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Ablynx NV & Vrije Universiteit Brussel v VHsquared Limited & Unilever Nederland B.V. & 4 others [2019] EWHC 792 (Pat), 29 March 2019

This judgment of the High Court follows a preliminary hearing to determine if the UK courts have jurisdiction to hear main proceedings.

HHJ Hacon held that the UK courts had exclusive jurisdiction to hear the case under art.24(4) of Brussels I recast despite there being a prima facie case that the relevant agreement had an exclusive jurisdiction clause. An exclusive jurisdiction clause has no legal force if it purports to exclude the exclusive jurisdiction of a national court under art.24(4) and so art.31(2) is not engaged. The claimants successfully argued that the proceedings would be concerned with the validity of UK patents, so the case will proceed in the UK.

The proceedings were brought primarily by the first claimant, Ablynx. The second claimant, VUB, is the patentee for the EP 0 656 946 patent family, consisting of three patents relating to immunoglobulins derived from camelid antibodies (“the Patents”).

One of the Unilever defendant entities had been a licensee of the Patents for the use of the inventions in a defined field called the ‘Reserved Sector’ since 1997. The first defendant, VHsquared, later became a non-exclusive licensee under the Patents in relation to the Reserved Sector. In 2001, Ablynx became a sub-licensee under the patents with the exclusive right to exploit the Patents for certain medical uses outside of the Reserved Sector.

Since 2012 Ablynx has alleged that VHsquared exploited uses of the invention in the field in which Ablynx is the exclusive licensee. VHsquared denied this, leading to litigation in the UK, Netherlands and Belgium. Ablynx named six defendants, VHsquared and five Unilever companies.

The Defendant’s Application
The defendants applied for a declaration that the UK courts had no jurisdiction to hear this case and a stay of the action (pending the outcome of litigation in Belgium). HHJ Hacon refused both the declaration and the stay.
The defendants had stated that if the proceedings were to continue, they intended to allege that the Patents are invalid in the UK. Under art.24(4) of Regulation (EU) 1215/2012 (“Brussels I recast”), this would typically result in the UK courts having exclusive jurisdiction.

However, the defendants argued that this general rule did not apply for two reasons:

1. First, the defendants were licenced to carry out the acts under a licence which granted exclusive jurisdiction to the ‘Court of Brussels’. Under arts.25 and 31(2) of Brussels I recast, the UK courts should stay the proceedings until the Brussels court declares itself not to have jurisdiction (should that happen). Article 24(4) could not, therefore, be engaged.

2. Secondly, the validity of the Patents would form only an incidental part of the proceedings, and so the proceedings are not ‘concerned with’ the validity of the Patents, as required by art.24(4).

Which court decides if Art.24(4) is engaged in the proceedings?
HHJ Hacon considered the interplay of three main provisions of Brussels I recast:

• Under art.24(4), a national court has exclusive jurisdiction over proceedings concerned with the validity of a patent.

• Under art.25(1), if two parties have agreed that a particular court shall have exclusive jurisdiction to settle disputes between them in relation to an agreement, then that court shall have the exclusive jurisdiction to do so.

• Under art.31(2), where a party begins proceedings in a court which is not the court with exclusive jurisdiction under art.25, the court of the country in which the action is started must stay the proceedings until the country with exclusive jurisdiction declares that it has no jurisdiction.

The defendants argued that where an art.25(1) agreement was in place, art.31(2) was engaged even where the proceedings were concerned with a relevant patent, as art.31(2) overrides art.24(4). HHJ Hacon disagreed. In his view, art.25(4) went on to make clear that any agreement which attempted to remove the jurisdiction granted to a court under art.24(4) would have no legal force. The jurisdiction conferred by art.24 is ‘more exclusive’ than that of art.25. Accordingly, art.31(2) is without prejudice to art.24.

Are the proceedings ‘concerned with’ the validity of a patent?
The defendants had argued that art.24(4) was not engaged if the validity of the relevant patent is a peripheral issue to the proceedings. Having reviewed the case law, HHJ Hacon concluded that proceedings were ‘concerned with’ the validity of a patent if, pursuant to an overall assessment, the proceedings are in substance or principally concerned with validity, but not otherwise. He also concluded that the proceedings could not be severed into separate validity and infringement portions, but an overall judgment must be reached about whether they fall within art.24(4).

When considering whether art.24(4) is triggered, this is not to be done by looking just at the pleadings as they stand, but by looking at all of the evidence available and coming to a view on as to the form the proceedings will most likely take at trial, including the relative significance of the likely issues.

Taking into account the usual practice in relation to patent validity proceedings in the UK, and the arguments which are typically run, HHJ Hacon concluded that there was no real doubt that if the proceedings progress to trial they will be concerned with the validity of the Patents within the meaning of art.24(4). Art.24(4) was therefore engaged.

Relevant Agreements under Art 25 and Art 31(2)
In case he was wrong about art.24(4) being engaged, HHJ Hacon also considered the position under arts.25 and 31(2). HHJ Hacon had to consider two legal questions in relation to art.31(2). First, whether in order to rely on this article a party merely has to assert that there is an agreement under art.25, or if there is a need to prove this to some higher standard (and, if yes, to what standard). Secondly, is the court before which the stay is sought entitled to consider the validity and true effect of the alleged agreement relied on.

HHJ concluded that a party seeking a stay has to satisfy the court that they have a prima facie case that there is an agreement granting jurisdiction to courts of another member state, that it is valid and that it covers the relevant proceedings. If this low threshold is met, then the court must stay the proceedings and cede jurisdiction to the chosen forum.

Having reviewed the agreements, HHJ Hacon found that the defendants had at least a prima facie case that the agreement would have conferred exclusive jurisdiction over the proceedings on the courts of Brussels.

Defendants’ Request for a Stay
A separate request for the proceedings to be stayed under the Arbitration Act 1966 was rejected on the grounds that the clause pointed to in the agreements did not cover these proceedings. The defendants also tried to argue that the claimants were estopped from bringing these proceedings because the previous Dutch action had involved the same parties, but this was dismissed on the grounds that the proceedings related to different patents and products.

A copy of the judgment can be found here.

Headnote: Elsa Glauert and Amy Crouch, Simmons & Simmons LLP