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Graf & Pitkowitz was established in 1994 and is among the leading independent law firms in Austria with offices located in Vienna and Graz.Show more
Arbitration & ADR
The Supreme Court recently assessed a case where the parties had agreed two conflicting forum selection clauses within the same contract: an arbitration agreement and a jurisdiction clause in favour of a state court. Conflicting forum selection clauses providing for the jurisdiction of state courts on the one hand and arbitral tribunals on the other hand are regularly contained in one contract. Austrian case law generally tends to construe contracts in a way that gives effect to the arbitration agreement.
The Supreme Court recently dealt with the challenge of an arbitrator on the grounds that he had rolled his eyes during the pleading of a party's representative. Said arbitrator did not explicitly contest the accusation of having rolled his eyes. Nonetheless, he claimed to be able to objectively give a legal assessment of the facts of the case. This decision adds to the case law on the impartiality and independence of arbitrators, particularly with respect to an allegation of bias based on non-verbal reactions.
The Supreme Court recently determined the admissibility of conducting an arbitral hearing by means of a videoconference in the context of challenge proceedings. The court held that even where one party opposes, ordering a remote hearing in arbitration is admissible and does not constitute a reason to challenge the arbitral tribunal. This decision must be regarded as a precedential landmark decision as it appears to be the first decision of any supreme court worldwide to tackle this issue.
Under longstanding Supreme Court case law, defective reasoning did not previously constitute a severe enough violation of procedural public policy to set aside an award. However, in recent years, the court has reversed this trend and repeatedly held that non-adherence to certain reasoning standards in arbitral awards can be a ground to set aside an award. In a recent decision, the Supreme Court has provided further guidance on the required reasoning standards for awards.
The Supreme Court recently considered whether a final arbitral award on the reimbursement of costs violated Austrian public policy. The claimant had ultimately succeeded in the arbitration conducted under the rules of the International Court of Arbitration of the International Chamber of Commerce. Nevertheless, the cost decision ordered it to reimburse the respondent's costs. The Supreme Court dismissed the claimant's request to set aside the cost decision.
The Supreme Court recently considered whether the fact that an arbitrator and a party counsel in one arbitration acted as co-counsel in another unrelated arbitration cast doubt on the arbitrator's independence and impartiality and thus disqualified him from acting as arbitrator in the arbitration under review. In its decision, the court correctly acknowledged the reality of the Austrian arbitration scene, which results in frequent contact between practitioners.
The Supreme Court recently considered the validity of a hybrid arbitration agreement which provided for the formation of a tribunal under the International Chamber of Commerce Rules of Arbitration to arbitrate at the Vienna International Arbitral Centre. In this context, the court also considered the consequences of violating procedural rules agreed by the parties and the tribunal's failure to issue a reasoned award.
The Supreme Court recently considered whether a rather brief and general notice of arbitration in ad hoc proceedings containing a nomination had properly initiated the arbitration proceedings and was thus sufficient grounds to request the Supreme Court to appoint an arbitrator, following the respondents' refusal to nominate one. The decision is a soft reminder for counsel that sending out incomplete notices of arbitration or nomination requests can be a time-consuming and costly endeavour.
The new Vienna International Arbitral Centre (VIAC) Rules of Arbitration and Mediation recently entered into force. They apply to all arbitration and mediation proceedings initiated after December 31 2017. The amendments to the VIAC rules allow for parties to conduct efficient and cost-effective arbitration and mediation proceedings, while offering enough flexibility when applying them in individual cases.
The Supreme Court recently considered whether proceedings (wrongly) commenced before an Austrian district court to set aside an arbitral award could nevertheless be continued. Notwithstanding the Supreme Court's exclusive jurisdiction regarding the setting aside of arbitral awards, the unusual facts of the case at hand led to the creation of an additional channel of appeals not provided for in the law.
The Vienna International Arbitral Centre (VIAC) recently obtained the right to administer domestic cases. The new law has received a warm welcome in Austria and is another sign of the quality of the VIAC's work and the confidence in its services. The VIAC has already established a working group to implement the proposed changes into the Rules of Arbitration and Conciliation in order to reflect this positive development.
The Supreme Court recently considered whether an arbitral award rendered in connection with licensing for the Austrian First Division Football League had to be set aside because of an alleged infringement of public policy. The decision is particularly interesting because the court had to tackle the sensitive issue of a possible infringement of substantive Austrian public policy in a situation where a party was forced to enter into an arbitration agreement with a dominant counterparty.
The Supreme Court recently considered if and under what circumstances defective reasoning of an arbitral award may lead to its annulment under the Arbitration Law. In a deviation from previous case law and views expressed by the majority of Austrian legal scholars, the court held that the requirement of sound reasoning is a fundamental principle of the Austrian legal system, and thus that an arbitrator's failure to comply with this constitutes a violation of procedural public policy.
In a recent decision the Supreme Court considered whether a lunch attended by a sole arbitrator and a party's counsel could give rise to doubts regarding the arbitrator's impartiality and independence. This decision serves as a reminder that arbitrators should disclose all circumstances that could give rise to a challenge and proceed with the utmost care when a challenge has been dismissed.
The Supreme Court recently considered several formal objections under the New York Convention, as well as several alleged grounds for refusal. The court adopted a rather strict approach with regard to the authentication requirement under the convention, while reiterating that the convention should generally be interpreted in favour of the recognition and enforcement of foreign awards.
The Supreme Court recently issued clear instructions that when it comes to the recognition and enforcement of foreign arbitral awards, Austrian law must not be applied where it is superseded by international treaties, such as the New York Convention. However, the convention contains no specific rules regarding the service of documents. Therefore, the decisive issue is whether national rules may nevertheless be applied in such a situation.
The Supreme Court recently considered, for the first time, the consequences of an arbitrator's failure to disclose circumstances that may give rise to doubts as to his or her impartiality and independence. In its decision, the court relied on both objective and subjective criteria – in particular, the weight of the non-disclosed fact and whether the non-disclosure was motivated by the arbitrator's desire to avoid a challenge.
A recent Supreme Court decision analysed whether parties to arbitral proceedings are still bound to pay for part of an arbitrator's services where the arbitrator is successfully challenged because of his or her conduct. The court held that, unless the work is found to be worthless, the arbitrator is entitled to receive remuneration.
The Supreme Court has ruled, for the first time, on the applicability of certain consumer protection laws in the context of corporate disputes and clarified the applicable law for assessing the capacity of a consumer when a foreign legal entity is involved. This decision makes clear that the Supreme Court will side with consumers in such cases.
The Supreme Court recently ruled for the first time on an issue that has been fiercely debated among legal scholars – namely, whether (and to what extent) grounds for challenging an arbitrator can also be raised in set-aside proceedings. The court ruled that where a challenge becomes known after the arbitration award was issued, only "blatant" grounds can be invoked in set-aside proceedings.
Following the revision of the Vienna Rules, another important development recently took place that is aimed at further increasing the attractiveness of Vienna as a venue for international arbitration. With the introduction of the Arbitration Amendment Act 2013, Parliament adopted a significant change to arbitration law in Austria, under which annulment claims will now be decided directly by the Supreme Court.
The Vienna International Arbitral Centre recently initiated a comprehensive review process aimed at modernising, overhauling and streamlining its rules. The process included a widely distributed user survey, a number of discussion rounds and a roadshow. The process is finally nearing completion and the centre is preparing to release the revisions publicly.
The Supreme Court recently clarified the relationship between state immunity and enforcement of an arbitral award in a case concerning art loaned by the Czech Republic to a Vienna museum for an exhibition. The Czech Republic argued that the works of art under dispute were cultural objects serving the country's sovereign aims, and thus exempt from enforcement proceedings. The Supreme Court rejected this defence.
The Supreme Court was recently faced with an inexecutable arbitration clause and clarified the interpretation of arbitration agreements and their boundaries. The court held that arbitration agreements must be interpreted primarily under procedural law; if an agreement refers to an arbitral institution which no longer exists, the agreement becomes inoperative only if it is impossible to reconstruct a comparable arbitration court.
The Vienna Commercial Court recently refused to set aside an arbitral award issued by a United Nations Commission on International Trade Law tribunal seated in Vienna that had awarded Danish-Polish Telecommunications Group €400 million against Telekomunikacja Polska. The court's decision is in line with the trend of Austrian case law to uphold arbitral awards.
The Supreme Court recently handed down a decision relating to the arbitrability of shareholder disputes in which it generally confirmed their arbitrability, but declared them to be subject to certain criteria. The decision is in line with the general approach to uphold arbitral awards taken by the Supreme Court since the introduction of the arbitration law. In fact, only in rare cases has the court set aside arbitral awards.
The Supreme Court recently held that selling refill products for a dispenser that is manufactured by another party without indicating that the refill product is not produced by the dispenser's manufacturer constitutes trademark infringement. The decision clarifies that parties must label refill products to prevent the relevant public (ie, the users of the refill product) thinking that the manufacturer of the refill product is also the manufacturer of the dispenser.
The Supreme Court recently had to decide whether the infringer of a registered Community design had to hand over the entire net profit or just a share of profit earned due to its use of an infringed design. The decision has great practical importance, as it gives IP rights holders clear guidelines regarding what to expect when claiming compensation for an unlawful use of their rights.
The Supreme Court recently set out clear principles regarding the protection of a work of visual art under the Copyright Act where technical functions played a role. In its decision, the court explained that the assessment as to whether a (visual) piece of work is actually protected by copyright must be assessed by the court as a legal issue only. There is no room to consider the opinion of experts or any other third parties.
The Supreme Court recently clarified the circumstances in which the burden of proof regarding the exhaustion of trademark rights shifts from the defendant to the trademark owner. It made clear that unless the defendant can prove a concrete risk of partitioning markets, it is up to the defendant to prove that the trademark rights relied on by the plaintiff are exhausted. This should be borne in mind when raising this defence.
The Supreme Court recently affirmed once more that the exemptions to the principle of exhaustion of trademark rights must be construed narrowly. In its decision, the court made clear that once trademark rights are exhausted, resellers may use not only word marks, but also figurative marks without any limitations when advertising or reselling original products.
In a welcome development of Austrian copyright law, the Supreme Court recently ruled that a combination of works by two artists does not constitute a joint work if it can be separated, even if the works involved were created for the sole purpose of being combined as a jointly planned contribution. Strong indicators of whether parts of a work are separable are the individual marketability and possible depreciation of the separated parts.
Parliament recently transposed parts of EU Directive 2015/2436 into national law. Most important is the introduction of certification marks, which did not previously exist under Austrian law. Other provisions of the bill concern the division of trademark applications, the shortening of the validity period of a registration and the reduction of the registration fee.
The Supreme Court recently ruled that the producer of a photograph who marks his or her name in the photograph's metadata must be credited as the producer on copies of the photograph made by other persons and intended for distribution. This judgment is good news for producers of digital photographs who wish to safeguard their copyright. Persons reproducing and distributing digital photographs should routinely check the metadata to ensure that the producer's name is listed on any reproduction.
The Supreme Court recently confirmed its view that the issuance of contradicting decisions in, on the one hand, infringement proceedings and, on the other hand, opposition proceedings by different panels of the same appellate court is no reason to admit an extraordinary appeal to the Supreme Court. The decision stresses that, in principle, the appellate courts must consider the issue of likelihood of confusion, and that it will step in only if the appealing party can demonstrate gross misjudgment.
In light of a European Court of Justice ruling, the Supreme Court recently overturned its earlier interpretation of an author's exclusive distribution right in relation to his or her work of art. The court found that any kind of distribution – regardless of whether it is a transfer of ownership – falls under the author's exclusive distribution right. Further, it held that this distribution right is violated only if ownership in the work is actually transferred.
In a recent case a trademark comprising a famous family name was infringed through use in the course of trade by someone with the same family name. The Court of Appeal defined the limits of trademark protection when competing with naming rights and the requirements that trademark owners must meet to shield their trademarks from exploitation under the cover of exercising legitimate naming rights.
The Supreme Court has once again ruled on a case dealing with the so-called 'picture right' – a provision in the Copyright Act on which numerous decisions are based. In the case, the question arose as to whether a well-known criminal defence lawyer had the right to demand that a media owner not publish his picture. The court weighed the claimant's interest in security against the defendant's interest in reporting the story.
The Supreme Patent and Trademark Board (SPTB) has clarified the status of program logic under the Utility Model Act. The SPTB concluded that program logic can be protected only if it contains a technical aspect. This means that only new, inventive and industry-related technical software can constitute an invention and thus be protected.
The Supreme Court recently considered whether an international trademark had a distinctive character that qualified it for protection under trademark law or whether, due to its descriptive nature, it could not be granted protection. The decision confirms that trademarks will be determined as distinctive or descriptive after a subjective and interpretive case-by-case analysis.
Following the European Court of Justice decision in Céline, the Austrian Supreme Court has changed its jurisprudence on whether the owner of an earlier trademark can demand the modification or cancellation of a company name that is identical or similar to its trademark. However, some have argued that the decision is too abstract, and it remains to be seen whether the Supreme Court will stick to this position in future.
In a recent decision the Supreme Court has reiterated its view that plaintiffs must prove that their products, product appearances and unregistered marks have acquired secondary meaning with the relevant public in order for them to be protected under the Act on Unfair Competition. Producers of products with distinctive product appearances should therefore consider registering them as trademarks.
The introduction of new provincial administrative courts in Austria will fundamentally change administrative provisions in several IP statutes. The main amendments concern the reorganisation of appeal procedures. Among other things, from the beginning of 2014 the Patent Office will handle only first instance proceedings and the Supreme Patent and Trademark Board will be dissolved.
In a recent decision the Supreme Court upheld the position of a collecting society claiming copyright infringement, ruling that the interests of an author to receive remuneration for the use of its work have greater weight than the interests of practising a trade. The court's decision is in accordance with the prevalent German doctrine on the subject concerning the monopolistic position and the obligation to contract.
In a recent decision the Austrian Supreme Court thoroughly examined the legal effects of a supplementary protection certificate for medicinal products and its interrelation with patent rights. The decision is complex, but provides valuable information on related proceedings for injunctive relief. Additionally, the detailed examination of legal aspects of supplementary protection certificates is welcome.
The Supreme Court recently clarified the applicability of Article 12(c) of the Community Trademark Regulation in the context of comparative advertising, ruling that it should be interpreted narrowly and must be employed only in cases where such usage is the only possibility for providing the public with comprehensive information on the marketed goods.
In a recent decision the Supreme Court evaluated the scope of patent protection of so-called 'Swiss-type claims' and infringements constituted by dietary supplements, thereby interpreting the European Patent Convention on a national level. A Swiss-type claim is intended to cover subsequent medical use (or indication of efficacy) of a known substance or composition.
The latest amendment to the Trademark Act grants trademark proprietors the right to submit a notice of opposition against registered trademarks. Previously, a proprietor had to wait for a trademark to be registered before it could challenge the lawfulness of the registration. By implementing opposition proceedings, the legislature also introduced a legal remedy to cancel a trademark registration retroactively.
The Patent Act provides for regulations with respect to employee inventions. Thus, employees (if they are not specifically employed for the purpose of making inventions) are entitled to adequate compensation if the invention or any right to use the invention is transferred to the employer. In a recent case the Supreme Court confirmed its view on the validity of flat-rate compensation agreements for employee inventions.
In a recent case the Supreme Court ruled on the permissibility of parodies of trademarks. The defendant claimed that its trademark, STYRIAGRA, was a parody of the claimant's trademark, VIAGRA, and that it wanted to encourage discussion about the use of chemical products (VIAGRA) as opposed to natural products (Styrian pumpkin seeds).
The Supreme Court recently clarified potentially far-reaching aspects of copyright-related information rights in the internet age. An Austrian copyright collecting society identified a number of dynamic internet protocol addresses that had unlawfully shared copyright-protected material. It requested that the internet access provider identify the holders of the respective addresses at the relevant dates and times, but it declined to comply.
The Trademarks Act provides that only the trademark owner has the right to use a registered trademark for goods or services for which it has registered the mark. Thus, third parties can use the same or similar sign only if there is no risk of confusion with the goods and services of the trademark owner. In two recent decisions the Supreme Court confirmed this principle in respect of domain names.