In the field of patents, there are many situations where foreign elements arise, and the question of applicable law or competent jurisdiction may be raised.
The typical case is where the patent in question is a U.S. patent, the proprietors are German and Dutch, they have established a joint ownership agreement due to a business relationship in China, they have a licensee in Belgium, and there is an alleged infringer of Japanese nationality…
In short, we see that this can quickly become complex.
Applicable Law
Conflict of Laws
A « conflict of laws » may arise when the laws of several countries individually claim jurisdiction.
Fortunately, in a number of cases, rules for resolving conflicts of laws exist at the international level: these must therefore be known.
Resolution of Conflicts of Laws
In a Non-Contractual Context (e.g., Infringement)
Regulation (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (known as the Rome II Regulation) establishes the rules concerning the applicable law in the event of a conflict of laws in Europe, in a non-contractual context.
In particular, in the context of infringement of intellectual property rights, Article 8 provides the rule:
The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed.
In short, if you have a German patent, the applicable law concerning infringement or the validity of the patent is German law.
It is not possible to derogate from this jurisdiction by agreement between the parties.
In a Contractual Context (e.g., License, Assignment, etc.)
Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (known as the Rome I Regulation) provides the rules concerning the applicable law in the event of a conflict of laws in Europe, in a contractual context.
General Case
Article 3 provides that the contract shall be governed by the law chosen by the parties. This choice may be modified by mutual agreement at any time.
The choice is express or results from the provisions of the contract or the circumstances.
In the absence of a choice, Article 4 provides a framework to assist in determining the applicable law: in general, the contract shall be governed by the law of the country with which it is most closely connected.
Employment Contract Case
It may happen that we need to determine the applicable regime for employee inventions.
Article 8 provides that the individual employment contract shall be governed by the law chosen by the parties (unless a national law provides that a particular provision cannot be derogated from).
If no choice is indicated by the parties, the applicable law is the law of the country where the work is usually carried out or, failing that, the law of the country where the establishment that hired the employee is located.
Of course, if the facts indicate that another country has a closer connection with the employment contract, that country’s law should be chosen.
Exceptions
It may happen that the French court refuses to recognize the jurisdiction of a foreign law that objectively appears applicable.
International Public Policy
The substantive provisions of the foreign law normally applicable under the conflict of laws rule may also be set aside, in whole or in part, on the grounds of the international public policy exception, in favor of those of French law.
The international public policy exception first encompasses the essential or fundamental principles of French law, such as dignity, human freedom, and the physical integrity of persons.
It also encompasses a more fluctuating concept over time and space, namely the mandatory legislative policies of France, the contours of which depend on the in concreto assessment of the judge.
Content of the foreign law not accessible
If the content of a foreign law cannot be established with sufficient certainty, the French court will tend to fall back on French law.
Fraud on the law
I am not aware of this scenario in the context of industrial property, but it should be noted that the French court may disregard a foreign law if it considers that there are intentional maneuvers designed to artificially render a foreign law competent, in place of the law that would normally have been applicable.
Competent jurisdiction
Jurisdictional conflicts
Once the applicable law is determined, this does not mean that the competent court is the court of that law (because that would be too simple :)).
Therefore, it is also necessary to determine the competent jurisdiction.
Resolution of jurisdictional conflicts
To do so, we have at our disposal Regulation (EU) No 1215/2012 (Brussels I bis) concerning jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
Principle (which almost never applies)
The competent court is, by default, that of the defendant’s domicile (Article 4 of Regulation (EU) No 1215/2012).
It should be noted immediately that what we are discussing here has no reason to apply to courts outside the European Union: it is entirely possible that a foreign court may declare itself competent even though the present regulation provides for a different solution.
Possible derogations
In contractual matters
In contractual matters, it is possible to bring an action against a person before a court of the place of performance of the obligation which serves as the basis for the claim (Article 7.1, e.g., a license in a given country).
In the context of a license agreement, it was held (CJEU, 23 April 2009, Falco) that a license agreement concerning an intellectual property right is not a contract for the provision of services within the meaning of Article 7.1(b) (formerly 5.1 under Brussels I), but rather concerns an obligation to pay.
Thus, it is necessary to apply Article 7.1(a) and determine the place of performance of the obligation by reference to the Tessili case law (CJEU, 6 October 1976, Tessili): in other words, the place where the obligation has been or must be performed must be determined in accordance with the law governing the disputed obligation under the conflict of laws rules of the court seized.
In tortious or quasi-tortious matters
In tortious or quasi-tortious matters, it is possible to bring an action against a person before a court of the place where the harmful event occurred (Article 7.2, e.g., an act of infringement).
While the place of the harmful event does not often raise questions, difficulties may arise in cases of infringement on the Internet.
In a decision by the Paris Court of Appeal, 4th Chamber, Section A, 30 January 2008, Case No. 06/14524, the judges had to address this question in the context of a website written in English.
Their answer was that the place of the harmful event could very well be France, particularly since the usual language in the technical field is English.
It should also be noted the decision of the CAFC (CAFC, Voda v. Cordis, 1 February 2007). According to the CAFC, a U.S. court is not competent to hear claims of infringement of foreign patents. This is reassuring, but it is better to state it explicitly.
Case of multiple defendants
Furthermore, in the case of multiple defendants, it is possible to bring them all before a court of the domicile of one of them, even if they are not all domiciled in the same country (Article 8.1 of Regulation (EU) No 1215/2012).
However, there must be a connection between the various claims brought by the same plaintiff against different defendants such that there is an interest in hearing and determining them together to avoid irreconcilable judgments if the cases were heard separately (27 September 1988, Kalfelis C-189/87).
For this last point, I invite you to leap (like a Salticidae) to the section about spiders below (you may have noticed the pun…).
Case of employee inventions
In the context of a dispute arising from the interpretation of the employment contract (e.g., to determine whether an invention falls under the regime of employee inventions), the regulation provides that the employee may bring an action against their employer before one of the following courts (Article 21 of Regulation (EU) No 1215/2012):
- before the courts of the Member State where the employer is domiciled, or
- in another Member State:
- before the court of the place where the employee habitually carries out their work or before the court of the last place where they habitually carried out their work, or
- where the employee does not habitually carry out or has not habitually carried out their work in any one country, before the court of the place where the establishment which employed the employee is or was situated.
The options for the employer are more limited if they wish to bring an action against their employee (Article 22 of Regulation (EU) No 1215/2012, excluding counterclaims): they must bring the action in the country where the employee is domiciled.
In any event, it is not possible to derogate from these principles unless such derogation occurs after the dispute has arisen or if the derogations do not restrict the employee’s right to bring proceedings before the courts previously mentioned.
Case of the registration or validity of patents
Article 24.4 of Regulation (EU) No 1215/2012 provides for the exclusive jurisdiction of the courts of the Member State for which the patent was filed regarding questions of registration or validity of the title.
Case of the enforcement of decisions
Regarding the enforcement of a decision (e.g., condemnation, ordered infringement seizure), the competent court is the court of the place of enforcement of the decision (Article 24.5 of Regulation (EU) No 1215/2012).
Case of lis pendens or related actions
Principle
« Lis pendens » (or « related actions ») is the circumstance that arises when two different courts have been seised of the same dispute, i.e., the same cause of action and the same subject matter (or of two disputes that would benefit from being heard together).
In the case of lis pendens, the court seised second must stay proceedings of its own motion until the jurisdiction of the court first seised is established (and must decline jurisdiction if the first court acknowledges its jurisdiction) (Article 29 of Regulation (EU) No 1215/2012).
In the case of related actions, the court seised second may stay proceedings (Article 30 of Regulation (EU) No 1215/2012). It may also decline jurisdiction at the request of one of the parties if the first court has jurisdiction and can consolidate the second case with the first.
The Italian or Belgian torpedo
The torpedo strategy involves a party with plans to exploit in Europe a project potentially infringing a patent not waiting to be sued before initiating a first declaratory judgment of non-infringement in a state whose courts are not known for their speed (at least for actions concerning patents).
Thus, due to the principle of « related actions » mentioned previously, it is no longer possible for the patent proprietor to bring an action before another court to have the infringer judged.
French courts have regularly deprived these « torpedo » actions of any useful effect by considering this practice as an abuse of the jurisdiction rules laid down by the Brussels Convention:
- Tribunal de Grande Instance de Paris, troisième chambre, 28 avril 2000,
- Tribunal de Grande Instance de Paris, troisième chambre, section 2, 9 mars 2001,
- Tribunal de Grande instance de Paris, 3e ch., 3e sect., 18 novembre 2003, RG n° 01/06528.
However, the CJEU opposes the reasoning of the French courts (CJEU 9 December 2003, C-116/02) by stating that it is necessary to stay proceedings even where the courts seized have excessively long processing times (reinforced by the response of the CJEU 27 April 2004, C-159/02).
The spider in the web
The spider-in-the-web tactic involves a patent proprietor suing an alleged infringer in a state known for the speed of its decisions and then drawing other infringers (potentially infringing in another state) before the same court (using Article 8.1 of Regulation (EU) No 1215/2012 mentioned above).
Decisions of the Court of Justice of the European Communities have challenged this possibility—at the very least, they have significantly restricted it (CJEU 13 July 2006, C-539/03): indeed, if there are multiple infringers in different countries, there is little risk of having several (allegedly) « contradictory » decisions in each country, as the factual and legal situations are necessarily different.
It is therefore for the judge (seized second) to assess whether there is a risk of a contradictory decision (CJEU, 12 July 2012, C‑616/10).
If no such risk exists, there is no need to apply Article 8.1 of Regulation (EU) No 1215/2012 in the sense of the decision CJEU of 27 September 1988, Kalfelis C-189/87.
We can see that this Phoneutria spider has somewhat lost its venom…
Effects of a foreign decision in France (or vice versa)
The theoretical territorial scope of a judgment beyond borders is determined by the lex fori (i.e., the law of the judge): it is therefore the law of the state from which the judgment emanates that alone determines the scope of the measures prescribed by the judge.
However, this does not mean that decisions of a French judge will be enforced instantly in another country: it will be necessary to request the exequatur of the decision abroad to allow its enforcement.
Nevertheless, Regulation (EU) No 1215/2012 provides for a simplified exequatur under Articles 36 to 51 (although certain cases (see Article 38) may block this simplified exequatur): it is sufficient to submit a simple request (the practical modalities are determined by the law of the country in which enforcement is sought).
Provisional and protective measures
It is possible to request any provisional or protective measure from the courts of the States that provide for them in their laws (Article 35 of Regulation (EU) No 1215/2012).
Provisional or protective measures provided for by the law of a Member State may be requested from the courts of that State, even if the courts of another Member State have jurisdiction as to the substance of the matter.
It should be noted that a measure aimed at obtaining evidence is not (strictly speaking) a provisional or protective measure. Therefore, to request an infringement seizure (or any equivalent measure), this Article 35 does not appear to be applicable… but this provides a perfect transition for what follows…
Managing evidence abroad
Worldwide
The Hague Convention of 18 March 1970, an international convention « on the Taking of Evidence Abroad in Civil or Commercial Matters, » entered into force in France on 6 October 1970.
Under this convention, a request must be submitted to the requesting court, which transmits a letter of request to the central authority of the requested State (Article 1).
This letter of request is executed in accordance with the law of the « receiving » State, but the letter of request may specify the application of rules from the « originating » State (Articles 9 et seq.).
The results of the execution of the acts are transmitted by the judge who executed the letter of request to the requesting court (Article 13).
For example, the United States Code, 28 USC §1782 allows, under certain conditions, obtaining a « discovery » measure in the USA for the purposes, in particular, of a French proceeding.
In Europe
Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, which entered into force on 1 January 2004 (inspired by the aforementioned Hague Convention of 18 March 1970), is also a useful legal tool.
This regulation allows the courts of the Member States to obtain the execution of investigative measures by the courts of another Member State or to execute them themselves in another Member State.
The request for an investigative measure specifying the nature and subject of the proceedings and the investigative measure to be executed is sent directly to the requested court.
The requested court carries out the investigative measure within 90 days, applying its own procedural rules (Article 10.2), but the requesting court may ask for the measure to be executed according to a special form provided by the law of the State to which it belongs (Article 10.3).
The results of the execution of the acts are transmitted by the judge who executed the letter of request to the requesting court.
Except for translation, interpretation, and other similar costs, this measure is free of charge.