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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ablynx NV & Anor v VHsquared Ltd & Ors [2019] EWCA Civ 2192 (10 December 2019) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2019/2192.html Cite as: [2020] FSR 9, [2019] EWCA Civ 2192, [2020] 1 All ER (Comm) 512, [2020] WLR 1412, [2020] ILPr 16, [2020] 2 All ER 601, [2019] WLR(D) 668, [2020] 1 WLR 1412 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
His Honour Judge Hacon
(sitting as a Judge of the High Court)
HP-2018-000025
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE NEWEY
and
LADY JUSTICE ASPLIN
____________________
(1)  ABLYNX NV(2) VRIJE UNIVERSITEIT BRUSSEL |
Respondents |
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| - and – |
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| (1) VHSQUARED LIMITED (2) UNILEVER NEDERLAND B.V. (3) UNILEVER NEDERLAND HOLDINGS B.V. (4) UNILEVER RESEARCH AND DEVELOPMENT VLAARDINGEN B.V. (5) UNILEVER VENTURES HOLDINGS B.V. (6) UNILEVER N.V. |
Appellants |
____________________
MS LINDSAY LANE QC & MR ALEXANDER THOMPSON (instructed by Linklaters LLP) for the Appellants
Hearing date : 27 November 2019
____________________
Crown Copyright ©
Lord Justice Lewison:
Introduction
Ablynx NV alleges that VHsquared Ltd has infringed the UK designations of the patents within the jurisdiction. The licence (in fact a sub-licence) granted to VHsquared is limited to what the licence calls "the Reserved Sector". The licence granted to Ablynx applies to all fields except the Reserved Sector. The licence under which VHsquared's sub-licence was granted (described below as the Unilever Licence) includes an exclusive choice of court clause conferring jurisdiction on the Belgian court. VHsquared says that its activities are covered by its licence and therefore there has been no infringement; and that any question about the scope of the licence is within the exclusive jurisdiction of the Belgian court. It also raises other defences to which I will come. Ablynx says that the exclusive jurisdiction clause is invalid because the Recast Regulation allocates exclusive jurisdiction over the validity of patents with a UK designation to the UK court.
The facts in more detail
Ablynx. VHsquared is a company domiciled in the United Kingdom. Ablynx is a company domiciled in Belgium.
"3.1.a The University shall grant Unilever an exclusive and territorially unlimited licence to exploit [the patents] and corresponding foreign patents … for the following products and sectors:
(i) packed food products;
(ii) washing and cleaning agents;
(iii) cosmetics with a non-medical orientation; and
(iv) process auxiliary agents, more specifically the catalytic and separation process auxiliary agents, for use in fields (i), (ii) and (iii) above.
3.1.b The University shall grant Unilever a non-exclusive and territorially unlimited licence to exploit [the patents] and corresponding foreign patents, as detailed in Annexe 1 to this Agreement for OTC diagnostics for non-medically orientated cosmetics, and for the use of antibodies in cattle fodder, for process auxiliary agents, more specifically the catalytic and separation process auxiliary agents for use in both fields stated in this Article 3.1.b."
"9. Applicable law and settlement of disputes
9.1 Belgian law shall govern this Agreement. The Court of Brussels shall alone be competent in case of dispute between the Parties or one of their (sub)licensee(s) concerning this Agreement.
9.2 In exemption from Article 9.1, the Parties hereby also agree that all disputes on the definition of the Reserved Sector, the scope of [the patents] and its delimitation from the Community Patents shall exclusively be settled by arbitral tribunal consisting of one jurist and two scientists, sitting in Brussels, according to the rules of the International Chamber of Commerce."
Ablynx an exclusive sub-licence under the VIB Licence ('the Ablynx Licence'). The field of use was defined as:
"… the use of Camel antibodies to develop products and processes for predicting, diagnosing, monitoring, preventing and treating diseases in animals and humans."
Ablynx Licence could not be broader than the exclusive VIB Licence, so its permitted field necessarily excluded the Reserved Sector. The Ablynx Licence also contained an acknowledgment by Ablynx that it had received a copy of the Unilever Licence in which the Reserved Sector had been defined.
"3.1 With effect from … (the 'Novation Date'):
(a) BAC agrees to assume all the obligations and liabilities of Unilever to the University under or arising from the [Unilever Licence] except to the extent that such obligations have been fully and properly discharged before the Novation Date;
…
(d) [VUB] agrees with BAC to be bound by its obligations under the [Unilever Licence] (to the extent that they have not been fully and properly discharged prior to the Novation Date) in every way as if BAC had been a party to the [Unilever Licence] in place of Unilever, except if explicitly stated otherwise in this Agreement.
…
7.1 This Agreement and any dispute or claim arising out of it shall be governed by, and construed in accordance with, Belgian law.
All disputes or claims arising out of or relating to this Agreement shall be subject to the non-exclusive jurisdiction of the Courts of Brussels, to which the parties irrevocably submit."
Ablynx had the exclusive right to exploit the inventions claimed in the patents by using camelid antibodies for certain medical uses. For its part, VHsquared had a non-exclusive licence to exploit the inventions in the Reserved Sector.
The Dutch litigation
Ablynx narrowed their approach to the interpretation of the "Reserved Sector". They contended that the patents would be infringed by "products with a therapeutic or prophylactic effect with regard to specific pathogens, whatever the nature of those products".
"4.10 The term (packaged) foodstuff is also unsuitable to serve as a limitation, now that the qualification as foodstuff, as Unilever et al. appears to fail to understand, does not exclude that such a product must also be deemed a medicinal product, while – as Unilever acknowledges – it is precisely medicinal products that are excluded from the licence. In addition, Unilever asserted that its licence did not extend to 'pills, syringes or powders (products that can be purchased from a pharmacy)'. The location where the products are offered cannot, however, be deemed a suitable delineation. After all, medicinal products are also offered in supermarkets, while foodstuffs (including functional foods) can also be sold in pharmacies and are not to be deemed a medicinal product."
Ablynx's exclusive licence was for certain medicinal products whereas VHsquared's licence was for non-medicinal products. The difficulty was being precise about where the line was to be drawn. The Dutch Court of Appeal said:
"4.12 … What keeps the parties divided is what 'medicinal product' is to be understood to mean in this respect. As this limitation, which is acknowledged by both parties, is not included in the licence agreement itself, the literal wording of the agreement itself cannot provide any clarity about the contents and meaning of that term – and thus of the scope of the licence. The Court of Appeal sees cause in these circumstances of this case to not only take account of the meaning of the literal wording of the agreement, but also to take note of the history of the making of the licence agreement, in order to determine what sense each of the parties could reasonably assign in the given circumstances to the provisions of the licence agreement and what they could reasonably reasonably expect of each other in this respect. This approach is also in accordance with Belgian law that applies to the licence agreement, which stipulates that account must be primarily taken of the common intent of the parties …"
Ablynx was satisfactory:
"4.11 … This limitation particularly does justice to the reasonable expectation – acknowledged by
…
… this limitation also does justice to VUB's expectation that the licence did not include products – whether or not they are to be deemed foodstuff – for curing (therapeutic effect) or prevention (prophylactic effect) of ailments caused by pathogens (pathogens of biological origin, of which viruses, bacteria and moulds are the most common)."
Ablynx had submitted, unchallenged, that the nanobodies necessary for that research had been developed by Unilever in the Netherlands during the term of the patents; using technology protected by the patents; and that the research was aimed at the production of foodstuffs to prevent or cure an ailment caused by a pathogen. It went on to say that in view of the interpretation of the licence that it had adopted, Unilever had "thereby gone beyond it". The fact that a foodstuff was not on the market did not detract from that conclusion. The Court of Appeal thus overruled the opinion of the District Court that the research to which the Court of Appeal referred in paragraph [2.10] fell within the terms of the Unilever Licence; and also held that the same conclusion applied to preparatory actions of Unilever in the Netherlands.
The English action so far
Ablynx issued the claim form on 4 September 2018. It alleged that VHsquared had infringed the patents. Infringement is defined by section 60 of the Patents Act 1977. A person infringes a patent "if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent". There then follows a list of what activities can qualify as infringements.
Ablynx Exclusive Field of Use" by reference to the scope of the Ablynx Licence (i.e. excluding the Reserved Sector as defined by the Unilever Licence). Paragraph 13 of the Particulars of Claim alleges that VHsquared has obtained a wrongful advantage. The essence of the allegation is that during the lifetime of the patents it was conducting research into the use of camelid derived proteins for the treatment of gastrointestinal pathogens. After the expiry of the patents it changed its field of research into treatments for inflammatory bowel disease. That resulted in the creation of an antibody called V565. The creation of that antibody was the result of acts of infringement set out in the Particulars of Infringement and therefore amounts to a wrongful advantage. The Particulars of Infringement assert that VHsquared has performed a number of acts "without the consent" of Ablynx. Those particulars do not mention V565 in terms. They allege infringements of the patents by carrying out certain activities "all of which fall within the scope of the Ablynx Exclusive Field of Use". The Particulars quote from posts on VHsquared's website. These include:
"Our novel antibody platform will provide a portfolio of new and innovative functional food products to target gastrointestinal infectious and immune mediated diseases." (about April 2010)
"VHsquared is carrying our early experimental research relating to certain gastrointestinal pathogens. Antibodies to these pathogens, including rotavirus, may in due course be exploited commercially.
…
VHsquared's research is for experimental purposes related to the subject matter of the Patents."
Ablynx was alleging that during the life of the patents VHsquared operated outside the scope of its licence. But, he said, under the terms of the Unilever Licence and its own licence VHsquared was "entitled to carry out research into antibodies that might have application as commercial products within the scope of the licence". He went on to draw attention to the choice of jurisdiction clause in the Unilever Licence; and asserted that the Belgian court had exclusive jurisdiction over the claim. At paragraph 85 of his witness statement he said:
"Should this application not succeed and the UK Claim continue [VHsquared] would intend to raise a number of defences. These include limitation under the Limitation Act 1980, invalidity of the patents in suit, lack of infringement due to activities complained of being experimental and covered by the VUB Licence and in particular because V565 is not an antibody to a "specific pathogen"; and absence of any common design."
The Belgian proceedings
i) Whether
ii) A claim that those activities are within the scope of the Unilever Licence.
The Regulation
"Where the parties have designated a particular court or courts to resolve their dispute, the proposal gives priority to the chosen court to decide on its jurisdiction, regardless of whether it is first or second seised. Any other court has to stay its proceedings until the chosen court has established or – in case the agreement is invalid - declined jurisdiction. This modification will increase the effectiveness of choice of court agreements and eliminate the incentives for abusive litigation in non-competent courts."
"(15) The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor.
(19) The autonomy of the parties to a contract, other than an insurance, consumer or employment contract, where only limited autonomy to determine the courts having jurisdiction is allowed, should be respected subject to the exclusive grounds of jurisdiction laid down in this Regulation.
(20) Where a question arises as to whether a choice-of-court agreement in favour of a court or the courts of a Member State is null and void as to its substantive validity, that question should be decided in accordance with the law of the Member State of the court or courts designated in the agreement, including the conflict-of-laws rules of that Member State.
(21) In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in different Member States. There should be a clear and effective mechanism for resolving cases of lis pendens and related actions, and for obviating problems flowing from national differences as to the determination of the time when a case is regarded as pending. For the purposes of this Regulation, that time should be defined autonomously.
(22) However, in order to enhance the effectiveness of exclusive choice-of-court agreements and to avoid abusive litigation tactics, it is necessary to provide for an exception to the general lis pendens rule in order to deal satisfactorily with a particular situation in which concurrent proceedings may arise. This is the situation where a court not designated in an exclusive choice-of-court agreement has been seised of proceedings and the designated court is seised subsequently of proceedings involving the same cause of action and between the same parties. In such a case, the court first seised should be required to stay its proceedings as soon as the designated court has been seised and until such time as the latter court declares that it has no jurisdiction under the exclusive choice-of-court agreement. This is to ensure that, in such a situation, the designated court has priority to decide on the validity of the agreement and on the extent to which the agreement applies to the dispute pending before it. The designated court should be able to proceed irrespective of whether the non-designated court has already decided on the stay of proceedings."
"The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties
(1) in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated….
(2) in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law;
(3) in proceedings which have as their object the validity of entries in public registers, the courts of the Member State in which the register is kept;
(4) in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, irrespective of whether the issue is raised by way of an action or as a defence, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place.
Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State."
"1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. The agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing;
(b) in a form which accords with practices which the parties have established between themselves; or
(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
…
4. Agreements … conferring jurisdiction shall have no legal force … if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 24."
"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 the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 24."
"Where a court of a Member State is seised of a claim which is principally concerned with a matter over which the courts of another Member State have exclusive jurisdiction by virtue of Article 24, it shall declare of its own motion that it has no jurisdiction."
"1. Without prejudice to Article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member 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.
2. In cases referred to in paragraph 1, upon request by a court seised of the dispute, any other court seised shall without delay inform the former court of the date when it was seised in accordance with Article 32.
3. 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."
"2. Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.
3. Where the court designated in the agreement has established jurisdiction in accordance with the agreement, any court of another Member State shall decline jurisdiction in favour of that court."
Ablynx. That is a non-exclusive jurisdiction. In addition, the Belgian court has jurisdiction under article 31 (2) because of the choice of court clause. That, too, is an exclusive jurisdiction. The contest, then, is in effect between two competing exclusive jurisdictions.
The structure of the judge's judgment
i) He first considered whether article 24 (4) was engaged. He decided that it was.
ii) He then went on to consider which court had jurisdiction to decide the validity of an EU patent with a UK designation. The judge found it difficult to envisage circumstances in which it would be sound for the validity of a patent to be determined outside the courts of the member state in which it was registered.
iii) The judge next considered whether the proceedings were concerned with the validity of a patent. Following previous authority, he decided that that question should be decided pursuant to an overall evaluation of the question whether the proceedings were in substance of principally concerned with validity, but not otherwise. In so doing it was necessary to form a view on the form which the proceedings would take at trial, including the relative significance of the likely issues.
iv) Again, following earlier authority he considered that severance of issues was not an option.
v) He then addressed article 31 (2) and considered the relationship between that article and article 24. Having regard to what he had previously said, he held that it was for the court of the member state in which the patent was registered to decide whether article 25 (4) invalidated the jurisdiction agreement.
vi) He then turned to the question whether article 25 (4) was engaged; and decided that it was.
vii) Finally, he considered whether article 31 (2) was engaged. He concluded that, but for the fact that article 25 (4) was engaged, article 31 (2) would have been. But article 25 (4) overrode article 31 (2), with the consequence that the stay was refused.
The parties' positions
Ablynx is that the six words in Mr Karet's witness statement mean that English action is "concerned with" the validity of patents. That has two consequences. The first is that the English court has exclusive jurisdiction. The second is that the choice of court clause in the Unilever Licence has no legal force as regards a claim that a UK designation of a European patent is invalid.
Ablynx's argument is a good one or not should be decided by the Belgian court in accordance with article 31 (2).
The Appellants' argument
Is article 31 (2) engaged?
i) The test to be applied by the court first seised is whether there is a prima facie or apparent case that there is an exclusive jurisdiction clause in favour of the court of another member state.
ii) By virtue of Clause 9 of the Unilever Licence there is a prima facie case of an agreement as referred to in article 25 conferring jurisdiction on the Belgian court.
iii) The Belgian court is seised, and therefore, in accordance with article 31 (2) the English court must stay these proceedings, leaving the Belgian court to decide whether the choice of court clause applies to the English action; and if so, to what extent.
Ablynx is bound by the jurisdiction agreement, which is contained in a contract to which it is not a party. Second, there is the question of the scope of the jurisdiction clause. The judge approached both these questions as questions of Belgian law.
No prima facie case?
Ablynx's first argument is that there is no prima facie or apparent case that article 31 (2) is engaged. There is no claim under the Unilever Licence: the claim is one in tort. Nor is there any dispute about the meaning of that licence; and VHsquared has not explained why it says that its activities during the lifetime of the patents were authorised by the licence. In broad terms, the judge agreed. He said:
"[85] Ms Lane took me to the Particulars of Infringement which sets out the history and alleged effect of the licences in some detail. She invited me to infer that inevitably the trial will for the most part be taken up with arguments about the scope of VHsquared's licence. I don't see why. The defendants have, entirely reasonably, avoided entering an appearance and so there is no pleaded Defence. But one real possibility is that little or none of
[86] The defendants might seek to re-argue all their points on the scope of Unilever Licence which did not succeed in the first Dutch litigation. Neither side raised issue estoppel. The infringing product would be different: it is now V565 instead of the rotavirus antibody. I was not told whether, and if so why the defendants believe that the conclusion of the Dutch Court of Appeal on scope was wrong. I accept that the Dutch Court of Appeal (in the first Dutch Action) did not have to consider V565. This might make some difference. But Crohn's disease involves an abnormal reaction of the patient's immune system to certain bacteria in the intestines. The ailment is treated by V565. If the view on the limits of Unilever's licence by the Dutch Court of Appeal in its paragraph 4.11 (see above) is taken to be correct, the ways in which argument on the scope of that licence can be reheated might be limited."
Ablynx have applied for permission to amend the Particulars of Infringement. But VHsquared has asserted that the application has been made outside the limitation period and therefore that it cannot be allowed. That is a live dispute; and I do not therefore consider that it would be right to treat the Particulars of Infringement as if they had already been amended.
Is Ablynx bound by the jurisdiction agreement?
Ablynx is bound by the jurisdiction agreement, because ultimately it will be for the Belgian court to make a definitive ruling. Although, as Mr Turner QC correctly pointed out, Ablynx was not a party to the contract that contained the choice of court clause, that is not the end of the matter. If the choice of court clause was valid as between the original contracting parties as a matter of EU law it appears to be a question of national law whether a third party has succeeded to the original party's rights and obligations: (Case 71/83) Partenreederei MS Tilly Russ v Haven & Vervoebedrijf Nova NV [1985] QB 931 at [25] and [26].
Ablynx was bound by the jurisdiction agreement. Having considered the evidence of both experts the judge concluded at [105]:
"But I accept that there is a prima facie case that VHsquared is not barred under Belgian law from relying on art.9.1 of the Unilever Licence, assuming that article has the meaning and effect which the defendants say it has."
Does the English action fall within the scope of the jurisdiction clause?
"Mr Troussel [for the Respondents] gave evidence in support of this second reason. He referred to articles of the Belgian patent statute and said that under Belgian law a choice of jurisdiction clause in a patent licence could not impede a licensor's right to assert the patent against a licensee acting outside the terms of the licence. On behalf of [the Appellants] Mr Van Den Broecke said that in Belgian law tortious claims for damages and other extracontractual claims which are connected with a contractual relationship are deemed to be covered by a jurisdiction clause in the contract unless it is stated to be limited to contractual claims. He referred to a commentary by U. Magnus and P. Mankowski."
Is there an arguable defence to the claim?
Which court decides?
"The penultimate sentence indicates that the designated court, i.e. the court chosen to resolve disputes, has priority in deciding the validity and effect of the alleged agreement."
"[17] Ms Lane submitted that the position is clear: art.31(2) is engaged and therefore these proceedings must be stayed. Art.24 could never make a difference in this court because it cannot override art.31(2). That is because art.31(2) is expressly stated to be without prejudice to art.26 but not art.24. The consequence is that all issues arising in these proceedings must be ceded to the Brussels courts, including the question whether art.24(4) is engaged and if so, what should be done about it. It is not the concern of this court.
[18] I disagree. To my mind art.25(4) explains why there is no mention of art.24 in art.31(2). Art.31(2) is necessarily without prejudice to art.24 since an agreement relied on for a stay under art.31(2) can carry no legal force if it purports to exclude the courts having exclusive jurisdiction under art.24. Even on the assumptions I have stated, art.31(2) cannot apply if art.24(4) is engaged. Art.24(4)'s engagement depends on whether these proceedings are 'concerned with' the validity of the Patents UK within the meaning of art.24(4). I must resolve this last question before I can decide whether the (assumed) agreement carries legal force and therefore whether art.31(2) is engaged.
[19] I also note that art.26 is itself made subject to art.24. This reinforces my view that the recasting of Brussels I has not altered the hierarchy of provisions awarding jurisdiction, with art.24 at the top. Arts.24 and 25 both speak of 'exclusive jurisdiction', but that conferred by art.24 is the more exclusive." (emphasis added)
"For the cases falling within article 24, the principle of exclusive jurisdiction cuts across and takes priority over the other principles underlying the Recast Regulation, including the principle of jurisdiction for the courts of the member state where the defendant is domiciled and the principle of respect for party autonomy referred to in recital (19) and reflected in various provisions of the Regulation." (emphasis added)
"Article [27], which, in certain language versions, refers to a claim being brought 'principally', does not provide further clarity. Apart from the fact that the degree of clarity of the wording of that provision varies according to the particular language version, that provision, as the Commission has observed, does not confer jurisdiction but merely requires the court seised to examine whether it has jurisdiction and in certain cases to declare of its own motion that it has none."
Ablynx's goal is to have all issues decided in the English court despite the existence of the choice of court clause. For that purpose it argues that the Belgian court does not have jurisdiction on the ground that the choice of court clause is invalidated by the assertion of invalidity in the English proceedings. It is not required itself to put the validity of the patents in issue in Belgium (if, indeed, it could). All it is required to do is to demonstrate that VHsquared has put it in issue in England; and then argue (in Belgium) about what the consequences are for the effectiveness of the choice of court clause.
"[49] According to the referring court, the court before which the interim proceedings have been brought does not make a final decision on the validity of the patent invoked but makes an assessment as to how the court having jurisdiction under Article [24(4)] of the regulation would rule in that regard, and will refuse to adopt the provisional measure sought if it considers that there is a reasonable, non-negligible possibility that the patent invoked would be declared invalid by the competent court.
[50] In those circumstances, it is apparent that there is no risk of conflicting decisions as mentioned in paragraph 47 above, since the provisional decision taken by the court before which the interim proceedings have been brought will not in any way prejudice the decision to be taken on the substance by the court having jurisdiction under Article [24(4)]…. Thus, the reasons which led the Court to interpret widely the jurisdiction provided for in Article [24(4)]… do not require that, in a case such as that in the main proceedings, Article [35] of that regulation should be disapplied."
Is article 25 (4) engaged?
"However, in a dispute of a contractual nature, questions relating to the contract's validity, interpretation or enforceability are at the heart of the dispute and form its subject matter. Any question concerning the validity of the decision to conclude the contract, taken previously by the organs of one of the companies party to it, must be considered ancillary. While it may form part of the analysis required to be carried out in that regard, it nevertheless does not constitute the sole, or even the principal, subject of the analysis." (Emphasis added)
"Thus, the divergence noted in para 26 of the present judgment between the language versions of article 22(2) of Regulation No 44/2001 is to be resolved by interpreting that provision as covering only proceedings whose principal subject matter comprises the validity of the constitution, the nullity or the dissolution of the company, legal person or association or the validity of the decisions of its organs." (Emphasis added)
"That case law cannot be applied to proceedings in which a question concerning the validity of a decision of a company's organs is raised. Since the validity of the patent concerned is an essential premiss, in particular in any infringement action, it is in the interests of the sound administration of justice that exclusive jurisdiction to adjudicate upon any dispute in which the patent's validity is contested is accorded to the courts of the member state in which deposit or registration of the patent has been applied for or has taken place, they being best placed to adjudicate upon the dispute. As has been pointed out in paras 37 to 39 of the present judgment, that is not so in the case of the courts where a company party to a contractual dispute has its seat if it pleads that the decision to enter into the contract taken by its own organs is invalid."
"I reject the submission … that the opening phrase of article [24(2)] must be read in such a way that if proceedings raise any issue within article [24(2)], ie, if the proceedings are concerned with the validity of the constitution of a company (etc) or the validity of the decisions of its organs (etc), then that is sufficient to make those proceedings "principally concerned with" that issue. … The validity issue may be one of many other issues which have nothing to do with the validity of the company or the validity of decisions of its organs, and those other issues may have to be decided by a different applicable law and may concern facts which are unrelated to the state where the company has its seat. In such a case the sound administration of justice could well require the courts of another state to determine the issues. That is even more so when the parties have agreed a jurisdiction for the resolution of disputes."
"… given my view that the Court of Appeal …did endorse the approach of Mance J that a court has to undertake an exercise in "overall classification" and make an "overall judgment" to see whether the proceedings are "principally concerned" with one of the matters set out in article [24(2)], we are bound to follow that interpretation unless there has been a subsequent decision of the ECJ (or House of Lords) which has stated a contrary interpretation. There is none."
"In order to answer the question whether proceedings which raise multiple issues are "principally concerned "with one of the matters within art.24(2) the court has to undertake "an exercise in "overall classification" and make an "overall judgment" to see whether the proceedings are "principally concerned" with one of the matters set out in" the article: JP Morgan Chase at [87]."
"I do not take from the English or European authorities which were cited to us any suggestion that one is required in all cases to disentangle issues which are interlinked in this way and apply art.24(2) to each issue separately. On the contrary, faced with such proceedings, the court is required to form an overall evaluative judgment as to what the proceedings are principally concerned with. The position is obviously different from a case where two quite independent claims are made in the same proceedings. Exclusive jurisdiction in relation to each claim would, in those circumstances, have to be determined separately."
"Under article 4 and those provisions, it is quite possible that the courts of two or more member states might have jurisdiction in relation to the same claim. This causes no difficulty under the scheme of the Recast Regulation. In all such cases it is the priority rules in Section 9 of Chapter II which determine the jurisdiction where the claim should proceed, which generally depends on which court is first seised. But as noted above, those rules are disapplied where a claim falls within the exclusive jurisdiction provision in article 24. Accordingly, it is clear from the scheme of the Regulation that the interpretation and application of that provision cannot depend on the type of evaluative judgment in relation to which different courts could reasonably take different views. In principle, there should be only one correct application of article 24 in relation to a given claim. This tells strongly against the broad evaluative approach to the interpretation and application of article 24(2) adopted by the courts below."
"But this approach had the effect of expanding the application of article 24(2) …contrary to the guidance in the Hassett case and the BVG case, rather than narrowing its application, as the Court of Justice had been at pains to do in its judgments in those cases. According to the Court of Appeal, article 24(2) of the Recast Regulation is to be read as having the effect of allowing a party which is able to bring one claim within that article (the English company law claim) to add on another claim (the authority claim) which is conceptually distinct and is not inextricably bound up with the former claim, so that the latter claim is to be taken to fall within the scope of article 24(2) as regards the jurisdiction of the English courts as well. In my view, Mr Crow QC for Koza Altin and the trustees was right to criticise this step in the Court of Appeal's analysis as an illegitimate reversal of the approach indicated in the judgment of the Court of Justice in the BVG case."
i) The exclusive jurisdiction provisions of article 24 are to be narrowly interpreted. In this regard Lord Sales' comments on the BVG case at [32] are pertinent:
"a narrow interpretation of article 22(2) meant that the ultra vires defence did not have the effect of pulling the whole proceedings or any part thereof into the exclusive jurisdiction of the German courts. In that context it could not be said that the "principal subject matter" of the proceedings comprised "the validity of the decisions of [BVG's] organs" as would be required if article 22(2) was to have any application." (Emphasis added)
In other words the exclusive jurisdiction clause in that case conferring jurisdiction on the English court took priority over article 24 (2).
ii) A claim which falls within the exclusive jurisdiction of one court may be severed from a claim that does not, even if the two claims are linked: [34].
iii) In deciding the scope of exclusive jurisdiction it is wrong in principle for the court to embark upon a broad evaluative assessment of what is in the claim, taken as a whole: [28].
i) The impugned activities are within the scope of the Unilever Licence;
ii) The impugned activities do not amount to an infringement because they are experimental;
iii) The claims in tort are time barred by the Limitation Act; and
iv) V565 did not exist before the patents expired.
"It asks whether that rule concerns all proceedings concerned with the registration or validity of a patent, irrespective of whether the question is raised by way of an action or a plea in objection, or whether its application is limited solely to those cases in which the question of a patent's registration or validity is raised by way of an action."
"… the view must be taken that the exclusive jurisdiction provided for by that provision should apply whatever the form of proceedings in which the issue of a patent's validity is raised, be it by way of an action or a plea in objection, at the time the case is brought or at a later stage in the proceedings."
"[26] First, to allow a court seised of an action for infringement or for a declaration that there has been no infringement to establish, indirectly, the invalidity of the patent at issue would undermine the binding nature of the rule of jurisdiction laid down in [article 24 (4)].
[27] While the parties cannot rely on [article 24 (4)], the claimant would be able, simply by the way it formulates its claims, to circumvent the mandatory nature of the rule of jurisdiction laid down in that article.
[28] Secondly, the possibility which this offers of circumventing [article 24 (4)] would have the effect of multiplying the heads of jurisdiction and would be liable to undermine the predictability of the rules of jurisdiction laid down by the [Regulation], and consequently to undermine the principle of legal certainty, which is the basis of the [Regulation] …
[29] Thirdly, to allow, within the scheme of the [Regulation], decisions in which courts other than those of a state in which a particular patent is issued rule indirectly on the validity of that patent would also multiply the risk of conflicting decisions which the [Regulation] seeks specifically to avoid… "
"… in the present case there are also other issues which have no equivalent in the patent case that raises only the issues of validity and infringement."
"I reject the submission … that if proceedings raise a number of issues and one of them is within the terms of article 22(2) and the resolution of that issue may be dispositive of the proceedings as a whole, that must mean that the proceedings are "principally concerned with" an issue within article 22(2) . Again, that is not what the article states. It is inconsistent with Mr Jenard's commentary. If the test is: what are the proceedings "principally concerned with", as the English Court of Appeal has held, then one issue which may be dispositive may be what the proceedings are principally concerned with, but it is not necessarily the case. No ECJ decision has given the article that interpretation. The GAT case does not support this proposition because that was a patent case and, as the ECJ makes clear in its judgment, when an infringement claim raises the issue of validity of the patent they are really two aspects of one issue. The Coin Controls and Fort Dodge cases are to the same effect."
Result
Lord Justice Newey:
Lady Justice Asplin: