Netherlands: Cross-Border Patent Litigation Revival 'Solvay vs Honeywell'

The Dutch courts used to be known for their judgments with cross-border effect in patent litigation, following a ruling of the Dutch Supreme Court in in 1989 in Lincoln vs Interlas. The main issues in subsequent cases to come before the Dutch courts were whether the court would have jurisdiction to grant injunctions with effect abroad or whether there were reasons to hold back on granting this cross-border relief.

There has never been any doubt in Holland that the court of the domicile of a defendant does have jurisdiction to grant injunctions against that defendant for all countries where he commits infringements. The cross-border jurisdiction issue arose most frequently where foreign members of the same group of companies were summoned in proceedings on the basis of Article 6 of the Brussels Regulation where the jurisdiction of the Dutch courts was primarily based on the domicile of a Dutch co-defendant from that same group.

In July 2006, the European Court of Justice ruled in Roche vs Primus & Goldenberg that a European patent is not a unitary right and therefore there is no risk of truly contradictory rulings if national courts in each country of registration have to decide on the infringement by the defendant based in that country, not even if all these defendants were part of the same group of companies and also not even if they would even act according to a common plan. That seemed to rule out Article 6 of the Brussels Regulation as a basis for such cross-border injunctions. However, it is important to note that the decision in that case was based on the factual situation that each alleged infringer was only active in his home country.

On the same day, the European Court of Justice also held in GAT vs LuK that Article 22 of the Brussels Regulation which provides that the court of the country of registration has exclusive jurisdiction on patent validity issues applies regardless of how the validity issue is raised. This means that it does not only apply to an action to invalidate a patent, but also to a validity defence raised in an infringement action. The interpretation of this ECJ judgment varied from country to country. In Germany, it was widely believed that it affects the jurisdiction of the court itself whereas in Holland, the Dutch courts held that they only had to suspend infringement claims aimed at injunctions with cross-border effect as soon as the defence was raised. They could then continue with them once validity had been decided by the courts of the country concerned with registration. However, that approach meant that an infringement action could only continue for the Dutch part of the European patent once validity was raised.

Both issues (Articles 6 (co-defendants within a group of companies) and Article 22 (impact of validity on infringement action) were at stake in Solvay vs Honeywell, in which the European Court of Justice issued its judgment on 12 July 2012. Solvay sued three Honeywell companies for patent infringement in full proceedings on the merits in the District Court The Hague. In the course of those proceedings, Solvay also claimed a preliminary injunction with cross-border effect.

The difference with this case compared to most cross-border cases was that the Honeywell companies were not subsidiaries that each were only active in one country, but actually all three were active in a number of countries, with their activities overlapping. Thus, the Dutch company that provided the primary base for jurisdiction, was also active in the countries in which the others were active. In such a case, if there would be no possibility to involve foreign co-defendants, there would indeed be a risk of contradictory judgments with effect for the same country, since the Dutch court could for instance find that the activities of the Dutch company in The Netherlands – or for instance in Finland, the example the ECJ had used – would be infringing, whereas the Belgian court could find that the same activities of the Belgian company in The Netherlands – or in Finland – would not. According to the European Court of Justice, this could indeed only be prevented if all companies could be sued in one court. In such a case, where the court of the domicile of a defendant has cross-border jurisdiction, the other companies can indeed be involved as co-defendants.

The second issue was whether GAT vs LuK would also block preliminary injunctions as soon as a validity defence is raised. The European Court of Justice held that Article 31 of the Brussels Regulation, which deals with provisional measures, provides an autonomous ground for jurisdiction that is not subject to the limitations of Article 22. Since the court will only provide a preliminary evaluation of the validity arguments and does not need to take an actual decision on validity, and since this evaluation in no way binds the panel that will decide on the merits, there is no reason to limit the scope of Article 31 in this way. Thus, a preliminary injunction with cross-border effect is allowed even if a validity defence is raised.

The judgment in Solvay vs Honeywell has therefore reopened the door for cross-border injunctions, albeit only with regard to preliminary injunctions and only in a situation where several defendants within the same group of companies are active in the same country. It is a fairly recent opening and the Dutch courts have not yet seen another case where it could be applied. In the meantime, a new development is already on the horizon, since it seems likely that the Unified Patent Court may open its doors in 2014 and that Court will always have the jurisdiction to issue inunctions for all 26 participating member states, but that's another story.

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