THE ‘EXCEPTIO PLURIUM LITIS CONSORTIUM’ JURISDICTION REPORT: NETHERLANDS
Michiel Rijsdijk Arnold + Siedsma
When several parties have joined in a case against another and won it, that can create problems for the losing party if it tries to appeal against the judgment on the merits. In the Netherlands, it is important to pay attention to the legal relationship of the parties involved in the proceedings on the merits.
Summoning only one party runs the risk of the counterparty putting forward the ‘exceptio plurium litis consortium’. Tis defence says that a claim cannot be accepted when the claimant brings the action on its own instead of together with one or more other parties. More importantly in this context, it prohibits claims against a single defendant instead of against several, on the grounds that the legal relationship between the parties is indivisible. If the court accepts this defence, it must declare the case inadmissible.
Te Dutch Supreme Court upheld this defence in its decision of July 9, 2010. Te case concerned the Dutch company Engineering Design Documentation Services, the US parent company Electronic Data Systems Corp and its subsidiary Electronic Data Systems International (Electronic Data). Engineering Design Documentation Services was established in 1977 and was active under the trade name ‘EDS’ in delivering information and, more recently, computer services. Electronic Data Systems Corp has been active since 1962 in the US in computer services under the trade name EDS. It established Electronic Data, a Dutch subsidiary, in 1979. In 1988, Electronic Data Systems Corp filed the Benelux trademark EDS, for which Electronic Data received a licence. In 1994, Engineering Design Documentation Services also filed a Benelux trademark EDS, for the same services.
A dispute arose about the trademarks and the trade name EDS. Electronic Data Systems et al requested nullification of Engineering Design Documentation Services’ EDS trademark. Engineering Design Documentation Services filed a counterclaim seeking nullification of the other EDS trademarks. Te court allowed the claims of Electronic Data Systems et al and rejected the counterclaims. Engineering Design Documentation Services decided to appeal against the decision but only served its writ to Electronic Data Systems Corp. Tis meant that the initial decision in favour of Electronic Data became final.
During the appeal, Electronic Data Systems Corp put forward the defence that Engineering Design Documentation Services had no interest in its appeal, as well as the exceptio plurium litis consortium defence. Tese defences were put forward as the question in this case was which party was entitled to carry the trademark and trade name EDS. Te relationship between the parties made it legally necessary that the answer to this question was uniform for all parties, all the more since Electronic Data
“ IN THE NETHERLANDS, IT IS IMPORTANT TO PAY ATTENTION TO THE LEGAL RELATIONSHIP OF THE PARTIES INVOLVED IN THE PROCEEDINGS ON THE MERITS.”
Systems Corp is the parent company of Electronic Data and the judgment in favour of Electronic Data was final. Tis meant that Engineering Design Documentation Services could not continue the proceedings against just one of the Electronic Data Systems parties. Te Court of Appeal accepted this defence and found that Engineering Design Documentation Services had no interest in appeal.
Te Dutch company then appealed to the Supreme Court. Te Supreme Court stated that although it would have been possible for Engineering Design Documentation Services to have held proceedings on the merits with Electronic Data Systems Corp alone, the fact that did not and that the proceedings on the merits were held between three parties whose legal relationship became indivisible through the initial decision, made an appeal between only Engineering Design Documentation Services and Electronic Data Systems Corp inadmissible. Te Supreme Court agreed with the appeal court that because the proceedings on the merits were held between all the parties, and the lower court’s decision applied to all of them, the part of the decision dealing with the legal relationship between Electronic Data and Engineering Design Documentation Services had effectively not been appealed, and therefore had become final. Tis meant that an outcome on appeal in favour of Engineering Design Documentation Services would be incompatible with the final decision between Engineering Design Documentation Services and Electronic Data. Terefore the exceptio plurium litis consortium defence was justified.
Tis decision underlines the importance of an assessment of the legal relationship between parties before starting an appeal procedure. Ideally, this would be assessed when starting a procedure on the merits.
Michiel Rijsdijk is a partner at Arnold + Siedsma. He can be contacted at:
mrijsdijk@arnold-siedsma.com
88 World Intellectual Property Review September/October 2010
www.worldipreview.com
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