuses in particular on German consumers and supplies goods to independent dealers in Germany).

Although neither of these companies is domiciled in Germany, Hummel took the position that the German court has jurisdiction on the ground that Nike Deutschland - which is a direct subsidiary of Nike Retail, but which was not a party in the proceedings - is an establishment of the ultimate US parent company Nike Holding within the meaning of Article 97 of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark. According to this provision, infringement proceedings shall be brought in the courts of the Member States in which the defendant is domiciled, or, if he is not domiciled in any of the Member States, in which he has an establishment. Nike Holding and Nike Retail denied jurisdiction.

The Regional Court in Düsseldorf ruled that it had jurisdiction, but dismissed Hummel’s action on the merits. Hummel appealed against that decision. In appeal, the Higher Regional Court asked the ECJ whether a second-tier subsidiary, with its seat in a EU Member State, can be considered as an ‘establishment’ of a parent company domiciled outside the EU under Article 97 of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark.

The judgment of the ECJ

First of all, the ECJ notes that Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark provides (subject to exceptions) for the application of the Brussels ICouncil Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Regulation (44/2001) to proceedings relating to EU trade marks (paragraph 24). However, this does not necessarily mean that the concept of ‘establishment’ in the Trade Mark Regulation bears the same meaning as that concept in the context of the Brussels ICouncil Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Regulation. In this connection, the ECJ refers to its judgment in Coty (C‑360/12), from which it follows that the jurisdiction rules laid down in the Trade Mark Regulation have the character of lex specialis in relation to the rules provided for by the Brussel I Regulation (paragraph 26). In addition, the ECJ notes that the two different Regulations do not pursue the same objectives (see for the different objectives paragraphs 27 and 28).

Accordingly, the ECJ interprets the concept of ‘establishment’ taking account of the wording, context and objectives of Article 97 of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark (paragraph 29).

As regard the wording, the ECJ determines that the Trade Mark Regulation does not explain the concept of ‘establishment’ for the purposes of its application, but that it is apparent that a defendant who is not domiciled in the EU is capable of having more than one establishment within the EU, “which a priori appears to suggest that, in such a case, actions may be brought before the courts of the various Member States where those establishments are located” (paragraph 30).

As regard the context, the ECJ holds that Article 97 “ensures that a court within the European Union always has jurisdiction to hear and determine cases concerning the infringement and validity of an EU trade mark” (paragraph 31). The rule that a defendant established outside the EU can be sued in a EU Member State in which he has an establishment “far from being an exception to the basic rule of jurisdiction at the domicile of the defendant (…), is, rather, an implementation of that principle, which suggests that that concept should be interpreted broadly” (paragraph 34).

According to the ECJ, it follows from such a broad interpretation “that there must be visible signs enabling the existence of an ‘establishment’ to be easily recognized”. This requires “a certain real and stable presence, from which commercial activity is pursued, as manifested by the presence of personnel and material equipment. In addition, that establishment must have the appearance of permanency to the outside world, such as the extension of a parent body (paragraph 37).

The ECJ rules that it is irrelevant in that regard whether (i) the establishment has legal personality or not (paragraph 38), (ii) it is a direct subsidiary or a second-tier subsidiary (paragraph 39) and (iii) “whether the establishment thereby determined has participated in the alleged infringement. Such a requirement, which is not laid down in Article 97(1) of [Trade Mark Regulation No 207/2009], would (…) not be reconcilable with the need for a broad interpretation of the concept of ‘establishment’” (paragraph 40).

Having regard to those considerations, the ECJ rules that Article 97 “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.”