IP is a valuable asset of many businesses and exists in various forms such as brand names, product designs, art, manufacturing processes and confidential information. By protecting IP, the owner can take legal action if someone has used it without their permission (IP infringement).
If a case is brought to court, the court which the party has chosen to raise proceedings in must have “jurisdiction” to hear and decide the case. In determining which court has jurisdiction, there are a number of relevant considerations including (but not limited to) whether the parties agreed on the court to be used in the event of a dispute, the domicile of the defender and the subject matter of the dispute. It should be noted that more than one court can have jurisdiction.
In cases of IP infringement, proceedings can be raised in Scotland if the infringer’s registered office is in Scotland, the infringer has a place of business in Scotland or the infringing activity is taking place or is threatened to take place in Scotland.
The recent case of University Court of the University of St Andrews v Student Gowns Ltd [2019] centred around the subject matter of Scottish jurisdiction in IP infringement cases.
The case
The University raised IP infringement proceedings at the Court of Session in Scotland against a student gowns supplier. The University’s position was that the supplier marketed a version of the University’s undergraduate gown for sale and used the University’s protected signs (such as “University of St Andrews”) when selling the gowns.
The University also averred that the gown supplier came to the University where it sold gowns to students stating they were made to University specifications. The University claimed that the gowns were of “inferior quality” and that the alleged IP infringements of using protected signs and passing off gowns as those of the University damaged their trade mark.
The jurisdiction question
The supplier is a company incorporated in England and Wales with its registered office in London. It denied IP infringement and claimed that the Court of Session did not have jurisdiction to hear the case, because:
- some of the gowns sold via the its website were sold to customers with addresses outside Scotland; and
- St Andrews’ gowns tend to be purchased by students after their place has been confirmed but before they start university and that as a minority of undergraduates are from Scotland their website was “not specifically marketed, aimed or directed at customers in Scotland”.
The supplier also submitted that even if the Scottish court had jurisdiction, it ought to decline to exercise it on the ground of forum non conveniens – i.e. the court should dismiss a case where another court, or forum, is more appropriate and better suited to hear the case. It was the supplier’s position that England was the more appropriate forum - the supplier was domiciled there and the alleged harmful online activity occurred in England.
The University argued that they had the option to sue in the place of the defender’s domicile or the place where the damage occurred, and that Scotland was “the place where the harmful event occurred or may occur”. They advised that in fact around 31% of the University’s undergraduate students are from Scotland and that most undergraduates do not buy their gowns until they have started their studies. Although some potential gown customers are outside Scotland, the fact was that the supplier’s activities were directed towards customers in Scotland.
The jurisdiction decision
Ultimately, the Court ruled that the plea of no jurisdiction was “not well founded” and that Scotland was the “more appropriate forum”. The goodwill subsisted in Scotland and it is protected by Scots law.
For the infringement of the trade mark element, the place of damage is the place where the trade mark was registered. The trademark was registered in the UK therefore each of the UK jurisdictions was a relevant place of damage. Accordingly, Scottish jurisdiction could be founded on.
Regarding the Forum non conveniens point, the Court reasoned that the subject matter of the action had a very real and substantial connection with Scotland because it involved a Scottish university complaining that its IP had been infringed, and that its goodwill was being damaged. The supplier was carrying on business in Scotland even although they did not have a place of business there. Some of the purported acts had taken place in St Andrews and the online advertising, whilst being managed from London, was to a great extent directed to a target market of undergraduates in Scotland.
As a result of this judgment, the University will now be able to continue to pursue this legal action in Scotland.
The benefits of enforcing IP rights in Scotland
This recent Scottish case shows the success of a party in arguing that the Scottish courts had jurisdiction. But what are the benefits of raising an IP dispute in Scotland?
- If the IP infringer has its registered office in Scotland, a Scottish court order (such as interdict and interim interdict or payment of damages) has automatic effect in Scotland. However, using the same scenario but replacing it with an English court order, the order will not be automatically enforceable in Scotland and will therefore not stop infringing activities in Scotland without further action being taken.
- In England, practitioners are encouraged to comply with a pre-action protocol before they raise court proceedings. The lack of pre-action protocol in Scotland means there is no requirement for Scottish practitioners to set out their case in advance of proceedings being raised and therefore a Scottish court action can be quicker.
- The Court of Session offers specialist IP procedures and IP judges to parties, giving them a tailored procedure to progress the case and judges with a great deal of experience covering the range of IP disputes.
Businesses should be aware of the advantages of enforcing their IP rights in Scotland if they can establish jurisdiction here.
Businesses in England (who trade throughout the UK) should also be alert to the risk of being sued in Scotland for IP infringement. If there is any risk of this Scottish solicitors should be urgently instructed to lodge caveats.
