No stay of liability issue, but prospect of some sort of stay of relief remains

Fontem Holdings 1BV and another v Ten Motives Ltd and another; Nicocigs Ltd v Fontem Holdings 1BV and another [2015] EWHC 2752 (Pat), is 2 October 2015 ruling by Mr Justice Norris, in the Patents Court, England and Wales.

In short, this was an application by the defendant -- the alleged infringer -- for summary judgment on infringement of a patent for an e-cigarette, or in the alternative an application to stay the action pending the outcome of European Patent Office (EPO) opposition proceedings. In a pretty short judgment for a patent case (just 46 paragraphs in length) Norris J summarised the law, considered the issue of infringement and briefly set out the particular circumstances of the new and rapidly-growing market for e-cigarettes.

Given the nature and speed of change in the marketplace, he said, there was a clear need for a much earlier determination of the validity and infringement issues in the national litigation than the earliest possible date for completion of the EPO's opposition proceedings. If however infringement were proven at trial, there remained the possibility of some sort of stay when it came to sorting out the appropriate relief.

Splitting trial between IPO and court "unsatisfactory and wasteful"

Angle Ring Ltd v ASD Westok Ltd is an extempore ruling of Judge Richard Hacon, sitting earlier this week in the Intellectual Property Enterprise Court (IPEC), England and Wales. The decision is briefly noted on the Lawtel subscriber-only service.

This was an dispute involving the ownership and validity of three patents in which the defendant Westok applied for summary judgment in respect of Angle's patent ownership claim.  Angle, the first claimant, asserted that Westok had never been the true inventors of the patents and had at all times known, or had reasonable grounds to know, that the second claimant was the true inventor. Although the IPEC would be able to deal with lack of inventive step or novelty at trial, the claimants failed to make a pro forma application to the UK Intellectual Property Office (the IPO, which has the initial jurisdiction to deal with claims relating to ownership of patents and patent applications) to have the matter transferred to the IPEC, leaving an issue as to whether the court had jurisdiction to deal with entitlement.

Westok submitted that there were no reasonable grounds for it to have known that the second claimant was the true inventor, and that the court should determine that there was no real prospect of concluding that it must have known that it was not entitled to the patents.

Richard Hacon refused the application. In his view:

* The allegation that Westok had had reasonable grounds for knowing that the second claimant was the true inventor was irrelevant. It was fair to infer from the pleading that the claimants had alleged that Westok had known that it was not entitled to the patents, and the court would have to determine whether Westok knew that it was not so entitled.

* It was not appropriate to go through the evidence in a mini-trial of whether the claimants' case was unarguable; it had been pleaded sufficiently and should go to trial.

* The claimants would find it difficult to adduce further evidence if it turned out that the existing evidence did not support its case that Westok had had the relevant knowledge, and Westok would therefore succeed at trial on that point.

* The court ought to exercise its inherent jurisdiction in order to deal with entitlement at trial. It was artificial to distinguish the matter of lack of inventive step or novelty and leave entitlement to the IPO. That would be unsatisfactory and wasteful.

Springtime, but no summary judgment for Huawei and their co-defendants

 Unwired Planet International Ltd v Huawei Technologies Co Ltd & Others [2015] EWHC 1198 (Pat) is a Patents Court, England and Wales, decision of Mr Justice Birss, delivered on 12 May. This ruling gives some useful guidance on applications for strike-out and summary judgment -- and on when not to bother making them.

Irish company Unwired, which held a portfolio of telecommunications patents, many of them declared to be essential to various telecommunications standards, sued Huawei and some other fairly serious telecommunications equipment businesses, alleging patent infringement in respect of the sale of standard-compliant products. In total, the action involved five standard-essential patents (SEPs) and one non-essential patent.

Unwired sought injunctive remedies, except to the extent that the various defendants were required and entitled to take licences to the SEPs on FRAND terms. Unwired made two open licensing proposals to the defendants; (i) in April 2014 it proposed a worldwide licence of all its patents, and (ii) in July 2014 it proposed a worldwide licence of its SEPs only.

The defendants said that none of the patents was essential, valid or infringed, but they said they'd be willing to take licences under any patents found to be valid and infringed. Their defence also alleged that, in seeking an injunction, Unwired was in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU) by committing an abuse of its dominant market position. Once the Article 102 issue was raised, further interested parties were joined to the proceedings. Unwired then applied to add to its claim a declaration that its offers of licence were FRANDly; the company also sought a declaration as to the terms or range of terms that would be FRAND for a licence to use the claimant's portfolio of SEPs and/or its portfolio of patents.

Huawei and the other defendants contended that the FRAND obligation points were capable of being dealt with summarily and that they should be: Unwired's proposals couldn't be FRANDly because Unwired failed to offer (i) single patent licences if requested; (ii) a licence under all SEPs essential to a particular standard; (iii) a licence under SEPs relating to a particular territory.

Birss J refused to deal with the FRAND issue summarily. In his view:

* It was at least arguable that a key part of the factual matrix against which the offer of FRAND terms had to be construed was competition law and policy. This being so, no matter how clear the meaning of the words themselves might seem, a final decision about their meaning and scope could not be made without putting them into their proper factual and competition law context.

* It could well be that competition law considerations and the wider context actually worked in the defendants' favour -- but that should be decided at trial. It would not be sensible to try and decide issues of the construction of the claimant's proposals summarily, since they were too closely connected with underlying facts which were themselves in dispute. Since Unwired had a real prospect of defending all the points arising on the summary judgment application, it must be refused.

* Unwired's assertion that its proposals were FRANDly had a real prospect of success, so its application to amend its claim by adding a declaration to that effect would be allowed on terms stipulated by the court.

Of all the areas of intellectual property litigation, patent law is probably that in which applications for summary judgment and/or strike-out of claims have the least chance of success since not only are the facts often complex and in dispute but the ease with which competition law issues under the TFEU can be raised will tend towards the conclusion that there is a need for a full trial.  In contrast, applications for speedy trials may be a bit more promising for patents than for other IP rights, given the relatively short life of a patent and the fact that a swift decision on the issue of validity in the light of allegedly killer prior art may avoid the need for a full-blooded court battle on issues of infringement.

Summary judgments: when experts can be dispensed with

In Nampak Plastics Europe Ltd v Alpla UK Ltd [2014] EWHC 2196 (Pat), a 3 July 2014 Patents Court, England and Wales, decision of Mr Justice Birss, some useful light was cast on the availability of summary injunctive relief in low-tech patent litigation.

This action involved an application for summary judgment where Alpla was seeking a declaration that a redesigned bottle did not infringe Nampak's patent for a plastic milk bottle, after Nampak --a manufacturer of moulded plastic milk bottles -- had commenced infringement proceedings against it. Having produced its modified design, Alpla invoked the commercial need for certainty at an early stage and sought summary judgment on the declaration.

According to Birss J, while although summary judgment was unusual in patent cases because claim construction and infringement determination generally required expert evidence, where a patent owner seeks to resist summary judgment he must give specific details as to issues where expert evidence would be required, since general assertions would not suffice. In this case, this patent was sufficiently simple for there to be no call for expert evidence: its claims did not use terms of art.  Accordingly the court could proceed to construe the claims.  On the facts, those claims would not be infringed by the redesigned bottle, so summary judgment on the application for a declaration of non-infringement would be granted.

Summary judgment and costs: come back and argue, says judge

Sitting in the Patents Court for England and Wales this morning, Mr Justice Floyd gave judgment in Nokia Oyj (Nokia Corporation) v IPCom GmbH & Co Kg [2011] EWHC 1470 (Pat), a fairly long decision but one which was driven mainly by factual issues and the submissions of the parties rather than the need to indulge in quantities of deep and anguishedly meaningful legal analysis. In any event -- in a judgment which will make PCC Page author Alasdair Poore happy because it contains the word "tentacles" -- Floyd J found IPCom's patents valid and infringed in respect of two of Nokia's devices but not a third in respect of which he agreed to grant a declaration of non-infringement.

What caught this blogger's eye was a little paragraph at the end of the decision:

"213 Technically I also have before me the summary judgment application. It makes no sense to grant summary judgment at the same time as judgment. The only point about the summary judgment application is who should bear the costs of the application. That will turn on whether it was ever likely to succeed. In adjourning the application to the trial, Kitchin J said that the trial judge would be in a better position to decide the costs of that application after he has decided the substantive issues. I propose to hear argument on this issue of costs, along, no doubt with other issues, after judgment has been handed down."

In a sizeabke (eight day) trial such as this, with two amply-endowed parties, it won't matter, but it does seem a little disappointing that, while the function of an application for summary judgment is to save time in court, the need for further argument on costs issue which hangs over from the application means that there will still be a bit stuff more to sort out after the main issues have been resolved.

Summary judgment "rarely appropriate" in patent trials, judge reminds us

In case you missed it,  in this week's big patent case, Virgin Atlantic Airways Ltd v Delta Airways Inc [2010] EWHC 3094 (Pat), Mr Justice Arnold summarised the principles applicable to summary judgments in general terms (as articulated by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)), then focused on their specific application to patent litigation. What he said was this:

Principles applicable to summary judgment applications

There is no dispute about these. ...[citing Easyair at [15]]

"... , the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:

i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success: Swain v Hillman [2001] 2 All ER 91;

ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].

iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman.
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10].

v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.

vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.

vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725."

This summary was cited with approval by Etherton LJ (with whom Wilson and Sullivan LJJ agreed) in AC Ward & Son v Catlin (Five) Ltd [2009] EWCA Civ 1098, [2010] Lloyds Rep IR 301 at [24].

Summary judgment in patent cases

It is common ground that summary judgment is rarely appropriate in patent cases. The reasons for this were explained by Dillon LJ in Strix Ltd v Otter Controls Ltd [1991] FSR 354 and Aldous LJ in Monsanto & Co v Merck & Co [2000] RPC 77.

In Strix Dillon LJ (with whom Croom-Johnson LJ agreed) said at 357-358:

"The difficulty that arises where it is sought to strike out a patent action on the ground that there is no arguable case of infringement arises because the construction of a patent, though a question of law for the court, is not a mere question of the judge reading the patent with the assistance of the legal arguments of counsel; it is a much more sophisticated exercise for two reasons. First the language of the patent is deemed to have been addressed by the inventor not to a panel of equity draftsmen but to 'the man skilled in the art', and consequently the court has to consider what the language of the patent would mean not to lawyers, but to the man skilled in the art with his knowledge of the art. Secondly it has long been established that a person does not avoid infringing a patent if he departs from the strict requirements of the claims by what the man skilled in the art would recognise as an 'obviously immaterial variant' – (to adopt a phrase conveniently used by Nicholls LJ in Anchor Building Products Ltd v Redland Roof Tiles Ltd [1990] RPC 283)."

In Monsanto Aldous LJ (with whom Auld LJ agreed) said at 92:

"I do not believe that the judge was right to conclude that the alternative case put forward by the patentees is unarguable upon the assumed facts. Despite the view as to the meaning of claim 20 which I have expressed above, it would not be right, at this stage of the action, to come to any concluded view as to the ambit of claim 20. The patent must be construed as a whole and the claims interpreted according to the Protocol on Interpretation. The subject of the specification is complicated. To come to a concluded view, the mantle of a man skilled in the art must be adopted. That will require the aid of expert evidence. The words of Dillon LJ in Strix v. Otter Controls Ltd which I have quoted, are in my view just as apt today after the Civil Court Practice Rules [sic] came into force as they were when the Rules of the Supreme Court were applicable."

Patent litigants are well advised to read and reread these paragraphs before seeking summary judgment in England and Wales, particularly if the judge is Arnold J ...