Röhm Enzyme v DSM1 and Roche v. The Wellcome Foundation2, two recent first instance decisions of the Belgium courts, indicate unwillingness of Belgian judges to countenance the use of a Torpedo action by potential defendants as a procedural device to counter a pan-European injunction for patent infringement.
The Torpedo strategy evolved, as a direct response to the Dutch courts' enthusiasm for seizing cross-border jurisdiction and granting pan-European injunctive relief in respect of infringement by a group of related defendants of a European patent in the countries designated by the patent. The Dutch courts have considered themselves entitled to seize cross-border jurisdiction as a consequence of their interpretation of the provisions of the Brussels Convention.
The Brussels Convention
One of the purposes of the Brussels Convention is to allocate jurisdiction for civil disputes amongst the courts of the EU member states. The basic rule under Articles 2 and 3 is that a person domiciled in a Member State must be sued in the courts of that state unless one of the stated exceptions apply.
The most relevant exceptions are set out in Article 5(3) and Article 6(1). Article 5(3) provides that a person domiciled in a Member State may be sued in respect of matters relating to a tort (which includes infringement of an intellectual property right) in the courts of another member state where the harmful event occurred. Article 6(1) provides that a person domiciled in a Member State may be sued where he is one of a number of defendants, in the courts of the place where any one of the defendants is domiciled.
The basic rule does not apply to proceedings where the validity of a registered intellectual property right is at issue. Article 16(4) provides that, in this case, the courts of the Member State in which the application for, or registration of, that intellectual property right has taken place, have exclusive jurisdiction.
Articles 19 to 22 of the Brussels Convention are designed to avoid conflict between, multiple, proceedings in courts of various member states. Article 19 provides that if the principle matter of the proceedings is one where another court has exclusive jurisdiction, then any other court, even if first seized, must decline jurisdiction. Article 21 provides that, where proceedings involve the same cause of action and the same parties, any court other than the court first seized must decline jurisdiction. Article 22 provides that, where proceedings are related, any court other than the court first seized has discretion to decline jurisdiction.
Finally, Article 26 provides that the judgment of one Member State shall be recognised in another Member State, without any special procedures, unless one of the exceptions in Article 27 applies. One exception is where recognition of the judgment is contrary to the public policy in the Member State in which recognition is sought.
The Dutch courts' initial enthusiasm for granting cross-border relief had its genesis in the Dutch Supreme Court in Lincoln v. Interlas in 1989 and reached a high point in the Dutch Court of Appeal' s decision in Chiron v. Organon Teknika in 1995. Essentially, by virtue of the combination of Articles 2, 6(1) and 22 of the Brussels Convention, the Dutch courts were willing to seize cross-border jurisdiction where a Dutch defendant was alleged to be infringing a Dutch European patent and other members of the group of companies to which the Dutch defendant was a member, were alleged to infringe counterparts of the same European patent registered in other countries. The ECJ in the decision of Kalfelis v. Schröder, has stated that, for Article 6(1) to apply, there must be connection between the claims, such that it is important to hear them together to avoid the risk of separate proceedings leading to conflicting judgments. This need for a connection between various defendants has become known as "connexity". The requirement is related to Article 22 which states that, in these circumstances, any court other than the court first seized, may decline jurisdiction. The Dutch courts also took account of the protocol to Article 69 of the European Patent Convention which is intended to harmonise throughout Europe the law on interpretation of claims on European patents. They considered that although each national European patent is a separate right, the fact of harmonisation of interpretation provided sufficient connexity.
The Dutch courts came to this conclusion, notwithstanding the existence of Article 16(4) which provides that courts of other member states have exclusive jurisdiction for proceedings concerned with the validity of the non-Dutch European patents, as they considered it was possible to separate issues of infringement and validity.
This position is different to that taken by other European courts, most notably, the English courts. The decisions of the English High Court in Coin Controls v. Suzo International and the English Court of Appeal in Fort Dodge v. Akzo demonstrate that the English courts are not prepared to separate the issues of infringement and validity and therefore will deny jurisdiction over a claim for infringement of a non-UK European patent where validity of that patent had been put in issue in the relevant European country.
In 1998, however, the two decisions of the Dutch Court of Appeal in the Boston Scientific cases marked a turning point since when the Dutch courts' have been more reluctant to grant pan-European injunctions. The Dutch Court of Appeal acknowledged the strong relationship between infringement and validity of patents and acknowledged that they were obliged to stay infringement proceedings in respect of non-Dutch European patents in circumstances where the validity of those patents was an issue in proceedings in other countries. Secondly, the Dutch courts held that they could only seize cross-border jurisdiction where the Dutch defendant was the "spider in the web" of the group of defendant companies, generally the head office of the group of companies.
The German courts have also recognised their ability to grant cross-border relief. However, this jurisdiction is rarely exercised in practice.
The Torpedo strategy
Not only will the Dutch courts countenance granting pan-European injunctions, they are granted quickly in accelerated proceedings which are generally considered to favour the patentee (possibly unsurprisingly where the validity of the patent is not considered).
The "Torpedo" strategy was therefore deployed by potential patent infringers. It is a pre-emptive strike in anticipation of a patentee filing a claim for a cross-border injunction. The potential defendant commences proceedings in a member state with a notoriously slow court system for a declaration of non-infringement and invalidity in respect of the European patent granted in that member state and also for declarations of non-infringement in respect of the corresponding European patents granted in other member states.
Article 21 of the Brussels Convention provides that, where proceedings involving the same cause of action and the same parties are brought in more that one member state, any court not first seized with jurisdiction must decline jurisdiction or stay the proceedings until the jurisdiction of the court first seized has been determined. This has the practical consequence that, while such an action is pending, the patentee is prevented from suing for infringement in any other country to which the claim relates. The "Torpedo" strategy was first deployed in Italy. However, because of the procedural difficulties of initiating such actions in Italy, the Belgian courts have become the more popular forum for these actions in recent years.
As it can take five to ten years for such an action to be determined by the Belgian courts, the effect of the Torpedo strategy is therefore to avoid the determination of the issue of infringement and in the meantime either successfully oppose the European patent in the EPO and/or to successfully revoke some, or all, of the European patents before the courts of member states in which they have been granted. Just as an application by a patentee for a pan-European injunction in the Dutch courts severely disadvantages a defendant whose non-infringement defences are weak, it is precisely such a potential defendant who is most likely to reap the advantages of a Torpedo strategy.
The Röhn Enzyme and Roche decisions
In the two recent first instance decisions of Röhm Enzyme and Roche, Belgian courts have shown for the first time their unwillingness to countenance the Torpedo strategy.
In each case, the respective plaintiffs sought a declaration that the first defendant' s European patent was invalid in Belgium. They further sought a declaration of non-infringement of this patent with regard to their own products in respect of all countries designated by the patent, including Belgium. Each case came up for interlocutory judgment on the jurisdictional issue. In each case, it was acknowledged by the parties that the Belgian court had jurisdiction to determine the issue of the invalidity of the Belgian European patent and non-infringement in Belgium. Therefore, the court in each case had to consider its extra territorial jurisdiction.
The key to the Röhm Enzyme decision was Article 16.4 of the Brussels Convention. The Court held that a claim for a declaration of non-infringement is so closely linked to the issue of the validity of a patent, that only the judge of the country where the issue of validity is at issue has jurisdiction to rule upon infringement. The court stated that the sole exception to this would be where a plaintiff explicitly states that it does not contest the validity of a patent, so that only infringement is at issue. As soon as there is a connection between subject matter for which several courts have jurisdiction, one part of which a specific court has exclusive jurisdiction, only the judge who has exclusive jurisdiction of that part has jurisdiction over the whole case. The jurisdiction of the Belgian court was therefore held to be limited to the issue of validity of the patent in Belgium and to the issue of (non)-infringement in Belgium.
Abuse of procedure
In the Röhm Enzyme case, the court explicitly recognised that the aim of the Belgian Torpedo strategy is to block all other claims for a number of years. The Court stated that if this was the purpose of the proceedings in this case, the practice had to be ended immediately as it constituted an abuse of procedure under the Belgian Civil Code.
After considering Article 16(4) of the Brussels Convention, the court concluded that the plaintiffs intentionally did not claim declarations of invalidity in Belgium in respect of the other national European patents because they were well aware of the fact that a Belgian judge had no jurisdiction in respect of such claims. Nonetheless, the court found that, just as the (non)-infringement claim was not limited to the Belgian territory but covered all countries designated by the European patent, so was the invalidity claim. The plaintiffs were therefore fully aware of the fact that they would have to introduce invalidity claims in all of these other countries. It was precisely this delimitation of the dispute which, in the court' s view, showed the plaintiff' s "unclean" attitude. By introducing the cross-border claim for a declaration for non-infringement in Belgium, the court concluded that the plaintiffs could have no other purpose than abusing the rule of Article 21.
Unusually for a Belgium court, the Röhm Enzyme judgment sets out principles of general application going beyond the immediate facts of the case. One could well conclude that this judgment was likely to be of considerable authority in subsequent cases. However, in the Roche decision, decided less than a month later, although the Torpedo strategy was again rejected, it was not rejected on the same policy grounds, but instead firmly on the basis of Articles 2, 6(1) and 5(3) of the Brussels Convention.
In the Roche case, the second defendant was a Belgian company, with its registered office in Belgium, so that the Belgian courts had jurisdiction over it under Article 2. The plaintiffs relied on Article 6(1) of the Brussels Convention to extend the jurisdiction of the Belgian court to the other defendants who were non-Belgian nationals. However, the Belgian court found that, in fact, the second defendant had nothing to do with the current dispute: it was not the owner of the patent, had not obtained a licence of the patent, did not trade in any products based on the patent and did not compete with the plaintiff' s products in respect of which the declaration for non-infringement was claimed. The Belgian court held that it had no jurisdiction under Articles 2 and 6(1), where a plaintiff does not have a justifiable cause of action against a Belgian defendant.
The court concluded that the proceedings were brought against the Belgian defendant for the sole purpose of denying proceedings to the jurisdiction of the natural court and blocking infringement proceedings in Germany (where the German member of the Roche group was subsequently sued for infringement of the German counterpart of the European patent). These German proceedings had been stayed pending the outcome of the Belgian action. This was held to be an improper use of the rules of procedure and constituted an abuse of process.
In fact, the court observed that the plaintiffs' writ of summons contained no claim at all against the second defendant and that the claim for revocation and a declaration for non-infringement were directed exclusively against the first defendant patentee, who was domiciled in the United Kingdom.
In the Röhm Enzyme case, the court also considered the legitimacy of the claims in respect of the defendants who marketed the products in various European countries other than Belgium. Here, the court held that there was no relevant "connexity" between the different claims. It held that a European patent consists of separate national rights, and even though it can be expected that the rules of the European Patent Convention will be interpreted uniformly, this does not preclude the possibility that, in certain countries, claims may succeed and, in others, claims may fail because of differences in rules, such as evidence or procedure, other than the patent rules. In fact, a judge who in one country may come to a certain decision in respect of a patent does not have any influence on the validity or infringement of the patent in another country.
In both the Röhm Enzyme and Roche cases, the plaintiffs put forward a "mirror theory" in respect of the interpretation of Article 5(3). The plaintiffs argued that they were entitled to sue the defendants in Belgium in order to determine the issue of whether they, the plaintiffs, committed a tort, mirroring the provision that a person domiciled in a member state may be sued in the courts of a different member state in relation to a tort where the harmful event occurred in that member state.
In the Röhm Enzyme case, the court rejected this theory, saying that Article 5(3) has no application where the plaintiffs are seeking a declaration in respect of the non-existence of a harmful event. In the Roche case, the court also found that no harmful events had taken place as at the date of the summons. The products which were the subject of the declaration for non-infringement had not even been put on the Belgian market at that time.
Judgment immediately enforceable
In the Röhm Enzyme case, the court explicitly stated that the judgment on jurisdiction could only be appealed together with an appeal against the judgment on the merits of the case and foreshadowed that no further steps could be taken by the plaintiff which could impede or delay patent infringement procedures in other countries. Thus, the court made it abundantly clear that the effect of this decision was not to require a foreign court to have to stay an action until the appeal of the decision was possible when the hearing on the merits would not occur until, five to ten years down the track3.
Although it is unlikely that there will be any uniform jurisprudence emanating from the Belgian courts in respect of the Torpedo strategy until the matter has been considered by the Belgian Court of Appeal, it would appear that a strategy will now only be successful in the rarest of circumstances.
A recent decision of an Italian Court of first instance4 suggests that the Italian Torpedo strategy may still be deployed successfully there. However, two recent decisions of courts of first instance in France have refused to recognise the legitimacy of such an Italian declaration.
The approaches of the courts in this area still appear to be in a state of flux. The general trend appears to show that the Torpedo strategy may soon be defunct. It may be that the less maverick view of the Dutch courts in respect of pan-European injunctions since the Boston Scientific cases, alleviates the need for the Torpedo strategy in any case.
First published in Patent World in September 2000.
1 Röhn Enzyme GmbH & Ors -v- DSM NV and BASF Belgium NV & Ors (Brussels Court of first instance, 12 May 2000). The Plaintiffs were represented by the Brussels office of Bird & Bird.
2 NV Roche & Ors -v- The Wellcome Foundation Ltd & Ors (Brussels Court of first instance, 8 June 2000). The Defendants were represented by the Brussels office of Bird & Bird.
3 It is interesting to note that in an even more recent decision of the Court of the first instance in Belgium on 23 June 2000, Medtronic Belgium v. Therex Limited, where a pan-European declaration of non-infringement was also rejected, jurisdiction for the Belgian territory was also rejected because the plaintiffs had not included a subsidiary claim for non-infringement covering only the Belgian territory. Such a decision may be appealed immediately. Accordingly, this may give the Brussels Court of Appeal the opportunity to give more guidance in this area.
4 Euromach SRL -v- Hiebsch & Peege AG (Court of Brescia, first civil division, 9 November 1999).