Everything flows, and the Dutch cross-border injunction flows like no other. From its source in the The Hague all the way to the cradle of Europe: Greece. So decided the Dutch Courts in the Novartis vs. Pharmathen case.
The willingness of the Dutch Courts to assume jurisdiction to grant cross-border relief in international patent cases is nothing new. This is well-known, as has been previously reported on this blog (see e.g. here and here). Still, even old rivers can change course.
In this case, Novartis initiated patent infringement PI proceedings in Greece against the Greek entity Pharmathen SA. Novartis’ patent related to a process for the production of a long action release product for treatment of tumors (‘LAR product’). The Greek Court concluded that the patent was not infringed and denied Novartis the claimed relief. In parallel merits proceedings the Greek court denied, on procedural grounds, the claims of both Pharmathen SA (seeking a DNI) and Novartis (seeking revocation of the PI decision).
Novartis subsequently initiated PI proceedings in the Netherlands against the Dutch entity Pharmathen Global, the parent company of Pharmathen SA. Novartis claimed a cross-border injunction – i.e. for all designated states where the patent was in force, including Greece – based on patent infringement and general tort law. This cross-border injunction was granted by the PI Judge of the District Court of The Hague (decision d.d. 19 July 2022 in Dutch here), and largely confirmed on appeal (CoA The Hague decision d.d. 15 November 2022 in Dutch here and English machine translation (not reviewed!) here).
On appeal Pharmathen Global argued that, in view of Art. 36 Brussels I-recast (recognition of foreign decisions), the Dutch Court was bound by the Greek court’s PI decision that Pharmathen SA does not infringe the patent. The Dutch CoA considered – based on expert evidence on Greek law – that the Greek decision did not result in res judicata as Pharmathen Global was not a party to the Greek proceedings. Moreover, under Greek law (as under Dutch law) a PI decision cannot result in res judicata. Therefore the Dutch CoA did not consider itself bound by the Greek PI decision.
However, Pharmathen Global also argued that – according to Greek law – the effect of a decision cannot be set aside by a second decision, other than an appeal. This would even be so if the second decision concerned another party, but would effectively result in the first decision being set aside. The CoA agreed that this rule was violated by the PI Judge of the District Court as far as the Judge had ordered Pharmathen Global to instruct Pharmathen SA to cease and desist the infringement in Greece.
This proved to be a pyrrhic victory for Pharmathen. The CoA did not dam the flow of the cross-border relief. Like the PI Judge, the CoA decided to grant an injunction against Pharmathen Global for all designated states, including Greece. The CoA just changed the course of the flow, that is, it’s legal basis.
Both the PI Judge and the CoA considered that Pharmathen’s method technically infringed the patent (i.e. by equivalence according to the CoA, applying the Pemetrexed approach).
The CoA differed from the PI Judge on the legal qualification of the acts performed by Pharmathen Global. The PI Judge considered that Pharmathen Global acted unlawfully by facilitating this infringement abroad (i.e. no direct infringement, but a general tort). The CoA, however, concluded that Pharmathen Global’s activities as the central, controlling parent company already concerned a direct infringement. Even if the infringing activities were de facto not performed by Pharmathen Global (but by Pharmathen SA), then Pharmathen Global should still be considered a direct infringer as the responsible party for these activities. This qualification of the controlling activities as direct infringement, rather than a tort, adds a new branch to the cross-border river.
________________________
To make sure you do not miss out on regular updates from the Kluwer Patent Blog, please subscribe here.
With this type of cross boarder injuctions one wonders whether a thing as complicated as the UPC is at all needed!
See also the decision of the French Supreme Court commented on this blog:
https://patentblog.kluweriplaw.com/2022/07/08/french-judge-competent-for-infringement-abroad-private-international-law-vs-upc/
Especially in the context of corporate tax havens in the Netherlands, Ireland and Switzerland with corporate shells piloting multiple cross-border subsidiaries ! Are such corporate tax optimisation constructions coming back to bite their inceptors?
I would not worry too much about Switzerland as it is not in the EU and Ireland is far from ratification, as the ratification needs a referendum.
When patents owned by those corporate tax shells are opted-out, the UPC will have no say in the matter. For the rest, it will have to be seen whether the alleged “long arm jurisdiction” of the UPC goes well beyond the boundaries of the UPC contracting states.
I refer to Art 82(1) UPCA: “Decisions and orders of the Court shall be enforceable in any Contracting Member State”. Under Contracting Member State only UPCA Contracting Member States can be meant. Certainly not any EPC Contracting Member State. That decisions and orders can be served in any state is not at stake here. To be enforceable in any non-Contracting Member State is a different issue.