The following isn't an Intellectual Property question per se, rather a commercial law question about how UK law views foreign judgements.
I have researched the following as thoroughly as I can, and I'm looking for a legal professional to validate my findings.
I own a software company registered as a Limited company in England / Wales. I have no assets or ties in the USA. I have a new web based software product under development. When launched, it will be hosted outside the US, and the point of sale will be the UK. I have a potential competitor based in the USA (I will refer to them as X). They have several US software patents that are broadly worded enough such that I believe that they could argue that my product infringes them.
X has also applied for several European patents. Three have been rejected as 'obvious'. Several are abandoned, and the ones active ones have received communication from the examination board stating that 'refusal is to be expected'. I am therefore confident that X will not be successful in obtaining any European patents.
Clearly X could not directly take an action regarding a US patent in a British court. Let's suppose that they file a patent infringement lawsuit in the US.
I need to confirm the following:
- If X could prove that I have a client in the US, a US court could consider that my software is 'put into action' in the US, and infringes a US patent. (Let's assume this is fact)
- X could pursue a lawsuit in the US court against my Ltd, but would need to serve me with papers in the UK
- It would, in theory, be possible for them to win a judgement and damages against my Ltd in a US court - I should not respond in any way to a US lawsuit as this could be seen as submitting to the US courts jurisdiction
- The judgement would not be directly enforceable in a UK court, only an action on the judgement by a UK court
- For a UK court to enforce a judgement it would have to be satisfied that the US court has jurisdiction
- For a US court to have jurisdiction my Ltd must have had a presence in the US, as defined by Cape vs Adams 1990
the company had its own fixed place of business (a branch office) in the jurisdiction from which it has carried on its own business for more than a minimal time; and
-the company's business is transacted from that fixed place of business.
- Even if a UK court did establish that the US court had jurisdiction, the "England and Wales court will not enforce judgements for taxes or penalties, such as fines". Therefore a penalty, fine or damages for patent infringement would not be recoverable by X.
Thank you for your answer and the information regarding damages / penalties.
I found Taylor Wessing article previously, but more specific information would help.
- "The judgement debtor present in the US". I assume this would mean my Ltd, and present in the sense of having some fixed place of business, rather than me, as a director, being present?
- "A declaratory judgement would not, for example, be enforceable". Would patent infringement damages be a declaratory judgement?
- "entered an appearance in the US proceedings" suggests that it would be best to not act on a possible US lawsuit, given the other information?
Finally, given the lack of any assets or presence in the US of my Ltd, in your opinion, is there anything this US company could do to have claim on my UK business assets for a US patent infringement ruling?
Thank you for your answer. One final follow up:
"Yes there is if they then raise proceedings in the UK on the back of the U.S. proceedings."
Given the points in my question, proceedings in the UK on the basis of what? Enforcing the US patent judgement would be covered by the points discussed above, and seems like it wouldn't be possible.
There are no relevant UK or European patents that an England / Wales court could consider. A US patent would not be relevant to an England / Wales court.
(Obviously if legal action actually took place I would consult a solicitor).
Sorry for the follow up but I have to ask, my understanding is that a UK court would not be interested in US patents or alleged US patent infringement as they are territorial. Is this incorrect?
I'll close this now, no need to reply, however, I believe this is incorrect
"The key issue with patents (and registered trade marks) is that jurisdiction is conferred on the place where the right is registered ... This acts as an exception to the general rule under
the Brussels Regulation, that the defendant can primarily
be sued in the place of his domicile, and secondly, where the harmful act occurred."