Non-imminent standardisation no ground for expedited trial

Polymer Logistics (Israel) Ltd v DS Smith Plc, a Patents Court for England and Wales decision of Mr Justice Mann on 7 March (not available on BAILII), addressed the question of when a patent owner might be able to apply for and obtain an expedited infringement trial.

PLI had a patent for a pallet dolly system and sought a speedy trial of an alleged infringement by Smith, with which PLI held a virtual market duopoly. Initially the trial date was set for March 2014, but PLI sought to expedite that hearing to July 2013, maintaining that a lack of expedition would be seriously unfair. Why was this? PLI was concerned that the expected market standardisation of pallets would occur over the next six months and that this would be in Smith's favour, with the result that PLI would not be able to penetrate the market further. Smith's pallet system was already used by Tesco, a large United Kingdom supermarket chain, and was also of potential interest to other supermarket chains and food suppliers. Another supermarket chain, Morrisons, had trialled PLI's products but had put those trials on hold. According to PLI, there was a strong market interest in the standardisation of pallets and that Tesco's acquisition of large number of Smith's pallets meant that Tesco might confine itself to that product in the future, generating a "domino effect" on Tesco's suppliers. This in turn would precipitate a de facto pallet standardisation which, PLI argued, would occur before the original trial date in March 2014. Once de facto standardisation had occurred, said PLI, it would be impossible to undo. This would mean that victory in a subsequent patent infringement trial would be hollow and damages would be an inadequate remedy.

Mann J declined to order an expedited trial. In his view, an application for an expedited trial had to demonstrate a real and justifiable urgency.  PLI could not be said to have shown that this was the case. While it was clear that Tesco was using Smith's product, the evidence demonstrated that supermarkets were cautious in relation to major changes affecting logistics. This was because any breakdown in logistics would be disastrous; accordingly it was not conceivable that the market would come together within six months to flood the market with Smith's product. It had not been proved that the original trial date of March 2014 had suddenly become inappropriate, so the application must be refused.

Explaining Patent Litigation 6: expedited trials

The sixth and final guest post in Liz Cohen's Explaining Patent Litigation series, on patent litigation in England and Wales, considers the opportunities available for seeking an expedited trial -- a particularly prized facility for patent owners when one considers how limited the duration of the patent monopoly is when compared with that of most other intellectual property monopolies. As Liz, an IP specialist partner in Bristow LLP, explains:

Expedited patent trials in England and Wales: is it worth applying?

Patent litigation in England and Wales conducted according to a tightly controlled court timetable. The Patents Court generally aim to issue a first instance decision on validity and infringement within 12 months from issue of the claim. But what if this is not fast enough? In cases of extreme urgency, a party may apply to court for expedited proceedings.

Examples of reasons for expedition include the hope of obtaining a favourable decision on validity (and infringement) before a German (or other) court hears a parallel infringement case; having an interim injunction lifted sooner so that an injuncted party may take advantage of a particular state of affairs (e.g. a generics company may be able to take advantage of a duopoly if it launches a generic product before the expiry of the relevant patent or SPC); and having two related cases tried together.

Expedited trials in the UK take six months on average to reach trial but can be heard as quickly as four months (so called “super-expedited” trials). Expedition may be ordered on the basis of certain conditions, for example, that the prior art is limited, or that disclosure of documents and/or experiments are limited or waived.

An application for expedition would normally be made at the outset of proceedings, as delay in making such an application can be fatal to the request.

In the absence of specific provisions in the CPR, requests for expedition are decided on principles drawn from case law. The general principles were summarised in WL Gore & Associates GmbH v Geox SpA [2008] EWCA Civ 622:

(a) the applicant must show good reason for expedition; (b) the court must consider whether expedition would interfere with the good administration of justice; (c) the court must consider whether expedition would cause prejudice to the other party; and (d) the court must consider whether there are any other special factors.

Often, when deciding whether to grant expedition, the trial judge will weigh (a) against (b) and (c). In HTC Europe Co Ltd v Apple Inc [2011] EWHC 2396 (Pat), HTC was seeking a UK decision on validity which it hoped would be of assistance in parallel German proceedings. The court granted some degree of expedition because of the considerable commercial importance of the claims to the parties and to third parties, such as mobile operators. In a later application for expedition (see HTC Europe Co Ltd v Apple Inc [2012] EWHC 2037 (Pat)) between the same parties in relation to different patents, the commercial certainty argument was advanced again. The court said that even though HTC had a good reason for expedition, the benefit of ordering expedition was not sufficient to outweigh the dual considerations of the proper administrations of justice and prejudice caused to Apple because the size and complexity of the case would cause significant disruption to the court timetable and Apple’s counsel were not available during the proposed trial period. In addition, the fact that further proceedings were pending against HTC from Apple and Nokia meant that HTC could not achieve sufficient commercial certainty from the expedition of the four patents in issue alone. Similar reasons for refusal were given in ZTE (UK) Ltd v Telefonaktiebolaget LM Ericsson [2011] EWHC 2709 (Pat), although delay and the unavailability of a decision in time for the German infringement hearing were also factors.

Despite the Patents Court’s obvious willingness to consider expedition cases, it seems that the bar for a “good reason for expedition” has been set very high. Only if an applicant can demonstrate a very strong sense of urgency, is a court likely to order any degree of expedition.

If expedition is obtained, the benefits to the party seeking expedition can be significant, particularly if it is involved in multi-jurisdictional litigation. English judges provide fully reasoned, respected decisions from a specialist Patents Court which can be persuasive to (but not binding on) other courts in Europe. In addition, an early decision on a patents matter can help to eliminate inconsistencies in a party’s case or evidence between jurisdictions and useful documents or evidence may come to light which can in certain circumstances affect the outcome in other jurisdictions.

Other posts in this series:
1: New Term, here
2: Small businesses and the Patents County Court, here
3: Smaller businesses and tax benefits, here
4: IPO Patent Opinions, here
5: Leave to appeal, here.