SDL Hair Ltd v Next Row Ltd and others; Master Distributor Ltd v SDL Hair Ltd and others  EWPCC 31
is an interesting Patents County Court, England and Wales, decision on infringements and threats which emanated last month from Mr Recorder Richard Meade QC. With so much going on, it got overlooked at the time -- but it's still worth noting.
Essentially this action concerned two separate though connected cases and turned on two issues. One case related to SDL's heated hair rollers. MDL sued SDL and six other defendants, for infringing UK Patent GB 2 472 483. The second concerned SDL's claim that it had received letters that conveyed wrongful threats of patent infringement regarding the patent.
The court had to decide four things:
* Did MDL even have status to sue for infringement at all? MDL said it was suing as an exclusive licensee under section 67(1) of the Patents Act 1977
-- but the patentee was continuing to deal in patented goods at the same time. Was that fact inconsistent with MDL having a legal right to exclusivity?
* Was the patent infringed? Everyone agreed that the heating in SDL's products depended on the current draw of the heating unit with a particular size of roller in it, and on the fixed heating time of the products.
* Were various letters which MDL sent SDL "groundless threats of infringement proceedings" under section 70 of the Patents Act, one of which was from MDL's solicitors and specifically mentioned patent infringement?
* Was Alan Howard (Stockport) Ltd -- the second-named defendant company in the infringement action -- the importer of the SDL products that it had bought? If that was the case, then threats made against that party would not be actionable by virtue of section 70(4) of the Act. As to whether Alan Howard (Stockport) Ltd was an importer, it appeared that shipping was arranged and paid for by SDL's Danish parent company, ID Hair Company -- in which case, if Alan Howard (Stockport) Ltd wasn't the importer, a threat against against it would be actionable.
How did Richard Meade QC, taking this action over from Colin Birss following the latter's elevation to the Patents Court, handle this? He ruled as follows:
* Starting with infringement, the judge saw no inconsistency between a patentee continuing to deal in patented goods and the grant of an exclusive licence. On the facts there was a real licence, not a sham: on its face it therefore complied with sections 67 and 120(7) of the 1977 Act. The fact that the patentee continued to deal in the patented goods was irrelevant. It followed that MDL was an exclusive licensee and was therefore entitled to sue.
* Since it was common ground that the heating in the SDL products depended on the way the current of the heating unit is drawn with a particular size of roller in it, and on a fixed heating time, neither of which involved a signal derived from monitoring the roller, neither of SDL's products infringed.
* Turning to the allegedly threatening letters, individually their various components cogency and, taking each by itself, would not constitute a threat. However, taken as a whole, the letters did clearly convey a threat. One was an urgent letter from solicitors that specifically spoke of patent infringement. The ordinary reader would have understood that the thrust of the letter was that some consequence was intended to follow, and that that consequence could really only be proceedings for patent infringement. Accordingly each of the communications complained about amounted to an actionable threat under section 70 of the Act
* On the evidence, the combination of ID Hair Company paying for and arranging transport and the risk remaining with it until the goods reached the customer was enough to say that it and not the customer -- in the this case, Alan Howard (Stockport) Ltd -- was the importer.
The judge managed all this with just two hearing days. The case provides yet another reminder of the need to be cautious about writing to an alleged or suspected infringer without incurring liability for making unwarranted threats.