European intellectual property cat-and-mouse

Can you sue a group of related
companies for patent infringement across Europe
in one consolidated proceedings in a single jurisdiction?

No.
A patentee must sue each infringer in their country of domicile
pursuant to the patent(s) and law in force there.
It does not matter that the alleged infringers are companies in the same
group acting in an identical manner according to a common policy: C-539/03 Roche Nederland and Others.

In which jurisdiction can you claim
or counter-claim for invalidity of an intellectual property right?

To invalidate a French patent, you must seek revocation in France
(and so on).
The Courts of the Contracting
State in which a patent
was applied for have exclusive jurisdiction in questions of patent validity
irrespective of how those questions arise: C-4/03 GAT and Art 16(4) Brussels Convention.

Implications

It is now clearer than ever that
cross-border injunctions in patent disputes do not comply with the Brussels
Regime. In the past, such injunctions
were commonly granted by the Courts in the Netherlands
(and sometimes in Germany).

In the past, Dutch Courts have
allowed infringement proceedings to be brought against a group of companies
in different Contract States if the central policy had been determined by the
Dutch defendant (the “spider in the web”). It is now clear that this practice does not
comply with the Brussels Regime.

Comment

On Thursday 13 July 2006, the First
Chamber of the European Court of Justice handed down two judgments which
clarify the game of intellectual property cat-and-mouse that is played across
the European Contracting States.

1
– C-539/03 Roche Nederland and Others.

The
patent in suit was EP 131 627. The
patentees, Drs Primus and Goldenberg had argued that Article 6(1) of the Brussels Convention applies in the present case to allow
all of the infringement proceedings to be heard together.

(Article
6(1) basically states that where there is more than one defendant, then suit
can be brought in the Contracting
State of one of the
defendants. Article 6(1) is an
exception to Article 2 which states that a defendant domiciled in a Contracting State must be sued there in that
State.)

Amongst
other things, the Court stated:

For Article 6(1) to apply there
must be a sufficiently close connection so that it is expedient to determine
the actions together in order to avoid the risk of irreconcilable judgments
resulting from separate proceedings: Case 189/87 Kalfelis [1988] ECR 5565,
paragraph 12 (repeating the words of Article 22).

For decisions to be contradictory
it is not sufficient that there is a divergence in outcomes. The divergence must also arise in the
context of the same situation of law and fact.

The facts will not be the same in
patent infringement proceedings where different companies are being sued,
even if the impugned activity is the same.

The legal situation will not be the
same as the law to be applied varies in each state.

To agree with the patentees would
multiply the potential heads of jurisdiction, undermine the predictability of
the rules of jurisdiction, and consequently undermine the principle of legal
certainty, which is the basis of the Convention.

The negative effects of such a decision damage would be even more serious if it
provided the defendant a wide choice, thereby encouraging forum shopping
which the Convention seeks to avoid and which the Court, in its judgment in Kalfelis, specifically sought
to prevent.

Even if a court seised
by the defendant were able to accept jurisdiction, the consolidation of the
patent infringement actions before that court could not prevent fragmentation
of the patent proceedings as soon as validity is brought into question (which
is commonly the case).

2
– C-4/03 GAT

This
judgment applies to any proceedings relating to the validity, existence or
lapse of a patent or an alleged right of priority by reason of an earlier
deposit (see Case 288/82 Duijnstee [1983] ECR
3663, paragraph 19).

Given
the wording of Article 16(4) of the Brussels Convention, it is quite likely that C-4/03 GAT
will also apply to disputes relating to trade marks and designs.

Amongst
other things, the Court stated:

Article 16 seeks to ensure that
jurisdiction rests with courts closely linked to the proceedings in fact and
law.

The Courts of the jurisdiction in
which a patent was applied for are best placed to adjudicate a dispute concerning
validity of the patent or the existence of a deposit or registration.

The concern for sound
administration of justice is all the more important in the field of patents
since, given the specialised nature of this area

The issuance of patents necessitates
the involvement of the national administrative authorities.

To allow a court seised of an action for infringement or for a declaration
that there has been no infringement to establish, indirectly, the invalidity
of the patent at issue would undermine the binding nature of the rule of
jurisdiction laid down in Article 16(4) of the Convention.

To hold otherwise would enliven the
possibility of circumventing Article 16(4) of the Convention and would have
the effect of multiplying the heads of jurisdiction, undermine the
predictability of the rules of jurisdiction, and consequently to undermine
the principle of legal certainty, which is the basis of the Convention

To hold otherwise would multiply
the risk of conflicting decisions which the Convention seeks specifically to
avoid (see, to that effect, Case C-406/92 Tatry [1994] ECR
I-5439, paragraph 52).

A judgment which falls foul of the
provisions of Article 16 will not benefit from the system of recognition and
enforcement under the Brussels Convention:
See Article 19, first paragraph of Article 28 and second paragraph of
Article 34.

Background

The
Brussels Regime consists of the Brussels Convention, the Lugano Convention and the Brussels Regulation (Council Regulation (EC) No 44/2001 of 22
December 2000).

Article
6 of the Brussels Convention, which appears in Section 2 of Title II,
entitled ‘Special jurisdiction’, states:

“[A
defendant domiciled in a Contracting
State] may also be
sued:

(1) where he is one of a number of
defendants, in the courts for the place where any one of them is domiciled;

…”

Article
16(4) of the Brussels Convention states:

“The
following courts shall have exclusive jurisdiction, regardless of domicile:

…

4. in proceedings concerned with the registration
or validity of patents, trade marks, designs, or other similar rights
required to be deposited or registered, the courts of the Contracting State
in which the deposit or registration has been applied for, has taken place or
is under the terms of an international convention deemed to have taken
place;..”

Article
18 of the Brussels Convention states:

“Apart
from jurisdiction derived from other provisions of this Convention, a court
of a Contracting
State before whom a
defendant enters an appearance shall have jurisdiction. This rule shall not
apply … where another court has exclusive jurisdiction by virtue of
Article 16.”

Articles
64(1) and (3) of the Munich Convention provides:

“(1) A European patent shall … confer
on its proprietor from the date of publication of the mention of its grant,
in each Contracting State in respect of which it is granted, the same rights
as would be conferred by a national patent granted in that State.

…

(3) Any infringement of a European patent
shall be dealt with by national law.”

The
question to be determined by the ECJ in C-4/03 GAT was:

‘Should
Article 16(4) of the Convention … be interpreted as meaning that the
exclusive jurisdiction conferred by that provision on the courts of the
Contracting State in which the deposit or registration of a patent has been
applied for, has taken place or is deemed to have taken place under the terms
of an international convention only applies if proceedings (with erga omnes effect) are brought
to declare the patent invalid or are proceedings concerned with the validity
of patents within the meaning of the aforementioned provision where the
defendant in a patent infringement action or the claimant in a declaratory
action to establish that a patent is not infringed pleads that the patent is
invalid or void and that there is also no patent infringement for that
reason, irrespective of whether the court seised of
the proceedings considers the plea in objection to be substantiated or
unsubstantiated and of when the plea in objection is raised in the course of
proceedings?’

The
questions to be determined in C-539/03 Roche Nederland and Others were:

“(1) ‘Is there a connection, as
required for the application of Article 6(1) of the Brussels Convention,
between a patent infringement action brought by a holder of a European patent
against a defendant having its registered office in the State of the court in
which the proceedings are brought, on the one hand, and against various
defendants having their registered offices in Contracting States other than
that of the State of the court in which the proceedings are brought, on the
other hand, who, according to the patent holder, are infringing that patent
in one or more other Contracting States?

(2) If the answer to Question 1 is not or
not unreservedly in the affirmative, in what circumstances is such a
connection deemed to exist, and is it relevant in this context whether, for
example,

— the
defendants form part of one and the same group of companies?

— the
defendants are acting together on the basis of a common policy, and if so is
the place from which that policy originates relevant?

— the alleged infringing acts of the
various defendants are the same or virtually the same?”

Thanks
again to the IPKat for news of these cases.

See the IPKat’s commentary.