Monday, 5 March 2012

When ownership of a patent is beyond challenge

KCI Licensing Inc and others v Smith & Nephew and others was decided last Thursday by Judge Colin Birss QC, sitting as a judge in the Patents Court, England and Wales). Following earlier litigation in which KCI had pursued Smith & Nephew (S&N) for infringing two of its European patents and established that infringement had occurred, the company applied for summary judgment in relation to an enquiry into damages. In its particulars of claim in the infringement proceedings, KCI had asserted that it was the registered patent holder. S&N admitted that assertion at the time but now, in its response to KCI's statement of intent in the enquiry into damages, S&N claimed that KCI was not the true patent owner after all. KCI was not impressed and argued that it was surely not open to S&N to raise the issue of true ownership on the enquiry into damages -- not just because of the earlier admission but also because it in any event was estopped from doing so. No, said S&N: it had actually raised the point in its skeleton argument at the trial and the admission was only that KCI was on the register as its registered proprietor, not that KCI was its true patent owner.

In an extempore judgment which was noted briefly on the Lawtel subscription-only service, Judge Birss QC allowed KCI's application. In his view, the pleading that KCI was the registered proprietor was a plea that it was (i) the proprietor and (ii) on the register. This was quite normal, but it would not be usual to see a plea that the claimant was the "true proprietor". In any event, the burden of proof lay with S&N to disprove that KCI was the true proprietor. Having already admitted in its defence that KCI was the proprietor, an amendment to the defence was needed before the issue of true ownership to be raised. Since this issue was raised in S&N's skeleton argument at trial, it would not be right to look at the matter simply as a pleading point. However, S&N should have raised the issue when the trial judge was ordering relief following his judgment; if indeed KCI was not the true owner, it had no right to orders for relief -- and this could and should have been a ground for S&N's subsequent appeal. Once the court was considering damages or an account on an enquiry into damages, there was no longer any cause of action for patent infringement; it had been replaced by a judgment premised on KCI having title to sue. By this time it was too late for S&N to challenge KCI's right to sue.

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