Praesidiad Holding BVBA v Zaun Ltd

Hearing date: 1 May 2025

Approved Judgment

This judgment was handed down remotely at 10.30am on 9 May 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

This is an appeal by the Defendant (“Zaun”) against an order made by Zacaroli J (as he then was) on 22 July 2024 striking out Zaun's counterclaim in these proceedings for the reasons given in his judgment dated 13 June 2024 [2024] EWHC 1549 (Pat). By its counterclaim Zaun claims a declaration that Registered Community Design No. 000127204-0001 (“the RCD”) and United Kingdom Re-Registered Design No. 90001272040001 (“the UKRRD”) “are and have at all material times been invalid”. In essence, the judge held that Zaun was precluded from challenging the validity of the RCD and the UKRRD because Zaun had already unsuccessfully challenged the validity of the RCD before the European Union Intellectual Property Office (“the EUIPO”) and on appeal therefrom to the General Court of the European Union. Zaun appeals with permission granted by Falk LJ, contending in short that the effect of the relevant Brexit legislation is that it is able to challenge the validity of the RCD and the UKRRD in these proceedings. The resolution of the appeal depends on the correct interpretation of legislation of considerable complexity.

Procedural background

The First Claimant (“Betafence”) is the proprietor of the RCD and the UKRRD. The Second Claimant (“Guardiar Europe”) is its licensee. Both Claimants are Belgian companies which are members of the Guardiar Group.

On 8 March 2018 Betafence's Belgian patent attorneys sent a letter to Zaun alleging infringement of the RCD. On 27 March 2018 Zaun filed an application at the EUIPO for a declaration of invalidity in respect of the RCD on the grounds that: (i) all the features of appearance of the product depicted in the design were solely dictated by its technical function (relying on Article 8(1) of Council Regulation 6/2002/EC of 12 December 2001 on Community designs, “the CD Regulation”); and (ii) the design was either not new or lacked individual character since it differed only in immaterial details from, or produced the same overall impression as, five prior designs (relying on Articles 5 and 6 of the CD Regulation). On 24 July 2018 the Claimants issued the claim form in these proceedings seeking relief for infringement of the RCD and served it on Zaun together with Particulars of Claim. On 8 August 2018 Zaun applied pursuant to Article 91(1) of the CD Regulation (set out in paragraph 12 below) for a stay of the claim pending the final determination of the application for a declaration of invalidity. On 23 October 2018 Deputy Master Hansen made an order by consent for such a stay.

On 19 July 2019 the EUIPO Invalidity Division issued a decision in case ICD 101 799 rejecting the application for a declaration of invalidity in respect of the RCD. Zaun appealed against this decision so far as its Article 8(1) ground was concerned, and on 15 February 2021 the EUIPO Third Board of Appeal issued a decision in case R 2068/2019–3 allowing the appeal, annulling the contested decision and declaring the RCD to be invalid pursuant to Article 8(1) of the CD Regulation. Betafence appealed against this decision, and on 19 October 2022 the General Court handed down its judgment in Case T-231/21 allowing the appeal, annulling the contested decision and rejecting the application for a declaration of invalidity. Zaun applied for permission to appeal against this judgment, but on 18 April 2023 the Court of Justice of the European Union made a reasoned order in Case C-780/22 P refusing to allow the appeal to proceed. Although the judgment of the General Court appears on its face to be dispositive of the application for a declaration of invalidity, the case was in fact remitted to the Third Board of Appeal. On 12 June 2023 the Third Board of Appeal issued a second decision in case R 2068/2019–3 dismissing Zaun's appeal. It is common ground that, at this point, the stay ordered by Deputy Master Hansen came to an end.

On 7 July 2023 the Claimants served an Amended Particulars of Claim. The amendments fall into four main groups. The first group of amendments provides further particulars of allegedly infringing acts committed by Zaun in the period from April 2017 to May 2018 (i.e. prior to the issue of the claim form and prior to Brexit). The second group of amendments alleges infringing acts committed by Zaun in January 2022 (i.e. after the issue of the claim form and after Brexit). The third group of amendments adds a claim for infringement of the UKRRD to the existing claim for infringement of the RCD. The combined effect of the second and third groups is to add allegations of infringement of the UKRRD in January 2022 to the pre-existing allegations of infringement of the RCD in June 2014 to March 2018. The fourth group of amendments recites the course of the EUIPO invalidity proceedings, although no legal consequence of those proceedings is asserted.

On 7 August 2023 Zaun served a Defence and Counterclaim. The counterclaim alleges that the RCD is invalid on the same grounds as those relied on by Zaun before the EUIPO, but the prior designs relied upon for the purposes of Articles 5 and 6 of the CD Regulation are different. Precisely the same grounds are relied upon as invalidating the UKRRD pursuant to sections 1B and 1C of the Registered Designs Act 1949, which implemented European Parliament and Council Directive 98/71/EC of 13 October 1998 on the legal protection of designs and correspond to Articles 5–6 and 8 of the CD Regulation. On 19 September 2023 the Claimants applied to strike out the counterclaim. This application came before the judge on 7 May 2024, and as noted above he acceded to it.

Relevant provisions of the CD Regulation

At the time that these proceedings were commenced, the UK was a Member State of the EU and the CD Regulation therefore had direct effect in the UK. The arguments on the appeal concern, among other things, the interpretation and effect of Title IX, headed “Jurisdiction and Procedure in Legal Actions relating to Community Designs”, and in particular Article 86(5). Before turning to Title IX, it is important to note Article 1(3), which provides:

“A Community design shall have a unitary character. It shall have equal effect throughout the Community. It shall not be registered, transferred or surrendered or be the subject of a decision declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. This principle and its implications shall apply unless otherwise provided in this Regulation.”

Title IX is divided into three sections. Section 1 is headed “Jurisdiction and enforcement”. It consists of Article 79 concerning the application of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (which was subsequently replaced by the European Parliament and of the Council Regulation 1215/2012/EU of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), “the Brussels I Regulation (Recast)”).

Section 2 is headed “Disputes concerning the infringement and validity of Community designs”. Article 80 requires the Member States to designate Community design courts to perform the functions assigned to them by the CD Regulation. (The UK complied with this obligation by designating the High Court of England and Wales, among other courts, as a Community design court: Community Designs (Designation of Community Design Courts) Regulations 2005 (SI 2005/696). By virtue of CPR rule 63.2 claims concerning registered Community designs must be started in either the Patents Court or the Intellectual Property Enterprise Court.)

Article 81 provides that Community design courts “shall have exclusive jurisdiction” over four categories of claim, including “(a) … infringement actions” and “(d) … counterclaims for a declaration of invalidity of a Community design raised in connection with actions under (a)”. Article 82 deals with international jurisdiction. Article 83 specifies the territorial extent of Community design courts' jurisdiction with respect to infringement. Article 84 specified the grounds on which, the persons by whom and the proceedings within which a counterclaim for a declaration of invalidity may be brought. Article 85(1) provides for a presumption of validity of registered Community designs in infringement proceedings, and stipulates that validity “may be challenged only with a counterclaim for a declaration of invalidity”. (Article 85(2) concerns unregistered Community designs.)

Article 86 provides:

“ Judgements of invalidity

1. Where in a proceeding before a Community design court the Community design has been put in issue by way of a counterclaim for a declaration of invalidity:

(a) if any of the grounds mentioned in Article 25 are found to prejudice the maintenance of the Community design, the court shall declare the Community design invalid;

(b) if none of the grounds mentioned in Article 25 is found to prejudice the...