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Wednesday, 11 June 2014

Court in the Act: UK Intellectual Property Office IS a court, rules another court

Here's a nice and easy decision on an issue arising from a patent dispute litigated in the Intellectual Property Enterprise Court, England and Wales: is the UK's Intellectual Property Office (UKIPO) a "court" in any meaningful sense of the word for the purposes of deciding the jurisdiction within Europe within which the courts should hear an action that spills over, beyond the convenient national borders of a single country?  In this post, guest contributor Paul England (Taylor Wessing LLP) explains the legal issues and their consequences:

UKIPO -- a 'court' for the purposes of the Brussels I Regulation

Some courts look like this ...
With Actavis v Eli Lilly [noted on the IPKat here] still fresh in our minds, and amendments to the Brussels I Regulation (recast) progressing through the European Parliament in preparation for the Unified Patent Court, jurisdictional matters are a hot topic generally at the moment. One aspect of this theme has now reached the Intellectual Property Enterprise Court in Future New Developments Limited ("FND") v B&S Patente und Marken GmbH ("B&S") [2014] EWHC 1874 (IPEC). This is whether the UKIPO is a "court" within the meaning of Brussels I, and thus the application of the Regulation to disputes in that forum.

The substantive case concerns entitlement to ownership of a patent under section 37 of the UK's Patents Act 1977. The patent in suit was European Patent (GB) 1 095 541, relating to energy saving technology for use with fluorescent tubes. The defendant , B&S, a company domiciled in Germany, was the registered proprietor of the patent, but Cayman Islands-based FND claimed entitlement by assignment from the original applicant, Inotec GmbH. FND claimed that a later assignment from it to B&S was done without authority and was therefore of no legal effect.

... and some courts look like this
B&S applied for a declaration by the IPEC that it had no jurisdiction to hear the dispute because the defendant was domiciled in Germany, and that the claim be set aside. FND countered by arguing that the English courts had jurisdiction under the following three Articles of the Brussels I Regulation: Article 5(3); Article 23(1)(b); and, Article 24. Significantly, in this case, the claim in the IPEC followed earlier proceedings in the UKIPO which resulted in the Hearing Officer directing that the claim would more properly be dealt with by the court and declining to deal with it.

The Article 5(3) issue

FND submitted that Article 5(3), enabling a claimant to sue a defendant in the jurisdiction where a harmful event occurs arising from a "tort, delict or quasi-delict occurs", is triggered. This was on the basis that there had been a misrepresentation in the signing of the assignment of the patent from FND to B&S. Judge Hacon held that this was not the case. There was no allegation of misrepresentation in the action, which was instead concerned with entitlement.

The Article 23(1)(b) issue

Article 23(1)(b) provides that a court of a Member State will have jurisdiction where that has been agreed by the parties (providing at least one of them is domiciled in a Member State). Such an agreement may be "in a form which accords with practices which the parties have established between themselves;…" FND argued that such a practice had been established by B&S in the earlier UKIPO proceedings, in such a way that it indicated that it had abandoned any right to challenge the jurisdiction of a UK forum. Judge Hacon held that the relationship between the parties in the IPO was not that of parties in agreement, but rather the opposite. Even if, hypothetically, B&S had expressly abandoned any challenge to the jurisdiction of the English courts, it would still not be an agreement, but rather a concession instead. This is not what Article 23(1)(b) is intended to cover.

The Article 24 issue

This states:
“Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered to contest jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 22.”
Bits of the UKIPO look like this
B&S had disputed the jurisdiction of the IPEC in their Acknowledgement of Service and made an application accordingly within 14 days of filing the Acknowledgement. However, FND initially argued that B&S had nonetheless entered into protracted proceedings before the UKIPO, without challenging jurisdiction, and therefore had committed itself to the jurisdiction of the English courts. B&S responded that the UKIPO is not "a court of a Member State" within the meaning of Article 24. Despite the fact that FND actually abandoned their Article 24 argument towards the end of their submissions, the Judge held that the UKIPO was such a court. Otherwise, the judge says, the UKIPO would forever be excluded from jurisdiction when the Brussels I Regulation is engaged. Instead, the Brussels I Regulation determines which country should be awarded jurisdiction and then it is a matter of domestic law which form of tribunal hears the case. As Judge Hacon put it:
"In other words, 'the courts of the Member States' in Arts 2, 5, 6 and 'a Court of a Member State' in Article 24 of the Regulation encompass any tribunal of the relevant Member State, or tribunal of a place within the Member State as the case may be, which may lawfully hear the proceedings."
The judge then concluded on the evidence before him that B&S's conduct before the UKIPO, objectively assessed, could only be interpreted as a willingness for the dispute to be heard in England, at the UKIPO initially, and then later in the Patents Court or IPEC (despite the later objection in the Acknowledgement). B&S had therefore entered an appearance before a court of the UK within the meaning of Article 24 – the UKIPO – and this gave the IPEC jurisdiction.
This Kat finds this reasoning perfectly correct and wonders if B&S wasn't clutching at straws by contesting this issue.

1 comment:

Steve Peers said...

The legislation to amend the Brussels Reg re the patent court has actually been approved and published in the OJ - issue L 163.

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