In terms of substantive patent law, 1999 was remarkable if only for the lack of any major developments. I have set out in tables 1 and 2 below a summary of the High Court and Court of Appeal decisions on the merits for 1999. There were no decisions on the merits handed down by the Patents County Court.
I comment below on only two of them: the High Court decision in Haberman v Jackel1 on the issue of commercial success and the Court of Appeal decision in United Wire v Screen Repair Services2 on the issue of implied repair.
Although certainty can be considered a "good thing" insofar as it enables patent practitioners to give clear advice to clients, there are nevertheless questions of substantive patent law on such matters as construction and infringement and obviousness to name but two which are deserving of review by the House of Lords. On construction and infringement, for instance, the issue as to whether the approach set out in Catnic v Hill & Smith3 to the construction of a patent claim was the correct approach under the Protocol to the Interpretation of Article 69 of the EPC was raised in PLG v Ardon4. Millet LJ who gave the leading judgment in PLG concluded that Catnic was otiose. Although Aldous LJ had been appointed to the Court of Appeal at the time of that appeal, he was unable to sit on the appeal as he had decided PLG at first instance. He did however have the opportunity to set the record straight in Kastner v Rizzla5where he decided that Millet LJ's statements in PLG on Catnic were obiter dicta and therefore not binding on him and that the approach set out in Catnic was the correct one to be adopted in order to comply with the Protocol. Since then the lower courts (as well as Court of Appeal for that matter) have been bound to follow Kastner. A review of the law on construction and infringement therefore awaits a successful Petition to the House of Lords1*.
TABLES 1 AND 2
In terms of procedural patent law, however, 1999 has been of considerable interest to patent practitioners. Leaving aside the case law, one the most significant events of the year was the coming into force of the new civil procedure rules (known as the CPR) on 26 April 1999. The CPR are designed to make civil litigation in England & Wales cheaper and quicker, inter alia, by giving to the Judges the power to manage cases in a proactive manner. Although competition from not only the Patents County Court but also other European jurisdictions coupled with the relative autonomy of the Patents Court had led the Patents Court Judges to begin the process of case management ahead of their introduction, the CPR now provide them with the necessary powers to cut the litigation cloth even better to suit the needs of each particular case.
Aside from the CPR, however, both the High Court and the Court of Appeal have handed down some interesting decisions on various aspects of procedural patent law. I comment below on those which I consider to be of particular importance to users of the English patent system, namely: (1) summary judgment on construction and infringement; (2) the stay of English proceedings pending the outcome of an EPO opposition; (3) the extent of the Court?s discretion to refuse an amendment.
1999 Cases on Substantive Patent Law
Haberman v Jackel
Haberman is of interest mainly because it was one of the few recent cases in which "commercial success" has been relied upon successfully to overcome an obviousness attack on the patent in suit. In most cases, a plea of "commercial success" fails because either it is not established that there is any relation between the invention and the increased sales of the commercial embodiment of the invention or the commercial embodiment only represents one part of a broader claim. In Molnlycke v Procter & Gamble6, the Court of Appeal relegated commercial success to that of secondary evidence to be used only to test the primary evidence of the properly qualified expert witnesses on the issue of obviousness.
In Haberman, the invention itself concerned a leak proof children's trainer cup. The Judge approached the issue of obviousness on the basis of the widely used four part test set out in Windsurfing v Tabour Marine7. He held that the question to be determined was whether, without any knowledge of the alleged invention, the difference between it (being the use of a slit valve to prevent leakage of fluid from the outlet of a training cup) and the prior art (being the facts that teats from feeding bottles had been made drip resistant by incorporating slit valves in the end and that it was a recognised problem that training cups were prone to leak) would have been obvious to the skilled man or required a degree of invention. In gaining an insight into the state of mind of the skilled man at the priority date, the Judge held that the following non-exhaustive list of matters relating to commercial success would be relevant:
- What was the problem which the patented development addressed?
- How long had that problem existed? How significant was the problem seen to be?
- How widely known was the problem and how many were likely to be seeking a solution?
- What prior art would have been likely to be known to those expected to have involved in finding a solution?
- What other solutions were put forward in the period leading up to the publication of the patentee's development?
- To what extent were there factors which would have held back the exploitation of the solution even if it was technically obvious?
- How well had the patentee?s development been received?
- To what extent could it be shown that the commercial success was due to the technical merits of the developments?
On the facts, Laddie J held that the plea of "commercial success" was established and relying, inter alia, on that finding further held that the invention was not obvious.
United Wire v Screen Repair Services
United Wire is of interest because it is the first Court of Appeal decision under the Patents Act 1977 on the question of implied repair.
In United Wire, Aldous LJ, who gave the leading judgment, reviewed the authorities under the 1949 Patents Act and referred to the following comments of Lord Hoffman given in the Privy Council decision in Canon v Green8 (a case which before the PC only concerned whether acts of repair amounted to infringement of copyright):
"Their Lordships would observe that the concept of a licence namely something which makes an action lawful which without it had been unlawful is not really applicable to the repair of a patented article. Because repair is by definition something which does not amount to the manufacture of the patented article, it is not an infringement of the monopoly conferred by the patent. It cannot therefore be an unlawful act and needs no special licence to make it lawful, unless as part of a general implied licence to use the patented product at all, which is sometimes used to explain why mere user does not infringe the patentee's monopoly. But this is perhaps better regarded as a consequence of the exhaustion of the patentee?s rights in respect of the patented article when it is sold."
Aldous LJ held in United Wire that the concept of implied repair was not applicable to the law of infringement as defined by the Patents Act 1977 and that when a patentee disposed of a patented product, the owner did not have the right to manufacture a new product under the guise of repair. In deciding whether a particular act constitutes the manufacture of the patented product, Aldous LJ indicated (perhaps unsurprisingly) that account should be taken of (a) the nature of the invention as specified in the claims and (b) what was done by the defendant.
On the facts, the Court of Appeal, overturning the finding of the Judge, held that the Defendants' acts of reconditioning the Claimant's frames constituted the making of a product the subject of the patent in suit and further that the Defendants had thereby infringed the patent in suit. The Judge's finding of validity was upheld.
1999 Cases on Procedural Patent Law
Stay of UK proceedings pending the outcome of an EPO opposition
Up until about a year ago, it was generally accepted that the practice of the English Courts was not to stay patent proceedings pending the outcome an EPO opposition. This practice, based on the principle that "justice delayed is justice denied", was explained most recently by Aldous LJ in Beloit v Valmet9:
"The fact that there may be proceedings both in national courts and before the EPO is inevitable as patent rights, both under the Convention and under the Act, are national rights to be enforced by the national courts with revocation and amendment being possible in both the national courts and in certain circumstances before the EPO. That overlap can mean that there are parallel proceedings in this country and the EPO with the potential for conflict. It is desirable for that to be avoided. Therefore the Patents Court will stay the English proceedings pending a final resolution of the European proceedings, if they can be resolved quickly and a stay will not inflict injustice on a party or be against the public interest. Unfortunately, that is not always possible as resolution in opposition proceedings in the EPO takes from about 4-8 years."
Historically, the practice in most other European jurisdictions has been to accede to a request for a stay at least unless the opposition can be shown to be weak.
In Smith and Nephew v 3M10 and then Bracco v General Hospital Corporation11, both patent revocation actions, the defendants (i.e., the patentees) applied for and were granted a stay of the proceedings pending the outcome of the corresponding EPO oppositions. In both cases, the stay was granted only because the position of the petitioners (i.e., the prospective defendants to prospective infringement actions) and the public interest (namely, the efficient disposal of petitions for revocation) were satisfactorily protected. Thus, for instance, in Bracco, the stay was granted on the basis of undertakings from the patentee (1) not to seek an injunction against the petitioner and (2) to limit their claim to damages to a sum based on a reasonable licence fee.
Then, towards the end of last year, Aldous LJ handed the leading judgment in Kimberly-Clark v Proctor & Gamble12. Although the appeal itself concerned the extent of the Court's discretion to refuse an amendment, Aldous LJ stated in the course of his judgment that although the grant of a stay was subject to a judicial determination of where the interests of justice lay, "the option to stay the proceedings in [the UK] ... must be the preferred option when opposition proceedings are before the EPO."
These comments of Aldous LJ would appear to indicate a relaxation of the previous practice on the part of the Court of Appeal and indeed, in Bracco, leave to appeal having been given by the Judge, the Court of Appeal at the end of January 2000 dismissed the petitioner's appeal against the grant of the stay2*. Shortly after the Court of Appeal decision in Bracco Laddie J granted a stay of a patent infringement action at the request of the defendant in Unilever v Frisa3*.
Although some patent practitioners view this development as a retrograde step, it still seems highly likely given the current length of EPO oppositions that in those cases where the patent represents a commercially important development and the patentee commences infringement proceedings in England soon after the patent has been granted that the English Courts would decide that justice would best be served by refusing to grant a stay. Indeed, shortly still after Laddie J's decision in Unilever, he refused to grant a stay in another patent infringement action, 3M v Rennicks. The factual position in 3M was far from from straightforward not least because in the Opposition, a question of internal EPO procedure had been referred to the Enlarged Board of Appeal. However, the main reason given by the Judge for the refusal to grant the stay (at least until the outcome of the decision of the Enlarged Board) was the prospect that a final decision by the EPO would not be rendered until after the expiry of the patent in suit which would thereby have deprived 3M of the opportunity to seek an injunction.
The Extent of the Court's Discretion to Refuse an Amendment
Under the 1949 Patents Act, the Patents Court had a general discretion to refuse an amendment to a UK patent over and above the statutory grounds set out in the 49 Act itself. In practice, the exercise of that discretion meant that on an application to amend a patent so as to validate an otherwise invalid claim, the patentee had to show through full disclosure of all relevant matters that he had not behaved covetously (e.g., that he had not threatened an infringer with an unamended patent after he knew or should have known of the need to amend it). The authorities on the position under the 49 Act were reviewed and summarised by Aldous J as he then was in Smith Kline and French Laboratories v Evans Medical13.
In a series of cases over the last few years, the Patents Court Judges had questioned the extent to which under the Patents Act 1977 (unlike the 49 Act), at least in relation to a European Patent, the Court still had a general discretion to refuse an amendment to an EP (UK) patent over and above the statutory grounds set out in section 75 of the 77 Act namely, that the proposed amendment must not add matter and nor extend the scope of protection14.
In Kimberly-Clark, the patent in suit was being opposed in the EPO by Proctor & Gamble and a third party, amendments had been made in the course of that opposition which had been allowed although their effect had been suspended because of an appeal and because whatever amendments that were allowed by the EPO would be backdated to the date of grant of the patent, any refusal to allow the same amendments in the UK proceedings would have been rendered otiose.
At first instance, Laddie J had held that under the 77 Act the Court's discretion to refuse an amendment was limited to the statutory grounds set out in section 75 and that the Court did not have the power to refuse an amendment on the ground of covetous behaviour on the part of the patentee. He justified his decision, inter alia, on the need for uniformity with the laws of other European countries on amendment.
Laddie J's decision was overturned by the Court of Appeal. Aldous LJ who gave the leading judgment in the Court of Appeal held that the position under 77 Act was the same as that under the 49 Act for the following reasons: (1) the terms of the sections permitting amendment in both Acts were strikingly similar; (2) section 75 of the 77 Act was concerned with post-grant amendment whereas EPO oppositions were concerned with what was effectively a pre-grant procedure; (3) section 75 was not one of the sections of the 77 Act which was to be construed so as to accord with the corresponding provisions of the EPC and CPC; (4) nothing in the 77 Act indicated an intention to restrict the Court's discretion so as to prevent covetous behaviour from being a ground of refusal of an amendment; (5) section 75 applied to both national as well as European patents and there was every reason to believe that Parliament had intended the public to be protected from an abuse of monopoly of a national patent after the 77 Act as much as before it.
In essence, Aldous LJ considered that the jurisdiction to amend under section 75 of the 77 Act in English proceedings was not equivalent to the jurisdiction of the EPO to amend in opposition proceedings and it was not therefore imperative that the same considerations were taken into account in exercising the discretion to amend in each forum. As a purely practical matter, Aldous LJ indicated strongly, as noted above, that the course of action which should have been considered by the Judge (but which had not been) was whether to stay the English proceedings pending the outcome of the EPO opposition.
Following the Court of Appeal decision in Kimberly-Clark, a patentee seeking an amendment of their patent (whether a European or a domestic UK patent) will continue to be obliged to give full disclosure and to justify to the Court any delay between becoming aware of the relevant piece of prior and making the application to amend.
Summary Judgment on Construction and Infringement
In the mid-1980s, there were a series of striking out applications in patent actions all of which were made on the ground that on the true construction of the patent there was no arguable case of infringement. This culminated in the Court of Appeal decision in Strix v Otter15 overturning the judgment of Aldous J (as he then was) striking out the action. Dillon LJ who gave the leading judgment in the Court of Appeal, whilst recognising that it was in the public interest for "hopeless" patent cases to be struck out, held that striking out applications were not permissible where issues of fact required the conduct of a mini-trial on affidavit evidence. He went on to explain that the difficulties on such applications brought in patent actions arose because the construction of a patent whilst ultimately a question of law for the Court necessarily involved evidence on the state of the art, the technical meaning ascribed to any terms of art used in the claims and whether under the Catnic approach to purposive construction the variants had any material effect on the way in which the invention worked and whether this would have been obvious to a skilled man at the application date.. Interestingly, the patent in suit in Strix was subsequently held to be valid and infringed (albeit by a different Judge to the one who had heard and acceded to the striking out application at first instance). Since Strix, applications to strike out patent infringement actions have perhaps not surprisingly gone out of a fashion in the UK.
In the US, by contrast, following the Supreme Court decision in Markman v Westview Instruments Inc16, motions for summary judgment on the issue of construction and non-infringement known as "Markman hearings" have become a normal part of US patent litigation practice.
It is against this background then that the Patents Court and then shortly afterwards the Court of Appeal were asked last summer in Monsanto v Merck17 to strike out certain pleaded allegations of infringement on the basis that they disclosed no arguable case of infringement. The factual background to the application is set out below.
The patent in suit concerned a class of pharmaceuticals known as NSAIDs. Claim 1 was directed to the class itself and claim 20 was a Swiss style (second medical use) claim directed to the medical use of that class to treat inflammation. Merck intended to launch a NSAID under the name VIOXX which contained as its active ingredient a product known as MK-966 referred to as the "keto form". In use, it was alleged by Monsanto that a substantial amount of the "enol" and "enolate" forms would be produced in the human body. Monsanto also alleged that substantial amounts of the "enol" and "enolate" forms were produced during the course of manufacturing the "keto" form, a process which took place outside the UK.
Monsanto had 3 arguments on infringement based on these alleged facts: (1) that the "keto" form fell within the scope of claim 1 and therefore the sale of VIOXX infringed the patent directly under section 60(1)(a) of the 1977 Act; (2) the "enol" and "enolate" forms fell within the scope of claim 1 and therefore (a) the sale of VIOXX infringed the patent indirectly under section 60(2) of the 1977 Act (being the knowing supply of an essential element with directions); and (b) the importation of VIOXX infringed the patent under section 60(1)(c) being a product obtained directly from a process, the process being the Swiss style claim 20.
The question before the Court on the striking out application concerned Monsanto's last infringement argument namely, whether the Court was in a position to conclude that claim 20 - "The use of a compound of claim 1 for preparing a medicament for treating inflammation" - should be construed in such a way as to exclude the use of the "enol" or "enolate" to form the "keto" form for preparing the medicament.
Monsanto accepted that the "enol" and "enolate" forms were not present in VIOXX the active ingredient imported into the UK, the active ingredient of which was in the "keto" form. The application to strike out was heard on the assumptions that (1) the "keto" form did not fall within the scope of claim 1, (2) the "enol" and "enolate" forms did fall within the scope of claim 1 and (3) the "enol" and "enolate" forms were not present after administration but were present during the production of the "keto" form abroad.
Pumfrey J, the Judge at first instance, decided that he was in a position to construe the claim as contended by Merck having regard to the words of the claim and the specification. He stated in the course of his Judgment that:
"It seems to me the crucial difference is actually between, on the one hand, the use of a compound of claim 1 to prepare an active ingredient for use in preparing the medicament and the use of an active ingredient to prepare the medicament. The latter is, in my judgment, what is claimed."
The Court of Appeal overturned the Judge's decision and allowed the appeal. Aldous LJ who gave the leading Judgment disagreed with the Judge's construction of the claim. He also cited with approval the statements of Dillon LJ from the Court of Appeal decision in Strix regarding the need for evidence on the issue purposive under Catnic and stated that the Dillon LJ's comments made at that time of Strix under the Rules of the Supreme Court were equally apt nowadays under the CPR.
As a post script, the same first instance Judge, Pumfrey J, held at trial that the patent was both invalid and not infringed. On Monsanto's third infringement argument, the Judge held that on the facts Monsanto had failed to establish that the "enolate" form was present in significant quantities during the production of the "keto" form and that in any event the "enolate" salt itself was not pharmaceutically acceptable (and thereby did not constitute a claim 1 compound..
Following the Court of Appeal decision in Monsanto, it seems that at least for the foreseeable future, "Markman type" hearings will not become a feature of the UK's patent litigation practice. US patent litigation practice is of course very different to that of the UK. One of the most striking illustrations of the differences is the fact that in the US, patent actions are normally heard by a jury and a technically unqualified Judge whereas in the UK they are heard by a technically qualified Judge alone. As a result of these (fundamental) differences, procedures developed in one jurisdiction are not necessarily appropriate in the other. That said, however, it would seem a retrograde step especially given the objectives of the CPR if the Patent Court Judges did not have the power to dispose at an early stage in the proceedings of arguments on construction and infringement which are "hopeless" or at the very least fail what has sometimes been referred to at least by some Judges as the "Judicial Laugh" test.
First published in Patent World in April 2000.
1* In UCC v BPCL, The House of Lords accepted the Defendant?s Petition against the Court of Appeal decision on the ground that Catnic was no longer good law but the case was settled shortly afterwards.
2* 27 January 2000, unreported.
3* 3 February 2000, unreported.
1. 1999 RPC 683
2. 27 July 1999, unreported
3. 1982 RPC 183
4. 1995 RPC 287
5. 1995 RPC 585
6. 1994 RPC 49
7.1985 RPC 55
8. 1997 RPC 728
9. 1997 RPC 489
10. 17 December 1998, unreported
11. 30 July 1999, unreported
12. 24 November 1999, unreported
13. 1989 FSR 561
14. Section 75 of the Patents Act 1977
15. 1991 RSR 354
16. 116 S. Ct. 1384, 38 USPQ2d 1461 (1996)
17. 5 May 1999 (High Court) and 23 July 1999 (Court of Appeal), both unreported.