D Jacobson & Sons v Crocs Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Warren |
| Judgment Date | 30 January 2014 |
| Neutral Citation | [2014] EWHC 987 (Ch) |
| Docket Number | Case No: HC11C03463 |
| Date | 30 January 2014 |
| Court | Chancery Division |
[2014] EWHC 987 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Warren
Case No: HC11C03463
Mr Jonathan Hill (instructed by TLT Solicitors) appeared on behalf of the Claimant
Mr Mark Chatsfield (instructed by Field Fisher Waterhouse LLP) appeared on behalf of the Defendant
( )
This action concerns registered design rights as well as certain unregistered UK design rights. The issue before me is whether the action should be stayed under Article 95.1 of the Communities Design Regulations No. 6 of 2006, which I will call the CDR.
The statutory provisions relevant to this application comprise essentially Articles 54, 81 and 91 of the CDR:
"Article 54: Participation in the proceedings of the alleged infringer.
1. In the event of an application for a declaration of invalidity of a registered Community design being filed, and as long as no final decision has been taken by the Office, any third party who proves that proceedings for infringement of the same design have been instituted against him may be joined as a party in the invalidity proceedings on request submitted within three months of the date on which the infringement proceedings were instituted. The same shall apply in respect of any third party who proves both that the right holder of the Community design has requested that he cease an alleged infringement of the design and that he has instituted proceedings for a court ruling that he is not infringing the Community design.
2. The request to be joined as a party shall be filed in a written reasoned statement. It shall not be deemed to have been filed until the invalidity fee, referred to in Article 52(2), has been paid. Thereafter the request shall, subject to any exceptions laid down in the implementing regulation, be treated as an application for a declaration of invalidity.
Article 81: Jurisdiction over infringement and validity.
The Community design courts shall have exclusive jurisdiction:
(a) for infringement actions and — if they are permitted under national law — actions in respect of threatened infringement of Community designs;
(b) for actions for declaration of non-infringement of Community designs, if they are permitted
under national law;
(c) for actions for a declaration of invalidity of an unregistered Community design;
(d) for counterclaims for a declaration of invalidity of a Community design raised in connection
with actions under (a).
Article 91: Specific rules on related actions.
1. A Community design court hearing an action referred to in Article 81, other than an action for a declaration of non-infringement, shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties, or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the Community design is already in issue before another Community design court on account of a counterclaim or, in the case of a registered Community design, where an application for a declaration of invalidity has already been filed at the Office.
2. The Office, when hearing an application for a declaration of invalidity of a registered Community design, shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties, or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the registered Community design is already in issue on account of a counterclaim before a Community design court. However, if one of the parties to the proceedings before the Community design court so requests, the court may, after hearing the other parties to these proceedings, stay the proceedings. The Office shall in this instance continue the proceedings pending before it.
3. Where the Community design court stays the proceedings it may order provisional measures, including protective measures, for the duration of the stay."
Article 6 of the ECHR, reflected domestically in the Human Rights Act provides, so far as material, as follows:
"In the determination of the civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law."
Reference has also been made to Article 47 of the European Union Charter on fundamental rights, but I do not need to read that.
The legal approach to stays
It is common ground that the applicable principles concerning the grant of stays is to be found in the two Court of Appeal decisions of Samsung v Apple [2012] EWCA 729 2013 FSR 13 and Starbucks v BSkyB [2012] EWCA Civ 1201 2013 BLR 623. The Starbucks case concerned a community trademark. The Community Trademark Regulations have provisions equivalent to those found in Article 91 with which I am concerned.
At paragraph 40 of his judgment in Samsung, Lloyd LJ, giving judgment to the court, said this:
"The purpose of Article 91(1) is plain. Consistently with the recitals (29) and (30) of the CDR it creates a rule which prevents the validity of a registered Community design being considered in simultaneous proceedings in different fora, subject to two exceptions, one real, the other more apparent than real. The first is where there are 'special grounds' for permitting two such proceedings to continue. That is presumably to ensure that the rules create flexibility and is not used to create injustice…"
Then at paragraph 49, the court said something about the legislative policy behind the special grounds exception:
"The nature and force of the special grounds which would justify not ordering a stay in a given case would need to be such as to make it appropriate to allow proceedings to continue to which Article 1 applies, thereby opening up the possibility of parallel and active proceedings on the same issue of validity or otherwise and therefore possible inconsistent decisions on the same point in different courts or as between a community design court and OHIM. The grounds would have to be of sufficient importance and substance on the facts of a given case to justify risk."
In Starbucks, Etherton LJ, with whom Patten LJ and Tomlinson LJ agreed, reviewed the earlier authorities and addressed the policy behind Article 91. He drew nine conclusions set out in paragraph 103 to 112 of his judgment. As stated in paragraph 108 under sixthly, the presumption in favour of a stay is strong, particularly because of the importance of the policy of avoiding inconsistent decisions and as further stated in paragraph 109 under seventhly, it will be a rare and exceptional case where there are special grounds. In paragraph 110 under eighthly, Etherton LJ said this — I will not quote the whole paragraph, but he said:
"… special grounds must relate to factual circumstances specific to the given case: Nokia v Wardell [2007] ETMR 20 at [38] and [39]. Systemic differences in terms of rules of evidence, procedure and powers of case management applicable to proceedings in the community trademark courts of different member states and at OHIM are irrelevant. For those reasons, the fact, if it be such, that an application to OHIM takes a long time or longer to be finally determined than in proceedings in this jurisdiction is irrelevant."
Then in paragraph 111 he went on to say:
"On the other hand, I see no reason why specific facts giving rise to particular urgency may not, depending on the precise circumstances, constitute special ground within Article 104(1). The general need of the business to know where it stands is plainly not sufficient. Furthermore, the urgency must be such as to surmount the heavy presumption in favour of the stay bearing in mind that the protective and provisional measures may be available to protect the claimant in the event of delay."
Before leaving Samsung and Starbucks I note that no argument appears to have been raised about the effect of Article 6.
The facts and history of this litigation
The claimant (which I will call Jacobson) is a medium sized English shoe company. The defendant (which I will call Crocs) is the company behind the famous Crocs plastic clogs. Crocs holds the community registered design at issue (the CRD) which it says has been infringed by Jacobson.
By three letters in October and November, as long ago as 2005, Crocs asserted its rights under the CRD. Jacobson considered that these amounted to ungrounded threats in relation to which it had a cause of action against Crocs. Following those letters and, on Jacobson's case, because of the well justified fear of litigation, Jacobson did not sell plastic clogs of the same general type as Crocs' clogs until 2009, thus missing out, on its case, on the years in which the clogs were highly popular in the market place. Moreover, Jacobson gave an undertaking on 6 January 2006 not to sell any of the relevant clogs. That was an undertaking not to the court but to Crocs.
On 31 July 2006, a company called Holey Soles Limited filed an opposition to the CRD in the Office for Harmonisation of the Internal Market (which I will call the first OHIM action). On 12 December 2007, the invalidity division held that the CRD was invalid for lack of individual character. In August 2008, another company, Partenaire Hospitalier International (which I will call PHI) applied to be joined as a party to the first OHIM action. From 7...
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...EWHC 3588 (Ch.), (Unreported, High Court of England and Wales, Sales J., 10th December, 2012) and D Jacobson & Sons v. Crocs Inc[2014] EWHC 987 (Ch.), [2014] E.C.C. 16 considered. 4. That the rationale underpinning article 104 was to reduce or avoid the risk of irreconcilable judgments. Hea......
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