The author of this post is Lydia Lundstedt, who is a Senior Lecturer at the Stockholm University.
In IRnova (C-399/21), decided on 8 September 2022, the CJEU clarified the interpretation of Article 24(4) of the Brussels I bis Regulation. The latter provision confers exclusive jurisdiction “in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered” upon “the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place”.
In its judgment, the Court ruled that Article 24(4) is to be interpreted as not applying to a dispute, in the context of an action based on an alleged status of inventor or co-inventor, concerning the determination of whether a person is entitled to certain inventions referred to in patent applications filed and patents granted in third countries.
I reported on the facts and the question referred here but a brief synopsis follows.
The Swedish company IRnova AB brought proceedings before the Swedish Patent and Market Court against the Swedish company FLIR Systems AB for a declaration that it was entitled to inventions referred to in certain European, US and Chinese patent applications and certain US patents on the ground that its employee was the true inventor (or co-inventor).
The Patent and Market Court dismissed the part of IRnova’s action concerning the patent applications filed in the US and China and the patent granted in the US. Incidentally, the court retained jurisdiction over the European applications which are governed by the lex specialis rules in the Protocol on Jurisdiction and the Recognition of Decisions in respect of the Right to the Grant of a European Patent.
IRnova AB appealed to the Patent and Market Court of Appeal, which asked the CJEU whether Article 24(4) could be applied to these types of entitlement disputes concerning patents registered and applied for in non-Member States.
The CJEU began by slightly reformulating the referring court’s question to refer to applications filed and patents granted in third States as opposed to non-Member States (paras 22-24). Thereafter, the CJEU established that the dispute had international character and therefore fell within the scope of the BIa Regulation (paras 25-31). Referring to its decision Owusu, C-281/02, the CJEU observed that international character may be based on the subject-matter of the dispute (here the patent applications and the patents) being connected to a third State.
Thereafter, the CJEU answered the question whether Article 24(4) applied to a situation such as the one in the Swedish proceedings. First, the CJEU observed that it follows from the wording of Article 24(4) that it concerns the courts of a Member State of registration and therefore the provision was not applicable to patents applied for and registered in third States (paras 32-35).
Second, the CJEU held that entitlement disputes, including those based on inventorship, are not “concerned with the registration or validity of patents” in the meaning of Article 24(4) (paras 36-49). In this regard, the CJEU recalled that the concept was autonomous and that it must not be given a wider interpretation than is required by its objective (paras 38-39).
The CJEU also recalled its case law in Duijnstee, 288/82 , GAT, C-4/03, and Hanssen Beleggingen, C-341/16 where it held that the rule on exclusive jurisdiction in what is now Article 24(4) is justified by the fact that the courts of the Member State where the patents are applied for or registered are best placed to adjudicate upon cases in which the dispute itself concerns the validity or lapse of a patent, the existence of the deposit or registration or an alleged right of priority by reason of an earlier deposit. It recalled further that an action which merely raises the question of who is the owner of a patent or whether a person has been correctly registered as the owner of a trade mark is not covered by that rule of exclusive jurisdiction because such questions are not closely linked in fact and law to the place where the right has been registered (paras 36-41).
The CJEU stated that the dispute in the Swedish proceedings did not concern these questions but only the question concerning the right to the inventions or to a part of them (para 42).
In this regard, the Court observed first that the question of who owns the inventions, which includes the question of who is the inventor, does not concern the application for an intellectual property right or the right as such, but the object of the right. The CJEU referred to its earlier case law on the justification for Article 24(4) and concluded that it was relevant in a case such as the one in the Swedish proceedings where the question relates only to the entitlement to object of the right, i.e. the invention (para 43).
Thereafter, the CJEU noted that the question of who is the inventor, which the CJEU noted was the sole issue in the Swedish proceedings, is a preliminary question and therefore distinct from that of whether a patent application has been filed or a patent granted. In addition, the CJEU stated that the dispute did not concern the validity an application, but seeks only to establish the right to the inventions themselves. The CJEU stated that the fact that a lack of entitlement to an invention may constitute a ground for refusal of the application is therefore not relevant to the jurisdiction to hear disputes concerning inventorship (paras 44-45).
Lastly, the CJEU stated that the preliminary question of who is an inventor is also distinct from that of the validity of the patent and that latter question was not part of the case in the Swedish proceedings.
The CJEU added that even if the national court was required to examine the claims in the patent applications or patents to determine each employee’s contribution to the invention, this examination does not concern the patentability of the invention.
The CJEU further added that infringement actions also require an in-depth assessment of the protection afforded under the law of the protecting country but that it had previously held that such actions were not covered by the rule on exclusive jurisdiction (paras 46-48).
In my opinion, the CJEU comes to a sensible outcome – the parties should not need to pursue duplicative proceedings in every granting third State with risk that inventorship is decided differently in different states.
The question of inventorship is not closely linked in fact to the state where the patent was applied for or granted as the relevant facts will have taken place where the invention was made, which in this case was most likely in Sweden. Although there is proximity in law to the State where the patent was applied for or granted (the CJEU noted that the Swedish court will likely need to apply US and Chinese law), inventorship disputes are mostly factual disputes concerning who actually came up with the inventive idea, and not the legal value of the parties’ contributions.
If IRnova succeeds with its case on the merits, an interesting question is how it will get the judgment enforced. It can use the Swedish judgment in support of a request before the US and Chinese authorities to persuade them to correct the applicant or owner. An interesting question is whether IRnova can request the Swedish court to order FLIR Systems to transfer the patent applications and patents to it.
Lastly, the decision has significant implications so it is surprising that the CJEU did not obtain a written opinion from the Advocate General. Indeed, the CJEU dealt with the question whether Article 24(4) applies to third States in a rather summary fashion.
The question whether Article 24 in general can be given reflexive effect either as a matter of EU law or national law has been hotly debated in the legal doctrine so I would have expected more than a textual argument to support the CJEU’s conclusion.
Reading the judgment of the ECJ I think that the ECJ did not deal with the question of the application of Article 24(4) Brussels I Recast to third States. The conclusions of the Court are that the dispute between IRnova and FLIR does not fall under tha scope of Article 24(4) as it does not concern a validity of a registration of an IPR-right. Only if it would, the question was to be answered whether the Swedish courts have jurisdiction if the IP-rights at stake be registered in a third State or whether reflexive effect be given to jurisdictional provisions in Article 24(4). This question is adressed to the ECJ in Case C-339/22 (BSH) (3rd preliminary question). See also Van Calster’s blog on the preliminary questions in the latter case https://gavclaw.com/2022/09/10/bsh-hausgerate-v-electrolux-an-opportunity-for-the-cjeu-to-clarify-reflexive-effect-of-exclusive-jurisdictional-rules-and-stays-under-article-244-intellectual-property-law/ . The dispute at stake in C-399/21 is not covered by Article 24(4) the Swedish courts have jurisdiction under Article 4, as FLIR has its habitual residence in Sweden. The question remains whether the ECJ should not have declared that this dispute does fall under Article 24(4) to prevent multi-court litigation and the risk of contrary decisions.
As I see it, there are really two questions at stake here, which the Court (and the referring court) merged together into one – the applicability of Article 24(4) to third states and the scope of Article 24(4) with respect to entitlement disputes based on inventorship. I think the Court satisfactory dealt with the second part, which in my view is relevant even for patents registered in other Member States. I was not satisfied with the Court’s reasoning with respect to the first part, as it has serious implications and deserves more in-depth treatment than it was given. Still, it is hard to ignore paragraphs 34-35 where the Court states that Article 24(4) does not regulate the situation where the patent is registered in a third country. That said, I certainly hope that the Court provides more substantial reasoning when it revisits the issue in C-339/22 (BSH). In my opinion, Article 24 does not apply to third states but I would like to see more substantial reasoning taking into account the system (not least the rules on new lis pendens for proceedings in third states) and objectives of the Regulation.
Thank you for making your approach more clear. One could say that paragraphs 34 and 35 only deal with the direct application of Article 24(4), as the ECJ does not mention the reflexive effect (my reading of the judgment). But one could also say that by those paragraphs the ECJ makes clear that this provision can never apply if a patent is registered in a third State. I hope for more clearence by the Court in the BSH-Case.