A Polish company, Beverage City Polska, produces in Poland an energy drink named “Diamant Vogue”, which it also distributes and promotes.

An independent German company, Beverage City & Lifestyle, signed an exclusive distribution contract for Diamant Vogue beverages with Beverage City Polska for the German territory.

Despite the similarity in their names, these companies are not related entities.

Considering that the Diamant Vogue beverage infringed upon its European Union trademark registration VOGUE, Advance Magazine Publishers filed an action against the German and Polish companies, as well as their respective directors, before the Court of the domicile of the director of the German company.

To assert its jurisdiction according to Article 8 of the Brussels I bis Regulation, the German Court relied on the previous case law of the Court of Justice of the European Union (hereinafter CJEU), in its Nintendo decision of September 27, 2017 (C-24/16 and C-25/16). On this basis, the CJEU stated that co-defendants may be brought before same court where only one defendant is domiciled “provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
In order for judgments to be regarded as irreconcilable, it is not sufficient that there be a divergence in the outcome of the disputes, but that divergence must also arise in the context of the same situation of fact and law.”

In other words, to depart from the default jurisdiction of the defendant’s domicile, it is not enough that there may be a risk of irreconcilable decisions. It is also necessary that there is an identical situation in fact and law.

In the Nintendo case, the CJEU held that there was the same factual situation when:

the defendants were companies belonging to the same group, and
that they acted identically or similarly, following a common policy developed by one of them alone.

The Polish company argued that this is not the case here since the defendant companies do not belong to the same group.

The Polish company also argued that it had only acted and delivered goods in Poland, which even less justified the German court’s assertion of jurisdiction over them.

The Court of Appeal noted that there was no capital link between the companies, which were acting independently of each other. It also observed that, unlike in the Nintendo judgment, the supply relationship between the companies did not involve the anchoring defendant, against whom proceedings were brought only in his capacity as representative of the German company.

However, the Court of Appeal questioned whether the existence of an exclusive distribution agreement between the parties might be sufficient to justify the application of Article 8(1) of the Brussels I bis Regulation. It therefore decided to refer a preliminary question to the Court of Justice of the European Union.
As summarized by the CJEU in its decision, the question raised by the Court of Appeal was whether the existence of an exclusive distribution contract between two of the co-defendants was sufficient to bring all co-defendants before the same court in case of infringement of the same European Union trademark.

The CJEU therefore reviewed the facts to determine if there were identical legal and factual situations for all of the defendants.

Regarding the same legal situation, the Court considered this condition to be met since the claim was for infringement of a European Union trademark, which is a unitary title that has the same effects throughout the territory of the Union.

With respect to the factual situation, the Court following the Advocate General’s suggestion, analyzed the existence of the same factual situation, or connection between the claims, not in terms of the capital links between the companies, but on the basis of the relationship between the facts themselves and the nature of the contractual relationship between the customer and the supplier.

In this case, the Court noted:

i) the existence of an exclusive distribution contract between the two defendant companies,

ii) to organize the marketing of the same infringing products, and

iii) that only one defendant owned the domain names used to market the products of both companies.

The Court considered that all of these factors make it foreseeable that the acts of infringement are part of the same factual situation.

The court hearing the case will therefore have to assess the existence of the same legal and factual situation by taking into account all the elements of the case, and not just the existence of capital links between the defendants.

The CJEU therefore answered the preliminary question as follows:

“In the light of the foregoing considerations, the answer to the question referred for a preliminary ruling is that Article 8(1) of Regulation No 1215/2012 must be interpreted as meaning that a number of defendants, domiciled in different Member States, may be sued in the courts for the place where one of them is domiciled before which, in the context of an infringement action, claims have been brought against all of those defendants by the proprietor of an EU trade mark where they are each accused of having committed a materially identical infringement of that trade mark and they are connected by an exclusive distribution agreement.”