The European Court of Justice recently breathed new life into the phenomenon of cross-border injunctions – a cost-effective tool originally developed by the Dutch courts to stop infringement.
A cross-border injunction, which enables a patent holder to start proceedings in a single country instead of all countries in which its patents are infringed, is a great time and money saver. The Dutch courts used to issue such injunctions routinely, both in cases on the merits and in preliminary proceedings, but over the years this practice had been considerably limited by the European Court of Justice (ECJ). However, a recent ECJ decision (Solvay v Honeywell, C-616/10, July 12 2012) appears to have reversed the trend, at least as far as cross-border measures in preliminary proceedings are concerned. The ECJ stated that if one or more companies infringe the same European patent with the same product in multiple EU member states, the patent holder may be entitled to claim and obtain a cross-border injunction before the court of one of those countries that is applicable in all those states. This is a significant development for patent holders, such as pharmaceutical companies, since conducting infringement proceedings in multiple EU countries is very costly in terms of both time and money.
EU Regulation 44/2001
The question of where a party that has committed patent infringement can be sued is a matter of private international law. In Europe, the jurisdiction issue is governed by EU Regulation 44/ 2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
According to the general rule stated in Article 2 of Regulation 44/2001, a party whose domicile is in a EU member state may be sued in the courts of that member state, irrespective of its nationality. However, Article 5(3) of the regulation states that with respect to claims relating to an unlawful act, a defendant may also be sued before the courts of the member state where the unlawful event occurred or may occur. In addition, according to Article 6(1), if the case involves multiple defendants domiciled in various countries, they may all be sued in a country where any one of them is domiciled, provided that the claims against them are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
Past Dutch practice
The practice of granting cross-border injunctions in patent cases started in the Netherlands in the 1990s. The Dutch courts considered that they had jurisdiction in many of the international patent disputes that were filed.
Not only did the courts assume jurisdiction to rule on infringement in the Netherlands, they also ruled on infringement outside the Netherlands in relation to parallel IP rights in other European countries (eg, Interlas v Lincoln, Supreme Court, November 24 1989, BIE 1991, 23, p86; NJ 1992, 404). If necessary, the Dutch courts would apply foreign law to non-Dutch patents in order to assess validity and infringement outside the Netherlands. The Dutch courts issued cross-border injunctions in cases on the merits and in preliminary proceedings. For this, the courts relied on a broad interpretation of Article 6(1) of the Brussels Convention (now Article 6(1) of Regulation 44/2001).
However, the Dutch practice was not followed in other European countries, and courts in several EU countries – in particular, the United Kingdom – strongly opposed it. In view of this growing criticism, in 1998 the Court of Appeal of The Hague held in two decisions (EGP/Boston Scientific, April 23 1998, BIE 2002, 8, p25 and Boston Scientific/Cordis, November 26 1998, BIE 2002, 10, p46) that the Dutch courts could assume jurisdiction for co-defendants domiciled outside the Netherlands in relation to infringements committed in their own country only if there was also a Dutch defendant – the so-called 'spider in the web', that was coordinating the infringing acts of the co-defendants. This considerably narrowed the interpretation of Article 6(1) of the Brussels Convention and thus limited the possibilities to obtain a cross-border injunction from the Dutch courts.
Past ECJ practice
In 2006 the cross-border injunction practice was further restricted by two ECJ decisions. In Roche v Primus (C-539, July 13 2006) the ECJ held that Article 6(1) of the Brussels Convention did not apply in European patent infringement proceedings involving a number of companies domiciled in various contracting states in respect of acts committed in one or more of those states, even where those companies belonged to the same group and may have acted in an identical or similar manner in accordance with a common policy elaborated by one of them. This effectively meant that, according to the ECJ, Article 6(1) did not allow for the 'spider in the web' doctrine developed by the Dutch Court of Appeal.
In Gesellschaft für Antriebstechnik mbH & Co KG v Lamellen und Kupplungsbau Beteiligungs KG (GAT v LuK, C-4/03, July 13 2006) the ECJ was asked to interpret Article 16(4) of the Brussels Convention (now Article 22(4) of Regulation 44/2001), which states that the court of the member state in which an IP right has been registered has exclusive jurisdiction to assess the right's validity. The question addressed in the case at issue was whether this provision was applicable only to proceedings that were started with the goal of declaring a patent invalid, or also to proceedings in which a defendant in a patent infringement case pleaded the invalidity of the patent by way of defence against the infringement claim. The ECJ ruled that the exclusive jurisdiction provided for by Article 16(4) applied to the proceedings in which the issue of a patent's validity was raised (eg, a nullity action or a nullity defence) at the time the case was brought or at a later stage in the proceedings. This means, in essence, that a national court that is asked to grant a cross-border injunction in proceedings regarding the infringement of a European patent has no jurisdiction to assess the infringement of the 'foreign' parts of the patent if the validity of such parts has been challenged. This effectively barred crossborder
decisions in cases on the merits, as the invalidity of the patent in question was nearly always argued by way of defence against the infringement claims.
However, after GAT v LuK the Dutch courts relied on Article 31 of Regulation 44/2001 to adopt the position that it was still possible to issue cross-border injunctions in preliminary injunction proceedings (eg, Bettacare v H3 Products, Preliminary Relief Judge of The Hague, September 21 2006; PTC v APE Holland, Preliminary Relief Judge of The Hague, October 4 2011, www.iept.nl (IEPT20111004); and YPM v Yell, The Hague Court of Appeal, July 12 2011, www.iept.nl (IEPT20110712)). According to Article 31, proceedings may be started before the court of a member state for provisional measures, even if under the regulation the court of another member state has jurisdiction as to the substance of the matter (ie, the validity of the patent). According to the Dutch courts, this meant that the court still had jurisdiction to grant a preliminary cross-border injunction, even if the validity of the patent was challenged.
Solvay v Honeywell
In the eagerly awaited decision in Solvay v Honeywell, the ECJ was asked to provide its views on cross-border injunctions and, in particular, on the Dutch practice of granting such injunctions as an interim measure, even after GAT v LuK and Roche v Primus. In Solvay v Honeywell a number of companies from the Honeywell group domiciled in different EU jurisdictions, including the Netherlands, had marketed the same product in several EU jurisdictions covered by a European patent owned by Solvay. The product was said to infringe the relevant national parts of the European patent, excluding the Netherlands.
Solvay had commenced infringement proceedings on the merits against the Honeywell companies before the Hague District Court. In these proceedings, Solvay requested, among other things, a provisional cross-border injunction for the relevant countries in which Honeywell was claimed to have infringed Solvay's patent. In its defence, Honeywell argued that the patent was invalid. The Hague District Court, which had until then assumed that it had jurisdiction to grant preliminary cross-border injunctions, referred some preliminary questions to the ECJ.
The ECJ reiterated, with reference to its judgment in Roche v Primus, that for there to be a risk of irreconcilable judgments, there must be a risk of diverging decisions arising from the same situation of law and facts. However, in the case at hand the Honeywell companies were all accused of having committed the same infringements (ie, selling the same product in all of the relevant EU member states). Therefore, they had all committed the same infringement in the same territories. This, said the ECJ, could lead to irreconcilable judgments. In other words, in such circumstances, all defendants could be sued before a single national court, based on Article 6(1) of Regulation 44/2001.
Furthermore, the ECJ held that Article 31 of Regulation 44/2001 allows a national court to grant a claim for a provisional injunction based on a national part of a European patent even if the invalidity of that patent is asserted and another national court would have exclusive jurisdiction to decide on that point under Article 22(4) of the regulation. The ECJ observed that Article 22(4) seeks to avoid conflicting decisions on the validity of a national part of a European patent. It further noted that although in such a situation, the application of the jurisdiction rule based on Article 31 can be affected by Article 22(4), this did not apply in the case at hand. The Hague District Court had made it clear that in the ongoing proceedings in which a provisional cross-border injunction had been requested, it would not make a final decision on the validity of the foreign parts of the European patent, but rather would make a (preliminary) assessment of how the court with jurisdiction under Article 22(4) would rule on the validity of the patent. In addition, the Hague District Court had indicated that if it came to the conclusion that there was a reasonable, non-negligible chance that the foreign court with jurisdiction under Article 22(4) ruled that the foreign part of the patent was invalid, the request for a cross-border injunction would be rejected. Under these circumstances, the ECJ held, there was no risk of conflicting decisions and the Hague District Court could assume jurisdiction to grant a cross-border injunction, even though the invalidity of the patent had been asserted.
After Solvay v Honeywell
The ECJ appears to have confirmed that the Dutch practice of granting cross-border injunctions on a preliminary or provisional basis, even if the validity of the patent has been disputed, is permitted, as long as the assessment of the patent's validity is purely preliminary. This applies not only to defendants domiciled in the country where the court is located, but also to a group of defendants from different countries, provided that one of them is domiciled in the country where the court is based, and provided that they have all committed the same infringing acts (eg, selling the same infringing product) in the same countries. Therefore, the ECJ appears to have re-opened the door to cross-border enforcement practice, which was previously closed by the GAT v LuK and Roche v Primus judgments.
This certainly appears to be how the Dutch courts have interpreted Solvay v Honeywell, as illustrated by the decisions granting such injunctions handed down since July 2012. For instance, in Boehringer Ingelheim v Teva the preliminary relief judge of the Hague District Court ordered Teva to refrain from acting unlawfully against Boehringer Ingelheim by promoting or facilitating the infringement ofBoehringer Ingelheim's Portuguese patent, even though Teva had argued that the Portuguese patent was invalid. The judge held that even though he had to assess the validity of the foreign patent, there was no risk that the decision would conflict with the decision on the merits of the Portuguese judge since the Dutch judge did not give a final ruling on the validity of the Portuguese national patent.
However, a point to bear in mind is that in Van Uden v Decoline (C-391/95, November 17 1998) the ECJ held that there had to be a real link between the subject matter of the measures sought and the territorial jurisdiction of the member state of the court before which those measures are sought. For instance, in Boehringer Ingelheim v Teva the court ruled that there was a real connecting link because the defendants were domiciled in the Netherlands.
On the other hand, if the measure claimed (ie, an order to cease and desist from infringing a foreign part of a European patent) must also be complied with abroad, and all of the defendants are domiciled abroad, it is unlikely that a court will assume jurisdiction under Article 31 to grant a cross-border injunction. For instance, in Delaval v Boumatic (Preliminary Relief Judge of The Hague, December 7 2012), in which the defendant was domiciled outside the Netherlands, the judge ruled that the court did not have jurisdiction to grant an injunction with effect outside the Netherlands against a Swedish defendant as there was no real connecting link between the requested cross-border injunction and the Dutch territory.
An interesting issue is whether courts in other EU countries will interpret Solvay in the same way as the Dutch courts. The ECJ may have found that the Dutch provisional measure procedures create no risk of conflicting decisions because the assessment made of the patent's validity is purely preliminary; however, it remains to be seen whether courts in other jurisdictions will also find that their national procedures for granting provisional or preliminary injunctions fulfil the criteria set by the ECJ (for a non-Dutch perspective on Solvay, see for instance Trimble, M, "Solvay v Honeywell and an Alternative Route to a Central Patent Court in Europe", Patently-O, September 3 2012). However, an opening has now been created at a European level and it will be interesting to see whether (and if so, in what circumstances) courts in other EU countries will also grant cross-border injunctions.
Unified Patent Court
With the reality of the unitary patent and the Unified Patent Court (UPC) getting closer each day, the possibility of dealing with infringement in all participating countries through a single procedure before the UPC (regardless of whether patent validity is challenged) is also getting nearer. However, as the UPC proceedings will potentially prove risky for patent holders and applicants (effectively putting all of their eggs in one basket), they may opt out of the UPC during the transitional period, preferring the option of possible cross-border injunctions
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