A recent decision made public on June 25, 2013 by the Italian Supreme Court panel sitting in Unified Session (SCUS) has removed important barriers against maintaining successful “Italian torpedo” actions in Italian courts.
The Italian torpedo is now infamous in European patent litigation. In sum, it is essentially an abuse of the lis pendens rule found in the Brussels/Lugano Convention, which grants the first member state court seized in a matter with pan-European application the right to retain exclusive jurisdiction. An “Italian torpedo” is a defensive action, particularly a request for a declaration of patent non-infringement, filed by an alleged infringer in Italy regardless of whether Italian courts have jurisdiction or the chances of success on the merits: such action is filed merely to take advantage of the significant delays inherent in most Italian courts in order to prevent an imminent patent infringement action from being filed against them in a different – and faster – EU member state court. As the analogy goes, the Italian torpedo aims to use such delays to sink the patent holder’s claim on the merits.
Italian courts have traditionally applied a high level of scrutiny to such actions and previously held that Italian courts have jurisdiction for patent validity or invalidity claims only where domicile is properly established by registration of the patent in Italy and only over the Italian national portion of the European patent. Only in one case (Mika Pharma v Idea A.G.) did an Italian court held it had jurisdiction over a claim for non infringement of a German patent, but in that case the patentee had failed to file a timely objection to the jurisdiction of the court. Overall these requirements have had the effect of (somewhat) limiting the actions in which a party may attempt utilize an Italian torpedo to protect themselves from an infringement action elsewhere.
However, the recent 28 May 2013 holding of the SCUS in The General Hospital Corporation (Massachusetts General Hospital) and Palomar Medical Technologies Inc. vs. Asclepion Laser Technologies GmbH (“General Hospital vs. Asclepion”) signified a departure from these requirements.
In General Hospital vs. Asclepion, the SCUS held that Italian courts may assert jurisdiction over a request for a declaration of patent non-infringement of both the Italian and German portions of two European patents, despite that the parties are all foreigners and that one of the patent in question is not an Italian patent.
The SCUS supported this decision – a notably short judgment lacking sufficient explanation for its shift in reasoning – by citing a recent judgment of the Court of Justice of the European Union stating that a request for a declaration of no liability in tort is considered to be a matter “relating to tort” for the purposes of jurisdiction as set forth in article 5, comma 3 of both the Brussels Convention (1968) and EC Regulation 44/2001 (Folien Fischer AG and Fofitec AG v. Ritrama S.p.A., Case C-133/11, 25 October 2012).
Previous Italian case law did not disagree with this reasoning, it did however properly excluded cases for patent validity or invalidity from the application of article 5(3). Instead, such actions have been governed by article 22.4 of Regulation 44/2001, which establishes domicile for the patent and thus jurisdiction of the courts for patent validity actions in the place where the application or registration was made.
Thus the SCUS’s holding in General Hospital vs. Asclepion is problematic because it departed from the long standing precedent of the Italian courts by asserting jurisdiction over the non-Italian portion of the patents at issue. The importance of this change cannot be understated as it signifies the willingness of Italy’s highest court to assert broad jurisdiction over Italian torpedo-style actions.
Such a stark change creates substantial uncertainty for parties in general and, specifically, non-Italian defendants that hold valid patents – in particular, non-Italian portions of European patents – and may lose the ability to file a meritous infringement action to enforce them in other EU member state courts once they are hit by a torpedo.
At the same time, those accused of infringement are advised that doors may be open to a successful preemptive cross-border action for non infringement.