On December 02, 2011, the General Secretariat of the EU Council sent to Permanent Representatives Committee (COREPER Part 1) Document 17407/11 titled Draft agreement on the Unified Patent Court – Relationship of the draft agreement on the Unified Patent Court with Regulation (EC) No 44/2001 Brussels I, originally classified LIMITE.
I was able to obtain a copy of that Document by means of a request in accordance with Article 15(3), third subparagraph, of the TFEU. Specific rules governing this kind of public access to Council documents are established in Annex II to the Council’s rules of procedure. These rules apply mutatis mutandis to European Council documents, as stipulated in Article 10(2) of the rules of procedure of the European Council.
In fact, Document 17407/11 conveys a non-paper from the Commission services dated November 30, 2011. The Commission services have considered the relationship of the draft agreement on the Unified Patent Court in the version of Council documents 16741/11 of November 11, 2011 and 17539/11 of November 24, 2011 with Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels I Regulation). The non-paper presents, to the extent possible, solutions to arrange that relationship in a legally sound and certain manner. The proposed solutions should be considered preliminary.
Of course, in the current situation problems concerning the relationship between the envisaged UPC agreement, on the one hand, and Bruisels I, on the other hand, clearly appear to be of lesser importance. However, these aspects surely contribute to the overall weight of problems to be resolved in principal before the intended ceremony on December 22, 2011, can take place in Warsaw.
The EU Commission sees the combined application of both instruments as follows:
- The UPC should be considered as a “court” within the meaning of Article 2(c) of the Brussels I Recast;
- As such, the jurisdiction rules of the Brussels I Regulation apply to the UPC. In practice, this means that the UPC will have jurisdiction any time when a national court of a Contracting Member State would have jurisdiction based on the rules of the Brussels I Regulation.1 The UPC would not have jurisdiction when no national court of a Contracting Member State has jurisdiction pursuant to the Brussels I Regulation (e.g. when jurisdiction pursuant to the Brussels I Regulation would lie with the courts of a non-Contracting Member State);
- The rules of the Brussels I Regulation do not apply to the internal allocation of competences between the various divisions of the UPC, which will be regulated by the UPC Agreement itself.
Recognition and enforcement
- Judgements given by the UPC must be recognised and enforced in all the Contracting Member States on the basis of the UPC agreement (Article 56 of the draft Agreement);
- Judgements given by the UPC must be recognised and enforced in non-Contracting Member States on the basis of the Brussels I Regulation.
Prevention of parallel proceedings (lis pendens)
- The lis pendens rule of the Brussels I Regulation does not apply between different divisions of the UPC;
- The lis pendens rule of the Brussels I Regulation does apply between the UPC on the one hand and the courts of non-Contracting Member States on the other hand.
However, according to the Commission non-paper the application of the Brussels I Regulation in relation to non-Contracting Member States could give rise to challenges. Article 71 of the Brussels I Regulation deals with the relation of the Regulation to international agreements on “particular matters”. These are international conventions that include rules on jurisdiction or the recognition and enforcement of judgements in certain specific matters (e.g. transport). This article currently reads as follows:
1. This Regulation shall not affect any conventions to which the Member States are parties and which in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.
2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner:
(a) this Regulation shall not prevent a court of a Member State, which is a party to a convention on a particular matter, from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another Member State which is not a party to that convention. The court hearing the action shall, in any event, apply Article 26 of this Regulation;
(b) judgments given in a Member State by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other Member States in accordance with this Regulation.
Where a convention on a particular matter to which both the Member State of origin and the Member State addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation which concern the procedure for recognition and enforcement of judgments may be applied.
It could be argued that the UPC Agreement is a “convention on a particular matter” referred to in Article 71 of the Brussels I Regulation. Even if the UPC Agreement might be considered not to govern the international jurisdiction or the recognition and enforcement of judgments within the meaning of that provision, it cannot be denied that it does have an impact on non-Contracting Member States because as a result of the internal division of competences within the UPC a defendant from a non-Contracting Member State could find him/herself de facto before a division which would not be situated in the Member State of the court designated by the rules of the Brussels I Regulation.
While Article 71 allows conventions on particular matters which already exist, it does not allow any such new conventions. The draft UPC Agreement could thus be considered to violate Article 71 of the Brussels I Regulation.
In order to avoid such challenges Commission services think it seems necessary to insert a provision in the Brussels I Regulation which clarifies that the Unified Patent Court is a court of a Member State in the sense of the Brussels I Regulation and the Regulation thus applies fully to the UPC.
Furthermore, Commission services argue that, in addition, in order to achieve the desired interpretation of the combined application of both instruments, it would seem highly desirable to clarify the concrete application of both instruments in the Brussels I Regulation, as this is done in Article 71 for other conventions on particular matters.1 This would require to set out specifically how the jurisdiction and lis pendens rules of the Brussels I Regulation apply in combination with the UPC Agreement (see Annex, draft Article 71bis(2)(a) and (b)).
Finally, Commission services argue that it would be necessary to ensure that the rules of the Brussels I Regulation will apply in the relations between the Member States party to the UPC Agreement and the Member States not party to that Agreement. As a result, a contrario, the rules of the Brussels I Regulation on recognition and enforcement do not apply to the circulation of judgements given by the UPC among the Member States party to the UPC Agreement.
So far the Commission’s expert views on necessary amendments to Brussels I.
Beyond these amendments – which apparently might be finalised after December 22, 2011 – Commission services argue that also UPC agreement itself needs urgent amendments before getting finalised:
The issue of international jurisdiction is addressed in Article 15b of the draft UPC Agreement, which is the prerequisite for ensuring a sound relationship to the Brussels I Regulation. This provision has been well elaborated in Council document 17539/11 of 24 November 2011.
Furthermore, the Commission takes note that the provisions relating to the applicable law, in particular Article 14e(3) of the draft UPC Agreement will safeguard in practice the application of third State law/non-Contracting State law, where such law must be applied pursuant to Union rules on private international law, the Rome I and II Regulations.
The final point to flag out is that as regards the jurisdiction concerning claims relating to the liability of the UPC itself, Article 3b(3) and (4) of the draft UPC Agreement do not seem in conformity with the Brussels I Regulation, which provides for alternative rules for jurisdiction in contract and tort matters, including the general rule of possibility to always sue persons domiciled4 in a Member State in the courts of that Member State. These provisions should either be deleted or they should be re-formulated so as to apply to matters which are outside the scope of the Brussels I Regulation.
Obviously, the UPC Agreement could not enter into force until the necessary modification of Brussels I Regulation has taken place. This should explicitly be provided for in the UPC Agreement.
It is unknown to me so far as to whether or not these requirements were met by the drafts actually taken into consideration by EU Parliament and Council.
In their conclusion, Commission services recall that the revision of the Brussels I Regulation is ongoing before the co-legislators. The Commission had however not proposed the issues raised in this note in its recast proposal, so it is not possible to deal with the necessary amendments in the framework of the on-going negotiations, but the respective amendment of the Brussels I Regulation requires a proposal from the Commission and the legislative adoption in the procedure foreseen in Article 81(2) TFEU. Such amendment could be drafted as an addendum to the existing Recast proposal and should be adopted before the European Parliament finishes the first reading of the Recast proposal.
Axel H. Horns
German & European Patent, Trade Mark & Design Attorney
The k/s/n/h::law blog
Some of the patent attorneys of the KSNH law firm have joined their efforts to research what is going on in the various branches of IP law and practice in order to keep themselves, their clients as well as interested circles of the public up to date. This blog is intended to present results of such efforts to a wider public.
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