Italian Torpedoes: the end is the beginning is the end?
Last month, I was invited to speak at the LESI YMC event in London (see here for some details), on a panel featuring some very well reputed foreign colleagues, with whom I discussed the options available for Pan-European patent dispute resolution. The following is a summary of my speech on one of the Italian topics that most interest foreign colleagues, that is Italian Torpedoes.
As it is known, Italian Torpedoes are legal actions typically filed in Italy by an alleged infringer who applies in court for a declaration of non-infringement (DNI) regardless of whether their claims are grounded or not: by doing so,the alleged infringer basically prevents the patent holder from enforcing its patent in faster EU courts which would be willing to stay their infringement proceedings until the end of the DNI action previously commenced in Italy. We already discussed these actions here and here on this blog. Jurisdiction of the Italian courts in similar cases has generally been grounded on Article 5.3 of the 1968 Brussels Convention and of EC Regulation no. 44/2001 (now Article 7.2 of EU Regulation no. 1215/2012), which provides that “a person domiciled in a Member State may be sued in another Member State … in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. This is an exception to the general rule set by Article 4 Reg. 1215/12, i.e. Article 2 Reg. 44/2001, according to which “Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”.
In decision no. 19559/2003 in BL Macchine Automatiche vs Windmoeller, the Italian Supreme Court denied jurisdiction of the Italian courts in similar cases, stating that an alleged infringer applying for a DNI basically denies that any harmful event occurred, therefore Art. 5.3 above should not apply. This seemed to put an end to Italian torpedoes.
Nevertheless, a few years later, the ECJ in the Folien Fischer case (C-133/11) stated that Article 5.3 “must be interpreted as meaning that an action for a negative declaration seeking to establish the absence of liability in tort, delict, or quasi-delict falls within the scope of that provision”.
As a consequence, the Italian Supreme Court overturned its 2003 judgement by its decision no. 14058/13 (Asclepion vs General Hospital). In that case, the German company Asclepion sued before the court of Rome two US companies, requesting the court to ascertain that it was not infringing the Italian and German parts of two European patents held by them. The US companies therefore filed an application before the Italian Supreme Court, requesting it to declare that the jurisdiction on the case did not belong to the Italian courts. Nevertheless, the Supreme Court, making reference to Art. 5.3 above and to the ECJ decision in Folien Fisher, finally stated that the IP Court of Rome had jurisdiction “for being the judge of the place where the harmful event may occur”. However, in its very short and poorly elaborated decision, the Supreme Court did not explain why this also entailed the Italian jurisdiction on the German parts of the two patents.
With decision no. 1143/2014, the IP Court of Milan immediately departed from the position expressed by the Supreme Court in 2013. In that case, an Italian company and two Spanish affiliates 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 they were in any case not infringing the Italian and Spanish fractions of the same patents. The US defendant pleaded the lack of jurisdiction of Italian courts with respect to the negative declaration of the infringement of non-Italian fractions of European patents. The Milan Court upheld the exception, noting that, on one hand, the defendant was not domiciled in Italy and, on the other, jurisdiction could not be grounded on the 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(3), of EC Regulation no. 44/2001 … it is not possible to claim the jurisdiction of Italian courts to hear an action for the DNI of non-Italian portions of European patents. 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 no actual or potential damage can arise in Italy from the alleged infringement of the Spanish portions of the patents. In fact, every national designation 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.”
In its decision no. 13625/2016, the Milan IP Court confirmed the above. A German company requested the court to declare that the Italian designation of a European patent held by the counterparty was null, and that in any case the plaintiff was not infringing the Italian and German designations of the same. The defendant objected that the court lacked jurisdiction in respect of the DNI of the German designation of the patent in question. The court upheld the exception, noting that each European patent gives rise to a bundle of national patents, each of which is subject to the law and jurisdiction of the Country of the relevant designation. “It follows that the jurisdiction over the issue concerning the validity (of the portions) of European Patents, but also over the (negative or positive) declaration of the infringement of the same, belongs to the different national judges, since it is in the territory of the relevant countries that the portion of the various European patents, and the relevant rights, are effective and can, therefore, interfere with other rights or be threatened by interfering conducts”. (…) “hence, the patent holder shall commence infringement proceedings in each Country in which he alleges that an infringement has taken place. By the same token, DNI actions shall be commenced in each Country where the fact (that is alleged to be licit) might happen”.
The decision also pointed out that Art. 5.3 of EC Regulation 44/2001 was irrelevant, as the infringement of a German designation of a European patent cannot take place in Italy, and that Supreme Court decision no. 14508/2013 cannot be shared, as already mentioned in the same court decision no. 1143/2014 mentioned above. In fact, even if Art. 5.3 applied also to DNIs, this would not change the conclusions on jurisdiction: “The request to ascertain that a certain conduct does not constitute an infringement of a patent implies, in any case, the effectiveness of the said patent, which effectiveness has a perimeter that is territorially limited to the space of validity of the legal system to which it refers; outside that perimeter of effectiveness, one could not speak either of counterfeiting or of non-infringement of the patent, and, therefore, one could not even envisage a “harmful event”, neither current nor potential, capable of constituting the connecting factor able to ground the jurisdiction of the judge of a different territory”.
These two Milan decisions again seem to put an end to Italian torpedoes in Italy, considering also the wide experience and the reputation of the judges of the Milan IP Court.
Nevertheless, the 2013 Supreme Court decision is still in place, and the Supreme Court is the highest judicial authority in Italy. As a consequence, it would be of no surprise if other judges followed the Supreme Court decision rather than the Milan ones. As a matter of fact, this has already happened. In fact, the IP Court of Rome, in its decision no. 2608/2018, stated that the jurisdiction over the non-Italian portions of the European patent there in issue, belonged to the same Rome Court under art. 5.3 of Regulation 44/2001, as per Supreme Court decision no. 14508/13. This was actually a very peculiar decision as its aim was only to declare that proceedings had been withdrawn, hence the reasoning on jurisdiction was not elaborated on any further. Nevertheless, this is still a final decision by one of the main Italian IP courts, which shows that Italian torpedoes might still not have come to a real end.