Apple Corps Ltd v Apple Computer Inc. [ChD]

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Justice Mann
Judgment Date07 April 2004
Neutral Citation[2004] EWHC 768 (Ch)
Date07 April 2004
Docket NumberCase No: HC-2003-C02428

[2004] EWHC 768 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Mann

Case No: HC-2003-C02428

Between:
Apple Corps Limited
Claimant
and
Apple Computer, Inc
Defendant

Geoffrey Vos Q.C., Daniel Alexander Q.C. (instructed by Eversheds) for the Claimant

Anthony Grabiner Q.C., Daniel Toledano (instructed by Linklaters) for the Defendant

Hearing dates: 25–27 February 2004

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Mann Mr Justice Mann

Introduction

1

This is the application of the defendant, Apple Computer Inc ("Computer"), disputing the jurisdiction of the court in respect of proceedings where service out of the jurisdiction has been ordered. The defendant is the well-known producer of computers and software. The claimant ("Corps") is the well-known record company formed by the Beatles. The basis of the claim made against Computer is that that corporation has broken, and intends to break, an agreement made between the two companies in October 1991 which regulated the use of their respective marks in respect of various areas of activity or proposed activity. On 7 th August 2003 Master Moncaster granted permission to serve Computer outside the jurisdiction under CPR 6.20 on two grounds – that the relevant agreement was governed by English law, and that the contract was made in England. At the hearing before me Corps sought to rely on the additional ground that Computer threatens a breach of contract within the jurisdiction which would entitle Corps to an injunction to restrain it. Computer disputes the propriety of service out on those grounds, denying the relevant factual bases, and further maintaining that England is not the appropriate forum for the dispute. In the circumstances the applications before me raise the following questions:

a) Was the contract made in England?

b) Was the contract governed by English law?

c) Is there a threatened breach of contract within the jurisdiction?

d) If any of those heads are made out, is England the proper place in which to bring the claim?

2

Those issues arise out of the wording of CPR 6.20:

"… a claim form may be served out of the jurisdiction with the permission of the court if —

(2) a claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction.

(5) a claim is made in respect of a contract where the contract –

(a) was made within the jurisdiction; …

(c) is governed by English law; …

(6) a claim is made in respect of a breach of contract committed within the jurisdiction."

CPR 6.21 (2A) provides that:

"The court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim."

3

The burden and level of proof in relation to those issues is common ground between the parties. It is agreed that:

a) In relation to (a), the burden is on Corps, and it has to establish a good arguable case.

b) In relation to (and (c) the burden is on Corps and it has to be actually decided.

c) In relation to (d) the burden is on Corps to establish the fact.

4

In addition, it is for Corps to establish that there is a serious question to be tried on the main question in the action, namely whether there is or will be a breach of the agreement. The agreed approach on this at the hearing was that I could assume that there was, though the outline of Corps' case on the point given by Mr Vos was not always clear to me. At a late stage and having seen a written elaboration of Corps argument on the point, Computer sought to resile from its position that there was a serious question to be tried, and to say that it had become apparent that there wasn't but after (I confess) flirting with idea that that should be allowed, I decided that it was too late for Computer to change its stance on that.

5

The agreement in question, which is called the Trade Mark Agreement in the jargon of this case, was a keenly negotiated agreement, negotiated between experienced lawyers (English and US) over many months. The evidence before me showed that each of the parties was overtly adamant that it did not wish to accept the other's jurisdiction or governing law, and could reach no agreement on any other jurisdiction or governing law. As a result it contains no governing law clause and no jurisdiction clause. In addition, neither party wanted to give the other an advantage in terms of where the agreement was finalised. If their intention in doing so was to create obscurity and difficulty for lawyers to debate in future years, they have succeeded handsomely.

The key terms of the agreement

6

As will appear in more detail when I come to set out the detailed history of this matter, the purpose of the Trade Mark Agreement was to regulate the activities of the two parties for the future. Computer was described as "Apple Computer"; Corps was described as "Apple Corps". It is dated 9 th October 1991 and its key terms are as follows:

"AGREEMENT

"…. Whereas, the context in which this Agreement arises in the parties' desire to reserve for Apple Corps' field of use for its Trade Marks, the record business, The Beatles, Apple Corps' catalog and artists and related material all as set forth in section 1.3 herein and to reserve for Apple Computers field of use for its Trade Marks, the computer, data processing and telecommunications business as set forth in section 1.2 herein and to coordinate the use of their respective Trade Marks in such fields of use as set forth in section 4 herein.

"Accordingly, the parties agree as follows:

1

DEFINITIONS

1.2

"Apple Computer Field of Use" means (i) electronic good,s including but not limited to computers, microprocessors and microprocessor controlled devices, telecommunications equipment, data processing equipment, ancillary and peripheral equipment, and computer software of any kind on any medium; (ii) data processingservices, data transmission services, broadcasting services, telecommunications services; (iii) ancillary services relating to any of the foregoing, including without limitation, training, education, maintenance, repair, financing and distribution; (iv) printed matter relating to any of the foregoing goods or services; and (v) promotional merchandising relating to the foregoing.

1.3

"Apple Corps Field of Use" means (i) the Apple Musical Artists; the Apple Catalog; personalities or characters which appear in or are derived from the Apple Catalog; the names likenesses, voices or musical sounds of the Apple Musical Artists; any musical works or performances of the Apple Musical Artists; (ii) any current or future creative works whose principal content is music and/or musical performances; regardless of the means by which those works are recorded, or communicated, whether tangible or intangible; (iii) promotional merchandise relating to any of the foregoing; (iv) merchandising relating to the Apple Musical Artists and the Apple Catalog and the related subject matter set forth in subsection (i), including, without limitation, the commercial exploitation of personalities, characters, names, designs, images, words, photographs, drawings, or other materials through articles such as posters, toys, games (including computer games), novelties, figures, figurines and clothing; and (v) printed matter relating to any of the foregoing goods or services.

1.4

"Apple Computer Marks" means (i) any design, reproduction or other depiction of an apple, in whole or in part, except for a whole green apple or a half apple (of any color(s)); and (ii) the word "Apple".

1.5

"Apple Corps Marks" means (i) any design, reproduction or other depiction of an apple, in whole or in part, except a "rainbow" or multicolour striped apple (in whole or in part) or any apple (of any color(s)) with a "bite" removed; and (ii) the words "Apple", and "Zapple".

2

PAYMENT

"Apple Computer shall pay to Apple Corps the sum of One Hundred Thousand Dollars ($100,000) (exclusive of VAT), the receipt of which is hereby acknowledged by Apple Corps. Apple Computer shall be responsible for any VAT that may be levied as a consequence of such payment and will indemnify and hold harmless Apple Corps if any VAT is due but not paid and any attempt is made by the relevant authority to levy such upon Apple Corps, Apple Corps shall be responsible for any income or similar tax payable by Apple Corps as a consequence of the receipt of such payment and will indemnify and hold harmless Apple Computer if such tax is not paid and any attempt is made by the relevant fiscal authority to levy such upon Apple Computer. If there is any attempt to levy any VAT or income tax on the payment set forth herein, the indemnified party shall cooperate fully with the indemnifying party and the indemnifying party shall have the right to contest or control any proceeding arising in connection thereto.

4

RIGHTS TO USE TRADE MARKS

4.1

"Apple Computer shall have the exclusive worldwide right, as between the parties, to use and authorise others to use the Apple Computer Marks on or in connection with goods and services within the Apple Computer Field of Use.

4.2

"Apple Corps shall have the exclusive worldwide right, as between the parties, to use and authorise others to use the Apple Corps Marks on or in connection with goods and services within the Apple Corps Field of Use.

4.3

"The parties acknowledge that certain goods and services within the Apple Computer Field of Use are capable of delivering content within the Apple Corps Field of Use. In such case, even though Apple Corps shall have the exclusive right to use or authorise others to use the Apple Corps Marks on or in connection with content within subsection...

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