CJEU empowers Patent Infringement Claimants: Member States have Jurisdiction over non-EU infringement of a European Patent (EP)
On 25 February 2025 the CJEU handed down its decision on BSH Hausgerate GmbH v Electrolux AB, confirming for the first time that EU member states have jurisdiction over infringement of a European Patent (EP) in other EP states, including countries outside the EU (such as the UK).
This follows on from the decision by the UPC last month in Fujifilm Corporation v Kodak GmbH & others, which found the UPC also had jurisdiction over infringement of an EP in non-member states. The cases addressed infringement in Türkiye and the UK respectively, which are both EPO members but not part of the EU or signatories to the UPC (so called “third countries”).
Both cases reversed the previously held position that cross-border injunctions could not proceed where the validity of the patent in suit is challenged. This is a major change of course for both the EU and UPC, which will have significant ripple effects on international litigation strategy.
Background – Jurisdiction
There is some important legislative background to contextualise these decisions. The starting point is the Recast Brussels Regulation, which governs jurisdiction between EU Member states. The Regulation’s general principle is that actions should be brought in the jurisdiction in which the Defendant is a resident – meaning, for instance, a German defendant should be sued in Germany – unless one of a handful exceptions apply. One relevant exception for present purposes is actions over the validity of a patent under Article 24(4), which should be brought in the country in which the patent is registered. Importantly, there is no such exception for patent infringement matters, meaning the general principle applies.
When the Brexit transition period ended on 31 December 2020, the EU’s jurisdictional provisions ceased to take effect in the UK. In particular, the Recast Brussels Regulation no longer applied, meaning that EU courts would no longer have jurisdiction over the UK.
However, under Article 71b(3) of the Recast Brussels Regulation, “common courts” (specifically, the UPC) can have:
jurisdiction to an infringement of a European patent giving rise to damage within the Union, that court may also exercise jurisdiction in relation to damage arising outside the Union from such an infringement. Such jurisdiction may only be established if property belonging to the defendant is located in any Member State party to the instrument establishing the common court and the dispute has a sufficient connection with any such Member State.
This provision faced significant speculation on how it would be interpreted by the UPC prior to the court opening. Particularly, it was unclear whether it extended the scope to infringement taking place outside the UPC contracting states or merely where the damage arising out of the infringement (where the infringement nonetheless occurred in a Member State). You can read our previous Law Now on the topic here.
What did not seem up for debate was the position as regards the jurisdiction of EU member states. The 2006 case of Gesellschaft für Antriebstechnik mbH & Co. K v Lamellen und Kupplungsbau Beteiligungs KG established that EU member states did not have jurisdiction for infringement taking place in non-EU countries where the patent in suit’s validity was challenged as part of the defence. Whilst that principle had been held to be good law, a key rationale for that decision was the risk of the courts indirectly dealing with validity when ruling on infringement due to the intertwined nature of the two (for instance, in issues of construction). The CJEU had held this risk to be untenable, given that jurisdiction for validity was exclusively in the country in which the rights were registered. The upshot of that ruling was that pan-EP injunctions were technically possible, but only where validity was not in issue.
The UK has so far upheld this approach and has repeatedly ruled that matters which involve the validity of foreign patents are not within its jurisdiction. The nearest the UK has agreed to go with comments on foreign validity are Arrow declarations, whereby the court issues a statement that a given product cannot infringe a given patent, as it would be obvious as at the priority date of that patent. Even then, the UK court will only grant an Arrow declaration in circumstances where it serves a “useful purpose”, and has refused to do so where the sole benefit is to impact parallel proceedings.
UPC Approach: Jurisdiction over infringement in non-UPC countries but not validity
The crux of the Defendant’s jurisdictional argument in the UPC case turned on the counterclaim for invalidity. Since the UPC does not have jurisdiction to deal with invalidity in the UK under Article 24(4) of the Recast Brussels Regulation, the Defendant argued that the UPC had no jurisdiction over the EP in so far as it related to the UK, including the claim for infringement. The UPC held that as the Patent was an EP, it nonetheless had international jurisdiction for the claim for revocation under Articles 24(4), 71a(2)(a) and 71b(1) of the Recast Brussels Regulation at least in so far as the German part was concerned. Validity had not been raised in respect of the UK part, and therefore Article 24(4) was not deemed to be relevant.
The remaining question was therefore whether the UK infringement element was within the court’s jurisdiction. The starting point for the court was the principle under Article 4(1) that a Defendant should be sued in the courts of their home jurisdiction. Article 4(1) was held to be universal and to enable “the patent holder to bring all his or her infringement claims before a single court and to obtain a comprehensive relief from a single forum”. Following a line of judgements by the European Court of Justice, the court held that Brussels Recast Regulation “may not only be intra-EU” and may therefore extend to third countries. The raising of a validity defence in relation to a third country would not mean that the UPC lost jurisdiction for the infringement action. Instead, a partial consolidation of the claims before the court would happen, whereby the main action would be in front of the UPC and any claim for invalidity would need to be brought in the third country.
CJEU Decision – Jurisdiction extended further to validity
The CJEU reaffirmed that validity remains under the sole jurisdiction of the state in which the patent is registered.
However, the court held that EU Member States could still deal with infringement in that third country. The court held that the exception under Article 24(4) must be “interpreted strictly since it establishes exclusion jurisdiction which is an exception to the general rule” that defendants should be sued in their home jurisdiction. Since a defence on invalidity grounds could be raised at any stage in proceedings (depending on the Member state in question), courts and claimants would have unnecessary uncertainty as to whether jurisdiction will have to be declined and proceedings started anew in a different jurisdiction. The claimant would also lose the benefit of Article 4(1), namely being able to “concentrate all of its infringement claims and to obtain overall compensation in a single forum”, thus avoiding the risk of contradictory decisions in different jurisdictions.
The court further found that Article 24(4) only grants exclusive jurisdiction as between EU member states. Consequently, the Brussels Recast Regulations do not confer “jurisdiction, whether exclusive or otherwise,” over patent validity to third countries that are not members of the EU. If an EU Court has jurisdiction to consider issues of infringement over that third country, it will also have jurisdiction to consider validity.
There are some limitations to this principle. States that are not part of the EU but are signatories to the Lugano Convention will have exclusive jurisdiction on validity pursuant to Article 73(1) of that regulation. This would include Iceland, Norway and Switzerland, but not, however, Türkiye or the UK.
As a provision of general international law, the court found that validity is still an issue for national courts in which the patent is registered and it would not be appropriate for an EU state to issue binding decisions on validity on that basis. They could, however, come to a decision on validity as part of their assessment on infringement. Such a decision would only have inter partes effects and would not be binding on the courts of the third country in question.
Comment
This is a major shift in policy from the EU, which may be unwelcome in non-EU and non-UPC states. The extended “long arm” is a significant extension of judicial powers in Europe (both applicable to national courts and the UPC).
That approach stands in contrast to the UK’s position, which (at present) is fixed against the EU’s old, pre-Brexit jurisprudence. It is unclear whether the UK will maintain its reluctance to issue decisions relating to the validity in EU/EP countries in light of these decisions: it is possible we will see an uptick in requests for Arrow declarations in the UK, it is also possible that we may see requests for anti-suit injunctions in the UK (which are prohibited under the Brussels Recast Regulations but which are now available again in the UK post-Brexit).
We expect the biggest winners here will be serial claimants, such as patent assertion entities (“PAEs”). The introduction of the UPC had already attracted an uptick in PAE activity in Europe. PAEs were the claimants in approximately 15% of all claims brought in the first year of the UPC (most of which were in the second half of the year, suggesting the actual figure will be much higher). The proliferation of litigation funding and the increasingly claimant friendly landscape mean these numbers are likely to grow. Unlike in the US, where PAEs often target SMEs and micro-enterprises, PAEs have targeted larger organizations in the EU, particularly in the tech space.
Previously, EU courts could only deal with patent infringement if they did not deal with invalidity. Since invalidity is the most common defence, cross border injunctions were rare and difficult to obtain for a claimant. Instead, the claimant would need to litigate in each jurisdiction in which it wanted relief. This led claimants to focus on the jurisdictions where infringement would cause the most financial harm. It also detracted PAEs, as the risk to return ratio of bringing proceedings was far more limited than in other key jurisdictions such as the US.
This change will make the EU a haven for claimants, and particularly for PAEs. The ability to issue a single claim with the possibility of obtaining cross border damages and an injunction is an exceptional tool for a claimant: it reduces the costs and risks of bringing an action, whilst maximizing the threat to the defendant. Deferring validity is even more helpful. Whilst the Claimant can issue proceedings in a single state, the Defendant must fund invalidity proceedings in every jurisdiction in which the decision will take hold. This increases the costs risk of a Defendant, who will typically not recover all its costs even if its defence is successful.
This brings the possibility of forum shopping across the EU, and a potential shift away from the UPC towards litigating in individual EU member states. The central attack on validity available at the UPC is a major downside for claimants, while the pan-EU relief it offered is now potentially available in any EU member state. Strategically, claimants may be better off opting out of the UPC and suing in an EU member state. In so doing, they force the Defendant to file separate actions for revocation in each jurisdiction it needs to defend, rather than being able to centrally attack the rights in all UPC states.
Whilst in theory EPs should be treated the same in the various EU jurisdictions, this is not always the case in practice. For instance, in Regen Lab v Estar, the UK and German courts reached different findings on whether there was infringement by equivalence, despite them considering the same EP and infringing products. Whilst the rules purport to restrict actions to the “home jurisdiction” of the defendant, in reality most international companies will have local subsidiaries who could be a suitable target for infringement actions in that jurisdiction. Other subsidiaries or their parent can then be included as joint tortfeasors, allowing the claimant significant choice in where to litigate.
Whilst the CJEU’s approach appears to be a step beyond the UPC by allowing for declarations on validity, their approaches were highly similar in practice. The UPC had expressly stated it could not make a ruling on the validity of the UK part of the EP, as such a revocation had not been sought and may not have been in the Court’s jurisdiction even if it had. Despite this fact, the Court refused to make a finding on infringement of the UK part of the patent, on the basis that it had found the German part of the EP to be invalid due to insufficiency. The UPC rather oddly concluded that it was up to the Defendant to “comment specifically on the differences” in the UK (either legally or factually) which could give rise to a different result on validity, which it held the Defendant had failed to do. This is tantamount to a declaration that the UK part of the EP was invalid, and so effectively mirrors the CJEU’s approach.
It is further not clear what it means for a declaration on validity to be binding inter partes and how this will be interpreted in parallel proceedings. If a party is bound by a declaration of invalidity in Germany, does that require them to withdraw their UK invalidation action? If they do not, does the claimant have recourse in Germany, for breach of a court order or otherwise? This issue does not appear to have been considered by the CJEU.
Defendants will need to think creatively about how to approach litigation and take proactive steps to seize protective jurisdiction in light of these changes. Initiating proceedings for a declaration of non-infringement or invalidity before a claim is brought – or before a claimant has the opportunity to opt out of the UPC – for instance, will be much more valuable given the risk of a cross border injunction.
