Dream, Wish or Reality? This year's Laddie Lecture

The Second Annual Sir Hugh Laddie lecture, "From National Patent Litigation to a European Patent Court: a Dream, a Wish or Soon Reality?", takes place on 15 June 2010 in the Cruciform Building, Gower Street, London. This year's speaker is well chosen for the subject, being none other than Raimund Lutz (President of the Bundespatentgericht). The event is hosted by IBIL (the Institute of Brand and Innovation Law), which is part of the Law Faculty, University College London. Professor Jan Brinkhof is in the chair.

The theme of this year's lecture is as follows:

"For more than four decades experts and politicians have endeavored to create a European Patent Court. Such a European Patent Litigation System would be indispensable for a future Community Patent, or as it is now called, an EU-Patent. Some also believe it would be desirable to make this court responsible for the European Bundle Patents in order to unify the decisions made regarding the whole of these bundles.

President Lutz will discuss the status and future of this project, as well as possible alternatives to some of the details of the proposed solutions".

President of the Court since 2006, Herr Lutz was formerly Head of the Subdivision for Trade and Business Law at the Federal Ministry of Justice, Berlin, where his primary focus was on intellectual property.

You can click here for full details and registration.

Patent ethics in court: a new title

In many countries any sort of IP litigation is a specialist activity, but in large, sophisticated and litigation-aware jurisdictions like the United States each area of IP is a discrete field of expertise and even within each field it is possible to discern sub-specialities. Outside the US there can be few jurisdictions on the planet where the volume and nature of legal activity could support a title such as Patent Ethics: Litigation, the latest work by Professor David Hricik, and which would permit nearly 300 pages of sources and analysis.

According to the publishers' web-blurb

"Patent Ethics: Litigation serves as a guide to the ethical issues arising in the course of the patent litigation process. By providing relevant rules and case law, it allows practitioners to identify ethical problems before they arise and to address them most effectively when they do. Patent Ethics: Litigation is the second of two volumes on patent ethics-the first is on prosecution-written by Professor David Hricik and Drinker Biddle partner Mercedes Meyer. This treatise is the first of its kind to combine the PTO rules with commentary by the author, which distills the author's own experience and expertise in patent litigation into effective practice strategies.

Readership: U.S.-based patent litigators, private-practice attorneys and agents, in-house intellectual property departments, foreign law practitioners overseeing U.S. operations, and law schools".

The book is not yet on the bookstore shelves, or indeed available online, but its home page can be accessed here. Published from the US desk of Oxford University Press, its ISBN is 978-0-19-536709-6. The UK price is to be £135.

Grounds for challenge of UK Comptrollers' Opinions remain narrow

In Nationwide Filter Company v Berni Hambleton BL O/091/10 Nationwide, the owner of a UK patent (GB 2411367), sought a review of a Comptroller's Opinion in which the examiner considered its patent -- which was for a method of forming a filter unit of the type comprising a filter element located in a peripheral encasement frame with a seal between the periphery of the filter element and the frame -- invalid for lack of inventive step over a prior French patent document. J. Elbro, hearing the review, cited the principles articulated by Mr Justice Kitchin in DLP Limited [2007] EWHC 2669 and concluded that, since the examiner’s opinion was not clearly wrong and no error of principle was alleged, there was no basis on which to set aside any portion of the Opinion.

The hearing officer also declined to consider an alternative obviousness argument which was based on a US document, which was raised unsuccessfully by Ms Hambleton. Since this argument had been rejected in the Opinion, it was not within the scope of review sought by Nationwide under the Patents Act 1977, Section 74B.

Making directors liable in Australia: what must be proved?

The current issue of the Allens Arthur Robinson Intellectual Property Newsletter features a good note by Trevor Davies and Rob Silberstein, "Patent infringement and company directors", on the 22 February 2010 ruling of Bennett J (Federal Court of Australia) in Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd and others [2010] FCA 108. Issues raised in this note include the liability of a director for an infringement performed by a company as well as liability for authorising the company's infringement.

In this case the third respondent (Dr Appanna) was recorded on the company website as being the managing director and founder of the first respondent, MDS; he also controlled the MDS companies as shareholder. but was he liable for the acts of MDS as a joint tortfeasor? Australian case law has developed three separate tests for establishing director's liability: Bennett J affirmed that, as the Full Court decided in Allen Manufacturing Co Pty Limited v McCallum & Co Pty Limited [2001] FCA 1838, it is not necessary to determine which test is the correct one, but had no doubt in concluding that Dr Appanna was liable. The following paragraph of the judgment, with key words highlighted, points to evidential targets:

"I am satisfied that Dr Appanna’s position as the Managing Director of MDS NZ and his participation in the procurement and distribution of the MDS devices in New Zealand and Australia are sufficient to establish that he deliberately, wilfully or knowingly pursued a course of conduct that resulted in MDS selling products that infringed the Inverness patents. Further, he was aware of competing products on the market and was indifferent as to whether or not those products were protected by patents. In taking part in the activities of MDS NZ and MDS Aus as a director and in the management of those companies, Dr Appanna directed or procured the obtaining of and the selling of the products that infringed Inverness ’ patents".

As to authorising infringing conduct under section 13(1) of the Patents Act 1990 (Cth), it is infringement of a patentee's exclusive rights not only to exploit an invention but also to authorise another person to exploit it. The judge agreed. Liability is established where it is shown that the alleged infringer authorised exploitation in that he sanctioned, approved or countenanced the act of infringement. Here it was shown that Dr Appanna knew that the infringing act of the sale of the products would occur, had the power to prevent those acts and was under a duty to interfere but failed to do so.

An expensive loss: what profiteth a man who loses his money ...

In Betson Medical (Ireland) Ltd v Comptroller General of Patents [2010] EWHC 687 (Pat), an appeal to Mr Justice Kitchin (Patents Court, England and Wales) from the Comptroller in which judgment was given on 31 March 2010, the issue before the Court involved non-payment of renewal fees and its consequences.

In short, Betson filed his patent application in December 1996. Nearly three years later, in October 1999, he assigned his application to Betson Medical, the company he set up to exploit his invention. Although Betson and his company were well aware of the renewal date, neither could pay the renewal fee for the patent in December 2003 for lack of funds. Betson himself sought funding both from banks and pfrom rivate investors, but no money was made available to him to pay either the renewal fee and additional fee within the time limits and the patent lapsed.

In July 2005, Betson Medical filed an application for restoration under rule 41(1)(a) of the Patents Rules 1995. The Intellectual Property Office did not consider that even on a prima facie basis had the requirements for restoration been met. Betson Medical was given a hearing date for September 2009. At that hearing the application was considered under s 28(3) of the 1977 Act (as it then stood):

"If the comptroller is satisfied that - (a) the proprietor of the patent took reasonable care to see that any renewal fee was paid within the prescribed period or that the fee and any prescribed additional fee were paid within six months immediately following the end of that period, the comptroller shall by order restore the patent on payment of any unpaid renewal fee and any prescribed additional fee".

The respondent comptroller refused the application to restore since Betson Medical had not exercised reasonable care to see that the renewal fee was paid in time, or during the six month grace period. Betson Medical appealed and Kitchin J had then to consider whether Betson Medical, as proprietor of the patent, or Betson himself on its behalf, had taken reasonable care to see that the renewal fee and the prescribed additional fee in respect of the patent were paid by the expiry of the grace period.

Kitchin J appeared to face no difficulty in dismissing this appeal. On the evidence, the company had faced severe financial difficulties in the period up to and including June 2004 and Betson himself had made strenuous efforts to secure funding in order (i) to ensure the commercial exploitation of his invention and (ii) to pay renewal fees for all its patents. However, on the application of settled principles, Betson had not shown that he had taken reasonable care to see that the limited sum in respect of the patent in question was paid by June 2004.

PatLit feels that it is such a shame that, having not had the money when he had the patent, the claimant had to deploy his funds so fruitlessly once he did have it.

Some thoughts from Fordham on industrial applicability

"The chances are that if two sides are squabbling about a patent, it has some industrial applicability" -- so said Lord Hoffmann when introducing the topic at today's session of the 2010 Fordham Intellectual Property Conference. His Lordship then reviewed the Court of Appeal's decision earlier this year in Eli Lilly v Human Genome Sciences (here), in which the question arose as to the degree of proof required for predictability of the likelihood of a specific outcome (in this case, treatment for an unspecified disease of the immune system). The EPO had considered that likelihood of treatment for a class of diseases was sufficient, while the trial judge had considered that the likelihood had to be narrowed to a specific condition. This issue relates to that of breadth of claims, which are likely to be wider in juvenile sciences such as biotech. In this case the Court of Appeal did not describe the difference between the EPO approach and that of the British courts as one of policy; Lord Justice Jacob's court had undermined the principle that the British courts should keep their decisions in line with those of the EPO and was therefore wrong.

EPO appeal board don't have to consider grounds in the order in which the appellant raises them

Picked up this week in the PLC IPIT & Communications weekly e-mail last Friday was news of a European Patent Office (EPO) Board of Appeal decision in Case T 0911/06 - 3.5.02 Hybrid generator apparatus/DA PONTE, 11 November 2009. This was a ruling to the effect that the EPO is not required to consider grounds of appeal in the order in which they are placed by an appellant.

This was an appeal against the refusal to uphold a patent as granted. In its grounds of appeal the appellant first proposed amendments to the patent and then requested a decision on the correctness of the refusal of the Opposition Division to maintain the patent as granted. While grounds of appeal are generally addressed in the order in which they are made, this might lead to a situation in which a "higher-ranking" request would be dealt with without having considered the decision concerning the status of the patent which was the subject of the appeal in the first place. Such an outcome, said the Board of Appeal, was both illogical and inconsistent with the spirit of the appeal procedure; it could also have the effect of depriving other parties of their rights regarding the original decision.

Patent marking, bounty hunting?

Writing on the Intellectual Property Watch weblog, Foley & Lardner special counsel Phillip Articola ("Forest Group Decision Has Led To Great Rise In Patent Marking Lawsuits") discusses the US decision in Forest Group, Inc. v Bon Tool Company et al., ___ F.3d ___ (December 28, 2009), in which the Court of Appeals for the Federal Circuit (CAFC) made it more viable for entities to sue patent owners for products that have been improperly marked with the term “patent” or any word or number connoting that the products are patented (e.g., patent number), since those entities can obtain one-half of the statutory penalty payable for making such a false patent marking.

The legislative provision which facilitates this bounty-hunting is 35 U.S.C. § 292, which imposes a civil penalty for falsely marking a product as patented. As Mr Articola explains, under § 292(a), false marking occurs when one intentionally marks or affixes or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing the same. This section also considers false marking to be when one uses “patent pending” or “patent applied for,” for the purpose of deceiving the public, when in fact no patent application has been filed or if a patent application has been filed but is no longer pending. A $500 penal is incurred in respect of each offence and, under § 292(b), “Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States”. The author concludes:

"Based on the Forest Group decision, § 292 will not only lead to a rise in patent marking lawsuits, but it will also likely be the case that patent marking suits will be included more frequently as a counterclaim in patent infringement lawsuits brought by patent owners against accused infringers. Of course, if the S.515 bill [US patent reform] in its current state eventually becomes law, this will certainly affect the number of such lawsuits. ...".

SMEs and patent litigation: are we asking the right questions?

The April 2010 issue of Sweet & Maxwell's monthly European Intellectual Property Review (EIPR) leads with an Opinion by Dr Sivaramjani Thambisetty (right), who lectures in IP law at the London School of Economics. Entitled "SMEs and Patent Litigation: Policy-Based Evidence Making?", this piece suggests that, in a number of recent policy documents, there is little evidence for the claims made that access to justice is denied. Dr Thambisetty identifies five assumptions concerning patent litigation and (Small and Medium-Sized Enterprises) SMEs that permeate the current policy debate in England and Wales:

1. More litigation would mean better enforcement and therefore better use of the patent system;

2. SMEs would patent more only if there was better enforcement;

3. SME access to cheaper patent litigation is in the public interest;

4. We can and must emulate the German example;

5. A streamlined procedure would attract a greater number of cases from within and from outside the United Kingdom.

The questions must be asked: are these the right assumptions upon which we should be proceeding, and what evidence can we attach to them?

Some of the answers, and indeed a good number of further questions, can be expected following the anticipated publication of the Study into current social, economic & business issues for small & medium-sized firms in the enforcement of Intellectual Property Rights in the UK. This study, commissioned by the Strategic Advisory Board for Intellectual Property Policy (SABIP)
from the Intellectual Property Institute, in partnership with Oxford University and expert practitioners, has sought to explore current social, economic and business issues for small- and medium-sized firms in the enforcement of intellectual property rights in the UK. The project involved surveying SMEs and legal professionals. If nothing else, it should give the most current and accurate account of what SMEs and micro-businesses think, how they make their IP litigation decisions and what they think of the results.

Violence not condoned -- but is Hitman a hit?

PatLit's curiosity was stirred by an invitation to visit Patent Hitman, a website which purports to assist actual or threatened defendants in patent litigation suits. According to the rubric:

"Alleged Infringement:
If you are currently being sued or being threatened of being sued (cease and desist letters, patent trolls) for patent infringement anywhere in the world, contact me. Chances are I can remedy this by providing prior art (patents, non-patent literature) to invalidate or weaken the corresponding patent and its claims potentially through reexamination at the USPTO. Depending on the urgency of your request, prior art can be located within days.

Provide me the troublesome patent(s) causing the lawsuit (or threat thereof) and I provide you the prior art. New search technology now exists which gives me powers not found at the USPTO which is capable of searching databases examiners never access.

Competitive Strategy:
Relevant prior art can also be located to weaken or invalidate your competitor's broad patent(s) which are limiting your company's strategy. It's possible and it's legal. You've just got to find the right person to locate the prior art.

All correspondence is strictly confidential.

Software patents. Business method patents. Biotechnology and pharmaceutical patents. Medical device patents. Etc.

PATENT HITMAN DOES NOT CONDONE VIOLENCE".

Patent Hitman appears to be a US-directed operation but, prior art being what it is, his services would presumably be relevant in any jurisdiction. The sort of services described are those which are generally undertaken by professional representatives acting on behalf of a defendant, though there is nothing to say that Patent Hitman is professionally qualified. While "All correspondence is strictly confidential", can it be assumed that communications between the threatened party and this service -- which are to be initiated via an email address or telephone contact number -- will enjoy privileged status?

If any readers of this blog have any information concerning Patent Hitman, can they please share it here?

Grounds of challenge narrow for Comptrollers' Opinions

In a ruling last week by Mr P. Thorpe on behalf of the Comptroller of Patents in the UK, Lundberg & Son VVS-Produckter AE v ZGP Ltd BL O/080/10, the request of Lundberg that a review be made of a non-binding infringement opinion was refused (such opinions may be obtained from the Comptroller under the Patents Act 1977, s.74B; though non-binding, they are relatively cheap to obtain and can be quite useful). The opinion had concluded that there was no infringement of Lundberg's patent by ZGP's Ecocamel shower head.

According to Lundberg, the opinion wrongly interpreted the manner in which ZGP's product worked. However, Mr Thorpe concluded that under the Patents Rules 2007, r.98(5)(b), the only ground on which a non-infringement opinion could be reviewed was if the decision was based on an incorrect interpretation of the patent and, as Mr Justice Kitchin had established in DLP [2007] EWHC 2669 (Pat) [noted here by the IPKat], the review could only consider whether the examiner had made an error of principle or his opinion was clearly wrong. Lundberg's request did not meet these requirements and must be dismissed -- though the company still had the option of getting a second, genuinely binding opinion, by suing for infringement.

Tactics and defences in OSS patent disputes

"(Mis-)Use of Patents in Open Source Software and Open Standards: An Evaluation of Tactics and Defences under Intellectual Property and Competition Law" is the title of an unpublished paper, by Nikolaos Volanis and Nikolaos Prentoulis, which was prepared for the European Summer School and Conference in Competition & Regulation (CRESSE) last year in Crete. Both authors are lawyers in private practice. According to the abstract,

"This paper aims to discuss the misappropriation of patents in the context of Open Source Software (OSS) and Open Standards (OS), from a perspective of Intellectual Property and Competition law. Through the illustration of various examples in recent case law, we first contemplate on the potential threat that patent misuse may have in the OSS industry, as well as the various responses of the OSS community to this threat. Furthermore, we examine alternative legal defences against opportunistic patent enforcement. Our focus is not placed on the defences aiming against the validity of the patent, but instead, we reflect on the legal bases pursuant to which the opportunistic behaviour of the patentee may lead to the unenforceability of his patents, or be considered as an anti-competitive behaviour. In this context, we stress that the network dynamics in the software and IT-related markets should play an important role when evaluating the abuse of patent rights or of dominant behaviour. From a competition policy perspective, this tension between opportunistic rent-seeking and the industry’s drive towards royalty-free software and standards requires a careful balancing, so as to not undermine the legitimate right of the patent holder to benefit from his investment in R&D".

The authors write of the FUD ('fear, uncertainty, doubt') factor which hovers over the OSS marketplace. Certainly, while the total volume of OSS patent-driven infringement litigation -- even in the United States -- is relatively slim, the threat of litigation is ever-present. Those companies with the biggest portfolios are simultaneously those best placed to sue and most worth suing.

You can read the paper in full here.

Great conference -- but what about the menu?

On 16 and 17 April 16 and 2010 the Centre for International Intellectual Property Studies (CEIPI) is organizing a conference at the European Parliament in Strasbourg, writes CEPIPI's Director General Christophe Geiger. The subject is "Towards a European Patent Court" and the event takes place under the high patronage of Mrs Catherine Trautmann, member of the European Parliament and former Minister for Culture and Communications. Says Christophe:

"As you know, there is now a rather broad consensus in favour of the creation of a common jurisdiction to settle disputes related to European patents and forthcoming Community patents. Indeed, the relevance of patent protection closely depends on the effectiveness of the jurisdictional system in charge of its implementation. On this matter the present system could be improved [a gentle understatement!].

This project is part of a resolutely federative process. However, it is still a delicate question and several controversial issues remain. With this in mind, we have gathered a panel of specialists – academics, practitioners and senior officials – to share their expertise and contribute to the success of this ambitious project.

For this reason, we are particularly honoured to inform you about this event and the gala dinner organised on the evening of the first day of the conference, on Friday 16 April at 8:00pm at the hotel restaurant du Parc in Obernai" (right).

If you'd like to attend, the provisional programme of the conference and the registration form are available on the CEIPI website here. Regretfully PatLit must report that the menu for the gala dinner has yet to be published.

Mobile phone litigation: who's to blame?

If a picture is worth a thousand words, we are all indebted to Nick Bilton for this marvellous depiction, on the New York Times' Technology BITS section, of the diagrammatic depiction (above) of the state of play in terms of litigation over mobile phones (thanks fellow-blogger and legal scholar Nikos Prentoulis, for this lead). In his article Nick explains:

"At first glance, it looks as if we’re in the middle of a patent lawsuit Super Bowl party. Nearly every large mobile phone player — with the exception of Microsoft, Palm and, so far, Google — has recently been involved in some sort of patent litigation regarding mobile technologies.

The graphic above, showing a sampling of these lawsuits, can be almost dizzying to look at and decipher. Within the last year, for example, Apple was sued by the Taiwanese company Elan Microelectronics over alleged infringement of touch-screen patents. Nokia went on a lawsuit spree, suing Apple, Samsung, LG and a variety of other mobile handset companies. Kodak sued several companies over patents related to the companies’ digital-imaging technology. And on Wednesday, Apple sued HTC, the Taiwanese handset maker.

Although patent litigation is not new in the technology world, these suits, specifically around mobile, point to the drastically changing mobile landscape. Lawyers I spoke with explained that mobile technology was still in its infancy and these large computing companies were trying to stake their claim to the future of computing ...".

Somewhat surprisingly, given the identities of the businesses above, the author -- citing Eric Von Hippel, a professor of technological innovation at M.I.T.’s Sloan School of Management -- suggests that the culture sharing of patent technology, which is generally the preferred outcome in developing technologies, has not been able to mature on account of the activities of patent trolls.

A matter of Opinion ...

U.S. Patent Opinions and Evaluations is the title of a most impressive book by David L. Fox (senior counsel, Fulbright & Jaworski), published late last year by Oxford University Press. According to the web-blurb,

"this book provides expert, up-to-date, practical advice and guidance on the four principal issues of patent evaluations and opinions, including: (1) claim construction and claim scope; (2) infringement; (3) validity; and (4) enforceability.

The book teaches how to apply these four principles to the many uses of patent opinions, including:

Evaluating and Opining on Third-Party Patents for:

--- Willful Infringement Risk Analyses
--- Invalidity and Noninfringement Investigations and Opinions for Avoidance of
Willful Infringement
--- Sarbanes-Oxley Infringement Risk Analyses and Reporting
--- Clearance (Freedom to Operate) Investigations and Opinions for New Products and Process
--- Design-Around Investigations and Determinations
--- Pre-Purchase and Pre-License Investigations of Patent Scope, Validity, and Enforceability
--- Pre-Filing Investigations for Ex Parte Reexamination and Other Post-Grant Challenges

Evaluating and Opining on One's Own Patent Rights for:

--- Pre-Filing Infringement, Validity, and Enforceability Investigations for Rule 11 Compliance
--- Evaluation of Patent Portfolio Strength and Scope
--- Pre-Filing Investigations for Reexamination and Reissue Filings
--- Pre-Sale and Pre-Licensing

Investigations of Patent Scope, Validity, and Enforceability".

Unlike many US publications which, one accepts are written specifically for the large and vibrant domestic US market, this one is so accessible to the non-US reader that one wonders if it wasn't written with the non-dom market in mind. Its charms are not confined to the regular text either: helpful Appendices give sample outlines of non-infringement and invalidity opinions, whether alone or combined with one another. Other topics covered and which the non-US reader must take care to appreciate include that graveyard of many a good intention, the waiver of attorney-client privilege.

Bibliographic details: ISBN13: 9780195367270, ISBN10: 0195367278. xliv + 1026 pages. Price:$295. Web page here.

Mixed fortunes for hearsay evidence notices served out of time

In today's decision of the Patents Court (England and Wales) in Intervet UK Ltd v Merial, the Queen's University of Belfast and the University of Saskatchewan [2010] EWHC 294 (Pat), Mr Justice Arnold considered at length (at paras 69 to 94) the patentees' application -- opposed by the alleged infringer -- for permission to serve two notices of intention to rely upon hearsay evidence which they had served out of time. Summarising both the legal position and the criteria to be weighed when considering whether to exercise his discretion to allow the application, the judge reminded readers:

"70. Failure to give notice in due time does not of itself mean that the hearsay evidence in question is inadmissible, but it is relevant to (i) the court’s exercise of its case management powers and (ii) the weight to be given to the evidence. So far as (i) is concerned, CPR r. 32.1 gives the court a discretion to exclude admissible evidence. That discretion may properly be exercised to refuse to admit hearsay evidence where there is a failure to comply with the specified time limit".

In this case the judge refused the first application and added that, even if he were to grant an extension of time for service of the notice and admitted the evidence, he would have given it no weight. The second application, made in respect of certain of the alleged infringer's documents, fared somewhat better, though the judge felt that it would be difficult for him to attach much weight to them. The documents were described as being "technical", the judge adding:

"They do not speak for themselves, even when read with the benefit of the technical education I have received during the course of this trial".

Reversing the burden of proof: some work in progress

Aaradhana Sadasivam (KhattarWong, Singapore) has written to PatLit as follows:

"Recently I was researching the provisions concerning the reversal of the burden of proof in diffrent jurisdictions and, to my surprise, I found that the ability to request reversal of burden of proof is not as simple as it may be thought or "advertised" in the matter of process patents. In fact,the patentee has to satisfy specific conditions (see for example, Section 100 of UK Patents Act in the UK), before he can get to reverse the burden of proof against an alleged infringer".

Aaradhana has attached this table, on which she is still working, comparing the provisions governing the reversal of the burden of proof across some important jurisdictions. If any readers would like to contact her with their comments, can they please email her here.

Late-stage amendments: a success for Servier

Back in 2008, in Les Laboratoires Servier and another v Apotex Inc and others [2008] EWHC 2347 (Ch) (noted here by PatLit), Mr Justice Norris gave a ruling which attracted much interest and some critical comment.

To recap, Servier developed and patented a pharmaceutical known as Perindopril (a prescription drug used against hypertension), which it sold as Coversyl. This patent was the '341 patent'. In July 2000 Servier applied for a further patent (the '947 patent') covering an allegedly new form of Perindopril. In July 2006 the European Patent Office dismissed an opposition, so the '947 patent survive unscathed.

Generics manufacturer Apotex decided to make Perindopril, considering the '947 patent to be no more than a rehashed version of '341. Servier sued for patent infringement and secured interim relief, restraining importation of Apotex's product. In subsequent proceedings the patent was found to be invalid and was revoked by the court. Since the interim injunction stopped Apotex selling Perindopril for a large period of time, the court had to quantify the entitlement of Apotex to damages under the cross-undertaking given by Servier when the application for interim relief was granted.

The problem that led to this little morsel of litigation was that, while the inquiry into damages was edging towards its close, Servier sought permission to amend its case in the light of a finding of infringement against Apotex in the Canadian Federal Court in Canada, in proceedings to which Servier was not a party, this patent being held not by Servier but by an associated company. The point of the application was this: the Perindopril which Apotex would have sold if no injunction had been granted would have been made in Canada and would have infringed the associated company's patent.

Norris J dismissed Servier's application on the ground that it was made at too late a stage in the proceedings. The Canadian proceedings actually predated the commencement of the inquiry into damages on the cross-undertaking; the underlying legal point, if valid, had been in existence since the beginning of the inquiry and it had been open to Servier to make the application from the outset -- but it didn't. Norris J added that a party that secures interim relief before failing to establish infringement is not actually a 'wrongdoer', but someone who has obtained an advantage upon consideration of a necessarily incomplete picture. From the court's perspective such a person should be treated as if he had made a promise not to prevent that which the injunction in fact prevented. There had to be some form of symmetry between the process by which he obtained his relief (an approximate answer involving a limited consideration of the detailed merits) and that by which he compensated the subject of the injunction for having done so without legal right, particularly where -- as here -- the paying party had refused to provide full details of the sales and profits which it made during the period when the injunction was in force. For the record, the damages awarded against Servier were assessed at £17.5 million. Servier appealed.

Allowing the appeal, the Court of Appeal (Lords Justices Lloyd-Jacob and Sullivan; Sir David Keene) held last Friday that Norris J failed to have adequate regard to the consideration that, refusing to allow the amendment, the court was gifting Apotex the benefit of the £17.5 million awarded as damages as a total windfall. For Apotex, in English proceedings, to be awarded this sum of £17.5 million -- which might be unjustified -- was a very serious matter and the judge's failure to take this into account seriously affected the exercise of his discretion.

The Court of Appeal added that, after the judge's decision, the Federal Court of Appeal in Canada had affirmed indeed its own decision. This made it even more likely that Apotex had received an unjustified benefit in England. The amendment was accordingly allowed -- but there was a little sting in the tail: the amendment was only to be allowed on the basis that Servier paid all the costs of the inquiry to date, since it should have raised the matter from the outset.

NB: this item is prepared in reliance on a Lawtel note and an earlier weblog post. This decision is not yet available on BAILII.

Addendum: since a number of readers have emailed PatLit to record, correctly, that Lloyd-Jacob J passed away some decades ago and to suggest that the report should have referred to Lord Justice Jacob, PatLit wishes to confirm that the Lawtel note really does say "Lloyd-Jacob LJ". I quote from the rubric of this case entry:

CIVIL PROCEDURE - INTELLECTUAL PROPERTY
CA (Civ Div) (Lloyd-Jacob LJ, Sullivan LJ, Sir David Keene) 12/2/2010
References: LTL 12/2/2010 EXTEMPORE
Document No.: Case Law - AC9601308

There is probably something in the CPR to provide that, while deceased judges may not try matters at first instance, and are probably not required to conduct case management hearings, they may be empanelled to hear appeals so long as they constitute a minority of those judges presiding ...

No real progress

The current issue of Informa's 10-times-a-year Patent World magazine has an article, "Another False Dawn" by Alan Johnson (Bristows), which will do little to cheer up those desperate souls who daily scour the entrails of European patent litigation for signs of meaningful progress. The article recalls the proud proclamation which was trumpeted last year:

On 4 December 2009 an EU press release was issued which was grandly entitled “Patents: EU achieves political breakthrough on an enhanced patent system". The press release went on: “The Council has today unanimously adopted conclusions on an enhanced patent system in Europe. The package agreed covers major elements to bring about a single EU patent and establish a new patent court in the EU. Both together will make it less costly for businesses to protect innovative technology and make litigation more accessible and predictable. Today’s agreement will pave the way for solving the outstanding issues to achieve a major reform of the EU patent system in the near future".

The story behind the spin is however that "little real progress has been made on the creation of an improved European patent system". Don't we know it!

"I do declare ..."

Florida patent lawyer Mark Terry, in an article on his blog yesterday entitled "When Can a Patent-Related Letter Spawn a Declaratory Judgment Action?", touched on a topic of some sensitivity in the United States: what kinds of letter can the plaintiff's attorney send out to a suspected infringer without the anxiety that it will trigger an action by its recipient who seeks declaratory judgment action in its own forum rather than that of the plaintiff? He offers the counsel of caution:

... in order to avoid declaratory judgment jurisdiction, I recommend sticking to exactly what the court stated doesn't constitute grounds for a declaratory judgment action: "a communication from a patent owner to another party, merely identifying its patent and the other party's product line".

This advice follows a Federal Circuit case that erupted last year after Texas-based patent-holder Acceleron wrote a letter to an alleged infringer, Hewlett-Packard, which only (i) brought the pertinent patent to the attention of HP, (ii) requested a dialogue and (iii) requested a confirmation that no "case or controversy" existed at the moment. Following further correspondence HP filed a declaratory action in Delaware. This did not please Acceleron, which claimed there was no "case or controversy" since it didn't actually threaten to sue or even claim that HP was infringing.

The Federal Circuit disagreed with this interpretation of the facts, for the following reasons: (1) Acceleron stated the patent was relevant to HP's product(s) [this is presumably a pretty well ever-present factor in cases in which a patent owner considers that the recipient of the letter is infringing his patent]; (2) Acceleron imposed a short deadline for responding to their letter [this is likely to be interpreted as a litigation-led imposition]; (3) Acceleron insisted that HP not file suit [ditto] and (4) Acceleron was a non-competitor patent holding company [it's not clear to me what weight should be given to this factor. Surely if the parties had been market competitors, the same implication could be drawn that litigation was being contemplated?].