Late references to prior art: how to reach a sensible solution

VPG Systems UK Ltd v Air-Weigh Europe Ltd was an extempore ruling of Judge Hacon yesterday, sitting in the Intellectual Property Enterprise Court (IPEC), England and Wales. It will never hit the law reports, but at least it was noted on the Lawtel subscription-only service. It's one of those small but revealing cases that shows how a low-tier court goes about its unglamorous daily business of resolving disputes as efficiently and economically as possible, given the obstacles facing the judge (otherwise known as the parties).

In short, this was all about a pre-trial case management conference in a standard infringement claim where the defendant alleged invalidity. The lists of issues had been determined at a case management conference, following which the defendant sought to include reference to a new item of prior art. Although that item of prior art had not been referred to in the original list of issues, it was not one that surprised anyone since it had been mentioned both in the pleadings and in evidence.

The defendant submitted that its expert had not realised, before the case management conference, that certain documents relating to the new item of prior art were available. It also argued that, since the relevant item of prior art had been referred to in the pleadings and in the evidence, in that sense it was already part of the material before the court.

Judge Hacon granted the defendant's application.

First, the bad news for the applicant: the primary difficulty for the defendant was one of the provisions of the Civil Procedure Rules, CPR r.63.23(2), which deliberately made it difficult for parties to add material into the case after the first case management conference. What's more, the fact that the expert had not realised that documents relating to the relevant piece of art were available before the first case management conference did not constitute an exceptional reason that could justify the proposed amendment.

What about the good news? Given that the prior art had been referred to in the pleadings and in evidence, it could not be said that the defendant was seeking to submit new material into the case; rather, it was seeking to rely on the new material as a specific item of prior art.  This being so, r.63.23(2) did not of itself provide a barrier to allowing the amendment -- and there wasn't any other barrier to allowing the specific item of prior art to be added into the list of issues. Plainly it was an item of prior item with which the patentee was familiar, it having been referred to in the pleadings and in the evidence, and therefore it had to be something that was well within the patentee's contemplation, and there was no real prejudice to the patentee in allowing the defendant to rely on it.

Now for the qualification: since its application would be allowed, the defendant would not be permitted to put in any material relating to the item of prior art that was not already before the court in the form of disclosure or evidence.

This seems to be a neat solution, protecting the interests of both parties and enabling the court to have a better stab at either invalidating or affirming the status of a patent that might well be of interest to others in the same market.

Litigation in the Brave New World 6: Case Management, Evidence and Trials

Case management: a term that means
different things to different people ...

This final post in Don McCombie's Brave New World series on the European Union's Unified Patent Court (UPC) looks at certain aspects of case management, evidence procedures and trials under the proposed UPC system.  More could be written about these topics, but the author, a patent litigator in the London office of Latham & Watkins, has concentrated on the aspects which, in his s opinion, are the most noteworthy.  This is what Don writes:

Case Management, Evidence and Trials
 Case Management and Evidence
 
The posts in the this series have been based on the 14^th draft of the Rules of Procedure.  A 15^th draft is now circulating online, but as no final version yet appears to be publicly available, all references in this note are to the 14^th edition.  Rule 10 sets out the five stages of proceedings before the UPC.  Stage 1, the written procedure is covered in my third post, and this post focuses on stages 2 and 3, the interim procedure and the oral procedure respectively.

As detailed in the third post, parties are required to provide all evidence in support of their claim/defence, or at least an indication of the evidence that the party intends to rely upon, together with the statements of case at the outset of the case.  This is likely to place a heavy burden on the parties, especially defendants who counterclaim for invalidity, although any party expert evidence may not be required until later in the proceedings (see Rules 181 and 104).

As noted previously, it is intended that a ‘judge-rapporteur’ will have wide-ranging management powers for the active management of UPC cases, which will mainly be exercised during the interim procedure.  The Rules are not very prescriptive, providing the judge-rapporteur with a great deal of discretion; the quality of decision-making will be key to the successful operation of the UPC system.

Once all written pleadings have been exchanged (see Rules 12, 35 and 36), the judge-rapporteur will arrange an ‘interim conference’ (see Rules 101-106), which will be very broad in scope – certainly broader than most ‘case management conferences’ in English proceedings.  Rule 104 lists the main purposes of interim conference, which include enabling the judge-rapporteur to 

·         identify the main issues and determine which facts are in dispute; 

·         explore the possibility of settlement; 

·         issue orders regarding further pleadings and evidence (including party and court expert evidence), experiments and the scope of oral evidence and the questions to be put to witnesses; 

·         hold preparatory discussions with witnesses; 

·         convene separate hearings to hear oral witness evidence, and make all preparations necessary for the oral trial hearing; and 

·         set the value-based element of the court fee.

It is not clear at what stage any decision as to the bifurcation of revocation counterclaims from infringement claims is to be made, although it is likely to be at or before the interim conference.

If many of the above matters are disputed between the parties, it is possible that the interim conference will be a lengthy hearing in itself, potentially little shorter than the one-day trial hearings envisaged under the Rules.

Specific Evidential Issues: Experts

Part 2 of the Rules of Procedure (currently Rules 170-202) relates specifically to evidence procedures under the UPC, although I will not be cover these in great detail here.  A key point to note, however, is the likely role of expert witnesses under the UPC.

Under the current English and US systems, party experts play an absolutely central role, particularly in support or defence of allegations of obviousness.  Court appointed experts are very rare in English patent cases, for example, although scientific assessors have been appointed in recent years in some of the most technically difficult cases.  From experience, a very significant proportion of the work (and costs) involved in preparing an English patent case relates to the identification and interviewing of expert witnesses, drafting expert reports in chief and in rebuttal of opposing party expert(s), and preparing for cross-examination of expert witnesses.  The majority of the trial hearing itself often consists of expert witness cross-examination, largely relating to the validity of the patent(s) in suit.

By contrast, in many continental European systems far less weight is often placed on the evidence of party experts than in common law systems, and oral expert evidence at trial on validity issues is rare in many countries.  Practitioners in England (admittedly, myself included) can get very animated when discussing the need for cross-examination of statements made in expert reports, but given that one of the stated aims of the Rules of Procedure is for trials to be completed within a single day (Rule 113), the scope for lengthy cross-examination is limited.  The Rules of Procedure do allow for the convening of a separate hearing for witness evidence in front of the judicial panel (i.e. unlike US-style depositions - see rules 104(g), 113 and 115), but it appears unlikely that UPC trials and evidence hearings will permit several days of cross-examination as standard, in contrast to the current practice of the English and US courts.

As someone accustomed to the central importance of party expert witnesses in patent proceedings, I see this as a very significant change.  I recognise, however, that practitioners accustomed to, say, German or EPO proceedings may take a different view.  The emphasis to be placed on expert evidence, and the willingness to convene extensive separate evidential hearings may vary between the different local, regional and central divisions, influenced by the legal backgrounds of the individual national judges composing the panels.  If such variations arise, this may be a further factor influencing the parties’ choice of forum.

Trials and Decisions

Oral trial hearings are covered in Rules 111-118.  As noted above, these are intended to be a maximum of one day in duration, although no specific provisions are made for multi-patent trials.

Unless a single judge has been requested by the parties, at least three judges will preside over every UPC first instance trial, comprised of:
·         two local legally-qualified judges and one legal judge from the central ‘pool’ in the case of local divisions averaging more than 100 cases per annum;
·         one local legal judge and two legal ‘pool’ judges in the case of local divisions averaging fewer than 100 cases;
·         two regional legal judges and one legal ‘pool’ judge in regional divisions; and
·         in the central division, two legal judges drawn from different Contracting Member States and one technically-qualified judge from the central ‘pool’ (see Article 8 of the UPC Agreement).

In the case of revocation counterclaims or where the parties so request, an additional technical judge will be allocated to the panel in the local or regional division.

Panels are supposed to deliver a decision on the merits within six weeks on the oral hearing, with issues of quantum of damages and compensation and legal costs being dealt with in separate proceedings (Rule 8).  The form, content and length of judicial decisions varies enormously between Contracting Member States at present, with modern English judgements being particularly encyclopaedic, at least in part as a result of the common law system.  Little guidance on the content of judgments is provided in any of the UPC documents, although Articles 35 and 36 of the Statute of the UPC  do contain some limited provisions, including the possibility of judges expressing dissenting opinions in exception circumstances (see also Article 78 of the UPC Agreement).  Again, the practice of judges may vary depending on the legal tradition in which the members of the judicial panel were trained, although the proposals provide for judicial training regimes and the rules on the composition of panels is intended to provide as much uniformity as possible.

End of the Line 

This is the final post in the series, ending with a ‘fade out’ rather than a bang.  I hope readers have found these posts interesting, or at least informative - I have certainly learned a lot through writing them.  If anyone reading has any comments or questions about the contents of this series, or about the UPC in general, I would be happy to hear from you.

RIM v Visto: Mr Justice Arnold takes charge

An interesting study in case management can be found in Research in Motion UK Ltd v Visto Corporation (and vice versa), [2008] EWHC 3025 (Pat), a Patents Court decision of Mr Justice Arnold on 12 December which PatLit nearly overlooked completely on account of its proximity to the holiday season.

In short, BlackBerry operator Research in Motion (RIM) applied for patent proceedings involving patent-owning but non-manufacturing entity Visto to proceed by way of a split trial, with the first trial being expedited. RIM had previously commenced proceedings for the revocation of three of Visto's European patents, while Visto (i) counterclaimed for infringement of its own patents by the entire Blackberry system and (ii) revocation of four of RIM's patents. Visto failed to identify any product that might infringe RIM's patents, and RIM offered an undertaking not to assert its four patents against Visto, its customers or licensees. 

Before Arnold J, RIM submitted that a single trial would require common general knowledge of the field to be considered at different priority dates for each patent. RIM also argued that Visto's counterclaim for revocation involved consideration of additional prior art.  Accordingly it made sense to split the trial.  Visto maintained that there was a valid juridical forensic advantage for it in having all the claims heard at the same time: by doing so it could place RIM in a squeeze: any contention by RIM that Visto's inventions were obvious would have the effect that RIM's patents were also invalid.

Arnold J ordered a split trial.  In his view

1. The trial of all seven patents together would be unwieldy and burdensome, demanding consideration of seven different sets of claims and raising the possibility of the parties seeking to assert the independent validity of more than one claim for each patent. The impact of differing priority dates and, therefore, differing states of common general knowledge, also had to be considered, as did the additional prior art. 

2. Since Visto's attack on RIM's patents was of no commercial significance to the non-manufacturing Visto, the case for a split trial was overwhelming. Visto's attack on RIM's patents could be described as purely forensic manoeuvring, which was not sufficient justification for imposing the burden of a trial of all seven patents together upon the court and the parties.

3. The only real argument against a split trial was the forensic advantage from the squeeze--but even this was not a significant advantage in terms of the commercial realities of the situation. 

4. It was plain that RIM's overriding objective was to avoid infringing Visto's patents, preferably through their revocation. RIM would stop at nothing to achieve this, risking even the possibility of an adverse impact on its own patents.  Any relevant evidence adduced by RIM concerning Visto's patents could be used by Visto at the subsequent trial of its counterclaim. A split trial was therefore appropriate. 

The judge added that commercially significant patent disputes should be tried promptly wherever, and to the greatest extent, that this was possible. If Visto's counterclaim was successful it could shut down the entire Blackberry network in the United Kingdom.  This being so, the commercial significance of this battle ran far wider than merely the interests of the immediate parties, but also affected third parties such as mobile phone operators. Also, the court's decision on validity might be of assistance to foreign courts confronted with infringement issues--although that factor was of less weight. Accordingly, a modicum of expedition was appropriate in fixing the trial date for RIM's assault on Visto's patents. However, the trial of the counterclaim for revocation of RIM's patents would be listed in the ordinary way.