Guest post by Professor Marketa Trimble (UNLV)
When in 2006 the Court of Justice of the European Communities ("ECJ") clarified the rules of jurisdiction in the European Union ("EU") as they pertained to patent litigation, it left some crucial questions unanswered. The recent judgment of the ECJ in Solvay v. Honeywell (C-616/10, July 12, 2012) provides some additional answers and, most importantly, suggests that there could be a new route open for a central patent court in Europe. A possibility that such a court could informally emerge deserves attention, particularly because of the protracted and complicated negotiations surrounding the creation of a centralized patent court system in Europe, which have generated significant skepticism about the viability of the project as presented by the EU institutions.
In the 2006 judgment GAT v. LuK (Gesellschaft für Antriebstechnik mbH & Co. KG v. Lamellen und Kupplungsbau Beteiligungs KG, C-4/03, July 13, 2006) the ECJ explained that the provision in the Brussels Convention on Jurisdiction (which was replaced by the Brussels I Regulation, Article 22.4, after the original suit), which gives exclusive jurisdiction to decide patent validity to the courts in the country where a patent was granted, applies not only to declaratory judgment suits but to any decisions by a court on patent validity, regardless of how the issue of validity is raised before the court. Commentators concluded that the decision prevented de facto the centralization of litigation of multiple parallel patents in one national court; any time an alleged infringer attacks the validity of foreign patents in suit, the national court has to either dismiss the case or, at a minimum, stay the infringement proceedings until the issue of validity is decided in foreign courts or patent offices.
The problem is that not all court decisions on patent validity are equal; not all result in a final resolution of the question of validity of a patent with erga omnes effects that translate into a cancellation of the patent by the national patent office. The Solvay v. Honeywell case concerned a decision by a Dutch court in which the Dutch court considered the validity of a foreign patent as a preliminary matter to determine whether it could issue a provisional measure, such as a preliminary injunction. In other words, the Dutch court assessed the validity of foreign patents, but its decision in the interim proceedings did not result in the cancellation of those patents by the national patent offices. In Solvay v. Honeywell the ECJ held that Dutch interim proceedings that result in the issuance of provisional measures fall within the scope of Article 31 of the Brussels I Regulation, which establishes a special jurisdictional regime for provisional measures – a regime that does not yield to the exclusive jurisdiction provision. Therefore, as long as proceedings fall within the scope of Article 31, courts may grant provisional measures concerning foreign patents, even if a defendant questions foreign patent validity.
Dutch courts are not the only European courts that make preliminary assessments of patent validity; German courts that decide patent infringement cases regularly assess patent validity as a preliminary question in patent infringement litigation. German court decisions on patent validity made within infringement proceedings also have limited effects, and do not result in the cancellation of patents by the German Patent Office. In the German bifurcated system, where infringement and validity decisions are made by different courts (until the issues meet in the German Supreme Court, if they both proceed that far), infringement courts exercise their discretion to decide whether to stay or continue infringement proceedings based on their assessment of the likelihood of the success of the patent invalidity claim.
The question following Solvay is whether the preliminary assessments by German courts in infringement proceedings should be viewed as being different from the preliminary validity assessments by Dutch courts in interim proceedings. At first glance the Solvay decision seems to suggest that they should be viewed differently; in interim proceedings Dutch courts assert jurisdiction based on Article 31 of the Brussels I Regulation, which does not succumb to the exclusive jurisdiction provision of Article 22.4, while the jurisdiction of German courts in infringement proceedings is based on other provisions of the Brussels I Regulation (Articles 2, 5.3, 6.1), which in cases involving decisions on patent validity must yield to the exclusive jurisdiction of the court of the country in which the patent was granted.
However, there is something in the ECJ decision that suggests that the two types of assessments of patent validity might be viewed similarly. While the ECJ could have stopped at its reference to the structure of the Brussels I Regulation, it continued in paragraphs 49 and 50 of the Solvay decision to analyze the nature of the assessment of validity in Dutch interim proceedings. The ECJ noted that when a preliminary assessment of validity is made, such as the Dutch court's assessment, "there is no risk of conflicting decisions … since the provisional decision … will not in any way prejudice the decision to be taken on the substance" by the court that has exclusive jurisdiction to decide patent validity.
If the application of the exclusive jurisdiction provision in Article 22.4 is to be guided by its primary objective – and if the primary objective is the avoidance of conflicting decisions concerning patent validity (Solvay, par. 47, and GAT, par. 29, but see GAT, par. 21) – and if preliminary assessments of patent validity, such as the ones made by Dutch courts in interim proceedings, cannot, by definition, conflict with any future final decisions on patent validity, then it appears that Article 22.4 should also not apply to German courts' assessments of patent validity in infringement proceedings.
Whether the Solvay judgment supports this interpretation of the applicability of Article 22.4 will have to be tested; although it would seem that the interpretation contradicts the 2006 GAT judgment, a close reading of GAT in light of Solvay suggests that the interpretation might stand a slight chance of success. If provisional assessments of patent validity are held not to be the kinds of decisions on patent validity that can be made only by the courts of the country in which a patent was granted, nothing should prevent German courts from deciding patent infringement cases involving patents granted in foreign countries. Naturally, such infringement cases would proceed only if courts determined that it is likely that the patents will be upheld if their validity is challenged in the countries where the patents were granted. But a patent holder with a strong patent could benefit from centralized patent litigation before the German courts (assuming the courts have jurisdiction over the defendant), and given the extensive expertise of some German courts and some procedural advantages, this possibility could be an attractive, albeit partial, solution to the problem of fragmented patent litigation in Europe.
(For more discussion of patent law and litigation in Germany, particularly in comparison with U.S. patent law and litigation, see Marketa Trimble, Global Patents: Limits of Transnational Enforcement, Oxford University Press, 2012. Chapter 3 from the book is also available at http://ssrn.com/abstract=2130268.)
Good point Ned, Madame la Guillotine as the first and sharpest bifurcator. Never thought of that till you pointed it out.
Well, Max, we have the example of the French Revolution to consider. The lightly accused had to proove his innocence. If he could not, off with his head. Now that resulted in swift justice. But what did history have to say about the French Revolution?
Loved your last sentence, anon. Bang on.
Until 1978 the UK Patent Office was ferocious on clarity and novelty but did not go near obviousness. The UK patent statute, from 1949, recognised that obviousness can only be tested rigorously when there are inter partes proceedings. Then, however, the UK went European and along came the European Patent Convention, the EPO, and the Problem and Solution definitive Approach to obviousness.
The EPO knows nothing about infringement proceedings. The EPO and European pols have no inkling of the trickiness of doing claim construction in an infringement setting. This might explain why both groups naively suppose that you can still reconcile justice with bifurcation.
In one of the few points that I agree with Lemley about, it is not only impossible, but unwie to think that any patent examination system can yield perfectly valid patents. It simply does not make sense (or cents) to try – thus to expect perfect is a fools errand (and why the presumption of validity is permitted to be overcome).
Speed without accuracy is more acceptable in the administrative body granting the patent. Speed without accuracy in a court should not be confused with Justice. The court is the place where those that escape the (supposed to be) speedy examination are more meticulously evaluated by parties with direct (and heightened) pecunary interests.
As I pointed out above, bifurcation does not make sense because Justice requires a full accounting of both infringement and validity and splitting can cause BOTH Type I and Type II errors. Getting to the wrong place faster should not be a goal.
Ned how about the view, espoused by professors and litigators in Germany, that things are much simpler and expeditious (swift justice is good justice) when the infringement court is not distracted by issues of validity.
I think valIdity should be decided only by courts.
I think there should be binding effect on all unless there is new evidence that raises substantial new issues of validity.
I oppose setting any time limits with respect to when validity should be determined. It should only be determined when litigation involving infringement actually occurs.
I’m sorry, but I am “aghast.” Why would one state enforce a different state’s patents?
Second, if Euro law requires the courts of a state to actually rule on validity, how is it that German courts do not have this authority? Something stink in the state of Denmark?
What Europe needs is to implement a rule all member states courts which have to power to grant injunctions must also have the power to rule on validity, and that their decisions will be followed unless overturned in that country on appeal.
If a state is inclined to enforce a foreign patent, they should refer the issue of validity in the first instance to a court of that country for decision.
Simple.
The complications in Europe are caused by the weakness of the German courts who cannot decide validity.
I’m writing for a bigger audience than just you, anon. I’m even hoping for some within the circles of influence of the legislators in Europe.
I genuinely want to flush out any enlightening remarks you can bring to all those readers.
I wonder why you pose question like 1 and 2. It should be obvious from my posts that I would favor a complete (and prompt) adjudication, as this would eliminate (or at least lessen) both Type I and Type II errors.
Clearly you miss the point of my pointing out the error types. Is it not better to avoid even the chance of error completely?
As to “enlighten us upon,” I thought unnecessary snark was frowned upon in the new age of Patently-O. Was I mistaken?
As to “Every court will do its best” this further weakens your concern that “holders of weak patents” gain an undue advantage. You seem to be confused – do you think the courts control for the undue advantage or not?
OK anon, in the spirit of helping the pols in Europe to debate the way to reform pan-European patent litigation, here are two more choice issues for you to enlighten us upon:
1. Injunctive relief. Which would you rather have, between a) the English way(do validity once, within one year, and do it properly, that is to say, appeal-proof); and b) the German way (do validity on an interlocutory rough and ready knee-jerk basis, grant interlocutory injunctive relief (or not, as the case may be), then do validity years later, but properly)?
2. Claim construction. Which would you rather have, between a) the English way (Do claim construction first. Then, on that one construction, do infringement and validity); and b) the German way (construe the claims in the District Court in Duesseldorf for infringement and then, later, and quite independently, construe the claim in the Federal Patents Court in Munich for validity purposes)?
Not sure your Type I/II point is the most strategic reform issue. Every court will do its best and, if the judges are all competent, its record will be adequate and improving, no?
Thanks MaxDrei, analogous to your Type I error, there is also the Type II error of a negative first (provisional) decision – that is, a finding in the early court of not likely to be valid, but actually is valid.
Any time you split something into parts and you need both parts for full justice you will run into this Type I/Type II error generating problem – be the split purely time wise or be it jurisdiction wise.
And while Type I errors MAY happen, I think your pessimism overshadows the early split court still applying its reasonableness standard – which should defeat most of your “weak patents would like this” stance.
Thanks for this posting. Food for thought. Small quibble: you write that holders of “strong” patents could benefit from litigating before the German courts. However, other commentators assert that it’s holders of weak patents who are the chief beneficiaries of the German way of litigating infringement and validity.
Thus, in Germany, you get enjoined and then, many years later, the asserted rights are finally declared invalid. but, by then you’re bankrupt and out of the market.
I suppose that’s what one calls a “strong” patent system.
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