CJEU expands possibilities for cross-border patent infringement injunctions

The CJEU decides that the EU Member State Court of the defendant's domicile, which has jurisdiction pursuant to Article 4(1) of the Brussels I bis Regulation to hear an infringement action of a patent granted in another Member State, does not lose that jurisdiction solely because the defendant contests, by way of defence, the validity of that patent. The CJEU further decides that Article 24(4) of the Brussels I bis Regulation does not apply to a third State court and, consequently, does not confer any jurisdiction (exclusive or otherwise) on such a court with regard to the assessment of the validity of a patent granted by that third State. If an invalidity defence is raised in response to a cross-border infringement action on the basis of a third State patent before the EU Member State Court of the defendant’s domicile, that court has jurisdiction to rule on that defence. The Court’s decision on validity should however not affect the existence or substance of the third State patent or result in the amendment of the patent register in the third State.

The CJEU’s decision has significant implications for patent infringement proceedings before national courts of EU Member States, as well as the UPC.

Background

The dispute began in Sweden, where claimant (BSH) initiated an action against defendant (Electrolux) claiming an injunction and damages for patent infringement on the basis of various parts of a European patent. The European patent in question was validated in multiple EU Member States, including the Netherlands, Germany, France and Italy, as well as in non-EU Member States (so-called “Third States”) Turkey and the United Kingdom.

In its defence, defendant challenged the validity of these foreign parts of the European patent and invoked Article 24(4) which provides, briefly put, 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 courts of the Member States in which registration of the patent has been applied for or has taken place “shall have exclusive jurisdiction”. With reference to this article, defendant argued that since it has contended that the foreign parts (i.e. outside Sweden) of the European are invalid, the Swedish court has no jurisdiction to hear the infringement claims relating to the foreign parts of the patent.

The Swedish court in first instance agreed and dismissed the claims, leading claimant to appeal. The Svea Court of Appeal then referred the case to the CJEU for guidance on the scope of Article 24(4). Particularly, the following questions were asked to the CJEU:

• “Is Article 24(4) [of the Brussels I bis Regulation] to be interpreted as meaning that the expression “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” implies that a national court, which, pursuant to Article 4(1) of that regulation, has declared that it has jurisdiction to hear a patent infringement dispute, no longer has jurisdiction to consider the issue of infringement if a defence is raised that alleges that the patent at issue is invalid, or is the provision to be interpreted as meaning that the national court only lacks jurisdiction to hear the defence of invalidity? [first question].
• “Is the answer to Question 1 affected by whether national law contains provisions, similar to those laid down in the second subparagraph of Paragraph 61 of the Patentlagen (Patents Law), which means that, for a defence of invalidity raised in an infringement case to be heard, the defendant must bring a separate action for a declaration of invalidity?” [second question]
• “Is Article 24(4) [of the [Brussels I bis Regulation] to be interpreted as being applicable to a court of a third [State], that is to say, in the present case, as also conferring exclusive jurisdiction on a court in Turkey in respect of the part of the European patent which has been validated there?” [third question]

Proceedings before the CJEU

The case saw notable developments, including two opinions from Advocate General (AG) Emiliou. In his first opinion, AG Emiliou took a restrictive view of Article 24(4), meaning that if the alleged infringer raises an invalidity defence with respect to a patent granted for another EU Member State, the court does not lose competence to decide on the infringement action. Although such court could not adjudicate the validity of this patent, that court may stay the proceedings until the validity of the patent at issue has been determined by the court of the state of registration, but only if it is proportionate and fair to do so, and those delays are ‘warranted’. The AG further noted that for the duration of the stay, the courts may order under circumstances a cross-border injunction as a provisional measure in line with the CJEU’s decision in Solvay/Honeywell.¹

At the oral hearing on 14 May 2024, key stakeholders, including the French government and the European Commission, backed claimant’s position. They argued for a stronger possibility for cross-border patent enforcement, in particular also regarding patents validated in non-EU Member States, such as the Turkey and the UK. Subsequently, AG Emiliou issued a second opinion refining his stance on third State patents. He reaffirmed that Article 24(4) does not extend to patents registered outside the EU, though he acknowledged practical concerns about adjudicating third State patents. He opined that where they have jurisdiction under another rule of the Brussels I bis Regulation, Courts are entitled to not adjudicate on that issue. However, if invalidity was merely raised as a defence in an infringement action, it would – according to the AG – not be contrary to customary international law if courts decide on this defence as a preliminary or incidental question, since the respective decision will have inter partes effects only.

The CJEU’s Decision

Regarding the first and second question, the CJEU has confirmed that the EU Member State Court of the defendant's domicile does not have jurisdiction to hear an invalidity defence raised by the defendant with respect to a patent granted in another Member State. The CJEU now clarified that the Court nevertheless keeps its jurisdiction to hear the infringement action. In line with the first opinion of AG Emiliou, the CJEU also considered that this does not mean that the Court should be unaware of the fact that an invalidity action of the patent granted in another Member State has been duly brought by that defendant in said other Member State. If the Court considers it justified, particularly when it considers that there is a reasonable and not insignificant chance that this patent will be revoked by the competent Court of said other Member State², the Court may, where appropriate, stay the infringement proceedings. This will allow the Court to take into account a decision handed down by the competent foreign Court. The CJEU recognizes that this could lead to a bifurcation of the infringement and validity proceedings. The CJEU remarks that its interpretation allows the holder of a European patent to concentrate all of its infringement claims and to obtain overall redress in a single forum, thus avoiding, inter alia, the risk of conflicting decisions.

Regarding the third question, the CJEU decided that Article 24(4) of the Brussels I bis Regulation must be interpreted as meaning that it does not apply to a court of a third State and, consequently, does not confer any jurisdiction (exclusive or otherwise) on such a court with regard to the assessment of the validity of a patent granted by that State. If an invalidity defence is raised in response to an infringement action on the basis of a third State patent, that Court has jurisdiction to rule on that defence, absent specific conventions or applicable lis pendens rules. The CJEU noted in this respect that the Court’s decision on the invalidity defence in principle only has “inter partes” effect, i.e. the scope is limited to the parties to the proceedings. Thus, where an invalidity defence is raised in response to an infringement action on the basis of a third State patent before a EU Member State Court, that defence is intended only to obtain the dismissal of the infringement action and does not seek to obtain a decision leading to the revocation of that patent. The Court’s decision on validity should not affect the existence or substance of the third State patent or result in the amendment of the patent register in the third State as that would encroach on the principle of non-interference.

Comment

The CJEU’s decision confirms the availability of cross-border relief for patentees in proceedings before national courts of EU Member States as well as the UPC. The decision provides guidance as to how courts can deal with invalidity defences relating to patents in other EU Member States as well as third States. The decision allows national courts of EU Member States as well as the UPC to grant cross-border injunctions in proceedings on the merits, while also allowing the Courts, where appropriate, to stay the infringement proceedings allowing them to take into account a decision by the competent EU Member State Court on validity. With respect to third State patents, the Court that hears the infringement case in general even has competence to decide itself on the invalidity defence resulting in an inter partes decision.

With these long awaited clarifications, the practice of cross-border relief has received renewed attention. Undoubtedly, parties will try to use this to their benefit. For the UPC this will mean that relief could extend to countries for which a European patent is granted, but which are not in the UPC. The first examples are already there. For national courts of EU-Member States such relief could even extend beyond the territories for which a European patent is granted. Let’s think big.