I mentioned the pending case C-339/22 BSH Hausgeräte v Aktiebolaget Electrolux yesterday at our excellent (if I say so myself) Max Planck Institute – EAPIL – KU Leuven workshop on Brussels Ia reform. Questions referred, are
Is Article 24(4) [BIA] to be interpreted as meaning that the expression ‘proceedings concerned with the registration or validity of patents … irrespective of whether the issue is raised by way of an action or as a defence’ implies that a national court, which, pursuant to Article 4(1) of that regulation, has declared that it has jurisdiction to hear a patent infringement dispute, no longer has jurisdiction to consider the issue of infringement if a defence is raised that alleges that the patent at issue is invalid, or is the provision to be interpreted as meaning that the national court only lacks jurisdiction to hear the defence of invalidity?
Is the answer to Question 1 affected by whether national law contains provisions, similar to those laid down in the second subparagraph of Paragraph 61 of the [Swedish] Patentlagen (Patents Law), which means that, for a defence of invalidity raised in an infringement case to be heard, the defendant must bring a separate action for a declaration of invalidity?
Is Article 24(4) [BIa] to be interpreted as being applicable to a court of a third country, that is to say, in the present case, as also conferring exclusive jurisdiction on a court in Turkey in respect of the part of the European patent which has been validated there?
BSH hold a European patent relating to a vacuum cleaner. The patent has been validated in Austria, Germany, Spain, France, the United Kingdom, Greece, Italy, the Netherlands, Sweden and Turkey. Electrolux of Sweden has subsidiaries in a number of other Member States, such as Germany. A number of disputes have arisen between BSH and companies in the Electrolux group concerning the patent in question. Inter alia, the European patent validated in Germany was invalidated in 2020 by a German court at the request of a subsidiary of Electrolux. That judgment has been appealed.
On 3 February 2020, BSH brought an action against Electrolux before the Patents and Market Court in Sweden and claimed inter alia that Electrolux should be prohibited from using the patented invention in all the abovementioned States and ordered to pay reasonable compensation for the unlawful use. BSH also claimed compensation for the additional damage caused by Electrolux’s alleged patent infringement. Electrolux argue that the Court should dismiss the action in relation to the foreign parts of the patents. In its view the foreign patents are invalid and the Swedish court therefore lacks jurisdiction to hear infringement actions concerning those patents.
End of December 2020 the court agreed, citing A24(4) viz the EU patents (the claim being issued prior to Brexit implementation day, this includes the UK) and ‘an internationally accepted principle of jurisdiction’ (in essence, the Moçambique rule) viz the Turkish patent.
BSH of course appeal.
A asked students in the August resit exams how they think the CJEU should answer. On Q1 I would expect them to cite the need to interpret A24 restrictively, with reference to one or two cases confirming same (there are plenty); and the lack of solution in the Brussels Recast. Contrary to what Electrolux contend, a proposal to allow a court to merely stay the case pending the foreign court’s decision on validity, was never rejected. Such a proposal was never made. BIa merely confirmed CJEU Gat v Luk’s holding that exclusive jurisdiction kicks in regardless of whether the argument of invalidity is introduced as a claim of by way of defence.
On Q2 I would like to seem them argue something to the effect that national CPR must not infringe the effet utile of BIa. (Only) if the effect of the Swedish rules is that it requires the defendant to initiate IPR invalidity claims in all the relevant States, or lose its possibility of an invalidity defence, this would in my view run counter BIa’s intention and scope.
Finally, on the 3rd Q they should engage with the lack of BIa clarification on reflexive effect, other than in the strict confines of A33-34 and its related recitals. Relevant case-law of course includes Ferrexpo and Central Santa Lucia L.C. v. Meliá Hotels International S.A. Interested readers may wish to consult Alexander Layton KC’s most excellent paper on same. Some students may refer to the UPC developments and the jurisdictional consequences in Article 71 BIa (operational 2023?).
Geert.
The Court of Justice delivered yesterday its judgment in case C‑399/21 (IRnova AB v FLIR Systems AB), which is about the scope of application of Article 24 Brussels I bis. The judgment is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version (to check whether an English translation has finally been made available, just click on the link below and change the language version)
“L’article 24, point 4, du règlement (UE) no 1215/2012 du Parlement européen et du Conseil, du 12 décembre 2012, concernant la compétence judiciaire, la reconnaissance et l’exécution des décisions en matière civile et commerciale, doit être interprété en ce sens que : il ne s’applique pas à un litige tendant à déterminer, dans le cadre d’un recours fondé sur la qualité alléguée d’inventeur ou de co-inventeur, si une personne est titulaire du droit sur des inventions visées par des demandes de brevet déposées et par des brevets délivrés dans des pays tiers”.
On 1st September 2023, the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters will enter in force between the European Union (save Denmark) and Ukraine, following their ratification on 29 August 2022.
Source: https://www.hcch.net/en/news-archive/details/?varevent=870
On 29 August 2022, Ukraine ratified the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, which will enter in force for this country on 1 December 2022.
Source: https://www.hcch.net/en/news-archive/details/?varevent=870
The blog is back from summer recess with a post on Airbus Investors Recovery Limited v Airbus SE, where the first instance court at Amsterdam by way of preliminary judgment deals with the law applicable to an investor suit. Claimant has had the investment claims of a number of Airbus investors assigned to it. The core of the claim is that Airbus has tortiously caused damage to the investors in both the act, and in the correspondence leading to, and after, settlement with various financial authorities following allegations of corruption in securing aircraft orders.
Oddly, no reference at all is made to Petrobas, despite the issues there being similar – perhaps the court in Airbus rejected relevance of the Petrobas decision for that case was held prior to CJEU Vereniging voor Effectenbezitters (VVE v BP).
I flagged many of the issues at issue in the judgment, in my post on applicable law which followed the jurisdictional discussion by the CJEU in VVE v BP.
The judgment is in Dutch of course however non-Dutch speakers may refer to it anyway, for the extract of Airbus’ choice of law provisions in the 2019 annual accounts [2.6]. This is relevant with a view to the discussion on transparency obligations following CJEU VVE v BP.
The court, and one assumes parties were in agreement for the issue is not discussed, first of all assumes the liability is non-contractual. I continue to be of the view that this need not necessarily be the case. Focusing the discussion on Rome II therefore, the court also accepts readily that the lex societas carve-out of Rome II does not apply (reference is made [5.3] to CJEU Treuhand). Parties are in agreement [5.6] that for Dutch investors, Dutch law applies per Article 4(2) Rome I (shared habitual residence).
[5.10] Airbus absolutely correctly in my view insist that the CJEU’s Brussels Ia application in VVE must not simply be extrapolated to the applicable law issues at stake here. The court essentially disagrees ([5.10] in fine) and in my view it is wrong to do so.
It then [5.111], not entirely convincingly in my view, dismisses application of Article 4(1), holding that this Article in its view always leads to two applicable laws in each investor-Airbus relationship: that of the market in which the shares were bought (which will have subjected the sales to information requirements), always accompanied by Dutch law for that is where in any event listing information needed to be given.
Having ruled out A4(1), it settles for Dutch law under Article 4(3) as the law of the place of the seat of the corporation that issues financial instruments, largely citing predictability. I am not convinced.
Reference to the CJEU, requested by Airbus, is dismissed, as is [5.17] immediate appeal against the applicable law finding. Airbus will no doubt appeal the final judgment to review the issue of applicable law, too. I would suggest they have plenty of reason to do so.
Geert.
EU Private International Law, 3rd ed. 2021, Chapters 2 and 4.
The Court of Justice delivered on 1 August 2022 its judgment in case C‑501/20 (MPA v LCDNMT), which is about Brussels II bis and the Maintenance Regulation:
“1. Article 3(1)(a) of Council Regulation (EC) No 2201/2003 […] must be interpreted as meaning that the status of the spouses concerned as members of the contract staff of the European Union, working in the latter’s delegation to a third country and in respect of whom it is claimed that they enjoy diplomatic status in that third State, is not capable of constituting a decisive factor for the purposes of determining habitual residence, within the meaning of those provisions.
2. Article 8(1) of Regulation No 2201/2003 must be interpreted as meaning that, for the purposes of determining a child’s habitual residence, the connecting factor of the mother’s nationality and her residence, prior to the marriage, in the Member State of the court seised of an application relating to parental responsibility is irrelevant, whereas the fact that the minor children were born in that Member State and hold the nationality of that Member State is insufficient.
3. Where no court of a Member State has jurisdiction to rule on an application for the dissolution of matrimonial ties pursuant to Articles 3 to 5 of Regulation No 2201/2003, Article 7 of that regulation, read in conjunction with Article 6 thereof, must be interpreted as meaning that the fact that the respondent in the main proceedings is a national of a Member State other than that of the court seised prevents the application of the clause relating to residual jurisdiction laid down in Article 7 to establish the jurisdiction of that court without, however, preventing the courts of the Member State of which the respondent is a national from having jurisdiction to hear such an application pursuant to the latter Member State’s national rules on jurisdiction.
Where no court of a Member State has jurisdiction to rule on an application relating to parental responsibility pursuant to Articles 8 to 13 of Regulation No 2201/2003, Article 14 of that regulation must be interpreted as meaning that the fact that the respondent in the main proceedings is a national of a Member State other than that of the court seised does not preclude the application of the clause relating to residual jurisdiction laid down in Article 14 of that regulation.
4. Article 7 of Regulation No 4/2009 must be interpreted as meaning that:
– where the habitual residence of all the parties to the dispute in matters relating to maintenance obligations is not in a Member State, jurisdiction founded, on an exceptional basis, on the forum necessitatis referred to in Article 7 may be established if no court of a Member State has jurisdiction under Articles 3 to 6 of that regulation, if the proceedings cannot reasonably be brought or conducted in the third State with which the dispute is closely connected, or proves to be impossible, and there is a sufficient connection between the dispute and the court seised;
– in order to find, on an exceptional basis, that proceedings cannot reasonably be brought or conducted in a third State, it is important that, following an analysis of the evidence put forward in each individual case, access to justice in that third State is, in law or in fact, hindered, in particular by the application of procedural conditions that are discriminatory or contrary to the fundamental guarantees of a fair trial, without there being any requirement that the party relying on Article 7 demonstrate that he or she has been unsuccessful in bringing or has attempted to bring the proceedings in question before the courts of the third State concerned; and
– in order to consider that a dispute must have a sufficient connection with the Member State of the court seised, it is possible to rely on the nationality of one of the parties”.
On 28 July 2022, the Hellenic Republic ratified the Hague Convention of 13 January 2000 on the International Protection of Adults, which will enter into force for Greece on 1 November 2022.
Source: https://www.hcch.net/en/news-archive/details/?varevent=869
Canara Bank v MCS International [2022] EWHC 2012 (Comm) is interesting with respect to Cooper J’s discussion of privity of choice of court and law, and the corporate carve-out of retained (post Brexit) Rome I.
Canara (an Indian bank) say that the Guarantee at the core of the issues, with English choice of law and court, was transmitted automatically to MCS France under the French Civil Code as a result of an amalgamation or merger of two French companies, namely the original guarantor and MCS France.
On the impact of Rome I, the judge [53] presumably with parties’ counsel approval, remarks that ‘pursuant to Article 1(2)(e) and (f), Rome 1 does not apply to questions governed by the law of companies or to the issue of whether or not an agent is able to bind a principal in relation to a third party. For both these issues, it is necessary to look to common law principles.’
[88] It is said again that whether an agent is able to bind a principal in relation to a third party is excluded from Rome 1 further to article 1(2)(g), the corporate carve-out. I do not think that is necessarily the case, even in combination with the Article 1(2)(e) carve-out for choice of court. The judge at any rate continues by applying the Dicey Rule 243 that where an agent acts or purports to act on behalf of a principal, their rights and liabilities in relation to each other are in general governed by the law applicable to the relationship or contract between them, with Dicey Rule 244(1) adding a bootstrap /von Munchausen /putative law element:
The issue whether the agent is liable to bind the principal to a contract with a third party, or a term of that contract, is governed by the law which would govern that contract or term, if the agent’s authority were established.”
[89] In light of the foregoing, ‘it was common ground between the parties, and rightly so, that Mr. Maurel’s actual authority on behalf of MIF fell to be determined under French law and the question of whether and to what extent Mr. Maurel was able to bind MIF in respect of the Guarantee given Canara’s knowledge of the resolution is a matter of English law.’
Common English conflict of laws is held to apply to the issue of transfer of a guarantee during the dissolution of a company, and parties agree [76] that whether a corporation has been amalgamated with another corporation is to be determined by the law of its place of incorporation: French law is held to be the relevant law for the dissolved guarantor issue, and expert reports were discussed.
Overall conclusion is [125]
Having considered the issue of good arguable case by reference to each of the issues raised by the parties in relation to the question of whether MCS France was a party to the Guarantee and therefore the jurisdiction agreement contained within it, it seems to me to appropriate to step back and consider whether overall Canara has a good arguable case on whether or not MCS France was a party to that jurisdiction agreement. In this regard, I consider that it does. Even were I to be wrong on one of the issues considered above, the balance of the evidence supports the conclusion that MCS France is a party to the Guarantee and to the jurisdiction agreement contained within it. In circumstances, where the evidence establishes that Canara, MCS France and MCS UK have done business since 2014 on the basis that the Guarantee was binding on MCS France, it would be a surprising conclusion that there was no good arguable case that MCS France was a party to the jurisdiction agreement.
Interesting, if flimsy on the corporate carve-out issue.
Geert.
Guarantee with EN law and jurisdiction clause. Whether it extends to French amalgamated company for purposes of jurisdiction.
Retained Rome I held not to apply on basis of corporate law carve-out.
Canara Bank v MCS International [2022] EWHC 2012 (Comm)https://t.co/jRg4GCW0Yr
— Geert Van Calster (@GAVClaw) July 30, 2022
I tweeted the case on 4 May….slowly I am getting trough the backlog. In Otsuka v GW Pharma [2022] EWHC 1012 (Pat) Karet DJ upheld jurisdiction to hear a dispute about a patent licence in circumstances where the licensee has indicated it will challenge the validity of licensed patents granted outside the UK.
On 7 January 2022 GW commenced proceedings against Otsuka in a state court in New York. There is a significant overlap between the matters raised in the New York claim and the E&W claim (as GW have indicated they will defend it). GW seek a declaration that under the Agreement between the parties none of the relevant patents Covers Epidyolex, including because the patents are invalid. Epidyolex is a drug for the treatment of seizures associated with various conditions or epileptic syndromes. The active ingredient in Epidyolex is cannabidiol (“CBD”).
[47] ff the judge considers the Moçambique rule which means that an English court has no jurisdiction to adjudicate a claim of title to foreign land. In Lucasfilm v Ainsworth the UKSC with some reference to the CJEU’s application of Brussels Ia’s Article 24, held that there is no jurisdiction in proceedings for infringement of rights in foreign land where the proceedings are “principally concerned with a question of the title, or the right to possession, of that property” (including intellectual property). [51] Reference is also made to Chugai Pharmaceutical Co Ltd v UCB Pharma SA and to Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd.
The judge [73] holds GW’s intended challenge to a foreign patent in this case is not direct in the sense suggested in Chugai and the rule in Moçambique is not engaged. Claim formulation in the US proceedings features as a strong argument in that conclusion. [81] ff a forum non challenge is rejected.
Geert.
EU private international law, 3rd ed. 2021, 2.196 ff.
Jurisdiction upheld in #patent licence dispute with licensee indicating challenge to validity of patents granted outside UK
Moçambique rule applied to IPR
Foreign Act of State doctrine, forum non conveniens
Otsuka v GW Pharma [2022] EWHC 1012 (Pat) https://t.co/RLypWznwbQ
— Geert Van Calster (@GAVClaw) May 4, 2022
This post is one for the comparative binder. Fong Chak Kwan v Ascentic Limited and Others [2022] HKCFA 12 (many thanks to Poomintr Sooksripaisarnkit for alerting me to the judgment) discusses a variety of issues, the one of interest to the blog is the tort gateway for a tort allegedly committed outside of Hong Kong. The ruling on that issue was delivered by Lord Collins, a former UKSC judge who continues to sit in the Hong Kong judicial system (unlike others who have withdrawn from the Hong Kong courts in light of the region’s rule of law issues).
[67] Direct damage was sustained on the Mainland, with indirect damage only in Hong Kong.
The First Instance judge [68] ‘in line with the majority judgments of Lady Hale and Lord Wilson in [UKSC Brownlie] .., and being unpersuaded by the minority view of Lord Sumption, decided that (a) the expression “damage” in Gateway F was not limited to damage which completed the cause of action; (b) the expression was not limited to direct damage as opposed to indirect/consequential damage; (c) where damage was felt in more than one jurisdiction, indirect/consequential damage qualified under Gateway F if it was of some significance; (d) the expression was to be given its ordinary and natural meaning, which embraced indirect/consequential damage; and (e) the consequences of a wide interpretation were sufficiently addressed by the discretion as to forum conveniens.’
The Court of Appeal [69] ‘like the judge, held that the reasoning of the majority in Brownlie v Four Seasons Holdings Inc was to be preferred to that of the minority. Damage included all of the heads of damage which might be suffered as a result of tortious conduct, including all the detriment, physical, financial and social which the plaintiff suffered as a result. The natural and ordinary meaning of Gateway F was clear, and there was no basis for drawing a distinction between direct and indirect damage. Nor was there any basis for applying the European jurisprudence on the Brussels Convention and Brussels I Regulations. Finally, the expression “the damage” in Gateway F did not mean that all the damage, or the damage which completed the cause of action, had to be sustained in Hong Kong.’
[74] ff Collins NPJ provides a historic and geographical comparative (Commonwealth) tour d’horizon, confirming the lower courts’ view.
[107]-[108] ‘(I)n the light of the legislative purpose, the natural and ordinary meaning of the word “damage” is just that, and the rule does not distinguish between the damage which completes a cause of action and that which does not, nor does it distinguish between direct or indirect damage, or between physical or financial damage. The question is whether there is a legislative purpose, or a public policy, or an absurd or undesirable result, which justifies a narrower construction, to encompass only direct damage as opposed to indirect damage.’: the judge finds there is no such purpose, policy or result.’
[109] he discusses 3 flows in the reasoning of the alternative reading, which are worth a read. [121] the same safety valve is emphasised as the UKSC did in the majority view in Brownlie: where the exercise of the locus damni gateway leads to unwarranted results, forum non conveniens can come to the rescue.
Geert.
Comparative conflicts
Note 64 ff Collins NPJ on jurisdiction in respect of tort allegedly committed outside of Hong Kong, with extensive reference to UKSC Brownlie https://t.co/Z0a0CPOowB and other jurisdictions https://t.co/oR1H7cR0Oe
— Geert Van Calster (@GAVClaw) June 22, 2022
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