The term "Italian Torpedo" was coined in 1997 by Prof. Mario Franzosi1 to refer to a patent litigation strategy of preventing a national court in Europe (e.g. the courts of Germany) from proceeding with an infringement action by filing a pre-emptive action in another, much slower court (particularly an Italian court). If a party has advance warning that it is about to be sued for infringement of a European patent, e.g. an Italian company exporting to Germany is about to be sued in Germany, it files an action for a declaration of non-infringement in Italy with a request for the declaration to extend also to the corresponding German patent and, by virtue of the lis pendens rule of Brussels Convention2, the Italian court becomes the court "first seised" with the action and has exclusive jurisdiction - i.e. to the exclusion of the German court. The German court would have to stay the proceedings pending the decision of the Italian court. Italian courts are notoriously slow, so the action might be kicked into the long grass for as much as 10 years. The action is said to be "torpedoed". The court in Belgium is also a popular option - a "Belgian torpedo".
Italian Torpedo actions fell out of favour for a decade following a 2003 Italian Supreme Court decision which ruled that the Italian Court did not have jurisdiction over the foreign cause of action3, but this was reversed by another decision in 2013.4 The torpedo action must be for a declaration of non-infringement, rather than a nullity/revocation action.5
The tactic of torpedoing a patent infringement action arises in the case of a European patent opted out of the Unified Patent Court. The UPC is designed to be fast. The preamble to the rules expects a final oral hearing within one year.6 It is a vastly preferable forum for litigating over patent infringement in Italy, Belgium and many other territories of the EU where it has jurisdiction. Patent owners may choose to opt out of the jurisdiction of the court for good reason. A principal reason arises where a patent is validated in many states and the proprietor does not want the patent to be open to central revocation. Similarly, opting out might discourage counterparties in different states joining forces in a single action. For example, where a patent is licensed state-by-state, the patentee may be content with the status quo.
But opting out might not be wise if there is a likelihood that an action might have to be brought in Italy, Belgium, France or any of the states in the court's jurisdiction where litigation is slow. An opt-out can be withdrawn, but withdrawal will be "ineffective" if an action has already been commenced before a national court within the UPC's jurisdiction.7
Whereas the patentee can opt back in again and file suit before the UPC, he/she should neither rattle sabres too readily nor delay in opting back in. The counterparty might file a torpedo action and thereby deny the patentee the benefits of the court's jurisdiction. An action filed anywhere in the Court's jurisdiction would have this torpedo effect. An action in Germany, for example, might proceed quite quickly, but it would nevertheless prevent the patentee from withdrawing the opt-out and filing suit before the UPC.
Does opting out increase the risk of a torpedo? Perhaps, but there is a risk anyway.
If no opt-out is filed, the jurisdictions of the UPC and the national courts run in parallel. Actions in relation to patent infringement, non-infringement and/or validity can be filed in either the UPC or a national court. The lis pendens rule applies between the UPC and national courts during the transition period.8 The patentee is not deprived of jurisdiction of either the UPC or the national courts other than by application of the rule. So there is still a risk of a torpedo action. It may be possible to torpedo a prospective action before the UPC by first filing a declaratory action in Italy (for example). As between the same parties and the same cause of action (patent infringement in Italy at least), the Italian court would be the court first seised and, as matters presently stand, the Italian court might well accept jurisdiction. In that case, what happens to a later UPC action? Would the UPC have to stay proceedings? I.e. - would it be torpedoed? There is debate as to what the UPC will do.
There is a view among commentators that the UPC may not stay proceedings in the face of a national torpedo action but, rather, would allow "carve out" of the part of the action relating to that state. Launching a Europe-wide infringement action might be a natural response to an action for declaration of non-infringement in one of the states within the UPC's jurisdiction. For the Court to stay its proceedings would be harsh. In the question of balancing the need for prompt administration of justice with the Court's obligation to avoid duplicative or irreconcilable judgements, the Court may favour the former. This view is given weight by the outcome of a mock UPC trial9 in the Paris Commercial Court in which certain judges participated (Klaus Grabinski and Camille Lignières) who are already appointed to the UPC. Klaus Grabinski, in particular, is designated to be the President of the UPC Court of Appeal and has been very influential in developing the UPC Rules of Procedure.
Conclusion
The difference is this - if the patent is opted out, jurisdiction of the UPC can definitely be deprived by filing a declaratory action in any state within the Court's jurisdiction. The putative infringer can chose any suitable state. If it is not opted out, the putative infringer can use existing torpedo options - e.g. file an action where he/she has standing and ask for a ruling that extends beyond the borders of that state - e.g. file in Italy for an Italian company - but this may provoke a wider infringement action before the UPC with the possibility of a carve-out for that state or those states where the torpedo action is effective.
Footnotes
1. Worldwide Patent Litigation and the Italian Torpedo (1997) 7 EIPR 382
2. Article 29(1): "Without prejudice to Article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established."
3. BL Macchine Automatiche v Windmoeller (2003) Italian Supreme Court decision no. 19550/2003, in which the court ruled that by bringing an action for declaration of non-infringement, the claimant was denying that any harmful event had occurred.
4. General Hospital Corporation, Palomar Technologies Inc. v Asclepion Laser Technologies GmbH (2013) Italian Supreme Court decision no. 14508/2013. indeed, outside the field of patents, the CJEU has long recognized that an action for a finding of liability by one party and an action by a counterparty for a declaration that he is not liable for the same loss are "the same cause of action" see C-406/92.
5. Following EUCJ cases GAT v LuK, C-4/03 and Roche v Primus C-539/03 in which it was established that patent validity cases in Europe must be determined country-by-country
6. Rules of Procedure of the Unified Patent Court, Preamble para. 7
7. Rules of Procedure of the Unified Patent Court, Rule 5.8
8. See Art 71c.2 of the Brussels Regulation (recast): "Articles 29 to 32 shall apply where, during the transitional period referred to in Article 83 of the UPC Agreement, proceedings are brought in the Unified Patent Court and in a court of a Member State party to the UPC Agreement."
9. https://www.opinews.com/ujub2022/#replay
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