The author of this post is Lydia Lundstedt, Senior lecturer at the Stockholm University.
Jurisdiction over foreign patent disputes is again the subject of two new requests for preliminary rulings by the Swedish Patent and Market Court of Appeals. The latest referral, BSH Hausgeräte (C-339/22), concerns the scope of Article 24(4) of Regulation No 1215/2012 (Brussels I bis Regulation) with respect to infringement disputes when the invalidity of a foreign patent is raised as a defence. It also concerns the potential “reflexive effect” of Article 24(4) in relation to patents registered in third countries.
The first question reads as follows (my translation):
Is Article 24(4) of Regulation (EU) 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to be interpreted so that the words ‘proceedings concerned with the registration or validity of patents . . .irrespective of whether the issue is raised by way of an action or as a defence,’ mean that a national court which, in accordance with Article 4(1) of that regulation, has established its jurisdiction to hear an infringement action no longer has such jurisdiction to determine the infringement action if an objection is raised that the patent in question is invalid, or is that provision to be interpreted as meaning that the national court only lacks jurisdiction to determine the invalidity objection?
The second (related) question is (my translation):
Is the answer to question 1 affected by the existence of provisions in national law, similar to those in the second paragraph of Section 61 of the [Swedish] Patent Act, which stipulate that an invalidity objection raised in an infringement action requires the defendant to bring a separate action for a declaration of invalidity in order to be admissible?
The third question concerning the potential “reflexive effect” of Article 24(4) reads (my translation):
Is Article 24(4) of the Regulation to be interpreted as applying in relation to a court in a third country, that is to say, in the present case so that it also confers exclusive jurisdiction on the courts of Turkey for the part of the European patent validated there?
The background is that the German company BSH Hausgeräte GmbH brought proceedings before the Swedish Patent and Market Court against the Swedish company Aktiebolaget Electrolux for the infringement of its European patents validated in Austria, Germany, Spain, France, UK, Greece, Italy, Netherlands, Sweden, and Turkey. Electrolux responded by alleging that the foreign patents were invalid and that the Swedish court therefore lacked jurisdiction to hear the infringement actions concerning the foreign patents.
Electrolux argued that the wording of Article 24(4) of Brussels I Regulation, which codifies the CJEU ruling in GAT (C-4/03), clearly covers infringement actions in which invalidity objections have been raised. It argued further that infringement and invalidity cannot be separated because a valid patent is a prerequisite for an infringement. In addition, Electrolux argued that there was nothing to prevent it from raising invalidity objections before the Swedish court and that the second paragraph of Section 61 of the Swedish Patent Act, which requires an invalidity objection to be raised as an independent action and not merely as an objection in an infringement action, only concerns Swedish patents. In addition, Electrolux argued that pursuant to Article 8 of Regulation (EC) No 864/2007 (Rome II), Swedish law was not applicable and that Swedish law could not either be applied by analogy.
BSH argued that the Swedish court had jurisdiction over the infringement actions pursuant to Article 4 of the Brussels I bis Regulation based on Electrolux’s domicile and the Swedish court did not lose this jurisdiction because Electrolux contested the patents’ validity. It argued further that its action principally concerned infringement, not invalidity so Article 24 and 27 of the Brussels I bis Regulation were not engaged. In addition, BSH argued that pursuant to the second paragraph of Article 61 of the Swedish Patent Act, the court should disregard Electrolux’s invalidity objections unless Electrolux brought separate invalidity actions in the countries where the patents are validated. In such case, BSH argued that the Swedish court could stay the infringement proceedings until the invalidity proceedings became final. Lastly, BSH argued that Article 24(4) of the Brussels I bis Regulation did not apply in relation to third countries.
The Swedish Patent and Market Court held that it lacked jurisdiction over the foreign patents. In short, it held that Article 24(4) applied when invalidity objections were raised in an infringement action concerning foreign patents and that the fact that Electrolux had yet to bring invalidity actions in the countries of registration was not relevant. In addition, the court held that it must also decline jurisdiction over the Turkish part of the European patent because Article 24(4) of the Brussels I bis Regulation was an internationally accepted principle.
BSH appealed to the Patent and Market Court of Appeals. The Court found that the wording of Article 24(4) did not clearly indicate whether it covered infringement actions once invalidity had been raised in objection and that this question was not answered by the GAT decision or the CJEU’s subsequent case law. Concerning the application of Article 24(4) to third country patents, the Court observed that it was not clear from the wording of Article 24(4) of the Brussels I Regulation whether it applied, in contrast to Articles 33 and 34 of the Brussels I Regulation on lis pendens and related actions, which clearly state that that they apply in relation to third countries. The Court also noted that this question had not been answered in Owusu (C-281/02), where the CJEU held that Article 2 of the Brussels Convention (now Article 4 Brussels I bis Regulation) on jurisdiction of the basis of domicile applied to disputes involving relations between the courts of a Contracting State and a non-Contracting State.
An earlier referral, IRnova (C-399/21) also concerns the scope of Article 24(4) of the Brussels I Regulation, but this time in the context of a patent entitlement action when the basis for the action is that the claimant is the true inventor.
The question reads as follows:
Is an action seeking a declaration of better entitlement to an invention, based on a claim of inventorship or co-inventorship according to national patent applications and patents registered in a non-Member State, covered by exclusive jurisdiction for the purposes of Article 24(4) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters?
The background is that the Swedish company IRnova AB brought proceedings before the Swedish Patent and Market Court against the Swedish company FLIR Systems AB for entitlement to patent applications and patents that FLIR Systems AB had applied for and registered in third countries (USA and China) by FLIR Systems AB. The companies had previously had a business relationship. IRnova alleged that one of its employees had developed the inventions, or at least, had made such a substantial contribution to the inventions that he was to be regarded as a co-inventor and that IRnova was therefore the rightful owner. FLIR Systems AB objected to the Swedish court’s jurisdiction and the Patent and Market Court dismissed IRnova’s action. The court held that Article 24(4) of the Brussels I bis Regulation was an internationally accepted principle and therefore should apply in relation to third countries. The court held further that an entitlement action based on inventorship was so closely related to the registration and invalidity of patents that Article 24(4) was engaged.
IRnova AB appealed to the Patent and Market Court of Appeal. The Court noted that the answer to this question was not clear from the CJEU’s previous case law including Duijnstee (288/82), where the CJEU held that Article 16 of the Brussels Convention (now Article 24(4) Brussels I bis Regulation) does not apply to a dispute between an employee for whose invention a patent has been applied for or obtained and his employer, where the dispute relates to their respective rights in that patent arising out of the contract of employment.