Monday, 6 July 2009

No ruling on hypothetical issue, says Patents Court

It isn't yet available on BAILII, but Friday's judgment of Mr Justice Floyd (Patents Court, England and Wales) in MMI Research Ltd v Cellxion Ltd and others [2009] EWHC 1533 (Pat) is worth a read, dealing with the popular issues of (i) scope of injunctive relief and (ii) stay of proceedings pending an appeal.

In short, in the main proceedings MMI's anti-phone-tapping patent was held valid and infringed as long ago as 11 March. Subsequently, at a hearing to agree the form of the court's order, the defendant raised a fresh issue as to whether the scope of the injunction might be limited on the basis that some sales of infringing goods might fall within the scope of the Crown use provisions of the Patents Act 1977, s.55. The Court considered that this was tantamount to ruling on a hypothetical issue:
"8. Before any act which would otherwise be an infringement ceases to be so by virtue of this section, it must be established that the person doing the act is a government department or a person authorised in writing by a government department. In opening the case at this adjourned hearing, Mr Howe QC [for MMI] assumed that, given that it was being said that authorisation of police forces was irrelevant, the defendants must be seeking to establish that the police forces were a government department. Mr Wilson [for Cellxion] intervened to say that this was not part of the defendants’ case. He said, although there was no evidence at all to this effect, that his clients were hoping to obtain “an authorisation”. There was no evidence as to what steps had been taken to obtain an authorisation, whether the authorisation was intended to be of the defendants or the police forces, and whether retrospective or prospective authorisation was being sought. This position was of course in contrast to the position taken in the skeleton argument that the authorisation procedure had no application to the case except in respect of demonstrations or non-police sales.
9. The change of position by the defendants also had the effect that the question which I was being asked to decide in respect of police forces had become hypothetical. The court does not readily entertain hypothetical questions. One obvious reason is that the question may never arise in fact – as here. Another reason is that it is far better to decide questions of law when in possession of the facts, rather than in contemplation of a variety of different factual scenarios, not all of which may be foreseeable. That is also the case here. If the defendants obtain an authorisation it may, as they point out, be retrospective. Does that render non-infringing the sale of the original machine made at a time when the defendants had no reason to suppose that the Police were authorised? This is not a matter which has been properly argued before me, and arises only because of the different way in which the defendants now put their case.
10. The defendants did not put before me any draft order explaining how the various injunctions, declarations and inquiry were to be limited in the event of an authorisation of the police or the defendants by the Crown. This is perhaps explicable by the fact that, until the hearing, the defendants were contending that authorisation was “nearly inapplicable to this case”. But such a draft order would have to deal with a variety of hypothetical circumstances, and I am by no means certain that the parties would not encounter further disputes over the drafting of such a document.
11. I have come to the conclusion, reluctantly, that it would be wrong for me to attempt to deal with points which might in the future arise if the defendants or the police obtain an authorisation to use the invention from a government department. It is true that one question which will arise in the event that some form of authorisation is obtained is whether use by the Police can be properly authorised under the section at all, given the dual requirement that the use must be both authorised by the department and “for the services of the Crown”. It is plain that these words operate to limit the acts which a government department can authorise ... There are arguments in both directions on this issue in the present case: the claimants arguing for a narrower “organisational” construction, the defendants for a wider “functional” construction. The clamants also take a point on the absence of any notification to them under section 55(7). But I do not think it would be right to decide even these questions until they actually arise".
On the issue of stay of injunctive relief pending an appeal the judge summarised the position succinctly:
"31. There is no right to a stay of an injunction pending an appeal, far less to a stay pending an application for permission to appeal to the Court of Appeal which has yet to be determined. In order to determine whether a stay should be granted the court needs to be put properly into possession of the relevant facts, in order to answer the relevant questions which are (a) what effect would the grant of an injunction, which later turned out ought not to have been granted, have on the defendants? (b) what effect would the refusal of the injunction have on the claimant who has at this stage established his right? and (c) what steps should the court take in order to place the appeal court in the best position to do justice between the parties?"
You can read the judgment in full here.

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