Landmark CJEU decision extends the options for European cross-border patent infringement disputes

• An EU Member State court of a defendant’s domicile has jurisdiction to hear an infringement action with respect to a patent granted in another Member State, irrespective of whether the defendant has raised an invalidity defence.
• An EU Member State court of a defendant’s domicile has jurisdiction to assess an invalidity defence with respect to a patent granted in a non-EU state with inter partes

The decision has been much-anticipated and confirms the availability of cross-border injunctions in proceedings before courts of EU Member States and the UPC.

Legal background

The decision focuses on the interplay between Articles 4(1) and 24(4) Brussels 1 bis Regulation.

Article 4(1) of that regulation provides a principle of general jurisdiction to the court of an EU Member State where a defendant is domiciled. Thus, where a defendant is sued for infringement of a European patent, the court of the EU Member State in which the defendant is domiciled has jurisdiction to hear the infringement case.

Article 24(4) of that regulation provides an exception to this general principle. In particular, the Article states that in proceedings concerned with the registration or validity of patents, irrespective of whether the issue is raised by way of an action or as a defence, the court of the EU Member State in which the patent has been applied for shall have exclusive jurisdiction. The CJEU previously ruled in GAT vs LuK (C‑4/03) that where a court of the EU Member State in which the defendant is domiciled is hearing an action alleging infringement of a patent granted by another Member State, and the defendant raises an invalidity defence, that court cannot establish the invalidity of the patent. Instead, that court must declare that it does not have jurisdiction regarding the validity of the patent, in view of the exclusive jurisdiction of the court of the Member State in which the patent is granted. Following GAT vs LuK, the common understanding was that the court could also not proceed with the infringement action in the other Member States where the validity of the patent had been challenged.

The decision

The question regarding whether, in such a situation, the court of the Member State in which the defendant is domiciled still has jurisdiction to hear the infringement action or whether it must declare that it does not have jurisdiction in respect of any aspect of the dispute relating to the patent granted by another Member State is now directly addressed by the CJEU in the present decision.

The CJEU has answered that question by ruling that the exclusive jurisdiction arising from Article 24(4) Brussels I bis Regulation relates only to the part of the dispute relating to the validity of the patent. Accordingly, a court of the Member State in which the defendant is domiciled does not lose jurisdiction over an infringement action where the defendant challenges the validity of the patent.

The CJEU’s justification for its interpretation of Article 24(4) of that regulation can be summarised as follows.

• The CJEU considered that the “proceedings concerned with the… validity of patents” referred to in Article 24(4) should be interpreted narrowly given that the purpose of the article is to establish an exception to the general rule provided by Article 4. If on the other hand Article 24(4) should be interpreted such that the court of the defendant’s domicile loses its jurisdiction over an infringement action for a patent granted in another Member State whenever the defendant raises an invalidity challenge (which occurs in the majority of disputes), Article 24(4) would tend to become the rule rather than the exception.
• The second key reason was that the CJEU decided that the objective of legal certainty regarding jurisdiction was better achieved by a narrow interpretation of “proceedings concerned with the… validity of patents” referred to in Article 24(4). Otherwise, the court of the defendant’s domicile would lose its valid jurisdiction over an infringement action based on the defence chosen by the defendant and the timing for raising said defence.

The CJEU also clarified a number of practicalities. Following Advocate General Emiliou’s first opinion, the CJEU noted that the court of the Member State in which the defendant is domiciled may stay the infringement proceedings, pending the outcome of any invalidity action taking place in another Member State and for which a patent granted in that other Member State is part of the infringement action. The court could, for example, stay proceedings if it considers that there is a reasonable possibility of the patent being declared invalid by the court of that other Member State.

The decision does not address the question of what might happen if injunctions are granted and damages awarded and later the patent is invalidated in another Member State. One option would potentially be for the court to grant a conditional judgment. The granting of a conditional judgement is, for example, expressly allowed in the UPC’s Rules of Procedure, at Rule 118 (2)(a).

The CJEU went one step further and ruled on the issue of whether Article 24(4) of the Brussels I bis Regulation applies to a court of a third State (e.g. the UK or US). However, the court held that Article 24(4) does not apply to a court of a third State. Consequently, that Regulation cannot confer ‘exclusive’ jurisdiction on third state courts regarding the validity of a patent granted in that state.

The CJEU nonetheless felt it necessary to determine whether, where a court of a Member State of the defendant’s domicile hears an action alleging an infringement of a patent for a third State and the issue of validity is raised, the court has jurisdiction over the issue of validity.

The CEJU decided that the court of the Member State does have jurisdiction to rule on that issue of validity, subject to a number of restrictions. These restrictions include relevant bilateral conventions agreed between a Member State and a third state, and where the same or similar proceedings are already pending before a court of a third state at the time when the Member State court was seized.

The CJEU noted, though, that the Member State court’s decision on validity of the patent granted for a third state would not affect the existence or content of that patent in that third state, or to cause its national register to be amended. As such, the decision only has inter partes effect.

Impacts

The decision is in agreement with the UPC’s Düsseldorf Local Division’s decision in Fujifilm vs Kodak (UPC_CFI_355/2023), which we reported on in our news item here. In that decision, the UPC ruled that it has jurisdiction over infringement actions concerning the UK part of a European patent, at least when the defendant is domiciled in a Contracting Member State.

Following the issuance of the CJEU’s decision, commentators have speculated that we may see applications for anti-suit injunctions at non-EU courts, to prevent parties bringing disputes at EU courts relating to patents granted for non-EU states. Such applications may aim to avoid conflicting proceedings arising between courts of non-EU and EU states over the same patent. In particular, it seems likely that a UK court may be open to issuing an anti-suit injunction against proceedings brought at the court of an EU Member State which were initiated after proceedings had already commenced at the UK court.

Following this ruling, claimants in Europe are now spoilt for choice when it comes to bringing cross-border infringement actions. Not only can a pan-European injunction be sought at the UPC, but also at the courts of EU Member States.