|August 7, 2013|
Previously published on August 2013
English courts now have a wide power to hear IPR cases with an international dimension, where the Defendant is within the jurisdiction (e.g., because it is a company incorporated here).
In the well-known copyright case, Lucasfilm Limited v Ainsworth  1 AC 208 , the Supreme Court allowed a claim for infringement in the US of US copyright relating to artefacts used in the Star Wars films. It rejected the argument that the English Courts had no jurisdiction to hear such a case because of the “exclusionary rule” established in British South Africa Co. v Companhia de Mocambique  A.C. 602, which had been thought to prevent cases based on invasion of property rights in the jurisdiction of another court.
Lucasfilm decided that this did not apply to a claim for infringement of copyright where the existence of the right was unchallenged but suggested the rule might apply to other IPRs and that English courts might not have jurisdiction to hear cases dealing with matters relating to the existence of IPRs, this being analogous to “title to, or the right to possession” of foreign property. However, comments in the Supreme Court suggested that the exclusionary rule was more restricted, being “principally concerned with a question of the title to, or the right to possession of, that property” which suggested that there may be jurisdiction.
The uncertainty has been largely eliminated by Hamed v Stevens  EWCA Civ 911 (26 July 2013). Hamed concerned a claim for restitution of amounts paid to acquire real estate in Egypt on the basis the sale was not completed. The claim succeeded at first instance. The appeal challenged the English court’s jurisdiction, alleging that the claim of unjust enrichment was in substance a dispute over title to immovable property situated outside of England. Accordingly, the Appellant said, the exclusionary rule operated to deprive the English Court of jurisdiction.
The Court of Appeal reformulated the exclusionary rule, holding that it excluded jurisdiction only where the proceedings directly relate to the issue of title to foreign property and would not apply where an issue of title only arises collaterally. Here, the issue of title only arose as part of the unjust enrichment claim, which would fail if title had passed.
This will mean that the uncertainty about whether the exclusionary rule applied to some forms of IPR disappears: Its application is limited to direct challenges to title, rather than arising because of particular types of right. Claims relating to all types of IPRs may proceed. This will extend to Copyrights, Designs, Trade Marks and Patents; but it should also extend to rights not recognised under English law, such as image rights and format rights.
The fact that subsistence of the rights arises as a subsidiary issue ought to be irrelevant.
The Court will be able to grant both damages and injunctive relief in relation to infringements abroad. This will give holders of international IPR portfolios an important tool to safeguard their investment where infringements occur in jurisdictions whose default judgments might not be enforced in England, and those where infringement actions are cumbersome or expensive. This will only apply where there is a defendant within the personal jurisdiction of the court, but IPR holders should also be aware that this rule could also be applicable in many “British style” offshore centres used as a venue for incorporating a company which undertakes infringing activity.