Adobe Systems Inc v Netcom Distributors and Ors

A national court has jurisdiction over a counterclaim seeking revocation of a Community trade mark only where success on the counterclaim could provide a defence to the infringement claim. The jurisdiction is a limited exception to the general allocation of validity questions to the Office. It does not extend to an otherwise freestanding challenge merely because the same registered mark is the subject of infringement proceedings or because the issues have some factual connection.

The claimant brought trade mark infringement proceedings concerning parallel imports. The defendants counterclaimed for revocation or partial revocation of UK and Community trade marks for non-use, but only in respect of goods and services outside those relied upon in the infringement claim. The claimant argued that the High Court had no jurisdiction to entertain that non-defensive Community trade mark counterclaim. Sales J had directed a preliminary hearing on jurisdiction and the possible operation of article 100(7) of Council Regulation 207/2009. The stay application was withdrawn, leaving the jurisdictional issue for determination.

1. Jurisdiction. The court ruled that the counterclaim for revocation of the Community trade marks for non-use was outside the jurisdiction conferred by articles 96(d) and 100 of Council Regulation 207/2009. A permissible counterclaim is one which, if successful, is capable of providing a defence to the infringement claim.
2. Construction. The Regulation had to be interpreted by ascertaining the Council’s meaning from the words used in their legislative context. Clear words should not be distorted, but interpretation was not confined to literalism. The authorities relied upon by the parties illustrated aspects of the process but did not determine the issue.
3. Scheme and policy. The Regulation allocated original validity jurisdiction principally to OHIM and gave national courts jurisdiction over infringement. Allowing defensive counterclaims enabled the national court to resolve the infringement claim and the validity issue together. No comparable justification existed for permitting an unconnected revocation claim merely because infringement proceedings had been commenced.
4. Article 100(7). The stay provision supported the conclusion that the relevant counterclaim was one affecting the defence to the infringement proceedings. It contemplated a stay of the effective claim while validity was considered by OHIM, rather than a stay of an independent counterclaim.
5. The claimant’s alternative application for a stay of the counterclaim was withdrawn. The provisions of the counterclaim seeking revocation of the Community trade marks for non-use were to be struck out, subject to an agreed draft order.

This was a first-instance decision. Sales J had made directions for a preliminary hearing on jurisdiction and the possible application of article 100(7) of Council Regulation 207/2009. The High Court determined the jurisdiction issue and directed that the relevant counterclaim provisions be struck out.