• Bring on the European Patent

    ECJ rules that National Courts have no Jurisdiction over each other’s Patents.
    National Patents must be Litigated Nationally

    Suppose you have two German companies in dispute over infringement of a French patent? Can they fight it out in the German courts? The ECJ says “No – not if validity of the patent is at issue”.

    GAT v. LuK

    In Gesellschaft fur Antriebstechnik mbH & Co KG (GAT) v. Lamellen und Kupplungsbau Beteiligungs KG (LuK) [2006] FSR 45, the ECJ held that Article 16(4) of the Brussels Convention (now Article 22(4) of the Regulation) is to be interpreted as providing exclusive jurisdiction to the courts of the territory of registration in all matters concerning the validity of a patent, irrespective of how such issue is raised (e.g. by nullity action or declaration of non-infringement or by way of defence and counterclaim for invalidity). This means that, whereas a party can bring an action for infringement in the courts of state A for infringement of a patent granted or registered by state B (e.g. because the defendant is domiciled in state A), as soon as the defendant enters a defence of invalidity, the courts of state A must decline or relinquish jurisdiction in favour of the courts of state B. Indeed, unless the defendant is prepared at an early stage to agree not to raise invalidity, transfer of the proceedings may be unavoidable. The English Patents Court had earlier come to the same conclusion in Coin Controls Ltd v. Suzo International Ltd [1997] FSR 660 (as had the courts of the German state of Mannheim in other proceedings).

    GAT, a German company, had tendered for a contract from Ford of Germany for the supply of shock absorbers. LuK, a German competitor, alleged that GAT’s shock absorbers would infringe its French patents and applied to the Düsseldorf Court (Landsgericht) for a declaration of non-infringement and included in its grounds the allegation that the patents were invalid. At first instance, the Düsseldorf Court accepted subject matter jurisdiction, held the patents to be valid and dismissed GAT’s action. GAT appealed to the Court of Appeal (the Düsseldorf Oberlandesgericht), which stayed the proceedings and referred the question of interpretation of Article 16(4) to the ECJ.

    Comment

    Whereas Dutch courts and the court of Düsseldorf (but, curiously, not the court of Mannheim) have in the past been willing to accept jurisdiction over infringement outside their borders, following the ECJ’s decision, the courts of all EU member states (other than the state of registration of the IP right) must now decline jurisdiction as soon as validity is put in issue. In the UK, it is rare in a patents dispute for validity not to be put at issue. In Germany it is less rare, as validity is heard by the courts in Munich, and infringement proceedings before regional courts are stayed pending judgement on validity.

    A claimant will be hesitant to bring an infringement action in one state under the patents of another state if it is within the defendant’s power to have the proceedings transferred simply by raising invalidity as a defence. There are few exceptions. Interlocutory proceedings are one.

    • Dutch courts, for example, may continue to grant interlocutory relief under patents of other states pending resolution of validity in the state of registration of the patent (but they may become more concerned that the relief should be short-lived and require that the validity proceedings be brought quickly).


    • The ECJ decision makes no mention of the prima facie strength of the invalidity proceedings. Commentators are speculating that a court might in effect strike out an invalidity defence if it is considered frivolous.

    • Finally, how will a court handle a Gillette or Formstein – type defence? Under these defences, the defendant in effect argues that it doesn’t matter whether the patent is invalid or not, because the infringement is equivalent to the prior art or is an obvious modification of the prior art.

    Background – the Rules for Jurisdiction in the EU

    The golden rule of jurisdiction is that persons shall be sued in the courts of the state in which they are domiciled (Article 2(1) of the Brussels Regulation). The exceptions to this rule are:

    (a) special jurisdiction in matters relating to tort, under which a person may be sued where the harmful event occurred – Article 5(3);

    (b) multiple defendant jurisdiction, whereby a person may be sued in the courts of the state of domicile of a co-defendant (provided the claims are so closely related that it is expedient to hear them together to avoid risk of irreconcilable judgements) - Article 6(1); and

    (c) exclusive jurisdiction, whereby proceedings concerning registration or validity of IP rights must be heard in the courts of the state where the right has been applied for - Article 22(4).