CJEU clears the way for single courts determining infringement actions in multiple jurisdictions without invalidity counterclaims interfering with the process (BSH Hausgerate v Electrolux)

The Court of Justice of the European Union (CJEU) has declared that there is jurisdiction for EU courts over infringement of patents designated to other EU and third states (where there is a defendant domiciled in the EU state of that court). However, the CJEU held that in relation to patents granted by EU states, EU courts did not have jurisdiction over validity as this is the exclusive jurisdiction of the state in which the patent was granted. Nevertheless, a challenge to validity will not prevent the courts continuing with infringement actions (with an option to stay). Further the CJEU held that the exclusive jurisdiction in relation to validity does not apply in respect of third state patents, and that courts seized with infringement disputes are able to assess the validity of third state patents as part of their infringement determination but their findings will only have effect as between the parties (BSH Hausgerate v Electrolux C-339/23  25 February 2025) (the BSH case)).

This is a significant decision since previously counterclaims for invalidity were triggering EU courts to cede jurisdiction to the courts of the states in which the patents in question were granted. The decision will also impact on UPC decisions. Some UPC local division courts had been awaiting the outcome of this case before deciding whether they had "long arm" jurisdiction over infringement in non-UPC states.   

Andrew Wells, HSF IP partner and patent specialist commented:

"This much anticipated decision from the CJEU gives plenty of food for thought.  Not only will it strengthen moves already afoot in the UPC to hear cases involving patents granted in non-participating states pursuant to its so-called 'long arm' jurisdiction, but it also gives national courts in Europe a much greater ability to hear cross-border infringement cases than has historically been the case.  This may alter the cost-benefit analysis of UPC vs national litigation for patentees in some circumstances and raises interesting questions about how far European courts may go in hearing cases relating to the infringement of patents from countries beyond EPC contracting states (e.g. the USA)."

Background

The BSH v Electrolux referral to the Court of Justice of the European Union (CJEU) raised critical questions about the jurisdiction of EU courts over patents registered in different member states and third countries.

The dispute began when BSH Hausgerate (BSH) sued Electrolux in Sweden for infringement of a patent concerning vacuum cleaners. The patent was validated in Sweden and several other EU countries, as well as the UK and Turkey. Crucial to Electrolux's case was a challenge to jurisdiction based on Article 24(4) of the Brussels I Regulation (Recast) (EU) 1215/2012 (Brussels Regulation). Article 24(4) states:

“…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 irrespective of whether the issue is raised by way of an action or as a defence.”

Electrolux counterclaimed against the validity of the patent and argued that the Swedish court lacked jurisdiction over both the infringement and validity elements of the non-Swedish designations. BSH, on the other hand, contended that Article 24(4) should not apply as it had only brought infringement proceedings.

The Swedish court dismissed BSH's infringement action, accepting Electrolux's argument that it lost jurisdiction when validity was raised. BSH appealed and the Court of Appeal referred the case to the CJEU.

The CJEU referral focused on two main issues:

1. Whether an EU court has jurisdiction to declare on the validity of a patent registered in a different member state (referral questions 1 and 2).
2. Whether Article 24(4) allows a member state to have jurisdiction over disputes concerning patents registered in a third state (ie. a non-EU state, like Türkiye or the UK) (either principally or as an incidental question) (referral question 3).

Advocate General's Opinion

The Advocate General ("AG") Nicholas Emiliou provided two key opinions on the matter. The first opinion, issued on 22 February 2024, addressed the jurisdiction over patents within EU member states, suggesting a narrow interpretation of Article 24(4) that allows courts to retain jurisdiction over infringement claims while not determining validity. The AG emphasised the need to balance the patent holder's right to an effective remedy with the alleged infringer's right of defence and sound administration of justice. The AG's opinion was that the court could make a preliminary analysis of validity, but if the invalidity defence is serious, the proceedings may be stayed pending a proper validity determination in the member state of patent registration.

In his second opinion, issued on 5 September 2024 following further submissions to the Grand Chamber, the AG explored three potential "ways" to tackle the jurisdictional issue of patents registered in third states. The first approach, which he ultimately rejected, was BSH's proposal for an unconditional application of Article 4(1), which would allow courts in the defendant's domicile to rule on the validity of patents in non-EU member states. The second approach recognised that Article 24(4) did not cover third states, but emphasised the clear principle of customary international law that one state cannot interfere with the public services of another. Therefore, courts could either decline to adjudicate a claim objecting to validity or stay the action while waiting for the third state to rule on validity. The third and, in the AG's own words, most "radical" approach proposed that courts could decide on the validity of patents in third states as an incidental question for the purpose of ruling on infringement actions. Such a decision would only have inter partes effect.

The CJEU's decision

The CJEU held:

1. Article 24(4) of Regulation (EU) No 1215/2012 of the European Parliament and of theCouncil of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, must be interpreted as meaning that:

a court of the Member State in which the defendant is domiciled, seised pursuant to Article 4(1) of that regulation, of an action for infringement of a patent granted in another Member State, retains jurisdiction to hear and determine that action where, in the context of that action, that defendant contests, by way of an objection, the validity of that patent, whereas the jurisdiction to rule on that validity lies exclusively with the courts of that other Member State.

2. Article 24(4) of Regulation No 1215/2012 must be interpreted as meaning that:

it does not apply to a court of a third State and, consequently, does not confer any jurisdiction, exclusive or not, on such a court with regard to the assessment of the validity of a patent granted or validated by that State. If a court of a Member State is seised, on the basis of Article 4(1) of that regulation, of an action for infringement of a patent granted or validated in a third State in the context of which the question of the validity of that patent is raised, by way of an objection, that court shall have jurisdiction, pursuant to Article 4(1) of that regulation, in order to rule on that exception, since its decision in that regard is not such as to affect the existence or content of that patent in that third State or to entail the amendment of its national register.

The CJEU confirmed the AG's opinion that a stay was still an option for a court where a counterclaim for revocation was lodged and the court, saying at paragraph 51: "If it considers it justified, in particular where it takes the view that there is a reasonable, non-negligible possibility of that patent being declared invalid by the court of that other Member State that has jurisdiction, the court seised of the infringement action may, where appropriate, stay the proceedings, which allows it to take account, for the purpose of ruling on the infringement action, of a decision given by the court seised of the action seeking a declaration of invalidity."

In relation to third state patents, the CJEU commented on other legislation and international agreements that might impact on the consideration of validity, including the Brussels Regulation (under Art 33 and 34 if the defendant has commenced an invalidity action in the patent's granting state (a third state) before the infringement action was filed) whose rules may lead to a stay or even termination of the infringement proceedings, the Lugano Convention which has a similar provision to Art 24(4), and any separate agreements between states which cover this area.

Impact

At the heart of the BSH case is the potential abuse of courts by defendants who claim invalidity for multiple designations, thereby attempting to remove jurisdiction from the court.  This decision alleviates that concern and allows the EU courts to proceed with decisions on infringement whether or not invalidity is raised in a counterclaim.

The CJEU has found a "third way" as anticipated by the AG's Second Opinion. A decision on validity of third state patents that is only inter partes is a novel solution. Will it remain truly inter partes? What is guaranteed is that European courts would have greater competence in patent infringement proceedings. This could significantly increase competition between patent courts in Europe – including between national courts and the UPC.