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Don't delay when requesting a stay under the Community Trade Mark Regulations

04 August 2014. Published by Jeremy Drew, Partner, Head of Commercial

In proceedings in which the defendants have already been found liable for passing off and trade mark infringement in respect of the BETTY BOOP trade marks, the High Court has rejected the defendants' application to have the remaining copyright infringement and trade mark invalidity proceedings stayed in favour of earlier, related Italian proceedings.


The defendants' application for a stay of the claimants' remaining copyright infringement claim and the defendants' remaining trade mark invalidity counterclaim was based on the fact that, when the claim form was issued on 4 April 2012, three sets of proceedings already existed in Italy concerning BETTY BOOP branded merchandise. In brief, these Italian proceedings consisted of:

  • A claim by Hearst Holdings Inc. (the first claimant in the English proceedings), against a number of Italian companies who were purportedly licensed by AVELA Inc. (the first defendant in the English proceedings) to sell BETTY BOOP branded merchandise.
  • Third party indemnity claims brought by the Italian companies against AVELA.
  • A claim by AVELA to invalidate Hearst's Italian and Community registered trademarks alleged to have been infringed by the Italian companies.
  • A claim by Hearst against AVELA for joint liability in relation to the acts of the Italian companies.

Importantly, the Italian Courts were seised of all these claims before the claim form was issued in the English Courts.

Birss J refused the defendants' application for a stay of the English proceedings, ruling that the policy behind Article 104 of the Community Trade Mark Regulation (CTMR) is to avoid irreconcilable judgments or at least the risk of irreconcilable judgments, and this policy is wholly defeated if an application for a stay under Article 104 is only brought after a judgment in the court second seised has been given – in the circumstances, the risk of irreconcilable judgments would not be mitigated by granting the stay. The defendants' extreme delay therefore constituted 'special circumstances' not to grant a stay under Article 104. In coming to this decision, Birss J provided a useful exposition of Article 104 and 109 CTMR, and Articles 27 and 28 of Council Regulation 44/2001 (Brussels Regulation).

Relevant legislation

Article 109 CTMR

Article 109 CTMR deals with simultaneous and successive civil actions on the basis of Community trademarks and national trade marks in the courts of different Member States. It provides that:

"Where actions for infringement involving the same cause of action and between the same parties are brought in the courts of different Member States, one seised on the basis of a Community trade mark and the other seised on the basis of a national trade mark:

(a) the court other than the court first seised shall of its own motion decline jurisdiction in favour of that court where the trademarks concerned are identical and valid for identical goods or services. The court which would be required to decline jurisdiction may stay its proceedings if the jurisdiction of the other court is contested;

(b) the court other than the court first seised may stay its proceedings where the trademarks concerned are identical and valid for similar goods or services and where the trademarks concerned are similar and valid for identical or similar goods or services."

Article 104 CTMR

Article 104 CTMR provides that a Community trade mark court hearing an action for infringement, revocation or invalidity (but not a declaration of non-infringement); "shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the Community trade mark is already in issue before another Community trade mark court on account of a counterclaim or where an application for revocation or for a declaration of invalidity has already been filed at the Office".


Article 109 CTMR

Birss J found as follows:

  • For the purposes of Article 109 CTMR, the parties were the same before the English and Italian Courts (to satisfy this test it was clear that not all parties needed to be the same, just some).
  • The expression 'same cause of action' had the same meaning as under Article 27 of the Brussels Regulation.
  • Referring to the principles laid down in The Alexandros T [2013] UKSC 70, Gubisch v Palumbo (Case C-144/86), the Tatry (Case C-406/92) and Sarrio v Kuwaiti Investment Authority [119] 1 AC 32, 'same cause of action' must be read as referring to "proceedings which have the same cause and the same objet" (a test derived from the French text of the Brussels Regulation).
  • 'Cause' means 'the same facts' and 'the same rule of law as the basis for the action' whilst 'objet' means 'the same end in view'. All of these requirements need to be present for the 'same cause of action' test to be satisfied.

Were the facts and was the rule of law the same?

Both the English and Italian proceedings concerned the sale to European consumers of Betty Boop merchandise which was licensed by AVELA. In a sense the proceedings were about similar issues in general terms but they were not concerned with the same facts. The persons carrying out the infringing acts in Italy and the transactions themselves were different in the UK and Italian proceedings and the images of Betty Boop used in Italy were different to the images used in the English proceedings.

Did the proceedings have the same end in view?

Birss J found this to be a more difficult question, but preferred the claimants' argument that the ends in view were not the same: just because relief arising out of one case in one country may overlap with the issues in another country does not necessarily mean that the ends in view are identical. The objective of the English court was to grant proper relief to compensate the claimants for the acts proved in the English case. The objective of the Italian court would be correspondingly focused on the proper relief arising from the acts proved before the Italian court. On this reasoning, it is difficult to envisage a scenario where two sets of proceedings will have the same ends in view, unless identical facts are proved and relied on, and identical relief is sought, in each court.

Accordingly, article 109 CTMR did not apply.

Article 104 CTMR

There was no doubt Article 104 applied because AVELA brought an invalidity claim in Italy before the proceedings in England were started. However the question of whether there were special grounds for continuing the hearing in England still had to be considered. Birss J relied on Starbucks v BSkyB [2012] EWCA Civ 1201 as the leading authority on this question, noting that the clear presumption in favour of a stay under Article 104 was strong and it would be a rare and exceptional case where there are special grounds within Article 104.

Counsel for the defendants submitted that mere lateness cannot create a special ground for refusing a stay under Article 104, however Birss J rejected 'mere lateness' as a characterisation of the timing of the defendants' application for a stay. Rather, for the application to be raised after the main judgment on infringement and passing off was "wholly unprecedented" and "certainly 'rare and exceptional'". Both parties were severely criticised for not bringing the existing Italian proceedings to the court's attention previously, and if they had been raised at the appropriate time Birss J suspected that significant parts of the English proceedings might have been stayed pending the Italian proceedings.

The risk of irreconcilable judgments between the English and Italian Courts could not be avoided or reduced by staying the English proceedings and the application for a stay under Article 104 CTMR was refused.

As Birss J had already refused to stay the proceedings under Article 104 (the wording of which is more favourable than Article 28 Brussels Regulation), no real question arose as to whether a stay should be granted under Article 28 Brussels Regulation.

Summary judgment

Although beyond the scope of this article, in addition to successfully defending the stay application, it is worth noting that the claimants also made a successful application for summary judgment in relation to the defendants' trade mark invalidity counterclaim: The Court found that the defendants' evidence did not support their allegation that the claimants had no rights in the mark in question when they applied to register it.


Birss J's judgment reinforces the decision in The Alexandros T, cementing the position that for proceedings to have the 'same cause of action' they must have: (i) the same facts; (ii) the same rule of law as the basis for the action; and (iii) the same end in view.

The judgment is also a salutary warning to those seeking to rely on Article 104 to stay proceedings. Serious delay in making an application can constitute special circumstances not to grant a stay, even though the presumption in favour of a stay is a strong one and should only be rebutted in a rare and exceptional case. Such a rare and exceptional case is where the court second seised has already given judgment on the claim and the risk of irreconcilable judgments would not be mitigated by granting the stay.

Birss J was scathing in his assessment of both parties' behaviour in failing to bring the Italian proceedings to the English Court's attention earlier, a failure which had put the English Court at the unavoidable risk of making an irreconcilable judgment with the Italian Courts. In short, when seeking to rely on Article 104 to secure a stay, don't delay.

Finally, it is worth remembering that the English Court's interpretation of the CTMR will not necessarily be mirrored in other European jurisdictions. In France, for example, the Court's interpretation of 'special circumstances' under Article 104 CTMR is markedly different (see, for instance, the approach in Soothys International v. Européenne de Produits de Beauté (No. RG 05/17476, OCt. 17, 2006).  Advice from local lawyers should be sought in such circumstances.

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