Tag: DNI

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Autostore v Ocado. The High Court holds not entirely convincingly on applicable law to obligations of confidence in relation to high-stake patent infringement suit.

In Autostore Technology AS v Ocado Group Plc & Ors [2023] EWHC 716 (Pat), Claimant AutoStore is a Norwegian company, pioneer in automated warehouse technology. First defendant develops automated systems for use in large scale grocery businesses.  The second defendant is a joint venture between the first defendant and Marks & Spencer. Ocado is a former customer of AutoStore’s.

Ocado’s defences include that the patents were invalid due to prior non-confidential disclosures to two parties based in Russia, including EVS, a company based in St Petersburg, and Russia’s central bank.

‘Matter made available to the public’ is part of the ‘state of the art’ condition for patents (in the UK: s.2(2) of the 1977 Act). It may affect the novelty or obviousness of a patent: Subsections 2(1) and (2) of the Patents Act 1977 (“the 1977 Act”) provide:

“2. (1) An invention shall be taken to be new if it does not form part of the state of the art.

(2) The state of the art in the case of an invention shall be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way.”

In support of their case of lack of novelty and inventive step Ocado rely on alleged prior disclosures to the Russian entities which Autostore say were made in confidence and could not therefore be part of the state of the art.

The section of the judgment that is of relevance to the blog (other than the brief reference to the TRIPS agreement [256]), is the qualification of the obligation not to disclose matter to the public, as (non)contractual, and the subsequent application of Rome II.  Hacon J summarises the issues [263] ff

Where a party relies on an express contractual restriction on the foreign disclosure of information, the effect of the alleged contract will be assessed according to the applicable law.  The party asserting the contractual restriction is obliged to plead the existence, the circumstances of formation and the relevant terms of the contract.  An English court seised will apply Rome I to determine which foreign law governs the contract.  The court will then decide whether, according to that law, there was an express term of confidentiality as alleged and whether its effect was to restrict the use of the information in issue.

The position is not so straightforward where it is said that a party in a foreign context was restrained from using information under an obligation that was not contractual – what an English court would recognise as an equitable obligation.

Rome II does not expressly recognise equitable obligations as a separate category. Clearly however they may still qualify as ‘non-contractual’.

[270 ff] Hacon J justifiably rejects Ocado’s assertion that Rome I and II dovetail. It is beyond doubt that not all obligations that are not contractual, must necessarily be covered by Rome II and vice versa.  Likewise, the overall application of Rome II clearly may imply non-contractual obligations that are putative. Meaning for the purposes of the application of Rome II, one may have to pretend for the time being that there are non-contractual obligations at play and that these are covered by Rome II, only for the so identified substantive lex causae to decide that there are not, after all, any non-contractual obligations at play.

Re the alleged disclosures made by the Bank, [276 ff] AutoStore’s primary contention is that the hypothetical breach of the alleged equitable obligation of confidence is correctly categorised as a culpa in contrahendo within the meaning of A12 Rome II, seeking support ia in CJEU Ergo. [286] It argues the respective obligations of confidentiality arose in the context of negotiations (with the Russian companies) which ultimately led to the conclusion of the Distribution Agreement governed by Norwegian law.  Consequently, the same law applies to the obligations of confidentiality.

However upon consideration the judge holds [298] – with much support found in prof Dickinson’s Rome II volume and his contribution on Rome II in Dicey’s 16th ed – that A12 does not apply to the alleged disclosures by the Bank, seeing as in his view A12 does not apply to third parties to the contractual negotiations, even agents of the contracting parties. There were no negotiations between AutoStore and the Bank and AutoStore for its own reasons wanted to ensure that any agreement reached would be with EVS and not the Bank.

Instead, [324] ff, the lex causae is held to have arisen out of an act of unfair competition within the meaning of A6 of Rome II. That is important, for Article 6 does not have an escape clause like Article 4(3).

Here, the judge’s reasoning is under par.

Oddly for instance he holds A6(2) is not engaged ia [335] ‘because the Bank is not a competitor of AutoStore’s’ yet he nevertheless applies A6(1): ‘the law applicable to a putative obligation of confidence on the Bank was the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected.’: this is not convincing.

Reference is then made by the judge to CJEU Verein für Konsumenteninformation v Amazon EU Sàrl , CJEU Volkswagen and to Celgard, and to the Mozaikbetrachtung present in particular in the latter case. However he then [351] holds that ‘attention must be paid to the hypothesis posited in this case. It is that the Bank was about to make Bank Bot Designs public or had already done so’, subsequently linking that [353] to the procedural relief Autosore would have hypothetically sought for the potential breach, in, the judge holds, Russia. Conclusion [354]: ‘Of the laws made applicable under art.6(1) of Rome II to apply to the question of confidentiality, the one that would have mattered on the hypothesis raised would have been Russian law.’ That link to procedural relief to me comes out of nowhere.

As for the relationship with EVS, [301] the question arises as to whether AutoStore and EVS contemplated a contractual relationship at the relevant times. The judge [302] holds that a theoretical possibility of the purchase of goods or services or of some other contractual relationship does not suffice to trigger A12: commercial parties are almost constantly on the look-out for such relationships. [322] after having considered the various arguments the judge holds that A12 is engaged vis-a-vis EVS, yet that the putative law of the contract cannot be determined by A12(1), hence requiring the application of A12(2)(a). The applicable law is the law of the country in which damage would hypothetically have occurred, here, it is held, Russia.

Applicable law for both claims having been held to be Russian law, the remainder of the judgment then deals with evidence of that law and the conclusion [396] that the information was disclosed without imposing any obligation of confidence on either EVS or the Bank.

As noted the A6 analysis in my view is appealable. For both the A6 and the A12 analysis it is also a pity and concern to see, once again, the English courts (chicken and egg-wise led of course by counsels’ probable absence of presentation of same) lack of engagement on issues of both acquired and retained EU conflict of laws, with scholarship outside of the UK and /or other than written in English.

Geert.

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Vestel v Philips. Court of Appeal rejects attempt to ground jurisdiction on a claim requalified from abuse of dominance to patent DNI.

In Vestel Elektronik Sanayi Ve Ticaret A.S. & Anor v Access Advance LLC & Anor [2021] EWCA Civ 440 – also known as Vestel v Philips, the Court of Appeal has rejected an attempt to establish jurisdiction for the Courts of England and Wales in a stand-alone competition law damages case.

Hacon J had earlier rejected jurisdiction in the claim which at first instance was formulated as an abuse of dominance claim. That claim was now reformulated with Birss LJ’s permission [30], with the relevant tort being the tort of patent infringement, and in effect the claim a negative declaration relating to that patent. That a claim for declaration of non-liability in tort (‘a ‘negative declaration’) may be covered by A7(2) BIa, was confirmed by the CJEU in C-133/11 Folien Fischer. In the case art issue, it would require Vestel to show it had not infringed a valid IP right. However Birss LJ holds that Vestel’s claim, aimed at obtaining a FRAND declaration for the patented technology (Vestel needs a licence for the technology patented by Philips, and wants it at FRAND terms: Fair, Reasonable and Non-Discriminatory).

The declarations sought by Vestel, after dropping the abuse of dominance plea, are in this form [49]: i) A declaration that the terms offered are not FRAND; ii) A declaration that the terms of Vestel’s counter-offer are FRAND; and  iii) Alternatively, a declaration as to the terms which would be FRAND. these, is it held, are not declarations of non-liability in tort. Vestel have not been given right to access the IPRs. They seek that right in specified terms. They cannot claim that a hypothetical right of entry can proactively ground jurisdiction on the ground that the non-existing access has not been transgressed. As Birss LJ puts it: ‘Vestel’s position is like that of a trespasser with no right to enter the property claiming that if they had permission then it would not be a trespass.’

This was a creative jurisdictional attempt. I think it justifiably failed.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.198; para 2.454.

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Ablynx and VUB v Unilever. The Court of Appeal reverses on Brussels Ia’s protection for choice of court (Article 31(2), yet dithers as to precise implications.

The Court of Appeal in [2019] EWCA Civ 2192 has reversed Hacon J’s ruling which I reviewed here in [2019] EWHC 792 (Pat) Ablynx and VUB v Unilever. Hacon J had held that Article 31(2) does NOT mean that the Brussels courts, to whom jurisdiction has been assigned in a licence agreement, get to decide first on the engagement of Article 24(4)’s exclusive jurisdictional rule re the validity of patents. Hacon J had decided that A31(2) cannot apply if A24(4) is engaged.

Lewison LJ with great clarity discussed CJEU and other authority on the application of (now) A25 and A24(4) (GAT v Luk and Roche of course feature). He holds at 71 that under the terms of the Recast Regulation, the Belgian court is empowered to decide whether the English court has exclusive jurisdiction; and that that question will involve the question whether the choice of court agreement is overridden by A25(4). And at 75: ‘the mere fact that there is a whisper of invalidity does not automatically bring proceedings in a different member state to a juddering halt. If this approach were to be applied to article 31(2) it would enable the Belgian court to decide, on a provisional basis, whether there was a non-negligible possibility that the UK court would declare the UK designation of the patents invalid. If it came to that conclusion, it would then have to decide to what extent that invalidated the exclusive jurisdiction agreement.’  ‘The court first seised (in England) is required to stay its proceedings as soon as the designated court has been seised (in Belgium) and until such time as the latter court declares that it has no jurisdiction under the exclusive choice of court agreement.’ Lewison LJ does hold that the court seized has to carry out a prima facie review of the validity of the choice of court agreement.

Conclusion, at 77: ‘it is for the court designated in the exclusive jurisdiction agreement (i.e. the Belgian court) to decide whether (and, if so, to what extent) it is deprived of its jurisdiction as a result of article 25 (4).’

However subsequently and despite counsel claim at 78 that the English court should not even consider the question whether A25(4) was engaged, the Court of Appeal does hold that the English courts should carry out a prima facie review of A25(4), too: at 78: if a prima facie case is established that A24 (4) does not apply (which at 110 following lengthy discussion it holds it does not, prima facie, in the case at issue; hence the action is stayed in its entirety) then it will be for the Belgian court to decide that question definitively. The opposite, it suggests, would cause unnecessary delay and expense.

This is a very thin line between full respect for Article 25(4)’s anti-torpedo mechanism, and disciplining abuse. I am not sure this judgment settles the issue on A25(4)’s full implications for court’s respective powers.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

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Ablynx and VUB v Unilever. On Brussels Ia’s protection for choice of court (Article 31(2) and, again, on DNIs and exclusive jurisdiction for patents.

[2019] EWHC 792 (Pat) Ablynx and VUB v Unilver engages similar discussions as Eli Lily v enentech and Chugai v UCB with the additional element of now, under Brussels Ia, the application of Artile 31(2). This Article makes safe the torpedo previously used to gazump choice of court, by giving the courts of the States in whose favour choice of court has been concluded, a first go at discussing the validity and application of the choice of court agreement.

Here: does Article 31(2) mean that the Brussels courts, to whom jurisdiction has been assigned in a licence agreement, get to decide first on the engagement of Article 24(4)’s exclusive jurisdictional rule re the validity of patents?

It is worth quoting Hacon J in full: at 17 ff

’17. Ms Lane (for the defendants, GAVC) submitted that the position is clear: art.31(2) is engaged and therefore these proceedings must be stayed. Art.24 could never make a difference in this court because it cannot override art.31(2). That is because art.31(2) is expressly stated to be without prejudice to art.26 but not art.24. The consequence is that all issues arising in these proceedings must be ceded to the Brussels courts, including the question whether art.24(4) is engaged and if so, what should be done about it. It is not the concern of this court.

18. I disagree. To my mind art.25(4) explains why there is no mention of art.24 in art.31(2). Art.31(2) is necessarily without prejudice to art.24 since an agreement relied on for a stay under art.31(2) can carry no legal force if it purports to exclude the courts having exclusive jurisdiction under art.24. Even on the assumptions I have stated, art.31(2) cannot apply if art.24(4) is engaged. Art.24(4)’s engagement depends on whether these proceedings are ‘concerned with’ the validity of the Patents UK within the meaning of art.24(4). I must resolve this last question before I can decide whether the (assumed) agreement carries legal force and therefore whether art.31(2) is engaged.

19. I also note that art.26 is itself made subject to art.24. This reinforces my view that the recasting of Brussels I has not altered the hierarchy of provisions awarding jurisdiction, with art.24 at the top. Arts.24 and 25 both speak of ‘exclusive jurisdiction’, but that conferred by art.24 is the more exclusive.’

Having held that Article 31(2) is not engaged, the Court still has to assess whether the claim is essentially a declaration of non-infringement or rather ‘concerns’ the validity of the patents. Defendants argue that the validity of the Patents UK would form only an incidental part of this action, since it is really a dispute about the scope of defendant’s licence.

Here, Hacon J discussed CJEU authority at length (GAT v LUK, BVG, Gasser etc.) and summarises at 53

(1) When a stay is sought under art.31(2), if an argument is raised that the court before which the stay is sought has exclusive jurisdiction under art.24, that court must decide whether the argument is correct.

(2) If the court has exclusive jurisdiction under art.24, art.31(2) is not engaged. There will be no stay.

(3) If the court does not have exclusive jurisdiction under art.24, it must decide whether at least prima facie there is an agreement which satisfies art.25 and which confers exclusive jurisdiction on courts of another Member State. If so, provided the defendant has not entered an appearance in a manner which satisfies art.26, there must be a stay of the proceedings.

EPLaw helpfully summarise the lenghty review of testimony and pleadings as follows: taking into account the usual practice in relation to patent validity proceedings in the UK, and the arguments which are typically run, the Court concluded that there was no real doubt that if the proceedings progress to trial they will be concerned with the validity of the Patents within the meaning of art.24(4). Art.24(4) was therefore engaged.

The case raises again the interesting issue of the degree to which the court may rely on parties’ submissions in particulars of claim when examining jurisdiction, or alternatively need to look beyond these stated arguments into what might and will be argued.

Leave to Appeal has been granted and a further order has already dealt with service issues.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

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DNIs, patents, exhaustion and jurisdiction under Lugano: Parainen Pearl v Jebsen Skipsrederi.

A case title which sounds a bit like a Scandinavian crimi – that’s because it almost is. In [2017] EWHC 2570 (Pat) Parainen Pearl et al v Jebsen Skipsrederi et al the facts amounted to claimants, who had purchased a vessel containing a pneumatic cement system patented by defendant (a company domiciled in Norway), seeking a declaration of non-infringement (DNI) of said patent. The purchase was somewhat downstream for the vessel had been sold a number of times before.

Claimants suggested jurisdiction for the UK courts for DNIs relating effectively to the whole of the EEA (at least under their reasoning; the specific countries sought were Sweden and Finland). For the English (and Welsh side of things jurisdiction is established without discussion under Article 5(3) Lugano, forum delicti. Reference was made to Wintersteiger and to Folien Fischer.

Claimants suggested that by the first sale to the original owner, defendants had ‘exhausted’ their intellectual property thus rendering the vessel into a good free to sold across the EEA. Should the court agree with that view, that finding of exhaustion would have to be accepted, still the argument went, across the EEA. Hence, an initial finding of exhaustion, given the need to apply EEA law the same in all EEA Member States, would have to be accepted by all other States and conversely this would give the English courts jurisdiction for pan-EEA DNIs.

Arnold J refers to among others Roche, Actavis v Eli Lilly, Marzillier. He holds that a potential finding by an English court of exhaustion may not necessarily be recognised and enforced by other courts in the EU or indeed EEA: it is not for the UK courts to presume that this will be so (despite their being little room for others in the EEA to refuse to enforce): ‘(Counsel for claimant) argued that.., on a proper application of European law, there could only be one answer as to whether or not the Defendants’ rights under the Patent in respect of the Vessel had been exhausted. In my view, however, it does not follow that it would be proper for this Court to exercise jurisdiction over matters that, under the scheme of the Lugano Convention, lie within the province of the courts of other Contracting States.’

Article 5(3) which works for UK jurisdiction, can then as it were not be used as a joinder-type (Article 6(1) Lugano; Article 8(1) Brussels I Recast) bridgehead for jurisdiction on further claims.

Conclusion: UK courts have no jurisdiction in so far as the DNIs extend beyond the UK designation of the Patent.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.4, Heading 2.2.12.1.

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‘Establishment’, jurisdiction and the EU Trademark Regulation: Hummel v Nike.

Jurisdiction in intellectual property cases is notoriously complex and frankly opaque, in the case of the EU exacerbated by the impact of secondary law. My colleague Marie-Christine Janssens has a great overview in the Belgian reports at the Congress of Washington of the International Academy of Comparative Law. Brussels: Bruylant, 611-652.

At stake in C-617/15 Hummel v Nike was Regulation 207/2009, in the meantime superseded by Regulation 2015/2424.  Article 94 of the former, entitled ‘Application of Regulation … No 44/2001’, contains rules on jurisdiction and procedure in legal actions relating to EU trade marks. It states that ‘Unless otherwise specified in this Regulation, Regulation … No 44/2001 shall apply to proceedings relating to [EU] trade marks and applications for [EU] trade marks, as well as to proceedings relating to simultaneous and successive actions on the basis of [EU] trade marks and national trade marks.’ Article 94 essentially varies, to some degree, the jurisdictional rules of the Brussels I (now Recast) Regulation.

Now, what needed specific interpretation was Article 97’s

‘1.      Subject to the provisions of this Regulation as well as to any provisions of Regulation … No 44/2001 applicable by virtue of Article 94, proceedings in respect of the actions and claims referred to in Article 96 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment. 

2.       If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.

3.      If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where [EUIPO] has its seat.

More specifically, the notion of ‘establishment’: Under which circumstances is a legally distinct second-tier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the EU to be considered as an “establishment” of that undertaking.

Nike, which has its seat in the US, is the ultimate holding company of the Nike Group, which sells sports goods across the world. Nike Retail, which has its seat in the Netherlands, also belongs to that group. Nike Retail operates the website on which Nike goods are advertised and offered for sale, in Germany in particular. In addition to online sales on that website, Nike goods are sold in Germany through independent dealers supplied by Nike Retail. Wholesale or retail sales in Germany are not directly conducted by the companies in the Nike Group.

Nike Deutschland GmbH, which has its seat in Frankfurt am Main and is not a party to the main proceedings, is a subsidiary of Nike Retail. Nike Deutschland does not have its own website and does not sell goods to end consumers or intermediaries. However, it negotiates contracts between intermediaries and Nike Retail, and supports Nike Retail in connection with advertising and the performance of contracts. Nike Deutschland also provides aftersales service for end consumers.  Hummel Holding claims that some Nike products, in particular basketball shorts, infringe its trade mark and that most of the infringements took place in Germany. It brought an action against Nike and Nike Retail before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany), which ruled that it had jurisdiction on the ground that Nike Deutschland was an establishment of Nike, but dismissed the action on the merits. This judgment is now being appealed.

The CJEU first of all (at 22 ff) warns for caution in the conjoined application of concepts used in both the Trademark Regulation and the Brussels I (Recast). The Trademark Regulation is, so the Court says specifically, lex specialis and one cannot therefore assume the same words mean the same thing. Readers of this blog are aware that I always give the CJEU thumbs-up when it mentions this (such as in Kainz), however the Court itself very regularly ignores its own instruction when the discussion involves the application of Brussels and Rome.

The point of Article 97, the Court notes (at 37) is to ensure that a court within the EU always has jurisdiction to hear and determine cases concerning the infringement and validity of an EU trade mark. In line with the AG’s suggestion the Court consequently opts for a broad interpretation of the concept, holding that the concept requires (1) a certain real and stable presence, from which commercial activity is pursued, as manifested by the presence of personnel and material equipment. (2) In addition, that establishment must have the appearance of permanency to the outside world, such as the extension of a parent body. However what is not required is for that establishment to have legal personality. Third parties must thus be able to rely on the appearance created by an establishment acting as an extension of the parent body. Furthermore and importantly, it is, in principle, irrelevant for the purposes of Article 97(1) of Regulation No 207/2009 whether the establishment thereby determined has participated in the alleged infringement.

A word of warning evidently: given the Court’s emphasis on the context of Article 97, with a view to its wide application, readers must not be tempted to read the judgment’s view on the concept of ‘establishment’ as applying across the board in EU conflicts law, let alone EU law as a whole.

Geert.

 

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Chugai v UCB: When does one litigate not just the scope but also the validity of a patent?

Update 31 August 2018 the merits of the case were subsequently held in August 2018,  [2018] EWHC 2264 (Pat).

End of exam season (sadly not yet of marking marathon). In the next few weeks I shall be posting on judgments issued a little or longer while ago, which I was pondering to use in exams. (I did for some of them).

In [2017] EWHC 1216 (Pat) Chugai Pharmaceutical v UCB the issue at stake was to what degree a suit seeking to establish absence of liability under a patent license, in reality provokes argument on the validity of the patent. Carr J has excellent review of precedent, much of which has passed in one way or another on this blog. Please do refer to judgment for proper reading.

Claimant (“Chugai”) seeks a declaration against the Defendants (collectively “UCB”) that it is not obliged to continue to pay royalties under a patent licence (“the Licence”) granted by the First Defendant (“UCB Pharma”).  UCB Pharma is a Belgian company with an English branch which entered into the Licence with Chugai in respect of a portfolio of patents. Chugai claims that its products, which are, in part, manufactured and sold in the USA, fall outside the scope of the claims of the Patent concerned. Accordingly, Chugai seeks a declaration that it owes no royalties for the manufacture and sale of these drugs manufactured after a certain date.

UCB alleges that, although framed as a claim for a declaration relating to a contract, a part of these proceedings, in substance, concerns not only the scope but also the validity of the Patent. UCB submits that the validity of a US patent is non-justiciable, since the English court has no power to determine the validity of a foreign patent. Accordingly, it submits that those parts of Chugai’s pleading which are said to raise issues of invalidity fall outside the subject matter jurisdiction of the English court.

European private international law as readers will know lays greats emphasis on exclusive jurisdiction in the case of validity of patents. The CJEU’s holding in C-4/03 Gat v Luk that nullity actions against a national part of a certain European patent can only be conducted in the jurisdiction for which that patent was registered, regardless of whether the nullity argument is raised in the suit or by way of defence, is now included verbatim in Article 24(4) Brussels I Recast. The EU’s take is rooted in the idea that the grant of a national patent is “an exercise of national sovereignty” (Jenard Report on the Brussels Convention (OJ 1979 C59, pp 1, 36)). The rule therefore engages the Act of State doctrine, and suggests that comity requires the courts of States other than the State of issue, to keep their hands off the case.

Particularly in cases where defendant is accused of having infringed a patent, this rule gives it a great possibility to stall proceedings. Where the action is ‘passive’, with plaintiff aiming to establish no infringement, the argument that the suit really involves validity of patent is less easily made.

The possibility of ‘torpedo’ abuse, coupled with less deference to the jurisdictional consequences of the Act of State doctrine [particularly its contested extension to intellectual property rights], means the English courts in particular are becoming less impressed with the exclusivity. (Albeit Carr J on balance decides per curiam (at 73-74) that direct challenges to the validity of foreign patents should not be justiciable in the English courts). Where the EU Regulation applies, they do not have much choice. Carr J refers to [2016] EWHC 1722 (Pat) Anan where claimant sought to carve out issues of validity by seeking a declaration that the defendant’s acts infringed a German patent “if the German designation is invalid (which is to be determined by the German courts)“.  EU law meant this attempt could not be honoured. Carr J however suggests that EU rules have no direct application in the present case because the Patent at stake is a United States patent. That is spot on, on the facts of the case: choice of court having been made in favour of the English courts, the case does not fall under the amended lis alibi pendens rule of the Brussels I Recast. In Article 33 juncto recital 24, reflexive effect is suggested for the Regulation’s exclusive jurisdictional rules, leaving a Member State court in a position (not: under an obligation) to give way to pending litigation in third countries, if its own jurisdiction is based on a non-exlusive jurisdictional rule (Articles 4, 7, 8 or 9) and not within the context of the protected categories.

Allow me to lean on 20 Essex Street’s conclusion in their review of the case: Carr J held that the case before him was not a direct challenge to validity. He accepted Chugai’s submissions that its claim was contractual. Disputed parts of the patent were incidental to the essential nature of its claim, which was a claim for determination of its royalty obligations. In his view, this claim fell within the exclusive jurisdiction clause, in favour of the English courts, which parties had agreed.

Essential reading for IP litigators.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7.

 

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Actavis v Eli Lilly. On the extent to which patent DNIs (Declarations of non-Infringement) are covered by Rome II’s exception for procedure.

Update 14 July 2017 the judgment was overturned by the Supreme Court [2017] UKSC 48, albeit not on the issues discussed here.

Actavis UK Ltd & Ors v Eli Lilly & Company [2015] EWCA Civ 555 discusses ia, at 100 ff, the question whether under Rome II the English court must apply the corresponding foreign laws governing the conditions for applying for patent ‘declarations of non-infringement’ (DNIs) in each of the foreign jurisdictions, or whether English law, as the lex fori, applies. English law takes  a more relaxed attitude amongst the EU Member States re what must be shown before a party can apply to the court for a DNI.

Are the rules for obtaining DNIs matters of procedure, falling outside the scope of Rome II per Article 1(3)? The judge whose findings were being appealed had held that DNI standing rules are not concerned with the substantive rights and obligations of the parties with regard to infringement of the patent in suit: they fall under the procedural exception. Viz the argument that Article 15(c) (A15 deals with the ‘scope of the law applicable’) he had held that there is a distinction to be drawn between the availability in principle of a remedy and the steps which must be taken in order to obtain that remedy. It was in his judgment only the former which was caught by Article 15 and made subject to the lex causae.

Longmore LJ at 138 referred to Wall v Mutelle de Poitiers Assurances and agreed with the first instance judge that the rules with which the case is concerned are conditions of admissibility of actions, rather than rules concerned with the substance or content of parties’ rights. They are covered by the exception for procedure and hence subject to the lex fori, English law. At 144 ff he rejects the applicability of specific parts of Article 15 to the various conditions relating to DNIs.

Interesting and relevant.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4.

 

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Actavis v Eli Lilly in the High Court: Better reach for a tablet when litigating patents.

In [2012] EWHC 3316 (Pat) Actavis v Eli Lilly, the High Court (Patents) upheld jurisdiction for the English courts to hear a case in which applicant seeks a pan-European declaration of non-infringement of a patent. Actavis, a generics manufacturer, sought declaration that it had not infringed Eli Lilly’s patent for Permetrexed, a cancer treatment.

Arnold J, along the lines of  the Supreme Court’s decision in Lucasfilm v Ainsworth, held that forum non conveniens arguments would not sway the Court towards declining jurisdiction for the non-UK parts of the declaration (Germany, France, Italy, Spain).  Arnold J referred to the de facto approximation of patent law in the various EU Member States:

‘As to the different national approaches, I accept that there are differences. In my view, however, the differences are rather less now than they have been in the past. Certainly, in recent years the European patent judiciary have been striving for consistency. I am sceptical that the remaining differences of approach, as opposed to other factors, are responsible for different outcomes in parallel cases. In any event, it seems to me to be manifest that it will reduce the likelihood of inconsistent decisions if one court at first instance and one court on appeal determines all five of Actavis’ claims. ‘

The judgment adds to the layer of complexity in intellectual property litigation. Prima facie the judgment may offer a great means to have pan-European patent infringement cases held in England (the very reference to a number of pending trial dates even in Germany, quietly underline the speed with which the UK can hear cases such as these).

Distinguishing is however of the essence:

– Actavis are headquartered in Switzerland (one will recall that under the Brussels I Regulation, the plaintiff’s domicile or nationality is generally irrelevant). Defendant is domiciled in the State of Indiana, United States. The declarations are not sought against any EU domiciled companies – Brussels I is not applicable. The outcome may be entirely different had the opposite been the case.

– The validity of Lilly’s patent is not sub judice. This too, even outside the Jurisdiction Regulation (where the exclusive ground of Article 22(4) would have trumped English jurisdiction), may have led to a different outcome under forum non conveniens arguments.

– Arnold J’s suggestion of de facto approximation may not hold with the ECJ for actions which do come within the Jurisdiction Regulation. As reported on this blog, even in Solvay, the ECJ  does not drop its insistence per Roche that de lege lata, European patent law remains national.

All of this may lead indeed to the awkward result that patent infringement cases are more swiftly and expertly dealt with in EU courts against non-EU defendants, then against EU defendants.

Geert.

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