The Court of Justice of the European Union (CJEU) has delivered a landmark ruling in BSH Hausgeräte v. Electrolux that significantly expands the jurisdictional reach of EU courts in cross-border patent infringement cases. The decision affirms that courts in any EU member state can hear patent infringement claims involving other EU countries, as well as third states, even when the validity of the patents is contested provided that the defendant is domiciled in the court’s jurisdiction. This ruling may reshape IP enforcement strategies across Europe and beyond.
KEY FINDINGS
- Long-Arm Jurisdiction Affirmed: The CJEU ruled that EU courts have jurisdiction over cross-border patent infringement cases, regardless of validity challenges, when the defendant is domiciled within the court’s state or (for Unified Patent Court (UPC) actions) in one of the 18 states participating in the UPC.
- Article 24(4) Brussels I bis Regulation Interpretation: The court held that Article 24(4), which grants exclusive jurisdiction over patent validity disputes to the national courts of the country where the patent is registered, does not bar infringement actions in other EU states, even when validity challenges are raised as defenses or counterclaims in those actions.
- Applicability to non-EU States: The CJEU confirmed that Article 24(4) does not limit EU courts’ jurisdiction over patent infringement actions involving non-EU countries, enabling claims to proceed for defendants domiciled within the EU, even when the alleged infringement occurs outside the EU and validity is raised as a defense.
COMMENTARY
This week’s decision upends the common understanding of how far EU courts may exercise long-arm jurisdiction following the 2006 CJEU ruling in GAT v LuK. In that earlier ruling, if validity was put in issue even as a defense to an infringement action, the exclusive jurisdiction of the relevant national court in which the patent was registered was triggered, barring the court in another member state from proceeding.
The ruling in BSH only applies to actions that are brought against EU defendants based on their domicile, and therefore does not extend to defendants domiciled outside the EU. However, for such EU-domiciled defendants, the assertion of jurisdiction over non-EU patents, even where validity is in issue, is a radical departure from existing case law, allowing—at least in principle—EU courts to rule on patent infringement cases globally.
While the BSH decision related to the jurisdiction of a national (Swedish) court, the reasoning should also apply, albeit in a limited way, to the UPC (being a “European Community court”). Whereas a national court has an inherent jurisdiction for all matters over entities domiciled within its borders (including, for example, infringement of US patents), the UPC’s jurisdiction is limited to European Patents (under the European Patent Convention) and Unitary Patents. The decision potentially confers on national EU courts a similar (indeed broader) jurisdiction to determine international infringement cases in a single forum. This may increase the competition between national courts in the EU and the UPC. If a national court is able to deal with infringement across the EU and beyond, the competitive advantage of the UPC in deciding cases centrally may diminish.
It remains to be seen how the courts in non-EU jurisdictions will react to this development. There is clearly the possibility of parallel conflicting proceedings with the court in a non-EU state taking an action for the revocation of the relevant patent, potentially coupled with a declaration that the patent is not infringed.
In such circumstances, there may be applications for anti-suit injunctions to prevent a party from pursuing an infringement/validity action in the EU courts. For example, legal frameworks outside of the Brussels Regulation (such as national legislation, case law, or the application of private international law) may conflict with the notion that an EU court can determine infringement and/or invalidity (including by way of a defence) of a non-EU patent.
IMPLICATIONS FOR BUSINESSES AND IP STRATEGY
- Cross-Border Enforcement: Companies might now consider pursuing cross-border patent infringement claims by consolidating actions in a single forum.
- Increased Forum Competition: The ruling could intensify competition between the UPC and national courts as attractive venues for cross-border IP litigation, impacting strategic decisions on where to file infringement suits.
- Non-EU Countries: Firms with global patent portfolios should evaluate the implications for non-EU jurisdictions, particularly in countries not bound by the Lugano Convention, such as the UK and Turkey.
- Anti-Suit Injunctions and Preemptive Litigation: The case is bound to result in jurisdictional battles concerning patents both within and outside the EU. Potential litigants on both sides of the court will need to consider strategies such as parallel or preemptive proceedings in non-EU jurisdictions and/or anti-suit injunctions to place themselves in the best position.
STRATEGIC CONSIDERATIONS AND NEXT STEPS
- Patent Portfolio Review: Businesses should reassess their European patent portfolios and infringement strategies to optimize enforcement and defense mechanisms in light of this expanded jurisdiction.
- Litigation Planning: Litigants may need to adapt litigation strategies to navigate the potential for parallel proceedings and anti-suit injunctions across multiple jurisdictions.
- Cross-Border Collaboration: Companies should coordinate closely with international legal counsel to address complexities arising from multijurisdictional patent enforcement and the interplay between different jurisdictions.
CONCLUSION
The CJEU’s decision in BSH Hausgeräte v. Electrolux represents a pivotal development in European patent litigation, reinforcing the jurisdictional power of EU courts and the UPC in cross-border infringement disputes. Companies operating in Europe should promptly reassess their IP litigation and enforcement strategies to capitalize on this enhanced jurisdictional scope.
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