Praesidiad Holding BVBA & Anor v Zaun Ltd

Factual and Procedural Background

This appeal arises from an order made by Judge Zacaroli on 22 July 2024 striking out the Defendant's counterclaim challenging the validity of a Registered Community Design ("RCD") and its corresponding United Kingdom Re-Registered Design ("UKRRD"). The Defendant had previously unsuccessfully challenged the validity of the RCD before the European Union Intellectual Property Office ("EUIPO") and the General Court of the European Union. The Defendant contends that Brexit legislation permits it to challenge the validity of both the RCD and UKRRD in these proceedings.

The First Claimant is the proprietor of the RCD and UKRRD, and the Second Claimant is its licensee; both are Belgian companies. The Claimants alleged infringement of the RCD in 2018, prompting the Defendant to apply for invalidity at the EUIPO on grounds including technical function and lack of novelty or individual character. The EUIPO initially rejected the invalidity claim, but on appeal, the RCD was declared invalid by the EUIPO Board of Appeal. This decision was overturned by the General Court, with subsequent appeals refused by the Court of Justice of the EU. The case was remitted to the EUIPO Board of Appeal, which dismissed the Defendant’s appeal in June 2023.

Following these developments, the Claimants amended their claim to include alleged infringement of the UKRRD in 2022. The Defendant served a counterclaim in August 2023 alleging invalidity of both the RCD and UKRRD on similar grounds to those previously raised but with different prior designs. The Claimants applied to strike out this counterclaim, which was granted by the judge. The Defendant appeals that decision.

Legal Issues Presented

1. Whether Article 86(5) of the Community Design Regulation ("CD Regulation") constitutes a provision regarding jurisdiction within the meaning of Article 67(1) of the Withdrawal Agreement, thereby precluding the Defendant from bringing the counterclaim challenging the validity of the RCD.
2. Whether the exception in paragraph 9(2) of Schedule 1A to the Registered Designs Act 1949 disapplies Article 86(5) of the CD Regulation in these proceedings.
3. Whether the common law principles of res judicata and abuse of process preclude the Defendant from bringing the counterclaim challenging the validity of the UKRRD.

Arguments of the Parties

Defendant's Arguments

• The effect of Brexit legislation, specifically paragraph 9(2) of Schedule 1A to the 1949 Act, allows the Defendant to challenge the validity of the RCD and UKRRD in these proceedings despite previous EUIPO decisions.
• Article 86(5) of the CD Regulation is not a provision regarding jurisdiction but rather a procedural bar or substantive defence, and thus should not preclude the counterclaim.
• A decision of the EUIPO is not a decision of a court of competent jurisdiction and therefore cannot found a plea of res judicata or abuse of process.
• The common law principles of res judicata and abuse of process do not bar the counterclaim concerning the UKRRD because it is a distinct national right whose validity has not been previously considered by the EUIPO.

Claimants' Arguments

• Article 86(5) of the CD Regulation is a provision regarding jurisdiction and applies to preclude the Defendant from bringing the counterclaim in respect of the RCD.
• Section 7A of the 2020 Act and Article 67(1) of the Withdrawal Agreement override any exception in paragraph 9(2) of Schedule 1A to the 1949 Act that might allow the counterclaim.
• The common law principles of res judicata and abuse of process also preclude the Defendant from bringing the counterclaim concerning both the RCD and UKRRD.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46	Principles of res judicata, issue estoppel, and abuse of process	Guided the court's understanding of preclusion doctrines relevant to repeated challenges of validity.
Dr Reddy's Laboratories (UK) Ltd v Warner-Lambert Co LLC [2023] EWCA Civ 113	Clarification on the terminology of validity and invalidity of registered rights	Supported the distinction between findings of invalidity and findings of "validity" in the context of registered rights.
Sky plc v SkyKick UK Ltd [2024] UKSC 36	Jurisdiction and effect of EU trade mark regulation post-Brexit	Supported the interpretation that provisions similar to Article 86(5) of the CD Regulation continue to apply to pending proceedings, affirming jurisdictional competence.
Henderson v Henderson (1843) 3 Hare 100	Abuse of process principle precluding re-litigation of issues that could have been raised earlier	Applied to bar the Defendant from raising points in the counterclaim that were or should have been raised in prior proceedings.
Simon v Taché [2022] EWHC 1674 (Comm)	Application of Brexit legislation and EU law in pending proceedings	Used to support the proposition that Brexit legislation preserves jurisdiction and applicable law for proceedings pending at the end of the transition period.

Court's Reasoning and Analysis

The court began by examining the legislative framework governing registered Community designs and the effect of Brexit legislation, particularly the European Union (Withdrawal) Acts of 2018 and 2020, the 2019 and 2020 Regulations, and the Withdrawal Agreement. It noted that the Defendant’s counterclaim was brought in "pending proceedings" as defined in Schedule 1A to the 1949 Act, which generally preserves the application of Title IX of the CD Regulation post-Brexit, except for specified exceptions including Article 86(5).

The court analyzed Article 86(5) of the CD Regulation, which prohibits counterclaims for invalidity of a registered Community design if the same subject matter, cause of action, and parties have already been finally determined by the EUIPO. The court held that Article 86(5) is properly characterized as a provision regarding jurisdiction because it limits the competence of Community design courts to entertain successive challenges on the same matter.

It rejected the Defendant’s argument that Article 86(5) is merely procedural or substantive law, emphasizing its placement within Title IX (dealing with jurisdiction and procedure) and its effect as a bar to the making of a counterclaim, not merely a defense. The court also distinguished this from limitation or estoppel principles and noted the need for autonomous interpretation under European law.

The court considered the interplay between paragraph 9(2) of Schedule 1A to the 1949 Act (which excludes Article 86(5) from continuing to apply) and section 7A of the 2020 Act together with Article 67(1) of the Withdrawal Agreement. It concluded that section 7A and Article 67(1) override the exception in paragraph 9(2), thereby preserving the effect of Article 86(5) and precluding the Defendant’s counterclaim on the RCD.

Regarding the UKRRD, the court held that Article 86(5) does not apply because it pertains exclusively to registered Community designs, not national re-registered designs. The UKRRD is a distinct legal right created by the 1949 Act, with different territorial scope but similar substantive conditions for validity. However, the court found that the common law doctrines of res judicata and abuse of process, specifically issue estoppel, preclude the Defendant from relitigating invalidity of the UKRRD on the same grounds as previously determined for the RCD, despite some differences in particulars.

The court rejected the Defendant’s contention that EUIPO decisions are not from courts of competent jurisdiction for res judicata purposes. It also dismissed arguments that the exceptions in paragraph 9(2) reflect policy choices such as "taking back control" or reciprocity with the EUIPO, finding no convincing policy rationale for excluding Article 86(5) from continuing effect.

Holding and Implications

The court DISMISSED the Defendant’s appeal.

The holding confirms that Article 86(5) of the CD Regulation, as preserved by section 7A of the 2020 Act and Article 67(1) of the Withdrawal Agreement, precludes the Defendant from bringing a counterclaim challenging the invalidity of the RCD once the matter has been finally determined by the EUIPO and the General Court. Furthermore, although Article 86(5) does not apply to the UKRRD, the common law doctrines of res judicata and abuse of process preclude the Defendant from relitigating the validity of the UKRRD on substantially the same grounds.

The decision underscores the continuing effect of EU law provisions on pending intellectual property proceedings post-Brexit and clarifies the legal boundaries for challenging registered Community designs and their UK re-registered counterparts. No new precedent was set beyond the application of existing principles and statutory interpretation in the Brexit context. The direct effect is the striking out of the Defendant’s counterclaim and the affirmation of the Claimants’ rights under the RCD and UKRRD registrations.