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Digg On 12 July 2012, the Court of Justice (⦣8364;SCJ⦣8364;) rendered its eagerly anticipated judgment in Solvay v Honeywell (C-616/10) relevant to the admissibility of cross-border injunctions in IP cases. We reported earlier here that Advocate General Cruz Villalón ("AG") proposed the CJ to endorse the on-going Dutch cross-border practice regarding provisional measures and to (re)open the door for cross-border injunctions in main proceedings under limited conditions. The CJ yesterday ruled in line with this proposal.
Background Solvay v Honeywell (C-616/10)
Solvay sued one Dutch and two Belgian Honeywell companies regarding infringement of several national parts of a European patent before the District Court of The Hague, claiming that all three companies infringed with the same product in all designated countries. Solvay requested a provisional injunction with cross-border effect for the duration of the main proceedings. The District Court referred questions to the CJ on 22 December 2010 for a preliminary ruling concerning the interpretation of Articles 6(1), 22(4) and 31 of Regulation (EC) No 44/20011 (the "Regulation") in view of its jurisdiction regarding the requested cross-border injunctions in both main and interim proceedings. The CJ's decision regarding these three articles is discussed below.
Article 6(1): avoidance of irreconcilable judgments
Article 6(1) stipulates that, in a situation where several defendants are domiciled in different Member States, such defendants may be sued in the courts of the Member State of one of the defendants if the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments. As an exception to the basic rule that a defendant is to be sued before his court of domicile (Article 2(1) Regulation), this rule must be interpreted strictly2.In addition, Article 6(1) cannot be interpreted in such a way as to allow a claim against foreign defendants with the sole object of ousting the jurisdiction of courts of the domicile of one of those defendants.3 The CJ recalled that in order for judgments to be regarded as irreconcilable within the meaning of Article 6(1) of the Regulation, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the same situation of fact and law. The CJ referred here to its controversial 2006 ruling in Roche v Primus.4 As proposed by the AG, the CJ limited the scope of this earlier judgment, explaining that the criteria of same situation of fact and law were not met in the specific situation of Roche v Primus, where different companies each infringed different national parts of a European patent, each in their own country. The CJ now opened the door for other outcomes, in situations where the factual situation is different from specific the situation of Roche v Primus, ruling, in answer to question 1, that it is possible that 'irreconcilable judgments' as meant in Article 6(1) can arise in a situation where defendants from several Member States:
"in proceedings pending before a court of one of those Member States, are each separately accused of committing an infringement of the same national part of a European patent which is in force in yet another Member State by virtue of their performance of reserved actions with regard to the same product".(emphasis added)
The CJ adds that "It is for the referring court to assess whether such a risk [of irreconcilable judgments] exists, taking into account all the relevant information in the file."
It is hence now largely up to the national courts to determine what "the same situation in law and facts" entails, depending on the specific circumstances.
Does Article 22(4) apply to provisional measures?
Article 22(4) of the Regulation affords exclusive jurisdiction in proceedings concerned with the registration or validity of registered intellectual property rights (e.g. patents, trademarks, designs) to the courts of the Member State of (deemed) registration. In GAT v LuK5 the CJ decided that this rule of exclusive jurisdiction concerns all proceedings relating to a patent's validity, also if the invalidity is raised by way of a defence in infringement proceedings. In Solvay v Honeywell the District Court of The Hague questioned the applicability of this rule to provisional measures. The CJ now clarifies:
"Article 22(4) of (the Regulation) must be interpreted as not precluding, in circumstances such as those at issue in the main proceedings, the application of Article 31 of that regulation." (emphasis added)
In brief, the specific scope of Article 22(4), as interpreted by the CJ, does not affect the application of Article 31. The CJ explains this decision by pointing out that the objective of Article 22(4) is to avoid conflicting decisions, and that there is no such risk in circumstances where the provisional decision taken by the court before which the interim proceedings have been brought will not in any way prejudice the decision to be taken on the substance by the court having jurisdiction under Article 22(4).We believe that this ruling should be understood as an answer to both questions 2 and 5, and read to apply to all provisional measures irrespective of the origin of jurisdiction (Article 31 or, for instance, Articles 2 or 6).
As the CJ concludes that Article 22(4) does not apply to such measures, the CJ does not need to answer questions 3 and 4 (concerning the conditions that might apply to the invalidity defence). Remarkably, the CJ did not address question 6 regarding the interpretation of the criterion "a real connecting link" for the applicability of Article 31, without any explanation.
Practical consequences?
The judgment regarding Article 6 is favourable for intellectual property right owners, in particular European patent owners, as it (re)opens the possibility to sue defendants based in different countries together before one national court, in proceedings on the merits, provided this is necessary to avoid irreconcilable judgments that arise in the "same situation of law and fact", a term which is now to be interpreted by the national courts in light of the facts of the matter. We believe the impact of this decision is not limited to patent cases. It should also be relevant for cross-border decisions in other intellectual property cases, unless specific rules derogate.
The CJ's decision regarding Articles 22(4) and 31 means that the current Dutch practice of granting cross-border injunctions concerning provisional measures is endorsed without limitation, and is expanded to foreign defendants.
The combination of the possibility to obtain quick, relatively low cost injunctions dealt with by specialised judges makes the Netherlands an excellent choice of forum to obtain cross-border relief in IP cases.
This publication describes the legal situation as of 16 July 2012.
Footnotes
1 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments
2 See paragraph 21 Solvay v Honeywell, with reference to Painer C-145/10 [2011] (a copyright case), paragraph 74.
3 See paragraph 22 Solvay v Honeywell, with reference to Kalfelis C-189/87 [1988], paragraphs 8 and 9.
4 C-539/03 [2006], repeated in Freeport, C-98/06 [2007], (a case regarding tort and breach of contract) paragraph 40 and Painer, paragraph 79.
5 C-4/03 [2006].
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.
Specific Questions relating to this article should be addressed directly to the author.
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