Don't blame the forum shoppers, blame the European Patent litigation system

In yet more patent litigation concerning BlackBerry mobile email devices, the Court of Appeal has declined to criticise the forum shopping and Italian torpedo firing tactics of BlackBerry manufacturer - Research in Motion (RIM). The appeal court noted that "a party who fires an Italian torpedo may stand to gain much commercially from it. It would be wrong to say that he is 'abusing' the system just because he fires the torpedo or tries to"; Jacob LJ in Research In Motion UK Ltd v Visto Corporation.

RIM commenced a non-infringement action in the English courts and the patentee counterclaimed that RIM's later commenced 'Italian torpedo' was an abuse of the Italian court process. The High Court declined jurisdiction to hear this part of the patentee's counterclaim. The Court of Appeal upheld this order finding that the English proceedings and the Italian proceedings were not "related" for the purposes of Article 28 of the Brussels Regulation (EC/44/2001), so it did not matter that the UK proceedings were technically the first in time.

Background

On 5 December 2006 RIM commenced an action in the English court claiming a declaration of non-infringement of Visto's EP (UK) by its "'family of integrated hardware and software". This claim for non-infringement excluded a particular aspect of some embodiments of the BlackBerry system, namely that which uses 'BlackBerry Mail Connector'.

On 27 December 2006 RIM commenced proceedings in the District Court of Milan, seeking revocation of the corresponding Italian patent and a declaration of non-infringement of not only the Italian patent but also the corresponding German, French, Spanish, Dutch and Belgian (but not UK) patents. The declaration sought included the BlackBerry Mail Connector excluded from the UK non-infringement declaration action.

On 2 February 2007 Visto served a defence and counterclaim to the UK claim for a declaration of non-infringement. Visto accepted that the BlackBerry system without Mail Connector did not infringe, but counterclaimed for infringement in respect of the Blackberry systems sold etc in the UK which included this aspect.

Importantly, Visto also counterclaimed for damages for the tort of abuse of abuse of process by RIM of either the Italian Court and/or of the English court. So far as the claim was made under Italian law, it was made pursuant to Article 96 of the Italian procedural code.

In essence Visto's allegations of abuse of process were that the restricted UK action was brought in a jurisdiction "reputed to be quick and harsher on patentees than other jurisdictions" in order to seek "any kind of relief from a court" in order to counteract the commercial uncertainty (and its publicity) that had arisen by virtue of the related litigation in the United States.

Secondly, the Italian action was brought as a "stifling device" with a view to preventing any infringement action being taken in other jurisdictions designated in the EP. RIM knew and intended that the Italian proceedings would be slow - had RIM genuinely wanted such claims determined promptly it would have brought them in the earlier UK action.

RIM applied for an order that the English court should decline jurisdiction (or stay the proceedings) in respect of Visto's counterclaim for abuse of process of the Italian court (the Art 96 claim) and/or for abuse of the process of the English court. Immediately prior to the hearing of this application and as Visto had accepted that the BlackBerry system without the Mail Connector did not infringe, RIM undertook to discontinue the English non-infringement action.

The High Court granted declined jurisdiction to hear the Article 96 claim. Visto appealed but by the time of the appeal the only two actions left, in practical terms, were the Italian non-infringement action and the counterclaim in the English court for abuse of the Italian process. Accordingly, the parties accepted that the order granted by the High Court should stand. However, what remained in dispute and needed to be determined by the appeal court (for costs purposes) was whether the High Court was right to grant the order it did, while the English non-infringement action and the defence to it was still in existence. This turned on the correct interpretation of article 28 of the Brussels Regulation which states:

• Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.
• Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.
• For the purposes of this article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgements resulting from separate proceedings.

ECJ case law has confirmed that if the English and the Italian actions where "related" in this sense and the English court was "first seised" it was not permitted to decline jurisdiction (including in respect of the Article 96 claim).

The patentee argued that when its defence was served it raised several factors as to why the English court should refuse to exercise its discretion to grant RIM a declaration on non-infringement, including the alleged abuse of the Italian process. Accordingly, from that time on, the English and Italian proceedings were "related".

Furthermore the English proceedings were "first seised" because under the Brussels Regulation the time when a court is taken to be seised is the time when the initiating document is lodged with it – in this case RIM's claim form. This remained the rule even though here it was the defence which was relied upon to assert that the proceedings were related and it was served later than the initiating document in the Italian proceedings!

Outcome

The Court of Appeal held that the actions were not related for the purpose of Article 28 and therefore upheld the High Court's order.

In its view this article "requires an assessment of the degree of connection, and then a value judgment as to the expediency of hearing the two actions together". Here the "substance of the English proceedings is a declaration about an English patent and a particular product. The substance of the Italian proceedings is other designations, but not focusing on the same product. The abuse of Italian process is a link between them, but it is the only link; it is only in relation to that point that there is a risk of inconsistent judgments. It does not seem to us that Article 28(3) requires one to find that any possibility [of conflict], no matter how small the point, requires the conclusion that the actions are related… We consider that the area of potential conflict is not sufficiently great to lead to the conclusion that expediency would require one trial…"

Comment

Although the precedent set by this case relates to the workings of Article 28, the judgment is also of interest for the comments made by Jacob LJ in respect of the forum shopping tactics of patent litigants. These are worth quoting as he clearly blames the system itself rather than those who utilize it to their own advantage.

"The case is yet another illustrating the unsatisfactory state of the current arrangements for deciding European wide patent disputes. Too often one finds parties litigating as much about where and when disputes should be heard and decided as about the real underlying dispute… Much ingenuity is expended on all this elaborate game playing. Despite the temptation to do otherwise, it is not easy to criticise the parties or their lawyers for this. They have to take the current system as it is and are entitled (and can only be expected) to jockey for what they conceive to be the best position from their or their client's point of view…"