Pan-European Patent Litigation: English Courts Create a Useful Stop-Gap Whilst a Unified European Court System Is Awaited

The England and Wales High Court (EWHC) has demonstrated its willingness for the English Courts to have jurisdiction over issues of infringement of foreign-designated patents.  In the decision Actavis Group hf v Eli Lilly & Company (USA)/Medis ehf v Eli Lilly & Company (USA),[2012] EWHC 3316 (Pat), the court confirmed that English courts could exercise jurisdiction over questions of infringement of foreign patents.
 
The decision applies to proceedings relating to European patents.  Rather than being one single right, a European patent comprises a number of national patents that are applied for in a single application and granted by a single decision of the European Patent Office.  After grant, the patent is validated in one or more European patent convention contracting countries and is then treated as a bundle of separate rights.  These separate rights have a scope which is limited to the territory of the respective contracting country.  Therefore, a European patent validated in, for example, UK, France and Germany will comprise separate parts for the UK, Germany and France.  Any litigation proceedings relating to the patent would be conducted before respective national courts of the countries in which the European patent is validated.  Thus, the courts will decide on the issues of the case based on their respective national laws.  It will be appreciated that where there are parallel litigation proceedings relating to the European patent in different countries then this will increase costs for the parties.  There is also the potential problem of the different national courts giving different results even though the issues are the same.
 
Thus, an owner of a European patent validated in a number of European countries looking to enforce the patent in each of those countries would need to initiate infringement proceedings before individual respective national courts.  There are continuing attempts to create a unified European patent court which can hear cases relating to pan-European rights in a single proceeding, but such a court with pan-European powers does not yet exist.
 
In the meantime, the above decision and an earlier decision of the Court of Justice of the European Union (“ECJ) may provide some help to European patent owners looking to seek cross-border relief or to parties looking to avoid a European patent.
 
In the ECJ decision (Solvay v Honeywell Companies (Case C-616/10)), the court held that a national court in Europe has pan-European jurisdiction to grant provisional relief in IP infringement actions and that national courts can issue preliminary injunctions with effect to the territory of other member states of the European Union.  Thus, the ECJ held that Dutch interimproceedings that result in the issuance of provisional measures, such as the grant of a preliminary injunction, fall within the scope of Article 31 of the Brussels I Regulation, which establishes a special jurisdictional regime for such provisional measures.  This regime does not yield to the exclusive jurisdiction provision for validity which was an issue in the earlier ECJ decision GAT v. LuK (Gesellschaft für Antriebstechnik mbH & Co. KG v. Lamellen und Kupplungsbau Beteiligungs KG, Case C-4/03).  Therefore, as long as proceedings fall within the scope of Article 31, courts may grant provisional measures concerning foreign patents, even if a defendant questions foreign patent validity.  However, in main proceedings, validity can be considered only by national courts.
 
In the more recent EWHC decision, Actavis brought a claim against Eli Lilly USA for a declaration of non-infringement with respect not only to the UK designation of Eli Lilly’s European patent (EP 1313508), but also with respect to the French, German, Italian and Spanish designations.  Eli Lilly USA challenged the English Court’s jurisdiction over the foreign designations. 
 
The court held that, because validity of the asserted European patent and that of the foreign designations was not challenged, the claims over the French, German, Italian and Spanish parts of the European patent could be heard by the EWHC also. 
 
The above cases may prove useful to claimants or defendants in some, but not all instances.  In particular, where a claimant seeks a declaration of non-infringement of a European patent, then the above decisions are applicable provided that the validity of the patent is not also challenged by the claimant.  Further, if a claimant looking to enforce a European patent seeks a preliminary injunction to halt the activities of an alleged infringer pending a main trial, then the principles are again applicable.  However, if in this second scenario, the defendant (i.e. the alleged infringer) counterclaims that the European patent is not valid, then the national court cannot decide on the issues with respect to the foreign designations. 
 
Therefore, alleged infringers who are content merely to seek a declaration of non-infringement of a European patent without national validity challenges should consider conducting the case in London to consolidate litigation. 
 
It must be noted however, that in proceedings where validity of a European patent is challenged, for example, by counterclaim as a defence to a claim for infringement, the proceedings will have to be pursued before the court of the various countries for which patent protection is asserted.
 
In summary therefore, the recent decision of the EWHC provides a useful mechanism for a consolidated pan-European patent litigation strategy whilst the unified European patent court is awaited.  However, if validity of the European patent is raised as an issue, then all bets are off and parties must resort to national country-by-country litigation proceedings.  Therefore, a unified court system in Europe is still the desirable goal to allow true consolidation of pan-European patent litigation proceedings.  After over 30 years in the making, such a system may now be within touching distance as the EU parliament has recently approved an EU unitary patent package.

 
Alistair McKinnon is a senior associate in the London office of WP Thompson.  He is a Chartered Patent Attorney and European Patent Attorney specialising in engineering, materials science and physics-based technologies.  Alistair acts for a wide spectrum of clients, ranging from large multinational companies to SMEs and individuals, and whose technologies lie in the fields of telecommunications, Internet TV systems, radiation detectors, ion implantation devices, fingerprint imaging, polymer films and their use in security documents, and embedded RFID devices.  He has wide experience in drafting and prosecuting patent applications and representing clients before both the UK Intellectual Property Office and the European Patent Office.
 
Alistair McKinnon can be contacted on +44 (0) 20 7240 2220 or by e-mail at ajm@wpt.co.uk
 
Julian Potter is a partner in the London office of WP Thompson.  His practice encompasses all physics-based disciplines, in particular telecommunications and associated technologies.  He has wide experience in drafting and prosecuting patent applications and representing clients before both the UK Intellectual Property Office and the European Patent Office.  Julian is also an experienced Patent Attorney Litigator and has been involved in both Patents Court and Patents County Court litigation covering a wide range of technologies from cryptographic key exchange architecture (Irdeto v Telewest), design methods for oil exploration drill bits (Halliburton v Smith) and GPS applications (GPS industries v Prolink).  Whilst managing the UK patent department of a leading global cellular telecommunications company he gained wide experience of the commercial and strategic value of intellectual property on a global scale and regularly advises clients on the development, exploitation and enforcement of a global intellectual property portfolio.
 
Dr.  Potter can be contacted on +44 (0) 20 7240 2220 or by e-mail at jmp@wpt.co.uk