The High Court has held that it had no jurisdiction to grant declarations of non-infringement for non-UK designated patents.
Jurisdiction and recognition and enforcement of judgments between the EU, Denmark, Iceland, Norway and Switzerland are governed by the 2007 Lugano Convention, which is equivalent to the recast Brussels Regulation (1215/2012/EU) for EU member states.
Article 2(1) of the Lugano Convention provides that persons, whatever their nationality, should be sued in the courts of the state where they are domiciled. Article 5(3) of the Lugano Convention (Article 5(3)) sets out an exception allowing persons to be sued for a tort in the courts for the place where the harmful event occurred or may occur. Defendants may be sued, at the claimant's option, in the courts of either the place where the damage occurred or the place of the event giving rise to that damage. Article 5(3) also covers claims for negative declarations seeking to establish the absence of liability in tort.
The law applicable to the question of whether past acts have infringed, or proposed future acts would infringe, for each designation of the patent is the substantive patent law of the relevant country (Article 8(1), Rome II Regulation on the law applicable to non-contractual obligations (864/2007/EC)) (Rome II). The law which has to be satisfied in order to obtain a declaration of non-infringement (DNI) is the lex fori (Article 1(3), Rome II).
In Actavis UK Ltd and others v Eli Lilly & Co, the High Court made declarations of non-infringement for non-UK designations of a European patent (www.practicallaw.com/4-572-1394).
The doctrine of res judicata provides that litigation raising issues that have, or could have, been decided in previous proceedings may be held to be an abuse of process.
J owned a European patent relating to a method for discharge of bulk material from a ship. A vessel previously owned by J, which was alleged to use the invention, had been sold and resold, ending up owned by P. The first buyer had undertaken that the system would not be used and gave J a right to inspect the ship, but P alleged that this undertaking was not passed on.
P brought an action in the UK for DNIs of the patent, both for the UK designation and for the other 11 countries where the patent had been validated, all of which were in the EU or EEA. No challenge to validity was made. J argued that the court had no jurisdiction to grant the declarations in respect of the 11 non-UK designations of the patent.
P agreed that in general the UK court did not have jurisdiction over claims for DNIs for non-UK designations of the patent by virtue of Article 5(3). However, P argued that there was such jurisdiction here because J's rights had been exhausted throughout the EEA by sale of the ship. If the UK court decided that P's acts in the UK would not infringe because J's' rights in the UK designation of the patent were exhausted, that decision should also apply to the other 11 designations because the doctrine of exhaustion of rights gave effect to the European principle of the free circulation of goods. Granting the declaration would avoid the need for parallel proceedings in the other 11 countries.
The court held that it had jurisdiction over the claim for a DNI relating to the UK designation as it concerned acts which were proposed to be carried out by P within the territory covered by the UK designation of the patent. However, it did not have jurisdiction to grant the declarations where they extended beyond the UK designation.
P's arguments confused the question of which court had jurisdiction under Article 5(3) with the question of the effect of any decision by a court which had jurisdiction.
The fact that a court had jurisdiction over a defendant under the Lugano Convention in respect of one claim did not mean that it also had jurisdiction over another claim even if the two claims were closely related in fact or law, and so each claim had to be considered separately. The effect of a decision by one court that the claimant is entitled to a DNI will depend on the extent to which that decision is recognised by the courts of the other contracting states and to what extent it has res judicata effects. These issues are matters for those other courts, although the Lugano Convention should provide the answers.
While there might be only one answer under European law as to whether there was exhaustion of J's rights, it did not follow that it was proper for the UK court to exercise jurisdiction over matters that, under the Lugano Convention, lay within the province of the courts of other contracting states. In principle, P could have brought claims in respect of all 12 jurisdictions in Norway, where J was domiciled, if they wished to avoid the problems of suing in 12 countries. Similar reasoning applied to the declaration sought by P that J had consented to the use of the system on the ship that they had sold and which P now owned.
The difference between this case and Actavis was that in that case the defendant's solicitors were held to have voluntarily accepted service of the complaint, and that in the circumstances service had been validly effected under Civil Procedure Rule 6.9.
Case: Parainen Pearl Shipping Ltd and others v Kristian Gerhard Jebsen Skipsrederi AS and others  EWHC 2570 (Pat).
First published in the December 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.