dutch perspective international infringement litigation

08 October 1999

Wouter Pors




1. Jurisdiction issues

1.1 Jurisdiction of the Dutch courts: cross border injunctions

As you all know, the Dutch courts have long held that cross border injunctions against defendants from other European countries are possible as long as a Dutch co-defendant can be found. This doctrine was based on article 6 section 1 of the Brussels Convention and on a Supreme Court judgement in a trade mark case against a Dutch defendant.1 These injunctions are enforceable in other European countries due to the same Brussels Convention.

The Brussels Convention, to which all member states of the European Union are parties, has unified jurisdiction rules throughout the European Union. The Convention determines jurisdiction over defendants who are domiciled in one of the countries of the European Union and in that case sets aside any conflicting national rule. It does not apply to defendants domiciled outside the European Union. In that case, if there is no bilateral treaty, jurisdiction is governed by the national law of the court where the action is brought. In the Netherlands this would be the Dutch Procedural Code. It is important to notice that this Code provides that, if a defendant has no domicile within the Netherlands, jurisdiction of the courts is based on the domicile of the plaintiff. This gives the Dutch courts cross border jurisdiction over American defendants, although the judgement cannot be executed in the United States for lack of a bilateral treaty on execution.

Once a court within a member state of the Brussels Convention has jurisdiction based on that convention, the convention itself also provides that the judgement can be executed in any member state, without evaluation by it's national courts.

The main rule of the Brussels Convention is that the court of the domicile of the defendant has jurisdiction. An additional rule is that the court within whose jurisdiction an infringement took place, also has jurisdiction, regardless of the domicile of the defendant. This means that the Dutch courts have jurisdiction over any foreign defendant, once the infringement took place in the Netherlands. The courts have ruled however that in such a case the injunction should also be limited to the Netherlands; this rule cannot be used as a basis for a cross border injunction. This goes to show that the Dutch case law is not as wild as is sometimes suggested.

An additional rule of the convention (article 6) says that, once you have established jurisdiction on the basis of the domicile of the defendant - in this case a Dutch company -, the court also has jurisdiction over co-defenders. The convention itself does not explicitly state whether these co-defenders should have contributed to the same infringement or whether a connection between the infringements committed by the defendants is required. This led the Dutch courts to the ruling that, if the same intellectual property right is infringed by co-defendants in different countries, for instance each committing the infringement in their country of domicile, and one of the co-defendants is domiciled in the Netherlands, the Dutch courts have jurisdiction to judge all these infringements and render injunctions for all the countries involved.

This however only works if the same intellectual property right is involved in each country, which means that the material law governing the question of infringement also is the same inn all of those countries. Most of the time this poses a significant hurdle. For instance, copyright protection for industrial designs is granted far more easily in the Netherlands than in Germany. Hence, the Dutch courts will not be willing to grant a cross border injunction for copyright infringement on an industrial design to easily. This might be different if the case is about an exact copy of a novel, since novels are awarded copyright protection throughout Europe (and beyond, of course).

In relation to patent, this is a different matter. The scope of protection of a European Patent is governed by article 69 of the European Patent Convention and the Protocol regarding that article. Since article 69 has direct effect without any implementation into national law,, the Dutch courts have ruled that the scope of protection is basically the same in each member state of the European Patent Convention. This means that there is no real hurdle to award a cross border injunction for a European Patent, based on the combined effect of the Brussels Convention and the European Patent Convention.

I would like to stress that only the injunction is cross border. Additional claims, such as damages, aiming available the names of manufacturers and suppliers and the like will not be easily awarded against foreign defendants, as those items are governed by national law, which differs throughout the European Union.

1.2 Restriction to cross border injunctions

The question of nullity is not affected, as this is the exclusive competence of the national courts of all states where the patent is registered. If the Dutch judgement also deals with the validity of the Dutch component of the patent, submitting this judgement in a foreign nullity procedure might help to convince that court, but of course there is no guarantee that another court will hold the same view (2).

In Expandable Grafts vs Boston Scientific, the Court of Appeal at The Hague has now ruled that a cross border injunction against a defendant from another European country is only possible if the Dutch company is "the spider in the web" with regard to the supposedly infringing product and if both companies are part of the same concern (3). This means that the Dutch company has to be the company that determines the policy with regard to marketing the infringing product. This in fact is a limitations, based on foreign criticism of the Dutch practice. One of the most influential judgements in this respect was rendered by the British Court of Appeal in Akzo vs Fort Dodge.

1.3 Exceptions to the main rule

This of course did not influence the Supreme Court ruling that a cross border injunction is always possible against a Dutch defendant. It also did not influence the jurisdiction over non-EU companies, which follows directly from the Dutch Procedural Code, although enforcement in such cases will of course be difficult.

The District Court decided to follow the rules laid out by the Court of Appeal, although it is of the opinion that those rules are incorrect (4). Therefore, the District Court is looking for exceptions that fit within the ruling of the Court of Appeal. In the case of Augustine vs Mallinckrodt, the spider in the web was a company based in the United States. According to the District Court this meant that the court had jurisdiction over all companies of the Mallinckrodt concern, also those based in other European countries (5). The consequence of all this is that the District Court will rule that it has no jurisdiction, only if the spider in the web with regard to a supposedly infringing product is based in another member state of the European Union.

But there is even an exception to that rule. In Velouta vs Schellens II, the Belgium based company Velouta requested a declaratory judgement, with effect for all designated countries, that they were not infringing Schellen's patent. Since it was the choice of Velouta themselves to bring the case before the Dutch court, the court also accepted jurisdiction to hear Schellen's counterclaim for a cross border injunction (6).

In the meantime, the Court of Appeal has ruled that Article 5 section 3 of the Brussels Convention does not establish jurisdiction to grant cross border declarations of non-infringement (7). This only poses a problem if there are only defendants from other EU-countries. I believe the "spider in the web" doctrine would also apply here if there were a Dutch co-defendant.

1.4 Abuse of right

The District Court will not accept jurisdiction if the case is a clear abuse of right. This was held to be true in a case where only 0.4% of the turn over in the supposedly infringing product was made by the Dutch defendant and the remainder by the English defendants (8).

In another case, the Dutch defendant did not appear in court and was granted default. The circumstances of the case however made it very likely that the foreign defendants were being set up by means of a deal between the plaintiff and the Dutch defendant made in order to create jurisdiction of the Dutch courts. Therefor the President of the District Court denied jurisdiction (9).

Of course, the fact that the Dutch courts will accept jurisdiction over non EU-companies is very nice, but enforceability outside the member states of the Brussels Convention will be very difficult, unless there is a bilateral treaty governing the enforcement of foreign judgements.

Whether the spider in the web doctrine of the Court of Appeal is the last word on jurisdiction, remains yet to be seen. The Supreme Court and also the European Court of Justice still have to rule on this matter. However, the EGP vs Boston Scientific judgement has not turned out to be the end for our profession, as some predicted. The Netherlands still offer interesting opportunities for patent litigation.

1.5 Personal view

I think the restrictions set by our Court of Appeal in EGP vs Boston Scientific are unnecessary. I also think that foreign criticism of our cross border practice is unjustified.

The Dutch courts were not doing something outrageous. It is not like any foreign company ran the risk of meeting with a Dutch cross border injunction. Dutch companies could indeed always be faced with an injunction to commit infringements anywhere in the world where the plaintiff held an intellectual property right, but this is a purely national issue, since it regards only Dutch defendants.

Foreign companies with no establishment - either direct or through an affiliated company - in the Netherlands do not run the risk of a cross border injunction. The only risk they run is an injunction to commit infringements within the Netherlands. That is our good right.

Only multinational companies, who not only operate on a multinational level, but also have registered business offices or subsidiaries in various companies, and at least in the Netherlands, run the risk of being faced with a Dutch cross border injunction. The same goes for companies that work together with a Dutch company in the same multinational infringement. But in that case, it is the defendant himself who chose to be active on a multinational level within the European Union. He saw the benefit of the large European market and sought not only penetration of that market, but also corporate presence in different countries of that market, amongst which the Netherlands. It is not more than fair that such a defendant should also be confronted with a multinational protection for the right owner, which is no more than a countervailing power for his own multinational activities. Both from a legal point of view and from an economic or corporate point of view, there is nothing wrong with the original Dutch cross border practice. It is simply the appropriate answer to cross border infringement by multinational companies.

As pointed out above, a requirement for a cross border injunction is that the material law is harmonised, as is the case with patent law. In other fields of intellectual property law, the plaintiff has to prove that the alleged conduct of the defendant constitutes an infringement under the law of each of the countries for which an injunction is sought. However, if this is not contested by the defendants, the court is likely to assume that a infringement can be established. This means that outside patent law, and provided that all defendants are adequately represented, it is not all that easy to actually obtain a cross border injunction.

2. Effective procedure

2.1 Ordinary full procedure

A normal full procedure in an intellectual property case does not differ from any civil law suit in the Netherlands. It will take between 11/2 and 2 years to obtain a judgement. The judgement may not be final, but might contain an order to deliver additional proof, for instance by hearing witnesses or by expert testimony. The procedure start with a writ of summons, followed by a statement of answer by the defendant, after which a second round of submitting written statements follows. Finally, if requested by either parties, an oral hearing will take place, which is standard practice in intellectual property cases. The exchange of statements may be slowed down by the possibility to ask for a new date to file a statement. This is in part up to the parties, but each District Court and Court of Appeal has it's own policy of allowing or refusing such delays. The outcome will be a thorough judgement, but a rather slow one.

There is a variety of the ordinary full procedure, where only a writ of summons and a statement of defence are allowed, followed by a hearing, but still leaves some room for slowing down. It is however the only expedient full procedure in intellectual property cases, except for patent cases.

2.2 Preliminary injunction

There is an alternative, which is the preliminary injunction procedure. This will give you the benefit of a preliminary judgement within 2 months. It starts with asking the President of the District Court permission to serve a writ of summons on the defendant, requiring him too appear in court at a specific hearing before the President. The writ of summons of course has to contain the claim and the grounds for that claim. Both parties may submit documents to the court until a few days before the hearing. The argument is mainly oral and the court does not hear witnesses. The case will be decided on the merits, not on the balance of inconvenience.

Over the years, a practice was developed where preliminary injunction procedures were not followed by full procedures; the parties might appeal the preliminary judgement, but this would produce an equally preliminary judgement on appeal, which would then be excepted by the parties in most cases.

This now seems to have come to an end, since article 50 TRIPS requires a full procedure to follow. The European Court of Justice has decided that article 50 TRIPS also applies to the Dutch preliminary injunction procedure,10 but is has not yet been established whether article 50 of TRIPS requires implementation law, which does not yet exist in the Netherlands. It therefor remains uncertain whether a full procedure is indeed mandatory. However, many cases are settled after the preliminary procedure, which of course renders article 50 TRIPS irrelevant in those cases.

Although the Dutch preliminary procedure is a procedure on the merits and the defendant has a good possibility to present it's case, it is looked upon with much criticism by foreign courts, especially when it is used to decide complicated matters, such as patent infringements. The Brussels Convention provides for one limited possibility not to allow the execution of a foreign judgement, namely in case it is contrary to the "ordre public" of the receiving state. There is some concern in the Netherlands that this might become the fate of cross border injunctions, rendered in preliminary proceedings.

2.3 Accelerated patent procedure

In order to overcome objections against judgements in preliminary injunction procedures, while on the other hand offering a quick way to obtain a judgement, the District Court of The Hague introduced a new accelerated patent infringement procedure (11).

To start such an accelerated patent procedure, the plaintiff requires a leave from the District Court. To obtain such a leave, a detailed draft writ of summons has to be filed with the court, along with the patent. The leave stipulates the date on which the writ has to be served, the dates on which the statements of claim, of answer and of answer to a counter claim have to be submitted to the court and the date for oral pleadings. Thus a judgement may be obtained in full procedure within some 8 to 12 months.

If the necessary documents, required under the Brussels Convention to prove that the writ has been served upon a foreign party, are not returned by the foreign authorities before the oral pleadings and that party does not appear in court, a preliminary injunction may be granted for the time until all documents are received. Since this is a preliminary injunction in a full procedure, rendered at the same time when the final judgement could have been rendered but for the absence of the necessary documents, there should be no problems executing such an injunction abroad.

In this way the Dutch court will issue a cross border injunction for patent infringement within a very reasonable span of time, which can be executed in each designated European country.

The same procedure can be used for a nullity claim.

Normally, if the patent holder starts an infringement case, a claim for nullity of the patent may be submitted as a counter claim in the accelerated infringement proceedings. This will not slow down the proceedings, as the leave already stipulates the date for submitting a statement of answer against a possible counter claim.

A defendant might however choose to start a separate, non-accelerated nullity procedure. If the nullity claim is not vexatious but serious, this will of course slow down the infringement procedure, unless both procedures can be joined on the basis of the accelerated regime. However, the President of the patent chamber of the District Court at The Hague in July 1997 refused to do so in Immunomedics vs Roche, which was later confirmed by a judgement of the court of 1 October 1997 on the grounds that both procedures were of different nature, one being an accelerated procedure and the other not. This of course would give way to parties only starting separate nullity proceedings in order to slow down the accelerated infringement procedure. Perhaps that is why the court added that it also refused to join both procedures since a judgement could already be rendered in the infringement procedure, while the exchange of statements was not yet finished in the nullity procedure. In this case, the injunction was denied as the court ruled that Roche did not infringe the patent. It still remains to be seen what the court will do in such a case if it decides that the defendant does infringe the patent.

In general, the rules for the accelerated patent procedures have turned out to be far too concise to cover all issues that might arise. The consequence is that this specific piece of procedural law is developed in a case by case process, often on the basis of telephone conversations between the attorneys of the involved parties and the President of the patent chamber of the District Court. As the results are rarely published or accounted for in the judgements themselves, this field of law has become a minefield to the lawyers who are not regularly involved in this type of litigation.

2.4 Preliminary patent injunction procedure

Finally, it is still possible to obtain a cross border patent injunction in preliminary proceedings. Standard procedure is that a draft writ of summons is sent to the President of the patent chamber, who will then set a day for oral pleadings. All relevant documents will have to be submitted to the court and to the opposite party at least several days, but preferably one or two weeks before the hearing. The President of the court may stipulate the exact term in his leave to serve the writ. The court will take no more than half a working day to hear the pleadings.

If the case is too complicated to present it to the court within this time frame, this should be indicated in the letter to the President accompanying the draft writ of summons. The President will then set dates for a statement of claim and a statement of answer, as well as for oral pleadings. After having read the statements, the President may indicate in writing to both parties on which topics he requires further information at the hearing (12). These provisions might be sufficient to overcome some of the objections felt in other countries against dealing with patent infringements in preliminary proceedings and might therefor prevent that execution of the injunction is blocked on grounds of "ordre public".

3. Evidence

3.1 Discovery

Dutch law does not provide for discovery. This means that each party can only present the evidence it has been able to collect on it's own account. Nevertheless, additional claims, such as for disclosure of suppliers, account of profits, etc are allowed. The effect is that, if the court establishes that an infringement has been committed, some very limited type of discovery-like action is available.

The result of a foreign discovery is admissible in a Dutch court case. US law provides for a discovery for the sole purpose of delivering proof in a foreign procedure, which can be used if the information to be discovered in the US.

This might in some cases be blocked by an anti suit injunction. Such injunctions are known in the UK, but not in the Netherlands. I have recently, by way of experiment, filed for an anti suit injunction in a Dutch patent infringement case, seeking an injunction against further discovery in the US. This was a special case, where it was very likely that the discovery was abused to obtain secret know how which was irrelevant to the patent at stake, but vital to the patent owner. The defendant does not really trust the outcome, so the issue is almost settled by now.

3.2 Preliminary procedure

In preliminary procedures, only written evidence can be submitted. The President of the District Court may appoint expert witnesses in some cases though. In patent case, sometimes the advice of the Dutch Patent Office is sought by the court. Otherwise, it is very much up to the parties to submit sufficient documents to convince the court. Of course, it is also possible to give a demonstration of the working of a machine during the hearing and to show video tapes or computer demonstrations.

3.2 Full procedure

In full procedure, it is also possible to suggest to the court that witnesses should be heard. It is up to the court to decide whether this is necessary, but they have to give the arguments for their decision, which might be challenged on appeal. Of course, it is always possible to submit any kind of document. The burden of proof however is on the plaintiff.

In medical liability cases, the burden of proof is still on the plaintiff, but the hospital has to disclose it's files to the plaintiff, whereupon he may also build his case on the evidence in that file. Recently I have been successful in establishing the same rule in a tort case against the government, which was not in the field of medicine. Perhaps this offers possibilities to do the same in other cases where the defendant has the information, if the court can be convinced that the defendant is under some special obligation of fair play. It seems unlikely though that this will be extended to intellectual property cases in general, since this would interfere with competition in general.

4. Costs, miscellaneous

The costs of intellectual property litigation in the Netherlands are fairly modest. A preliminary procedure would cost between € 7,500 and € 10,000. A full procedure might cost between € 10,000 and € 15,000. Patent litigation is more expensive, partly due to it's nature, partly due to the fact that attorney at law and patent attorney are separate professions in the Netherlands, which means that you need both to go to trial. This means that the costs would be double or even triple, which still is moderate compared to some countries.

Court fees are no more than a few hundred Euro for an injunction and additional claims, without damages. If damages are claimed, the court fee is a percentage of those, but this can be avoided by simply not mentioning the amount claimed. In that case an additional follow-up procedure is required once the infringement has been established, but no extra court fees are required for that procedure.

The party that loses the case has to pay the other party's court fees and a modest contribution to the costs of the other party's representation in court, which in most cases will not exceed € 4,000.

Finally, costs can of course be limited by filing a criminal complaint or involving customs. If a criminal complaint is filed, the District Attorney will investigate the case. If he sees a possibility for successful criminal action, he will provide the victim with a copy of his file. This may take a long time, but may also offer the same results as a real discovery procedure, without any costs. I have been able to obtain damages in a trade mark infringement case by submitting proof that was gathered by both the Dutch and German police. Thus, this might be useful in some cases, but is difficult to keep under control.

With regard to customs, a Dutch national report with regard to AIPPI Question 147 was adopted by the Dutch branch of AIPPI in it's September 8 meeting. A copy of that report is enclosed.

Notes:

  1. Supreme Court 24 November 1989, NJ 1992/404, Lincoln vs Interlas.
  2. This might be different in as far as European law regarding the validity of the patent is available. That allready is the case in the field of biotechnology, where a European Directive has been adopted and has also been implemented by the European Patent Office
  3. Court of Appeal The Hague 23 April 1998, IER 1998/30, EGP vs Boston Scientific
  4. District Court The Hague 20 May 1998, IER 1998/31, Baxter vs Pharmacia & Upjohn.
  5. District Court The Hague 15 July 1998, IER 1998/40, Augustine vs Mallinckrodt.
  6. District Court The Hague 18 February 1998, BIE 1999/37.
  7. Court of Appeal The Hague 22 January 1998, Evans vs Chiron.
  8. District Court The Hague 23 December 1997, IER 1998/10, Akzo Nobel vs Webster
  9. President of the District Court The Hague 27 November 1997, IER 1998/11, Goldschmidt vs Elzbieta.
  10. European Court of Justice 16 June 1998, IER 1998/39, Hermes
  11. The rules for this procedure have been published by the court in BIE 1996, p. 292
  12. The rules for this procedure have been published by the court in BIE 1995, p. 232