The Court of Justice of the European Union (CJEU) has confirmed that the special jurisdiction rule in Article 5(3) of Regulation 44/2001 (the "Regulation") under which courts of Member States in which the harmful event occurs or may occur are competent, applies to copyright infringement cases.  The CJEU held that, under this rule, the courts both of the place of the causal event and where the damage occurred had jurisdiction.

The CJEU ruled that an alleged copyright infringer cannot be sued, on the basis of the causal event, in the courts of a Member State in which he has not acted. However, the CJEU considered that the courts of Member States in which damage relating to physical copyright infringement may occur, had jurisdiction, even if the act complained of did not occur within that Member State.

Following its decision in Pinckney v Mediatech (see our e-bulletin here), the CJEU specified that courts who were granted competence on the basis of the place of the damage under Article 5(3) had jurisdiction only to rule on damage caused in that territory (Hi Hotel HCF SARL v Uwe Spoering, C-387/12).

Business impact

  • Parties may be sued for copyright infringement in courts of jurisdictions in which they have no domicile and have not acted if their acts may cause damage to be suffered in the Member States of the courts seized.
  • This decision is good news for copyright owners wanting to take action against infringement of their copyright works in the courts of Member States in which infringing copies are made available.
  • Although there must be a sufficient connection between the court seized and the dispute, that connection appears established where the acts complained of give rise to acts by other persons in the state of the court seized.
  • This ruling means that parties may become the subject of multiple cross-jurisdiction actions since, under Article 5(3), courts only have jurisdiction to rule on damage suffered within the territory of the court seized.
  • This decision may encourage "forum shopping", with authors choosing to sue alleged infringers in the courts of Member States in which they consider that they will have the best chance of success and will recover most.  
  • The decision suggests that parties seeking to challenge the admissibility of a referral to the CJEU for lack of relevance to the proceedings face an uphill struggle. Questions of European law which bear some relevance to the dispute will be admitted.

Background

In 2003, the Claimant, a photographer, granted the Defendant, a French domiciled company named Hi Hotel HCF SARL ("Hi Hotel"), the right to use photographs he had taken of the Defendant's hotel, in advertising brochures and on the Hi Hotel website. The parties had not entered into any written licensing agreement but the Claimant's invoice contained the following note: "include the rights – only for the hotel hi". 

Five years later, in 2008, it came to the Claimant's attention that his photographs had been published without his authorisation by a publisher in Berlin, Germany. The Claimant considered that Hi Hotel had infringed his copyright by passing his photographs to the publisher. As such, the Claimant started proceedings against Hi Hotel in Germany. Hi Hotel appealed on a point of law.  

The Bundesgerichtshof (the German Court of Appeal) considered that it was necessary to determine whether the German courts had jurisdiction. Accordingly, it asked the CJEU whether the "harmful event" referred to in Article 5(3) of the Regulation occurred  in a Member State A when the tort complained of was committed in another Member State B but consisted of participating in another tort committed in Member State A.

Although the question of infringement had not yet been decided, for the purposes of assessing jurisdiction, the German Court of Appeal worked on the assumption that the publisher in Germany had breached the Claimant's copyright and that, although Hi Hotel had not acted in Germany, Hi Hotel had assisted the breach by handing over the photographs to the publisher in France.

After hearing Advocate General Niilo Jääskinen, the CJEU handed down its decision, deciding that there was no need for a written opinion.

Admissibility of the referral

Hi Hotel submitted that the referral to the CJEU was inadmissible and that the question of jurisdiction was not relevant to the dispute since the issue of whether there had been a complete assignment of the Claimant's copyright by the Claimant to Hi Hotel had not yet been determined.

The CJEU rejected this submission on the basis that referrals were only considered inadmissible when the question of interpretation of European law bore no relation to the facts of the main dispute or when the CJEU was not provided with the necessary factual or legal material to formulate a complete answer.

On the facts, the CJEU considered that the referral was relevant since the lack of jurisdiction of the German courts was a submission made by Hi Hotel in the main proceedings.

The CJEU held that the fact that the question of liability in tort had not been determined did not affect the admissibility of the request for a preliminary ruling.

Ruling on substance

The CJEU reminded that the general rule on jurisdiction was to be found in Article 2(1) of the Regulation, which provides that the courts of the Member State in which the defendant is domiciled, have jurisdiction.

The CJEU explained that the rule in Article 5(3) of the Regulation, granting jurisdiction to the courts of Member States in which damaged occurred or may occur,  was a rule of special jurisdiction and that, as such, it should be interpreted restrictively. The CJEU, following its decision in Melzer, held that "the place where the damage occurs or may occur" means both (i) the place where the causal event giving rise to the damage occurs; and (ii) the place where the damage occurs. In addition, the CJEU specified that the special jurisdiction under Article 5(3) of the Regulation called for a "particularly close connection" between the dispute and the courts seized and that the only court which may properly be seized was the court in which the "relevant point of connection" were situated.

- The place of the causal event

Since Hi Hotel had acted in France (and not Germany) and was only one of several "perpetrators" to be sued (other perpetrators would include the publisher in France and the publisher in Germany), the CJEU concluded that the "causal event" did not occur within the jurisdiction of the court seized. As such, the CJEU ruled that the German court's jurisdiction could not be established on the basis of the place where the causal event under Article 5(3) of the Regulation. 

- The place where the damage occurred or may occur

As Hi Hotel had not acted within the jurisdiction of the court seized, the CJEU considered the question of whether jurisdiction could be established on the basis that the damage had occurred in Germany.

Relying on its earlier ruling in Pinckney, a case relating to online copyright infringement, the CJEU ruled that jurisdiction to hear the action may be established in copyright infringement cases in favour of a court of a Member State in which copyright protection is provided. On the facts, the CJEU noted that the Claimant's copyright was protected under German law.

The CJEU considered that the possibility that damage may occurfollowed from the possibility of acquiring copies of the Claimant's work in Germany further to the photographs having been handed over by Hi Hotel to the publisher in France.

Significance of the decision

This decision is consistent with the CJEU's previous case law, effectively granting a wide scope of application to the special jurisdiction rule in Article 5(3) of the Regulation, despite its opening remarks that the rule should be interpreted restrictively. However, the CJEU emphasised that where the jurisdiction of a court is based on the place of the damage suffered, that court's competence is limited to assessing the damage which occurred in that territory.

It follows from this decision that the German courts are competent even though Hi Hotel's alleged infringing acts occurred in France. However, their jurisdiction is limited to determining the damage suffered by the Claimant on the German territory.