Paris Central Division

-    What is a party and when are two parties identical?

In a recent decision, the Paris Central Division addressed a preliminary objection related to the admissibility of an action for revocation. The involved parties in the revocation case (in relation to for EP 3 646 825) are Edwards Lifesciences Corporation from California, USA, as the Patent Owner, and Meril Italy srl from Milan, Italy, as the Claimant. 

The patent owner had previously filed an infringement action in Munich against Meril Life Sciences Pvt. Ltd. (referred to as Meril India), inter alia, before the Local Division in Munich and requested the dismissal of the Parisian revocation action. The patent owner argued that Meril Italy was only recently founded, lacks business activities, and shares employees with Meril India. Hence - so the patent owner – Meril Italy and Meril India are one and the same party so that the revocation action by this party (let us call them Meril Indaly…) was inadmissible. This argument is based on Art 33 (4) UPCA:

“If […] an action for infringement […] between the same parties relating to the same patent has been brought before a local […] division, these actions may only be brought before the same local […] division.”

In consequence, any (other) party not involved in the infringement case at hand is free to bring a revocation actions before the Central Division.

But what is a “same party”?

Literal interpretation:

The UPCA does not define "party", and the Central Division concludes that Italian law should apply to determine party status. Under Italian law, corporate connections do not establish a new legal entity, and Meril Italy is not the same party as Meril India (and/or Meril Germany).

Article 29 Brussels Recast I:

The patent owner argued that the term "same parties" in Article 33(4) UPCA should be interpreted broadly, citing a judgment (in C-351/96) of the Court of Justice of the European Union (CJEU) on the Brussels Convention. However, the Central Division rejects the argument based on the CJEU judgment on "same parties”, stating that the judgment addresses a different legal issue related to avoiding conflicts between decisions in different contracting states. The purpose of Article 29 of the Brussels Convention is to prevent parallel proceedings, which is different from the situation under the UPCA.

The Central Division concludes that the present case falls outside the scope of Article 29 of the Brussels Convention, and the UPCA provides autonomous rules for addressing parallel proceedings. Therefore, the broader interpretation advocated by the patent owner was not applicable in this specific case.

Strawman theory:

The patent owner argued that Meril Italy is a "strawman company", suggesting it lacks independent legal status, and its actions should be attributed to the parent company. However, the Central Division finds insufficient evidence to support the claim that Meril Italy is a strawman company.

The Central Division notes that the economic interests, common ownership, and shared personnel between Meril Italy and Meril India indicate a connection but not necessarily an agreement that the legal activity benefits the parent company. The Central Division concludes that there is no clear evidence of abusive intent or an abuse of process by the Meril Italy, aligning with the Enlarged Board of Appeal of the European Patent Office's stance on opposition not being purely inadmissible when a party acts on behalf of another unless it involves abuse of process, which requires evidence.

Uniform administration of justice:

The patent owner contended that a broad interpretation of the term "same parties" in Article 33(4) UPCA aligns with the UPCA's intent for a uniform administration of justice, preventing conflicting judgments within its divisions. However, the Central Division finds this argument unpersuasive. It emphasizes that the UPCA and RoP offer mechanisms to handle parallel proceedings, such as staying the proceeding or referring counterclaims to the central division. The Central Division points out that the local division has discretionary powers to manage these situations, ensuring fairness and equity while avoiding conflicting decisions. 

Conclusion by the Central Division:

The revocation action is admissible. In our opinion, this conclusion seems to be in line with German case law based on comparable questions (see, for example, BGH, judgment of 30th July 2013 - X ZR 36/11, marg. 7 and 8).

Our takeaways:

• The narrow interpretation of the Central Division opens strategic options for the potential infringer. An affiliated company of the potential infringer may initiate a revocation action at the Central Division even if the potential infringer is sued before the local Division. In effect, a certain “forum shopping” seems possible (please note the next bullet point, though!).
• On the other hand, the Central Division also seems to indicate that a revocation action of a "pure strawman" would be inadmissible. However, such property must be proven by the patent owner.
• The decision seems to be in line with German case law based on (in our opinion) comparable questions (see, for example, BGH, judgment of 30th July 2013 - X ZR 36/11, marg. 7 and 8).