A variety of issues were canvassed in Lucasfilm Ltd v. Ainsworth [2009] EWCA Civ 1328 but this note only deals with those of jurisdiction. Was the alleged infringement of US copyright in Star Wars action figures justiciable in England? If so, was there any discretion to refuse to hear the case following Owusu v. Jackson (C-281/02 [2005] ECR-I 1383)? The defendant had acted from England but had advertised the figures via a website and sold them to buyers resident in the US.
Jacob L.J. postulated an extremely narrow view of the justiciability of foreign intellectual property actions. He followed the immovable property cases (e.g. British South Africa v. Companhia de Moçambique [1893] A.C. 602) to hold that these US copyright infringements were not justiciable in the English court, despite that court's personal jurisdiction over the defendant. He regarded intellectual property of all kinds as essentially local and difficult to decide by another court. However, other than the validity of a patent, intellectual property is not so closely analogous to immovable property. Patents are registered rights and the validity question might raise issues of purely local sovereignty, for example, the accuracy of public registers. Under the Brussels 1 Regulation this is reflected in Article 22. However, matters of infringement or alienation of the patent and the validity, infringement and alienation of unregistered intellectual property (such as copyright, in issue here) are all outwith Article 22. These cases may raise difficult questions of the foreign law and special issues of peculiarly foreign policy for an English court to determine. Nevertheless, they must be adjudicated in England even though the intellectual property is protected by another Member State's law (Pearce v. Ove Arup Partnership Ltd [2000] Ch. 403). Under the traditional rules of jurisdiction forum conveniens might resolve those difficulties. The case is justiciable here but is better decided in the place where the intellectual property is protected and where it is infringed so English proceedings should be stayed. Jacob L.J. disliked this solution, doubting that forum conveniens could resolve all the possible problems of overlapping jurisdiction leading to inconsistent judgments, at [185].
Jacob L.J. was at his most trenchant in dismissing the claimant's arguments that the case must be heard in England if he was wrong on justiciability. There was no doubt that the defendant was subject to the personal jurisdiction of the English court as he was domiciled here and had been served here. The claimant argued (a) the court had jurisdiction under Article 2 of the Brussels 1 Regulation which it could not decline (Owusu); (b) that Pearce v. Ove Arup gave the court subject-matter jurisdiction over the infringement; (c) that even if jurisdiction was not compelled by the earlier arguments, the court had discretionary jurisdiction and should exercise it as England was the forum conveniens. Jacob L.J. disagreed on all points. He drew a distinction (well-known in the USA but not so far greatly used in England) between personal and subject-matter jurisdiction. He concluded that the English court's personal jurisdiction under Article 2 did not confer subject-matter jurisdiction for infringement of a foreign copyright. By this he presumably meant that this subject-matter jurisdiction is an exclusive jurisdiction based upon the foreign court's territorial protection of its intellectual property. That is consistent with his view of the justiciability of intellectual property matters. An alternative idea of subject-matter jurisdiction is more flexible, non-exclusive and usually additional or alternative to personal jurisdiction. A court has jurisdiction over the subject-matter where no personal jurisdiction exists, for example a tort which has a close connection with that territory (Article 5(3) Brussels 1 Regulation). Personal jurisdiction, on the other hand, is usually extremely wide-ranging, covering all types of disputes. Jacob L.J. denied that the Brussels 1 Regulation could have conferred jurisdiction over infringements of foreign copyrights which had no intra-Member State effect. He found nothing in the Treaty on the Function of the EU requiring such an interpretation and viewed such extraterritorial jurisdiction as somehow improper under international law. The ECJ would undoubtedly take a different view. In the Lugano Opinion it expressly decided that the Brussels 1 Regulation covers not merely intra-community disputes but also those with an international element involving relations between a Member State and a third country (C-1/03 [2006] ECR I-1145 at [143]–[144]). The jurisdiction conferred by the Brussels 1 Regulation is accessible to claimants from outside the EU (Group Josi C-412/98 [2000] ECR I-5925). The domicile of the defendant within a Member State is all that is necessary in most cases to trigger the rules of the Brussels 1 Regulation and a court can only decline jurisdiction consistently with the provisions of the Regulation (Owusu).
Jacob L.J. decided that his own view was so correct (acte clair) it did not need a reference to the ECJ. This is a shame. A reference of this case would greatly illuminate the limits of Owusu. Sadly, he does not appear to have been referred to Fentiman's useful critique of intellectual property issues and Owusu which precisely laid out the opposing arguments (in Nuyts ed., International Litigation in Intellectual Property and Information Technology, Kluwer 2008). Owusu taken literally (as Jacob L.J. found impossible) would require cases even concerning the ownership of foreign patents to be decided in England if the defendant was domiciled here. Owusu could be read less strictly so that matters of such importance as fall within Article 22 could not be heard in England but referred to the non-Member State's court. A more subtle interpretation of Owusu might permit the English court to use forum conveniens to stay proceedings where the technique reflects provisions of the Regulation. These might be either limited to the exact reflection of the provisions (so, for example, only where the lis pendens was between the same parties, on the same cause of action and started before the English proceedings) or more broadly the full spectrum of forum conveniens. Questions regarding the scope of Owusu have been asked and answered by the English courts and Jacob L.J. is not alone in finding the strictures of the Brussels 1 Regulation uncomfortable. In Choudhary v. Bhatter [2009] EWCA Civ 1176 the Court of Appeal made an elementary error in deciding that the court had no jurisdiction over a defendant domiciled in India in a case involving the decisions of the board of an English company, despite Article 22 giving exclusive jurisdiction over the matter to the English court. No doubt the court was concerned at the lack of connection between the dispute and England but that is no excuse. There are intelligent arguments to consider on both sides. The first instance decisions of Skype Technologies SA v. Joltid Ltd [2009] EWHC 2783 (Ch), Catalyst v. Lewinsohn [2009] EWHC 1964 (Ch) and Equitas Limited v. Allstate Insurance Company [2008] EWHC 1671 (Comm) all decided that Owusu is binding so that the English court cannot stay proceedings in favour of a non-Member State. These carefully argued judgments conform much better to the structure and logic of the Regulation. If they are right, then Lucasfilm must be overturned.
