The much-anticipated decision of the CJEU (case C-339/22) regarding the jurisdiction of EU member state national courts (including the Unified Patents Court, UPC) to decide patent infringement cases has now landed. The decision stems from a referral by the Swedish court of appeal in a patent infringement case.
BSH sued Electrolux in the Swedish courts for infringement of its vacuum-cleaner related European patent number 1434512, in Sweden and other EU and non-EU states. Electrolux counter-claimed that the patents were invalid, and that the Swedish court had no jurisdiction: it argued that if invalidity of the patents is raised as a defense, then the court loses jurisdiction over the infringement case under Article 24(4) of the Brussels I Regulation (Regulation 1215/2012).
Article 4(1) of the Brussels I Regulation states that persons domiciled in a Member State shall, regardless of nationality, be sued in the courts of that Member State. However, Article 24(4) provides an exception that in proceedings concerning the registration or validity of patents, the courts of the Member state in which the patent is registered have jurisdiction. In the BSH/Electrolux case, the Swedish court of appeal referred the following questions to the CJEU:
- If validity is raised in a patent infringement action, does a court having jurisdiction under Article 4(1) lose jurisdiction?
- Is it relevant whether national law requires a separate invalidity action?
- Does Article 24(4) also apply to "third" (non-EU) countries, such as (in this case) Turkey?
In its ruling, the CJEU confirmed that national courts cannot rule on the validity of foreign patents but can rule on patent infringement claims, even if the patent was granted in another European country, and even if validity of the patent is contested. If validity is contested, then the court has the option to stay proceedings if there's a reasonable possibility the patent might be invalidated in its country of registration, or refuse to grant relief for infringement in the event that it concludes that the patent is indeed invalid. Any finding of invalidity in this connection would, however, be strictly inter partes, and would not result in revocation of the patent.
By coincidence, an example of this situation arose in the recent decision of the Düsseldorf Local Division of the UPC in Fujifilm v Kodak (UPC_CFI_355/2023).
Here, Fujifilm sued three German Kodak entities for infringement of its European patent number 3594009 in both Germany and the UK. Kodak counter-claimed for revocation of the patent in all UPC member states where it is in force (i.e. Germany, but not the UK), and argued that because the UK is outside the UPC, the court lacked jurisdiction to decide upon infringement of the UK patent.
The Düsseldorf LD found that it had jurisdiction to decide upon infringement of both the German and UK patents (as the court where the defendants are domiciled), revoked the German patent as being invalid, and did not need to address whether it could revoke the UK patent because this was not pleaded by the defendant. However, in view of its finding of invalidity of the German patent, the court concluded that the UK infringement action could not be successful, and found no legal basis for staying the UK infringement proceedings, or granting relief conditional on UK validity.
The CJEU decision raises some interesting opportunities and challenges for UPC patent enforcement strategy. For example, are all actions for infringement of "foreign" patents in which invalidity is counter-claimed effectively bifurcated? And what happens if, e.g., a Unitary Patent is found valid and infringed in amended form (versus an unamended "foreign" patent)? Is it possible to obtain relief for infringement of a "foreign" patent whose validity is unchallenged? It will be interesting to see how practice develops go-going forwards.
