September 30, 2016
In recent years, there have been a number of cases which demonstrate that the English courts can and will determine issues of infringement in respect of foreign IPRs where the validity of those IPRs is not challenged.
This jurisdiction arises under European Union (“EU”) Regulation (EU) No 1215/2012 (the “Recast Brussels Regulation”). This provides a common framework concerning jurisdiction and the recognition and enforcement of foreign judgments, which applies to all EU Member States. Article 24(4) provides that Member States have exclusive jurisdiction over issues concerning the validity of patents and other IP rights which are registered in accordance with their national laws. However, such jurisdictional exclusivity does not apply to infringement.
This framework therefore allows litigants to ask the English Patents Court, to make determinations in respect of the infringement of patents covering other EU Member States (if the other jurisdictional requirements are satisfied). For example, in Actavis Group HF v Eli Lilly & Company  EWHC 3319 Pat, Actavis sought declarations of non-infringement in respect of the French, German, Italian, Spanish and UK designations of a European Patent (“EP”). Eli Lilly accepted that in these circumstances, where validity was not in issue, the Patents Court was not required to decline jurisdiction by virtue of the predecessor to what is now article 24(4) of the Recast Brussels Regulation and Eli Lilly’s jurisdictional challenge based on the English common law doctrine of forum non conveniens failed. This case demonstrates that, in principle, there is no reason why pan-European infringement issues cannot be dealt with by the English courts, where the validity of the patents in issue is not challenged.
The recent case of Anan Kasei Co., Ltd and Rhodia Opérations v S.A.S V Molycorp Chemicals & Oxides (Europe) Ltd  EWHC 1722 (Pat), illustrates that the English Courts are careful not to stray outside the confines of the Recast Brussels Regulation. The claimant in this case (“Rhodia”), commenced proceedings against the defendant (“Molycorp”) for infringement of the UK and German designations of an EP before the English Patents Court. Molycorp subsequently challenged the validity of the German designation of the EP before the Budespatentgericht (Federal Patent Court). At a preliminary hearing, the English Patents Court had to decide, amongst other things, whether it had jurisdiction over the claim in respect of the German designation. Rhodia did not dispute that the German Court had exclusive jurisdiction in respect of the validity of the German designation. However, it tried to avoid the English Patents Court ceding jurisdiction over the infringement issue to the German Courts by seeking to amend its claim as follows:
“In respect of the German designation of the Patent, if [the] German designation is not invalid (which is to be determined by the German courts) the Defendant’s conduct has infringed, and/or would fall within the scope of the claims of, the German designation of the Patent.”
Arnold J decided that the issue between the parties was whether Molycorp had infringed a valid claim of the German designation. Despite Rhodia’s attempt to separate out the issues of infringement and validity, Arnold J decided that those issues were inseparable. Consequently, the English Patents Court had no jurisdiction over Rhodia’s claim in respect of the German designation of the patent in issue.
Would a different jurisdictional approach apply after Brexit?
The jurisdictional approach in the Rhodia and Eli Lilly cases was primarily framed by reference to the Recast Brussels Regulation (although in the latter case, the interpretation and application of the Brussels Regulation was not contested). This begs the question as to how the jurisdictional aspects of these cases would play out after the UK has implemented ‘Brexit’ and left the EU.
In 1978, the UK signed up to the Brussels Convention. Although it was largely superseded by Regulation (EC) No 44/2001 (the “2001 Brussels Regulation”) and later on, by the Recast Brussels Regulation, the UK and 14 other EU Member States continue to be signatories to the Brussels Convention. If the Recast Brussels Regulation ceases to have effect in the UK, and assuming that no alternative plan is adopted by the UK Government, the Brussels Convention would apply. The Brussels Convention provided the foundation for the 2001 Brussels Regulation and the Recast Brussels Regulation and their provisions are largely the same. For example, Article 16 of the Brussels Convention is equivalent to Article 24 of the Recast Brussels Regulation. For this reason, the Eli Lilly and Rhodia cases would be unlikely to have proceeded any differently had the jurisdictional issues been determined under the terms of the Brussels Convention.
However, while falling back on the Brussels Convention has the attraction of simplicity, it may not be politically acceptable. Although the Brussels Convention is not an instrument of EU law, a Protocol on the interpretation of the Brussels Convention signed in 1971 gives the CJEU jurisdiction over its interpretation. Given that UK sovereignty was a key issue in the recent UK referendum, it seems unlikely that the UK electorate would accept CJEU primacy through the back door of the Brussels Convention.
An alternative possibility is for the UK to sign up to the 2007 Lugano Convention, which is a parallel convention to the Brussels Convention and currently governs the relationship between EU Member States and three members of the European Free Trade Association (“EFTA”), namely Iceland, Norway and Switzerland. However, in order to do so, the UK would need to either become a member of EFTA or obtain the agreement of the current parties to the 2007 Lugano Convention, both of which would inevitably require the UK to agree to the principle of free movement of people. Again, there may not be much political appetite for this given that immigration was a key driver for many people who voted to leave the EU. Furthermore, Article 2 of the Second Protocol on the 2007 Lugano Convention requires signatories to pay “due account” to decisions of the CJEU and other EU Member States which concern the provisions of the 2007 Lugano Convention and the corresponding European framework. While this falls short of giving the CJEU primacy over the application of the 2007 Lugano Convention by non-EU Member States, it could still be unpalatable from a political perspective.
Of course, it is always possible that the UK could enter into an amended form of one of the regimes discussed above or negotiate a new regime with one or more EU Member States. But even in this case, it seems unlikely that any new regime would take a drastically different approach.
If all else fails, the UK could fall back on its common law regime. Recent developments in English case law provide that the English Courts do have jurisdiction, at common law, to rule on foreign intellectual property disputes save for those which concern issues of validity (see Lucasfilm Ltd. & Ors. v Ainsworth & Anor.  UKSC 39 and the Eli Lilly case). On this basis, it appears that applying the English common law rules on jurisdiction to the Eli Lilly and Rhodia cases would effectively produce the same results as the Recast Brussels Regulation (and the 2007 Lugano Convention and Brussels Convention).
Given that all of the regimes discussed above have followed a consistent approach when it comes to jurisdictional issues concerning patent infringement and validity matters, it seems likely whatever regime the UK adheres to, litigants will continue to be able to obtain declarations of non-infringement of foreign patents after the implementation of Brexit.
Interestingly, although it is not clear whether the Unified Patent Court (the “UPC”) will progress, assuming it does go ahead without the UK, it may be possible for litigants to obtain a declaration of non-infringement of patents over which the UPC has exclusive competence under the UPC Agreement, namely Unitary Patents (“UPs”) and, after the end of the UPC transitional provisions, EPs which have not been opted out. Once the UK leaves the UPC system, the provisions of the UPC Agreement giving the UPC exclusive competence for such matters will not be binding on the English Courts.
In theory (and subject to possible difficulties with recognition by the UPC – see further below), this option could be extremely attractive to litigants seeking to clear a path to market for a non-infringing product and wishing to use the more rigorous procedures of the English litigation system (e.g. disclosure and cross examination).
Recognition of UK judgments abroad
A declaration of non-infringement is of little use unless it is recognised in the European territories that it covers. Currently, the Recast Brussels Regulation provides for mutual recognition and enforcement of judgments amongst EU Member States. If the UK leaves the EU and signs up to the 2007 Lugano Convention or some form of the current Recast Brussels Regulation, then UK declarations of non-infringement of EU national patents will continue to be recognised in the relevant EU Member States. If the UK sticks to the default position, which is reliance on the Brussels Convention, its provisions concerning the mutual recognition and enforcement of judgments will only apply only in the other 14 EU Member States who are signatories to the Brussels Convention.
In circumstances where the Brussels Convention does not apply and no other reciprocal arrangement is in place, the question as to whether a declaration of non-infringement issued by a UK Court in respect of one or more foreign designations of an EP will depend on the law of the EU Member State in which the declaration is sought to be recognised.
The position is unclear in respect of declarations of non-infringement of a UP. The fact that the UPC Agreement gives the UPC exclusive competence in respect of UPs means that the UPC is likely to be reluctant to recognise an English decision making a declaration of non-infringement in respect of a UP. But if the UK remains a party to the Brussels Convention and the UPC division being asked to recognise the English decision is located in a Member State which is also a party to the Brussels Convention, then refusing to recognise the English decision might be more difficult. Even if the UPC does not recognise the English decision in a formal sense, having a well-reasoned decision from a highly respected Court is likely to have persuasive value and encourage settlement.
In a post-Brexit world, it is likely that litigants will continue to be able to obtain declarations of non-infringement of European national patents from the English courts. However, such declarations will not be fully effective if they are not recognised in the EU Member States which they cover. If the UK does not agree reciprocal arrangements with the EU concerning the recognition and enforcement of judgments, it is uncertain as to whether and how such declarations would be recognised (save for the 14 Member States that are party to the Brussels Convention if the UK remains a signatory). However, even where recognition in the formal sense is refused, a well-reasoned decision from a highly regarded Court using its quick and rigorous procedures is likely to have substantial persuasive value and promote settlement.
 In the Eli Lilly case, the European designations in respect of which the declaration of non-infringement was sought were all Brussels Convention countries.