Lower Threshold UK Patent Appeals

By Patrick Kelleher


February 2006

A recent judgment from the English Court of Appeal in the case of Smith International v SPS Group ([2005]EWCA Civ 1357) has clarified an important issue relating to the threshold required to be passed for securing leave to appeal in certain patent cases. The ruling on what was essentially a procedural point may understandably have slipped under the radar for followers of English patent jurisprudence but it has important ramifications for practitioners before the UK Patent Office.

The UK Patent Office has parallel jurisdiction with the English and Scottish Courts to hear petitions for revocation of UK Patents. UK Patent Attorneys have full rights of audience in the Patent Office and the forum is commonly used in smaller cases without the involvement of specialist patent solicitors but often with the aid of patent Counsel. The cases are heard by experienced Patent Office hearing officers.

Appeal from a decision of the Patent Office hearing officer is to the English High Court and is an appeal by right – leave to appeal is granted automatically. The appeal is heard by a single patents judge in the High Court. If one of the parties wishes to appeal from that decision, a slightly different regime is involved. It was issues regarding this subsequent level of appeal (from High Court to the Court of Appeal) which concerned the Court in Smith v SPS.

The issue before the Court of Appeal concerned the appropriate threshold to be overcome by the appellant before it could be granted leave to appeal by the Court. The hearing had its basis in a contradiction between relevant statutory provisions. On one hand, and a position supported by the Respondent, SPS, the Civil Procedure Rules (“CPR”) enacted in 1999, stated that where a matter was appealed to the High Court and subsequently leave for a further appeal was sought to the Court of Appeal, no leave to appeal would be granted unless the Court of Appeal essentially considered that the appeal would raise an important point of principle or practice.

The relevant provision of the CPR was brought into force by section 55 of the Access to Justice Act 1999 (“AJA”) and its intention was to limit access to the Court of Appeal when the parties had already previously been heard on appeal. For public policy reasons related to reasonable and just apportionment of court resources, so-called second appeals should only be allowed to be heard in important cases where consideration of the issues by this higher Court was in the public interest.
One might think that this was an open and shut case. For Smith International to be able to obtain leave to appeal it needed to show that it passed the stringent test set out in the AJA / CPR. On the other side of the coin, however, Smith International relied upon a conflicting provision of the Patents Act 1977.

Under section 97(3) of the Patents Act, and unlike the position under the AJA, leave to appeal is not exclusively a matter for the Court of Appeal. Under the Patents Act, in circumstances such as this where the case was a second-level appeal in proceedings which began life in the patent office, either the High Court or the Court of Appeal could grant leave to appeal. Furthermore, the Patents Act was silent as to the threshold to be applied by the Court when deciding whether to grant leave. In the absence of an express statutory threshold, the Court would have to fall back on the standard threshold in English law for appeals to the Court of Appeal – whether the appeal has real prospects of success.

Accordingly, one can see that if Smith International, the party seeking leave to appeal, were successful in its arguments, it would only need to show a real prospect of success before it obtained leave. If SPS, the party opposing the grant of leave to appeal, were successful in its arguments, then the Court would have to apply a more stringent standard, that of an important point of principle or practice.

Unusually, the full Court of Appeal (a 3 judge panel of Mummery, Jacob and Neuberger LJJ)) heard the application for leave to appeal. Normally, a single Lord Justice of Appeal hears applications for leave.

The Court held that the appropriate test was to be found in the Patents Act 1977. Although the relevant provisions of the Access to Justice Act 1999 were cast in general terms and on their face were wide enough to catch the current situation, the AJA was actually trumped by the Patents Act. Not only was the Patents Act enacted earlier in time than the AJA but the relevant provisions of the Patents Act were specifically directed towards patent appeals.

The Court found that for the AJA (and hence the CPR) to apply in preference to the Patents Act, the earlier Patents Act provisions needed to have been repealed or amended. No such repeal or amendment was expressed in the AJA. Furthermore, the Court noted that it was difficult to imply a legislative intention to repeal an earlier enactment which is specific in nature, where the later provision is general in nature.

The Court found support for its reasoning in the fact that the AJA had expressly repealed a similar provision also relating to access to the Court of Appeal but in a different area of law. The Court reasoned that such express repeal would have been unnecessary had there been an implied repeal in any event by the general provisions of the AJA. Essentially, the provisions of the AJA demonstrated that the legislature had given appropriate consideration to access to the Court of Appeal. Where access was to be limited, the AJA contained a specific repeal provision. Where, as in the present case, no specific limitation of access was expressed in the legislation it could be assumed that the legislature had considered and rejected that there should be a specific repeal.

The Court of Appeal further ruled that the legislation could not be construed as requiring appellants to address the thresholds of both pieces of legislation – seeking the Court’s leave under the Patents Act and, regardless of the outcome, subsequently asking the Court of Appeal for leave. This would effectively deprive the High Court of the power to grant leave under the Patents Act.

The Court therefore found that the relevant hurdle to be overcome by the Appellant was whether the appeal had reasonable prospects of success. This was found to be the case and accordingly leave to appeal was granted to Smith.

Published in World Intellectual Property Report, February 2006