End of the Spider-in-the-Web

The ECJ ruled that National courts of a contracting state do not have jurisdiction over other group company defendants merely because they belong to the same group acting with a common policy

 
Roche Nederlan BV v. Primus

The ECJ’s decision in Roche Nederlan BV v. Primus (Case C-539/03) has virtually eliminated the so-called “spider in the web” doctrine established in the courts of the Netherlands. Under that doctrine, Dutch courts could grant injunctions against members of a group of companies incorporated in other EU countries, and the injunctions granted need not be limited to the Netherlands or to the states of incorporation of the defendants, if the parent company of the group has its seat in the Netherlands.

The “spider in the web” doctrine grew out of Expandable Graft Partnership v. Boston Scientific BV (case 97/1296) [1999] F.S.R. 352, in which the Court of Appeal of The Hague held that cross-border injunctions should in general be granted only against a defendant domiciled in the Netherlands, but in the case of a group of companies, such relief could be granted if the parent company of the group has its seat in that country. The doctrine is based on Article 6(1) of the Regulation (Article 6(1) of the Convention).

The ECJ was asked to consider whether there is sufficient connection between the defendants for the purposes of Article 6(1) where those companies, which belong to the same group, have acted in an identical or similar manner in accordance with a common policy conceived by one of them. It was held that the derogation from the domicile principle in Article 6(1) is to be construed narrowly. National courts of a contracting state do not have jurisdiction over other group company defendants in such circumstances. The Court noted that there might be some advantages in the consolidation of related actions before one court but that this might encourage forum shopping, which is one of the tactics the Brussels Convention was designed to avoid.

Comment

The ECJ has put the brakes on the forum shopping that has led to the Netherlands being a favoured venue for litigation against group companies operating across Europe. This decision eliminates the one-stop Dutch litigation in the case of groups headquartered or registered in the Netherlands. National Courts of Europe can still grant extra-territorial injunctions against defendants registered or headquarters in their national jurisdictions, but in the case of a patent or other national registered right, following GAT v. LuK (click here), only if validity is not put at issue. Of course, pan-European remedies are still available for infringement of Community Trade Marks and Community Designs, because these are pan-European rights.