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IP owners' hopes of litigating pan-European patent disputes in one EU member state have been dashed, after the European Court of Justice (ECJ) ruled that cross-border injunctions are not available in patent infringement cases.
In two eagerly awaited decisions, GAT v LuK and Roche v Primus, handed down on July 13, the ECJ judges said that European patents are national rights that must be enforced nationally.
"From a legal perspective, I think the Court made very wise and consistent decisions, but it will be bad for industry because companies will have to litigate [in each member state] separately," said Bruno Vandermeulen of Bird & Bird's Brussels office.
He added that this may increase litigation costs: "As of now, cross-border litigation is totally excluded so companies need to sustain higher costs to enforce their patents in more countries."
Lawyers are predicting that the rulings may boost support for the European Patent Litigation Agreement (EPLA), a draft proposal that foresees an integrated judicial system for patents and a central patent court for those EU member states that sign up to it.
"Some courts [frustrated by the existing system] effectively started grabbing more jurisdiction. Now the ECJ has said in the clearest terms that you can't do it. If you are going to litigate infringement and validity, it has to be done in the state where the IP is registered," said Kevin Mooney of Simmons & Simmons.
"The rulings may encourage industry, the European Commission and the Parliament that the EPLA is the way forward. It is the only show in town," said Mooney.
The decisions came less than a week after a majority of lawyers and business leaders attending a hearing into plans for a Community Patent urged the Commission to focus its efforts on implementing the EPLA, rather than trying to revive plans for a Community patent (see box).
Commission backs patent litigation deal |
The European Commission looks set to support the European Patent Litigation Agreement (EPLA), which could make it easier to litigate patents in Europe, in preference to resurrecting proposals for an EU Community patent. Speaking at a public hearing on future patent policy held in Brussels in July, Internal Market Commissioner Charlie McCreevy said that the EPLA "is seen as a promising route towards more unitary jurisdiction" and promised that his team would explore how the project could be developed further. A majority of those chosen by the Commission to make a brief statement at the hearing – representing industry, lawyers, patent attorneys and consumer organizations – urged the Commission to shift its efforts towards implementing the EPLA, instead of trying to rally support for a Community patent. The Commission's last efforts collapsed two years ago after member states failed to agree on the rules and language regime to be used. At the moment, despite being able to make one application through the European Patent Office, patent owners must bring a separate patent infringement lawsuit in each country where their European patent is registered. Critics say that it makes the cost of enforcing a patent in Europe prohibitively expensive and creates a less favourable environment for innovation than exists in the US. The EPLA would establish a European Patent Court which would determine the validity and infringement of European patents. The Agreement would be optional and would only apply in those EU member states that had signed up to it. In the past, the Commission had stymied attempts to push ahead with the EPLA, questioning whether member states had the legal right to enter into agreements that deal with cross-border jurisdictional issues within Europe. And McCreevy warned there may be practical and legal difficulties ahead: "You should be aware that there are some institutional hurdles to be tackled if the Community is to become involved in the EPLA initiative. Furthermore, stakeholders differ on the degree of centralization or the nature of the local first instance courts." Not all of those attending the hearing supported the EPLA. Florian Mueller, a leading anti-software patent campaigner, said it was simply another attempt to give software and business method patents a stronger legal basis in Europe than they have now. He also voiced concerns about the lack of judicial independence of any court set up under the EPLA. The Commission is expected to announce its proposals for a European patent regime before the end of the year. |
Legal uncertainty
In the GAT v LuK case, Gesellschaft für Antriebstechnik offered to supply auto parts to Ford in Germany. Lamellen und Kupplungsbau Beteiligungs KG claimed that the products infringed its German and French patents. GAT then asked the Regional Court in Düsseldorf for a declaration of non-infringement.
Düsseldorf's higher regional court asked the ECJ whether it could determine if the patents had been infringed and whether the invalidity claim affected its ability to do so.
In particular, it asked the Court to clarify how Article 16.4 of the Brussels Convention (now Article 22.4 of the Brussels Regulation) should be applied. In general, European law says that the court where the defendant is based has jurisdiction, but Article 16.4 gives the court in the country where a patent is registered exclusive jurisdiction "in proceedings concerned with the registration or validity of" registered IP rights.
In September last year, the Advocate General issued an Opinion saying that if an invalidity defence is raised during infringement proceedings, the court may: refer the whole case to the jurisdiction where the patent is registered; adjourn its decision; or review the matter if the defendant had acted in bad faith.
But now the ECJ has made it clear that the courts in the country where the IP is registered have exclusive jurisdiction in cases where the validity of a patent is in question.
The judges said: "Article 16(4) ... is to be interpreted as meaning that the rule of exclusive jurisdiction laid down therein concerns all proceedings relating to the registration or validity of a patent, irrespective of whether the issue is raised by way of an action or a plea in objection."
The Roche case dates back to 1997 when Primus and Goldenberg, both based in the US, launched a patent infringement suit in The Hague against Roche in the Netherlands and eight subsidiaries of the Roche group based in the US, Belgium, Germany, France, the UK, Switzerland, Austria and Sweden.
The Supreme Court of the Netherlands asked the ECJ whether Article 6(1) of the Brussels Convention allowed owners of European patents to launch an infringement action against various foreign defendants in one court or whether they have to litigate in each national court separately. Under Article 6(1), in a case where several defendants are sued, the competent court is the one in the country of domicile of any of the defendants.
In its ruling, the ECJ backed an opinion issued by Advocate General Philippe Léger in December who said it was "unavoidable" that infringements of the same European patent have to be litigated in each relevant national court, even if the lawsuit is against the same group of companies based in different contracting states.
The decision will end the so-called spider in the web approach – a limited cross-border injunction action, which patent owners have been using for almost 10 years.
The judges said that Article 6(1) "must be interpreted as meaning that it does not apply in European patent infringement proceedings involving a number of companies established in various Contracting States in respect of acts committed in one or more of those States even where those companies, which belong to the same group, may have acted in an identical or similar manner in accordance with a common policy elaborated by one of them."
Lawyers say patent owners will still need to choose carefully in which jurisdiction to bring their first patent infringement action, based on the likely time and expense of obtaining a decision and the importance of the market to their business.
"Forum shopping will not go away entirely," said Reinhardt Schuster of Bardehle Pagenberg. "Patent owners will still make choices. That's human and reasonable."
MIP will carry a full analysis of the cases in its October issue
