LORD WOOLF, MR:
This is the judgment of the Court. The Appellants have petitioned in the
English Patents Court to revoke EP (UK) No 0189958 which is owned by
the first Respondent, Akzo Nobel NV. The other Respondent, Intervet
International BV, is a wholly owned subsidiary of Akzo and claims to have
an exclusive licence under the patent.
The Appellants seek to reverse the order of Laddie J of l6 October l997
which refused to grant relief which, in essence, would have prevented the
Respondents from maintaining legal proceedings in the Netherlands for
infringement of the United Kingdom patent in respect of acts committed
in England. The Appellants contend that such relief is appropriate
because the United Kingdom Courts have sole jurisdiction to determine
the dispute. They say that is urgent as the proceedings which the
Respondents have commenced in the Netherlands, seeking relief both in
respect of acts committed in the Netherlands and acts committed in the
United Kingdom, are about to be heard. For this reason and to enable the
Netherlands Courts to know our views we have expedited this appeal.
The Facts
Akzo are a large multinational company domiciled in the Netherlands.
They are the owners of the United Kingdom patent and a corresponding
Dutch patent. Both patents stem from an application filed at the European
Patent Office on 21January 1986. They claim as the invention a vaccine
used to prevent infection of dogs by the canine parvovirus (CPV) and the
method of its preparation. The method involves use of CPV strain 1 - 404.
There are five Appellants. The first, Fort Dodge Animal Health Limited is
part of the American Home Products Group of Companies. It is domiciled
in England. It is named as the eighth Defendant in the Dutch proceedings.
It was the sixth Defendant before it changed to its present name. There
is no evidence before us that it has committed or has been involved in
any act that would constitute an infringement of the Dutch patent and we
understand that the complaint of Akzo relates to acts committed within
the United Kingdom.
The second Appellant, Arthur Webster Pty Limited, is an Australian
company which is also part of the American Home Products Group. It
is the first Defendant in the Dutch proceedings. It is alleged to have
delivered infringing vaccines to the first Appellant for, we understand,
sale in the United Kingdom and to the fifth Appellant for sale in the
Netherlands.
The third Appellant, Webster Animal Health (UK) Limited, and the fourth
Appellant, Willows Francis Limited, are also part of the American Home
Products Group. They are domiciled in England and are the third and
fourth Defendants in the Dutch proceedings. There is no allegation or
evidence that they have committed or been involved in any act which
could infringe the Dutch patent, but it is alleged that the second Appellant
is infringing the United Kingdom patent.
The fifth Appellant, Fort Dodge Animal Health Benelux BV, is a Dutch
company which is also part of the same group. They have carried out acts
in the Netherlands which are alleged to infringe the Dutch patent.
Upon the evidence, one of the Appellants is domiciled in the Netherlands.
One is domiciled in Australia and the rest in the United Kingdom. It is not
alleged that any of the United Kingdom domiciled companies have actively
participated in the acts of any company which are alleged to infringe the
Dutch patent. What is alleged is that they have carried out acts which are
alleged to infringe the United Kingdom patent.
The vaccine that is alleged by Akzo to infringe the patents was originally
produced in Australia by a company in the Arthur Webster Group. The
right to market such a vaccine came through the acquisition by American
Cyanamid of the Arthur Webster business and the subsequent merger of
American Cyanamid into the American Home Products Group.
According to the Appellants, their CPV cannot come within the ambit of
the United Kingdom Akzo patent as it is made from a strain of the virus
known as V 89042601 which is different to strain 1 - 404 referred to in
the Akzo patents. That fact should have been apparent to Akzo as the
Appellants' vaccine has been on the market in the United Kingdom since
1991. The method of production of the petitioners' vaccine is described in
the relevant Arthur Webster patent EP no. 0485463 which was applied for
on 8 July 1989 and was published in May 1990.
On 28 April 1997, Akzo and Intervet commenced proceedings in the
Netherlands seeking both preliminary and final relief in respect of alleged
acts of infringement of both the Dutch patent and the United Kingdom
patent. It is contemplated that, subject to appeal, a decision, at least
on interim relief, will be reached after a hearing due to take place on 7
November 1997.
On 22 September 1997 the Appellants petitioned the English Patents
Court for revocation of the Akzo United Kingdom patent. In their pleading
they allege that the United Kingdom patent was invalid and should be
revoked because it lacked novelty, was obvious, was insufficient, extended
beyond that disclosed in the application and that claim 6 was not a claim
to a patentable invention. The answer to that petition was due within 21
days. It is likely that if the proceedings are prosecuted by the parties
with diligence, it can be determined at first instance in about a year to 18
months time.
The dispute
The Appellants' case on the application before Laddie J and before
us is that in the circumstances of this case the only court which has
jurisdiction to determine whether the Appellants have infringed the United
Kingdom patent is the English Patents Court. That being so, it is said
that prosecution of that claim in the Dutch Courts against Appellants
domiciled in the United Kingdom is vexatious and should be restrained by
injunction. Alternatively, if there be doubt on the question of jurisdiction,
guidance should be sought from the European Court of Justice as to the
true construction of the relevant Conventions and in the meantime there
should be an injunction to protect the Appellants' position. Alternatively,
if the Patents Court does not have exclusive jurisdiction by reason of the
relevant Conventions, it is nevertheless the appropriate Court to decide
all issues relating to the United Kingdom patent and therefore the relief
sought should be granted.
The Respondents contend that the Dutch Courts do have jurisdiction
to determine the matters raised in their pleaded case in the Dutch
proceedings and in particular to determine whether the Appellants who
are domiciled in the United Kingdom are infringing the United Kingdom
patent. In any case, the United Kingdom Courts have no jurisdiction to
grant the relief sought on the present application and should not do so.
The correct course is to leave it to the Dutch Court to decide whether it
has the appropriate jurisdiction.
At the outset we make it clear that we do not believe that consideration
of the procedures adopted by the Dutch Courts to resolve patent disputes
is material to the issue before us nor is it appropriate for the Courts of
the United Kingdom to voice any opinion upon them. At the heart of
the dispute between the parties is whether the English Patents Court
has exclusive jurisdiction in respect of the issues concerning the United
Kingdom patent. That does not depend upon whether the Respondents
are seeking to litigate in the Netherlands as opposed to another State
which is a signatory to the Brussels Convention.
One of the purposes of the Brussels and Lugano Conventions was to
eliminate disputes as to where actions should be decided and to avoid
the need to consider whether one jurisdiction was more appropriate
than another. It is therefore necessary to look to those Conventions for a
solution.
The Brussels Convention
The Brussels Convention, by Section 2 of the Civil Jurisdiction and
Judgments Act l982, has the force of law in the United Kingdom. It has
to be interpreted in accordance with the principles laid down by and any
relevant decision of the European Court of Justice. Further the relevant
reports, such as the Jenard and Schlosser reports, may be considered to
ascertain the meaning or effect of any provision of the Convention.
The relevant provisions of the Brussels Convention are these.
TITLE II
JURISDICTION
SECTION I
GENERAL PROVISIONS
Article 2
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.
Persons who are not nationals of the State in which they are domiciled
shall be governed by the rules of jurisdiction applicable to nationals of
that State.
Article 3
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.
In particular the following provisions shall not be applicable as against
them -
- in the United Kingdom: the rules which enable jurisdiction to be founded
on:
(a) the document instituting the proceedings having been served on the
defendant during his temporary presence in the United Kingdom; or
(b) the presence within the United Kingdom of property belonging to the
defendant; or
(c) the seizure of the plaintiff of property situated in the United Kingdom.
....
SECTION 2
SPECIAL JURISDICTION
Article 5
A person domiciled in a Contracting State may, in another Contracting
State, be sued:
....
(3) In matters relating to tort, delict or quasi-delict, in the courts for the
place where the harmful event occurred.
....
Article 6
A person domiciled in a Contracting State may also be sued
1. Where he is one of a number of defendants in the courts for the place
where any one of them is domiciled
....
SECTION 5
EXCLUSIVE JURISDICTION
Article 16
The following courts shall have exclusive jurisdiction, regardless of
domicile:
....
4. 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.
....
SECTION 7
EXAMINATION AS TO JURISDICTION AND ADMISSIBILITY
Article 19
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.
....
SECTION 8
LIS PENDENS - RELATED ACTIONS
Article 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 stay its
proceedings until such time as the jurisdiction of the court first seised is
established.
Where the jurisdiction of the court first seised is established, any court
other than the court first seised shall decline jurisdiction in favour of that
court.
....
SECTION 9
PROVISIONAL, INCLUDING PROTECTIVE, MEASURES
Article 24
Application may be made to the courts of a Contracting State for such
provisional, including protective, measures as may be available under the
law of that State, even if, under this Convention, the courts of another
Contracting State have jurisdiction as to the substance of the matter.
TITLE III
RECOGNITION
Article 28
Moreover, a judgment shall not be recognised if it conflicts with the
provisions of Sections 3, 4 or 5 of Title II, or in a case provided for in
Article 59.
In its examination of the grounds of jurisdiction referred to in the
foregoing paragraph, the court or authority applied to shall be bound by
the findings of fact on which the court of the State of origin based its
jurisdiction.
TITLE VII
RELATIONSHIP TO OTHER CONVENTIONS
Article 57
1. This Convention shall not affect any conventions to which the
Contracting States are or will be parties and which in relation to particular
matters, govern jurisdiction or the recognition or enforcement of
judgments.
2. With a view to its uniform interpretation, paragraph l shall be applied in
the following manner:
....
As is clear from the heading to Section 1, Article 2 sets out the general
rule, namely that a Defendant must be sued in his home State. That
general rule is subject to the special jurisdictions provided for in Articles
5 - 15. Thus in matters relating to tort, a Defendant may be sued in the
Courts of the State where the harmful event occurred (Article 5(3)) or in
the State of the Defendants' domicile.
We believe that Articles 2 and 5(3), subject to the exclusion contained
in Article 16, apply to actions in respect of intellectual property rights.
Thus an owner of an appropriate right can take proceedings in respect of
that right either in the country of domicile of the Defendant or where the
infringement takes place. The decision to that effect of Lloyd J in Gareth
Pearce v Ove Arup Partnership Ltd (1997) FSR 641 was correct.
Mr Silverleaf QC who appeared for the Appellants submitted that such
a conclusion was contrary to the Paris Convention of 1883 as revised,
the Agreement of Trade-Related Aspects of Intellectual Property Rights
(commonly referred to as TRIPS), the European Patent Convention
and Article 222 of the Treaty of Rome. We do not believe that these
Conventions or the Treaty are directly concerned with jurisdiction.
No doubt it was contemplated, prior to the Brussels Convention, that
intellectual property rights, being national rights, would be litigated in
the State where the right was registered. Indeed there are cases in this
country which so held. Even so, those Conventions and the Treaty are not
inconsistent with the provisions of the Brussels Convention which apply
to intellectual property rights just as much as to other rights. That we
believe to be acte clair.
Article 6(1) provides another special jurisdiction in that a Defendant, who
is one of a number of Defendants, may be sued in the State where one of
them is domiciled. The Article has been interpreted as being an exception
to the general rule and is to be treated in such a way as to avoid the
principle set out in Articles l to 5 being called into question. In Kalfelis v
Schroder, Case 189/87 (1988) ECR 5565, the European Court said that
there must be a connection between the claim made against the person
not domiciled in the State where the litigation is pending and the claim
made against the party domiciled in that State. The connection must be
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."
In the present case there has been no examination of the facts and
therefore no concluded view can be reached as to whether there is the
necessary connection in respect of some of the Appellants. However,
a number of Appellants are only alleged to have infringed the United
Kingdom patent and it would appear tenuous to suggest that it was
expedient to determine together an action for infringement of a Dutch
patent, with which they are not concerned, and a United Kingdom patent
with which they are, so as to avoid irreconcilable judgments. They are
actions relating to two different national rights. True they stem from
the same patent application and similar rules of construction will be
applicable, but the rights given by those patents are national rights
limited in territory to the State in which they are registered and the ambit
of the monopolies will not necessarily be the same as amendment is
possible. There is no risk of irreconcilable judgments because a judgment
on infringement in the United Kingdom will depend upon a national right
having effect only in the United Kingdom. The same applies to a judgment
on the Dutch patent.
Article l6 is in Section 5 of the Convention which contains exceptions
to the general rule. It is headed "Exclusive Jurisdiction". Article 16(4)
provides that the Courts of the State in which a patent is registered have
exclusive jurisdiction "in proceedings concerned with the registration
or validity" of the patent. There can be no doubt that all proceedings
for revocation of a patent have to be decided by the Court of the State
where the patent is registered. In this case proceedings for revocation
of the United Kingdom patent have to be decided by the English Patents
Court. That also applies to proceedings "concerned with the registration or
validity of patents". What is the ambit of those words?
In the Jenard Report (OJC59 5.3.79 p36), Article 16(4) is considered. The
Report concludes that:
"Since the grant of a national patent is an exercise of national
sovereignty, Article 16(4) of the Judgments 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."
It follows that Article 16(4) should be construed as differentiating
between actions for infringement and proceedings concerned with validity.
In the United Kingdom it is possible to have both an action for
infringement by a patentee and the equivalent action for a declaration of
non-infringement by a person threatened by a patent. Where questions
of infringement and validity both arise it is invariably not possible to
conclude there is infringement without validity being determined. An
extreme example, known as a Gillette defence, is where the alleged
infringer's case is that the patent is invalid if the alleged infringing
acts fall within the ambit of the claims. That appears to be part of the
Appellants' contentions in this case. It follows that the split contemplated
in the Jenard Report between actions for infringement and proceedings
concerned with validity cannot always be made.
Article 64 of the European Patent Convention states that a European
patent confers on its proprietor the same rights as those of a national
patent and that infringement shall be dealt with by national law. In the
United Kingdom those rights are defined in Section 60 of the Patents Act
1977. They are rights which apply only so long as the patent is in force.
In proceedings for infringement, validity of the patent is often disputed
and, if the attack on the patent is successful, it will be revoked pursuant
to Section 72 of the 1977 Act. Such revocation has the effect of revoking
the grant of the patent and therefore its registration as a patent, and is
the reason for the view held in the United Kingdom that it is not possible
to infringe an invalid patent. In many cases the attack on the patent
prompts the patentee to seek amendment so as to limit the ambit of his
monopoly. In the United Kingdom that is possible under Section 75 of the
1977 Act. Any amendment has effect and is deemed always to have had
effect from the grant of the patent (s.75(2)).
As Article 64 of the European Patent Convention requires the national law
to be determinative of what will and what will not amount to infringement,
it follows that when there is a bona fidechallenge to the validity of a
United Kingdom patent, any proceedings for infringement must in English
eyes be "concerned with" the validity of the patent. Often, perhaps
normally, the issue of validity will be the principal element of the dispute.
No conclusion as to the chances of a claim of infringement succeeding
can be made until a decision has been reached as to the strength of
the allegations of invalidity. No concluded view on infringement can be
reached until a decision has been reached as to whether any amendment
should be made and the attack on the patent has been rejected.
In the present case the Appellants have raised a substantial attack on
the validity of the United Kingdom patent and also intend to rely upon a
Gillette defence. This is a case therefore in which no conclusion on the
infringement can be reached without consideration of the validity of the
patent. We believe that for the purposes of Article 19 the claim by the
Respondents in respect of acts carried out in the United Kingdom are
principally concerned with validity of the United Kingdom patent and
therefore by reason of that Article and Article 16 the claim falls within the
exclusive jurisdiction of the United Kingdom Court.
In our view Laddie J was correct in Coin Controls Ltd v Suzo International
(UK) Ltd (1997) FSR 660 at page 676 when he said:
"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 Plastus quoted above. However
the fact that the defendant can challenge validity does not mean that he
will. In Plastus he did not. Until he does, only infringement is in issue and
the approach in Pearce applies. The court cannot decline jurisdiction on
the basis of mere suspicions as to what defence may be run. But once
the defendant raises the validity the court must hand the proceedings
over to the courts having exclusive jurisdiction over that issue. Further,
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 form 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 treated
for jurisdiction purposes as one issue or claim."
Article 24 relates to provisional, including protective, measures. As
explained in the Jenard Report application may be made to the Courts of
a Contracting State for such provisional measures as may be available
under the internal law of that State. However, the measures must be
provisional and, in our view, granted in aid of or as an adjunct to some
final determination then in contemplation.
Upon the evidence before this Court, provisional relief by way of
injunction would not be granted in the United Kingdom to restrain
continuance by the Appellants of the acts complained of as infringement
because of the delay by the Respondents in taking action. However that
delay may or may not be determinative in the eyes of a Dutch Court. But
that is the Court in which Akzo seek provisional relief in respect of acts
taking place in the United Kingdom, and it is for that Court to determine
the effect of the delay.
Mr Silverleaf accepts that a Dutch Court has to apply Dutch law when
deciding whether to grant provisional relief pursuant to the jurisdiction
conferred by Article 24. He submits that the United Kingdom Patents
Courts has by reason of Articles 2, 5 and 16(4) exclusive jurisdiction
over the dispute between Akzo and the English domiciled Appellants
relating to the United Kingdom patent. It follows, he submits, that
provisional relief could only be granted in aid of or as an adjunct to a final
determination in the United Kingdom Courts. Akzo have not initiated any
proceedings in the United Kingdom and have not stated any intention of
doing so. It followed that there was no jurisdiction under Article 24 to
grant provisional relief as sought by Akzo.
Mr Prescott QC, who appeared for the Respondents, submits that the
Dutch Court can order provisional relief as an adjunct to Akzo's claim
for final relief in the Dutch proceedings. That provisional relief would do
justice between the parties pending resolution of the question of validity
by the United Kingdom Patents Court.
The crucial difference between the submissions of the parties is the effect
of Article 16(4). If the United Kingdom Courts have exclusive jurisdiction
over the dispute concerning the United Kingdom patent, then there is
no justification for the Respondents attempting to obtain from the Dutch
Court even provisional relief as an aid to or an adjunct of the claim for
final relief in respect of the United Kingdom patent. It would be vexatious
to seek such relief. If our conclusion as to the proper application of Article
16(4) is correct, it follows that Article 24 does not provide jurisdiction to
grant provisional relief restraining infringement within the United Kingdom
as an adjunct to the claim for full relief pleaded in the Dutch proceedings.
The question of relief
We have expressed definite views as to the construction of Articles
16(4) and 24 and their application to the facts. We have also expressed
views as to the ambit of Article 6. However we accept that a contrary
opinion is tenable. The matter is accordingly not "acte clair". The question
which view is right is one of considerable importance to the enforcement
of intellectual property rights in jurisdictions subject to the Brussels
Convention. We believe that it is necessary for the European Court of
Justice to consider the construction of those Articles and their application
to the facts and therefore it would be right to refer appropriate questions
to that Court. That we believe to be the correct course, despite the
submission of Mr Prescott that we did not have jurisdiction to grant any
relief and that in any case no reference should be made because it was
not necessary. We turn to give our reasons why those submissions should
not be accepted.
Mr Prescott submitted that this Court has no jurisdiction to grant an
injunction in favour of the United Kingdom domiciled Appellants which
would restrain Akzo from maintaining proceedings before the Dutch Court
in respect of the United Kingdom patent. To support that submission he
referred us to Commission v Luxembourg and Belgium (1964) ECR 625 at
631, Commission v France (1979) ECR 2729 at 2739, The Queen v MAFF,
ex parte Hedly Lomas (1996) ECR 2553.
The judgments in those cases were concerned with inter-state disputes
not with a dispute between individuals, as in this case. They do not
support the submission which we believe to be wrong. The United
Kingdom Courts have jurisdiction to prevent vexation and oppression by
persons subject to their jurisdiction. In particular, the Courts are entitled
to prevent persons domiciled in this country from being submitted to
vexatious or oppressive litigation whether started or to be started in
this country or another country. As was stated in the advice of the Privy
Council in Societe National Industrielle Aerospatiale v Lee Kui Jak (1987)
l AC 871, a Court can restrain a person from pursuing proceedings in
a foreign Court where a remedy is available both in that foreign Court
and this country, but will only do so if pursuit by the person "would be
vexatious or oppressive." Further, since such an order indirectly affects
the foreign Court, the jurisdiction must be exercised with caution and only
if the ends of justice so require. We emphasise that injunctions granted
for such purposes are directed against the vexatious party and not the
courts of the other jurisdiction.
In the present case we have concluded that the dispute relating to the
United Kingdom patent comes, by reason of Article 16(4), within the
exclusive jurisdiction of the United Kingdom Patents Court. We have also
concluded that the matter is not "acte clair". In those circumstances
we do not consider we would be justified in reaching a final conclusion
that the pursuit, by Akzo, of the claim in the Dutch Courts in respect
of the United Kingdom patent would be vexatious. It follows that we
are not prepared to grant a final injunction at this time. The reference
is necessary in order to decide whether final relief by way of injunction
or declaration would be appropriate. We now therefore proceed to
consider whether interim relief by way of injunction or otherwise would be
appropriate pending the determination of the reference to the European
Court.
Despite the fact that the relief would be directed against the Respondents,
we have in mind that it would indirectly affect the Dutch Court which has
not yet considered what action, if any, would be appropriate. We have
every confidence that the Dutch Court will, when deciding what to do,
take into account that this Court will be referring to the European Court
of Justice questions to elucidate how Articles 6, 16(4), l9 and 24 should
be applied to the dispute. It will give proper weight to our conclusion
that it would be wrong for this Court to anticipate the decision of the
European Court. It will, we believe, also consider carefully the other views
expressed in this judgment and, of course, the submissions of the parties
and the facts. That being so we have come to the conclusion that justice
does not require that this Court should grant any relief at this stage. The
nature of the parties businesses means that it is most unlikely that they
will suffer any significant harm pending the decision of the European
Court which will not be compensated by the award of damages.
We shall therefore adjourn this appeal pending a judgment of the
European Court upon questions to be referred to them. When the views of
the European Court are known we shall decide what further relief, if any,
is appropriate.
Order: Appeal adjourned. Question of costs of appeal below to be
reserved and costs in court below to be stayed.