England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		CLAIM NO HC14D03614 Royal Courts of Justice Rolls Building, Fetter Lane London EC4A 1NL
		15 September 2015

Stephen Jourdan QC sitting as a deputy High Court judge

Introduction

1. On 15 September 2014, the Claimant, Tech 21 UK Limited ("Tech21") issued a claim form. In it, Tech21 claimed two declarations against the Defendant, Logitech Europe SA ("Logitech"). First, that Tech21 has not infringed and will not infringe any Community unregistered design right owned by Logitech by making, processing, offering, putting on the market, importing, exporting or using protective iPad Air and/or iPad mini cases sold under the name "Impact Folio" within the European Community, nor any UK unregistered design right or other rights subsisting in the same designs. Second, that Logitech has made unjustifiable threats to bring proceedings for infringement of Community unregistered design right in respect of Tech21's possessing, offering, putting on the market, and/or using such cases. The claim form also claimed an injunction to restrain further such threats, dissemination of the judgment and costs.
2. On 22 December 2014, the claim form was served, with Particulars of Claim, on Logitech at its registered office in Lausanne, Switzerland. The Particulars of Claim claimed similar declarations to the claim form, although not specifically mentioning UK unregistered design right, and also an order for dissemination and publication of the judgment and declarations, an inquiry as to damages and an order for payment of all sums found due on the inquiry with interest.
3. On 26 January 2015, Logitech issued an application for a declaration that the Court has no jurisdiction over this claim and an order that the claim form should be set aside. That was supported by a witness statement made by Mr Stettler dated 25 January 2015.
4. Directions for the hearing of that application by a judge were then made by consent. Tech 21 then filed a witness statement of Mr Cass, Tech21's finance director, dated 1 May 2015. This did not contradict Mr Stettler's statement but supplied additional evidence. Although the directions provided for Logitech to serve evidence in reply, no further evidence was served. There are no disputes of fact relevant to the issues which I have to decide.

The facts

5. Logitech, a Swiss company, is a member of the wider Logitech group of companies. The Logitech group is a well known manufacturer of accessories for electronic devices, particularly computers and tablets. Tech21 is a UK company which specialises in impact protection cases for tablets and smartphones. Logitech has establishments in two EU member States, the Netherlands and Croatia.
6. In January 2013, the parties entered into commercial negotiations with a view to collaborating on the design of a range of cases to be sold by Logitech. On 30 January 2013, the parties signed a non-disclosure agreement ("the NDA") to facilitate exchange of information. In October 2013, following various design discussions, the parties signed a manufacturing and sales agreement ("the MSA"). The commercial relationship did not prosper, leading to the termination of the MSA in January 2014.
7. In the spring/summer of 2014, both parties launched their own lines of impact protection cases for iPads. The Logitech product was called "Big Bang", the Tech21 product "Impact Folio".
8. In July 2014, Logitech became aware that Tech21 was distributing the Impact Folio cases at the Apple Store in Regent Street in London. Subsequently, in August, Logitech became aware that Tech21 was distributing the same product in Germany. A test purchase was made at the Apple Store in Cologne. The design of the Impact Folio case was almost identical to that of the Big Bang case.
9. On 10 September 2014, Tech21 received a letter from Jonas, a German law firm in Cologne acting for Logitech ("the Letter"). This said:

"We are representing our client Logitech Europe S.A., Daniel Borel Innovation Center, CH-1015 Lausanne, Switzerland in matters of Intellectual Property.

We have been informed that you entered into a manufacturing and sales agreement with our client dated October 11, 2013 that covers inter alia the development, manufacturing and sale of tablet products for and to our client. You were asked to develop for manufacturing the products based on our client's designs that were presented to you by Logitech and by Design Partners, a partner company of our client. Furthermore it was agreed that our client will maintain exclusive ownership rights to the design and product intellectual property. Moreover, you have undertaken not to take our client's designs, IP and/or discussions and reproduce a Tech21 or other branded version of the product and that such rights will survive termination (see Schedule G, "IP Rights").

Therefore, our client is the exclusive owner of all IP rights including design rights that have been implemented in its protective Pad Air/ Ipad mini cases "Big Bang" which is based on the design of our client and has been put on the European market some months ago. Moreover, considering the innovative and unique design of the Big Bang products our client has become the owner of an unregistered Community Design accordingly.

Our client noticed recently that you are distributing a protective case for iPad Air/ Ipad Mini named "IMPACT FOLIO" in Germany through various Apple stores. Your products are nearly identical to the product of our client and give the same overall impression. Hence, your products are a clear infringement of our client's unregistered Community Design. Our client therefore asserts claims for injunction, rendering of accounts and damages. Moreover, you are obliged to compensate our client for any legal costs so far accrued from our services.

With its request to sign a cease and desist declaration, our client hereby gives you the opportunity to avoid a legal dispute. In the name and on behalf of our client we hereby ask you to sign the enclosed cease and desist declaration we have already prepared or sign a cease and desist declaration that covers the claims cited above. We look forward to receiving the enclosed cease and desist declaration — duly signed — at the latest until 15 September 2014.

The receipt of the signed declaration via fax by this time will be deemed in due time if the original document is then received without further notice.

If you do not comply with the before-signed claims not fully or not in due course our client will reserve its rights to take legal action against you which would cause further costs."

10. The cease and desist declaration which accompanied the letter contained an undertaking by Tech21 to Logitech:

"1. upon pain of a contractual penalty of €5.100,00 … for each case of non-compliance — excluding the application of the continuation-of-offence clause — to refrain from manufacturing, offering, placing into circulation, importing or using, or possessing for the above purposes in the European Union protective cases as shown below…

2. to render accounts regarding the scope within it has committed the actions referred to under 1. above, specifying a) the quantity of products obtained or ordered as well as names and addresses of manufacturers, suppliers and other previous owners of the products; b) the individual deliveries, broken down according to the quantities delivered, the delivery times and prices and product names, and the names and addresses of the commercial customers; c) the individual offers, broken down according to the quantities offered, the offer dates and prices and product names, and the names and addresses of the recipients of the offer; d) the kind of the advertising performed, broken down according to the advertising media, their circulation figures, dissemination period and area of coverage; e) the turnover made with the products and the cost factors broken down to individual cost factors;

3. to pay damages for the actions referred to under 1 above;

4. to destroy all products described under 1 above which are directly or indirectly possessed or owned by Tech21 UK Ltd. at their own expense;

5. to recall all products described under 1 above or to remove these products from the distribution channels.

6. to reimburse Logitech Europe S.A. for the costs of our retainer to the amount of 1.5 fees on the basis of a value in dispute of €100,000,00 plus expenses (in total €2.274,50)."

11. On 12 September 2014, Tech21's solicitors, Charles Russell Speechlys, wrote to Jonas asking for an extension of time to 26 September. On 15 September, Jonas replied giving an extension to 17 September. The same day, 15 September, this claim was issued, and on 17 September Charles Russell Speechlys sent a copy to Jonas.
12. Two days later, on 19 September 2014, Logitech filed a motion in the Regional Court in Düsseldorf applying for a preliminary injunction, on the basis of infringement of a Community design, alternatively violation of competition law. The basis of the claim was essentially that set out in the Letter, although providing more detail.
13. Tech21 filed three affidavits in response; by Mr Cass, and by two other individuals who work for Tech21 – the head of design and a product designer. These said that the design of the Impact Folio cases was developed by Tech21, not by Logitech or Design Partners. A previous design had been worked on by Tech21 in conjunction with Logitech, and prototypes were prepared based on that previous design, but they would have been too expensive to produce commercially. Thereafter, Tech21 produced a different design and commissioned prototypes based on that different design. It was that design that was used for the Impact Folio cases.
14. The motion was heard by the Regional Court in Düsseldorf on 27 January 2015. The Court heard submissions from the parties and the Presiding Judge then said that the preliminary opinion of the court was that Tech21 would have to be seen as the sole designer of the Big Bang case, and that the court suggested Logitech should withdraw its application for a preliminary injunction, which Logitech did on 25 February 2015. The following day, this application was issued by Logitech.

The Lugano Convention, the Brussels Regulation, the EC Designs Regulation and the UK Design Regulation

15. To understand the issues in this case, it is necessary to briefly explain the relevant features of these documents.

The 1968 Brussels Convention and the 1988 Lugano Convention

16. In 1968, the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters ("the Brussels Convention") was concluded between the then member States of the EEC. It created a new regime to determine where people should be sued in civil and commercial disputes, and to facilitate the recognition and enforcement of judgments in the Community. The fundamental principle was that people should be sued in their home state – where they were "domiciled" - unless there was a good reason for suing them somewhere else. One exception was that, in matters relating to tort, a person could be sued in the courts for the place where the harmful event occurred. It was amended and extended on subsequent occasions following the accession of the United Kingdom and other states to the EEC.
17. In 1988, the rules of the Brussels Convention were extended to Iceland, Norway and Switzerland by the Lugano Convention.

The Judgments Regulation

18. With effect from 1 March 2002, the Brussels Convention was replaced for all member States other than Denmark by Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Judgments Regulation"). The Brussels Convention continued to apply between Denmark and the other Member States and also in certain territories of Member States, although Denmark adopted the Regulation a few years later. Article 68 of the Judgments Regulation provided that, as between the Member States, it superseded the Brussels Convention and that any reference to the Brussels Convention should be understood as a reference to the Judgments Regulation.

The EC Designs Regulation

19. On 12 December 2001, the European Community made Council Regulation (EC) No 6/2002 on Community designs ("the EC Designs Regulation"). This created a new right called a "Community design". It came into force on 6 March 2002. The recitals include the following:

"(29) It is essential that the rights conferred by a Community design can be enforced in an efficient manner throughout the territory of the Community.

(30) The litigation system should avoid as far as possible 'forum shopping'. It is therefore necessary to establish clear rules of international jurisdiction.

(31) This Regulation does not preclude the application to designs protected by Community designs of the industrial property laws or other relevant laws of the Member States, such as those relating to design protection acquired by registration or those relating to unregistered designs, trade marks, patents and utility models, unfair competition or civil liability."

20. Under arts 1, 7 and 11, a Community design is protected as an "unregistered Community design", if made available to the public by being published, exhibited, used in trade or otherwise disclosed (unless confidentially) except where these events could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community. "Design" is very widely defined in art 3(a).
21. Under art 4(1), a design is protected by a Community design to the extent that it is new and has individual character, as defined in arts 5 and 6. Art 14 identifies who has the right to the Community design. The right vests in the designer or his successor in title (subject to an exception in the case of employees).
22. Art 19 provides that an unregistered Community design confers on its holder the exclusive right to use it and to prevent any third party not having his consent from using it, but only if the contested use results from copying the design.
23. Art 79(1) provides that, unless otherwise specified, the Brussels Convention: ".. shall apply to proceedings relating to Community designs and applications for registered Community designs, as well as to proceedings relating to actions on the basis of Community designs and national designs enjoying simultaneous protection."
24. Art 79(3) provides that, in the event of proceedings in respect of the actions and claims "referred to in article 85", articles 2, 4, 5(1), (3), (4) and (5), 16(4) and 24 of the Brussels Convention shall not apply. It is clear that the reference to article 85 there is an error – the reference was clearly intended to be to article 81. This was common ground between counsel. Art 79(4) made provision for Member States where the Brussels Convention had not entered into force.
25. Art 80 provides for Member States to designate "Community design courts" to perform the functions assigned to them by the Regulation. This Court has been so designated.
26. Art 81 provides:

"The Community design courts shall have exclusive jurisdiction:

(a) for infringement actions and — if they are permitted under national law — actions in respect of threatened infringement of Community designs;

(b) for actions for declaration of non-infringement of Community designs, if they are permitted under national law;

(c) for actions for a declaration of invalidity of an unregistered Community design;

(d) for counterclaims for a declaration of invalidity of a Community design raised in connection with actions under (a)."

27. Art 82 provides:

"1. Subject to the provisions of this Regulation and to any provisions of the [Brussels Convention] applicable by virtue of Article 79, proceedings in respect of the actions and claims referred to in Article 81 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment.

2. If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment.

3. If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where the Office has its seat.

4. Notwithstanding paragraphs 1, 2 and 3:

(a) Article 17 of the Convention on Jurisdiction and Enforcement shall apply if the parties agree that a different Community design court shall have jurisdiction;

(b) Article 18 of that Convention shall apply if the defendant enters an appearance before a different Community design court.

5. Proceedings in respect of the actions and claims referred to in Article 81(a) and (d) may also be brought in the courts of the Member State in which the act of infringement has been committed or threatened."

"The Office" is the Office for Harmonisation in the Internal Market (Trade Marks and Designs). It has its seat in Spain.

28. Art 83 provides:

"1. A Community design court whose jurisdiction is based on Article 82(1), (2) (3) or (4) shall have jurisdiction in respect of acts of infringement committed or threatened within the territory of any of the Member States.

2. A Community design court whose jurisdiction is based on Article 82(5) shall have jurisdiction only in respect of acts of infringement committed or threatened within the territory of the Member State in which that court is situated."

29. Art 88(2) provides: "On all matters not covered by this Regulation, a Community design court shall apply its national law, including its private international law."
30. Article 89 provides that where, in an action for infringement a Community design court finds that the defendant has infringed a Community, it shall, unless there are special reasons for not doing so, order certain measures. These include an order to seize the infringing products.
31. Art 93(2) provides:

"1. Within the Member State whose courts have jurisdiction under Article 79(1) or (4), those courts shall have jurisdiction for actions relating to Community designs other than those referred to in Article 81 which would have jurisdiction ratione loci and ratione materiae in the case of actions relating to a national design right in that State.

2. Actions relating to a Community design, other than those referred to in Article 81, for which no court has jurisdiction pursuant to Article 79(1) and (4) and paragraph 1 of this Article may be heard before the courts of the Member State in which the Office has its seat."

32. Art 96(1) provides:

"The provisions of this Regulation shall be without prejudice to any provisions of Community law or of the law of the Member States concerned relating to unregistered designs, trade marks or other distinctive signs, patents and utility models, typefaces, civil liability and unfair competition."

The UK Regulations

33. On 15 August 2005, the Secretary of State made the Community Design Regulations 2005 ("the UK Regulations") under the power conferred by s.2(2) of the European Communities Act 1972 to make regulations for the purpose of dealing with matters arising out of or related to EU obligations and rights of the UK.
34. So far as material, regulation 2 provides:

"2. Remedy for groundless threats of infringement proceedings

(1) Where any person (whether entitled to or interested in a Community design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of a Community design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in paragraph (2).

(2) Subject to paragraphs (3) and (4), the claimant shall be entitled to the following relief—

(a) a declaration to the effect that the threats are unjustifiable;

(b) an injunction against the continuance of the threats; and

(c) such damages, if any, as he has sustained by reason of the threats…

(4) If the defendant proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of an unregistered Community design the claimant shall not be entitled to the relief claimed.

(5) Proceedings may not be brought under this regulation in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything.

(6) Mere notification that a design is…

(b) protected as an unregistered Community design,

does not constitute a threat of proceedings for the purpose of this regulation…"

35. It was common ground before me that "proceedings for infringement of a Community design" in regulation 2(1) is to be interpreted as meaning such proceedings in a UK court. That was what Floyd J decided in relation to similar threats provisions in s.21 of the Trade Marks Act 1994 in Best Buy Co v Worldwide Sales Corporation España [2010] FSR 35 at [15], which Lord Neuberger MR said (obiter) that he thought was right on appeal (see [2011] FSR 30 at [24]).

The 2007 Lugano Convention

36. On October 30, 2007 the European Community, Iceland, Norway, Switzerland and Denmark agreed on a new Lugano Convention to replace the 1988 Lugano Convention ("the 2007 Lugano Convention"). The provisions of the 2007 Lugano Convention are essentially the same as those of the Judgments Regulation. However, while the Judgments Regulation applied as between Member States of the EU, the 2007 Lugano Convention applied as between the European Community, Iceland, Norway, Denmark and Switzerland.
37. The UK did not sign the 2007 Lugano Convention. Instead it was applicable to the UK by virtue of the UK's membership of the European Community, and Council Decision 2007/712/EC of 15 October 2007 on its signing on behalf of the European Community. Under CPR part 6.33(1), the claimant may serve the claim form on a defendant domiciled in a state which is party to the 2007 Lugano Convention "where each claim against the defendant to be served and included in the claim form is a claim which the court has power to determine" under the Lugano Convention.
38. Article 2 of the 2007 Lugano Convention embodies the fundamental principle that, subject to the specific exceptions which follow: "…persons domiciled in a State bound by this Convention shall, whatever their nationality, be sued in the courts of that State". Article 5(3) of the 2007 Lugano Convention provides for one such exception: "A person domiciled in a State bound by this Convention may, in another State bound by this Convention, be sued... in matters relating to tort … in the courts for the place where the harmful event occurred or may occur."
39. It was common ground between the parties that the "place where the harmful event occurred" refers to both the place where the acts were done which caused the harm, and the place where the harm was suffered e.g. in the case of pollution of a river, both where the pollutant entered the river and where it affected the claimant's seed beds: Bier v Mines de Potasse d'Alsace Case 21/76 [1978] 1 QB 708. It was also common ground that the "harmful event" in the case of a claim for a declaration of non-infringement of a right is the place where the infringement of the right would have occurred, if it had been committed: see Equitas Ltd v Wave City Shipping Co Ltd [2005] EWHC 923 (Comm); [2005] 2 All E.R. (Comm) 301.

The 2012 recast Judgments Regulation

40. In 2012, the European Union made Regulation (EU) 1215/2012. This recast and replaced the Judgments Regulation. It came into force on 10 January 2015. It applies in all EU Member States to court proceedings commenced on or after that date. Therefore it does not apply in the present case.

Does the Court have jurisdiction to hear the claim for a declaration that Tech21's activities do not infringe any Community unregistered design right vesting in Logitech?

41. Under articles 81(b) and 82(1) of the EC Designs Regulation, an action for a declaration of non-infringement of Community designs "shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment". It is accepted by Tech21, for the purposes of this application, that Logitech has establishments in the Netherlands and Croatia. Therefore, if Logitech is to be regarded as "the defendant", any claim for a declaration that Tech21's activities do not infringe any Community unregistered design right vesting in Logitech must be brought in the courts of the Netherlands or Croatia.
42. In his skeleton argument, Mr Alkin conceded that this was the case. In his oral argument, however, he applied for permission to resile from that concession. This was not opposed by Mr Cuddigan and I permitted him to do so. Mr Alkin then argued that, because Logitech had written the Letter, the application for the declaration of non-infringement was purely defensive in nature. Therefore Tech21 was "the defendant" for the purposes of article 82(1).
43. I have no hesitation in rejecting this argument. The core principle of the Brussels Convention and all its successors, which is also reflected in article 82(1) of the EC Designs Regulation, is that people should be sued in their home state, where they are likely to find it easier to deal with litigation, unless there is a solid justification for suing them in the courts of a different state. In the case of article 82(1), if a person is not domiciled in a Member State, but has an establishment in such a State, then they may be sued in the courts of that State. This must be because, if a person maintains an establishment in a State, they can be expected to find it easier to deal with litigation in the courts of that State than in the courts of a state where they are not domiciled and have no establishment.
44. The concept of "defendant" in article 82(1) is clearly the person being sued – the person who is being brought, against his will, to face court proceedings. The person who starts proceedings is undoubtedly the claimant, even if the proceedings are defensive in nature, and the person who is required to participate in court proceedings initiated by someone else is undoubtedly the "defendant". Accordingly, this Court has no jurisdiction to hear the claim for a declaration of non-infringement of any Community design right vesting in Logitech.

Does the Court have jurisdiction to hear the claim in respect of the alleged threat?

45. Mr Alkin's argument for Tech21 is as follows. The Letter made a threat to sue in the UK courts which, under regulation 2 of the UK Regulations is a statutory tort. Article 5(3) of the 2007 Lugano Convention entitles Tech21, as a person domiciled in the UK to sue Logitech, as a person domiciled in Switzerland in this Court in matters relating to tort if the UK is "the place where the harmful event occurred or may occur". The threat to sue in the UK was received in the UK, and if carried out, would occur in the UK. Therefore the Court has jurisdiction.
46. Mr Cuddigan for Logitech disputes that on the following grounds. First, the Letter did not make a threat to sue in the UK courts. Second, in any event, the Lugano Convention does not apply at all, because it is implicitly excluded by the terms of the EC Designs Regulation. Third, even if the Lugano Convention applies, it is subject to the specific jurisdiction provisions in the EC Designs Regulation, and this claim is within article 81(b), as an action for a declaration of non-infringement of Community designs.

The applicable test

47. The first question is what test I should apply in determining the matters in dispute. Mr Cuddigan submitted that I should decide the issues, as they were issues of law. Mr Alkin originally submitted that I should decide if there is a good arguable case on the issues, but then argued that it was only necessary for me to decide if there was a respectable case which should be allowed to go forward, at least in respect of those issues which would need to be considered at trial.
48. A number of cases were cited on this issue: Canada Trust Co v Stolzenberg [1998] 1 WLR 547 and [2002] 1 AC 1, Chellaram v Chellaram (No 2) [2002] 3 All ER 17, Bols Distilleries v Superior Yacht Services [2007] 1 WLR 12, Knorr-Bremse Systems v Haldex Brake Products [2008] FSR 30, Football Dataco v Sportradar [2011] FSR 10 and [2011] 1 WLR 3044, Altim Holdings and Investment v Kyrgyz Mobil Tel [2012] 1 WLR 1804 and Joint Stock Co Aeroflot — Russian Airlines v Berezovsky & Ors. [2013] EWCA Civ 784, [2013] 2 CLC 206. From those authorities, I derive the following principles which apply where a claimant serves a claim form out of the jurisdiction in reliance on the 2007 Lugano Convention or the Judgments Regulation, and the jurisdiction of the court is then challenged by the defendant. In this context, three different situations must be distinguished.
49. First, those where the question of whether the court has jurisdiction depends on the resolution of a dispute of fact which is not relevant to the merits of the substantive dispute. For example, where the defendant is domiciled, or whether the defendant agreed to confer jurisdiction on the court. In that sort of case, the court will not normally direct the trial to determine the dispute, with disclosure and cross-examination. Rather, it will decide the issue on the basis of the witness statements filed by the parties. The court must be satisfied, on the basis of that material, that the party invoking the court's jurisdiction has a "good arguable case" that the facts which confer jurisdiction exist. This connotes that the court must be as satisfied as it can be, having regard to the limitations which an interlocutory process imposes, that the facts are such as to give the court jurisdiction. The party alleging that the facts exist must have a better argument that they do exist than the party who denies that those facts exist. If the two arguments are equal, then the party asserting the court has jurisdiction will not succeed.
50. Second, those where the question of whether the court has jurisdiction depends on the resolution of a dispute of fact which is relevant to the merits of the substantive dispute. For example, whether there was a contract at all. In that sort of case, the court will again not direct a trial, and will still apply the good arguable case test, but here it will avoid giving even the appearance of pre-trying the central issue, while at the same time scrutinising most jealously the factor which confers jurisdiction.
51. Third, those where the jurisdiction issue depends on the resolution of issues of law or the construction of documents. In that sort of case, the Court will normally decide the issue, and not apply the good arguable case test.
52. There is no relevant dispute of fact in the present case. The issue of whether this Court has jurisdiction depends on the interpretation of the Letter and the EC Designs Regulation. Therefore, it seems to me that I must decide those issues, and not merely decide if Tech21 has a good arguable case on them.
53. In the case of the issue as to the interpretation of the EC Designs Regulation, if the issue is critical to my decision, I should refer the issue to the Court of Justice of the European Union, unless I consider it is acte claire i.e. that I can with complete confidence resolve the issue myself, being fully mindful of the differences between national and Community legislation, of the pitfalls which face a national court venturing into what may be an unfamiliar field, of the need for uniform interpretation throughout the Community and of the great advantages enjoyed by the CJEU in construing Community instruments; if I have any real doubt I should refer: see R v International Stock Exchange ex p Else (1982) [1993] QB 534 at 545.

In deciding if the Letter contains a threat to bring infringement proceedings in a UK court, is Tech21's reaction to the Letter admissible?

54. Mr Cuddigan submitted that the question of whether the Letter contained a threat to bring infringement proceedings in a UK court should be evaluated in the light of how Tech21 had understood and responded to the letter. He argued that the evidence showed that they understood the Letter as meaning that proceedings would be brought in Germany, not the UK, and that supported his argument that it did not threaten proceedings in the UK.
55. Regulation 2(1) says: "Where any person (whether entitled to or interested in a Community design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of a Community design …". That language is very similar to that in s.21(1) of the Trade Marks Act 1994: "Where a person threatens another with proceedings for infringement of a registered trade mark …".
56. In Best Buy, where s.21(1) was under consideration, one issue was whether a letter written by Spanish lawyers on behalf of the defendant, to the claimants' English solicitors, contained a threat of proceedings in the UK for infringement of the defendant's registered Community trade marks. Lord Neuberger, with whom Etherton and Patten LJJ agreed, said at [2011] FSR 30 at [18] that both that question, and others concerning the meaning of the letter was:

"…to be answered by reference to what a reasonable person, in the position of the recipient of the letter, with its knowledge of all the relevant circumstances as at the date the letter was written, would have understood the writer of the passage to have intended, when read in the context of the letter as a whole."

57. He said that approach was consistent with principle in the light of a number of authoritative decisions on the interpretation of contracts and unilateral documents, including Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 749, a case about the interpretation of a break notice given under a lease.
58. At para 19, he said:

"I very much doubt that it could be appropriate to take into account subsequent correspondence (e.g. the October letter) when interpreting the September letter. By definition, a later letter, like a later event, could not be known to either the sender or the recipient of the September letter. I suppose that the October letter, which was a reply to the September letter, might be said to be admissible as it shows how the recipient of the September letter understood it, which could in turn be evidence of how a reasonable person would have understood it, but, even if that argument was open in principle, it does not arise on the instant facts."

59. Mr Cuddigan argued that, despite Lord Neuberger's doubts, it was appropriate to take into account subsequent correspondence in deciding whether the Letter had threatened UK proceedings. He said that whether a letter contained a threat was different to the meaning of a contract. There was not the same requirement for certainty. It would be wrong to allow someone who did not in reality think that a letter contained a threat to sue on the basis that a reasonable person would think that it did. Mr Cass's statement said that Tech21 had started these proceedings because of "… the undesirability of being involved in proceedings in Germany" and that made it clear that this claim was just forum shopping, and was not brought because Tech21 really thought that there was a threat of proceedings in the UK.
60. In my view, under regulation 2, evidence of how a letter was subjectively understood by the recipient is not admissible in deciding if the letter threatened infringement proceedings. That was the view of Neuberger J on the trade marks threats provisions in Prince v Prince Sports Group [1998] F.S.R. 21 and it was clearly still his view in Best Buy.
61. Whether the reaction of the recipient of a notice is admissible in construing the notice was considered in Lancecrest v Asiwaju [2005] EWCA Civ 117, [2005] L. & T.R. 22. One issue in that case was whether a tenant's rent review counternotice was valid. The test was whether it was in terms sufficiently clear to bring home to the ordinary landlord that the tenant was informing the landlord that he did not accept the landlord's proposed rent. Clarke LJ held that, read objectively it was sufficiently clear. He said, at [74]:

"I have reached that conclusion without regard to the fact that the landlord operated the contractual machinery to fix the new basic rent. However, the fact that it did so seems to me to give support to the view that a reasonable landlord would have understood the letter as saying that the tenant did not accept the annual amount of the rent."

62. Neuberger LJ agreed with Clarke LJ that, read objectively, the counternotice did provide the required information. He did not agree, however, that it was permissible to place weight on the reaction of the landlord to the tenant's letter to decide if it was a valid counter-notice. He said, at [38]-[47], that this would be unsound in principle and could well lead to inconsistency and unfairness. Brooke LJ thought that the counter-notice did not, objectively, communicate that the tenant did not accept the landlord's proposed rent. However, he agreed with Neuberger LJ that, for the reasons he gave, the landlord's actual reaction plays no part in the legal test that has to be applied.
63. In my view, the reasons given by Neuberger LJ in that case for not taking into account the reaction of a landlord in deciding if a tenant has given a valid counter-notice, with which Brooke LJ agreed, are compelling, and apply with equal force here. It would be wrong in principle to have regard to Tech21's subjective understanding of the Letter, and it would also produce uncertainty, and the risk of unfairness, and additional costs.
64. In Newbold v Coal Authority [2013] EWCA Civ 584 [2014] 1 WLR 1288 at [54], Sir Stanley Burnton (with whom McFarlane LJ agreed) said of alleged notices claiming compensation for the cost of remedial works pursuant to the Coal Mining Subsidence Act 1991:

"There was no contentious background relevant to their interpretation, and the subsequent conduct of the parties, although clearly relevant to the issue of estoppel, was irrelevant to their interpretation: Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583: a principle applicable to notices given under contract or statute as well as to contracts."

In my view that applies equally to the question of whether a letter threatens proceedings for the purposes of the UK Regulations.

What is the applicable test?

65. The test which is applicable in deciding if a letter threatens proceedings was summarised by Lord Neuberger in Best Buy at [20]-[21]. A threat does not have to be explicit. Lord Neuberger endorsed the guidance given by Lightman J in an earlier case:

"The policy represented by the first statutory threats provision … was clearly to stop patentees who were (in Pope's words about Addison) 'willing to wound but afraid to strike' from holding the sword of Damocles above another's head … In summary, the term 'threat' covers any information that would convey to a reasonable man that some person has trademark rights and intends to enforce them against another. It matters not that the threat may be veiled or covert, conditional or future … ".

66. At [25]-[30], Lord Neuberger applied those principles to the facts of the Best Buy case. He said that the complaint made in the letter in that case was of potential infringement of the defendant's trade marks throughout Europe, and therefore the threat was Europe-wide. It was true that the notion that the defendant would have been understood to be intending to bring proceedings in the courts of all 27 EU member states was fanciful. However, there were two answers to that point. First:

"… if one makes a Europe-wide threat of proceedings, the fact that, when it eventuates, the claim is brought only in one member state does not mean that the threat of proceedings was not in each member state. A threat to do something is not the same as a promise to do it."

67. Second, on the facts of that case, where it was known that the claimant's group were intending to launch their European business in the UK, it was far from fanciful to conclude that it was intended to extend to courts in this country. So the Europe-wide assertions, claims and threats in the letter would clearly have been understood by a reasonable recipient in the position of the claimant to have been a threat (not a promise) of infringement proceedings in the UK.
68. Therefore, as I see it, the question here is whether a reasonable recipient of the Letter in the position of Tech21 would have understood there to be a realistic possibility of UK proceedings brought by Logitech in respect of alleged infringement of Logitech's claimed Community design right, either immediately or in the future.
69. In the course of Mr Cuddigan's submissions opening the application, I said that it seemed to me that any reasonable recipient of the Letter would inevitably take legal advice from a solicitor specialising in intellectual property, because without such advice the recipient would not know where proceedings might be brought. The Letter referred to Community design right, and no reasonable reader who was not themselves an expert in intellectual property would be in a position to form a view on where infringement proceedings in respect of that right might be brought without expert advice. Therefore the test ought to be how the Letter would have been understood by a reasonable recipient who had received such advice. Mr Cuddigan agreed with that suggestion, and so did Mr Alkin.
70. In Best Buy, [2010] FSR 35 at [18], Floyd J quoted from earlier authority where Laddie J had said this:

"… the meaning and impact of the letters in issue has to be decided in accordance with how they would be understood by an ordinary reader … What is particularly important is the initial impression which the letters would have on a reasonable addressee. During court proceedings, it is inevitable that the lawyers, parties and judge will read and re-read the offending passages with ever closer attention. Such meticulous analysis is not what would happen in the real world and the court must guard against being led down a path of forensic analysis to a meaning which is narrower or broader than would occur to the ordinary recipient reading the letter … in the normal course of business."

71. This is undoubtedly the right approach to the question of whether a letter would reasonably be understood as threatening proceedings. But here, the question is not whether the reasonable reader would understand proceedings to be threatened – he clearly would. The Letter said: "… our client will reserve its rights to take legal action against you…". The question is whether the reasonable reader would understand the threat to be of legal action in the UK, or in Germany, or somewhere else. That question depends on understanding the provisions which govern the allocation of jurisdiction for infringement proceedings in respect of unregistered Community design rights, which an ordinary businessman would not have.
72. Accordingly, I consider that the question for me is whether the Letter would have been understood by a reasonable recipient, who had received correct legal advice on the provisions governing where proceedings for infringements of Community design rights may be brought, as indicating that there was a realistic possibility of UK proceedings being brought by Logitech against Tech 21 in respect of alleged infringement of Logitech's claimed Community design right, either immediately or in the future.

Did the Letter threaten UK proceedings?

73. As Tech21 is domiciled in the UK, the default position under article 82(1) is that infringement proceedings had to be brought in the UK. However, the Letter complained about alleged acts of infringement in Germany. Therefore, under article 82(5), proceedings could also be brought in Germany. Under article 83(2), however, the jurisdiction of a German court would exist only in respect of acts of infringement committed or threatened within Germany. Under article 83(1), a UK court would have jurisdiction in respect of acts of infringement committed or threatened within the territory of any of the Member States, including Germany.
74. A reasonable reader, knowing that, would read the letter understanding that Logitech had a choice as to whether to sue in Germany or the UK, but that if Logitech wanted an injunction and damages in respect of acts of infringement in the UK, or anywhere else in the EU other than Germany, it would be necessary for them to bring UK proceedings. Mr Cuddigan submitted that this was an obscure point which would not occur to a reasonable reader of the Letter, even with the benefit of legal advice. I do not agree. It is clear from articles 82 and 83 that, in the case of a company domiciled in the UK, an infringement claim brought in Germany could only provide relief in respect of acts of infringement in Germany.
75. Mr Cuddigan submitted that, if a German court ruled in favour of Logitech on the issue of whether Tech21's cases infringed a Community design right held by Logitech, that would give rise to an estoppel in Logitech's favour. That may be right, but it would still be necessary, if Logitech wanted damages and an injunction in respect of UK acts of infringement, or acts of infringement elsewhere in the EU other than Germany, to bring subsequent proceedings in the UK.
76. It is clear from the cease and desist declaration that Logitech wanted relief that extended beyond Germany. Mr Cuddigan said that was something that Logitech were asking for to avoid proceedings. But, as Mr Alkin pointed out, it is very unusual to seek by way of settlement of a threatened claim relief very much more extensive than you will be entitled to if you bring the claim. I think that a reasonable reader would understand that Logitech would bring such proceedings as were required to secure for them the relief set out in the cease and desist declaration, if Tech21 did not agree to give them that relief.
77. Mr Cuddigan drew attention to the fact that the NDA was governed by the laws of Switzerland, and exclusive jurisdiction was given to the courts of Logitech's place of business. Only at Logitech's discretion could the courts of Tech 21's place of business take jurisdiction. It gave notice that Logitech had a legal department, and that it was situated in Morges, Switzerland. He also pointed out that the MSA was governed by the laws of Switzerland, and that any dispute was to be settled in accordance with the Swiss Rules of International Arbitration, with the seat of the arbitration in Lausanne, Switzerland.
78. I can see that those provisions would suggest to a reasonable reader that proceedings in the Swiss courts, or arbitration proceedings in Switzerland, were a realistic possibility. I do not think they exclude the realistic possibility of proceedings elsewhere, and indeed Mr Cuddigan's main submission was that the threatened proceedings would obviously take place in Germany.
79. Mr Cuddigan made a number of points that indicated that German proceedings were likely. The letter was written by a small firm in Düsseldorf, whereas in Buy Best the offending letter was written by a Spanish law firm called Clifford Chance S.L. Abogados, clearly part of or associated with Clifford Chance, a very large multi-national firm. The cease and desist declaration contained some expressions which sound strange to the ears of an English lawyer and suggest that German proceedings were contemplated. The only acts of infringement referred to in the letter were acts in Germany, even though Tech21's main business was in England.
80. That does, I agree, suggest that proceedings in Germany were more likely than proceedings in the UK, at least to start with. But given the demand for Europe wide relief in the cease and desist declaration, I think a reasonable reader would have regarded it as being likely, and certainly at least a realistic possibility, that proceedings in Germany, if successful, would be followed by proceedings in the UK.
81. Accordingly, in my view a reasonable reader of the Letter in Tech21's position would clearly have understood it to indicate that proceedings in the UK were likely or, at the very least, that there was a realistic possibility of UK proceedings in respect of alleged infringement of Logitech's claimed Community design right, either immediately or in the future.

Does the Lugano Convention apply at all?

82. Mr Cuddigan submitted that the effect of article 67 of the 2007 Lugano Convention is that, if there is another convention which in relation to particular matters, governs jurisdiction, then that other convention takes precedence over the 2007 Lugano Convention. He supported that by reference to article 71 of the 2001 Judgements Regulation, Protocol 3 to the 2007 Lugano Convention, Nürnberger Allgemeine Versicherungs v Portbridge Transport International (C148/03) [2004] ECR I-10327, and Innovia Films v Frito-Lay North America [2012] EWHC 790 (Pat), [2012] RPC 24.
83. It is clear from those provisions and authorities that, to the extent that the EC Designs Regulation indicates that one or more provisions of the Lugano Convention were not intended to apply to proceedings relating to a Community design, then those provisions will not apply. I did not understand Mr Alkin to argue the contrary. The question, then, is whether the EC Designs Regulation makes it clear that the Lugano Convention is not to apply to such proceedings, in whole or in part.
84. In his skeleton argument, Mr Cuddigan submitted that: "Art. 79 of the Designs Regulation states that unless otherwise stated, the Brussels Convention (and hence, it is accepted, the Lugano Convention) apply to 'proceedings relating to Community designs'." In his oral submissions, however, he argued that the 2007 Lugano Convention is implicitly wholly disapplied by article 79 of the EC Designs Regulation. This was on the basis that the 2007 Lugano Convention is not mentioned while the Brussels Convention is, and because the Community design right is a purely Community right of no relevance to non-EU member States.
85. I cannot accept that submission. I think Mr Cuddigan's position in his skeleton argument was clearly correct. The Lugano Convention is a treaty binding on the EU and on the UK and its jurisdiction rules will apply to proceedings relating to a Community design, save to the extent that those jurisdiction rules are inconsistent with specific provisions of the EC Designs Regulation.

Is this a claim for a declaration of non-infringement of Community design within article 81(b)?

86. At the hearing, I understood Mr Cuddigan to be making two alternative submissions. First, that every threats claim is to be treated as a claim for a declaration of non-infringement of Community design within the meaning of article 81(b). Second, even if that was wrong, this claim is to be treated as a declaration of non-infringement of Community design within the meaning of article 81(b).
87. After the hearing, I invited further written submissions in relation to this issue, in relation to some material which had not been referred to in submissions. In Mr Cuddigan's written submissions, he made it clear that it is not Logitech's case that every threats claim falls within article 81(b). He accepts that in many cases, this will not be the case. He submitted that the question is whether a threats claim is, in substance, a claim to restrain unfair competition, or whether it is, in substance, a claim to secure a declaration of non-infringement. If it is, in substance, a claim to restrain unfair competition then it will not be within article 81(b).
88. He said that the exception in regulation 2(5) of the UK Designs Regulations is ineptly drafted, but what it is trying to do is make clear that primary infringers, those who make or import allegedly infringing articles can be threatened, while secondary infringers, those who distribute or sell them, cannot. He cited Russell-Clarke and Howe on Industrial Designs (8^th ed) paras 7-030, which says that the "exception is ineptly drafted". He said that Tech21 is a primary infringer. A threats claim brought by a primary infringer in respect of a threat of proceedings made only to that infringer, and who has therefore suffered no damage by reason of the threat is, in substance, a claim to a declaration of non-infringement. It is not a claim to restrain unfair competition. There is nothing in the nature of unfair competition in sending a letter which complains about infringement to a primary infringer. The only real issue raised by such a letter between the rights owner and the primary actor is the issue of infringement, and the letter has no effect beyond those parties.
89. Mr Alkin submitted that all threats claims, including this one, are not to be treated as a claim for a declaration of non-infringement within article 81(b). Rather, they fall within article 96(1) of the Community Designs Regulations as falling within "the law of the Member States concerned relating to … civil liability and unfair competition."
90. There is a helpful explanation of the purpose and history of the groundless threats provisions which apply to patents, trade marks and designs, in the Law Commission's Consultation Paper Patents, Trade Marks And Design Rights: Groundless Threats (Law Com no. 212) published in 2013, and the Commission's Report (Law Com no. 346) published in April 2014. They have their origin in anti-competitive business practices in the 19^th century, typified by the facts in Halsey v Brotherhood (1880) 15 Ch. D. 514 (Jessel MR) and (1881) 19 Ch D 386 (Court of Appeal).
91. Parliament responded to that mischief by enacting s.32 of the Patents, Designs and Trade Marks Act 1883, creating a new statutory tort of making groundless threats of patent infringement proceedings. This was not limited to threats made to secondary infringers. It applied where any person claiming to be the patentee of an invention "threatens any other person with any legal proceedings or liability in respect of any alleged manufacture use sale or purchase of the invention", but the section did not apply "… if the person making such threats with due diligence commences and prosecutes an action for infringement of his patent."
92. In Reckitt Benckiser UK v Home Pairfum [2004] EWHC 302, [2004] F.S.R. 37 at [10]-[11] Laddie J explained that this section:

"… was in response to a perception that owners of patent rights were in the habit of threatening infringement proceedings against competitors without any bona fide intention of following them up with proceedings. The cost and complexity of patent infringement proceedings were thought to be so high that the issue of such threats might drive competitors from the market. For this reason, unscrupulous patentees with weak cases might be tempted to issue threats even when they had no intention to litigate. To overcome this, the 1883 Act made it actionable to threaten another with patent infringement proceedings. Under that legislation, the proprietor could avoid liability if he commenced and pursued patent infringement proceedings with due diligence; thus under that legislation, a patentee could still utter as blood curdling threats as he liked as long as he followed them through. The legislation was subsequently changed. It was no longer a defence to follow up the threats with proceedings. A threat was actionable even if the proprietor had every intention of commencing and pursuing the infringement proceedings and did so. Over time, the threats provisions were extended to cover registered designs and, most recently, registered trade marks."

93. The change referred to there was made by s.6 of the Patents and Designs Act 1932. This removed the defence of issuing proceedings promptly, and introduced instead a defence where the person making the threats "proves that the acts in respect of which the proceedings are threatened constitute or, if done, would constitute an infringement…". This change was made because of the growing practice of issuing proceedings (thereby avoiding a threats action), only to drop them as soon as a defence was filed: see Law Com 346 para 2.11.
94. In 1970, the Banks Committee reviewed the law and recommended that a distinction should be introduced into the law between classes of alleged infringer; the primary infringer whom the patentee may seek to warn off without fear of an action for threats, and the customer of the primary infringer who would remain protected by the threats provision. That recommendation was then given effect to when s.70(4) of the Patents Act 1977 introduced a new provision that proceedings "…may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process."
95. In Cavity Trays v RMC Panel Products [1996] R.P.C. 361, the defendant had threatened the plaintiff with proceedings in respect of acts of marketing and selling a product as well as making it. The defendant argued that effect of s.70(4) was to enable a person to warn off primary infringers, and s.70(4) should be interpreted as applying even where the threats related to marketing and selling. The Court of Appeal rejected that argument. The Court held that the purpose of s.70 was to provide relief against abuse of monopoly, and that s.70(4) was intended to provide a limited and defined exception to that relief, so that a patentee could give an adequate warning of intended proceedings. The right of a patentee to make threats in respect of certain alleged acts of infringement, but not others, without risk of proceedings being brought, might seem to provide an arbitrary division, but did not lead to absurdity.
96. Subsequently, s.12 of the Patents Act 2004 amended s.70(4) to allow threats in respect of any kind of infringement of a patent to be made against manufacturers and importers. Under the amended version of s.70(4), proceedings may not be brought for either:

(a) a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process, or

(b) a threat, made to a person who has made or imported a product for disposal or used a process, to bring proceedings for an infringement alleged to consist of doing anything else in relation to that product or process.

97. However, when, the following year, in 2005, the Secretary of State made the UK Regulations, he took the same approach as in the unamended version of s.70(4), and only allowed an exception based on the nature of the allegedly infringing acts. That is also the basis for the exception from the right to bring threats proceedings in relation to other forms of intellectual property, for example s.21 of the Trade Marks Act 1994 and s.253 of the Copyright, Designs and Patents Act 1988.
98. It is apparent from Chapter 5 of Law Com no. 212 that four other EU countries, Ireland, Germany, France and the Netherlands, all have provisions which make actionable threats of intellectual property litigation, in certain circumstances. Ireland has statutory threats provisions similar to those in the UK. Germany, France and the Netherlands deal with threats of intellectual property litigation either through general tort law or through unfair competition law. That makes it clear that threats claims are to be regarded as forming part of general civil liability or unfair competition laws relating to Community designs, and not as claims for a declaration of non-infringement. The precise scope of the protection against threats of proceedings afforded varies from country to country; there has been no EU legislation requiring harmonisation of this aspect of the law.
99. It is not right to characterise a claim under regulation 2 as one for a declaration of non-infringement. It is true that, if (but only if) the defendant decides to contest the claim in reliance on regulation 2(4), and seeks to prove that the acts in respect of which the proceedings were threatened did constitute an infringement of a Community design, the Court will have to determine whether there was an infringement. The burden of proof will be on the defendant, unlike in a claim for a declaration of non-infringement. Mr Cuddigan says that these features of a threats claim are a mere matter of procedure, but I do not agree. They reflect the nature of a threats claim, which is directed at what is seen as the unfair anti-competitive practice of intimidating competitors by threatening expensive infringement proceedings, and where justification of the threat has to be raised and proved by the person making the threat. If the defendant attempts to justify his threats, and the Court rejects that attempt on the basis that there was not an infringement, it will make a declaration that the threats were unjustifiable. But that does not mean that the proceedings are, in substance, a claim for a declaration of non-infringement.
100. Logitech accepts that, in the case of threats made to secondary infringers, threats proceedings do not fall within article 81(b). Such proceedings are, it accepts, not a claim for a declaration of non-infringement. It argues, however, that in the case of threats made to primary infringers there is no element of unfair competition. I do not accept that argument. An unjustified threat of expensive infringement proceedings made to a primary infringer is certainly capable of having the object and effect of stifling competition in an unfair way. The right to bring threats proceedings was created, and has been retained as part of our law, to prevent what is regarded as an unfair anti-competitive practice. Whether it is right to prohibit such threats in all cases, some cases or no cases, is a policy decision. There may well be defects in the existing law; the Law Commission thought there were and recommended changes. There is a strong argument that the amendment made by s.12 of the Patents Act 2004 ought also to be made to regulation 2 of the UK Regulations. But whether or not that is so, it is clear that the purpose of the threats provisions is to create civil liability for what is perceived as undesirable anti-competitive behaviour. It is not to provide a procedure for obtaining a declaration of non-infringement.
101. I do not think that Mr Cuddigan's suggested test of whether proceedings are, "in substance", a claim to a declaration of non-infringement is a workable one. It would lead to considerable uncertainty as to whether a threats claim was, or was not, to be treated as falling within article 81(b). There would be debate in each case as to whether "in substance" the claim was for a declaration of non-infringement or one relating to unfair competition.
102. Recital 11 to the Judgments Regulation said (with emphasis added): "The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile and jurisdiction must always be available on this ground save in a few well-defined situations in which the subject-matter of the litigation or the autonomy of the parties warrants a different linking factor." As the Advocate General said in para 60 of his opinion in Coty Germany v First Note Perfumes (Case C-360/12) [2014] E.T.M.R. 49, the objective of the Judgments Regulation: "…is to lay down rules of jurisdiction which are both common to all the Member States and foreseeable for the parties to a dispute, recourse to which is thus both certain and rapid." In Canada Trust Co v Stolzenburg (No. 2) [2002] 1 AC 1, the House of Lords held that the issue of domicile under the Lugano Convention had to be determined at the date of issue of proceedings, not at the date of service. Lord Steyn said: "The second major aim of the Convention is the achievement of predictability and certainty at all stages for all concerned…". That was one reason for the House determining that the date of issue and not the date of service was the relevant date.
103. It is of great importance that parties to litigation should be able to know with as much certainty as possible and at the commencement of a claim whether a particular court will or will not have jurisdiction. Mr Cuddigan's suggested question of whether a threats claim is, in substance, one for a declaration of non-infringement does not satisfy the requirement of certainty.
104. Mr Alkin referred me to two practitioner's text books which support Tech21's submission on this issue: Stone: European Union Design Law (2012) para 21.20, which says that article 81 does not give jurisdiction to the Community design courts for the UK remedy of groundless threats "which is a creature of UK law and hence not dealt with in the Regulation", and Wiseman (ed.): The Community Designs Handbook (2011) para 19-055. which says that threats claims do not have to be commenced within a Community design court, but without giving a reason. Neither of those books consider the matter in any detail. They do, however, accord with the view that I have formed.
105. In Samsung Electronics (UK) v Apple [2013] F.S.R. 7, Samsung Electronics (UK) Ltd, which was domiciled in the UK (see para 18), and its Korean parent company, brought proceedings against Apple under regulation 2 of the UK Regulations in respect of alleged threats made by Apple to sue the Samsung companies in the UK for infringement of Apple's registered Community design. At para 33, Mann J said: "Service out of the jurisdiction in respect of this claim needs to be effected under the normal provisions of English law, and the special provisions in the Community Designs Regulation do not apply to this claim". If the threats claim had been regarded as being within article 81(b), then the High Court would have had jurisdiction under article 82(1). So it seems clear that Mann J did not regard the threats claim as falling within article 82(1). However, it does not appear that the contrary was argued, and Mann J's statement therefore simply reflected what was common ground between the parties. Therefore I do not place reliance on it. However, it does accord with the clear view which I have formed.

Does the Court have jurisdiction to make a declaration that there is no infringement of any UK unregistered design right which Logitech may have?

UK unregistered design right

106. "UK unregistered design right" is an expression used to refer to the "design right" created by part III of the Copyright, Designs and Patents Act 1988. Under s.213, it is a property right which subsists in an original design, but it does not subsist unless and until the design has been recorded in a "design document" (as defined) or an article has been made to the design. "Design" means the shape or configuration (whether internal or external) of the whole or part of an article. Design right does not subsist in features of shape or configuration of an article which enable the article to be connected to, or placed in, around or against, another article so that either article may perform its function. Nor does it subsist in surface decoration.
107. Design right subsists in a design only if the design qualifies for design right protection in one of three ways. First, under s.218, in the case of a design not created in the course of employment, if the designer is a "qualifying person". A "qualifying person" is defined in s.217 as an individual habitually resident in a "qualifying country", or a body corporate or other body having legal personality which is formed under the law of a part of the UK or another qualifying country, and has in any qualifying country a place of business at which substantial business activity is carried on. "Qualifying country" means the UK, a member state of the EU, or a country designated by Order. Switzerland has not been so designated. Second, under s.219, if it is created in the course of employment with a qualifying person. Third, under s.220, if the first marketing of articles made to the design is by a qualifying person and takes place in the UK, an EU member State, or another country designated by Order.
108. Under s.226, the owner of design right in a design has the exclusive right to reproduce the design for commercial purposes by making articles to that design.

Tech21's argument

109. Tech21 relies on two factors in support of the claim for a declaration of non-infringement of design right. First, in both the Letter and the German proceedings, Logitech asserted ownership of all intellectual property rights in relation to designs produced by Tech21 pursuant to the NDA/MSA. This claim would encompass UK unregistered design right. Second, if Tech21 is correct that the Letter constitutes a threat to sue for infringement of Community design right in the UK in respect of Tech21's 'Impact Folio' cases, it was reasonable to expect that any such claim would be accompanied by a parallel claim for infringement of UK unregistered design right. Such parallel pleas, Mr Alkin submitted, are standard in design right cases because the rights overlap to a very considerable extent.

The issue here

110. Two points were common ground between counsel. First, that the jurisdiction of Court to make a declaration will only be exercised where there is a real and present dispute between the parties: see Rolls-Royce v Unite the Union [2010] 1 WLR 318 at [120]. Second, under article 5(3) of the 2007 Lugano Convention, if there was a real and present dispute between the parties as to whether Tech21 was infringing UK unregistered design right owned by Logitech by selling Impact Folio cases in England, this Court would have jurisdiction to make a declaration of non-infringement.
111. Applying the principles summarised above, it seems to me that to decide this issue in Tech21's favour I must apply the "good arguable case" test. I must be as satisfied as I can be that when the claim was brought, there was a real and present dispute as to whether Tech21 was infringing UK unregistered design right owned by Logitech by selling Impact Folio cases in the UK.
112. The first question is whether, in considering that issue, I should confine myself to the facts pleaded in the Particulars of Claim. The only fact pleaded in the Particulars of Claim in support of there being a controversy about any design right of any kind is the Letter itself. The Particulars of Claim allege that Tech21 carries on business as a designer and supplier of protective cases for mobile phones and tablets under the name Impact Folio, but not that such cases are sold in the UK. The Letter did not refer to sales in the UK or to UK design right. Accordingly, if I should confine myself to considering the facts pleaded by Tech21, I do not consider that they disclose a real and present dispute about whether sales of cases in the UK infringe any UK unregistered design right vested in Logitech.
113. Mr Cuddigan submitted I should confine myself to the facts which are pleaded, and cited Football Dataco v Sportradar [2010] EWHC 2911 (Ch), [2011] FSR 10 (Floyd J) and [2011] EWCA Civ 330, [2011] 1 WLR 3044 (Court of Appeal). It is true that the judgments in that case discuss the facts pleaded in the Particulars of Claim, but there was no issue there as to whether the Court should confine itself to considering the pleaded facts.
114. The point is potentially of some importance. I should, therefore, only decide it if it is essential for me to do so. I will, therefore, first consider what the position is if I may properly have regard to the facts put in evidence by the parties as well as the facts pleaded in the Particulars of Claim. In that case, it is clear from Mr Stettler's statement that Tech21 does sell Impact Folio cases in the UK, and that this was known to both parties at the time the Letter was written.
115. The Letter alleged that Logitech was the exclusive owner of "design and product intellectual property" and "our client is the exclusive owner of all IP rights". That must include any UK unregistered design right in respect of the cases. So it seems to me that the essential question is whether the facts alleged in the Letter, if true, would mean that there was an infringement of UK unregistered design right vested in Logitech by the sales of Impact Folio cases in the UK.
116. Mr Cuddigan pointed out that there are many very significant differences between Community unregistered design and UK unregistered design right. He argued that an allegation of infringement of Community unregistered design does not imply an allegation of infringement of UK unregistered design right. Nothing in the Letter indicates that the conditions needed for the UK unregistered design right to come into existence were satisfied.
117. Mr Cuddigan had essentially two points. The first was that UK design right protects far less of a design than Community unregistered design. In the EC Designs Regulation, "design" is defined by article 3(a) as: "the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation". It is a very wide definition. In s.213 of the 1988 Act, by contrast, "design" is defined as only covering shape or configuration and as not extending to features which enable the article to be connected to, or placed in, around or against, another article so that either article may perform its function, nor in surface decoration. In the case of an iPad case, the scope for UK unregistered design right was, therefore minimal.
118. He did not submit, however, that there was no scope for UK unregistered design right in respect of the cases, and so this did not seem to me to dispose of the argument that the Letter gave rise to a real and present dispute about UK unregistered design right. The Letter alleged that: "Your products are nearly identical to the product of our client and give the same overall impression". Assuming the existence of the conditions needed for UK unregistered design right to subsist, that seems to me sufficient to give rise to a real and present dispute about whether the Impact Folio cases infringe UK design right vested in Logitech.
119. The second point was that, for UK unregistered design right to arise, it must be created by a qualifying person, or an employee of a qualifying person or be first marketed by a qualifying person. The Letter did not allege that this had occurred.
120. In my view, this second point is a good one. On Logitech's case, as set out in the Letter, there would be no UK unregistered design right at all, because none of the conditions in ss.218-220 would be satisfied. On Tech21's case, there would be UK unregistered design right and it would be vested in Tech21. But on neither case would there be UK unregistered design right vested in Logitech.
121. Mr Alkin did not provide any explanation of how the facts in evidence could have given rise to a potential claim that there is a UK unregistered design right vested in Logitech. It is true that the Letter asserted that "our client will maintain exclusive ownership rights to the design and product intellectual property", but that was on the premise that the designs had been provided by Logitech and Design Partners and then misused by Tech21, in which case there would be no UK unregistered design right. It is also true that the Letter asserted that "our client is the exclusive owner of all IP rights including design rights that have been implemented in its protective iPad Air/ iPad mini cases "Big Bang" which is based on the design of our client and has been put on the European market some months ago." But that again was on the premise that the cases were based on Logitech's design, not on Tech21's design.
122. Mr Alkin pointed out that the Letter says: "You were asked to develop for manufacture the products based on our client's designs". He submitted that this amounted to an allegation that Tech21 had contributed to the design, and that such a contribution is capable of attracting UK unregistered design right, even on the hypothesis that the starting point was Logitech's designs. It is, I suppose, possible that the process of developing the cases for manufacture might involve some element of additional design undertaken by a qualifying person, sufficiently distinct from the original design to be arguably capable of attracting UK unregistered design right. However, that possibility is a long way from there being facts giving rise to a real and present dispute as to whether Logitech was entitled to UK unregistered design right. It gives rise to no more than a speculative possibility that there could be such a dispute.
123. Accordingly, whether I look only at the Particulars of Claim, or whether I also have regard to the evidence filed, I do not think that there is a good arguable case that there was, when this claim was commenced, a real and present dispute between the parties as to whether Tech21's sales of Impact Folio cases in the UK infringed UK unregistered design right vested in Logitech. It is, therefore, unnecessary for me to decide if I should limit my consideration to the pleaded facts.

Conclusions

124. My conclusions are, therefore, that:

(a) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any Community unregistered design right vested in Logitech.

(b) This Court has jurisdiction to hear the claim under regulation 2 of the UK Regulations in respect of the threat made by the Letter to bring infringement proceedings in the UK courts.

(c) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any UK unregistered design right vested in Logitech.

125. If the parties cannot agree on what order ought to be made to give effect to the above conclusions, I will hear submissions on that.