The Prudential Assurance Company Ltd. v The Prudential Insurance Company of America

This is an appeal from an order made on 11 April 2002 by Mr Justice Laddie in trade mark proceedings brought by The Prudential Assurance Company Limited against The Prudential Insurance Company of America. For convenience I will refer to the parties respectively as “Prudential (UK)” and “Prudential (USA)”.

For well over one hundred years each of the parties has carried on insurance business. They, and their respective group companies, now offer a wide range of financial services. Although in competition, Prudential (USA) has derived its business, principally, from the United States of America, while Prudential (UK) has operated mainly in the United Kingdom and other parts of Europe. Until recently, they had managed to co-exist without undue conflict under arrangements made in 1974. Those arrangements provided that Prudential (UK) would not use the “PRUDENTIAL” name or mark in the United States; and that Prudential (USA) would not use that name or mark in Europe or in certain countries of the Commonwealth. Prudential (UK) asserts that the arrangements constitute an agreement binding in law. Prudential (USA) accepts that the arrangements were made; but denies that they were intended to have, or do have, legal effect. That issue remains to be resolved in these proceedings at a trial; but it is not before the Court on this appeal. The issue on this appeal is whether – if the 1974 arrangements do not have legal effect - Prudential (UK) should be permitted to argue at a trial that, nevertheless, the use by Prudential (USA) of the mark “PRUMERICA” in Europe constitutes trade mark infringement.

That issue arises in the circumstances that the marks “PRU” and “PRUDENTIAL” are registered both as Community trade marks under the Community Trade Mark Regulation (Council Regulation 40/94/EEC) and as United Kingdom trade marks under the Trade Marks Act 1994 or its predecessor, the Trade Marks Act 1938. Prudential (UK) is the proprietor of those trade marks. But Prudential (USA) has been successful in obtaining registration of the mark “PRUMERICA” in a number of trade mark registries in Europe against the opposition of Prudential (UK). Registration of that mark has been upheld on appeal. Prudential (USA) relies, in particular, on the decision of the Cour d’Appel in Paris to uphold the rejection, by the French Trade Marks Registry, of Prudential (UK)’s opposition to registration of the mark “PRUMERICA” in France (Footnote: ¹). It is said, in effect, that Prudential (UK) cannot be allowed to argue that an English court should reach an inconsistent result.

In these proceedings Prudential (UK) seeks to prevent Prudential (USA) from using the marks “PRUMERICA” and “PRUDENTIAL-BACHE” in the United Kingdom and other parts of Europe. It claims to be entitled to do so, first, on the basis that such use would be in breach of the 1974 agreement; and, second, on the basis that such use would infringe its registered trade marks.

The proceedings were commenced by the issue of a claim form on 30 November 2001; permission having been obtained from Mr Justice Jacob on 23 November 2001, under CPR 6.20, to issue for service out of the jurisdiction. Prudential (USA) acknowledged service, through its solicitors, on 27 December 2001; but, by notice dated 8 January 2002, applied to set aside the order of 23 November 2001 and to strike out or stay the claims. That application came before Mr Justice Laddie on 6 and 7 March 2002. His written judgment ([2002] EWHC 534 (Ch), [2002] IP&T 781) was handed down on 11 April 2002.

The judge rejected the submission, made on behalf of Prudential (UK), that the challenge to jurisdiction must fail on the ground that, by applying to strike out the claims on substantive grounds, Prudential (USA) had submitted to the jurisdiction. The effect of his decision on that point, as he recognised at paragraph [20] of his judgment, was that, in order to uphold the order of 23 November 2001, it was for Prudential (UK) to show that it had a good arguable case in respect of the claims made. But, of course, if Prudential (UK) could discharge that burden, it would succeed not only in upholding the order for service out of the jurisdiction but also in its opposition to the application to strike out the claims on substantive grounds.

The application by Prudential (USA) to strike out the claims was made on three grounds: (i) that, having regard to the evidence before the court, there was no arguable case for any legally binding contract between the parties; (ii) that, in relation to alleged infringement by the use of the mark “PRUMERICA”, the English court had no jurisdiction, or should decline to exercise any jurisdiction which it might have; and (iii) that, in relation to alleged infringement by the use of the mark “PRUDENTIAL-BACHE”, there had been no use by Prudential (USA) which was inconsistent with a consent to use given by Prudential (UK).

The judge was persuaded – although, as he said at paragraph [43] of his judgment, “not without considerable misgivings” - that the contractual claim advanced by Prudential (UK) on the basis of the 1974 agreement “was sufficiently arguable to justify service out of the jurisdiction”. He was satisfied, also, that he should not decide the contract issue as if on an application for summary relief. As he said, this was just the sort of case in which it would be unwise to embark on the “mini-trial” which would be necessary to decide that issue. There is no appeal from the judge’s decision on those points.

Prudential (USA) accepted before the judge that unauthorised use of the mark “PRUDENTIAL-BACHE” might well infringe rights conferred on Prudential (UK) as proprietor of its registered marks, or some of those marks; but argued that the use which Prudential (USA) was making of the “PRUDENTIAL-BACHE” mark – that is to say, use in connection with investment management services and, in particular, in material on a web site “www.prudential-bache.com" was use to which Prudential (UK) had given consent. The judge took the view (at paragraph [86] of his judgment) that the varied nature of the business in which Prudential (USA) was and is involved was such that the borderline between those activities in relation to which it was to be allowed to use the mark “PRUDENTIAL-BACHE” and those in relation to which consent had not been given was imprecise and could not be determined on the correspondence before him. As he put it: “the precise scope of the mutual permissions given by each to the other is difficult to discern as is the question whether the activities advertised in the P-US web site fall within any relevant permission from P-UK”. He was in no doubt that that was not an issue which could be resolved in summary proceedings. There is no appeal from the judge’s decision on that point.

In the result - and as matters now stand – these proceedings will go to trial in any event on the 1974 contract issue and on the question whether the use of the mark “PRUDENTIAL-BACHE” is within any relevant consent. The issue yet to be determined is whether there should be a trial in relation to alleged infringement by the use by Prudential (USA) of the mark “PRUMERICA”.

The contention advanced by Prudential (USA) before the judge, identified in ground (ii) of the application to strike out, was that:

“. . . the Court either does not have jurisdiction, or should decline to exercise any jurisdiction it may have pursuant to Article 21 of the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters and Article 105(2) and/or 105(3) of the Council Regulation 40/94 on the Community Trade Mark and by means of estoppel res judicata;”

The judge encapsulated his understanding of that contention in two sentences at paragraph [46] of his judgment:

“In a nutshell, Mr Silverleaf’s argument [on behalf of Prudential (USA)] is that the decision by the Cour d’Appel is binding in all States which are signatories to the Brussels Convention and where the same issue of confusing similarity arises. It follows that no infringement proceedings can be brought anywhere because of the outcome in the French registration proceedings.”

The judge rejected that contention. But he gave Prudential (USA) permission to appeal to this Court.

The challenge is to the jurisdiction of the United Kingdom courts to entertain, or to adjudicate upon, trade mark infringement proceedings. It is important to keep in mind that Prudential (UK) alleges infringement (i) of its Community trade marks (“CTMs”) – of which there are two – and (ii) of its United Kingdom trade marks – of which there are seven. The judge explained the difference between CTMs and national trade marks in a passage, at paragraphs [51] and [52] of his judgment, which is not, I think, contentious and which I gratefully adopt. After pointing out that national trade marks are applied for and granted nationally – and that the vast majority of registered trade marks are still national marks - he said this ([2002] IP&T 781,797a-e):

“[51] . . . A large trader may well have the same, or substantially the same, trade marks registered in numerous countries under national trade mark laws. Infringement and validity of a national trade mark has to be determined in the national court in accordance with national law. The result is that where a trader is faced with an international trade which he considers infringes his registered trade mark rights, he may need to litigate in numerous countries (subject to the impact, if any, of the Brussels Convention). Within the European Community the existence of national intellectual property rights has always given rise to concern for those anxious to advance the concept of a single homogeneous market. In the area of registered trade marks, the creation of CTMs was designed to offer a pan-European right which would gradually displace the national registrations, although it is still permissible to apply for and enforce the latter. CTMs are applied for and granted at the Office for the Harmonisation of the Internal Market (OHIM) at Alicante. Once granted, they are effective throughout the EC. They can be invalidated either by revocation proceedings brought in OHIM or as a result of a counterclaim for invalidity brought before a relevant court during infringement proceedings. Their grant can also be opposed at OHIM.

[52] The issue of infringement could cause a problem. There is, as yet, no Community court which can try trade mark infringement proceedings. This means that infringement of CTMs has to be litigated through the national courts of the member states. Clearly this raises the possibility of multiple findings by different national courts in relation to the same act of infringement of the same CTM in different countries. . . . ”

The judge then went on to examine the way in which the Community Trade Mark Regulation (Council Regulation 40/94) (“the Regulation”) sought to ensure that the possibility of multiple findings by different national courts in relation to the same act of infringement of the same CTM in different countries was avoided – so that the intended benefits of a unitary trade mark right were achieved. He pointed out that each Member State was required, by article 91 of the Regulation, to designate certain of its national courts as “Community trade mark courts”; and that, by article 92, those courts were given exclusive jurisdiction for all infringement actions relating to CTMs. As he put it (at paragraph [55] of his judgment): “It is only the Community trade mark courts which can determine CTM infringement proceedings”. He went on to say this, at paragraphs [59] and [61] of his judgment ([2002] IP&T 781, 799a-g):

“59.

. . . Article 94(1) stipulates that a Community trade mark court shall have jurisdiction in respect of acts of infringement committed or threatened within the territory of any member state of the Community. Thus one national Community trade mark court can determine the infringement action between the proprietor of the mark and the alleged infringer in all member states. It is for this reason that the title “Community trade mark court” is doubly appropriate. A national court which is a Community trade mark court not only is given the jurisdiction to deal with Community trade marks but, as between the parties before it, can determine their rights throughout the Community.”

. . .

61.

Gathering all these strands together and summarising them, we can see that proceedings for infringement of CTMs must be brought before Community trade mark courts of first instance and appeals go to Community trade mark courts of second instance. In an action for infringement brought before the Community trade mark court in one member state, the court can determine the issue of infringement for all member states. Similarly, if it invalidates a CTM, it is invalid throughout the Community. By these provisions, a CTM can only be enforced against a particular infringement in a single Community trade mark court, even if the infringement takes place in a number of member states . . .”.

The provisions to which the judge referred – in particular, article 94(1) of the Regulation – address the need to avoid inconsistent findings by different national courts (acting as Community trade mark courts) in relation to the same acts of infringement of the same CTM. But they leave untouched two other problems. The first is the need to avoid the possibility that the benefits sought to be obtained by a unitary trade mark right – that is to say the right conferred by registration of the mark as a CTM under the Community Trade Mark Regulation – will be undermined by co-existing rights under national trade marks, infringement of which (absent some provision in Community legislation) would have to be separately litigated in the several national courts; with the possibility of inconsistent findings. The second is the need to avoid the possibility of inconsistent findings where the mark has not been registered as a CTM, but is the subject of registration in more than one national trade mark registry; so that, again, the infringement of co-existing rights under national trade marks would have to be separately litigated in the several national courts. Article 105 of the Regulation addresses the first of those problems. But the second is left to be dealt with (if at all) under the Brussels Convention.

The judge identified the problem to which (as he thought) article 105 of the Community Trade Mark Regulation is directed in a passage at paragraph [63] of his judgment ([2002] IP&T 781, 800a-b):

“. . . a mark may be registered as a CTM and thereby be effective throughout the Community but it may be registered at the same time as a national trade mark in, say, the UK, Germany and France. The draftsman of the Regulation clearly considered that in such a case, and in the absence of curative legislation, although the CTM could only be litigated in one country, the infringement of the British, German and French national trade marks had to be litigated in the British, German and French courts. Thus the advantage sought to be obtained by the creation of CTMs would be undermined in many cases. It was to avoid this problem that [the] Regulation implemented Article 105.”

Article 105 is in Section 1 (Civil Actions on the basis of more than one Trade Mark) of Title XI (Effects on the Laws of the Member States) of the Regulation. It is in these terms:

Article 105

Simultaneous and successive civil actions on the basis of Community trade marks and national trade marks

1.

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 seized on the basis of a Community trade mark and the other seized on the basis of a national trade mark –

(a)

the court other than the court first seized shall of its own motion decline jurisdiction in favour of that court where the trade marks 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 seized may stay its proceedings where the trade marks concerned are identical and valid for similar goods or services and where the trade marks concerned are similar and valid for identical goods or services.

2.

The court hearing an action for infringement on the basis of a Community trade mark shall reject the action if a final judgment on the merits has been given on the same cause of action and between the same parties on the basis of an identical national trade mark valid for identical goods or services.

3.

The court hearing an action for infringement on the basis of a national trade mark shall reject the action if a final judgment on the merits has been given on the same cause of action and between the same parties on the basis of an identical Community trade mark valid for identical goods or services.

As the judge pointed out, paragraph 1 of article 105 of the Regulation applies in cases where there are concurrent (or simultaneous) actions for trade mark infringement; paragraphs 2 and 3 apply where actions for trade mark infringement are sequential (or successive). Further, it is clear that paragraphs 2 and 3 apply only in cases where, if the actions for trade mark infringement had been concurrent and not consecutive, they would have fallen within sub-paragraph (a) of paragraph 1 – that is to say, in “dual identity” cases. Paragraphs 2 and 3 do not apply in cases (within sub-paragraph (b) of paragraph 1) where there is not identity both of the trade marks and of the goods or services for which the trade marks are valid. The distinction between cases in which there is dual identity and cases in which there is similarity (but not dual identity) reflects the levels of protection conferred by article 5(1)(a) and (b) of the First Council Directive of 21 December 1988 (89/104/EEC) – to which the laws of Member States in relation to trade marks are required to approximate.

What is less clear, as a matter of first impression, is whether paragraphs 2 and 3 of article 105 also apply where the “final judgment on the merits” has been given in proceedings other than an action for trade mark infringement. In particular, it is less clear, on first impression, whether those paragraphs can have any application where the final judgment on the merits has been given in proceedings for a declaration of invalidity; or in proceedings for registration of the trade mark, as in the present case. That is a question to which I shall need to return. But, whatever the answer to that question, it is plain that article 105 applies only where one of the actions or proceedings involves a CTM. In cases where a CTM is not involved – or has not been involved in earlier proceedings between the same parties – article 105 of the Regulation can have no application.

As I have said, where the mark has not been registered as a CTM, but is the subject of registration in more than one national trade mark registry, the need to avoid the possibility of inconsistent findings in the national courts is not addressed by any of the provisions in Article 105 of the Community Trade Mark Regulation. It is, I think, common ground that, if that need is addressed at all by Community legislation, the relevant provisions must be found in the Brussels Convention. I should note, for completeness, that although, from March 2002, the Brussels Convention has been replaced by Council Regulation (EC) 44/2001 neither party has suggested that the provisions of Regulation 44/2001 differ in any material respect from the relevant provisions of the Convention.

The object of the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (“the Convention”), as its preamble makes plain, is “to determine the international jurisdiction of [the courts of the Contracting States], to facilitate recognition and to introduce an expeditious procedure for securing the enforcement of judgments, authentic instruments and court settlements”. Title II is concerned with jurisdiction. The basic rule, in matters to which the Convention applies, is that persons domiciled in a Contracting State are to be sued in the courts of that State – article 2; but that basic rule is subject to exceptions. For present purposes the relevant exception is that, in relation to proceedings which fall within article 16 (at Section 5 of Title II), certain courts have exclusive jurisdiction, regardless of domicile. In respect of defendants not domiciled in a Contracting State, the jurisdiction of the courts of each Contracting State shall be determined by the law of that State – article 4; but that rule, also, is subject to the provisions of article 16. Article 16 is in these terms, so far as material:

Article 16

The following courts shall have exclusive jurisdiction, regardless of domicile –

. . .

4.

In proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, the courts of the Contracting State in which the deposit or registration has been applied for, has taken place or is under the terms of an international convention deemed to have taken place.

The importance of article 16(4) of the Convention, in the present context, is that in many proceedings for the infringement of a national trade mark - as well as in all proceedings concerned with registration or (solely) with validity - it will have the effect that the court of the State in whose registry the national trade mark is registered has exclusive jurisdiction. That is because in many proceedings for infringement, validity will be put in issue. A claim for infringement will be met by the riposte that the trade mark is invalid. In such a case the court in which infringement proceedings have been commenced (if not a court of the State in whose registry the national trade mark has been registered) must refuse jurisdiction. It is required to do so by article 19 of the Convention:

Article 19

Where a court of a Contracting State is seized of a claim which is principally concerned with a matter over which the courts of another Contracting State have exclusive jurisdiction by virtue of Article 16, it shall declare of its own motion that it has no jurisdiction.

The point was addressed by Mr Justice Laddie – in the context of proceedings for the infringement of patents – in Coin Controls Limited v Suzo International (UK) Limited and others [1997] FSR 660, 675-678. I respectfully agree with his analysis of the point in that case.

Section 8 of Title II (Lis Pendens – Related Actions) includes article 21, on which Prudential (USA) particularly relies:

Article 21

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established

Where the jurisdiction of the court first seized is established, any court other than the court first seized shall decline jurisdiction in favour of that court.

The provisions of article 21 must be read in conjunction with articles 16 and 19. Where the court first seized has exclusive jurisdiction by virtue of article 16, the other court is required, by article 19, to decline jurisdiction. In such a case article 21 is not engaged. Nor is article 21 engaged where it is the court other than the court first seized that has exclusive jurisdiction by virtue of article 16. In such a case article 19 requires the court first seized to decline jurisdiction: the jurisdiction of the court first seized is not capable of being established for the purposes of article 21.

It follows that there will be many cases in which concurrent proceedings between the same parties brought in the courts of different Contracting States in respect of the infringement of national trade marks will not fall to be dealt with under article 21 of the Brussels Convention; notwithstanding that those proceedings may be said to involve “the same cause of action”. That is because the underlying question in the infringement proceedings will be: “Has the defendant infringed a valid claim?” – see the observation of Mr Justice Laddie in the Coin Controls case (ibid, 677). Article 21 will be in point only in those infringement cases in which the validity of the national trade mark is not in issue.

Prudential (USA) places reliance, also, on the other articles in Section 8 of the Convention – that is to say, on articles 22 and 23:

Article 22

Where related actions are brought in the courts of different Contracting States, any court other than the court first seized may, while the actions are pending at first instance, stay its proceedings.

A court other than the court first seized may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seized has jurisdiction over both actions.

For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

Article 23

Where actions come within the exclusive jurisdiction of several courts, any court other than the court first seized shall decline jurisdiction in favour of that court.

For my part, I do not think that article 22 of the Convention provides assistance in the present context. I would accept that infringement proceedings involving national trade marks registered in the registries of different Contracting States can be said to be “related actions” for the purposes of article 22; at least in circumstances which enable those proceedings to be heard and determined together. In such cases article 22 empowers courts other than the court first seized to stay their proceedings while the actions are pending at first instance. But, as it seems to me, there will be little purpose in doing so unless the decision on the common issue in the one court will be determinative of that issue in the other court. And the power to decline jurisdiction cannot arise or be exercised in cases where – because validity is in issue – each court has exclusive jurisdiction (to the exclusion of the other) over the proceedings which are before it. Nor do I think that article 23 of the Convention is in point. The purpose of that article, as it seems to me, is to make provision for the case in which there are, in the same action, matters over which, by virtue of article 16, courts of different States have exclusive jurisdiction. The article is needed in order to avoid the impasse to which the application of article 19 would otherwise give rise.

It is said that the object of the provisions in Section 8 of Title II of the Convention – that is to say, the provisions of articles 21, 22 and 23 - “is to prevent conflicting decisions on identical or almost identical issues arising between the same parties in different courts of the Contracting States”. For my part, I would accept that the object of those provisions is to avoid or reduce the possibility that courts in different Contracting States may reach conflicting decisions in concurrent pending actions between the same parties which raise the same or closely related issues. But I find nothing in article 21 to suggest that that article is intended to require a court in one Contracting State to stay its proceedings or decline jurisdiction unless there is a concurrent action involving the same cause of action and between the same parties pending in another Contracting State; and nothing in article 22 to suggest that that article is intended to empower a court in one Contracting State to stay its proceedings unless there is a concurrent related action (within the meaning of that article) pending in another Contracting State – or to decline jurisdiction unless the two related actions could proceed together in another Contracting State. It is, I think, important to keep in mind that Section 8 of Title II of the Convention is directed, specifically, to the position where, under the earlier Sections in the same Title, an action could be brought in more than one Contracting State; but where, because an action involving the same cause of action and between the same parties – or a related action – has already been commenced in State A, a concurrent action ought not to be allowed to proceed in State B. Where, at the time an action is commenced in State A, one of the parties has already obtained a judgment in State B, Section 8 of Title II is not in point. In such a case the relevant provisions of the Brussels Convention are those in Section 1 (Recognition) of Title III (Recognition and Enforcement).

Section 1 of Title III of the Convention comprises articles 26 to 30. Article 26 sets out the basic rule: a judgment given in a Contracting State shall be recognised in the other Contracting States without the need for any special procedure. Article 27 prescribes circumstances (none of which are in point in the present case) in which a judgment shall not be recognised. Article 28 provides that a judgment shall not be recognised if (inter alia) “it conflicts with the provisions of Sections 3, 4 or 5 of Title II”; so a judgment in proceedings concerned with the registration or validity of a national trade mark could not be recognised unless the proceedings were in a court of the Contracting State in which registration had been sought or had taken place – article 16(4). Article 29 provides that where the court of one Contracting State is required to recognise the judgment of another Contracting State, it may not review the substance of that judgment. Article 30 enables a court of one Contracting State in which recognition is sought of a judgment given in another Contracting State to stay its own proceedings if an appeal against the foreign judgment has been lodged.

It follows, as it seems to me, that in a case (like the present) where the proceedings in the other Contracting State have already led to a final judgment between the parties it is upon article 26 of the Brussels Convention – and not upon article 21 – that reliance must be placed (if at all). The relevant question, in the context of consecutive infringement proceedings, is whether the requirement, under article 26, that the judgment of the court of State B in proceedings for the infringement of a national trade mark must be recognised by the courts of State A leads to the conclusion that the court in State A must reach the same result in later proceedings for the infringement of an identical or similar mark. Whatever the answer to that question in a case where the proceedings in State A are concerned only with the matter of infringement, it is, I think, plain that the question must be answered in the negative in a case where the proceedings in State A are concerned (as they often will be) with both the infringement and the validity of a national trade mark registered in the registry of State A. That is the effect of the requirement, in article 28, that a judgment shall not be recognised if it conflicts with the provisions of Section 5 of Title II – that is to say, with the provisions (inter alia) of article 16(4). In a case involving both infringement and validity of a national trade mark, the exclusive jurisdiction provisions of article 16(4) – read in conjunction with articles 19 and 28 – have the effect (subject to article 105 of the Regulation) that the issues are determined in the courts of that State. As Mr Justice Laddie put it, in the passage at paragraph [51] of his judgment in the present case to which I have already referred:

“Infringement and validity of a national trade mark has to be determined in the national court in accordance with national law.”

Article 90 of the Community Trade Mark Regulation is in these terms:

Article 90

Application of the Convention on Jurisdiction and Enforcement

1.

Unless otherwise specified in this Regulation, the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, signed in Brussels on 27 September 1968 . . . shall apply to proceedings relating to Community trade marks and applications for Community trade marks, as well as to proceedings relating to simultaneous and successive actions on the basis of Community trade marks and national trade marks.

2.

In the case of proceedings in respect of the actions and claims referred to in Article 92 –

(a)

Articles 2, 4, 5(1), (3), (4) and (5) and Article 24 of the Convention on Jurisdiction and Enforcement shall not apply;

(b)

Articles 17 and 18 of that Convention shall apply subject to the limitations in Article 93(4) of this Regulation;

(c)

the provisions of Title II of that Convention which are applicable to persons domiciled in a Member State shall also be applicable to persons who do not have a domicile in any Member State but have an establishment therein.

The actions and claims referred to in article 92 are those over which Community trade mark courts have exclusive jurisdiction. The article is in these terms:

Article 92

Jurisdiction over infringement and invalidity

The Community trade mark courts shall have exclusive jurisdiction –

(a)

for all infringement actions and – if they are permitted under national law – actions in respect of threatened infringement relating to Community trade marks;

(b)

for actions for declaration of non-infringement, if they are permitted under national law;

(c)

for all actions brought as a result of acts referred to in article 9(3), second sentence [matters arising after publication of a Community trade mark application which would, after publication of the registration of the trade mark, be prohibited by virtue of that publication];

(d)

for counterclaims for revocation or for a declaration of invalidity of the Community trade mark pursuant to Article 96.

The effect of those provisions is that articles 21 and 26 of the Convention are made applicable to proceedings relating to simultaneous and successive actions on the basis of CTMs and national trade marks – including, in particular, trade mark infringement proceedings. That is what paragraph 1 of article 90 of the Regulation requires; and there is nothing in paragraph 2 of that article to limit that effect.

I have already noted that Article 21 of the Convention and article 105(1) of the Regulation apply – and apply only – where there are concurrent, or simultaneous, proceedings. Article 21 of the Convention requires that where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established. I have sought to explain that article 21 must be read with articles 19 and 16(4) of the Convention; so that article 21 can apply only where the proceedings are for infringement alone, not involving questions of the validity of national trade marks. In cases where article 21 of the Convention could have applied if the proceedings were actions for the infringement of national trade marks the effect of article 90 of the Regulation is that article 21 of the Convention applies also where one of the courts is a Community trade mark court before which there are proceedings for the infringement of a CTM. But article 90 of the Regulation cannot have the effect of making article 21 of the Convention applicable to a case in which one trade mark is a CTM in circumstances where, if both trade marks were national trade marks, article 21 would have no application. So article 21 will have no effect in a case where one of the courts is “seized on the basis of a national trade mark” – that is to say, where one of the courts is seized by virtue of article 16(4) of the Convention.

It is to that problem that article 105(1) of the Regulation is addressed – as the judge appreciated. The opening words of article 105(1) – “Where [actions for infringement] involving the same cause of action and between the same parties are brought in the courts of different [Member] States . . .” - are indistinguishable from the opening words of article 21 of the Convention – “Where [proceedings] involving the same cause of action and between the same parties are brought in the courts of different [Contracting] States . . .” . But the words which follow in article 105(1) – “one seized on the basis of a Community trade mark and the other seized on the basis of a national trade mark” – make clear that article 105(1) of the Regulation is to apply to those cases to which article 21 of the Convention (even when read with article 90(1) of the Regulation) cannot apply. Article 105(1) of the Regulation plainly does apply where one court is seized on the basis of a national trade mark and so, but for article 105(1), would have exclusive jurisdiction under article 16(4) of the Convention – with the consequences that I have sought to describe.

As I have said, the effect of article 105(1) of the Regulation depends on whether there is dual identity. Where the trade marks concerned “are identical and valid for identical goods or services” the court other than the court first seized “shall [of its own motion] decline jurisdiction” in favour of the court first seized. The words of sub-paragraph (a) are indistinguishable from those in the second paragraph of article 21 of the Convention. Where the trade marks concerned “are identical and valid for similar goods or services” or “are similar and valid for identical or similar goods or services” the court other than the court first seized “may stay its proceedings”. The words of sub-paragraph (b) are indistinguishable from those in the first paragraph of article 22 of the Convention. It is pertinent to have in mind that the protection afforded by article 5(1)(a) of the First Council Directive (89/104/EEC) in cases of dual identity does not depend on establishing confusing similarity, for obvious reasons. Cases in which the question whether there exists “a likelihood of confusion on the part of the public” or a “likelihood of association between the sign and the trade mark” – article 5(1)(b) cases - will fall within article 105(1)(b) of the Regulation. The existence, or otherwise, of confusing similarity is an area in which national courts have a special role: it is for the national court to make the assessment in the light of the circumstances prevailing in its own territory – see Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV (Case C – 342/97) [1999] ECR I 3819, at paragraph 11. It is, therefore, no surprise to find that the court is given a discretion under sub-paragraph (b) of article 105(1) which it does not have under sub-paragraph (a). It is also no surprise to find that articles 105(2) and (3) apply only in dual identity cases.

The relationship between paragraph 1 and paragraphs 2 and 3 of article 105 of the Regulation reflects the relationship between Section 8 of Title II and Section 1 of Title III of the Brussels Convention. Section 8 of Title II and paragraph 1 of article 105 apply where there are concurrent, or simultaneous, actions; Section 1 of Title III and paragraphs 2 and 3 of article 105 apply in cases where the proceedings are consecutive, or successive. I have sought to explain that the problem to which paragraph 1 of article 105 of the Regulation is addressed is that (without that paragraph) there would be nothing in the Regulation to require a court seized on the basis of a national trade mark, under article 16(4) of the Convention, to decline jurisdiction in favour of a Community trade mark court seized on the basis of a CTM (or vice versa) – notwithstanding that the court seized on the basis of the CTM (or the court seized on the basis of the national trade mark, as the case might be) was the court first seized – and nothing which would enable either court to stay proceedings where the actions before them were related. In particular, article 90(1) of the Regulation, in conjunction with articles 21 and 22 of the Convention, does not have that effect. The problem to which paragraphs 2 and 3 of article 105 of the Regulation are addressed, as it seems to me, is the same; but in the context of consecutive or successive proceedings. Absent paragraph 3 of article 105 there would be nothing in the Regulation to require a court seized on the basis of a national trade mark, under article 16(4) of the Convention, to give effect to a judgment in earlier proceedings involving the same cause of action and between the same parties, of a Community trade mark court seized on the basis of a CTM; and, absent paragraph 2, there would be nothing to require a Community trade mark court seized on the basis of a CTM to give effect to an earlier judgment of a court seized on the basis of a national trade mark. Article 90(1) of the Regulation, in conjunction with article 26 of the Convention, does not have that effect.

That that is the problem to which paragraphs 2 and 3 of article 105 of the Regulation are addressed is confirmed by a careful reading of the provisions in those paragraphs in the light of article 90 of the Regulation and of the provisions of the Convention relating to simultaneous and successive civil actions; and with the obvious purpose of paragraph 1 of article 105 in mind.

The factor common to all three paragraphs of article 105 of the Regulation is that the actions should involve “the same cause of action and [be] between the same parties”. That expression - “the same cause of action and between the same parties” - is found, also, in article 21 of the Convention. The meaning of the phrase “the same cause of action” in that context was considered by the Court of Justice in Gubisch Maschinenfabrik KG v Palumbo (Case 144/86) [1987] ECR 4861. The Court explained that article 21 must be construed as if the requirement were that the two actions were between the same parties and involved the same cause of action and the same subject matter – see paragraph 14 of its judgment (ibid, 4875) and the translator’s note at page 4863. The Court went on to say this:

“15.

In the procedural situation which has given rise to the question submitted for a preliminary ruling the same parties are engaged in two legal proceedings in different Contracting States which are based on the same ‘cause of action’, that is to say the same contractual relationship. The problem which arises, therefore, is whether those two actions have the same ‘subject matter’ when the first seeks to enforce the action and the second seeks its rescission or discharge.

16.

In particular, in a case such as this, involving the international sale of tangible moveable property, it is apparent that the action to enforce the contract is aimed at giving effect to it, and that the action for its rescission or discharge is aimed precisely at depriving it of any effect. The question whether the contract is binding therefore lies at the heart of the two actions. If it is the action for rescission or discharge of the contract that is brought subsequently, it may even be regarded as simply a defence against the first action, brought in the form of independent proceedings before a court of another Contracting State.

17.

In those procedural circumstances it must be held that the two actions have the same subject matter, for that concept cannot be restricted so as to mean two claims which are entirely identical.”

The Court of Justice adopted the same approach in its subsequent decision on the reference in “The Tatry”(Case C-406/92) [1994] 1 ECR 5439. It observed, at paragraph 39 of its judgment (ibid, 5475), that for the purposes of article 21 of the Convention “the ‘cause of action’ comprises the facts and the rule of law relied on as the basis of the action”; and, at paragraph 41, that “The ‘object of the action’ . . . means the end the action has in view”. At paragraph 42 the Court said this:

“The question accordingly arises whether two actions have the same object when the first seeks a declaration that the plaintiff is not liable for damage as claimed by the defendants, while the second, commenced subsequently by those defendants, seeks on the contrary to have the plaintiff in the first action held liable for causing loss and ordered to pay damages.”

It answered that question in the affirmative.

What, then, is the need for the words “on the basis of an identical . . . trade mark valid for identical goods or services” which appear at the end of paragraphs 2 and 3 of article 105 of the Regulation? Those words cannot be intended to add anything to the phrase “the same cause of action” which is used earlier in the same paragraphs. If those words were allowed to qualify that phrase, they would cut down the meaning which the Court of Justice has taught that the phrase is intended to convey. The true analysis, as it seems to me, is that those words are intended to qualify the earlier phrase “a final judgment on the merits”; by identifying the court by which the judgment is to have been given. The words are intended to make it plain that paragraphs 2 and 3 of article 105 apply where “a final judgment on the merits has been given . . . by a court seized on the basis of an identical . . . trade mark valid for identical goods or services”. They are to be read in conjunction with the opening words in each of paragraphs 2 and 3. The paragraphs apply where the court hearing an action “. . . seized on the basis of a [Community/national] trade mark” . . . finds that a “a final judgment on the merits has been given . . . by a court seized on the basis of an identical [national/Community] trade mark valid for identical goods or services”. Read in that way, paragraphs 2 and 3 complement, precisely, paragraph 1(a) of article 105; and they meet the problem which article 28 of the Convention, read with article 90 of the Regulation, does not meet.

The principal question on this appeal is whether article 105(2) of the Regulation requires the United Kingdom court to reject proceedings brought by Prudential (UK) for the infringement of the Community trade marks “PRU” and “PRUDENTIAL” by the use of the mark “PRUMERICA” on the grounds that there has been a final judgment on the merits in the Cour d’Appel in opposition proceedings relating to the registration, in France, of the mark “PRUMERICA”. The view which I have taken of the meaning and effect of article 105(2) leads, necessarily, to the conclusion that that question must be answered in the negative. The French court was seized on the basis of the national trade mark “PRUMERICA”. The United Kingdom court is seized, under article 92 of the Regulation, on the basis of the CTMs “PRU” and “PRUDENTIAL”. Whether or not the marks are valid for identical goods or services, the requirement of dual identity is not satisfied. The marks on the basis of which the two courts are seized are not themselves identical. Article 105(2) can have no application in the present case.

That would be sufficient to dispose of the principal question on this appeal. But, in recognition of the arguments put before us, I think it right to examine the basis upon which the judge reached the same conclusion – that article 105(2) was not in point.

The argument advanced on behalf of Prudential (USA) in the court below – and pursued in this Court – emphasised the need to give to the expression “the same cause of action and between the same parties” the same meaning and effect in article 105 of the Regulation as it was to be given in the context of article 21 of the Convention; that is to say, the meaning which the Court of Justice had held that that expression should be given in the Gubisch case and in The Tatry. The argument was summarised by the judge at paragraph [68] of his judgment ([2002] IP&T 781, 801). It was submitted that the same cause of action is involved when the question for determination is whether two marks are confusingly similar, whether that question is raised in the context of infringement of one by the other or in the context of preventing registration of one in the face of registration of the other. Thus an infringement action is, for this purpose, the same cause of action as a trade mark opposition where the same two marks are in conflict. The factual issue which has to be resolved in each case is whether there exists a likelihood of confusion between the two. Once that issue has been decided in one proceeding between two parties, they cannot reopen it. To allow them to do so would be to risk conflicting decisions on the issue, which is what article 105 of the Regulation is designed to prevent.

The judge accepted (at paragraph [70] of his judgment) that essentially the same factual issue can arise in an infringement action as in a trade mark opposition. As he said, it follows that it is possible for a court to come to one conclusion in relation to the issue of whether the defendant’s mark infringes the registered proprietor’s mark and, in theory, a trade mark registry could come to a different conclusion in relation to the issue whether those two marks were confusingly similar for trade mark proceedings. The possibility of inconsistent decisions is inherent in a scheme which allows the registration of national trade marks.

The judge pointed out that article 105(1) of the Regulation applies, in terms, only where there are concurrent actions for infringement. In the light of that requirement he thought that it was essential to the argument advanced on behalf of Prudential (USA) under article 105(2) that “a trade mark opposition be treated as if it was a kind of infringement action since it involves substantially the same issue of confusing similarity”. He rejected that premise. At paragraphs [75], [76] and [77] of his judgment ([2002] IP&T 781, 803f-804d he said this:

“[75] . . . The correct starting point is art 105(1) which is concerned with the situation where there are concurrent ‘actions for infringement’ concerning a Community trade mark and the equivalent national trade mark. Although one of the issues a national registry will have to consider in determining an opposition is virtually identical to a major issue which will arise in an infringement action between the same two marks, this does not mean that the trade mark registry proceedings can be described as an ‘action for infringement’ as required by art 105(1). It is nothing of the sort. It is not made so by describing the relief sought by an applicant whose mark is under opposition as ‘registration on the grounds of non-infringement’. Article 105(1) is designed to prevent multiple infringement proceedings being brought in different member states. This should cause no difficulty to the proprietor of the mark alleged to have been infringed. Since the CTM is effective in all member states, in effect what art 105(1) requires is that the proprietor should sue for CTM infringement and national trade mark infringement in the same court at the same time.

[76] The purpose of art 105(2) and (3) is to achieve the same effect as art 105(1) but in a case where the infringement proceedings are not concurrent but sequential. Even if there was obscurity in the wording used, this is the obvious legislative intention and the provisions should be construed accordingly. However the wording of both art 105(2) and (3) reinforce the point. This can be illustrated by reference to art 105(2) which provides for priority as between a court hearing an action for infringement of a CTM on the one hand and a final judgment on the merits given in respect of a ‘trade mark valid for identical goods or services’. As mentioned above, the word ‘valid’ here must mean ‘registered’ or ‘in force’. This is not appropriate language for describing opposition proceedings to the grant of a registration. The prior judgment has to be in respect of a granted trade mark. In my view this is a reference to a judgment in an infringement action and cannot apply to opposition proceedings where the issue is whether a registration should be granted. Furthermore this is consistent with the relationship between art 105(2) and (3). They are, in effect, mirror images of each other. In the former the action for infringement of the CTM is the second in time, in the latter it is the action for the infringement of the national trade mark. In both they are considering infringement actions for the CTM and the national trade mark, just as art 105(1) does.

[77] Thus opposition proceedings before a national registry (or OHIM) are not to be equated with an action for infringement under art 105. This is not altered by the fact that in this case an appeal lay to the Cour d’Appel. The hierarchy through which the proceedings pass during the appeal phase does not alter the nature of the proceedings. The proceedings in France started out as an opposition and remained such on appeal.”

I agree with the judge’s observations in paragraph [75] of his judgment – as set out above. It is plain that article 105(1) of the Regulation applies only where both actions are actions for infringement. An opposition to registration is not an action for infringement; notwithstanding that similar questions may arise in relation to confusing similarity. Further, for the reasons which I have already sought to explain, where the question is one of confusing similarity, the case will fall within sub-paragraph (b) of article 105(1); and not within sub-paragraph (a). And there are obvious reasons why registration proceedings should not have been brought within article 105(1) of the Regulation. Registration of national trade marks is essentially a matter for national trade mark registries – with appeals (if provided under national law) to national courts. Registration of CTMs is a matter reserved, exclusively, to OHIM – with an appeal to Boards of Appeal and, ultimately, to the Court of Justice.

I am less confident that the judge is correct in his view – expressed in paragraph [76] of his judgment – that articles 105(2) and (3) apply only where both the earlier proceedings and the sequential, or successive, proceedings are actions for infringement. Plainly, the later proceedings must be: articles 105(2) and (3) so provide. But I would not rule out the possibility that a Community trade mark court hearing proceedings for infringement of a CTM in which dual identity is alleged may be required to reject the action if the same point has been determined by a national court in earlier proceedings for revocation, or for a declaration of invalidity, of an identical national trade mark valid for identical goods or services. It is unnecessary to decide the point on this appeal. I prefer to put my judgment on the fact that, in this case, the necessary requirement of dual identity is not present.

The judge appreciated, of course, that article 105 of the Regulation could have no direct application to the challenge to infringement proceedings in so far as Prudential (UK) sought to enforce its United Kingdom trade marks. But he went on to reject a submission that - if he had held that the challenge to infringement proceedings in respect of the CTMs could succeed on the basis of article 105 of the Regulation (which he did not) - he ought to give article 105 some indirect effect in relation to the infringement proceedings in respect of the national trade marks. In my view he was right to do so; and I do not understand that part of his decision to be challenged.

The real question is whether article 26 of the Brussels Convention requires the United Kingdom court to “recognise” the judgment of the Cour d’Appel by refusing to entertain proceedings the object of which is to obtain a decision which is inconsistent with that judgment. The question can be stated in this form: does article 26 require a court in State A to dismiss proceedings for infringement of a national trade mark registered in the register of State A, where the infringement alleged is the use in State A of a similar mark which has been registered as a national trade mark in the registry of State B, in circumstances where there has been a judgment of a court in State B rejecting opposition to the registration of that mark on the grounds that the similarity of the two marks is not confusing. As I have sought to explain, the answer to that question is plainly “No” in a case where the court in State A is seized on the basis that the validity of its own national mark is in issue – article 16(4) and article 28 of the Convention. But, if the validity of the national mark is not in issue in the action before the court in State A, it seems to me that the answer is much less clear. And if (in such a case) the court in State A is required to dismiss the proceedings for infringement of its own national marks, it may well be required, also, to dismiss proceedings for infringement of the CTMs – article 90(1) of the Regulation.

The judge did not decide that point. He thought that the argument that infringement proceedings in respect of the United Kingdom marks could be challenged on the basis of the Convention – without recourse to article 105 of the Regulation – was not seriously pursued. And it is pertinent to note that the application notice which was before him contains no reference to article 26 of the Convention. Indeed, in the grounds of appeal to this Court it seems to have been included, by way of adjunct to article 21, almost as an afterthought.

In my view it would be wrong to decide that question on this appeal. We have not heard argument upon it; and, without knowing whether the validity of the United Kingdom trade marks are to be put in issue in these proceedings, it is impossible to say whether it will arise. It is enough to decide, at this stage, that article 26 of the Convention can be of no assistance to Prudential (USA) unless it can show that the proceedings do not fall within the exclusive jurisdiction conferred by article 16(4). That has not been established.

We were urged by counsel for Prudential (USA) to refer the jurisdictional questions raised on this appeal to the Court of Justice for a preliminary ruling under article 234 of the EC Treaty. There is power to do so where the court of a Member State before which such questions are raised considers that a decision on the question is necessary to enable it to give judgment. For my part, I accept that this Court should, ordinarily, do so in a case in which it has any real doubt – see the observations of Sir Thomas Bingham, Master of the Rolls, in R v International Stock Exchange, ex parte Else [1993] QB 534, 545C-G. But in exercising the power to refer the national court must observe some measure of self restraint: lest the Court of Justice become overwhelmed. In particular, the national court should be cautious when asked to make a reference for a preliminary ruling in a case where it may turn out, after the facts have been established, that the point does not, in the event, arise.

In my view we should decline to direct a reference at this stage in the present case. My reasons are these. Whatever the decision on the jurisdictional points raised on this appeal, the action will proceed to trial on the 1974 contract issue. If Prudential (UK) succeeds on that issue, the question whether it could succeed on a claim for infringement of its trade marks will become moot. Second, a decision on the scope of article 105 of the Regulation will not determine the question whether the United Kingdom court has jurisdiction to determine the claims for infringement of the national trade marks. As I have said, article 105 of the Regulation has no application to those claims. Third, I am satisfied that there is no real doubt that article 26 of the Convention can have no application to the claims for infringement of the national trade marks – nor any application, by the extension effected by article 90(1) of the Regulation, to the CTMs – unless it be established that the proceedings do not fall within the exclusive jurisdiction conferred by article 16(4) of the Convention. And, as I have said, that has not yet been established. A reference which required the Court of Justice to address the question what effect, if any, article 26 of the Convention does have in a case which falls outside article 16(4) would be premature.

I would dismiss this appeal.

Lord Justice Potter:

I agree and have nothing to add.

Lord Justice Kennedy:

I also agree.