Innovia Films Ltd v Frito -Lay North America, Inc

Exclusive jurisdiction under the Protocol on Recognition is exclusive of courts in non-Contracting States as well as other Contracting States. Where an applicable convention confers mandatory exclusive jurisdiction, the court cannot stay proceedings on forum non conveniens grounds, although a case-management stay may be available in rare and compelling circumstances.

Section 12 of the Patents Act 1977 confers subject-matter jurisdiction over foreign patent applications. The jurisdiction is not lost merely because an application later proceeds to grant. A court may nevertheless decline to exercise jurisdiction on ordinary forum grounds. For service out, the claimant must show a serious issue to be tried, a good arguable case within a jurisdictional gateway and that England is clearly or distinctly the appropriate forum.

Innovia Films Ltd brought proceedings concerning entitlement to patent applications filed by Frito-Lay North America, Inc and alleged breaches of confidence following disclosures made during discussions about food-packaging films. The proceedings concerned European, United States and other foreign applications, together with related patents.

Frito-Lay had also commenced proceedings in the Texas Court. It applied to set aside permission to serve one English action out of the jurisdiction, or alternatively to stay it, and sought stays of the other action. The principal issues were the exclusive jurisdiction of the English court over the European applications, the scope and continuing operation of section 12 of the Patents Act 1977, the applicable law of the confidence claim, service out and the appropriate forum.

1. European applications. Section 82(4)(b) of the Patents Act 1977 had to be construed consistently with Article 3 of the Protocol on Recognition. The expression exclusive jurisdiction meant exclusive of all other possible jurisdictions, including non-Contracting States. The Protocol was intended to provide one forum for entitlement disputes and to secure legal certainty and recognition of the resulting decision.
2. Forum non conveniens. The EPC was a convention within Article 71 of the Brussels I Regulation. The mandatory exclusive jurisdiction created by the Protocol excluded a stay on forum non conveniens grounds. The reasoning in Owusu v Jackson applied with equal force. A temporary case-management stay was legally possible, but only in rare and compelling circumstances.
3. Section 12 jurisdiction. Section 12 conferred subject-matter jurisdiction and was not limited to foreign applications based on UK filings. Foreign priority filings could be a factor in the forum assessment but were not determinative. The court had jurisdiction over pending US applications, but, applying US law as established on the evidence, there was no private right of action to challenge inventorship or entitlement to such applications. That was a substantive bar, not merely procedural.
4. The court did not lose section 12 jurisdiction merely because an application proceeded to grant after proceedings began. The cause of action remained the same indivisible dispute about ownership.
5. Applicable law. For pre-11 January 2009 events, the breach-of-confidence claim was governed by common-law conflict rules. The obligation and associated rights were most closely connected with England. For later events, Article 6(2) of Rome II applied, leading to Article 4(3); the claim was again more closely connected with England.
6. Service and forum. Innovia established a serious issue to be tried and a good arguable case for the gateway in CPR Practice Direction 6B paragraph 3.1(2) only in relation to part of the inventorship relief. The ordinary forum factors were broadly neutral. The interests of justice favoured this court because it had exclusive jurisdiction over the European applications and could determine the widest combination of claims. Neither application was shown to involve material non-disclosure.
7. Both of Frito-Lay’s applications were dismissed.