UK: Cross-border Injunctions : An Update

More often than not, infringement of intellectual property rights takes place in several countries at the same time. If the intellectual property holder wants to end the infringement, in principle, he has to start separate proceedings in the various countries where the infringement occurs. This may be a cumbersome operation.

Already in the 1980s, the Dutch courts recognized this problem and worked towards finding a solution: after establishing that the intellectual property rights were being infringed (according to the respective laws of the countries concerned) the Dutch court would issue an injunction, not only covering the Dutch territory, but also the territories outside The Netherlands. These so-called cross-border injunctions made it possible for the IP owner to fight the infringer in one court only, instead of having to chase him throughout Europe and beyond.

At first, cross-border injunctions were mainly granted in trade mark and copyright cases. In fact, the first decision in which the Dutch Supreme Court acknowledged the possibility of cross-border relief related to trade mark infringement in the Benelux (Interlas/Lincoln; Supreme Court, November 24, 1989). Thereafter cross-border relief slowly entered the domain of patent law.

After the landmark-decision in Interlas/Lincoln, in the early 1990s cross-border injunctions were first awarded in disputes between Dutch parties who were competing on foreign markets. Gradually, however, the courts showed willingness to extend their powers and even in the absence of strong links to The Netherlands the District Court in The Hague found that it had jurisdiction over Dutch and foreign defendants to issue cross-border relief. The first of these cases involved a dispute between a US company, Cordis Corporation, and a Swiss company, Schneider, member of the US based Pfizer Group. The second concerned a dispute between two US companies, S.R. Bard Inc. and Advanced Cardiovascular Systems Inc. After these cases a number of similar cases followed.

In all these cases, the plaintiff sued the competitor’s Dutch distributor, along with the foreign competitor itself and its distributors in the other designated countries. The plaintiff then asked for a cross-border injunction against all defendants. The District Court held that it had cross-border jurisdiction with respect to the different defendants on the following grounds:

With respect to the Dutch defendant(s), the District Court derived jurisdiction from article 2 of the Brussels convention (as of March 1, 2002: Regulation 44/2001) or the Lugano convention. This article stipulates that the court of the country of domicile of the defendant has jurisdiction.

With respect to the European defendants, the District Court derived jurisdiction from article 6 (1) of the Brussels or Lugano conventions. This article provides that when there are several defendants, all of them may be sued before the courts of the country of residence of one of them. In the case of Kalfelis/Schröder (ECJ case 189/87), the European Court of Justice has held that article 6 (1) is only applicable when there is such a connection between the claims against the various defendants that a joint treatment is justified to avoid irreconcilable decisions were the cases to be treated separately. The District Court considered such a connection to exist when the allegedly infringing products are the same in all designated countries and the patents invoked stem from the same European patent. According to the District Court the scope of protection of a European patent should be determined in a uniform manner under article 69 of the European Patent Convention and its protocol, which makes joint treatment desirable and justified; irreconcilable decisions should thus be avoided.

Finally, with respect to the non-European defendants, the District Court derived jurisdiction from article 126 par. 7 of the Dutch Code of Civil Procedure. The text and interpretation of this article is similar to article 6 (1) Brussels and Lugano conventions.

After some time, a storm of criticism against the "crazy Dutch" who ruled Europe from a court room in The Hague, was beginning to gather in various parts of Europe. This resulted in a more limited interpretation of the Brussels and Lugano conventions.

In the second half of 1998 the Court of Appeal in The Hague rendered a decision in the case of Expandable Grafts Partnership et al/Boston Scientific et al (April 23, 1998). Unlike the District Court in its earlier decisions, in that case – and the cases that followed – the Court of Appeal decided that there is not a sufficient connection within the meaning of Kalfelis/Schröder when the claims against the Dutch defendant are based on alleged infringement of the "Dutch" European patent and the claims against the foreign defendants are based on alleged infringement of the foreign European patents out of that European bundle. In principle, therefore, the Court does not accept jurisdiction on the basis of article 6 (1) of the Brussels convention (or Regulation 44/2001) or the Lugano convention. The Court of Appeal accepts one exception to this rule: cross-border jurisdiction may be derived from article 6 (1) if the foreign defendants belong to the same group of companies as the Dutch defendant(s) and the European head office ("the spider in the web") is located in The Netherlands. In that case the acts are considered as one joint action based on one joint strategy which originates in The Netherlands and cross-border jurisdiction is also accepted with respect to the foreign defendants. With respect to Dutch defendants cross-border jurisdiction is also accepted without a "spider" in The Netherlands.

In view of the importance of this issue and the sharp (and questionable) departure from past practice, it would have been preferable for the Court of Appeal to have referred questions on the interpretation of the relevant provisions of the Brussels convention to the European Court of Justice. In the final analysis, only the European Court of Justice can harmonize the law on this point. Perhaps the Court considered this unnecessary in view of the questions, which at that time had already been posed to the European Court of Justice by the UK Court of Appeal in Fort Dodge Animal Health et al/Akzo Nobel (and thereafter in Cordis/Boston Scientific). However, both cases were settled before the European Court of Justice could render a decision and the questions were never answered.

Recently the European Court of Justice has been given a new chance to shed its light on this issue. On December 19, 2003 the Dutch Supreme Court in the case Roche/Primus et al referred the following preliminary questions to the European Court of Justice:

A. Does a connection exist as required for the applicability of article 6 (1) Brussels Convention between the claims for patent infringement, which a holder of a European patent has instituted against a defendant established in the country of the solicited court on the one hand and against different defendants, located in other Member States than the country of the solicited court on the other hand, whom the patentee accuses of infringing the patent in one or more different Member States?

With these questions, the Supreme Court has asked the European Court of Justice’s opinion both on the broader interpretation of the Brussels convention followed in the early 1990s (Question A) and with respect to the spider-in-the-web approach developed by the Court of Appeal (Question B). It will be very interesting to see how the European Court of Justice will resolve this issue.

Until the European Court of Justice has rendered its decision, the spider-in-the-web approach is likely to be followed. It is noted in this respect that on several occasions the District Court and the Court of Appeal have refused to grant cross-border injunctions in preliminary injunction proceedings (kort geding), even if jurisdiction exists "in view of the far-reaching consequences of cross-border injunctions" (see e.g. Medinol/Cordis; Court of Appeal, July 3, 2003). It remains to be seen, however, whether this practice can be upheld. In a very recent decision in the case Philips/Princo (March 19, 2004), the Supreme Court has decided that if the Court has jurisdiction with respect to a (non-European) foreign defendant, it should in principle issue a cross-border injunction if infringement abroad has been established. According to the Supreme Court this also applies in preliminary injunction proceedings and irrespective on which ground the Dutch Court has jurisdiction. Although the Supreme Court did not follow the same reasoning with respect to a foreign European-based defendant, there does not seem to be a convincing justification to decline cross-border relief against these defendants in preliminary injunction proceedings if the "spider in the web" is located in The Netherlands and the court has jurisdiction pursuant thereto.

Prof. Willem Hoyng of Howrey’s Amsterdam office represented Primus et al and Koninklijke Philips Electronics N.V. before the Supreme Court in the cases Roche/Primus et al and Philips/Princo.

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