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National Cross-Border Infringement Actions: Ready For A Serious Comeback?
07/17/2024While the patent litigation world is closely watching the Unified Patent Court, the Court of Justice is thinking about a matter that might yet again shake up the European patent litigation landscape. In this update we discuss the February 22, 2024, Opinion Ag, C-339/22 of the Advocate General, Nicholas Emilio, in the case between BSH Hausgeräte GmbH and Electrolux AB, about cross-border jurisdiction in patent cases under the Brussels 1 bis Regulation. If the Court of Justice follows the Advocate General’s opinion, cross-border infringement cases before national European courts may make a serious comeback. This, in turn, could make national courts attractive again for cross-border patent matters.
BSH holds a patent that is valid in several European countries. It sued Electrolux (established in Sweden) in the Swedish patent court arguing infringement in all European countries where its’ patent is in force. Electrolux defended by raising the invalidity of the foreign parts of the European patent. It also asked for the action to be dismissed to the extent it concerns the Austrian, French, German, Greek, Italian, Netherlands, Spanish, Turkish and U.K. parts of the patent. According to Electrolux, the Swedish courts do not have jurisdiction to hear the infringement proceedings for the foreign parts of the European patent. It invoked the exclusive jurisdiction rule of article 24 (4) of the Brussels 1 bis Regulation, pursuant to which the courts of Member States of registration have exclusive jurisdiction in proceedings concerned with the validity of that part of a European patent. BSH countered that the Swedish court does have jurisdiction based on article 4 of the Brussels 1 bis Regulation since Electrolux is domiciled in Sweden. According to BSH, the exclusive jurisdiction rule in article 24 (4) is not applicable since the action was not “concerned with the validity of patents” within the meaning of that article, as it was about infringement. The Swedish court dismissed the action in respect of the infringement of the foreign patents. BSH filed an appeal against that decision with the Swedish Court of Appeal. It maintained that article 24 (4) does not apply to actions for infringement of patents. The Swedish Court of Appeal decided to refer several questions to the Court of Justice. In this article, we will focus on the first question only. With that question the Swedish Court of Appeal wants to know whether an invalidity defense causes it to lose jurisdiction over the infringement case or whether such a defense only results in lack of jurisdiction to hear the invalidity defense.
In his opinion, the AG discusses the background and history of the exclusive jurisdiction rule from article 24 (4) of the Brussels 1 bis Regulation. The AG also discusses the earlier decision of the Court of Justice in GAT. In that case the Court held that the rule of exclusive jurisdiction “concerns all proceedings relating to the validity of a patent irrespective of whether the issue is raised by way of an action or a plea in objection.” That wording seems to cover an infringement action in which an invalidity defense is raised. GAT led to an amendment of article 24 (4), clarifying that it covers proceedings concerned with the validity of patterns “irrespective of whether the issue is raised by way of an action or as a defense.” The GAT decision and the subsequent amendment of the Brussels 1 bis Regulation, however, did not clarify what an invalidity defense means for the jurisdiction on the issue of infringement.
While the AG clearly explains why he disagrees with the Court’s decision in GAT, he also recognizes that overturning it is not an option as the Regulation has been amended to reflect that decision in the meantime.
In his opinion, the AG proposes several practical guidelines for national courts when hearing infringement proceedings and the invalidity defenses. The AG proposes that, once an invalidity defense is raised, the courts hearing the infringement should make an assessment of that invalidity challenge. Article 24 (4) does not prohibit that, as the Court of Justice previously decided in the Honeywell/Solvay case. Following that assessment the infringement court should only stay the action if the validity challenge has a genuine prospect of success. If the court considers that the invalidity challenge is not solid, it should assume that the patent is valid and rule on the infringement accordingly.
When the national court considers the invalidity challenge to be serious, the court should grant a stay. That stay should not, however, be without limits. The AG proposes that the court should set a deadline to bring invalidity proceedings in the Member State of registration. If the infringer fails to do so within the deadline, the infringement court should lift the stay, assume the patent is valid, and rule on the infringement. If a stay is filed within the deadline, the infringement court should follow the progress of the invalidity proceedings and decide whether to lift or maintain the stay as appropriate. No further details on how to do this are provided in the opinion.
The AG also adds that if a stay is granted, there is nothing to prevent the infringement court from issuing preliminary injunctions in the meantime.
Under these practical guidelines to deal with applying the narrow interpretation, national courts have quite some discretion to assume cross-border infringement jurisdiction. An invalidity defense does not have to stop them from deciding the infringement per se. They can issue infringement relief, either as a preliminary measure if a stay is granted, and on the merits, if the validity challenge is not considered serious enough.
If the Court of Justice follows the opinion of the Advocate General, national courts of European Member States will have clearer guidance on their jurisdiction in infringement matters. It would give them the legal basis to keep infringement proceedings with that court even though invalidity was raised as a defense. Allowing the courts to make an assessment of the seriousness of the invalidity defense, and subsequently allowing those courts to grant infringement relief, could open the door to a new wave of cross-border patent enforcement at national courts. It could even allow national courts to take on competition with the UPC.
The Dutch patent court in The Hague has never shied away from granting cross-border infringement relief. That court is most likely to quickly apply a decision of the Court of Justice in line with the Advocate General’s opinion.
