In the 1990’s, the Dutch courts acquired some fame for granting so-called cross-border injunctions, in which a defendant would be ordered to stop infringements not only in The Netherlands but also abroad. This became a popular remedy in international litigation. In 1998, the Court of Appeal in The Hague put some limitations on granting cross-border injunctions, which has led to a common misunderstanding that they are no longer available. This is not true. In fact, the Dutch Supreme Court confirmed quite recently that it supports granting cross-border relief. Although cross-border injunctions have been developed in intellectual property litigation they could also be granted in other types of litigation, if certain conditions are met.
It may seem strange that a court should be allowed to grant injunctions that are enforceable outside its own jurisdiction against companies based in other countries. Within the legal framework of the European Union it really isn’t that strange. The European Court of Justice recently confirmed in Turner v. Grovit that all EU member states should readily accept the jurisdiction of courts from other member states, if provided by European law. This is one of the four cornerstones of Dutch cross-border injunctions.
The first cornerstone is the availability of this type of remedy under national law. In 1989, the Dutch Supreme Court decided in Lincoln v. Interlas that there was no reason a defendant’s obligation to do something or refrain from doing something should stop at national borders. This in itself is not surprising, taking into consideration that specific performance is at the very heart of continental Europe’s civil law systems. Earlier this year, the Supreme Court confirmed its view in Philips Electronics v. Postech and Princo when it said that cross-border relief is even available in preliminary injunctive proceedings. That case involved Swiss and Taiwanese defendants in an injunction for patent infringement that covered all EU member states.
Jurisdiction is the second cornerstone. Within the EU this is predominantly a matter of European law. There are treaties and regulations on jurisdiction and enforcement, which extensively deal with the issue of international jurisdiction within the EU. The main rule is that the home court of the defendant has jurisdiction over every activity of that defendant. The Dutch courts have applied this regardless of where the defendant is committing infringements. International companies however tend to have different subsidiaries for different countries, each based in the country where they are active. If there is a sufficient connection between these companies and between the acts they commit, these companies can all be sued before one court in one European country.
The District Court in The Hague did indeed assume jurisdiction over such multiple defendants without limitation for quite some time. However, this was limited by the Court of Appeal in April 1998 in Expandable Grafts v. Boston Scientific. The Court of Appeal held that if there is a sufficient connection between these companies and between the acts they commit then the subsidiaries can all be sued before one court provided that there is shown to be a concerted policy across the group in relation to the infringement and provided the suit was brought in the home country which can be said to control that policy . This has become known as the spider-in-the-web doctrine. Last December, the Dutch Supreme Court finally had an opportunity to put this doctrine before the European Court of Justice in Roche v. Primus and Goldenberg. The ECJ has yet to hand down its judgment but in the meantime the courts continue to assume jurisdiction to grant cross-border injunctions.
The third cornerstone is substantive law. Even a court that does have jurisdiction can only grant an injunction intended to be enforced in another country if it is convinced that such an injunction would be capable of enforcement in the courts of that country. This is one of the reasons why cross-border injunctions are common in intellectual property litigation. There is a reasonable level of harmonization of substantive law on patents, trade marks, designs and database protection throughout the European Union through treaties, EU Directives and EU Regulations. Accordingly, it is assumed that if there has been a finding of infringement then it is unlikely to be challenged by other courts in other EU member states. In the absence of harmonization, cross-border injunctions could still be obtained but the courts would require the claimant to demonstrate why the outcome of litigation should be the same under the national law where enforcement is sought.
The fourth cornerstone is enforcement. Surprisingly, this is the easiest hurdle to overcome, at least within the EU. If a court of any member state has jurisdiction under European law then its judgments are enforceable throughout the EU. There are only some very limited exceptions to that rule which are hardly ever applied. This was confirmed in the 2004 ECJ judgment of Turner v. Grovit mentioned above .
This short article can only serve to offer a very general introduction into the mechanics of cross-border injunctions. The Dutch courts have developed many rules for specific situations, including infringements outside the EU. The District Court in The Hague alone has handled dozens of cross-border cases in the last six years, since Expandable Grafts v. Boston Scientific. A comprehensive overview is available upon request.
In a global economy, where disputes are not confined within national borders, cross-border litigation is a very useful tool for cost effective dispute resolution. Bird & Bird is very well placed to handle this type of litigation and is able to render strategic advice at a European level.