The Court of Justice of the European Union ("ECJ"),
Europe's highest court in charge of interpreting harmonized
laws among the 27 member states, has set the scene for a new option
in patent infringement proceedings in Europe. In the decision
Solvay v. Honeywell Companies (Case C-616/10), the court
has confirmed that national courts in Europe are not prevented by
European legislation from granting pan-European preliminary
injunctions.
Beyond confirming that a pan-European injunction is in line with
European law, the ECJ also extended the scenarios in which
plaintiffs can add other defendants into proceedings to avoid the
risk of irreconcilable judgments: proceedings may cover defendants
domiciled in different European countries, provided that they are
accused of infringing with respect to the "same product"
in the same countries. This opens the door for plaintiffs to enjoin
several European companies in one proceeding, but also leaves open
important questions. Like earlier ECJ judgments such as
Roche/Primus and GAT/LUK that changed the patent
litigation landscape some years ago, this decision will likely have
a significant effect on litigation strategies in Europe.
The Facts of the Case in a Nutshell
The proprietor of a European patent, Solvay, brought an action before a Dutch court against three companies of the Honeywell Group. The action was for infringement of the national parts of a European patent in Denmark, Ireland, Greece, Luxemburg, Austria, Portugal, Finland, Sweden, Liechtenstein, and Switzerland. Notably, the Dutch part of the European patent—in the territory where the court is domiciled—was not asserted. Furthermore, only one of the defendants was in fact based in The Netherlands. The two other defendants were based in Belgium, as was the plaintiff Solvay. After bringing an action on the merits, Solvay sought later provisional relief in the form of a cross-border prohibition. The request was for an injunction to stop the three companies from infringing the asserted patents until a decision had been made in the main proceedings.
The European Law as It Was...
To understand the impact of the decision, it is important to
recall one basic concept of patent protection in Europe: The term
"European patent" is a misnomer. It is not, as one might
believe, one single right/title with a similar protection in
different countries. In fact, a European patent is a bundle of
national patents that are applied for in a single application and
granted by a single decision of the European Patent Office. After
grant, however, the patent is treated as separate rights, each
having a limited scope confined to the territory of the respective
member state. Consequently, a European patent in fact consists of
"the German part of the European patent," "the
French part of a European patent," etc. Whether or not the
national parts of the European patent are infringed is then
determined based on the national laws of the respective member
states of the European Union. While these laws are essentially
harmonized, differences still exist, in particular regarding
construction of the patent claim in the case of equivalent acts and
the relevance of the prosecution history.
In essence, therefore, if a court wants to determine infringement
of the German part of the European patent, the court will have to
apply German law. If it also wants to determine infringement of the
UK part of the European patent, it will have to apply UK law, etc.
The straightforward way of pursuing infringers, therefore, is to
take the case to a court in the country where the infringing act is
committed, so that the court will apply its national law, with
which it is familiar.
However, attempts have previously been made to centralize
infringement proceedings by asking the court also to rule on
infringement of other national parts of a European patent based on
the Brussels Regulation (Regulation No. 44/2001). This practice had
been cut back substantially by two earlier judgments of the ECJ. In
GAT/LUK, the ECJ held that once a defendant raises the
defense of invalidity of a patent—irrespective of whether
the issue is raised by way of a counteraction or plea in
objection—the pan-European proceeding could not continue,
as a binding decision on validity can only rightfully be made by
the courts of the member state where the patent is registered. As
invalidity is one of the standard defenses in patent infringement
proceedings, this effectively ruled out infringement suits before
one court that would cover several jurisdictions. In
Roche/Primus, the ECJ decided that there is no
cross-border jurisdiction when the infringing acts relate to the
same product but are committed by different defendants in different
member states by infringing different national parts of a European
patent. In essence, the mere fact that the various national parts
all stem from the same European patent application is not
considered a sufficient nexus for establishing cross-border
jurisdiction.
A patent owner is thus forced to bring his case to several courts
if he wants to act against infringers in more than one country.
This is one of the key reasons why attempts continue to be made to
create a unified European patent court that can cover several
jurisdictions with just one single proceeding.
...and the Law as It Is Now
The ECJ ruled in Solvay/Honeywell on two issues for
cross-border scenarios: jurisdiction over defendants domiciled
outside the territory of the court, and the admissibility of a
cross-border injunction in patent matters in general.
First, the ECJ decided that a member state court can have
jurisdiction over co-defendants domiciled in different member
states, provided that the defendants each infringe in
relation to the same product the same national part of a
European patent. The key difference from Roche/Primus is
that the co-defendants both infringe the same national part of the
European patent in at least one EU member state. The ECJ argued
that this geographic overlap could lead to irreconcilable
judgments. In separate proceedings, there is a risk that two
national courts might come to different results for infringement of
the same national part of the European patent. If, for example, the
actions had to be filed with the Belgian and Dutch courts, where
the defendants are domiciled in the Solvay/Honeywell case,
the ECJ points out that both courts would have to deal with
infringement of the Finnish part of the European patent as the
result of both defendants marketing the identical infringing
product in Finland. This risk of irreconcilable judgments is
sufficient reason to have the cases joined before one court.
Second, the ECJ clarified that despite the limitations in the main
proceedings set out in its earlier case law, the situation is
entirely different if preliminary relief is sought. The
court argued that while the rules of its earlier landmark
GAT/LUK decision remain unchanged, these rules apply only
to a final decision on the validity of the patent. If, in contrast,
only interim measures are sought, these formal limitations will not
apply.
Obviously, the court that is asked to enact preliminary measures
that enforce a patent right immediately has to be aware of the
significance of its decision. In addition to being convinced that
the patent is infringed, the court will have to consider whether
there is a reasonable, non-negligible possibility that the patent
invoked would be declared invalid by the respective courts in other
member states. However, this assessment is only a prognosis and
part of the decision-making process of the court for the temporary,
interim injunction. It does not preclude the courts in the
respective member states from arriving at a different conclusion on
validity and eventually revoking the patent with effect for their
territory.
Therefore, in preliminary relief cases, the courts of a member
state are not bound by the constitutional restrictions that were
the basis of the landmark GAT/LUK decision. Consequently,
the ECJ confirmed that courts in the member states are not
prevented from issuing preliminary injunctions with effect to the
territory of other member states of the European Union as well.
Questions Remain
Plaintiffs will certainly be seeking cross-border injunctions on the basis of the Solvay/Honeywell decision. The ECJ decision paves the way for doing so, even though it is limited to specific fact scenarios and to preliminary injunctions as the remedy. Still, questions remain about the application of the ECJ ruling:
- The adoption of the ECJ ruling in the national courts will vary depending on the national case law in issuing preliminary injunctions in patent matters. Courts in several member states allow in principle preliminary injunction requests in patent matters (e.g., France, Germany, Italy, Netherlands, Spain, or UK). The thresholds for patentees in obtaining a preliminary injunction are, however, different throughout the member states. Member state courts will now need to decide whether they regard themselves as having jurisdiction in cross-border scenarios. This opens the door to plaintiffs for forum shopping throughout Europe.
- If the ECJ's ruling is followed strictly, the court deciding on the pan-European preliminary measures will have to apply not just one set of patent law, but the patent laws of all the countries for which territory protection is claimed. While the laws are harmonized to a high degree, differences still exist—for example, whether and to what extent to take the prosecution history of the patent into account for the construction of the patent claims. Diligently applying the laws of many different countries may be a daunting task for a court, and it remains to be seen how receptive courts are to issue such pan-European preliminary injunctions in daily practice.
- The ECJ leaves open the question of how to proceed with a parallel main action once the defendant raises the invalidity defense. For main proceedings, the strict GAT/LUK principles of the ECJ still apply. Consequently, even though the preliminary injunction could be obtained at one court, the subsequent main proceedings for infringement will have to be pursued before the court of the various territories for which patent protection had been asserted. In Solvay/Honeywell, the Dutch court might subsequently need to dismiss the main action because no Dutch part of the European patent was asserted.
- The ECJ did not answer the Dutch court's question about what requirements constitute "a real connecting link" between the subject matter of the measures sought and the territorial jurisdiction of the national court before which those measures are sought. In that case, the real connecting link to the Dutch court was not obvious, since infringement of the Dutch part of the European patent was not even claimed.
Impact on Litigation Strategy
The ECJ has thus added a new tool to the litigator's toolbox
in Europe. If the facts support it, a preliminary injunction can be
obtained quickly to block infringing acts throughout Europe in one
single proceeding. It is no longer necessary that all defendants be
domiciled in the territory where the court resides, nor is it
required to commit infringing acts in this specific territory. It
is sufficient that the defendants' infringing acts relate to
the same product and to the same countries so that infringement of
a foreign part of the European patent can be decided based on the
same facts for all defendants. As the ECJ reasoned, this is
justified to avoid conflicting decisions of courts in various
member states on essentially the same allegedly infringing
acts.
However, this tool comes at a price. The defendant can still force
the plaintiff to have the issue reviewed in detail in main
proceedings where the strict GAT/LUK principles still
apply. Instead of selecting one or two jurisdictions for main
proceedings, as a budget-conscious patent owner may currently
prefer, a plaintiff may then be forced, if the defendant has the
stomach for the fight, to litigate the case in the other
jurisdictions. This may require a substantial increase in the
litigation budget once the first quick preliminary success has been
achieved.
Furthermore, the Solvay/Honeywell scenario is limited to
specific distribution and marketing situations because the
plaintiff needs to present evidence that the defendants were active
in the different member states and thereby at least once infringed
the same national part of the European patent. This structure is
unlikely to apply to U.S. or far-Eastern businesses that sell in
Europe through strictly separated local subsidiaries.
Strategic considerations for choosing a cross-border preliminary
injunction will also be affected by the strength of the patent at
issue. Unless infringement and validity claims are very strong,
many claimants may shy away from the procedure because of the
potential liability that may arise under the preliminary injunction
once enforced.
It will also be interesting to see what measures defendants take
to counter such proceedings. For example, some courts, such
as the UK courts, would likely be amenable to fast-tracking a
validity challenge to limit the impact of an interim injunction
that was not justified. Potential defendants may consider filing
protective letters with their anticipatory defense, for instance in
German courts, or make use of other preemptive tools as offered by
the respective European jurisdiction.
Summary and Outlook
The ECJ has added a new tool to the litigator's toolbox in
Europe. Whether this tool will be widely used or will eventually
prove to be unwieldy and/or to entail too many undesired
consequences remains to be seen. In any event, the ruling opens up
the scene for more pan-European approaches.
Nevertheless, as the ruling is restricted to preliminary measures
and does not cover main proceedings, it gives, at best, half of
what a patent owner would desire. The calls for a unified court
system in Europe will therefore continue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.