A single market, perhaps, but the EU remains a patch- work of jurisdictions

"As always I read with interest the IPKat, this time on my favourite subject: cross-border litigation. As I am acting in this case for Solvay, please allow me to give you a more precise factual background and some comments on the opinion of the Advocate General (AG).

Indeed, Solvay sued the Dutch and two Belgian companies for the infringement of their European patent (EP) in all countries in which the EP was valid, claiming that all three companies infringed the EP with the same product in all those countries.

Just after Primus/Roche (in which I acted for Primus) I wrote that a case such as this is different from Primus-Roche, in which each of the Roche entities only infringed in their own country.

However, it is important to realize, as to the facts, the following. 

The EP patent in this case was valid in two different versions (A and B). After Honeywell lodged its defence, Solvay realized that in fact the defence (according to Solvay) could be read as an acknowledgement by Honeywell that they infringed version (A) of the EP. So Solvay asked the Court to give, for the countries in which the A version was already granted, a provisional measure for the duration of the main proceedings. This provisional measure did not address the Netherlands because, in that country, the other version of the EP was valid (version B).

The Advocate General comes to two unsurprising conclusions: 

1. In the case at hand the cases are connected. It is difficult to see how you can come to a different decision because a different decision would mean that a case would not be connected because the defendants are different. That now is the essence of art. 6(1) of Regulation 44/2001 and such a ruling would therefore have made art. 6(1) meaningless. 

2. Art 22(4) is inapplicable in cases where preliminary relief is asked. That is also unsurprising because, in such cases, the court only (in certain countries) expresses a preliminary view but does not establish invalidity inter partes or erga omnes.

The AG has apparently understood this at [43].  However, now we come to the point where the AG has confused issues and has not followed Primus-Roche and GAT-LUK. The AG is describing four different scenarios.

a. Invalidity is invoked in both interim and main proceedings;
b. Invalidity is only invoked in the main proceedings;
c. 1) Invalidity is only invoked in the preliminary proceedings before the main action is started;
c. 2) Invalidity was not raised in the case on the merits but only during the preliminary injunction proceedings.

It is painful to see that the AG states that this seemed to be the situation in the case at hand. That is incorrect. (Of course) Honeywell had also raised the invalidity defence in the case on the merit (as in scenario (a)).

Before we now turn to what the AG says about these different scenarios, I think it is wise to remember that jurisdiction as to preliminary or provisional measure can be found on two grounds

1. Because the court that has been asked to grant the provisional measure has also jurisdiction in the case on the merit or  

2. If the court does not have jurisdiction on the merit on the basis of art. 31 of Regulation 44/1002. 

The AG stated that, in scenarios (a) and (b), the court must decline jurisdiction on the basis of art. 25 of Regulation 44/2001 and that this follows from GAT-LUK. However, this is clearly incorrect. From GAT-LUK and Primus-Roche it follows clearly that the court does not have jurisdiction with respect to the question of invalidity, but that the court does have jurisdiction with respect to the infringement. See e.g. Primus-Roche at [40]:

“Finally, even assuming that the court seised by the defendant were able to accept jurisdiction on the basis of the criteria laid down by the national court, the consolidation of the patent infringement actions before that court could not prevent at least a partial fragmentation of the patent proceedings, since, as is frequently the case in practice and as is the case in the main proceedings, the validity of the patent would be raised indirectly. That issue, whether it is raised by way of an action or a plea in objection, is a matter of exclusive jurisdiction laid down in Article 16(4) of the Brussels Convention in favour of the courts of the Contracting State in which the deposit or registration has taken place or is deemed to have taken place (GAT, paragraph 31). That exclusive jurisdiction of the courts of the granting State had been confirmed, as regards European patents, by Article Vd of the Protocol annexed to the Brussels Convention.” (emphasis added)

Thus speaks the CJEU: even if one would assume that art. 6(1) is applicable (as the Dutch court held), then such consolidation of all these different patent infringement actions before one court could not prevent at least a partial fragmentation. Partial fragmentation means that only a part is fragmented and, as follows clearly from the rest of [40], that part is the validity part: see: “That issue”. 

The AG simply refers to art. 25 for stating that the court would also not have jurisdiction with respect to the infringement as soon as the defendant raises invalidity. However, it is clear from Roche that that is not the consequence of art. 25; moreover, GAT-LUK also gives no support for this view. In GAT-LUK the CJEU says the following about art. 19 (now art. 25 of Regulation 44/2001):

“Article 19 of the Convention, which, in certain language versions, refers to a claim being brought ‘principally’, does not provide further clarity. Apart from the fact that the degree of clarity of the wording of that provision varies according to the particular language version, that provision, as the Commission has observed, does not confer jurisdiction but merely requires the court seised to examine whether it has jurisdiction and in certain cases to declare of its own motion that it has none.”

So it is clear art. 25 does not confer jurisdiction but only states that, if you have no jurisdiction, you should decline jurisdiction. However it is clear that with respect to infringement there is jurisdiction. See also very well reasoned Opinion of AG Geelhoed at [38]:

“To begin with, the second proposition (Ho: the proposition that if invalidity is raised also the at the time of the writ of summons existing jurisdiction with respect to infringement falls away) must be discarded. As the Court pointed out in the Duijnstee judgment, Article 16(4) of the Brussels Convention is based on a distinction between disputes concerning the granting and registration of a patent, in which the validity of patents is generally at issue, and disputes concerning patent infringements. The second proposition may be attractive from the standpoint of legal certainty and coherence, but is inconsistent with the explicit choice of the drafters of the convention not to bring all disputes concerning patents and other industrial property rights within the scope of Article 16(4) of the Brussels Convention.”

The Opinion of the AG in the present case goes on that point and therefore goes directly against the explicit choice of the drafters of the Convention (now Regulation) and cannot be reconciled with what the CJEU held in Primus-Roche. 

The Supreme Court of the Netherlands followed these rules and held that an invalidity defence has no influence on the jurisdiction with respect to infringement but if, in the infringement case, the judge has to deal with validity because it is raised as a defence,  the judge has to suspend the proceedings until the competent court has ruled about the invalidity.

Scenario (a)
This means for scenario (a) that a court is competent to hear the request for preliminary relief because it is competent to hear the main case. The court cannot however deal with the invalidity defence itself: this may mean that, if dealing with that defence is important for the decision in the main case, the court will have to suspend the action until the competent court has resolved the invalidity issue. However, if the court is competent to hear the infringement claims, on the basis of normal rules such as arts. 2 or 6(1) of Regulation 44/2001, the court is also competent to hear the application for interim measures. Thus, in such a case, a patentee will not need to rely on art.31 in order to establish jurisdiction.

Scenario (b)
Of course (contrary to what the AG seems to think at [39], in scenario (b) there is not even a request for a preliminary injunction. In that situation the infringement court can only deal with pure non-infringement defences and may be able to decide the case on these grounds (e.g.  that the alleged infringing product does not fall under the scope of the claims) or, if it has to take into consideration the invalidity defence, it will have to suspend the proceedings until the court competent with respect to the validity has ruled on validity. Note: in this respect most continental courts only deal with defences as is necessary for deciding the case. They will not always deal with all defences, as is customary in the UK. 

The court can (and Dutch courts frequently do) order preliminary measures (scenario a) for the time the case on the merits lasts.

Scenario (c 1)
What the AG states is correct, assuming the court has also jurisdiction on the main case. The fact that the court has jurisdiction in the main case gives the court jurisdiction for provisional measures. We immediately see here the strange consequence of what the AG has said about scenario (a):
If I start preliminary injunction proceedings before the case on the merit is pending then the court has jurisdiction over provisional measures and does not have to turn to art. 31. However, if the preliminary measures have been asked in a pending case where the defendant has invoked the invalidity, jurisdiction is suddenly lost and for provisional measures the court has to turn to art. 31.
This strange difference is absent if, in accordance with GAT-LUK and Primus-Roche, one would hold that the court does not lose jurisdiction with respect to the infringement question simply because a defendant raises the invalidity defence.

Scenario (c 2)
This is a type of scenario which only can be thought of by somebody who has no experience in practice. After GAT-LUK, every defendant in cross-border proceedings on the merit raises the invalidity defence; this is often used as a delaying tactic which can only be effectively countered in obvious cases by a provisional measure. The scenario of the AG where the invalidity defence is not raised in the main proceedings but only in the preliminary injunction case is therefore unrealistic. However, in such a case he considers the court competent to hear the preliminary injunction without the court having to turn to 31. In my view this is correct, but it shows again that the defendant who is clever and has raised the invalidity delaying defence in the main proceedings is better off because he forces the court to turn to art. 31. Again this is the consequence of the AG not applying GAT-LUK and Primus-Roche correctly by denying the court jurisdiction in infringement cases.

Finally it is good to see that the AG refers to the criticism which has come from all sides to the Primus-Roche decision. 

It says a great deal if the highest court in the European Union deliberately -- as they did in that case  -- cite only a part of art. 2(2) of the European Patent Convention (EPC), leaving out the part which did not fit their judgment and give a clearly wrong reading of articles 64(1) and 69 of the EPC. I say “deliberately” because this “omission” was already in the report for the oral hearing; during the hearing I pointed to that omission and its consequences. 

However more serious is the fact that the CJEU in Primus-Roche de facto discriminated against the small economic weaker patentee in favour of the allegedly infringing multinational.

Primus-Roche is a telling story. Roche was allegedly infringing all over Europe and financially weaker Primus had found an economic way of acting in one court against it. After the decision of the CJEU, Primus was forced to give up all other countries outside the Netherlands as it could not afford to litigate in all these jurisdictions. Nothing prevents the CJEU from making it clear in its upcoming judgment that it has come to the conclusion that, in the fact scenario of Primus-Roche too, there is a connection in the sense of art. 6(1). A great court is only great if it is able to recognize its own errors". 

How we used to find CJEU Opinions in the days before the internet ...

‘(1) Regarding Article 6(1) of Regulation No 44/2001 [on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, the "Brussels Regulation": Article 6(1) provides that defendants which are domiciled in different Member States may be sued in the courts of a Member State of one of the defendants if needed, so as to to avoid the risk of irreconcilable judgments].

In a situation where two or more companies from different Member States, in proceedings pending before a court of one of those Member States, are each separately accused of committing an infringement of the same national part of a European patent which is in force in yet another Member State by virtue of their performance of reserved actions with regard to the same product, does the possibility arise of “irreconcilable judgments” resulting from separate proceedings as referred to in Article 6(1) of the Regulation?

(2) Regarding Article 22(4) of Regulation No 44/2001 [which vests exclusive jurisdiction in IP invalidity proceedings to the courts of the Member State of registration]

(a) Is Article 22(4) of the Regulation applicable in proceedings seeking provisional relief on the basis of a foreign patent (such as a provisional cross-border prohibition against infringement), if the defendant argues by way of defence that the patent invoked is invalid, taking into account that the court in that case does not make a final decision on the validity of the patent invoked but makes an assessment as to how the court having jurisdiction under Article 22(4) of the Regulation would rule in that regard, and that the application for interim relief in the form of a prohibition against infringement shall be refused if, in the opinion of the court, a reasonable, non-negligible possibility exists that the patent invoked would be declared invalid by the competent court?

(b) In order for Article 22(4) of the Regulation to be applicable in proceedings such as those referred to in the preceding question, must the defence of invalidity be subject to procedural requirements in the sense that Article 22(4) of the Regulation is only applicable if invalidity proceedings before the court having jurisdiction under Article 22(4) of the Regulation are already pending or are to be commenced – within a period to be laid down by the court – or at least that a summons in that regard has been or is being issued to the patent holder, or does it suffice if a defence of invalidity is merely raised and, if so, are requirements then laid down in respect of the content of the defence put forward, in the sense that it must be sufficiently substantiated and/or that the conduct of the defence must not be deemed to be an abuse of procedural law?

(c) If question 1 is answered in the affirmative, does the court, after a defence of invalidity has been raised in proceedings such as those referred to in question 1, retain jurisdiction in respect of the infringement action with the result that (if the claimant so desires) the infringement proceedings must be stayed until the court having jurisdiction under Article 22(4) of Regulation [No 44/2001] has given a decision on the validity of the national part of the patent invoked, or that the claim must be refused because a defence that is essential to the decision may not be adjudicated, or does the court also lose its jurisdiction in respect of the infringement claim once a defence of invalidity has been raised?

(d) If question 1 is answered in the affirmative, can Article 31 of Regulation [No 44/2001, which gives overriding extraterritorial jurisdiction in the case of provisional measures] confer on the national court jurisdiction to adjudicate on a claim seeking provisional relief on the basis of a foreign patent (such as a cross-border prohibition against infringement), and against which it is argued by way of defence that the patent invoked is invalid, or (should it be decided that the applicability of Article 22(4) of the Regulation does not affect the jurisdiction of the Rechtbank to adjudicate on the infringement question) jurisdiction to adjudicate on a defence claiming that the foreign patent invoked is invalid?

(e) If question 4 is answered in the affirmative, what facts or circumstances are then required in order to be able to accept that there is a real connecting link ... between the subject-matter of the measures sought and the territorial jurisdiction of the Contracting State of the court before which those measures are sought?’

(1) principally:

‘(a) Article 6(1) ...  is to be interpreted as meaning that it applies in an action for infringement of the European patent involving several companies established in different Member States when the actions relate separately to acts carried out in the same Member State and infringe the same national part of a European patent governed by the same law.

(b) Article 22(4) ... is to be interpreted as meaning that the rule of exclusive jurisdiction that it lays down is not applicable when the validity of a patent is raised only in interim proceedings, in so far as the decision likely to be adopted at the end of the proceedings has no final effect.’

(2) In the alternative:

‘Article 31 ... is to be interpreted as meaning that a national court cannot authorise a provisional measure that produces no effect in its territory, which it is incumbent on the court to decide’.

* the English and Italian proceedings were not related within the meaning of the Regulation.

* in ascertaining whether proceedings were related, the court could look beyond the claim documents and into the defences. In this case the defence relied on post-claim matters -- the commencement of the Italian proceedings. However, although the test of first seisin was largely mechanical, the application of Article 28 required an assessment of the degree of connection, and then a value judgment as to the expediency of hearing the two actions together in order to avoid the risk of inconsistent judgments.

* the mere fact that different courts might deliver inconsistent judgments did not of itself mean that proceedings were inevitably related. Article 28 left it open to acknowledge a connection, or a risk of inconsistent judgments, while still concluding that the connection was insufficiently close, or that the risk was not sufficiently great, to make the actions related for the purposes of the Article.

* the English proceedings, in substance, were for a declaration concerning an English patent and a particular product. The substance of the Italian proceedings was other designations, but not focusing on the same product. The abuse of Italian process was the only link between them and it was only in relation to that point that there was a risk of inconsistent judgments.

* Article 28(3) did not require the court to find that any possibility, no matter how small the point, required the conclusion that the actions were related.

"The case is yet another illustrating the unsatisfactory state of the current arrangements for deciding European wide patent disputes. Too often one finds parties litigating as much about where and when disputes should be heard and decided as about the real underlying dispute".