1. 

European trade marks need effective protection throughout the European Union. ( 2 )

2. 

This can best be achieved by enabling courts to issue relief of a pan-European nature, covering trade mark infringements that occur not only in the forum Member State but also in any of the EU Member States. ( 3 ) The EU legislature has provided for comprehensive relief of this kind, ( 4 ) but grants the required extended jurisdiction ( 5 ) exclusively to a court which can base its international jurisdiction on Article 97(1) to (4) of the Community trade mark regulation ( 6 ) (‘CTMR’). This supersedes the more general jurisdictional rules of the CTMR and those of the ‘Brussels I’ ( 7 ) Regulation. ( 8 )

3. 

The Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany), acting in its capacity as a Community trade mark court, queries whether it has comprehensive jurisdiction of this kind for an infringement claim brought by a Danish company against a US defendant. According to Article 97(1) CTMR, courts have international jurisdiction if a defendant, who is not domiciled in the EU, has an establishment in the forum Member State. As the US defendant has a second-tier subsidiary in Germany, the question arises whether that entity is an ‘establishment’ for the purposes of Article 97(1) CTMR.

4.

Recital 16 states:

‘Decisions regarding the validity and infringement of Community trade marks must have effect and cover the entire area of the Community, as this is the only way of preventing inconsistent decisions on the part of the courts and the Office and of ensuring that the unitary character of Community trade marks is not undermined. The provisions of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters should apply to all actions at law relating to Community trade marks, save where this Regulation derogates from those rules.’

5.

Article 97 is entitled ‘International jurisdiction’ and provides in subsections 1 and 2:

‘1.   Subject to the provisions of this Regulation as well as to any provisions of Regulation (EC) No 44/2001 applicable by virtue of Article 94, proceedings in respect of the actions and claims referred to in Article 96 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.

2.   If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.’

6.

Article 98 is entitled ‘Extent of jurisdiction’; its subsection 1 reads:

   ‘A Community trade mark court whose jurisdiction is based on Article 97(1) to (4) shall have jurisdiction in respect of:

7.

Recitals 11 and 12 state:

8.

Section 1, entitled ‘General provisions’, of Chapter II, entitled ‘Jurisdiction’, comprises Articles 2 to 4, which provide in their respective first paragraphs:

‘Article 2

1.   Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.’

‘Article 4

1.   If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Articles 22 and 23, be determined by the law of that Member State.’

9.

Hummel Holdings A/S, the plaintiff in the main proceedings, is a producer of sports goods and sports and recreational clothing and has its seat in Denmark. Hummel has instituted proceedings in Germany at the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) against two defendants in the Nike group for selling items of sports clothing allegedly in breach of its international figurative trade mark No 943057, which has also been registered to take effect in the European Union for goods in class 25.

10.

The first defendant, Nike Inc., is the ultimate holding company of the Nike Group and has its seat in the United States of America.

11.

The second defendant Nike Retail BV belongs to that group and is domiciled in the Netherlands. Nike Retail operates the website www.nike.com/de, on which NIKE goods are advertised and offered in English and German for sale in Germany as well as other countries.

12.

Most of the infringements of the plaintiff’s trade mark are alleged to have taken place in Germany. In Germany goods can be ordered online via Nike Retail’s website or through independent dealers that are not part of the Nike Group and that themselves order those goods from Nike Retail. In addition to this, pre-sale and post-sale services are provided by Nike Deutschland GmbH. This company does not sell NIKE goods but supports customers by telephone or email when they are ordering them, and also acts as an agent of Nike Retail for contracts concluded with dealers. With regard to post-sale services, Nike Deutschland deals with questions on exchanges or complaints, and supports dealers in advertising and the performance of those contracts.

13.

Nike Deutschland has its seat in Frankfurt am Main and is not a party to the main proceedings. It is however a second-tier subsidiary of the first defendant Nike Inc, and its presence in Germany is central to the plaintiff’s case on the jurisdiction of the German courts.

14.

Before the Landgericht Düsseldorf (Regional Court, Düsseldorf), the plaintiff requested (I) an injunction prohibiting the import, export, advertising, offering for sale and placing on the market of the goods concerned or allowing those goods to be placed on the market, and (II) orders to disclose, inter alia, copies of invoices, and to withdraw from circulation and destroy the goods concerned, and finally (III) a declaration of a right to damages.

15.

As to the first defendant, the plaintiff sought these injunctions and orders (1) with regard to the territory of the European Union, and in the alternative, (2) with regard to the territory of the Federal Republic of Germany. As to the second defendant, the cause of action appertained only to the territory of the Federal Republic of Germany. The order for reference concerns only the first claim for relief.

16.

The Landgericht Düsseldorf (Regional Court, Düsseldorf), on the basis that Nike Deutschland was to be considered an establishment of the first defendant, thereby creating a link between the US defendant and Germany, affirmed that it had international jurisdiction, and with respect to the territory of the whole of the European Union. However, it dismissed the suit on the facts. On appeal by the plaintiff to the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf), the defendants continue to contend that the German courts do not have international jurisdiction with respect to the first form of relief being sought.

17.

It is in that context that the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) referred the following question for a preliminary ruling:

‘Under which circumstances is a legally distinct second-tier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the European Union to be considered as an “establishment” of that undertaking within the meaning of Article 97(1) of Regulation No 207/2009 ?’

18.

Written observations were submitted to the Court by the plaintiff and both defendants, by the Italian Government and by the European Commission. All except the Italian Government made oral submissions in the hearing which took place on 6 October 2016.

19.

At the outset, it is important to note that, under the CTMR, only ‘Community trade mark courts’, which are specifically selected national courts vested with this function, ( 9 ) can decide on infringement actions. ( 10 ) The Landgericht Düsseldorf (Regional Court, Düsseldorf) and Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) have been designated as such by the German Government. ( 11 )

20.

However, not all Community trade mark courts can grant the Union-wide relief ( 12 ) claimed by the plaintiff in this case.

21.

Whether or not a particular Community trade mark court has this comprehensive power depends on whether it can base its international jurisdiction on Article 97(1) to (4) CTMR. ( 13 ) Only then ‘shall’ a Community trade mark court ‘have jurisdiction in respect of acts of infringement committed or threatened within the territory of any of the Member States’. ( 14 )

22.

Therefore, while the plaintiff’s allegation that infringements took place in Germany constitute a jurisdictional basis for a Community trade mark infringement suit in Germany under Article 97(5) CTMR, ( 15 ) this provision can only serve as a basis for jurisdiction in respect of acts of infringement committed or threatened within the territory of this forum Member State. ( 16 ) It is not a sufficient basis for granting the relief requested by the plaintiff, the effects of which extend beyond German territory. For this, jurisdiction must be based on Article 97(1) to (4) CTMR. ( 17 )

23.

As already mentioned, Article 97(1) CTMR provides such a basis of international jurisdiction if the third State defendant has an establishment in the forum Member State. ( 18 ) Therefore, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) seeks clarification of the conditions under which Nike Deutschland, with its seat in Germany, can be characterised as an establishment of Nike Inc.

24.

Article 97(1) CTMR provides that infringement proceedings in Community trade mark matters ‘shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment’.

25.

The first issue to address is whether the term ‘establishment’ has, as the Commission mentioned in the oral hearing, an autonomous EU-wide meaning, or whether this is to be left to the national court to determine on the basis of its domestic law. ( 19 )

26.

The latter might be suggested by the fact that the term ‘domicile’, under Article 59 of Brussels I ( 20 ) is to be determined in accordance with the domestic law of the Member State where the matter is brought before a court. Equally, however, Article 60 of Brussels I provides an autonomous definition of domicile for companies and associations. ( 21 )

27.

As a general rule, provisions of EU law are to be interpreted autonomously. ( 22 ) Further, an EU-wide meaning of ‘establishment’ is consistent with the aim of Article 97(1) to (4) CTMR to create a uniform basis for the comprehensive EU-wide jurisdiction. Therefore the approach taken in this Opinion is that an autonomous interpretation must be provided by the Court. ( 23 )

28.

While some statutory definitions have been included in the CTMR, ( 24 ) the legislature has not furnished one for the term ‘establishment’.

29.

In addition to this, the Court, to date, has not yet had the opportunity ( 25 ) to give an interpretation of Article 97(1) CTMR nor of the term ‘establishment’ as used in other provisions of the CTMR. ( 26 )

30.

In the absence of guidance in the legislative material, ( 27 ) the term ‘establishment’ under Article 97(1) CTMR necessarily has to be determined by recourse to sources going beyond the CTMR.

31.

Prima facie the Insolvency Regulation ( 28 ) would seem to be a good source of this kind. In its Article 2(h) it provides for a statutory definition ( 29 ) of the term ‘establishment’, for, inter alia, the context of international jurisdiction.

32.

However, in the present context this definition can neither be applied directly nor used by way of analogy. It is expressly given ‘for the purposes of this Regulation’ only. The purpose of attaching to establishment in the Insolvency Regulation is quite different from the context of Article 97 CTMR: Establishment based jurisdiction under the Insolvency Regulation is only operative in the context of secondary proceedings which are not based on the main centre of interest of the debtor; further, the rulings handed down in such proceedings are of limited effect. ( 30 ) In contrast, Article 97 CTMR attaches to establishment to the end of identifying a central jurisdiction in order to issue judgments with an extended effect.

33.

A natural source for guidance in interpreting a jurisdictional provision of the CTMR is, however, Brussels I, as this legal instrument lays down the general rules on jurisdiction in civil and commercial matters. Brussels I applies to proceedings relating to Community trade marks, unless otherwise specified in the CTMR. ( 31 ) With its predecessor instrument (the Brussels Convention) dating back to 1968, Brussels I provides a longstanding conceptual framework, and one which also underpins more recent jurisdictional rules to be found in special regulations such as the CTMR.

34.

Brussels I in its general provisions supplies some statutory definitions, ( 32 ) but it does not define the term ‘establishment’.

35.

However, Brussels I uses the term ‘establishment’ as a connecting factor for international jurisdiction under Articles 5(5) and 18.

36.

The Italian Government has pointed out in its written observations, that the Italian version of the term ‘establishment’ as used in Brussels I (‘sede d’attività’) is not identical to the one used in Article 97 CTMR (‘stabile organizzazione’). However, in light of the close connection between the two legal instruments, which is established by the express reference to Brussels I in recital 16 and Articles 97 and 94 CTMR, the linguistic divergence in one language version does not prevent the Court from resorting to Brussels I, which is the classical legal instrument on international jurisdiction.

37.

As the participants in the preliminary ruling proceeding as well as the requesting court have pointed out, a robust body of case-law with respect to the meaning of ‘establishment’ exists under Brussels I.

38.

The first norm to be interpreted by the Court in this regard was Article 5(5) of Brussels I, ( 33 ) according to which ‘special jurisdiction’ ( 34 ) lies ‘as regards a dispute arising out of operations of a branch, agency or other establishment in the courts for the place in which the branch, agency or other establishment is situated’.

39.

The Court gave an interpretation of these notions for the first time in 1976 in its judgment in De Bloos, in which it stated that ‘one of the essential characteristics of the concepts of branch or agency is the fact of being subject to the direction and control of the parent body’ and that the notion of establishment is ‘based on the same essential characteristics as a branch or agency’. ( 35 )

40.

In its judgment in Somafer, the Court held that ‘having regard to the fact that the concepts referred to give the right to derogate from the principle of jurisdiction of Article 2 of the Convention, their interpretation must show without difficulty the special link justifying such derogation’. ( 36 ) It added that ‘such special link comprises in the first place the material signs enabling the existence of the branch, agency or other establishment to be easily recognised and in the second place the connection that there is between the local entity and the claim directed against the parent body’.

41.

With regard to the first issue, the Court stated that ‘the concept of branch, agency or other establishment implies a place of business which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension’.

42.

As regards the second issue, the Court ruled that ‘the claim in the action must concern the operations of the branch, agency or other establishment’ and that ‘this concept of operations comprises on the one hand actions relating to rights and contractual or non-contractual obligations concerning the management properly so-called of the agency, branch or other establishment itself such as those concerning the situation of the building where such entity is established or the local engagement of staff to work there’. ( 37 )

43.

Finally, in Blanckaert & Willems and SAR Schotte, the Court held that a branch, agency or establishment ‘must appear to third parties as an easily discernible extension of the parent body’ ( 38 ) and that ‘the close connection between the dispute and the court called upon to hear it must be assessed ... also by reference to the way in which these two undertakings behave in their business relations and present themselves vis-à-vis third parties in their commercial dealings’. ( 39 )

44.

In a more recent decision the Court had to give an interpretation of the same notions in the context of Article 18 of Brussels I, which provides in paragraph 2 that ‘where an employee enters into an individual contract of employment with an employer who is not domiciled in a Member State but has a branch, agency or other establishment in one of the Member States, the employer shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State’.

45.

In Mahamdia, the Court, on the basis of an analysis of the abovementioned precedents concerning Article 5(5) of Brussels I, identified two criteria as decisive for the creation of a sufficient link to the forum Member State. The Court held that ‘first, the concept of “branch”, “agency” or “other establishment” implies a centre of operations which has the appearance of permanency, such as the extension of a parent body. It must have a management and be materially equipped to negotiate business with third parties, so that they do not have to deal directly with the parent body … Secondly, the dispute must concern acts relating to the management of those entities or commitments entered into by them on behalf of the parent body, if those commitments are to be performed in the State in which the entities are situated’. ( 40 )

46.

The Mahamdia case concerned an employment lawsuit filed by a driver employed by an embassy of the People’s Democratic Republic of Algeria against that State. In that context, the Court stated that ‘an embassy may be equated with a centre of operations which has the appearance of permanency and contributes to the identification and representation of the State from which it emanates’. ( 41 )

47.

The Court thereby added a particular aspect to the link between the ‘parent body’ and the establishment, namely identification and representation. This corresponds to the different functions that Article 18(2) of Brussels I assumes, as compared with Article 5(5) of Brussels I: Article 18(2) concerns the special situation in which a defendant lacks EU domicile and, by then attaching to its establishment, treats that establishment as a surrogate for the lack of domicile by saying that the defendant ‘shall … be deemed to be domiciled in that Member State’. If it is to be a surrogate, identification is the central element.

48.

Both, Articles 5(5) and 18(2) of Brussels I allow the plaintiff to sue a defendant at a place which is not his domicile, but at which he has an establishment.

49.

Nevertheless, both of these provisions require, beyond the mere existence of an establishment, that the dispute arose ‘out of the operations of that establishment’. Thus, under these norms, the establishment by itself is not sufficient to constitute the link to the forum State, but an additional element is needed. The second of the two criteria, which have been developed in the Brussels I case-law described above, refers exclusively to that additional element.

50.

However, the text of Article 97(1) CTMR does not contain this second element, but rather contents itself with giving jurisdiction to the Member State in which the defendant has an establishment. Therefore, the second criterion of the Court’s two-pronged test as to Articles 5 and 18 of Brussels I can be ignored in the present context.

4.

‘Establishment’ under Article 97(1) CTMR

51.

The first criterion, thus being the only one relevant to my analysis, contains two elements that point to characteristics that are independent of the particular action in which the attachment to the establishment takes place. They shed light on the essence of the notion of establishment itself. These characteristics are (a) a centre of operations, which has the (b) appearance of permanency, such as the extension of a parent body.

52.

As to the ‘centre of operations’ being the first characteristic, the Court has further explained that the establishment must have a management and be materially equipped to negotiate business with third parties, so that they do not have to deal directly with the parent body. ( 42 ) Abstracting from the particular given context of contracts, one may infer that some operational activity is required and a certain real and stable presence as manifested by personnel and material equipment on site is necessary. Certainly, a minimum level of organisation and a degree of stability is required; the presence of goods and bank accounts alone is not sufficient to constitute an ‘establishment’. ( 43 ) Moreover the Brussels I case-law clearly requires management at local level.

53.

The element of real and operative presence is evidently fulfilled in this case, where Nike Deutschland is a local company actually performing pre-sale and post-sale services for Nike customers in Germany. Nike Deutschland is a legally independent GmbH; so the element of local management is satisfied.

54.

What, however, the defendants challenge in the present case, is whether there is indeed a sufficient link between Nike Deutschland and the first defendant. According to the case-law of the Court, that link is established by an ‘appearance of permanency, such as the extension of a parent body’. ( 44 ) This suggests a certain degree of dependence and obedience on the part of the establishment.

55.

The defendants make two objections in this context.

56.

First, the defendants suggest that, for formal reasons, Nike Deutschland cannot be an establishment of another firm as it is a legally independent company and, in the context of civil procedure, a formal approach needs to be taken.

57.

However, as has been seen above, there is settled case-law ( 45 ) to the effect that a legally independent entity can qualify as an establishment. In the case SAR Schotte, ( 46 ) the establishment concerned was also incorporated as a German GmbH.

58.

The requesting court in this context refers to Advocate General Mengozzi’s opinion in Mahamdia, ( 47 ) where he stated that it was common ground that the notions of ‘branch’, ‘agency’ and ‘establishment’ essentially refer to entities lacking legal personality. This statement was however an obiter dictum, because the Mahamdia case concerned an embassy with no separate legal personality. The same is true for Opinion 1/03 of the Court, ( 48 ) cited by Advocate General Mengozzi. The Opinion of the Court also did not discuss legal independence but rather added the attribute ‘lacking legal personality’colorandi causa in the context of rules on ‘branches, agencies or other establishments’ in general. Whether or not an entity having legal personality could qualify as an establishment of another undertaking was not at issue there.

59.

On the other hand, looking for definitions in other contexts, one can find authority, clearly saying that ‘the legal form of an establishment, whether simply branch or a subsidiary with a legal personality, is not the determining factor’. ( 49 )

60.

Therefore, in the present context, there is no reason to deviate from the longstanding pertinent case-law cited above.

61.

Also, the formal approach generally taken in civil procedure to which the defendants refer does not preclude the economic perspective adopted here as to whether a defendant has an establishment in a State or not. The establishment is not a party to the proceeding but merely serves as a link between the defendant and a certain territory. The argument that the establishment itself could not be bound by the judgment against its parent is irrelevant for the question of whether the place of a certain subsidiary can establish a connection between the defendant and a certain State and its courts. ( 50 ) Instead, what is decisive, is whether the subsidiary can be regarded as a base of the defendant company from which the latter can defend its interests.

62.

Secondly, Nike Deutschland does not have the same directors as the first defendant. ( 51 ) The defendants therefore argue that any control Nike Inc. has over Nike Deutschland may be weak and not immediately transparent to third parties. This argument goes to the question of how far the ‘direction and control of the parent body’ ( 52 ) must extend and how that can be ascertained, a question that needs to be considered against the background of the great importance of predictability ( 53 ) in jurisdictional questions.

63.

Going back to the settled case-law, however, it becomes clear that actual direction and control is not at issue, but rather the perception of third parties ( 54 ) in the State where the establishment is situated. They must have the impression that the entity belongs to the parent, namely that, ‘although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, [they] do not have to deal directly with such parent body but may transact business at the place of business constituting the extension’. ( 55 ) The assessment must take place also ‘by reference to the way in which these two undertakings behave in their business relations and present themselves vis-à-vis third parties in their commercial dealings’. ( 56 ) Although a merely symbolic presence is not enough, what is decisive is that it ‘contributes to the identification and representation of the’ parent ‘from which it emanates’. ( 57 )

64.

In the present case, Nike Deutschland is presented as the German contact to be used concerning NIKE products ( 58 ) and it forms, by providing pre-sale and post-sale services, a relevant part of the sales organisation firmly embedded in the group’s operational structure. Even though it does not act as a seller itself, it has an essential function within the management of the sales and is an integral part of the sales and merchandising organisation of Nike in Germany. An essential element of this integration is the prominent use of the name ‘Nike’ and also the fact that the name of the German subsidiary contains no restriction to certain tasks or businesses, but simply adds the country’s name to the overall corporate name. The identity of names was also a relevant factor in the case SAR Schotte. ( 59 )

65.

The assessment of these factors needs to be carried out from the perspective of the national environment in the forum State. That is why the national court is in the best position to ascertain whether the subsidiary presents itself as a firmly-linked outpost of the defendant or not. This assessment has to be based on objective criteria that can be verified. The material factors taken into account for the purpose of assessing the characterisation as an establishment must be ascertainable by third parties. ( 60 ) They must have been public or at least made sufficiently accessible to enable third parties to be aware of them; ( 61 ) internal data about the actual direction and control within the group are not relevant for this. ( 62 )

66.

The defendants argue that insofar as a mere presumption that an entity is an establishment can be the basis of jurisdiction, the plaintiff must have necessarily acted in reliance on this presumption (subjective element). The defendants say that this is a general principle of law, that applies only when the party invoking it merits protection. ( 63 )

67.

This argument is not, however, convincing. Article 97(1) CTMR by attaching to the defendant’s establishment does not aim to protect the interests of the plaintiff but those of the defendant. ( 64 ) It also needs to be stressed again that objective criteria are necessary to produce the impression of direction and control of the defendant over the entity that is potentially an establishment. In any event, the first element of a real centre of business operations is still required. Therefore, under the approach taken here, the establishment is never entirely fictitious.

68.

Against this background, legal certainty and predictability ( 65 ) are ensured, from the plaintiff’s as well as from the defendant’s perspective. In the present case, Nike Inc., the first defendant, being the head of Nike Group, is in a position to make clear statements and correct wrong impressions. Nike Inc. therefore bears the risk of clarifying the legal and commercial connections between it and the alleged establishment, by means of explicit public messages, by restructuring its merchandising organisation or by restricting the use of its brand name by the German subsidiary, if it wishes to avoid submission to comprehensive German jurisdiction under Article 97(1) CTMR.

69.

Even though Article 97(1) CTMR does not expressly require that the dispute arose ‘out of the operations of that establishment’, ( 66 ) in the defendants’ view, ( 67 ) some involvement of the establishment in the tortious conduct for which the defendant is sued nevertheless needs to exist. ( 68 )

70.

Recital 12 of Brussels I could support the contention that, beyond the mere presence of an establishment, a further element is necessary. Recital 12 states that ‘alternative grounds of jurisdiction are generally based on a close link between the court and the action or in order to facilitate the sound administration of justice’.

71.

In order to ascertain whether Article 97(1) CTMR establishes an ‘alternative ground of jurisdiction’ of this kind, due account must be afforded to the rationale underpinning the norm, its nature and the function of the term ‘establishment’ within the broader norm.

72.

Article 97(1) to (4) CTMR enumerate criteria for determining the Member State, whose courts are to be entrusted with granting in one single judgment effective protection of Community trade marks throughout the European Union. ( 69 )

73.

In order to provide at least one Member State with competent courts for every situation, the legislature has constructed in Article 97(1) to (3) CTMR ( 70 ) a ‘ladder of attachment’ for international jurisdiction establishing a hierarchical order comprised of several points of attachment. One of these points of attachment is the ‘establishment’ of the defendant.

74.

The ladder of attachment for international jurisdiction has a total of five steps, the first one being the defendant’s EU domicile, and the second being the defendant’s EU establishment. ( 71 ) The third is the plaintiff’s EU domicile, and the fourth the plaintiff’s EU establishment. ( 72 ) Finally, the seat of the Office for Harmonisation in the Internal Market can determine the competent court. ( 73 )

75.

‘Establishment’ comes into play at the second level of attachment. It is only applicable if the defendant is not domiciled within the EU, given that this is the first step. Thus, domicile maintains its position as the primary connecting factor for jurisdiction, while establishment is secondary.

76.

Under the general regime of Brussels I, in which the defendant’s EU domicile is also the primary point of attachment, ( 74 ) the determination of international jurisdiction for third-State defendants is left to the national law of the forum Member State. ( 75 ) This would be undesirable under the extended pan-European jurisdiction of the CTMR. Protection of a uniform trade mark across the Union in one judgment through comprehensive jurisdiction requires a uniform basis of jurisdiction. That is why under the CTMR the rules on general jurisdiction provided by Brussels I were declared inapplicable in the CTMR ( 76 ) and replaced by the specific autonomous ladder of attachment in Article 97(1) to (3) CTMR.

77.

As to the nature of Article 97(1) to (3) CTMR, it can be seen from the above that it constitutes a specific rule of general jurisdiction rather than a rule of special jurisdiction. It does not create an ‘alternative ground’ of jurisdiction ( 77 ) but defines the general jurisdiction for the purposes of the CTMR, thereby replacing the general rules that would otherwise be applicable. ‘Establishment’ in Article 97(1) CTMR does not furnish a ground of jurisdiction ‘in addition to the defendant’s domicile’. ( 78 ) Rather, it applies ‘instead of the defendant’s domicile’, where the latter is not available. It is therefore better viewed as a surrogate than as an ‘alternative’.

78.

Consequently, no further element is required.

79.

Moreover there is no reason to follow the defendants’ view that Article 97(1) CTMR needs to be narrowly interpreted. This would only be required for special jurisdictions, given they are exceptions carved out of the general rule. ( 79 )

80.

The term ‘establishment’ under Article 97(1) CTMR should rather be afforded a wide interpretation. It does not constitute an exception to the general rule but rather implements it. This general rule is laid down in recital 11 of Brussels I, which states ‘that jurisdiction is generally based on the defendant’s domicile and must always be available on this ground save in a few well-defined situations’.

81.

Article 97(1) CTMR with its primary attachment to the defendant’s domicile, backed up by the secondary attachment to its establishment, implements exactly that principle, which is (for general civil cases) codified in Article 2 of Brussels I and which follows the maxim ‘actor sequitur forum rei’. ( 80 )

82.

This general principle of jurisdiction is designed to protect the procedural interests of the defendant, who is deemed to be not only physically closer to the place of his domicile but also more familiar with the language and the procedural and substantive laws of that country. Although it is not a universal principle, this longstanding maxim, inspired by continental European approaches, is basic and typical for European jurisdictional rules. ( 81 )

83.

The principle clearly favours the jurisdictional interests of the defendant over those of the plaintiff. The Court in Dumez France and Tracoba, ( 82 ) in interpreting the Brussels Convention as the predecessor instrument of the Brussels I Regulation, ( 83 ) even referred to a ‘hostility of the Convention towards the attribution of jurisdiction to the court of the plaintiff’s domicile’. ( 84 )

84.

The ladder of attachment that the legislature has constructed in Article 97(1) to (3) CTMR is perfectly in line with this general approach in European civil procedure, as there is no step which attaches jurisdiction to the plaintiff’s domicile or establishment before ensuring that the defendant does not have any relevant connection to one of the Member States - a connection which, in the absence of a domicile, can be its establishment.

85.

The twofold function of this secondary attachment to the defendant’s establishment is to provide at least some protection to that party by attaching to a place where the defendant is deemed to have a certain minimum presence, even though this would not amount to a full-scale presence, which only a domicile ( 85 ) can provide. Thus ‘establishment’ as a connecting factor in this context serves (1) as a last resort of putting into effect the principle of attaching jurisdiction to the place of the defendant, and at the same time (2) as a threshold preventing an overly hasty switch to the place of the plaintiff.

86.

When the Court is asked to interpret Article 97(1) CTMR, and more precisely the notion of ‘establishment’ therein, the definition provided by the Court will therefore influence whether or not the next, less favoured third step on the ladder will be triggered, a point at which international jurisdiction will shift from a Member State with a connection to the defendant to one with a connection to the plaintiff. This is a shift that needs to be prevented if possible. The central conceptual schism described above lies between these two steps. A broad interpretation of the term ‘establishment’ is thus required in order to put into effect the central principle of ‘actor sequitur forum rei’.

87.

The broad interpretation that has been suggested here may lead to a situation where the defendant is deemed to have more than one establishment within the EU. In the present case, it is likely that not only Nike Deutschland but also Nike Retail will qualify as an establishment.

88.

This raises the question whether all establishments are on an equal footing or whether only one of them can serve as a connecting factor pursuant to Article 97(1) CTMR. As the defendants indicated in the oral hearing before the Court, Nike Retail is the principal establishment of the Nike organisation in Europe. Thus, if international jurisdiction could only attach to the place of the principal establishment, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) could not issue the pan-European relief that has been requested. This could only be done by a Dutch court.

89.

However, instead of providing for an attachment to the ‘principal establishment’, ( 86 ) Article 97(1) CTMR simply speaks of ‘the courts of the Member State in which the defendant … has an establishment’. ( 87 ) Moreover the ‘principal place of business’ already comes under the definition of a company’s ‘domicile’. ( 88 ) It would make no sense to have in Article 97(1) CTMR two categories, with ‘domicile’ being the primary one and ‘establishment’ the secondary, if ‘establishment’ comprised only the principal establishment. ( 89 )

90.

That being so, any establishment in a Member State can serve as a connecting factor to establish international jurisdiction under Article 97(1), second alternative, CTMR. This situation has a parallel in Article 97(1), first alternative, CTMR in that, in the context of domicile of companies, a company also can have more than one domicile. ( 90 ) In such cases of alternative jurisdiction, according to general principles of civil procedure, the choice between several competent courts is to be left to the plaintiff.

91.

However, in light of the aim of limiting the number of competent courts in Community trade mark cases, ( 91 ) which is particularly important in the context of extended international jurisdiction, ( 92 ) the prospect of a plurality of qualifying Member States could be used as a counter argument against the broad interpretation of ‘establishment’ under Article 97(1) CTMR.

92.

The fact that extended jurisdiction over Nike Inc. could be exercised by courts in the Netherlands and in Germany creates a risk of forum shopping, albeit a limited one. However, inconsistent decisions will be prevented ( 93 ) by the mechanisms of Brussels I, in particular by that regulation’s provisions on lis pendens, ( 94 ) which also apply under the CTMR. Ultimately, this situation is to be accepted for the higher value of upholding the idea of the defendant’s procedural protection that is secured by vesting ‘establishment’ under Article 97(1) CTMR with a broad meaning.

93.

The legal protection afforded to the defendant by attaching jurisdiction to its establishment is, admittedly, not as strong as the protection achieved by attaching to its domicile, where the defendant disposes of the full panoply of its resources. Yet when the defendant does not have a domicile in the EU, basic minimum protection in a dispute based on extended jurisdiction is provided through its establishments in Member States.

94.

I therefore propose that the Court answer the request for a preliminary ruling as follows:

In circumstances such as those in the main proceedings, a legally distinct second-tier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the European Union is to be considered an ‘establishment’ of that undertaking within the meaning of Article 97(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1) if that legally distinct second-tier subsidiary is a centre of operations which, in the Member State where it is situated, has the appearance of permanency, such as an extension of the third State parent body.