Barcelona Patent Court publishes landmark ruling in TV platform dispute

Summary

On 17 October 2022, the patent-specialised Commercial Court of Barcelona No.4 (first instance) ruled  on a complex infringement case brought against several entities of the famous telecoms’ giant, “Telefónica”. Two-Way Media Ltd, the claimant, alleged that two of its patents  had been infringed by the platform and devices for the broadcast of pay television “MOVISTAR+”, “MOVISTAR+ EN TUS DISPOSITIVOS”, and others.

The two patents, EP 2.278.775  (EP 775) and EP 2.323.333, (EP 333), protect a multicasting method and apparatus, specifically, a computer-implemented method and apparatus for playing media stream.

In turn, the defendants brought a nullity action against the two patents This was based on several grounds for invalidity, namely:

1. Lack of technical contribution;
2. Lack of novelty;
3. Lack of inventive step; and
4. Added matter. 

The judgment delves thoroughly into various legal points, comprising the different national and European jurisprudence. As we shall see, the court dismissed the  invalidity grounds, and it had then to assess the infringement action. Here the court also examined the passive standing of the owner of the web pages where the accused services and products were offered. Lastly, the court upheld the infringement and ordered the payment of damages. 

(See the judgment here).

Barcelona Patent Court’s ruling

1. Lack of technical contribution

The defendants argued that both patents were invalid under Articles  138(a) and 52(c) of the European Patent Convention (EPC), as they only reflected vague and abstract ideas.

• EP 775:  The defendants  claimed that the patent could define any known audio or video streaming system and that it “does not contribute in any way to improving existing streaming or transmission techniques, nor the transmission of information between client and server”.
• EP 333: The defendants argued that the exercise of collecting information, calculating royalties for copyright, or providing publicity covered by the patent was nothing more than a mental exercise. This was not accompanied by any teaching on how to technically use (i.e. modifying or creating a state of things) such data collection. 

Consequently, the defendants submitted that the patents fell under the EPC exclusion for  the registration of “schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers”. 

Referring to the EPO’s guidelines for examination and case law, the court considered that it is legitimate to have a mix of technical and non-technical features appearing in a claim. As is often the case with computer-implemented inventions, an invention may have technical aspects which are hidden in a largely non-technical context. Indeed, the technical character may be implicit in the physical characteristics of an entity, or, in the nature of an activity, or may be conferred to a non-technical activity through the use of technical means. 

Consequently, the court dismissed the defendants’ arguments concluding that: 

“We cannot take a single feature of a claim and consider it in isolation to argue that the claim is invalid for lack of technical character.  Much less can we depart from that single feature to consider that an entire patent (…) is invalid for the same reason. Nor can we consider the aforementioned feature to be an accumulation of abstract and vague ideas and regard them in the same way as the plans, principles, and methods of art. 52,c) of the EPC”.

2. Lack of novelty

The court summarised the legal and jurisprudential framework for novelty. It assessed  in particular the differences about explicit and the implicit disclosures that may destroy the novelty of a patent. It noted that lack of novelty may result implicitly, even if the information is not expressly mentioned in the prior art, but follows as an inevitable consequence of the expressly mentioned disclosed prior art.

However, the court considered that the above principle could not be applied to this case.  This was because there was no explicit evidence to clearly determine that the elements of the claims were present in the referenced documents. Nor that they will be known as such by the skilled person, without recurring to probabilities or possibilities. 

The court also confirmed that, when determining prior art for novelty purposes, it  is not admissible to combine different prior art documents to compare their teachings with the elements of the prior art. Consequently, the comparison has to be made document by document, of those comprising the prior art with the claimed invention to determine whether or not it discloses the claimed elements. 

3. Lack of inventive step 

Once again, the court conducted  a major review and summarised the legal and jurisprudential configuration of the inventive step requirement. Applying these  principles, to this case, the court made the following conclusions:

• When the prior art comprises several documents, the court said in its judgment that: “If the defendant has chosen a document farther away than it should have, it will bear the burden of its possible error in the analysis of inventive step, but we cannot fail to make such an assessment merely because there is a document closer to the relevant prior art. (…) the important thing will always be whether the document selected by the defendant is part of the relevant prior art”.
• Regarding expert opinions, the court recognised that there is no single method for evaluating inventive step, but a method must be followed to ensure that the decisive factors are considered in the assessment. However, in this case the court concluded that one of the chosen experts did not follow any prescriptive method, so that their allegations had to be disregarded. 
• The court also criticised the fact that the defendants merely pointed out the differences between the closest prior art and the contested claim. They then moved directly to examine obviousness and skipped the steps of identifying the technical effect of those differences.
• As to the determination of the objective technical problem, the court concluded that it was erroneous for both patents. This was because the technical problem stated by the defendants’ contained indications on the technical solution offered by the patent. Therefore, they were adopting an ex post facto view of the inventive step.   

4. Added matter

For the added matter ground, after a summary of the relevant legal and case-law considerations , the court assessed the information disclosed in the parent patent application as filed (as it was a divisional patent). It concluded that the alleged addition of subject matter was not well founded. This was because the person skilled in the art had only encountered information that did derive, or was directly and unambiguously deduced, from the information previously contained in the application.

5. Infringement action

For the infringement assessment, the court reviewed the patent specifications and  noted that some concepts of the patents were used indistinctively as synonyms or equivalents, without restrictions. They also described some preferred realisations, which did not preclude other realisations from being carried out.  In this context, the court set the concept of a computer in the light of the claimant’s patents, as a departure point for the infringement assessment. Taking each patent in turn: 

• EP 775: The court concluded that Telefónica’s decoder was subsumable within the concept defined by the patent. This was based on the experimental tests carried out by the expert witness on the above challenged realisations (such tests had not been challenged, nor contested by the defendant).
• EP 333: The court relied on the cross-examination of Telefónica’s expert, who acknowledged at the hearing that he had based his non-infringement report on information that was not supported by objective data, but was based on mere assertions made by its own client. Therefore, the court dismissed Telefonica’s arguments and concluded that the patent was infringed. 

6. Passive standing

The court also examined the issue of  the passive standing of one of the defendant entities. Telefónica S.A,  the owner and licensor of the web pages where the challenged services were offered, claimed that it was not responsible for such services. It argued that it did not provide the services,  wasn’t  involved in their commercialisation, nor was it the owner of the equipment supplied to the client for the provision of the service, nor in charge of the installation, nor the recipient of the payments made by the user for the provision of the service. 

However, the court considered that the mere fact that the domain names were licensed (as well as the trade marks) did not deprive the licensor of liability, nor does it attribute, by extension, only the liability for their use to the licensee. This conclusion was based on several facts:

• It had not been alleged that the licensees had committed an overreaching of their licences when offering the products and services;
• The licensor could have introduced control measures and limits on the use of its domain names and trade marks; and 
• The licensor had obtained a profit from the exploitation of the  domain names (and trade marks). 

Consequently, the court  considered that Telefónica S.A was also responsible for the infringement acts carried out through the licensed web site. 

Result:

In view of the above, the court upheld the infringement action and ordered the defendants to pay the damages suffered, as well as the costs.

In summary, this is a complete and exhaustive judgment that includes in detail the case law and legislation applicable to the case. However, this judgment can be appealed to the Appeal Court of Barcelona.  (There is no information if the appeal has been filed yet).

7. Ruling on damages

The court explained  that the determination and quantification of the damages derived from the infringement will be carried out in the enforcement phase of the judgment, as it was agreed at the case management conference. This practice of deferring the settlement of damages to a later stage of a case is commonly admitted by Spanish legislation and jurisprudence. However, the same doctrine has set certain limits for this proceeding to be deferred, and usually requires that, as a minimum, the bases for the determination of the amount be established in the main proceedings.

However, the court in this case did not rule on:

• The criterion chosen for the determination of damages; nor
• On the method of calculation or items to be included in the compensation. 

All these matters will probably be raised at the appeal court if the defendant decides to appeal. We will report further as soon as we hear more!