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Entitlement disputes – High Court interprets “exclusive jurisdiction”

Entitlement disputes – High Court interprets “exclusive jurisdiction”

02/04/12

High Court of England and Wales holds that it has jurisdiction which is exclusive to all other possible jurisdictions in entitlement disputes over European patent applications between a UK party and a party not resident in an EPC contracting state

This case [2012] EWHC 790 (Pat), before the Patents Court of the High Court of England and Wales, relates to a dispute of ownership of a number of patent applications and patents. The parties involved are Innovia Films Limited (“IFL”), a client of and represented by W P Thompson & Co.*, and Frito-Lay North America, Inc. (“Frito-Lay”). IFL claims that it is the rightful owner of various patent applications (including European patent applications) filed by Frito-Lay, and of any patents granted as a result thereof, and that Frito-Lay has acted in breach of confidence in filing the patent applications and obtaining granted patents.

The High Court held that it had “exclusive jurisdiction” to hear the entitlement dispute between the parties concerning the European patent applications, and that it would continue to have jurisdiction over those parts of the dispute relating to any foreign applications which grant after the date when the entitlement proceedings were commenced but before a decision is made on the entitlement dispute.

Case details

Frito-Lay filed a number of US Patent Applications, and national and PCT applications claiming priority from the US patent applications. The PCT applications had been taken forward into national and regional phases in a number of territories including before the European Patent Office. Some of Frito-Lay’s US patent applications had been granted.

Amongst other things, in this application the High Court heard argument from Frito-Lay relating to what would be the appropriate jurisdiction to decide upon the entitlement dispute in relation to the European patent applications.

The Protocol on Jurisdiction and the Recognition of Decisions in respect of the Right to the Grant of a European Patent (“the Protocol on Recognition”) defines an order of fora where entitlement disputes can be heard. The appropriate forum for deciding the issues is dependent upon the residence of the parties to the entitlement dispute. Also, any final decision given by the courts of an EPC contracting state relating to an entitlement dispute are to be recognised in other EPC contracting states.

Based upon the respective residences of the parties in this instance, the High Court had to decide if the entitlement question relating to the European patent applications could only be heard in the courts of an EPC contracting state (the UK in this case), or if the entitlement question relating to the European patent applications could be heard in the courts of a non-EPC contracting state (in this case the United States District Court for the Eastern District of Texas Tyler Division).

Article 3 of the Protocol on Recognition specifies that the courts of the EPC contracting state-resident “shall have exclusive jurisdiction” when the party bringing the entitlement dispute is resident in an EPC contracting state and the other party is resident in a non-EPC contracting state.

In the present case the argument centred on interpretation of the phrase “exclusive jurisdiction”. IFL contended that this meant exclusive of the jurisdiction of any other state whatsoever, whereas Frito-Lay contended that it meant merely exclusive of the jurisdiction of any other EPC Contracting State.

The High Court held that “exclusive jurisdiction” is exclusive of all other possible jurisdictions, i.e. of EPC and non-EPC jurisdictions. Thus, entitlement disputes relating to European patent applications could only be heard in the court of an EPC contracting state.

Another issue heard related to whether or not the courts of the UK would lose jurisdiction to hear the s.12 entitlement dispute if an application in the patent family proceeded to grant.

The High Court referred to the judgement of Jacob LJ in the Court of Appeal Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9, [2008] RPC 17. In that case, the Court noted that an application relating to an entitlement dispute over a UK patent application would be “transmuted” into an application relating to an entitlement dispute over a UK patent when the patent granted. The Court also noted in that case that, although there is no provision in the UK Patents Act for transmuting an application relating to an entitlement dispute over a foreign patent application into an application relating to an entitlement dispute over a foreign patent, “the logic is the same” because “whether the dispute is about a right to an application or to a patent resulting from the application, the cause of action, entitlement, is about one indivisible thing, ownership.”

Thus, using the logic of that earlier judgment, the High Court held that, should one of the foreign patent applications which was the subject of the s.12 claim proceed to grant prior to a decision being made on the entitlement dispute, then the High Court would not cease to have jurisdiction over the foreign applications under s.12 merely because they have granted before trial.

Permission to appeal was granted.

*Counsel for Innovia was instructed by W. P. Thompson & Co.