English High Court seizes patent infringement jurisdiction once again

Another judgment, another instance of the English court seizing jurisdiction in a patent dispute. In Ablynx NV and Anor v VHsquared Limited and Ors [2019] EWHC 792 (Pat), His Honour Justice Hacon (sitting as a High Court judge) has provided a useful judgment concerning the application of the Brussels Regulation to patent disputes where there is also a purported choice of jurisdiction by contract. Even in circumstances where the parties have made such a choice, a forum shopping defendant might well find the shelves to be bare. 

Ablynx is the exclusive sub-licensee of certain fields of use for three patents (now expired) protecting an invention relating to immunoglobulins derived from camelid antibodies [“camelid” refers to several even-toed ungulates, not just camels, so we can leave puns involving humps and deserts at the door, please]. Broadly speaking, the Defendants were licensees in relation to other fields of use. The Defendants are alleged to have infringed the UK designations of the patents during their term by encroaching on Ablynx’s field of use. This allegedly provided an illegitimate springboard for work completed following the expiry of the patents. There is ongoing litigation relating to the same subject matter in the Netherlands and Belgium, and there was earlier litigation in the Netherlands.

Apparently called a "camel" stretch, therefore topical

The Defendants contended that the relevant licence agreement conferred exclusive jurisdiction on the court of Brussels to settle any disputes arising in connection with the agreement (including the present one). The High Court was therefore asked to give effect to this choice of jurisdiction pursuant to Articles 25 and 31(2) of the Brussels Regulation, and to stay the proceedings pending the Brussels court’s decision on whether it has jurisdiction under the Agreement. The Claimants meanwhile relied on Article 24(4), on the basis that the proceedings are concerned with the validity of patents, in respect of which the English court has exclusive jurisdiction. The Defendants had not entered an appearance, and had not (yet) formally challenged the validity of the patents. It was however clear from evidence that were the Defendants’ application for a stay to fail, the Defendants would counterclaim for invalidity (among other defences e.g. non-infringement and experimental use). 

The Defendants attempted to persuade the judge to follow, by analogy, an observation by the Court of Appeal in JP Morgan Chase Bank NA v Berliner Verkehrsbetriebe (BVG) Anstalt des Offentlichten Rechts [2010] EWCA Civ 390. JP Morgan concerned Article 22(2) of Regulation 44/2001, which is materially identical to Article 24(2) of Brussels I Recast. This Article confers exclusive jurisdiction in relation to proceedings which have as their object, among other things, the validity of the constitution and decisions of companies/organs registered in a particular Member State. The CoA observed that it is not necessarily the case that the courts of the "home" Member State will be best placed to hear such a dispute, particularly if the parties have expressly chosen another jurisdiction to solve their disputes. Therefore, said the Defendants, the best place for this dispute was the Brussels court.  Hacon HHJ disagreed, and distinguished patents from the CoA’s observation on the basis that the grant of patent rights is “an exercise of national sovereignty”, and to adopt the approach in JP Morgan might have constitutional implications in some Member States.

Therefore, the question of jurisdiction turned simply on the meaning of “concerned with...the validity of patents”. Here, Hacon HHJ did follow the CoA in JP Morgan, which adopted a fairly permissive interpretation of the analogous wording in Article 24(2). In the judge’s view, “proceedings are ‘concerned with’ the validity of patents if, pursuant to an overall assessment, the proceedings are in substance or principally concerned with validity”. On the evidence before him, the judge concluded that were this claim to progress to trial, the proceedings would be concerned with the validity of the patents. The Defendants' remaining planned defences appeared to be subsidiary, and the judge was also sceptical of the Defendants' argument that any trial would primarily concern arguments regarding the scope of the patent licence. Therefore, he refused to grant the stay sought by the Defendants: the English court had exclusive jurisdiction pursuant to Article 24(4). The judge also held (obiter) that if he were wrong about jurisdiction under Article 24(4), the Defendants had a prima facie case that the Brussels court would have exclusive jurisdiction under Article 25. His summary of the interplay between Articles 24, 25 and 31(2) is succinct and useful: 

1. When a stay is sought under Article 31(2), if an argument is raised that the court before which the stay is sought has exclusive jurisdiction under Article 24, that court must decide whether the argument is correct.
2. If the court has exclusive jurisdiction under Article 24, Article 31(2) is not engaged. There will be no stay.
3. If the court does not have exclusive jurisdiction under Article 24, it must decide whether at least prima facie there is an agreement which satisfies Article 25 and confers exclusive jurisdiction on the courts of another Member State. If so, provided the defendant has not entered an appearance in a manner which satisfies Article 26, there must be a stay of the proceedings. 

(Readers will recall that Article 31(2) was introduced into Brussels I Recast in order to deter the so-called “Italian torpedo” tactic i.e. a race to seise first a court that is expected to deal with the claim slowly, thereby excluding the court that the parties previously agreed would have exclusive jurisdiction until the first court rules whether it in fact has jurisdiction).  

It appears that the Defendants have (successfully) sought permission to appeal. More news when we have it.