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JGM
JGM, Solicitor
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Experience:  30 years as a practising solicitor.
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Enforcing a US patent infringement judgement in the UK

Resolved Question:

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.

Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
You are largely correct although there are certain issues about enforcement that you might find helpful.
Despite the close commercial links between the US and the UK, there is no convention or treaty providing for the reciprocal enforcement of judgments between the US and UK. Accordingly, the statutory schemes for registering judgments handed down by courts in convention or treaty countries are not available. Nevertheless, the enforcement in England of a judgment in personam handed down by a court in the US can be a relatively simple matter, which is governed by English common law principles.
Method of enforcement
A US judgment cannot be enforced directly in the UK (by execution or a similar process). Instead, the judgment will be viewed as a simple contract debt between the parties to it. It is this “debt” which can be enforced through the English courts and this is done by way of issuing new proceedings. The English court will generally not re-examine the merits of the underlying dispute. Nevertheless, certain criteria must be satisfied for the court to enforce the debt created by the judgment in the US. There are six important elements to consider:
1. Jurisdiction
The US court must have had international jurisdiction according to English conflict of laws rules. Broadly this means that the English court will have to be satisfied that either the judgment debtor was either present in the US when the US proceedings were commenced or entered an appearance in the US proceedings or otherwise expressly submitted to the jurisdiction of the US court.
2. Judgment for a definite sum
The US judgment must be for a definite and ascertainable sum to be enforceable in England. A declaratory judgment would not, for example, be enforceable. Costs orders relating to any proceedings would be enforceable, but only when the final figure is determined. The English courts will not entertain actions to enforce, either directly or indirectly, foreign penal or revenue law.
3. Final and conclusive judgment
In order to begin enforcement proceedings in England, the existence of the debt must have been pronounced upon finally and conclusively by the US court which heard the case. Then proceedings could be commenced in England to enforce the judgment. However, where US proceedings are or may be subject to an appeal to
a higher court, it is likely that the English court will stay enforcement proceedings pending the appeal. If the US court has granted a stay of execution pending the hearing of the appeal, enforcement proceedings cannot be commenced in England.
4. Fraud
A US judgment which has been obtained by fraud will not be recognised or enforced in England. If the issue of fraud is raised in enforcement proceedings in England, this is one occasion on which the English court will consider re-examining the issues in the underlying action that relate to the alleged fraud, even if those issues have been considered by the US court.
5. Public policy
A US judgment will not be recognised or enforced by the English court if this would be contrary to UK public policy. For example, punitive damages awards are not enforceable in England (although the basic award, before the punitive element was added, would be enforceable). Given the similarities between the US and English legal systems and values, it will be rare for a US judgment to offend UK principles of morality or justice.
6. Natural or substantial justice
If the English court considers that the proceedings in the US were conducted in a manner contrary to natural or substantial justice, it will not enforce a judgment. One of the most common arguments raised under this heading is that the judgment debtor was not given sufficient and proper notice of the US proceedings and therefore did not have an adequate opportunity to defend the action. The English court will consider each case on its merits, but if the proceedings (including provisions as to notice) have been conducted in accordance with the laws of the relevant US court, the English court will be reluctant to interfere. If a defence of lack of notice is raised, a judgment debtor must be able to demonstrate that it had a reasonable prospect of successfully defending the action in the US.
The burden of proof is on the judgment debtor who seeks to oppose the enforcement of a US court judgment on the basis of one of the criteria listed. The general principle applied by the English courts is that a judgment in personam of a US court of competent jurisdiction which is final and conclusive will be conclusive in England between the parties.
Finally note that there is a distinction between fines and penalties on the one hand and damages for infringement on the other. You can't class an award of damages in a civil case as a fine or penalty, although punitive damages would not be recognised by a UK court.
I hope that this helps.
Please leave a positive response so that I am credited for my time.
Customer: replied 2 years ago.

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?


Expert:  JGM replied 2 years ago.
- "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?
Yes it would be the company if you are using the company to trade.
- "A declaratory judgement would not, for example, be enforceable". Would patent infringement damages be a declaratory judgement?
No, a judgement in a patent case would tend to be an injunction stopping the infringement along with damages for the claimant's losses.
- "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?
I would be hesitant to advise not entering appearance but I am not qualified in U.S. law and you have have to take specific advice on that point from a U.S. lawyer.
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?
Yes there is if they then raise proceedings in the UK on the back of the U.S. proceedings.
Customer: replied 2 years ago.

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).

Expert:  JGM replied 2 years ago.
In theory if you tried to sell a product in the US that infringed a US patent, the patent holder could sue you. If they did so in the US they could then come to the UK court and get the judgment affirmed.
However, in my experience they won't do that and they will simply sue you directly in the UK court.
If you are only intending to sell in the UK or Europe and have patents, or hold the copyright in a source code, they would have no grounds to sue you.
Customer: replied 2 years ago.

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?

Expert:  JGM replied 2 years ago.
That is incorrect. If a US company seeks to sue a UK company for somehow breaching a US patent, the UK court has jurisdiction to hear the case based on the domicile of the defendant.
JGM, Solicitor
Category: Law
Satisfied Customers: 10920
Experience: 30 years as a practising solicitor.
JGM and 3 other Law Specialists are ready to help you
Customer: replied 2 years ago.

I'll close this now, no need to reply, however, I believe this is incorrect

https://www.lw.com/thoughtLeadership/sue-over-an-app

"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."

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