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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> The Football Association Premier League Ltd v Luxton  EWCA Civ 1097 (09 November 2016)
Cite as:  EWCA Civ 1097
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
MRS JUSTICE ROSE DBE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE FLOYD
| THE FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITED
|- and -
|ANTHONY WILLIAM LUXTON
Helen Davies QC and Lindsay Lane (instructed by DLA Piper UK LLP) for the Respondent
Hearing date: 11 October 2016
Crown Copyright ©
Lord Justice Floyd:
The Treaty provisions relied on
Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended…
1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void…
The suggested defences
The law on Euro-defences
"Article 101 of the treaty prohibits agreements and concerted practices so far as they have as their object or effect the prevention, restriction or distortion of competition within the internal market. An intellectual property right is not itself an agreement or concerted practice capable of contravening article 101 of the treaty. But there are undoubtedly circumstances in which it may be unenforceable because there is a sufficient nexus between the exercise of the right and the agreement or concerted practice in question. The test, which dates back to the venerable but still authoritative decision of the Court of Justice in Sirena Srl v Eda Srl (Case 40/70)  ECR 69, at para 9, is whether it is "the subject, the means or the result of a restrictive practice": see also Keurkoop BV v Nancy Kean Gifts BV (Case C-144/81)  ECR 2853, at para 27 ("the exercise of that right may be subject to the prohibitions contained in the Treaty when it is the purpose, the means or the result of an agreement … or concerted practice."
"'Euro-defences' of this kind have been deployed by alleged infringers of intellectual property rights for many years, and the English courts have varied in the robustness with which they approach them. The dilemma is that litigation devalues intellectual property rights, by increasing the cost and delay associated with their enforcement. It may also serve to confer on the alleged infringer a temporary immunity or an improvement of his bargaining power in settlement negotiations, to which he will turn out not to be entitled. The effect can often extend beyond the parties or transactions in issue, to many other cases in which similar questions might be raised. These factors mean that defences like the present one must be scrutinised with some care, even if that requires a certain amount of analysis. On the other hand, a defendant must be allowed to go to trial if it has raised a triable issue of fact which is relevant in point of law. For obvious reasons, this is especially important when the case is founded on fundamental principles of the European Union such as the free movement of goods and undistorted competition."
i) The right derived from its trademarks which the claimant was seeking to enforce was its right to control first marketing in the EEA. This was an exercise of rights which did not engage the principle of free movement of goods between member states. It affected only the entry of the goods into the EEA market and was specifically authorised by articles 5 and 7 of the directive which were part of an exhaustive code that fully reflected the free movement requirements of the TFEU: see .
ii) What produced the impediment to the free movement of goods was not the enforcement of the claimant's right to control the first marketing of its products in the EEA. The act of a trademark proprietor in seeking to control the first marketing of his products in the EEA was in principle an ordinary exercise of the essential right conferred on him by articles 5 and 7 of the directive. The claimant could not be prevented from doing something which is in itself entirely lawful and consistent with the principle of the free movement of goods, simply because it proposed to do something else as well which was unlawful and inconsistent with that principle: paragraph .
iii) It did not advance the argument to say that the policy of withholding information about provenance is effective only because it is combined with a policy of "vigorously" enforcing trade mark rights. EU law expressly forbids the defendants from importing goods not previously marketed within the EEA. It cannot therefore follow that because Sun enforces its trade mark rights "vigorously" it should have no trade mark right to enforce: ibid.
iv) It also did not advance the argument to refer to the enforcement of Sun's trade mark rights as part of a "scheme" to eliminate the independent resellers from the secondary market. This is simply a pejorative way of making the same unsustainable point: ibid.
v) Even if the case law concerning Article 7 of the Directive had any application it would not assist. That is because that case law only went as far as establishing that a proprietor could not claim a right under the Directive to oppose further commercialisation if the exercise of that right would itself unjustifiably impede the free movement of goods. The case law did not go as far as to say that rights which had no impact on trade between member states became non-existent or unenforceable because the exercise of those rights is accompanied by other acts which do: paragraph .
vi) The argument that Article 5 was limited in the way suggested by the defendants was an extreme one because it provided a defence to traders even if they are knowingly importing the claimant's goods without their consent, or those who were industrial counterfeiters: paragraph .
i) There was no relevant connection between the policy of withholding information about provenance and the prevention, restriction and distortion of competition by means of the distribution agreements: see paragraph .
ii) There was also no relevant connection between the policy of withholding information about provenance and the enforcement of the claimant's right to control the first marketing of its trademark products in the EEA: ibid.
iii) More generally neither the trademark rights nor the rights conferred on their proprietor by the directive can be characterised as the subject the means or the result of an agreement or concerted practice contravening article 101 TFEU: ibid.
The judgment of Rose J
The parties' submissions
"I do not regard it as clear that a breach of Art. 81 can only constitute a claim, not a defence, in any circumstances. It seems to me well arguable that to be able to prove that a relevant agreement is in breach of Art. 81 would give a defendant a stronger basis for saying that the claimant does not have legitimate reasons under s. 12(2). I do not decide that the defendant's position on either of these points is necessarily right as a matter of law, even if the necessary facts can be established. But it does seem to me that the points are sufficiently arguable for it to be wrong to strike these paragraphs out of the Defence."
Lord Justice Tomlinson: