Neutral Citation Number: [2017] EWHC 2570 (Pat ) 
  Case No: HC -2017 -00051 7 
IN THE HIGH COURT OF JUSTICE  
CHANCERY DIVISION  
PATENTS COUR T 
  Rolls Building  
Fetter Lane, London, EC4A 1N L 
  18 October 201 7 
B e f o r e :  
MR JUSTICE ARNOL D 
____________________  
Between:  
 
 PARAINEN PEARL SHIPPING LIMITED  
SMT SHIPPING (CYPRUS) LIMITED  
EUREKA SHIPPING LIMITED  Claimants  
 - and -  
 KRISTIAN GERHARD JEBSEN 
SKIPSREDERI AS  
KGJS CEMENT AS  
KGJ CEMENT AS  Defendants  
____________________  
James Mellor QC and Quentin Cregan (instructed by Stephenson Harwood 
LLP) for the Claimants  
James Abrahams QC and Yash Kulkarni (instructed by Bristow s LLP) for the 
Defendants  
Hearing date: 16 October 2017   
____________________  
HTML VERSION OF JUDGMENT
 
____________________  
Crown Copyright ©  
MR JUSTICE ARNOLD :   
Introduction  
1. This is an application by the Defendants under CPR Part 11 to set aside 
service  of the claim form on them on the ground that this Court has no 
jurisdiction over the claims asserted in it. The claims are for negative 
declarations relating to European Patent No. 2 032 426 entitled "System and 
method for discharge of bulk material from a ship" ("the Patent") owned by 
the First Defendant ("KGJS"), a company registered in Norway. The Second 
Defendant ("KGJSC") and the Third Defendant ("KGJC") are companies in 
the same group which are also registered in Norway. The First Claimant 
("PPS") is  a company registered in the Marshall Islands which owns a ship 
now known as the M/V Nordanvik ("the Vessel"), while the Second Claimant 
("SMT") and the Third Claimant ("Eureka") are companies registered in 
Cyprus which are respectively the technical and c ommercial managers of the 
Vessel. It is common ground that the Court's jurisdiction over the Defendants 
is governed by the Lugano Convention. There is no dispute that the Court 
would have jurisdiction in respect of the Claimants' claim for a declaration of  
non-infringement ("DNI") of the UK designation of the Patent pursuant to 
Article 5(3) of the Lugano Convention. The claims asserted by the Claimants 
extend to 11 other designations of the Patent, however. The Defendants 
contend that this Court has no juri sdiction in respect of such claims.  
Factual background  
2. The following account of the factual background is taken from the Claimants' 
Particulars of Claim. For present purposes, the Claimants' factual allegations 
must be assumed to be correct.  
3. The Defendants are members of a group of companies dealing in (amongst 
other things) cement and/or the shipping and delivery of cement.  
4. The Patent claims priority from Norwegian Patent Application NO 20062650 
filed on 9 June 2006. The Patent was designate d in 32 countries on grant, but 
has only been validated post -grant in the following 12 countries: Denmark, 
Finland, France, Germany, Ireland, Iceland, Netherlands, Poland, Portugal, 
Spain, Sweden and the UK. The Claimants do not challenge the validity of t he 
Patent in these proceedings.  
5. The Vessel was built in about 2002 and was acquired by KGJC in about 2005. 
At the behest and with the consent of KGJS, KGJC installed a pneumatic 
cargo/cement system on the Vessel. This took place in or about 2006 in 
Batam,  Indonesia. The Defendants brought the Vessel back into the European 
Economic Area, and then operated the Vessel. The Defendants engaged in 
some inter -company sales of the Vessel in the EEA in about 2008, from at 
least KGJC to KGJSC, with KGJS's knowledge and consent.  
6. In late 2008, while KGJSC owned the Vessel, it was grounded and severely 
damaged in Norway. The Vessel was re -floated and moved to berthing. 
KGJSC then offered the Vessel for sale and sold it on the open market on an 
"as is, where is basis". The sale took place in Norway, and the contract of sale 
was governed by English law. The buyer ("CSCSA"), gave an undertaking not 
to use or re -commission the pneumatic cement system on the Vessel, with a 
right of first refusal to the sellers if the Vessel was to be re -sold before 
conversion to a bulk carrier and a right to inspect the Vessel. It is the 
Claimants' case that the undertaking was not passed on so as to bind any 
subsequent buyer of the Vessel, and that the Defendants had and took 
opportunities t o inspect the Vessel at various times.  
7. The Vessel was sold twice more, coming ultimately to be owned by PPS. At 
least the first sale (from KGJSC to CSCSA) had its place of closing in the 
EEA (Oslo or Horten), as did the third sale (from Esmenet Shipping C o SA to 
PPS) (Oslo). The Claimants allege that each of those sales were with the 
knowledge and/or consent of the Defendants.  
8. The Vessel services clients of the Claimants in Finland and Sweden and 
elsewhere in the EEA, and the Claimants propose to bring th e Vessel to the 
UK in order to develop a client base in the UK.  
9. The Vessel is alleged by the Defendants to contain a system on board and/or to 
utilise a process that infringe the Patent. The Claimants contend that, even if it 
does contain such a system an d/or use such a process, the Defendants have (1) 
exhausted their rights under the Patent in relation to the Vessel in the EEA 
and/or (2) consented to the use of the system and process on the Vessel.  
The declarations claimed by the Claimants  
10. The Claimants claim the following declarations pursuant to the inherent 
jurisdiction of the Court:  
"(a) declarations of non -infringement of patent EP 2,032,426 in its UK 
Designation in relation to the M/V Nordanvik; and/or  
(b) declarations of non -infringement of patent  EP 2,032,426 in its Finnish and 
Swedish Designations in relation to the M/V Nordanvik; and/or  
(c) declarations that the First Defendant's rights in respect of the Patent in 
relation to the M/V Nordanvik have been exhausted within EEA; and/or  
(d) declarations that each of the Defendants has consented to the use of the 
System on the M/V Nordanvik."  
The Lugano Convention  
11. On 30 October 2007 the European Community, Denmark, Iceland, Norway 
and Switzerland concluded a Convention on jurisdiction and the recognition 
and enforcement of judgments in civil and commercial matters ("the Lugano 
Convention") which replaced the Lugano Convention of 16 September 1988. 
The substantive provisions of the Lugano Convention are essentially the same 
as those of Council R egulation 44/2001/EC of 22 December 2000 on 
jurisdiction and the recognition and enforcement of judgments in civil and 
commercial matters ("the Brussels I Regulation"). While the Brussels I 
Regulation applied as between Member States of the European Commun ity, 
the Lugano Convention applies as between the Member States of what is now 
the European Union on the one hand and Denmark, Iceland, Norway and 
Switzerland on the other hand.  
12. The Lugano Convention applies to the United Kingdom by virtue of the UK's 
mem bership of the EU, and Council Decision 2007/712/EC of 15 October 
2007 on its signing on behalf of the European Community.  
13. Article 2(1) of the Lugano Convention embodies the fundamental principle 
that, subject to the specific exceptions provided in the Co nvention, "persons 
domiciled in a State bound by this Convention shall, whatever their 
nationality, be sued in the courts of that State".  
14. Article 5(3) of the Lugano Convention provides for one such exception:  
"A person domiciled in a State bound by this Convention may, in another 
State bound by this Convention, be sued ... in matters relating to tort … in the 
courts for the place where the harmful event occurred or may occur."  
Interpretation of Article 5(3)  
15. The following points are common ground. First, t he "place where the harmful 
event occurred or may occur" covers both the place where the damage 
occurred and the place of the event giving rise to that damage. Accordingly, 
the defendant may be sued, at the option of the claimant, in the courts of either 
of those places: see Case C -523/10 Wintersteiger AG v Products 4U 
Sondermachinenbau GMBH [EU:C:2012:220 ], [2013] Bus LR 150  at [19] and 
the case law cited.  
16. Secondly, Article 5(3) covers claims for negative declarations seeking to 
establish the absence of liability in tort. Accordingly, wh ere a claimant seeks 
such a negative declaration, he may do so in the courts of either the place 
where the damage occurred or may occur or the place of the event giving rise 
to that damage: see Case C -133/11 Folien Fischer AG v Ritrama SpA  
[EU:C:2012:664 ], [2013] QB 523 .  
CPR rule 6.33(1)  
17. Under CPR rule 6.33(1), the claimant may serve the claim form outside the 
UK on a defendant domiciled in a state which is party to the Lugano 
Convention "where each claim against the defendant to be served and included 
in the claim form is a claim which t he court has power to determine under .. 
the Lugano Convention".  
The law applicable to claims for DNIs of patents  
18. The following points are common ground. First, by virtue of Article 8(1) of 
European Parliament and Council Regulation 864/2007/EC of 31 July  2007 on 
the law applicable to non -contractual regulations ("the Rome II Regulation"), 
the law applicable to the question of whether past acts have infringed, or 
proposed future acts would infringe, each designation of the Patent is the lex 
loci protection is, that is, the substantive patent law of the relevant country.  
19. Secondly, by virtue of Article 1(3) of the Rome II Regulation and English 
private international law, the law which is applicable to the other conditions 
which must be satisfied in order to o btain a DNI is the lex fori : see Actavis UK 
Ltd v Eli Lilly & Co  [2015] EWCA Civ 555 , [2015] Bus LR 1068 .  
Declaratory relief under English law  
20. English law as to the grant of declaratory relief was recently summarised by 
Floyd LJ delivering the judgment of the Court of Appeal in Fujifilm Kyowa 
Kirin Biologics Co Ltd v Abbvie Biotechnology Ltd [2017] EWCA 1, [2017] 
RPC 9 at [59] as follows:  
"The modern approach to the grant of declarations can be taken from two 
cases: Messier -Dowty Ltd v Sabena SA  [2001] 1 All ER 275  at [41] -[42] (Lord 
Woolf MR) and Financial Services Authority v Rourke  [2002] CP Rep 14  
(Neuberger J, as he then was). In Messier -Dowty  the court held that the grant 
or refusal of declaratory relief in relation to commercial disputes should not be 
constrained by artificial lim its wrongly related to jurisdiction. Instead it should 
be kept in proper bounds by the exercise of the court's discretion. Negative 
declarations were an unusual remedy which can result in procedural 
complications resulting in unfairness to the defendant. B ut subject to 
appropriate circumspection, there should be no reluctance to grant negative 
declarations 'when it is useful to do so'."  
Analysis  
21. As noted above, there is no dispute that this Court has jurisdiction over the 
Defendants under Article 5(3) of th e Lugano Convention with regard to 
declaration (a) claimed by the Claimants since it concerns acts which are 
proposed to be carried out by the Claimants within the territory covered by the 
UK designation of the Patent, namely the UK.  
22. Turning to declaratio n (b) claimed by the Claimants, the Defendants contend 
that this Court has no jurisdiction under Article 5(3) since it concerns acts 
which have been, and are intended to be, carried out within the territories 
covered by the Finnish and Swedish designations  of the Patent, namely 
Finland and Sweden respectively and since jurisdiction with respect to acts in 
the UK did not carry with it jurisdiction in respect of acts in those Contracting 
States.  
23. In support of this contention, counsel for the Defendants relie d upon two 
authorities, namely the judgment of the Court of Justice of the European 
Union in Case C -539/03 Roche Nederland BV v Primus  [2006] ECR I -6535  
and the decision of the Court of Appeal in Actavis Group hf v Eli Lilly & 
Company  [2013] EWCA Civ 517 , [2013] RPC 37 .  
24. In Roche v Primus  the CJEU held that Article 6(1) of the Brussels Convention 
did not apply to European patent infringement proceedings involving a 
number of companies established in various Contracting States in respect of 
acts committed in one or more of those States even where those companies 
belonged to the same group and might have acted in an identical or similar 
manner in accordance with a commo n policy elaborated by one of them. The 
Court reasoned at [27] -[35] that there was no risk of irreconcilable judgments 
in such circumstances, since "the legal situation would not be the same" 
because actions for infringements of European patents were gover ned by 
national law in each relevant State.  
25. In Actavis v Lilly  the Court of Appeal held that service of the claim on the 
defendant pursuant to CPR rule 63.14 was permissible in respect of the UK 
designation of the European patent in suit, but not in respe ct of foreign 
designations. As Kitchin LJ explained at [82]:  
"Foreign designations of a UK patent are not patents under the 1977 Act and 
CPR 63.14 does not provide a means of service in relation to them. Nor is the 
position any different if the claim form  also includes a claim in respect of the 
UK designation. In such a case the claim form must be regarded as including 
separate claims in respect of each designation and CPR 63.14 only provides a 
means for its service in so far as it relates to the UK design ation. Were the 
position otherwise, the provisions of CPR 63 could be circumvented by, as 
Lilly puts it, convoying claims in respect of foreign patents with a claim in 
respect of a corresponding UK patent. That would be an absurd result and one 
which canno t have been intended."  
26. To these authorities there may be added the following passage from the 
judgment of Lord Hodge in AMT Futures Ltd v Marzillier, Dr Meier & Dr 
Guntner Rechtanwaltgesellschaft mbH [2017] UKSC 13 , [2017] 2 WLR 853  
at [32] cited by counsel for the Claimants:  
"In both  [Case C -189/87 Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst 
and Co   [1988] ECR 5565 ] and [Case C -51/97  Réunion Européenne SA v 
Spliethoff's  Bevrachtingskantoor BV  [1998] ECR I -6511 ] the CJEU has 
recognised that the scheme of the Judgments Regulation creates the difficulty 
that one jurisdiction may not be able to deal with all the related points in a 
dispute. This inconvenience is the price which the scheme in the Judgments 
Regulation imposes by setting out well -defined rules in order to achieve its 
primary purpose of ensuring that there shall be no clash between the 
jurisdictions of member states of the EU, as Lord Goff of Chieveley observed 
in Airbus Industrie GIE v Patel  [1999] 1 AC 119 , 131 -132."  
27. Counsel for the Claimants did not dispute that, in general, this Court does not 
have jurisdiction over claims for DNIs in respect of non -UK designations of 
European patents by virtue of Art icle 5(3); but he nevertheless submitted that 
this Court did have jurisdiction in the particular circumstances of the present 
case. Since his argument centred on the Claimants' contention that the 
Defendants' rights under the Patent have been exhausted, it  is convenient to 
address it in the context of declaration (c) claimed by the Claimants.  
28. In support of their claim for declaration (c), the Claimants rely upon the well -
established principle of European law that the sale of a product anywhere 
within the E EA by or with the consent of the proprietor of a patent exhausts 
the proprietor's rights under that patent: see Case C -187/80 Merck & Co Inc v 
Stephar BV [1981] ECR 2063  and Joined Cases C -267/95 and C -268/95 
Merck & Co Inc v Primecrown Ltd [1996] ECR I -6285 . The Claimants 
contend that the Defendants have exhausted their rights under all designations 
of the Patent in relation to the Vessel by selling the Vessel. As counsel for the 
Claimants put it, "such exhaustion has EEA -wide effect".  
29. Accordingly, the Claimants argue, if this Court decides that the Claimants' 
proposed acts in relation to the Vessel in the UK would not infringe the UK 
designation of the Patent because the Defendants' rights have been exhausted, 
it necessarily follows tha t that decision must be equally applicable to the other 
11 designations of the Patent, because the doctrine of exhaustion of rights 
gives effect to the fundamental European principle of free circulation of 
goods, and hence the same law must be applied thro ughout the EEA. The 
Claimants go on to argue that it would serve a useful purpose for the Court to 
make a declaration to that effect, because it would avoid the need for parallel 
proceedings in 11 other countries.  
30. In my view this argument confuses two dif ferent questions. The first is which 
court has jurisdiction over a defendant in respect of a claim under Article 5(3). 
The second is what the effect is of any decision by a court which has 
jurisdiction.  
31. Answering the first question requires a claim -by-claim analysis: as can be seen 
from AMT v Marzillier  and CPR rule 6.33(1), the fact that a court has 
jurisdiction over a defendant under the Lugano Convention in respect of one 
claim does not meant that it also has jurisdiction over that defendant in respect 
of another claim even if the two claims are closely related in fact and/or law. 
Even if it is assumed that the bringing of claims for DNIs under different 
designations of the same European patent on the ground of exhaustion of 
rights before the courts of d ifferent Contracting States would lead to a risk of 
irreconcilable judgments which would justify a stay of proceedings by courts 
other than the court first seised pursuant to Article 28 of the Lugano 
Convention, it does not follow that the court first seis ed would have 
jurisdiction over all such claims.  
32. Turning to the second question, the effect of a decision of a court that a 
claimant is entitled to a DNI under one designation of a European patent in 
other Contracting States in respect of which the same p atent is designated 
depends on, first, whether the decision of the first court is recognised by the 
courts of the other States and, secondly, if so, whether and to what extent it 
has res judicata  effect. No doubt, if the system established by the Lugano 
Convention operates as intended, then the decision of the first court should be 
recognised and should be accorded res judicata  effect. Nevertheless, the 
questions of whether to afford recognition and res judicata  effect to the 
decision of the first court are  matters for the courts of the other Contracting 
States.  
33. Counsel for the Claimants accepted that the making of declaration (c) by this 
Court would amount to pre -empting the decision by the courts of other 
Contracting States as to whether to recognise and accord res judicata  effect to 
this Court's decision on the issue of exhaustion. He argued that this would be 
unobjectionable because, on a proper application of European law, there could 
only be one answer as to whether or not the Defendants' rights under the 
Patent in respect of the Vessel had been exhausted. In my view, however, it 
does not follow that it would be proper for this Court to exercise jurisdiction 
over matters that, under the scheme of the Lugano Convention, lie within the 
province of the cou rts of other Contracting States.  
34. As for the practical consequences of this Court declining jurisdiction in 
respect of the Claimants' claims in respect of the other 11 designations of the 
Patent, as counsel for the Defendants pointed out, in principle, the  Claimants 
could bring claims for DNIs in respect of all 12 designations before the courts 
of Norway, where the Defendants are domiciled (cf. Actavis v Lilly ). (This is 
unaffected by the fact that, as I was informed by counsel for the Claimants, 
after the claim form had been issued, but before it had been served, KGJS and 
KGJC brought proceedings for infringement of the Norwegian counterpart of 
the Patent against the Claimants, having previously brought preliminary 
injunction proceedings in Finland which we re dismissed.)  
35. Turning to declaration (d), counsel for the Claimants submitted that this raised 
essentially the same issue as declaration (c). As counsel for the Defendants 
pointed out, however, this is incorrect. Declaration (c) depends on the 
applicatio n of a principle of European law, whereas declaration (d) depends on 
the application of the relevant national laws to determine whether there has 
been consent amounting to a defence to patent infringement. Accordingly, 
even if this Court had jurisdiction i n respect of the claim for declaration (c), it 
would not follow that it had jurisdiction in respect of the claim for declaration 
(d).  
Conclusion  
36. For the reasons given above, I conclude that this Court has jurisdiction over 
the Defendants in respect of the  claim for declaration (a), but does not have 
jurisdiction over them in respect of the claims for declaration (b) or 
declarations (c) and (d) in so far as they extend beyond the UK designation of 
the Patent. Counsel for the Defendants submitted that, in th at event, the Court 
should set aside service of the claim form and leave the Claimants to bring a 
fresh claim confined to declaration (a), which the Defendants' solicitors had 
been instructed to accept service of. I see no reason why the Claimants should 
have to go to the trouble and expense of issuing and serving a fresh claim 
form, however. In my judgment the proper course is to make a declaration that 
this Court has no jurisdiction over the claims for declaration (b) or 
declarations (c) and (d), and to s trike out paragraph 35 and the prayer for relief 
of the Particulars of Claim, in so far as they extend beyond the UK designation 
of the Patent .