Monday, 20 June 2011

Dutch court holds Bulgarian decision contrary to public policy

It sounds like it should be none of their business, but, as that Dutch IP oracle Nauta Dutilh (and in particular Prof Charles Gielen, who coincidentally acted for the successful party in this case) explain in an article on their website, it's very much the business of the Dutch court when considering whether the Brussels I Regulation applies. Because the Bulgarian court's judgment was contrary to public policy, it did not have to be recognised by the Dutch court.

For a court to hold a foreign court's judgment to be contrary to public policy is powerful stuff. The case concerned Johnny Walker whisky, placed on the market outside the EEA but confiscated in Bulgaria at the instance of Diageo, the trade mark owner. The Sofia district court, on the basis of an interpretation of the relevant law by the country's Supreme Court, held that the importation into the EEA of goods placed on the market outside the EEA with the trade mark owner's consent did not amount to an infringement. That's a view of the rules about exhaustion which is perhaps more archaic than novel. It's certainly surprising. Equally surprising is that five judges dissented. How many judges does the Bulgarian Supreme Court have, for goodness' sake? A lot, apparently, but I can't find its judgments on the web, although I have learned some useful Bulgarian words (and letters in its version of the Cyrillic alphabet: съд is transliterated as "sud", the vowel being my new letter: the word means "court". The Russian sounds the same but with the phonetically equivalent letter у in the middle).

Because the trade mark registrations were held by Diageo's Dutch subsidiary (not an uncommon situation, for tax reasons) the confiscatee brought proceedings in Amsterdam to recover damages. Diageo contended that the Sofia district court's judgment was contrary to public policy within the meaning of Article 34(1) of the Brussels I Regulation. The Supreme Court had gone against the Silhouette judgment (which also involved parallel imports and Bulgaria, though at that time it was not an EU Member State) and should have made a reference to the Court of Justice under Article 267 of the Treaty. The Supreme Court had violated a fundamental principle of EU constitutional law, so not only the district court's judgment but also the Supreme Court's interpretation on which it was based was contrary to public policy.

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