On 27 July the Supreme Court of England and Wales overturned the Court of Appeal’s decision in ruling that claims based on infringements of US copyright taking place in the USA are justiciable in the courts of England where the court has personal jurisdiction over the defendant. This is a significant ruling which categorically confirms that claims for infringement of foreign copyright are in principle justiciable in England.
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The appeal concerned intellectual property (IP) rights in the Imperial Stormtrooper helmet made for use in the first Star Wars film, Star Wars Episode IV – A New Hope. The Claimant, Lucasfilm, engaged the Defendant, Andrew Ainsworth, to make Stormtrooper helmets based on drawings and a clay model supplied to him and conceived by Lucasfilm.
In 2004 Mr Ainsworth made replicas of the Stormtrooper helmet for sale to the public in the USA. Lucasfilm obtained a judgment from the US courts against him to the value of $10 million for copyright and trade mark infringement. Proceedings were also commenced in the English High Court involving claims for infringement of English copyright, enforcement of the US judgment, and claims for US copyright infringement.
At first instance and in the Court of Appeal, the English courts found that under English law no copyright subsisted in the replica helmet, it being a utilitarian item (a film prop) and not a sculpture that would attract full copyright protection.
The Court of Appeal overturned the earlier High Court’s decision that the alleged US copyright infringement could be determined by the English court. The Court of Appeal held that the English court did not have judicial authority, based on long-standing common law rules fundamentally established in British South Africa Co v Companhia de Moçambique (the Moçambique rule) that the English court “has no jurisdiction to entertain an action for … the determination of title to, or the right to possession of, any immovable situate out of England … or recovery of damages for trespass to such immovable”.
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The appeals before the Supreme Court
The only two issues before the Supreme Court were whether:
- In English law, under section 4 of the Copyright Designs and Patents Act 1988, the original helmets were “sculptures”, so that copyright would subsist in them as an artistic work and Ainsworth’s replicas would amount to an infringement of Lucasfilm’s copyright; and
- the English court could exercise jurisdiction over an infringement of copyright committed outside the EU in breach of the intellectual property laws of that country where the defendant was domiciled in England.
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The Supreme Court’s decision
The Supreme Court unanimously refused the appeal on point (1). It agreed with the two lower courts’ finding that the helmets were not sculptures for the purposes of English copyright law and so should not enjoy full copyright protection.
It unanimously allowed the appeal on jurisdiction, holding that the English court did have jurisdiction to hear the US copyright infringement claims, for the following key reasons:
- The English law had ‘moved on’. The Moçambique rule had been significantly eroded by subsequent cases, and The Civil Jurisdiction and Judgments Act 1982 makes its clear that the English court’s jurisdiction does extend to trespass or torts concerning immovable property outside of England unless the proceedings are principally concerned with the question of title to or possession of the property.
- Even if the rule prevented a foreign court from adjudicating on claims of validity because that would call into question the ‘act of state’ doctrine, it was not a bar to foreign courts adjudicating on claims alleging infringement of IP rights. Also, the Private International Law (Miscellaneous Provisions) Act 1995 abolished any ‘rule’ in English law that held that, because an IP right is ‘local’ and infringing it would not be a wrongful act outside of the state where the right was granted, a court outside of that territory could not hear the claim.
- The Supreme Court also noted various developments in European and international law which demonstrated a move towards allowing claims for infringement of IP rights to be heard outside of the jurisdiction in which the right was granted. These included that:
- Article 22(4) of the Brussels Regulation provides an exception to the general rule of jurisdiction which is place of domicile of the defendant, whereby in proceedings concerned with the registration or validity of patents, trade marks, designs or other similar rights required to be deposited or registered, exclusive jurisdiction is given to the courts of the Member State in which the deposit or registration has been made. This exception is to be interpreted strictly; it can only apply to IP rights which are required to be registered or deposited and does not apply to infringement actions in which there is no issue as to validity.
- Regulation (EC) No 864/2007 (Rome II), although not applicable to this case as it only came into force on 11 January 2009, nevertheless plainly envisages that actions may be brought in Member States for infringement of foreign IP rights including copyright.
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This decision sets an important authoritative precedent for allowing claims against English domiciled defendants based on infringement of foreign copyrights to be heard in the English courts.
The reasoning of the Supreme Court which led to its decision to hear the US copyright infringement claim relied strongly on the distinction between claims to determine the validity of a right and claims alleging infringement of a right. It furthermore drew a distinction between those rights such as patents which require registration and copyright which does not.
For foreign copyright holders the potential to bring a claim for foreign infringement against an English domiciled infringer in the English courts represents an interesting proposition. The English IP courts have experienced specialist judges well used to handling such cases effectively. Claimants will now be able to consolidate in the English court actions based both on English copyright law and the relevant foreign equivalent against English domiciled defendants, obviating the need to register and enforce a foreign judgment against the English defendant.
The fact that the English civil procedure rules provides for costs shifting, with the losing party normally being ordered to pay a significant part of the winning party’s legal costs, is another factor that could make the prospect of enforcement in England attractive to a foreign copyright owner with a strong case.
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