Context: Last year we said that a forthcoming ruling by the European Court of Justice (ECJ) in BSH Hausgeräte v. Electrolux could enable the Unified Patent Court (UPC) to adjudicate the UK parts of patents granted by the European Patent Office (EPO) (May 31, 2024 ip fray article). The long-arm jurisdiction case was reheard by the Grand Chamber, subsequently to which the Advocate General authored a supplementary second opinion.
What’s new: Today the ECJ handed down its decision (when the article was written, it was available only in French and Swedish; later the English version became available, too), and its impact will be way bigger than that of any other European patent ruling, even Huawei v. ZTE. The net effect is that as long as a defendant is domiciled in the territory of a court in an EU member state (or in UPCland), that defendant (and any properly joined co-defendant that aids and abets the infringement) may be ordered to pay damages and/or to cease the infringement even of a patent that is valid outside the territory for which the court is traditionally responsible, regardless of an invalidity defense having been raised, though the decision applies only inter partes and will not result in the deletion of foreign patents from another country’s patent register (or modification of claims). In practice, this means that
- the UPC can order injunctions against defendants based in UPCland (or properly joined co-defendants) and/or award damages with respect to the non-UPCland parts (such as the UK and Turkish parts) of EPO-granted patents, and
- national courts in EU member states such as the Munich I Regional Court or The Hague District Court can ordered injunctions and/or award damages against such defendants with respect to foreign patents, which would even include (for example) U.S., Chinese or Brazilian patents.
Direct impact: The key question for the courts adjudicating such extraterritorial infringement cases will be whether to stay their infringement cases pending foreign validity determinations. With respect to other EU member states, the hurdle for a stay will be higher than for non-EU patents. While patent courts in the EU now have the obligation to decide on such claims, litigants should nevertheless take into consideration whether a given court is actually willing to do so, given that there is always the risk of courts taking a more skeptical view of infringement and/or validity if they seek to avoid the effort of adjudicating extraterritorial claims, which involves questions of foreign law such as potentially the eBay v. MercExchange standard for injunctions or the standard for willfulness enhancements (treble damages). Furthermore, enforcement could run into significant complications in some situations, such as if someone sues a European car maker and a U.S. supplier over a U.S. patent in a European court (such as for cost reasons).
Wider ramifications: Recently, a UK appeals court has shown a tendency toward judicial imperialism by potentially making interim licenses to standard-essential patents (SEPs) and even to non-SEPs (if routinely licensed alongside SEPs) available to virtually any implementer of an industry standard (February 16, 2025 ip fray article). Today’s ECJ ruling will likely raise concerns over extraterritorial encroachment in the U.S., UK and other jurisdictions, and could result in similarly expansive rulings elsewhere.
To call BSH Hausgeräte v. Electrolux a landmark ruling would almost be an understatement. In terms of practical importance, it is easily in the top 1% of all ECJ decisions that get the same label. It is not appealable. It could be overriden only be a future ECJ decision or through EU legislation.
In light of that extraordinary significance, it bears giving credit to the winning legal team. BSH’s external coordinator and mastermind of this enforcement strategy is Dr. Roman Sedlmaier of IPCGS in Munich. It’s just been a little over a month since he won a potentially very important UPC ruling on the language regime (January 17, 2025 ip fray article) as counsel for German supercomputer company ParTec against NVIDIA. BSH’s Swedish lead counsel (this case originated from a Swedish appeals court) is Advokatbyrån Gulliksson’s Magnus Dahlman (whom we have also mentioned in a UPC context before). From his firm, he was joined by Therese Grennard.
The procedural background is a patent dispute between two household appliance makers. BSH sought damages for past infringement from Electrolux in Sweden, where the defendant is domiciled, and included damages claims with respect to other jurisdictions than Sweden, arguing that a Swedish court has jurisdiction over such claims with respect to a defendant domiciled in its country. The court of first instance did not believe that it had jurisdiction, given that Electrolux raised invalidity defenses with respect to foreign jurisdictions and EU law had repeatedly been interpreted as giving each court exclusive jurisdiction over the validity of its country’s patents even in an infringement context. But the appeals court in Sweden decided to put the question before the ECJ.
BSH successfully argued that a distinction had to be made between validity with respect to the status of a given patent in a foreign country’s patent register. A Swedish court cannot order, for instance, the French or UK patent office to remove a patent from its register. But according to BSH and now also the ECJ, an infringement ruling including monetary and injunctive remedies is nonetheless possible.
Two Latin terms highlight the difference. A patent is an erga omnes (“against them all”) right: it has effect against everyone who infringes. The question was never about that overall status, but only about the inter partes (“between the parties”) infringement proceedings, where a validity finding is necessary if an invalidity defense is raised.
The primary question of statutory interpretation was whether exclusive jurisdiction over a patent in terms of its status in ther relevant patent register precluded a foreign court from nevertheless ordering infringement remedies over an invalidity defense. The first step was to answer this question with respect to a patent registered in another EU member state. To give two examples, that would apply to
- a situation in which the UPC is asked to order remedies with respect to the Spanish part of a European bundle patent (see item 1.1 of our February 15, 2025 UPC Roundup) as Spain is an EU member state but not (yet) a UPC contracting state, and
- one in which a Dutch court is asked to order remedies with respect to a German patent or the German part of a European bundle patent (as both the Netherlands and Germany are EU member states).
The first of the two answers given by the ECJ to the questions referred to it addresses this part (unofficial translation to English):
A court of the EU Member State in which the defendant has its legal domicile, seised under Article 4(1) of the Brussels Ibis Regulation of an action for infringement of a patent granted in another EU Member State, shall retain jurisdiction to hear that action where, in the context of that litigation, the defendant contests, by way of exception, the validity of that patent, whereas jurisdiction to rule on that validity lies exclusively with the courts of that other Member State.
That means it is not a “get-out-of-jail-free card” for defendants to raise an invalidity defense with respect to a patent (or part of a European bundle patent) registered in another EU member state. There is jurisdiction over infringement at the defendant’s domicile nonetheless. What about staying the proceedings in order to await a foreign invalidity decision? The second part of para. 51 (unofficial translation) gives the infringement court discretion as to whether it orders a stay pending the foreign invalidity case:
If [the infringement court] considers it justified, in particular where it considers that there is a reasonable and non-negligible chance that the patent will be annulled by the competent court of that other Member State (see, by analogy, judgment of 12 July 2012, Solvay, C‑616/10, EU:C:2012:445, paragraph 49), the court hearing the infringement action may, where appropriate, stay the proceedings, which allows it to take into account, in order to rule on the infringement action, a decision given by the court hearing the invalidity action.
The key words in the above sentence are “may, where appropriate” (in the French original: “peut, le cas échéant”): it also may not stay, such as if the invalidity arguments are unconvincing.
The next question of statutory interpretation was what this means for non-EU countries. In a literal sense, the relevant statute (Art. 24(4) of the Brussels Ibis Regulation, which gives courts exclusive jurisdiction over the validity of patents registered in their jurisdiction) never addressed non-EU countries. But courts used to apply it by analogy.
Today the ECJ has clarified that Art. 24(4) is only for EU member states (unofficial translation):
[The statute] does not apply to a court of a non-EU country and, consequently, does not confer any jurisdiction, exclusive or otherwise, on such a court in respect of the assessment of the validity of a patent granted or validated by that country. 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 which the question of the validity of that patent is raised by way of exception, that court shall have jurisdiction, pursuant to Article 4(1), to rule on that exception, its decision in that regard not being such as to affect the existence or content of that patent in that non-EU country or to result in the amendment of its national register.
This means EU member states should simply decide on, for instance, the infringement of U.S. patents if the defendant is domiciled in their country, but obviously, even if the ECJ had not said so, the United States Patent & Trademark Office (USPTO) would not delete a patent from its register or modify its claims because of an order coming out of the EU.
With respect to patents in non-EU countries, the infringement court can also order a stay within the discretion it has under national law. The fact that the ECJ ruling doesn’t even talk about that possibility is presumably attributable to the inapplicability of Art. 24(4) (exclusive jurisdiction over validity) to non-EU countries. For EU Member States the stay is mentioned at least as a means of overcoming the hurdle that there is exclusive jurisdiction on validity within the EU. In practice, it will probably be harder to obtain a stay with respect to non-EU patents.
Co-defendants
In patent infringement litigation there are very often multiple defendants. If one of the defendants is based in the relevant country (or, in the UPC’s case, in one of the 18 UPC contracting states, given that the UPC is one court with multiple divisions as opposed to a collective of courts) and other defendants participate in the same infringement, they will be impacted by the decision as well.
In practice, however, one also has to take enforcement into consideration. What if, for example, someone sues BMW in Munich and includes a Korean supplier? Enforcing an injunction or damages award against the Korean company could be difficult, though in some cases there may be ways of enforcing against that company’s revenues from European customers.
UPC rulings over non-EPO patents?
The UPC Agreement gives the UPC jurisdiction over EPO-granted patents. So far, no one has even tried to assert any other patents in the UPC. Presumably the UPC would not assume jurisdiction over non-EPO-granted patents. To do so, it would have to interpret its jurisdiction statute as being non-limiting. In connection with anti-antisuit injunctions, the UPC has taken the position that it has been tasked rather generally with the protection of patent rights (December 27, 2024 ip fray article). But, again, there is no precedent of UPC decisions involving patents granted by any other patent office than the EPO.
Foreign law as matter of fact and subject to expert testimony
Defendants may try to argue differences in law. For example, they might say that a certain patent is not valid in the UK because some prior art may be considered there, but would not be deemed eligible in Germany. The UPC could probably resolve some legal questions based on the European Patent Convention (EPC), which still applies in the UK as well. But there is always the possibility of questions coming up that require expert testimony, also with respect to remedies such as access to injunctive relief.
It has repeatedly happened in UK litigation, particularly in SEP cases where testimony on French law (with respect to the ETSI FRAND pledge) has been given. It could be necessary in future BSH-based cases in the EU, though the infringement courts will try to avoid it or at least to narrow the issues put before an expert.
Procedural situation in Swedish BSH v. Electrolux litigation
It is unclear whether Electrolux will ultimately be liable for infringement damages. The Swedish court of first instance held the patent invalid (despite contrary decisions, based on the same prior art, by the Federal Court of Justice of Germany and a Technical Board of Appeal of the EPO) and not infringed (contrary to a ruling by the Dusseldorf Higher Regional Court). BSH appealed that decision. Only if it prevails on appeal will there be a damages determination.
Potential for international blowback
Courts and policy makers in other jurisdictions are probably not amused.
After today’s decision, litigants will now routinely seek to enforce non-UPCland parts of European bundle patents.
If it were up to the judges in the UK and Spain, they’d be more than happy for their countries to join the UPC. The UK can’t anymore (due to Brexit) though it originally wanted to, and Spain could but hasn’t done so yet. Now they will see many cases in which UPCland-based defendants get sued over UK parts of European bundle patents in the UPC.
The United States Court of Appeals for the Federal Circuit decided in Voda v. Cordis (2007) (Casetext link) that a U.S. district court has no supplemental jurisdiction over the infringement of foreign (in that case, European) patents.
Today’s decision is a major win for BSH’s counsel and creates significant opportunities for courts and legal service providers in the EU. For example, U.S. patent litigation is very expensive, so some low-budget litigants might actually sue in an EU member state is the defendant is domiciled there. They might also hope that European judges are more willing than their U.S. counterparts to grant injunctions even if they formally have to apply eBay. Some national patent courts in EU member states that have seen their dockets “cannibalized” by the UPC (The Hague being a perfect example) have a new opportunity as a result of today’s ECJ decision.
But the big question is how other jurisdictions around the globe will respond, be it through extraterritorial rulings of their own and/or through antisuit injunctions.
It’s pretty much “no holds barred” now in the extraterritorial patent enforcement arena.