Apple Corps Ltd v Apple Computer Inc

For jurisdictional purposes, a contract formed through instantaneous communications is ordinarily made where acceptance is received. However, where offer-and-acceptance analysis is artificial or inappropriate, a contract may, in principle, be made simultaneously in more than one jurisdiction. The court must still determine whether England is the proper place for the claim.

Under the Rome Convention, characteristic performance may be a negative obligation. Where a contract distributes reciprocal rights and restrictions between the parties, no single party may provide the characteristic performance. The court must then assess all relevant connections under Article 4(1), including the contract’s commercial and factual context, without confining the inquiry to performance-related geographical factors.

Apple Corps Limited claimed that Apple Computer Inc had breached, and threatened to breach, a 1991 Trade Mark Agreement regulating the parties’ use of their respective marks. Permission had been granted to serve the proceedings out of the jurisdiction under CPR 6.20.

The jurisdictional issues were whether the agreement was made in England, whether it was governed by English law, whether a threatened breach occurred within the jurisdiction, and whether England was the proper place for the claim. The application also required consideration of the appropriate forum in light of the parties, evidence, governing law and concurrent Californian proceedings.

1. Service out. Apple Corps established a good arguable case that the agreement was made in England. The evidence did not establish the precise order of the telephone statements, but it supported the possibility that an acceptance was made in California and received in England. The good arguable case test did not require proof on the balance of probabilities.
2. The court further held that, as a matter of principle, a contract could be made in two places simultaneously where the facts made offer-and-acceptance analysis artificial or inappropriate. The parties had agreed to complete only when both indicated that they were ready. Treating the agreement as made in both England and California better reflected the transaction and avoided a result depending on which party spoke first.
3. Under the Rome Convention, incorporated by the Contracts Applicable Law Act 1990, the Trade Mark Agreement had no identifiable characteristic performance. Its central obligations were reciprocal restrictions and permissions concerning trade mark use. The Article 4(2) presumption therefore did not apply, and the closest connection had to be assessed under Article 4(1).
4. The Article 4(1) inquiry was broad. The court could consider the contract’s commercial setting and all relevant geographical connections. The agreement’s connection with the settlement of English litigation, together with the other factors, made England the country with which it was most closely connected. English law therefore governed.
5. England was also the proper place for the claim. The governing law was important, and proceedings in California were likely to involve additional depositions and potentially wider evidence about negotiations. The construction dispute was more appropriately tried in England.
6. The alternative jurisdictional grounds concerning threatened breaches in England were not considered. Apple Computer’s application was dismissed.