The Court of Justice of the European Union (CJEU) has declared that EU courts (which includes the Unified Patent Court and also national courts) have jurisdiction over cross-border patent infringement actions against defendants domiciled in their territory, even when invalidity of foreign patents is raised as a defence.
The CJEU decision clarifies the longstanding question about the jurisdiction of EU courts when invalidity of foreign patents is raised by a defendant in infringement proceedings.
The CJEU judgement also clarifies the position for cross-border patent infringement actions involving patents in non-EU states (including UK patents). EU courts have jurisdiction to hear infringement actions involving patents in non-EU states and also decide on invalidity defences for those patents, with the decision being limited to the proceedings before that court and having no effect on the existence of patents in those states. The judgement therefore gives EU courts jurisdiction to hear infringement claims and invalidity defences for UK patents enforced against defendants domiciled in EU member states.
Background
The CJEU judgement (C-339/22) centres on the interpretation of Article 4(1) and Article 24(4) of the Brussels I bis Regulation.
Article 4(1) of the Regulation states that persons domiciled in an EU member state shall, whatever their nationality, be sued in the courts of that EU member state.
Article 24(4) of the Regulation states that the courts of each EU member state are to have exclusive jurisdiction in proceedings concerned with the registration or validity of any national patent or European patent granted for that EU member state, irrespective of whether the issue is raised by way of an action or as a defence.
The dispute began when German company BSH Hausgeräte sued the Swedish company Electrolux in Sweden for infringement of the national parts of European patent EP1434512 relating to vacuum cleaner technology. BSH’s infringement action pertains to alleged infringement in Sweden as well as a number of other EU member states and also a non-EU member state (Turkey in this case).
In their defence Electrolux argued that the patents were invalid and, citing Article 24(4) of the Regulation, argued that the Swedish court therefore lacked jurisdiction over the infringement of the foreign patents.
In the first instance, the Swedish court accepted Electrolux’s argument that when validity was raised the Swedish court lacked jurisdiction for the infringement action in respect of the foreign validations of the European patent. This was appealed by BSH which led the Swedish court of appeal to refer the issue to the CJEU. The questions put to the CJEU focussed on two main issues:
- Does a court that has jurisdiction to hear a patent infringement action under Article 4(1) of the Regulation lose that jurisdiction if the validity of the patent is contested?
- Does Article 24(4) of the Regulation also apply to courts in a third state (i.e. a state that is not a member state)?
On the first issue, the CJEU found that an EU court does not lose the jurisdiction to hear a patent infringement action merely because a defendant challenges the validity of a foreign patent. At the same time the CJEU has confirmed that the jurisdiction to rule on patent validity lies exclusively with the courts of an EU member state in which a patent is registered.
A court with jurisdiction to hear a patent infringement action may consider the validity of the foreign parts of a European patent to determine the infringement action. If it is considered that there is a reasonable, non-negligible possibility of the foreign parts being declared invalid in another EU state – then the infringement proceedings may be stayed.
On the second issue, the CJEU ruled that Article 24(4) of the Regulation does not apply to a court of a third state (i.e. a non-EU state, such as the UK) and does not confer any jurisdiction, whether exclusive or otherwise, as regards the assessment of the validity of a patent granted or validated in that third state. The CJEU ruling means that EU courts have jurisdiction to hear a patent infringement action and decide on an invalidity defence when raised in relation to a patent in a third state. The UK is not an EU member state and is included within the scope of this power as a third state. Notably, the judgement clarifies that the ruling of an EU court is limited to the proceedings before that court and does not have any bearing on validity of a patent in a third state.
Implications
The CJEU has sought to stop the practice of defendants simply raising invalidity defences to remove the jurisdiction of a court to hear a cross-border infringement action. This is good news for patentees and the CJEU judgement even comments that a holder of a European patent, who believes that that patent has been infringed by the same defendant in several member states, is able to concentrate all of its infringement claims and to obtain overall compensation in a single forum. This is to be balanced against the risk that proceedings may have to be stayed pending a validity determination in the state of patent registration when validity is arguable or the defendant files revocation actions in those states.
For UK rights holders the ruling allows EU courts to rule on infringement of UK patents and even rule on invalidity defences. UK patents cannot be revoked by EU courts but can be enforced via infringement actions filed at EU courts to obtain remedies against defendants domiciled in EU states.
It remains to be seen but the judgement appears to give greater powers to the national courts of the EU member states for potentially rivalling the UPC. Patent proprietors can potentially enforce national parts of European patents via an EU national court without the risk of revocation of the national parts validated in other states and also without the risk of the court losing jurisdiction if patent invalidity is raised by a defendant. A patent holder has the option to commence infringement proceedings before an EU court with the defendant needing to file multiple revocation actions in different states. This raises some interesting strategic considerations for patent holders considering whether to opt-out European patents from the jurisdiction of the UPC.
Image source: Court of Justice of the European Union.
