In an age of developed international commerce, global disputes arise between sophisticated international businesses. Not infrequently, they involve patents and the terms of licences to patents. Patents are territorial in nature, as are the courts of sovereign states. How such courts seek to resolve international patent disputes therefore requires careful navigation of international jurisdictional norms.

In 2022, the European Union (EU) instigated the World Trade Organisation's (WTO) dispute resolution mechanism in response to courts in China seeking to enjoin litigants from enforcing their foreign patents in the courts of the relevant foreign country. In 2025, a case is proceeding in the Court of Justice of the EU (CJEU) in which the CJEU is asked to consider the jurisdiction of courts of EU Member States (and therefore the Unified Patent Court (UPC) too) to hear and determine disputes as to patents to third states outside the EU. Most recently, the UPC's Local Division (LD) Düsseldorf has held that the courts of the EU Member State in which the defendant is domiciled (and the UPC) have jurisdiction to hear and determine claims for infringement of a patent covering that Member State, any other EU Member State and any third state, such as the UK.

This article explains the context of the case that has reached the CJEU, the two opinions already given by the Advocate General (AG), the messages and inconsistencies apparent in the AG's rationale, and the UPC LD Düsseldorf's reasoning (and disregard for the AG's rationale). We conclude that care must be taken not to conflate the rationale for the intra-EU operation of the EU's 'Brussels' regime with the position in respect of third states. Interference in the domestic affairs of a third state, for example, in the determination of a dispute as to patent infringement or validity, could be seen as a breach of the principle of sovereign equality, and the Brussels regime must be interpreted consistently with that principle.

The EU's jurisdictional architecture

The jurisdictional reach of courts in the EU, including the UPC, in international patent disputes is the subject of a case proceeding in the CJEU following a reference from the Svea Court of Appeal, Stockholm, Sweden: Case C-339/22 BSH Hausgeräte GmbH v Electrolux AB[1]

The dispute is set in the context of the interpretation of the EU legislation governing, as between the Member States of the EU, jurisdiction and the recognition and enforcement of judgments on civil and commercial matters – the Brussels Regulation (1215/2012).

Article 4 of the Brussels Regulation provides by way of 'general provision' that "persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State". Additional 'special jurisdiction' is then provided by article 7, in matters relating to tort (such as a claim for patent infringement), in the courts for the place where the harmful event occurred or may occur (i.e. the place where infringement occurred). However, the general and special jurisdictions are subject to the exclusive reservation of jurisdiction provided for by article 24(4) in proceedings concerned with the "registration or validity" of patents. Irrespective of whether the issue is raised by way of an action or as a defence, jurisdiction in respect of such proceedings is reserved to the courts of the Member State of registration.

The interpretation of these provisions (and earlier iterations of them) by the Court of Justice, in particular in Case C-3/04 GAT v LuK [2] established that because a finding of invalidity of a patent typically has effect as against all third parties (and not just the party seeking the invalidity finding), in order to avoid contradictory decisions from the courts of different EU Member States as to the validity of a single designation of a European patent, the courts of the state of the designation had exclusive jurisdiction to decide the validity (or otherwise) of that designation. This meant that since the raising of invalidity as a defence to an infringement claim brought into play the reservation of exclusive jurisdiction, questions of infringement, validity and registration of a designation of a European patent (and of any patent) have, with very few exceptions, been determined by the courts of the country of the relevant designation/patent. This is consistent with the international norm.

Later, in Case C-616/10 Solvay v Honeywell, the Court of Justice distinguished the position in respect of claims for provisional relief. Where the Brussels Regulation (by article 31) enabled a party to seek, in one Member State, a preliminary injunction having effect in one or more different Member States, the raising of issues concerning validity did not disapply the operation of article 31.

Under the Brussels Regulation, the UPC is considered to be a 'common court', equivalent to a court of an EU Member State. The above described principles therefore apply in respect of the UPC just as they do in respect of a court of a Member State hearing a patent dispute.

More recently, alongside the European collaborative momentum that has resulted in the UPC Agreement and the establishment of the new court, some litigants, governments and other stakeholders have been advocating for a change to the principles described above, to enable greater cross-border determination of patent disputes. On 28 January 2025, in Fujifilm v Kodak (UPC/CFI/355/2023), the UPC's Local Division Düsseldorf held that under the Brussels Regulation, the courts of an EU Member State in which a defendant is domiciled have jurisdiction which is "universal" over actions for patent infringement made against that defendant. On this basis, provided that the defendant is domiciled in the EU, the local divisions of the UPC may hear and determine claims for infringement of a European patent covering a UPC Contracting Member State, covering any other EU Member State whether or not it is part of the UPC, and covering any other 'third' state.

Which brings us to the C-339/22 BSH v Electrolux case now proceeding in the CJEU.

BSH Hausgeräte GmbH (BSH) brought proceedings in a court in Sweden against Electrolux AB (domiciled in Sweden) for infringement of European patent designations covering Austria, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden, Turkey and the United Kingdom. Turkey and the UK are not in the EU (and so may be described as 'third states'). A number of questions were referred to the CJEU.

Whether the reservation of exclusive jurisdiction applies to patents to non-EU states

The CJEU was asked to consider whether the Brussels Regulation's reservation of exclusive jurisdiction for questions of validity or registration applies in respect of designations of European patents to third states.

BSH, the French Government and the Commission argued that under the Brussels Regulation art. 4(1),

  • proceedings might be brought against a defendant domiciled in an EU state for infringement of patents covering not only other EU Member States but also third states; and
  • for third states, the reservation of exclusive jurisdiction to the country of grant/registration would not operate and so the court with domicile-based jurisdiction might rule on those issues too.

So, with such reasoning, against a UPC state-domiciled defendant, the UPC (or a court of the Member State in which the defendant is domiciled) could rule on the infringement and validity of a European patent to a non-EU state like Turkey or the UK.

In a case before the CJEU, the usual procedure entails an oral hearing, then the preparation and delivery of an advisory written 'Opinion' by the AG, and then after the justices have been able to consider the AG's reasoning the Court delivers its written judgment containing its reasoning and its ruling.

The (first) Opinion of the AG was delivered in February 2024[3]. The AG opined that the Brussels Regulation reservation of exclusive jurisdiction in respect of the validity of a patent cannot apply to disputes involving patents to third states: the reservation makes sense for 'intra-EU' disputes only.

However, the AG continued to explain that the raison d’être for the reservation was the deference due to certain sovereign rights and interests, including that states would not accept interference by foreign courts with the validity of entries in public registers or patents or the right, reserved to states, to exercise enforcement power in respect of judgments in their states.

Therefore, the notion that the Swedish courts were prohibited from adjudicating the validity of the German designation but would be obliged to issue a declaration as to the validity of the Turkish designation, was "baffling" and "questionable from the point of view of public international law": the same sovereign rights and interests would be respected in the first case, but completely dismissed in the other. The location of the defendant’s domicile could not serve as justification for the courts in the state of domicile to interfere in the domestic affairs of a third state. That could be seen as a breach of the principle of sovereign equality, and the Brussels regime must be interpreted consistently with that principle. In legislating the Brussels regime in its modern form, the EU legislature had not meant to impose a comprehensive solution on the issues of disputes closely connected to third states. Nor was it in the EU legislature's power to oblige the courts of a Member State to rule on matters impinging upon the sovereign rights and interests of third states: public international law frames the legislature's discretion.

Thus, an implicit derogation from the mandatory effect of domicile-based jurisdiction must be acknowledged. Courts of the EU Member States should be permitted to determine questions of jurisdiction on the basis of their national law and so to decline jurisdiction where, had there been a similar connection with a Member State, the court would have had to relinquish jurisdiction, provided this would not lead to a denial of justice in respect of the third state. Hence the Swedish court could decline to adjudicate the issue of the validity of the Turkish patent raised by way of defence to the infringement claim.

Very unusually, after the AG's February 2024 Opinion was delivered, the CJEU assigned the case to the Grand Chamber (15 judges, rather than the usual ‘chamber’ of 3 or 5 judges) and reopened the oral part of the procedure. Following further argument, the AG delivered a second Opinion in September 2024[4]. He confirmed the above view in further reasoning expressed in stronger terms.

The AG explained that the fact that the art.24(4) reservation of exclusive jurisdiction is limited to the titles of Member States is easily explained by the fact the Brussels regime is a system of jurisdiction internal to the EU, pursuing objectives specific to the functioning of the single market, designed to distribute jurisdiction in civil and commercial matters between the courts of the Member States. It would be simplistic to infer absolute domicile-based jurisdiction in relations with third states – this would be a very curious external effect not envisaged by the drafters of the Brussels legislation. Such a reading was not required in respect of the validity or registration of foreign patents and would be inconsistent with the objective of sound administration of justice. Such a judgment "would never be recognised" by the third state, and proceedings going to the registration or validity of a patent to a third state could, in some circumstances, be abusive.

Further, since the EU is bound to respect international law, including customary law, in the exercise of its powers, the Brussels Regulation must be interpreted in a manner that is consistent with that law.

The Brussels regime cannot claim to be universal when an EU defendant is involved and at the same time take into account only the sovereignty of the Member States, while ignoring that of third states. Hence the AG reiterated his opinion that while under the Brussels Regulation art.4(1), the courts of Member States may have jurisdiction to hear and determine disputes involving third states in the matters in question, nevertheless they are permitted not to exercise such jurisdiction. The CJEU's ruling in Owusu v Jackson Case C-281/02 (in which, in the context of a claim in tort, the CJEU held that a court of a Member State may not decline jurisdiction over a person domiciled in that state on the ground that the natural forum for resolution of the dispute is in the courts of a country outside the EU) is not mandatory in nature in such cases.

The AG then added to his opinion two further lines of reasoning entailing recommendations going beyond his previous Opinion.

The first new line of reasoning drew upon the ‘reflexive effect’ theory “developed many years ago” by “Droz”[5]. According to this theory, it would be going too far to interpret art.4(1) as mandatory in nature in cases about the registration of a patent to a third state. While pursuant to art.4(1) the courts of the Member States would have jurisdiction when seised of a claim against a ‘local’ defendant and having as its object, for example, the validity of a third state patent, art.4(1) would allow those courts to use the powers provided for in their national law (whatever they may be, including those deriving from their rules of private international law) to decline to give judgment. Similarly, where such courts are seised of an infringement action concerning a third state patent, against such a defendant, and the latter raises an invalidity defence, they could refuse to rule on that defence and, as the case may be, stay that action while waiting until the authorities in the third state had ruled on its validity, in a manner which ‘reflects’ the solution arising from Article 24(4) of that regulation.

The second new line of reasoning proposed a “possible ‘third way’”. This would interpret art.4(1) as meaning that “it does not confer any jurisdiction on the courts of the Member State of the defendant to hear and determine actions concerned with the registration or validity of third-State patents”. Where the question of the validity of such a patent is raised as a defence in an infringement action, that provision “would confer jurisdiction on those courts to determine that issue only as an incidental question, for the sole purpose of ruling on the action”. It would not give them the power to attach erga omnes effect to the grounds relating to the validity of the title (or, a fortiori, to make a declaration in that regard, having such an effect, in the operative part of their judgment). Hence where a court of a Member State is seised of such a claim against a ‘local’ defendant, it would have to declare that “it has no jurisdiction to hear and determine the matter (or, as regards an invalidity defence raised in an infringement action, to limit the effects of its decision to the parties), on the basis of that regulation”.

The AG described this approach as both more radical and more targeted than the above recommendations. Yet it still goes further than the established international norm – and the norm under the Brussels Regulation to date - which is not to consider questions of infringement or validity (let alone revocation) of patents to third states at all. This is because a finding of infringement/non-infringement in view of validity considerations (without making any ruling as to validity) impacts not just the parties to the litigation but also the operation of the market in the third state.

An explanation was provided in a judgment in the UK back in 1994 (Plastus Kreativ v 3M[6]):

“A finding of infringement is a finding that a monopoly granted by the state is to be enforced, invariably with the result the public have to pay higher prices than if the monopoly did not exist – if that is to be the proper result, then it should come about from a decision of a court situated in the state where the public have to pay the higher prices, as it is then likely to command the respect of the public.”

Therefore a further, more general question, not addressed in the AG's Opinions, is whether the courts of EU Member States should be accepting jurisdiction of questions of infringement of a patent to a third state at all. As the AG observed in BSH v Electrolux, the Brussels regime was not designed to address disputes connected to third states, deference is due to certain sovereign rights and interests, including in respect of patents and the right, reserved to states, to exercise enforcement power in respect of judgments in their states, and so an implicit derogation from the mandatory effect of domicile-based jurisdiction must be acknowledged. This logic applies not just for questions of registration, but also questions of validity and infringement of (and what relief is appropriate for infringement of) patents to third states.

In respect of the validity of patents to third party states, should any recognition of exclusive jurisdiction be considered implicitly to operate as the Brussels regime reservation has done so since the CJEU's ruling in GAT v LUK, a challenge to the validity of a third state patent in that third state would in practice be considered to remove the question of infringement to that third state too. However, the AG's reasoning does not tie any such recognition to the natural reading of the terms employed in Brussels Regulation or its operation to date; and as discussed below, the AG in fact recommends changing the approach established in GAT v LUK. Nor would this address asserted jurisdiction to award preliminary relief to restrain infringement of a patent to a third state by a court in an EU Member State (or the UPC).

It is therefore apparent that the approach to questions of jurisdiction concerning patents to third states must be disconnected, by the CJEU, from the approach under the Brussels Regulation for issues of intra-EU jurisdiction. No third state is party to or bound by the Brussels regime. Therefore no third state has conceded the jurisdiction of its courts in respect of questions of registration or validity or infringement (or any relief to be awarded for infringement) of patents to its territory, or the operation of trade within its territory, in the way that the EU Member States have respectively conceded to the courts of each other pursuant to the EU's founding and constitutional treaties and the Brussels legislation. It is a matter of comity.

How the Brussels regime operates as between its contracting parties is a different question which is of course within the competence of the EU’s institutions.

The scope of the Brussels Regulation's reservation of exclusive jurisdiction for proceedings concerned with the registration or validity of patents

Further support for the above conclusion may be found by considering the consequence of another part of the AG's reasoning in his first Opinion in the BSH v Electrolux case, in the context of another of the questions referred by the Swedish court. This question invites re-consideration of the approach established by the CJEU in GAT v LuK.

The AG observed that under the Brussels Regulation, the courts of the state of registration/grant of a patent have jurisdiction over infringement of that patent, but the jurisdiction is "not exclusive, but optional". The jurisdiction of the courts of the EU Member State for which the patent has been designated/granted is territorially limited, whereas the jurisdiction of the courts of the Member State in which the defendant is domiciled is "universal". This jurisdiction "may extend to the infringement of the European patent committed in all the States for which it has been granted". Those courts "may award damages to compensate for the total loss suffered by the patent holder, or issue an injunction prohibiting the continuation of the infringement in all those States". Hence in theory, the Brussels Regulation enables the patent holder to "consolidate" all their infringement claims before, and to "obtain a comprehensive relief from, a single forum".

However, the Swedish court observed that the established operation of the reservation of exclusive jurisdiction effectively deprives the court with domicile-based jurisdiction of such universal jurisdiction. It asked whether the reservation of exclusive jurisdiction should operate where a question of validity is raised merely by way of defence to an infringement claim.

The AG queried the legal standing of the CJEU's judgment in GAT v LuK. He then proceeded to address the merits of that ruling, observing that it makes unattractive the consolidation of infringement claims concerning different 'parts' of a European patent and encourages patent holders to "start separate proceedings in the various States of registration of those ‘parts’ instead". He considered this "unfortunate" but observed that the effect of the ruling had been codified into the modern form of the Brussels Regulation.

The AG said that had it not been for this codification ([63]):

"I would have advised the Court to overturn it and to declare instead that the rules of exclusive jurisdiction for proceedings concerned with the validity of patent does not apply where an invalidity defence is raised in infringement proceedings, to the extent that the judgment delivered by the court seised would produce inter partes effects only."

As presently codified, the rule of exclusive jurisdiction "concerns all proceedings relating to the … validity of a patent". While the most natural reading of this wording covered the 'broad' reading of the provision as understood as established by the court's ruling in GAT v LuK, the AG's opinion was that this reading was flawed, and a narrower reading should instead be adopted by the Court. Pursuant to the narrower reading, if claim for infringement of a patent to a third state is made against a defendant in their EU Member State of domicile, and the defendant challenges the validity of the patent in the third state, the court in the state of domicile would remain competent to hear and determine the infringement claim, they simply could not make a legal determination as to the validity of the patent/designation to the third state.

Again, how the Brussels regime operates as between its contracting parties is a matter within the competence of the EU’s institutions. It is for the EU legislature/CJEU to determine the allocation of jurisdiction in civil and commercial matters, including in patent disputes, between the courts of different EU Member States

However, the approach recommended by the AG, if applied to patents to third states, would impinge comity. It would entrench EU Member States (or the UPC) asserting/accepting jurisdiction to hear questions of infringement of patents to third states, awarding relief impacting the market in third states, and facilitating anticompetitive conduct impacting third states.

The reasoning of the Advocate General in the BSH v Electrolux case is therefore internally inconsistent. The AG explains that since the EU is bound to respect international law, including customary law, in the exercise of its powers, the Brussels Regulation must be interpreted in a manner that is consistent with that law. The location of the defendant’s domicile cannot serve as justification for the courts in the state of domicile to interfere in the domestic affairs of a third state. That could be seen as a breach of the principle of sovereign equality, and the Brussels regime must be interpreted consistently with that principle. This covers matters of infringement (and the operation of the market) in a third state and matters of registration or validity of a patent in a third state. Yet the AG recommends a change to the operation of the Brussels Regulation (in particular the extent of any recognised reservation of exclusive jurisdiction in respect of questions of registration or validity of patents to third states) that would conflict with his recommendation that international law, including customary law, be respected.

The UPC Local Division Düsseldorf's decision in Fujifilm v Kodak

In Case UPC/CFI/355/2023, Fujifilm sued Kodak companies domiciled in Germany for infringement of a European patent, designations of which are in force in Germany and the UK. Fujifilm argued that the UPC's jurisdiction covered not only the alleged infringing acts in Germany, but also in the UK. Kodak challenged the asserted jurisdiction in respect of the UK designation by way of preliminary objection and sought revocation of the German designation for invalidity.

On 28 January 2025, the UPC Local Division Düsseldorf concluded that the German designation of Fujifilm's patent was invalid. While the court had no jurisdiction to rule on the validity of the UK designation (which had not been put in issue by Kodak), it assumed the grounds for invalidity applied equally in respect of the UK designation and ruled that therefore the infringement action in respect of the UK designation could not succeed.

Nevertheless, the LD Düsseldorf's reasoning on jurisdiction is notable. It stated that the UPC's "international jurisdiction" arises from Brussels Regulation article 4, along with article 71b(1), under which the jurisdiction of the UPC is limited to matters governed by the UPC Agreement but which "lists multiple scenarios in which the effect of the Court's decisions will obviously extend beyond the territories of the Contracting Member States". Further, the LD Düsseldorf stated that pursuant to the UPC Agreement article 32(1), the UPC has "international jurisdiction" in the counterclaim for revocation AND "exclusive jurisdiction for counterclaims for revocation of (European) patents". It said that the views of the AG in the BSH v Electrolux case (and the outcome of that case) were "not decisive" in the present dispute because it (the LD Düsseldorf) had concluded that the German designation was invalid.

By this reasoning, the LD Düsseldorf appears to state that the UPC, when exercising domicile-based jurisdiction against a defendant, can (1) determine claims for infringement of European patents to third states, (2) has international jurisdiction to counterclaims for invalidity of European patents to third states, and (3) has "exclusive" jurisdiction, displacing the jurisdiction of the courts of the designated state, in respect of counterclaims for invalidity made in respect of European patents, including designations to third states. This covers matters of infringement (and the operation of the market) in a third state and matters of registration or validity of a patent in a third state.

This is completely at odds with the AG's explanation in the BSH v Electrolux case that the EU is bound to respect international law, including customary law, in the exercise of its powers, and that the Brussels Regulation must be interpreted in a manner that is consistent with that law. For the courts of EU Member States, and the UPC, to interfere in the domestic affairs of a third state risks (at the very least) breach of the principle of sovereign equality.

Unanswered questions

How the Brussels regime operates as between its contracting parties (the EU Member States) is a question within the competence of the EU’s institutions, including the CJEU. Likewise, the jurisdiction of the UPC in respect of patents to EU states that are not participating in the new court is a matter which may be addressed by the CJEU in the context of the Brussels Regulation.

However, care must be taken not to conflate the rationale for the intra-EU operation of the Brussels regime with the position in respect of third states. The AG's reasoning in the BSH v Electrolux case recognises that the location of the defendant’s domicile in an EU Member State could not serve as justification for the courts in the state of domicile to interfere in the domestic affairs of a third state. That risks breach of the principle of sovereign equality, and the Brussels regime must be interpreted consistently with that principle. The EU is bound to respect international law, including customary law, in the exercise of its powers; the Brussels Regulation must be interpreted in a manner that is consistent with that law. Interference in the domestic affairs of a third state, for example in the determination of a dispute as to patent infringement or validity, is likely to be seen as a breach of the principle of sovereign equality, and the Brussels regime must be interpreted consistently with that principle.

In keeping with the positions established internationally by treaty, the courts of EU Member States do not have jurisdiction over patents having effect in third states. Nor does the UPC. The Brussels regime has for many years operated without difficulty in respect of patents to third states, without overstepping international norms. Attempts to change this should be resisted. Although antisuit injunctions are banned as between the EU Member States (and the UPC) under the Brussels regime, third states are by definition not within the Brussels regime. It would be an inauspicious start for the UPC, by overreach, to invite the courts of friendly countries to resort to such measures; or, should the UPC seek to impose extraterritorial jurisdiction on litigants, to invite the sort of complaints about overreach that have led to the EU's own complaint to the WTO.

It would be very interesting to have the opinion of the CJEU on whether the UPC has a such long arm jurisdiction. Will Kodak appeal the decision of the UPC and refer the case to the CJEU for a preliminary ruling? In the meantime, we wait for the CJEU's ruling in the BSH v Electrolux case.

To be continued…

If you have any questions about the points raised in this article, please contact Marianne Schaffner or Ailsa Carter

Footnotes:

[1] Request for a preliminary ruling from the Svea hovrätt, Patent- och marknadsöverdomstolen (Sweden) lodged on 24 May 2022 — BSH Hausgeräte GmbH v Aktiebolaget Electrolux
[2] Gesellschaft für Antriebstechnik v Lamellen und Kupplungsbau Beteiligungs (‘GAT v LuK’) C-3/04
[3] BSH Hausgeräte GmbH v Electrolux AB
[4] Opinion of Advocate General Emiliou delivered on 5 September 2024.
[5] Droz, G., Compétence judiciaire et effets des jugements dans le Marché commun, Paris, Dalloz, 1972, § 156; Mayer, P., ‘Droit international privé et droit international public sous l’angle de la notion de compétence’, Revue critique de droit international privé, No 54, 1979, pp. 362 and 374 to 376; and Pataut, E., Principe de souveraineté et conflits de juridictions (Étude de droit international privé), LGDJ, Paris, 1999, §§ 4 to 11, 48, 97 and 359
[6] Plastus Kreativ AB v Minnesota Mining and Manufacturing Co. & Anr [1995] RPC 438