Source: EURLEX
Language: en
Format: md

[JURE SUMMARY](#SM)

## JURE SUMMARY

The plaintiff Czech company filed an action with the Krajský soud of Plzen (CZ) against the defendant, a Lithuanian company, for non-payment of a licence fee. The defendant and the legal predecessor of the plaintiff had signed an agreement allowing the defendant to manufacture a product in Lithuania and to use the respective trade mark. The first instance court deduced that because the manufacturing of the product in question and the use of the trade mark were to be considered as services provided in Lithuania, the Czech courts lacked of jurisdiction, and so it dismissed the proceedings.
On the plaintiff’s appeal, the Vrchní soud of Prague (CZ) reverses the decision of the lower court, stating that jurisdiction is to be considered as based on the obligation that constitutes the cause of the action, i.e. the obligation of the defendant to pay the licence fee, and not the obligation to grant the defendant the right to use the trade mark in Lithuania. Article 5(1)(a) of the Brussels I Regulation has to be applied according to Article 5(1)(c) because granting a licence cannot be considered as the sale of goods or the provision of a service. The words "the obligation in question" refer to the concrete obligation of the debtor and not the entire obligation relationship. By virtue of Czech law, the content of a licence agreement is the licensor's obligation to grant the licensee the right to exercise intellectual property rights and the licensee's obligation to provide consideration. Both obligations must be considered separately with respect to the cause of the action. In the given case, the payment of agreed licence fees is claimed, and this particular obligation is the only criterion for consideration of the courts' jurisdiction. The appeal court states that the obligation is to be performed by payment to the account of the plaintiff’s legal predecessor in the Czech Republic and therefore supports the jurisdiction of the Czech courts.

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