On July 12, 2012 the Court of Justice of the European Union ("CoJ") rendered its judgment in the Solvay/Honeywell-case (C-616/10). This judgment confirms that the present Dutch approach to cross-border injunctions is in line with the European Regulation on Jurisdiction in civil and commercial matters. The CoJ seems to recognize the need for fast and effective intellectual property litigation.
The Solvay/Honeywell-judgment relates to the interpretation of the uniform European rules on jurisdiction in Articles 6 (1), 22 (4) and 31 of Regulation 44/2001 (the "Regulation"). In short:
- Article 6 (1) provides that under certain circumstances co-defendants from different jurisdictions can be sued in the same action;
- Article 22 (4) provides that in respect of the validity of intellectual property rights such as patents, the national court of the country where the patent is registered has exclusive jurisdiction; and
- Article 31 provides that national courts may order provisional and protective measures, notwithstanding the jurisdiction of another court.
With the Solvay/Honeywell-judgment the CoJ revisits its judgments in Roche/Primus and GAT/LuK of 2006. In these judgments the CoJ significantly reduced the scope for so-called "cross border injunctions" issued by a single court. Particularly in the Netherlands it was not uncommon that defendants were ordered to cease intellectual property infringement in other European jurisdictions, at the risk of having to pay substantial penalties to the IP rights owner.
In Solvay/Honeywell the CoJ clarified the legal position where it concerns multiple co-defendants accused of the same infringement in the same jurisdictions. In addition, there are important findings in respect of provisional relief. The CoJ seems to accept the Dutch practice that under certain circumstances cross-border injunctions are not in violation of the Regulation.
Article 6 (1): co-defendants and the risk of irreconcilable judgements
Pursuant to Article 6 (1) of the Regulation a party can be sued together with a party based in another jurisdiction, provided the claims are so closely connected that it is expedient to hear and determine them together. The aim is to avoid the risk of irreconcilable judgments resulting from separate proceedings in basically the same situations.
In the Roche/Primus-case (C-539/03, 13 juli 2006) the CoJ ruled that this co-defendant rule should not be applied broadly in patent litigation merely because a European patent stems from a uniform application and in principle has the same scope of protection throughout the EPC member states. Emphasizing that European patents are still national rights, the CoJ held that there is no risk of irreconcilable judgements even if issues of validity and infringement are dealt with differently by various courts in Europe. And therefore the co-defendant rule cannot be used to centralise a pan-European patent case before one court.
In Solvay/Honeywell the CoJ distinguishes its previous judgment, ruling that the co-defendant rule can be used where each of the defendants is separately accused of the same infringement in the same countries. E.g. where a Dutch entity and a Belgium entity are both accused of infringing the same patent (by selling the same product) in the same country (e.g. Finland), then both the Dutch Court and the Belgium Court would have "Article 2" jurisdiction (domicile of the defendant) and irreconcilable judgments could therefore result. Under those circumstances, the CoJ now rules in Solvay/Honeywell, the co-defendant rule may indeed be used to bring the action before a single court.
What remains unclear however, is what happens if the validity of the foreign patent is challenged. Does Article 22(4) (together with article 25) of the Regulation lead to the situation where the "centralised infringement court" loses jurisdiction over the case altogether, insofar as it concerns this challenged national patent, or only insofar as validity is concerned. Would it remain competent to hear the infringement debate on that foreign patent and/or should the infringement court stay the proceedings until the validity challenge is resolved by the foreign court having exclusive jurisdiction?
This already shows that the Primus/Roche and GAT/LuK cases left a lot of questions unanswered. In Solvay/Honeywell, however, at least some progress can be reported. It concerns the question of the validity challenge in the context of a provisional or interlocutory injunction.
Interpretation of Article 22 (4) and 31: continuation of the Dutch cross-border injunctions in preliminary injunction proceedings
As explained above, Article 22 (4) provides for exclusive jurisdiction in matters concerning the validity of patents or other IP rights. The questions is, simply put: what if a provisional injunction is requested before another court than the court with exclusive jurisdiction. Should a validity challenge cause the first court to decline jurisdiction when an application is made for provisional relief?
In the GAT/LuK-case (C-4/03, 13 juli 2006) the ECJ ruled that this exclusive jurisdiction clause should apply whatever the form of proceedings in which the issue of a patent’s validity is raised, be it by way of an action or a defence, at the time the case is brought or at a later stage in the proceedings.
In Solvay/Honeywell, the ECJ now establishes that in a situation where the infringement court does not give a final ruling on validity (but only provisionally assesses the chance that a patent will be invalidated), Article 22(4) of the Regulation does not prevent the infringement court from issuing a provisional injunction with cross border effects.
Dutch Treat? Double Dutch?
Of course another step forward in clarifying the jurisdiction rules in patent litigation is more than welcome. The CoJ appears to be sensitive as to what the Dutch Courts have tried to achieve absent a centralised patent litigation system in Europe: sensible, fast and effective patent litigation in Europe.
But the decision is disappointing in other respects. A lot of issues and relevant questions were on the table in Solvay/Honeywell, but the CoJ chose to answer only a few. Whilst the Court's focus on "system-internal" consistency in the law is understandable, the legal and business community is in need of more guidance from the Court than it is apparently willing or able to give. With its piecemeal decision practice and its preference for "Euro Newspeak", it is not surprising that many litigants consider the Luxemburg Court as a sidetrack that should best be avoided.