European Patents and the Italian Torpedo: the IP Court of Milan Departs from the Court of Cassation?

With a recent decision (Judgment no. 1143/2014 ) concerning the jurisdiction of the Italian courts with respect to non-Italian fractions of European patents, the IP Court of Milan seems to depart from the position expressed by the Supreme Court in its late 2013 reversal on the so-called Italian Torpedo (commented, among other places, here).

An Italian company and two Spanish affiliates, belonging to a group that specialises in manufacturing elevators, asked the Milan IP Court to invalidate the Italian fraction of a number of European patents owned by a US competitor, and to declare that their elevator systems did not infringe the Italian and Spanish fractions of the same patents. The US defendant pleaded, inter alia, the lack of jurisdiction of Italian courts with respect to the negative declaration of the infringement of non-Italian fractions of European patents, and lack of locus standi on the part of the two Spanish plaintiffs.

The Milan Court upheld the first exception, claiming a lack of jurisdiction over the negative declaration concerning the Spanish fractions of the patents in suit. The judges observed that, on one hand, the defendant had no domicile in Italy and, on the other, jurisdiction could not be based on the special connecting factor of the “place of the harmful event ” provided for by Art. 5 ( 3 ) of EC Regulation no. 44/2001.

“Even assuming the application of Article 5, paragraph three, of EC Regulation no. 44/2001 (a corresponding provision being contained in the text of the Brussels Convention)” — the Court reasoned — “according to which, in matters relating to tort , delict or quasi-delict, a person domiciled in a Member State may be sued in another Member State, before the courts of the place where the harmful event ‘has occurred or may occur’ (in the text of Regulation EC/44/2001), it is not possible to claim the jurisdiction of Italian courts to hear an action for the negative declaration of infringement of non-Italian portions of (omissis)’s European patents. In particular, this Court emphasises that Italy may be the locus commissi delicti (meaning both the harmful act and the harmful effect) only for the infringement of the Italian portion of the European patents, as actual or potential damage occurring in Italy arising from the alleged infringement of the Spanish portions of the (omissis)’s patents is not realisable. In fact, every national fraction of a European patent produces its effects only on the territory of the State to which it pertains and can be said to be infringed only in that territory. ”

This passage seems to mark a clear distance from the Court of Cassation’s ruling referred to above, where, in affirming the jurisdiction of an Italian court for a negative declaratory action concerning a foreign portion of a European patent, the judges relied on the case-law of the European Court of Justice in Case C- 133/11 Folien Fischer, according to which Art. 5 (3) of Regulation 44/2001 also applies to a negative declaration seeking to establish the absence of liability in tort, delict, or quasi-delict.

For the IP Court of Milan, even taking into account the dual role of the “place of the harmful event” criterion, the relevance of both the harmful act and harmful event, and the concept of potential damage in addition to actual damage, what is decisive in ruling out the Italian courts’ jurisdiction over a foreign portion of a European patent is the fact that in Italy the fraction has no effect, so that under no circumstances may an infringement, and thus a harmful act or event, occur.

But the Milan court went even further. Having ruled out its own jurisdiction with respect to actions concerning the Spanish fractions of the patents in suit, the Court found it was inevitable to declare the lack of locus standi of the two Spanish plaintiffs with respect to the remaining actions, all concerning the Italian portions of the competitor’s patents. The group’s products sold on the Italian market — the only ones potentially affected by the Italian portion of those patents — originated exclusively from the Italian branch, while the Spanish affiliates did not play any role in Italy.

The success of the Italian Torpedo is mainly measured at the territorial IP Courts level. It will be interesting in the coming months to see which trend will prevail. It is also possible that this very case, or a similar one, makes its way through the upper echelons of the judiciary, eventually giving rise to another decision of the Court of Cassation.