PCC 17: Victims of their own success?

The PatLit PCC Series, kindly supplied by the Chartered Institute of Patent Attorneys (CIPA), seeks to explain how litigation works in the recently-revamped |Patents County Court (PCC) for England and Wales.  In this episode, the 17th, CIPA President Alasdair Poore takes up the story of Cautious Co and its pursuit of its foe, IPOff Ltd, which it alleges has infringed the intellectual property rights in its robotic octopus. He asks: could their commercial success put Cautious Co into the High Court?

Cautious have issued proceedings for patent and design right infringement in the PCC against IPOff.  IPOff have just served their defence, asserting that the patent and unregistered designs are not infringed, the alleged invention is blindingly obvious, as they put it, and the designs are commonplace and don’t create a different impression from the average octopus. Cautious’ patent attorney writes:

“Dear Cautious, I enclose a copy of IPOff’s defence and counterclaim.  Some things we must think about:

First, we need to consider filing a reply to IPOff’s defence, and we must file a defence to their counterclaim.  The time limit for doing this is 28 days from the date of service [Differs from the Intellectual Property Court: CPR 63.22(4) cf CPR 63.7 for patent and registered design cases].  We do not necessarily have to submit a reply – it really depends on whether we wish to rely on new arguments or facts.  However, in this case, as in most IP infringement cases, IPOff also counterclaim for a declaration that your rights are invalid.  As we have to respond to that, we will in any event file are reply to their defence. 

Secondly, we need to prepare for the Case Management Conference (commonly referred to as the “CMC”).  Again we are required to apply for a date for the CMC within 14 days of the date the defence was served [PD63 5.3].  In the PCC the CMC is very important.  The judge determines what issues he/she thinks are the key issues and decides what additional evidence etc. each party will be permitted to bring in order to prove these issues. Only very exceptionally will further evidence be permitted [CPR63.23(2)].  It is important therefore to ensure that we clearly identify any evidence we need to bring before the judge.  (It is also our opportunity to persuade the judge that IPOff should not be permitted to extend the evidence – it will shape the case for the future). 

Let's now address their defence of the patent infringement claim.  They deny infringement.  We have already said what we need to say here and we do not need to add any more at this stage.  They also assert invalidity of the patent for three reasons: prior art combined with common general knowledge makes the invention obvious; that the invention is a computer programme and therefore not patentable; and that the invention does not work (ie it is not sufficiently described so as to enable a person skilled in the art to perform it).  This is because they say it does not produce the confident predictions of results of football matches.

We will say our case will be that it is not obvious.  However, you may also want to rely on your extraordinary commercial success.  If so you have to say so (now) [PD63 4.6] and you have to provide specific information if you wish to do this [PD63 6.3] either now or when ordered:  the identity of each product, sales over a convenient period of the product, sales over an equivalent period of equivalent products marketed before your product, and marketing and promotional spend of each of those products.  Bear in mind that in practice however, commercial success has rarely been successful; and relying on it may make the case more complicated and significantly expensive for you – and possibly might be a ground for the judge to say that it should be transferred to the Patents Court.
In relation to reply on this subject we merely repeat what we say in the defence, and that therefore the patent is not invalid.
[to be continued]

Cautious’ patent attorneys letter explains that really the reply and defence to counterclaim is pretty simple.  However, it does highlight that, when choosing the PCC/Patents Court, there are a wide range of issues – like commercial success – that need to be considered at an early stage.   A key element of strategy is to consider whether they are prepared to go for a cut-down case and risk missing out some elements or they need to rely on fuller examination of the facts.

A further question:  the general principle is that, where possible, the court will determine the claim solely on the basis of the statements of case and oral submissions [PD63 31.1]. That means that, clearly where additional facts are going to be relied on (for example in relation to the question of obviousness, such as a predisposition to do something different) these should be included.  It is not really clear whether further argument is necessary at this stage.  If a reply is submitted, CPR 63.20(1) would seem to suggest that it should be included – although for trial oral submissions will be permissible.  However, concise argument explaining why the defence is wrong, place them in front of the judge earlier, and also gives the judge more of a picture at the CMC.

More on the reply and CMC in next week’s letter.