Solvay / Honeywell: cross border provisional relief under Brussels I

In its Solvay/Honeywell judgment (C-616/10) of 12 July, the CJEU decided on several important issues regarding the Brussels I Regulation. Those active in international commercial litigation, particularly patent infringement proceedings, will be interested in this case. The questions in Solvay concern the application of several ‘Brussels I’ rules of jurisdiction to cross-border patent infringement proceedings. The CJEU gets the chance to clarify some questions-left-open related to the 2006 cases GAT v. LuK (C-4/03 ) and Roche v. Primus (C-539/03). Unfortunately, the ruling in Solvay itself also leaves several questions unanswered. I wonder especially whether it was necessary for the CJEU to ‘reformulate’ the questions put before it. I’m afraid it looks like the ‘reformulation’ has obscured the view of what is really going on here.

The problem with European patent law is that there so far – unlike EU- Trademarks and Designs – does not exist a unitary EU patent that covers the entire internal market. The ‘European Patent’ currently granted by the European Patent Office represents a ‘bundle’ of independent national patents. Efforts to remedy this situation are at present in a stage of ‘enhanced cooperation’ between 25 Member States (Italy and Spain not participating). Also, negotiations about the creation of a centralized patent court system in Europe have been under way for a while. Agreement in the European Council on the location of the Central Division of the (possible) future Unified Patent Court was reached in June 2012 and a draft agreement has recently been discussed. Until these developments materialize, most questions related to infringement and validity of European patents have to be determined in a territorially fragmented way.

Solvay SA, a Belgian company, brought an action in the District Court of The Hague (Netherlands) for infringement of several national parts (Denmark, Iceland, Greece, Luxembourg, Austria, Portugal, Finland, Sweden, Liechtenstein and Switzerland) of a European Patent. Defendants were three companies of the Honeywell-group, two of them established in Belgium and one in the Netherlands. In the course of the proceedings, Solvay lodged an interim claim against the defendants in the main proceedings, seeking provisional relief in the form of a cross-border prohibition against infringement for the duration of the main proceedings. The defendants contested the jurisdiction of the District Court The Hague under the Brussels I Regulation. The CJEU  ruled on essentially two issues:

–       Can Art. 6(1) on jurisdiction over multiple defendants be applied in a situation where two or more companies from different Member States are each separately accused of infringing the same national part of a European patent which is in force in yet another Member State?

–       Should Article 22(4) on exclusive jurisdiction for the Member State of registration of Intellectual Property rights be applied in a situation of interim provisional relief when the defendants question the validity of the patent?

Art. 6(1) in patent infringement proceedings

On the first issue, the Court held that its decision in Roche still stands. In order for judgments to be regarded as at risk of being irreconcilable within the meaning of Article 6(1) of Brussels I, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in ‘the same situation of fact and law’. In the case of European patent infringement proceedings involving a number of companies established in various Member States with respect to acts committed in one or more of those States, the existence of the same situation of fact cannot be inferred, since the defendants are different and the infringements they are accused of and which were committed in different Member States, are not the same (Roche par. 27-31). However, in Solvay the Court observed that Roche may be distinguished on the grounds that it follows from ‘the specific features of a case such as that in the main proceedings that potential divergences in the outcome of the proceedings are likely to arise in the same situation of fact and law, so that it is possible that they will culminate in irreconcilable judgments resulting from separate proceedings’ (Solvay, par. 27). The Court instructs the national court to take into account the fact that if co-defendants in the main proceedings are each separately accused of committing the same infringements with respect to the same products, and if such infringements were committed in the same Member States in such a manner that they adversely affect the same national parts of the European patent at issue, the claims are connected and there is a risk of irreconcilable judgments (Solvay, par. 27-29). The Court adds that it is for the national court to determine whether such a risk exists taking into account all the relevant information in the file. The key difference from Roche is thus that the co-defendants both infringe the same national part(s) of the European patent at issue. The fact remains, though, that it is up to national courts to shed more light on the somewhat vague notion ‘same situation of law and fact’ (cf. cases C-98/06 Freeport and C-145/10 Painer). Still, not much to quarrel with here, seems reasonable enough.

Application of Art. 22(4) in interim proceedings

Complications arise when considering the second issue. Article 22(4) Brussels I awards exclusive jurisdiction in proceedings concerned with the registration or validity of registered intellectual property rights (patents, trademarks etc.) to the courts of the Member State of registration. In GAT, the Court decided that this rule of exclusive jurisdiction concerns all proceedings relating to a patent’s validity, irrespective of the form of proceedings in which the issue of a patent’s validity is raised, be it by way of an action or a defense, at the time the case is brought or at a later stage in the proceedings (GAT, par. 25). The referring court essentially asked whether the fact that a defense of invalidity of a patent has been raised in interim proceedings for a cross-border prohibition against infringement, is sufficient, and, if so, under what formal or procedural conditions, for Article 22(4) to become applicable (questions 2 and 3). Second, should this question be answered in the affirmative, the referring court asked the CJEU to shed light on the procedural consequences (question 4) and whether in that case the referring court can assume jurisdiction under Article 31, which requires a ‘real connecting link’ between the subject matter of the measure sought and the territorial jurisdiction of the Member State (questions 5 and 6). Article 31 Brussels I functions as a ‘residual’ provision on jurisdiction and stipulates that a court of a Member State has jurisdiction to order provisional measures even if the courts of another Member State have jurisdiction as to the substance of the matter (see the Van Uden case C-391/95). The Court held:

32 It is apparent from the wording of the question referred for a preliminary ruling and the order for reference that the issue at the heart of the dispute in the main proceedings concerns a procedure for the adoption of an interim measure governed by the rule of jurisdiction set out in Article 31 of Regulation No 44/2001.

33  Consequently, the question asked must be construed as seeking to ascertain essentially whether Article 22(4) of Regulation No 44/2001 must be interpreted as precluding, in circumstances such as those at issue in the case in the main proceedings, the application of Article 31 of that regulation.

The Court then considered that both provisions operate independent from each other and that the decision in GAT doesn’t lead to a different conclusion:

49     According to the referring court, the court before which the interim proceedings have been brought does not make a final decision on the validity of the patent invoked but makes an assessment as to how the court having jurisdiction under Article 22(4) of the regulation would rule in that regard, and will refuse to adopt the provisional measure sought if it considers that there is a reasonable, non-negligible possibility that the patent invoked would be declared invalid by the competent court.

50     In those circumstances, it is apparent that there is no risk of conflicting decisions as mentioned in paragraph 47 above, since the provisional decision taken by the court before which the interim proceedings have been brought will not in any way prejudice the decision to be taken on the substance by the court having jurisdiction under Article 22(4) of Regulation No 44/2001. Thus, the reasons which led the Court to interpret widely the jurisdiction provided for in Article 22(4) of Regulation No 44/2001 do not require that, in a case such as that in the main proceedings, Article 31 of that regulation should be disapplied.

51    In the light of all the foregoing considerations, the answer to the second question is that Article 22(4) of Regulation No 44/2001 must be interpreted as not precluding, in circumstances such as those at issue in the main proceedings, the application of Article 31 of that regulation.

Concluding remarks

That’s clear: Article 31 does not yield to Article 22(4) in this case. This does, however, not provide an (entirely) adequate answer to the question asked, namely whether the Dutch court is bound to apply Article 22(4) (and the GAT decision) if jurisdiction in the interim proceedings is based not on Article 31 but on the ‘regular’ provisions on jurisdiction in Article 2-24 Brussels I. After all, it follows from the Van Uden – Deco Line ruling that there are two possibilities for jurisdiction to issue provisional measures: either derived from the ‘regular’ rules of jurisdiction as found in arts 2-24 Brussels I, or based on the ‘supplementary’ provision of Article 31 with additional requirements observed (‘real connecting link’). Should Article 22(4) be applied in this case, then, as the referring court points out, jurisdiction for interim provisional relief can no longer be based on arts. 2-24 of Brussels I (or, to be exact, jurisdiction to rule on the validity issue). The question then arises whether Article 22(4) in the circumstances of the case also precludes the application of the ‘residual’ provision on jurisdiction to grant provisional and protective measures of Article 31 (see again the Van Uden case C-391/95). In other words, the question on the relationship between Article 31 and 22(4) is presented to the Court on the condition that Article 22(4) does apply to proceedings seeking a provisional cross-border prohibition against infringement. The Court however, doesn’t see it this way and states in paragraph 33 that ‘the question asked must be construed as seeking to ascertain essentially whether Article 22(4) (…) must be interpreted as precluding, in circumstances such as those at issue in the case in the main proceedings, the application of Article 31(…)’ (emphasis added). As is apparent from the above, I doubt whether the question had to be so construed.

The Court states in par. 50 that the reasons which led it to interpret Article 22(4) widely in GAT, do not require that, in a case such as that in the main proceedings, Article 31 should not be applied. And how does that work for the other provisions of Brussels I (art. 2-24) under which jurisdiction to grant provisional measures may be assumed? On the one hand, one can argue that this ruling should be read to apply to all provisional measures irrespective of the origin of jurisdiction (the Court in par. 49 and 50 mentions ‘interim proceedings’ and ‘provisional decision’ without it being apparent that one should read ‘under Article 31’). On the other hand, in other places in the ruling the Court restricts its reasoning specifically to the relation between Article 22(4) and Article 31 (paragraphs 40 and 48 in particular), making more plausible the view that the decision is limited to the operation of Article 31. Since the Court did not address the possibility of jurisdiction to issue provisional measures in interim proceedings under Article 2-24, it seems to me the decision is limited to jurisdiction for provisional measures under Article 31.

In that case, it will be interesting to see how the referring court will apply the notion ‘real connecting link’ under Article 31. The CJEU, surprisingly, didn’t mention let alone clarify this requirement (incidentally, AG Cruz-Villalon does address the interpretation of Article 31 and the ‘real connecting link’ in his opinion in par. 44-55). Given the fact that there is no Dutch part of the European Patent at issue in this case, the ‘real connecting link’ might be difficult to establish (perhaps, although far from impressive, the fact that both Belgian companies belong to the same group as the Dutch defendant (i.e. Honeywell)).

To sum up: a thought provoking judgment that unfortunately doesn’t entirely live up to the promise that the ‘very specific questions from the referring court (…) provide an opportunity for the Court of Justice to clarify its most significant judgments on the matter in regard to Articles 6(1), 22(4) and 31(…)’ (Opinion AG Cruz-Villalon, par. 2).