The plaintiff, C. C. Ltd., is the proprietor of three patents; European
Patent (GB) No. 0,266,021 BI ("the U.K. patent"), European Patent (DE)
No. 0,266,021 BI ("the German patent") and European Patent (ES)
No. 0,266,021 BI ("the Spanish patent"). As their titles indicate, all of
these are the national patents which have arisen out of a single patent
application made to and processed through the European Patent Office.
The three patents are, at least at the moment, identical. Their subject
matter is a coin-dispensing apparatus of the type used, for example,
in gaming machines to dispense winnings accurately and rapidly. The
plaintiff manufactures at least two types of such apparatus. One of those
products is said to be made in accordance with the invention covered by
the patents.
There are four defendants. The first, S. International (U.K.) Ltd. ("S.
U.K."), trades in England. In particular it sells in England a coin dispensing
device called the C. H. which is alleged to fall within the claims of the
plaintiff's U.K. Patent. S. U.K. is a wholly owned subsidiary of the second
defendant, G. Investments Holdings B.V. ("G."). G. is a Dutch company.
Apparently it does not trade itself although it gives financial support to
its subsidiaries including S. U.K. The third defendant is another Dutch
company, S. International (Nederlands) B.V. ("S. Holland"). It appears
to be the company within the S. Group which is primarily concerned
with the development and manufacture of the C. H.. Since it is a Dutch
company and the plaintiff has no Dutch equivalent of its U.K., German
and Spanish patents, it cannot be sued in its home territory. However,
as explained more fully below, its products find their way not only to
England where they are sold by S. U.K. but also to Spain, where they
are sold or offered for sale by a local agent, who has not been joined in
these proceedings, and to Germany where they are sold by the fourth
defendant, S. International Deutschland G.m.b.H. ("S. Germany"). Just
as the C. H. is said to infringe the U.K. patent so, of course, its offer
for sale and sale in Germany and Spain is said to infringe the German
and Spanish patents respectively. S. Holland and S. Germany are also
subsidiaries of G..
In these proceedings the plaintiff sues all the defendants for infringing all
three patents. As far as infringement of the U.K. patent is concerned,
it is not in dispute that S. U.K. will be liable if that patent is valid
and infringed. Furthermore Mr. Miller, who appeared on behalf of the
defendants, conceded for the purpose of this application that a sufficiently
arguable case had been made out on the pleadings that S. Holland was
jointly liable with S. U.K. for the commercial activities which are alleged to
infringe the U.K. patent. As such it is accepted that S. Holland is a proper
party to the present proceedings, at least in respect of infringement of
the U.K. patent. However this is not the totality of the case made against
S. Holland. It is said that, just as it is arguably liable as a joint tortfeasor
with S. U.K. for infringement here, so it is also liable as a joint tortfeasor
with S. Germany for infringement of the German patent and, on the
same basis, for the infringement in Spain of the Spanish patent. It is also
alleged that S. U.K. is jointly liable for infringement of the German and
Spanish patents. As far as S. Germany is concerned, it is alleged to be
primarily liable for infringement of the German patent and to be liable as
a joint tortfeasor for infringement of the Spanish and U.K. patents. Finally
G. is said to be liable as joint tortfeasor for infringements by the other S.
companies of all three patents.
When the matter was called on before the court, there were cross-
applications to be determined. The plaintiff was seeking interlocutory
injunctions against all four defendants to restrain them from infringing
the three patents in England, Germany and Spain. There was also
an application by the defendants to remove all but S. U.K. from the
proceedings and to strike out of the statement of claim all assertions
relating to the infringement by any of the defendants of the German and
Spanish patents. Even if the defendants succeeded in their application,
that might not necessarily deprive the court of its jurisdiction to grant
interlocutory relief in respect of foreign acts of infringement by foreign
parties. Mr. Silverleaf, for the plaintiff, argued that the provisions of article
24 of the 1968 Convention on Jurisdiction and Enforcement of Judgments
in Civil and Commercial matters ("the Brussels Convention"), which is
now part of our domestic law as a result of the Civil Jurisdiction and
Judgments Act 1982, gave me that jurisdiction: see also Kitechnology
B.V. v. Unicor G.m.b.H. Plastmaschinen [1995] F.S.R. 765. However the
parties were willing to accept a very early date for a speedy trial and, as
a consequence, I decided that no interlocutory relief was appropriate. I
therefore do not have to consider the issues arising under article 24.
As a result this judgment is only concerned with which parties and which
issues should remain in the action for the purpose of the trial. This
raises important and far reaching questions concerning the justiciability
in England of acts of infringement abroad. However, before turning
to consider them, it is necessary to see which parties and causes of
action are maintainable as a matter of English law at this stage. In
particular, whatever the position may be under the Brussels Convention,
Mr. Silverleaf accepted that for many of the pleaded causes of action his
client must show that it has an arguable case of joint tortfeasance. Joint
tortfeasance in respect of infringement in England
As indicated above, there is now no dispute that the plaintiff has pleaded
a sufficient case of infringement of the U.K. patent against S. U.K. and
S. Holland. It also says that G. and S. Germany are liable because they
were part of a common design to infringe in this country. There are two
recent decisions of the Court of Appeal which are particularly relevant
to this issue namely; Unilever Plc. v. Gillette (U.K.) Ltd. [1989] R.P.C.
583 and Unilever Plc. v. Chefaro Proprietaries Ltd. [1994] F.S.R. 135 in
which the Gillette case was considered and explained. It seems to me that
the core of the Chefaro decision is contained in the following passages in
Glidewell L.J.'s judgment, at pp. 138, 141:
"In order to show infringement by common design it is necessary for the
plaintiff to show some act in furtherance of the common design – not
merely an agreement. The issue, therefore, before the judge and this
court is: does the evidence show a good arguable case that there was
such a common design and/or that Akzo had procured or assisted Chefaro
to infringe the patent?... I do not accept that when Mustill L.J. [in the
Gillette case] was referring to 'a fair inference,' he meant anything other
than that what must be shown is a good arguable case that there are
facts from which an inference could clearly and properly be drawn." As I
suggested in Mead Corporation v. Riverwood Multiple Packaging Division
of Riverwood International Corporation, The Times, 28 March 1997:
"The court must be satisfied that there are proper grounds before it
allows foreign parties to be exposed to the expense and inconvenience
of joinder in proceedings here. In particular, it is not enough merely to
point to the fact that the English and the foreign defendants are closely
related to one another either by shareholding or otherwise. It is for that
reason that in Chefaro the Court of Appeal reaffirmed that the fact that
the foreign corporation had overall control, both financial and voting, of
the English defendant was not sufficient by itself to enable the court to
conclude that there is a good arguable case that the necessary inference
of assistance or common design could be drawn. Some evidence that the
foreign party was actually involved in furthering the common design of
infringement must be shown to the court or, as Glidewell L.J. put it, it is
necessary for the evidence to show that the foreign party 'took part' in
the primary act of infringement. Material which is neutral on this critical
issue is of no assistance. It follows that material which merely shows that
the foreign and domestic defendants are closely associated with each
other, or which shows that the parent regards itself and its subsidiaries
as a single economic unit throws no light on the issue of who took part in
the acts alleged to infringe the patent... To demonstrate a common design
involving the parent, the plaintiff will need to show, by evidence, that it is
likely that the parent did more than look on with approval."
Applying this approach to the facts of this case, there is no material which
justifies keeping G. in these proceedings in respect of the allegations of
infringement in England. The fact that it provides commercial backing to
all its subsidiaries, including S. U.K., does not mean that it committed
some act in furtherance of a common design that the British subsidiary
should infringe the U.K. patent. The claim against G. in respect of
infringement of the U.K. patent must be struck out. According to the
particulars of infringement served with the statement of claim, the claim
to joint tortfeasance levelled at S. Germany in respect of activities in
England is based on the following matters. (1) The majority of the acts
of disposal of the C. H. throughout the United Kingdom are under and
by reference to the banner "S." or "S. International" without identifying
the separate corporate identities. (2) The sample of the C. H. obtained
by the plaintiff bears a label marked "STC-S. Technical Components
Europe" and the name "S. International, Holland-England-Germany-
Belgium." The separate companies are not further identified. (3) The
service manual for the C. H. is in English only and does not distinguish
between any of the separate companies. Furthermore the manual does
not "discriminate between currencies of any particular nation." It will work
for any currencies.
Furthermore, as a result of the evidence filed on this application, Mr.
Silverleaf also relied on the fact that a Mr. O., the general manager of
S. Germany, attended development review meetings and contributed
towards the development costs of the C. H..
In my view these matters get nowhere near making out an arguable case
of joint tortfeasance against S. Germany in respect of English activities.
There is no reason to doubt Mr. O.'s evidence that S. Germany conducts
no business in the United Kingdom and is quite independent of S. U.K.
and Mr. Si.'s evidence that S. U.K. is quite independent of, inter alia, S.
Germany. The acts of infringement complained of consist of offering for
sale of C. H. in England. There is nothing to suggest that S. Germany had
anything to do with any such offer. The claim made against it in relation
to the English infringements should be struck out. Joint tortfeasance in
respect of infringement in Germany and Spain
If the court here has jurisdiction to try here actions for patent
infringement in a foreign country, it will be determining the issues of
infringement according to the law of the country in which the infringement
occurred. It seems to me to follow that the assertion that a number
of parties are liable as joint tortfeasors for acts of patent infringement
committed in the foreign country must be determined in accordance with
the law of joint tortfeasance in that country. In this case brief evidence
was served from German and Spanish lawyers touching on this issue
but in the end I did not understand either side to suggest that the law in
either of those countries was significantly different to the law here and I
will proceed on the basis that it is the same.
As far as G. is concerned, it plays no greater role in S. activities in Spain
and Germany than it does in England. There is no credible case of joint
tortfeasance in either of those countries. The pleas made against it
should therefore all be struck out and it should be removed from these
proceedings.
As far as S. Holland is concerned, Mr. Miller accepted that it could not be
removed from the proceedings in respect of the English infringements
because it was responsible for getting in all the orders world-wide and
then sold the C. H. through what it called its "agents" in the different
countries. I understood Mr. Miller to accept that in those circumstances
it was at least arguable that S. Holland was directly implicated in acts of
infringement here. The same relationship exists between S. Holland and
sales by the S. Group in Germany and Spain. By the same reasoning a
sufficient case has been pleaded for joint tortfeasance in those countries.
As far as S. Germany is concerned, I have already said that no sufficiently
arguable case for liability has been made against it in respect of
English infringements. No better case is made against it in respect of
infringements in Spain. In so far as it is alleged to be liable in respect of
the latter, the plea is bad and should be struck out.
The particulars of infringement also allege that S. U.K. is liable as a joint
tortfeasor for alleged infringements in Germany and Spain. There is no
material supporting these assertions. These pleas also are bad and should
be struck out.
In summary, the causes of action which, subject to issues of justiciability,
are adequately pleaded are as follows: (1) infringement of the German
patent in Germany committed by S. Germany; (2) infringement of
the German patent in Germany, as a joint tortfeasor, committed by S.
Holland; (3) infringement of the Spanish patent in Spain, as a joint
tortfeasor, committed by S. Holland (4) infringement of the U.K. patent
in England committed by S. U.K.; (5) infringement of the U.K. patent in
England, as a joint tortfeasor, committed by S. Holland.
The crucial question now to be decided is which if any of causes of action
(1), (2) and (3) are justiciable here. For convenience I shall refer to these
as the "foreign claims" in this judgment. The double actionability and
Mocambique rules
Mr. Miller's argument that the courts in England are not competent to hear
and determine the foreign claims starts with the double actionability and
Mocambique rules. The first, based upon cases such as Phillips v. Eyre
(1870) L.R. 6 Q.B. 1 and Boys v. Chaplin [1971] A.C. 356, has been
stated in Dicey & Morris, The Conflict of Laws, 12th ed., vol. 2 (1993), pp.
1487-1488:
"(1) As a general rule, an act done in a foreign country is a tort and
actionable as such in England, only if it is both (a) actionable as a tort
according to English law, or in other words is an act which, if done in
England, would be a tort; and (b) actionable according to the law of the
foreign country where it was done. (2) But a particular issue between the
parties may be governed by the law of the country which, with respect to
that issue, has the most significant relationship with the occurrence and
the parties."
Def Lepp Music v. Stuart-Brown [1986] R.P.C. 273 shows that this
common law rule prevented infringement of foreign intellectual property
rights being litigated here. The activity abroad could never be an
infringement of British intellectual property rights and, for this purpose,
could not be treated as if it had taken place here. However this rule
has been abolished by section 10 of the Private International Law
(Miscellaneous Provisions) Act 1995 and it can therefore no longer
prevent proceedings from being brought here to enforce foreign rights.
Mr. Miller accepted that this was the position.
But the second rule which prevented English courts from accepting
jurisdiction over suits relating to foreign intellectual property rights arose
out of British South Africa Co. v. Companhia de Mocambique [1893] A.C.
602 – the so-called Mocambique rule. That was an action for trespass
to lands abroad. The House of Lords held that English courts had no
jurisdiction to entertain such an action. In the leading speech of Lord
Herschell L.C., the history of the exclusion of these types of action was
considered. He pointed out that for a long time the courts had drawn a
distinction between cases in which the plaintiff's cause of action had no
necessary connection with a particular locality and those in which there
was such a connection. The latter should be tried at the venue most
connected with the cause. He said, at p. 621:
"In saying that we may not try actions here arising out of transactions
abroad which are in their nature local, I do not think that the learned
judge was referring to the mere technical difficulty of there being no
venue in this country in which these transactions could be laid, but to the
fact that our courts did not exercise jurisdiction in matters arising abroad
'which were in their nature local.'"
He cited with approval the following passage from Phillips v. Eyre, L.R. 6
Q.B. 1, 28:
"Our courts are said to be more open to admit actions founded upon
foreign
transactions than those of any other European country; but there are
restrictions in respect of locality which exclude some foreign causes of
action altogether... such as trespass to land; and even with respect to
those not falling within that description, our courts do not undertake
universal jurisdiction." Lord Herschell L.C. went on to point out some of
the difficulties which would be caused if English courts tried to exercise
this jurisdiction.
The principles which applied to land in the Mocambique case apply equally
well to attempts to litigate foreign intellectual property rights in English
courts. Those rights give rise to monopolies or quasi-monopolies which
are strictly territorial in nature. In the case of patents, historically their
purpose was to encourage and protect local industry. So courts following
the common law tradition have declined to entertain actions concerned
with the enforcement of foreign intellectual property rights; see Potter v.
Broken Hill Pty. Ltd. (1906) 3 C.L.R. 479 and Tyburn Productions Ltd. v.
Conan Doyle [1991] Ch. 75. In Plastus Kreativ A.B. v. Minnesota Mining
and Manufacturing Co. [1995] R.P.C. 438, 447, Aldous J. explained some
of the reasons why he was not attracted to the task of adjudicating here
on foreign intellectual property, and particularly patent, rights:
"For myself I would not welcome the task of having to decide whether a
person had infringed a foreign patent. Although patent actions appear on
their face to be disputes between two parties, in reality they also concern
the public. A finding of infringement is a finding that a monopoly granted
by the state is to be enforced. The result is invariably that the public
have to pay higher prices than if the monopoly did not exist. If that be
the proper result, then that result should, I believe, come about from
a decision of a court situated in the state where the public have to pay
the higher prices. One only has to imagine a decision of this court that
the German public should pay to a British company substantial sums of
money to realise the difficulties that might arise. I believe that, if the local
courts are responsible for enforcing and deciding questions of validity and
infringement, the conclusions reached are likely to command the respect
of the public. Also a conclusion that a patent is infringed or not infringed
involves in this country a decision on validity as in this country no man
can infringe an invalid patent. In the present case the plaintiffs admit the
validity of the patent and therefore there is no dispute upon the matter.
However, it will be implicit in the judgment of this court that there has
been infringement, and that, between the parties, the patent is valid.
Thus, I believe it is at least convenient that infringement, like validity, is
decided in the state in which it arises." Views consistent with this were
also expressed by Aldous J. in Chiron Corporation v. Organon Teknika Ltd.
(No. 10) [1995] F.S.R. 325, 338.
Mr. Silverleaf said that the Mocambique rule was to be regarded as part of
the double actionability rule as evidenced by the fact that the opinion of
Lord Herschell L.C. was based on or referred to Phillips v. Eyre, L.R. 6
Q.B. 1. As a result he said that this rule also was abrogated by section 10
of the Act of 1995. I do not agree. The Mocambique rule has nothing to
do with double actionability. It is a principle of public policy based on the
undesirability of our courts adjudicating on issues which are essentially
foreign and local.
In the alternative, Mr. Silverleaf argued that intellectual property is
properly to be regarded as an immovable for the purposes of determining
whether the court has jurisdiction and that the court is accordingly given
jurisdiction by section 30 of the Civil Jurisdiction and Judgments Act 1982.
That provides:
"(1) The jurisdiction of any court in England... to entertain proceedings for
trespass to, or any other tort affecting, immovable property shall extend
to cases in which the property in question is situated outside that part
of the United Kingdom unless the proceedings are principally concerned
with a question of the title, or the right to possession of, that property. (2)
Subsection (1) has effect subject to the 1968 Convention [and the Lugano
Convention]..." His reasoning was as follows. The Mocambique rule is
based on the fact that land is an immovable. It is because of this that the
English courts have held that there is no jurisdiction. That rule has then
been applied to oust the jurisdiction of the English (and Australian) courts
to determine foreign intellectual property claims by analogy. He said that
in those circumstances it would be wrong and illogical to treat such rights
as analogous to immovables for the purpose of application of the rule but
then to ignore the analogy for the purposes of its statutory removal.
As attractive as this argument is, I am not persuaded it is right. In the
Broken Hill case, 3 C.L.R. 479, 494 Griffiths C.J. stated that a patent
was "analogous to an immovable" and I accept that the Mocambique
rule has been applied to intellectual property rights by analogy. But
that fact emphasises that, whatever the similarities may be, patents
and other intellectual property rights are not accurately described as
immovables. The same view was expressed by Lloyd J. in Pearce v. Ove
Arup Partnership Ltd. [1997] Ch. 293. Since section 30 of the Act of 1982
only applies to immovables and that expression does not cover intellectual
property rights, it has no bearing on the issues I have to determine.
If the Mocambique rule has been destroyed or limited in relation to patent
and similar rights, that must be as a result of our adherence to the
Brussels Convention, not because of the Acts of 1982 and 1995. It follows
that, in the absence of any change in our law brought about by the
Convention, the three foreign claims are not justiciable here and I would
order them to be struck out of the plaintiff's pleadings. The Brussels
Convention
This became part of our domestic law pursuant to section 2(1) of the Civil
Jurisdiction and Judgments Act 1982. As Lloyd J. pointed out in the Pearce
case [1997] Ch. 293, although a number of intellectual property cases
have
been decided since 1982 in which the provisions of the Convention
might have been raised, they were not. Section 3(1) of that Act provides
that any question as to the meaning or effect of any provision of the
Convention shall be determined in accordance with the principles laid
down by and any relevant decision of the European Court of Justice. In
accordance with section 3(3), two reports (O.J. 1979 C. 59, pp. 1 and
71), called the Jenard and Schlosser reports after the names of their
respective authors, may be considered for the purpose of determining the
meaning or effect of any provision of the Convention and they shall be
given such weight as is appropriate in the circumstances.
When considering the Convention, it is necessary to have at the forefront
of one's mind the profound changes it is designed to effect to the ground
rules used for deciding in which courts actions shall be brought. Our
judge-made rules are, we hope, based on the common sense principle of
deciding which court is the most suited to determine the issues between
the parties, in other words what is the forum conveniens. The explanation
for the Mocambique rule given by Lord Herschell L.C. and the reluctance
expressed by Aldous J. in the Plastus case [1995] R.P.C. 438, 447 and the
Chiron case [1995] F.S.R. 325, 338are full of reliance on that principle.
The trouble is that one man's forum conveniens may be another's forum
inconveniens. If different legal systems have slightly different rules on
justiciability, there is a risk of competing litigation in different countries.
Most practitioners familiar with disputes with an international flavour
will have experienced the somewhat unseemly tussles which sometimes
have taken place between courts of different countries trying to assert
exclusive jurisdiction over a common dispute.
One of the purposes of the Convention is to replace the differing domestic
rules, at least in relation to forum, by a simple set of rigid provisions
forcing litigation into the courts of one country and out of the courts of
others. As the Schlosser report states (O.J. 1979 C. 59 p. 71, at p. 97):
"in accordance with the general spirit of the 1968 Convention, the fact
that foreign law has to be applied, either generally or in a particular case,
should not constitute a sufficient reason for a court to decline jurisdiction.
Where the courts of several states have jurisdiction, the plaintiff has
deliberately been given a right of choice, which should not be weakened
by application of the doctrine of forum conveniens."
During the course of his submissions, Mr. Miller frequently pointed to the
inconvenience or worse which would flow from accepting Mr. Silverleaf's
argument and allowing the three foreign claims to be litigated here. I
accept that inconvenience may be caused if Mr. Silverleaf is right and,
of course, I share the sentiments expressed by Aldous J. in the Plastus
case. But if the Convention requires the courts here to accept the foreign
claims, then the same rules apply to other contracting states and none of
us has the power or right to ignore or override it. If the Convention gives
jurisdiction to the courts of one country, they cannot reject the gift. They
must accept it and act on it.
Mr. Silverleaf's argument in relation to the foreign claims proceeds as
follows. The plaintiff is suing for patent infringement. That is a tort. In so
far as material, article 2 of the Convention states: "Subject to the
provisions of this Convention, persons domiciled in a contracting state
shall, whatever their nationality, be sued in the courts of that state."
Since in the three foreign claims, the defendants are either German or
Dutch domiciled, this article would preclude proceedings being brought
against them in England. But article 2 does not stand alone. Derogations
from it are provided for elsewhere in the Convention. Article 3, in so
far as relevant, provides: "Persons domiciled in a contracting state may
be sued in the courts of another contracting state only by virtue of the
rules set out in Sections 2 to 6 of this Title." Therefore the "defendants
play at home" provisions of article 2 may be avoided but only to the
extent permitted by another article of the Convention. Mr. Silverleaf
therefore turns to article 6(1): "A person domiciled in a contracting state
may also be sued... where he is one of a number of defendants, in the
courts for the place where any one of them is domiciled." For reasons set
out hereafter, in considering article 6(1) it is necessary to have in mind
articles 21 and 22:
"21. Where proceedings involving the same cause of action and between
the same parties are brought in the courts of different contracting states,
any court other than the court first seised shall of its own motion decline
jurisdiction in favour of that court..."
"22. Where related actions are brought in the courts of different
contracting states, any court other than the court first seised may, while
the actions are pending at first instance, stay its proceedings... For the
purposes of this article, actions are deemed to be related where they
are so closely connected that it is expedient to hear and determine them
together to avoid the risk of irreconcilable judgments resulting from
separate proceedings."
Initially the argument based on article 6(1) appeared strong. When
S. U.K. was being sued here for joint liability for the alleged acts of
infringement in Germany and Spain, article 2 allowed the plaintiff to bring
the proceedings here in its country of domicile and then S. Holland and S.
Germany could be brought in as co-defendants in relation to those foreign
torts. In fact, as explained above, I have come to the conclusion that
there is no arguable case against S. U.K. in respect of those foreign torts
so this argument does not survive. But that is not an end of the matter.
Both S. U.K. and S. Holland are being sued here for infringement of the
U.K. patent. Mr. Silverleaf says that this is to all intents and purposes the
same cause of action as will be brought under the Spanish and German
patents. The allegedly infringing article, the C. H., is the same, the three
patents are identical and the similarities in the actions are cemented
by the provisions of the Convention on the Grant of European Patents
(1978) (Cmnd. 7090) (the "E.P.C."). That not only creates a single,
supranational patent application and grant procedure, but also imposes
on all courts the necessity of construing the national patents in the same
way in accordance with E.P.C. article 69. Furthermore what the E.P.C.
is creating is a "European Patent." Although that patent is then granted
in respect of individual countries and, in each, is treated like a national
patent (E.P.C. article 64(1)), nevertheless those national patent rights
can be considered as cuttings taken from the European Patent stock and
planted in the national soil. That is why S. U.K.'s three patents are, at
least for the moment, identical.
Since the causes of action in relation to infringement here, in Germany
and in Spain are essentially identical, article 6(1) allows them to be
tied together in one court of the plaintiff's choice. The interrelationship
between the actions is highlighted if one looks at the position of S.
Holland. That company is being sued here for infringement of the U.K.
patent (cause of action 5 referred to above). It is, however, also accused
of infringing the identical patents in Germany and Spain by exploiting the
same allegedly infringing product in those countries. The three causes
of action levelled at S. Holland are clearly related, but if this is so, then
the cause of action against S. Germany must be related because cause of
action 1 is identical to cause of action 2 set out above.
When articles 21 and 22 are compared it is clear that the E.P.C. draws
a distinction between identical causes of actions and related causes of
action. Where identical causes of action are involved, all courts seised
of the proceedings other than the first have no option but to decline
jurisdiction. Where the causes of action are not identical but related,
there is no compulsion on any court to decline jurisdiction. The concepts
of identical and related cause of action are not referred to expressly in
article 6(1). However it appears from the decision of the European Court
of Justice in Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst and Co.
(Case 189/87) [1988] E.C.R. 5565 that there is a close interrelationship
between articles 6(1) and 22. In that case, at pp. 5582-5583, the
Bundesgerichtshof referred to the European Court of Justice, inter alia,
the question whether:
"for article 6(1) of the Convention to apply, a connection must exist
between the claims made by the same plaintiff against several defendants
and, if so, what the nature of that connection is." The court held:
"8. The principle laid down in the Convention is that jurisdiction is vested
in the courts of the state of the defendant's domicile and that the
jurisdiction provided for in article 6(1) is an exception to that principle. It
follows that an exception of that kind must be treated in such a manner
that there is no possibility of the very existence of that principle being in
question.
"9. That possibility might arise if a plaintiff were at liberty to make a
claim against a number of defendants with the sole object of ousting
the jurisdiction of the courts of the state where one of the defendants
is domiciled. As stated in the [Jenard Report], such a possibility must
be excluded. For that purpose, there must be a connection between the
claims made against each of the defendants.
"10. In order to ensure, as far as possible, the equality and uniformity of
the rights and obligations under the Convention of the contracting states
and of the persons concerned, the nature of that connection must be
determined independently.
"11. In that regard, it must be noted that the above mentioned
report prepared by the committee of experts referred expressly, in
its explanation of article 6(1), to the concern to avoid the risk in the
contracting states of judgments which are incompatible with each other.
Furthermore, account was taken of that preoccupation in the Convention
itself, article 22 of which governs cases of related actions brought before
courts in different contracting states.
"12. The rule laid down in article 6(1) therefore applies where the actions
brought against the various defendants are related when the proceedings
are instituted, that is to say where it is expedient to hear and determine
them together in order to avoid the risk of irreconcilable judgments
resulting from separate proceedings. It is for the national court to verify in
each individual case whether that condition is satisfied.
"13. It must therefore be stated in reply to the first question that for
article 6(1) of the Convention to apply there must exist between various
actions brought by the same plaintiff against different defendants a
connection of such a kind that it is expedient to determine those actions
together in order to avoid the risk of irreconcilable judgments resulting
from separate proceedings."
So here, Mr. Silverleaf says, the proceedings relating to infringement of
the German, Spanish and U.K. patents are related and it is expedient to
try them together in order to avoid the risk of irreconcilable judgments.
This is an attractive argument. There is however one further article which
Mr. Silverleaf wished to bring to my attention. It is article 16(4):
"The following courts shall have exclusive jurisdiction, regardless of
domicile... in proceedings concerned with the registration or validity
of patents, trade marks, designs, or other similar rights required to be
deposited or registered, the courts of the contracting state in which the
deposit or registration has been applied for, has taken place or is under
the terms of an international convention deemed to have taken place..."
Mr. Silverleaf acknowledged that he could not ask the courts here to
determine the validity of the German and Spanish patents. But he said
the claim here was for infringement, not for a declaration of validity. His
client's claim should be treated like any others falling within article 6(1).
The fact that a different issue, validity, was not triable before the English
courts did not alter the position. Indeed he said that article 16(4) was
deliberately limited in its scope. It could have said that all proceedings
relating to registrable rights had to be determined in the courts of the
country of registration but it did not do so. Only issues of registration
and validity are taken out for special treatment. This view was supported
by the commentary in the Jenard report (O.J. 1979 C. 59, p. 36) on this
article:
"Since the grant of a national patent is an exercise of national
sovereignty, article 16(4) of the [Brussels] Convention provides for
exclusive jurisdiction in proceedings concerned with the validity of
patents. Other actions, including those for infringement of patents, are
governed by the general rules of the Convention."
So, whatever views may be held as to the convenience or otherwise of
allowing English courts to determine issues of infringement of foreign
intellectual property laws, if the Convention compelled the plaintiff to sue
here, e.g. because of the provisions of article 2, or give it the option of
so doing, e.g. because of the provisions of article 6, the English courts
cannot decline jurisdiction. The same must apply, for example, to German
or Spanish proceedings concerning the infringement of British intellectual
property rights.
Mr. Miller put forward two responses to these formidable arguments. First
he said the Convention was not concerned with justiciability but only with
forum. If a cause of action was not justiciable according to domestic rules,
the Convention did not change the position. Secondly he said that here
the combined effects of articles 16(4) and 19 meant that the courts here
should not entertain these patent infringement proceedings. Justiciability
The defendants argue that the word "jurisdiction" is often used to
embrace
two concepts, namely jurisdiction over particular defendants and
jurisdiction over subject matter. The latter is more precisely referred to as
justiciability. They say that the Convention is only concerned with the
former. Therefore if, pursuant to the Convention, a party may be brought
before the court here, that does not determine whether the court has
power
to entertain the cause of action. It was argued that this was no hardship
because in most cases there was an alternative forum provided under
the Convention. For example in relation to actions for infringement of
intellectual property, the provisions of article 5(3) could be prayed in aid:
A person domiciled in a contracting state may, in another contracting
state, be sued... in matters relating to tort, delict or quasi-delict, in the
courts for the place where the harmful event occurred..."
I must confess to finding it hard to accept this submission. Article 2 sets
out the primary rule of the Convention. It follows that, say, an English
domiciled defendant must be sued in England unless another article
provides an alternative possible forum. Although article 5 provides a list of
particular types of proceedings which may be brought in other courts, it is
not all embracing. There are causes of action which fall outside its scope
and the scope of any other article (save article 2). It follows that for the
latter causes of action, the Convention only provides one forum. If that
happens, then, pursuant to article 3, the courts of no other contracting
state can accept jurisdiction. The result will be that the proceedings
may be forced into the exclusive grasp of a court which, according to Mr.
Miller's argument, may have to decline to hear it because of domestic
restrictions on justiciability. I understood Mr. Miller to accept that this
was a possibility. In my view this cannot be the meaning and effect of the
Convention.
Half way through the hearing of this application, Lloyd J. gave judgment
in the Pearce case [1997] Ch. 293. He came to the conclusion that this
argument, advanced by the defendants in his case, was wrong. Mr. Miller
agreed that the Pearce case was not helpful to him. If I may say so, it
appears to me to be correct and, prima facie, the Convention can force
the courts of a contracting state to entertain and determine foreign
infringement proceedings. Articles 16(4) and 19
This leads me to Mr. Miller's second argument. It is not one which arose in
the Pearce case, which was concerned only with copyright infringement.
Copyright, being a non-registered right, does not come within the ambit
of
article 16(4). However patents do. This means that proceedings
concerning their validity must be determined in the country of
registration, the German patent in Germany and the Spanish patent in
Spain. Mr. Miller says that validity is the or one of the major issues in the
case and, for that reason, article 19 comes into play:
"Where a court of a contracting state is seised of a claim which is
principally concerned with a matter over which the courts of another
contracting state have exclusive jurisdiction by virtue of article 16, it shall
declare of its own motion that it has no jurisdiction."
So here, he says, in so far as the English court is seised of a claim of
infringement of the Spanish patent, that is a claim which principally
concerns validity and therefore the court of another contracting state,
viz. Spain, has exclusive jurisdiction and I have no choice but to decline
jurisdiction. Similar considerations apply to the claim for infringement of
the German patent.
I was not shown any case in which the meaning of "principally concerned"
in this article has been considered. However the Jenard report (O.J. 1979
C. 59, p. 39) says:
"The words 'principally concerned' have the effect that the court is not
obliged to declare of its own motion that it has no jurisdiction if an issue
which comes within the exclusive jurisdiction of another court is raised
only as a preliminary or incidental matter."
As against this, Mr. Silverleaf argues that what counts for the purpose of
article 19 is his client's claim, which is for infringement only. That claim
raises no issue of validity. The question of jurisdiction must be decided at
the time when the proceedings are commenced. At that time the court
has no right to second guess what defences the defendant may run. Once
the plaintiff has chosen a forum which can hear the claim, the defendant
cannot divert the proceedings to another country by choosing to run an
invalidity defence. If it were otherwise, a defendant might choose to plead
invalidity not through any belief in the correctness of the plea but as a
strategy for forum shopping. Furthermore the words "a claim which is
principally concerned" does not mean "a claim in which an important
issue is." It refers to something which is the foundation of the claim. He
says that if the defendants' arguments were right on this point then the
views in the Jenard report quoted above on the issue of where patent
infringement proceedings are to be fought are, at least, misleading.
To start with, I cannot accept the argument that article 19 is only
concerned with claims, meaning the assertions made by the party who
initiates the proceedings. It must be concerned with what is in issue
before the court. In some patent infringement proceedings it is really only
validity which is in dispute. The function of article 19 appears to me to be
to ensure that litigation covered by the exclusive jurisdiction provisions
of article 16 are determined in the court having exclusive jurisdiction. If
Mr. Silverleaf were right, which court would have jurisdiction would be
determined by which party managed to commence proceedings first.
In the absence of binding authority, I also do not accept the second
argument as to the meaning of "principally concerned." I can see no
reason
to give the article a narrow linguistic interpretation. The Jenard report
suggests that what is excluded is incidental matter. Something which is a
major feature of the litigation is not incidental and is therefore a matter
with which the action is principally concerned. The issue which has
to be decided then is whether the three foreign claims sought to be raised
in the English courts are principally concerned, in this broad sense, with
the issue of validity of the foreign patents.
As I have said, validity is frequently in issue, and sometimes the most
important issue, in English patent infringement proceedings. This is
now enshrined in section 74(1)(a) of the Patents Act 1977. We have
always taken the view that you cannot infringe an invalid patent. This
was restated by Aldous J. in the passage from the Plastus case [1995]
R.P.C. 438, 447, quoted above. However the fact that the defendant can
challenge validity does not mean that he will. In the Plastus case, he
did not. Until he does, only infringement is in issue and the approach
in the Pearce case [1977] Ch. 293 applies. The court cannot decline
jurisdiction on the basis of mere suspicions as to what defence may
be run. But once the defendant raises validity the court must hand
the proceedings over to the court having exclusive jurisdiction over
that issue. Furthermore, since article 19 obliges the court to decline
jurisdiction in relation to claims which are "principally" concerned with
article 16 issues, it seems to follow that jurisdiction over all of the claim,
including that part which is not within article 16, must be declined. It
may well be that if there are multiple discrete issues before a court it
will be possible to sever one or more claims from another and to decline
to accept jurisdiction only over those covered by article 16, but I do
not believe that that approach applies where infringement and validity
of an intellectual property right are concerned. They are so closely
interrelated that they should be treated for jurisdiction purposes as one
issue or claim. That interrelationship can be illustrated in two ways.
Before English courts, it is common for a defendant to run an invalidity
attack for the purpose of putting a squeeze on the scope of the claims.
Whether there is infringement is likely to be affected significantly by the
success of the invalidity attack. Secondly whether there is infringement
is dependent on the wording of the claims. Yet the attack on validity
frequently forces the patentee to seek to amend his claims in the course
of the proceedings. The validity attack therefore directly impinges on
the issue of infringement. Incidentally, there is no obligation under the
E.P.C. for uniform amendments to be sought for the national phases
of a European patent. I understand that in some Convention countries
amendment is not possible while in others the rules governing whether
permission to amend will be given are different to those in force here. The
result is that national patents which start out identical may end up being
different in different countries. So obliging infringement and validity to be
run together may have significant advantages. The alternative of leaving
infringement to be determined in one country and validity in another
has nothing to commend it and is only likely to result in an unhelpful
proliferation of proceedings.
At one stage I was attracted to the argument that in Germany questions
of
validity and infringement are dealt with by separate courts. Therefore it
is easier to treat them as discrete and severable claims. It follows that
at least in respect of foreign claims 1 and 2, it would be permissible to
retain the issue of infringement here. But in the end I have come to the
conclusion that this point is bad. The fact that, for constitutional reasons,
different courts deal with these issues in Germany does not alter the
fact that there, as here, there is in the end only one question; "has the
defendant infringed a valid claim?"
The result is that since I have been told and it is apparent that the
validity of the German and Spanish patents is being challenged by the
defendants, the claims of infringement are caught by article 19. I must
decline to accept jurisdiction. The plaintiff may have anticipated this
possible outcome. I was told that the day after the arguments before me
finished, the plaintiff's solicitors wrote to the defendants' solicitors saying
that invalidity "is not a matter which can be pleaded here in respect of
the German and Spanish patents." The defendants are entitled to plead
the invalidity of the patents put against them and the plaintiff cannot
avoid the effect of article 19 by telling them that they cannot. However,
rather than waste the costs of requiring the defendants to plead invalidity
here as a precursor to the claims being struck out, where, as here, it is
plain that validity is to be put in issue, the court should take the course
of striking out the relevant claims forthwith. The result will be that all
claims against S. Germany will be struck out and that company should
be removed from the proceedings. Although S. Holland remains a party
in relation to the allegations of infringement of the U.K. patent, all claims
against it in respect of the German and Spanish patents must be deleted.
In this judgment I have accepted the argument that, absent an attack on
validity, it would be possible in circumstances similar to those existing in
this case to bring proceedings here for infringement of foreign patents.
That is crucially dependent on the fact that the U.K. and foreign patents
are identical. Proceedings for determining infringement of them can
therefore be regarded as related for the purpose of article 6(1). That
may well not be so where the patent claims in the various countries are
materially different either because the patents were applied for separately
through the national patent offices or because they began life as an E.P.C.
application but have been subject to different amendments in different
countries after grant.
In coming to these conclusions, I cannot pretend to be happy that the
consequences for intellectual property litigation have been thought
through properly in the Convention. The fact that registered and
unregistered rights (e.g. passing off and registered trade mark
proceedings) may be subject to different regimes could well produce
a proliferation of litigation rather than the opposite. Furthermore the
conclusions I have come to mean that a defendant can, within limits,
forum shop by deciding whether to attack validity. But this perhaps is
no worse than the forum shopping available to the plaintiff as a result of
the Pearce case. It is not difficult to think of cases where the Convention
may produce truly absurd results. For example an English company
might be sued in England for unfair competition in Holland or Germany
by alleged misuse of an unregistered trade name. The court here will
not only have to decide questions of Dutch and German law but also
factual issues relating to the pronunciation and meaning of similar words
spoken in Dutch or German. The fact that this may be the consequence
of the Convention does not alter its meaning. Similarly the fact that what
are likely to be essentially the same issues of patent validity may have
to be litigated in a number of countries simultaneously is unlikely to
impress the user of the E.P.C. patent system, but this appears to be an
inevitable consequence of article 16(4) of the Convention and the fact
that the Community Patent Convention (Convention for the Patents for
the Common Market, Luxembourg (1976) (Cmnd. 6553)) has not been
brought into operation. There is much to be said from the user's point
of view for a system where an international patent application leads to a
patent having international effect and which needs only to be litigated in
one country. That is not yet the system which we have.
I am aware that interlocutory injunctions effective abroad have been
granted in patent matters by the Kort Geding procedure in Holland. Such
powers could be argued to arise out of article 24 of the Convention which
is of very wide scope and apparently is not limited by the provisions
of article 16. It therefore has no direct bearing on the issues I have to
consider. Further, in view of the fact that I have decided in any event not
to grant interlocutory relief, the questions of whether or not this court
has the jurisdiction to grant such relief in respect of infringements abroad
and, if so, the considerations which would have to be taken into account
in deciding whether to do so and the conditions it might feel obliged to
impose on a plaintiff granted any such relief do not arise for consideration
in this case.