(Resolution of the Supreme Court of December 17, 2025, File No. 23 Cdo 2385/2025)
The District Court in Kladno awarded the plaintiff a claim for payment of a contractual penalty in the amount of CZK 1,000,000, arising from the defendant’s breach of a concession agreement. The plaintiff, as the supplier, granted the defendant a non-exclusive right to promote, distribute, and sell new vehicles and to provide related services. In the event of termination of the agreement, the parties agreed that the defendant would be obliged to immediately remove and refrain from using all banners, posters, logos, and other symbols belonging to the plaintiff or the vehicle manufacturer. For breach of this obligation, the agreement stipulated a contractual penalty of CZK 25,000 for each day of the breach. Despite this, after the termination of the contract the defendant continued to display the manufacturer’s logo on its banners and website, thereby presenting itself to the public as an authorised dealer of new cars of this brand.
The defendant appealed to the Regional Court in Prague, which overturned the original judgment and referred the case to the Municipal Court in Prague as the court with subject‑matter jurisdiction. It did so because the claim for a contractual penalty for breach of the contractual obligation to refrain from using the specified trademark is a claim arising from industrial property rights. In view of this, pursuant to Section 6(1)(a) of Act No. 221/2006 Coll., on the Enforcement of Industrial Property Rights, as amended (the “EIPR”), and Section 39(2) of Act No. 6/2002 Coll., on Courts and Judges, as amended, the Municipal Court in Prague has exclusive jurisdiction to hear and decide the case at first instance.
The plaintiff subsequently filed an appeal with the Supreme Court, arguing that the appellate court had failed to adequately address the question of whether and why the claim for payment of a contractual penalty should be so closely linked to industrial property rights as to establish the exclusive jurisdiction of the Municipal Court in Prague.
The Supreme Court referred to the Paris Convention and its previous case law, according to which trademarks undoubtedly belong to industrial property rights; for claims based on the statutory absolute protection of these rights, the Municipal Court in Prague has exclusive jurisdiction.
The key conclusion is that the contractual nature of the strengthening of the obligation (contractual penalty) does not in itself preclude it from being a claim “arising from industrial property”. If the right to a contractual penalty is linked to a breach of an obligation whose content is respect for trademark rights (i.e. an obligation not to interfere with them), the court must first determine whether there has been an infringement of the trademark rights.
The Supreme Court emphasised that the opposite interpretation would lead to an inefficient fragmentation of jurisdiction. It also drew attention to case law on disputes concerning intellectual property rights under Section 9(2)(g) of Act No. 99/1963 Coll., the Code of Civil Procedure, as amended, which distinguishes between claims arising from “general” obligations and claims arising from the regulation of intellectual property rights. It applied similar criteria in this case as well.
The Supreme Court expressly distinguished the situation under consideration from cases where the parties would, by contract, independently create an obligation to refrain from certain conduct (including a prohibition on using an intangible object) regardless of whether it is the industrial property of a specific person. In such a case, for the assessment of the dispute it would not be relevant to whom the designation in question “belongs” and whether an industrial property right exists, and the dispute over the contractual penalty would not be a dispute over a claim arising from industrial property rights.
In the present case, however, according to the plaintiff’s submissions, the contractual penalty was agreed precisely for the event of a breach of the obligation not to use the designations belonging to the plaintiff or the manufacturer, i.e. for an infringement of their industrial property rights. The decisive factor is therefore whether these designations were the subject of their industrial property rights and whether the defendant infringed those rights. It is therefore a claim arising from industrial property rights.
The Supreme Court concluded that the dispute over the payment of a contractual penalty in this case is a dispute over a claim arising from industrial property rights within the meaning of Section 6(1)(a) of the EIPR. It therefore considered the contested decision of the Regional Court to refer the case to the Municipal Court in Prague as the court with subject‑matter and territorial jurisdiction to be correct and dismissed the plaintiff’s appeal.
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