Art.28 Jurisdiction Regulation and Related Actions

In Research in Motion v Visto [2007] EWHC 900, on appeal [2008] EWCA 153, the English courts was asked to interpret the meaning of "related actions" in Art.28 Jurisdiction Regulation (generally, see para 14-049 et seq. in book). The action concerned the "Blackberry Wars". The facts were a little complicated but merit understanding. RIM issued proceedings in England for a declaration of non-infringement of Visto's EP(UK) patent in relation to its Blackberry products . Later, it issued proceedings in Italy seeking a declaration of non-infringement of the corresponding EP(Italy) patent and also the German, French, Spanish, Dutch and Belgian EP sister patents.

Subsequently, Visto served a defence and counterclaim to the English action claiming, inter alia, that RIM was guilty of the tort of abuse of process under Art.96 of the Italian procedural code (which permits a court to award damages of a fixed amount where the losing party has "acted or resisted in the proceedings with bad faith or gross negligence"). In essence, Visto claimed that RIM had abused the process by its Italian "torpedo" (patent proceedings are notoriously slow in Italy) and that seeking a declaration of non-infringement in relation to non-Italian countries was plainly spurious and contrary to the Jurisdiction Regulation.

RIM applied to have Visto's counterclaim stayed under Art.28 Jurisdiction Regulation on the grounds that the Italian action and the English counterclaim were related and the Italian court was the court first seized. During the oral proceedings, RIM undertook to discontinue its action for a declaration of non-infringement. On that basis, it was clear that the Italian proceedings were the first in time and thus, the counterclaim was stayed as the Italian court was the court first seized and the proceedings were plainly related.

However, Mr Justice Lewison went onto to consider what the position would have been if RIM's English action for a declaration of non-infringement had been still alive for the purpose of determining costs. He said that although the English court was technically first seized, the action for a declaration for non-infringement of the English patent was wholly unrelated to the action for abuse and that the defence of abuse under Art.96 of the Italian procedural code was not "latent or pregnant" in RIM's action. He thus held that the Italian court was the court first seized.

Visto appealed this latter part of the court's decision. Thus, the appeal was essentially about costs. The Court of Appeal dismissed the appeal. However, they went about it in a rather different way. Visto argued that in essence, the English court was the court first seized, the proceedings were related and thus under Art.28(1), the English court could not decline or stay jurisdiction. The Court of Appeal said that the concept of "related proceedings" in Art.28 involved

"an assessment of the degree of connection and then a value judgment as to the expediency of hearing the two actions together (assuming they could be so heard) in order to avoid the risk of inconsistent judgments. It does not say that any possibility of inconsistent judgments means that they are inevitably related. It seems to us that the Article leaves it open to a court to acknowledge a connnection, or a risk of inconsistent judgments, but to say that the connection is not sufficiently close, or the risk is not sufficiently great, to make the actions related for the purposes of the Article"

The Court of Appeal concluded that when looked in the round, the area of potential conflict was not sufficiently great to lead to the conclusion that expediency would require one trial even if it were theoretically possible. Accordingly, it concluded that the proceedings were not related within the meaning of Art.28. The Court said that it broadly agreed with the reasoning of the High Court judge but said that when considering whether proceedings were related, one should not consider defences which were latent or pregnant within the claim but to consider the actual defence filed.

In the author's view, the result of the courts was right. It would have been a nonsense for the English court to determine the issue of abuse under Art.96 Italian Code of Procedure which necessitated a prior finding of a losing party in Italian proceedings before considering the issue. Absent the Art.96 point, there was no risk of irreconcilable judgments under Art.28(3) (see para 14-053). Lewison J's remark that the issue of whether a court is first seized and whether there is a risk of irreconcilable judgments is intertwined must be right. If A issues proceedings in England for collection of £5000 debt against B, A then issues proceedings in in Italy claiming that B is infringing its UK patent and B counterclaims in the English debt proceedings for a declaration of non-infringement of the UK patent, then in substance, the claim for debt in £5000 has nothing to do with the issue of related actions. It would thus be most strange for the English court to be considered first seized on the patent matters.

However, the Court of Appeal's finding that the actions were not related gives rise to a real difficulty which the COurt of APpeal does not appear to have appreciated. If the actions were unrelated, then under Art.28, the English court had no right to stay the proceedings. In a lis alibi pendens situation, only where the actions are related can a court of a Contracting State stay proceedings. Lewison J overcame this point by concluding that the Italian action and the English counterclaim were related actions but not the English claim for declaration of non-infringement and thus the Italian court was the court first seized. Thus, the Court of Appeal appear to have come to the conclusion that Lewison J would have been right to have stayed the proceedings even though Art.28 was not engaged.