In the 1990s, 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 Dutch facility was much used by both domestic and foreign patent owners, not in the last place by American companies, since it offered a one stop gateway to Europe. The enthusiasm amongst patentees was somewhat tempered when the Court of Appeal in The Hague put some restrictions on these types of injunctions in a 1998 judgment. Although only companies based in other European Union Member States could benefit from these restrictions, whereas Dutch or non-European companies could not, rumour had it that the heydays of cross-border injunctions had ended. Not only was this not correct, it also did not bear recognition of the fact that there was no Supreme Court ruling on the issue. This has now changed. Over the last half year, the Supreme Court finally got the opportunity to address the issue. In a December judgment, questions were put to the European Court of Justice. In a more recent March judgment, the Supreme Court gave its own view on some of the issues. That judgment will be discussed in this article.
The possibility to grant cross-border injunctions was accepted by the Dutch Supreme Court in a 1989 trade mark case, brought by an American plaintiff against a Dutch defendant (HR 24-11-1989, NJ 1992/404, Lincoln v. Interlas).
The effectiveness and practical achievability of such injunctions against foreign defendants is normally based on the combination of two legal instruments. To be practically able to judge the situation in other countries, the law on infringement has to be more or less the same in all countries for which an injunction is sought. For patents this is the case for all European Union Member States, because the issue is governed by the European Patent Convention. For trade marks and designs the same applies, since those are now subject to European Union Directives and Regulations. So, the Dutch Courts can assume by way of fiction that the material outcome of proceedings would be the same in all Member States. A defendant could argue and prove that this is not true in a specific case, but that is rarely ever done and has not been successful so far.
The Court’s jurisdiction and the enforcement of judgments in other European Union Member States are governed by a European Union Regulation and by a treaty. If a court has jurisdiction under the Regulation, all Member States are obliged to accept its judgments and assist in their enforcement.
Within the Netherlands, the standards are set by the courts in The Hague. They have exclusive jurisdiction in patent matters, community trade mark matters and community design right matters and also handle a large part of the other ipr cases.
Therefore it is quite understandable that the 1998 ruling by the Court of Appeal in The Hague limiting cross-border injunctions against defendants from other European Union Member States and the more recent ruling excluding cross-border injunctions in preliminary injunction proceedings had some impact. The latter ruling has now been overturned by the Supreme Court in its 19 March judgment.
Under Dutch procedural law, one can obtain an injunction on patent infringement in preliminary injunction proceedings. Such proceedings involve a trial hearing where the defendant can present his arguments. He can also submit evidence and expert reports. The court will then make a preliminary assessment on the merits, which is normally as thorough as the assessment in full proceedings. Balance of convenience type arguments play almost no role in reaching a decision. Nevertheless, the Court of Appeal has held that there are reasons to be reluctant to give such an injunction cross-border effect, basically because other countries might be reluctant to accept such judgments for due process reasons, especially when such preliminary relief would not be available in their courts.
In a patent case brought by the Dutch electronics company Philips against two Taiwanese and a Swiss company, the Court of Appeal refused to grant a cross-border injunction for the rest of the European Union and only granted an injunction for the Netherlands, since they held that this type of cross-border relief should not be available in preliminary injunction proceedings.
The Supreme Court has now held that the starting point should be that, if the Dutch courts do have jurisdiction based on any international rule to decide on infringement on a foreign intellectual property right, they are in principle allowed to grant an injunction on acts to be committed abroad that constitute such an infringement. The Supreme Court then goes on to say that this rule also applies in preliminary injunction proceedings, regardless of the ground for international jurisdiction. Therefore, the ruling by the Court of Appeal that it should exercise restraint in granting such an injunction was not sufficiently founded. More specifically, there is no reason why the basic rule should not apply in preliminary injunction proceedings.
Although the Supreme Court says that the courts are “allowed” to grant an injunction, this has to be seen in the light of the Lincoln v. Interlas ruling, in which the Supreme Court said that an injunction had to be granted if the courts found an infringement, except for special circumstances that were not further specified by the Supreme Court.
The wording of the Supreme Court judgment, in which it says that the Court of Appeal’s rejection of the injunction was ill founded is normally used to indicate that the Supreme Court cannot exclude that the outcome could be different under special circumstances, but that in general the ruling under appeal was wrong. This is caused by the fact that the Supreme Court only deals with matters of law and makes no assessment of the facts of the case.
The defendants in this case were not based in European Union Member States. Nevertheless they invoked a 1980 European Court of Justice ruling which urges the courts to exercise restraint in ex parte proceedings (which, as mentioned above, these proceedings are not). The Supreme Court simply ruled that this judgment does not apply to the situation at hand and that there is no reason for analogous application of such a rule.
I think this judgment is a clear sign that the Dutch Supreme Court sees no reasons to hold back on cross-border injunctions, not even in preliminary injunction proceedings in patent cases. It goes without saying that this is good news for the Dutch legal profession.
Also published in the June 2004 issue of WIPR.