March 2020: Recent Decisions in the Patents Court

It has been a month or two since my last update. This is unsuprising, given there has been so much else going on. It is, however, important to get away from the unhappy news that dominates the front pages. Where better to turn than the judges of the Patents Court?

This post looks at six recent decisions:

  1. Lufthansa Technik AG [2020] EWHC 83 (Pat) (14 January 2020)
  2. IPcom GmbH & Co Kg v Vodafone Group Plc & Ors [2020] EWHC 132 (Pat) (28 January 2020)
  3. Take-Two Interactive Software Inc & Anor v James & Ors [2020] EWHC 179 (Pat) (29 January 2020)
  4. Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors [2020] EWHC 256 (Pat) (10 February 2020)
  5. Eli Lilly And Company v Genentech, Inc [2020] EWHC 261 (Pat) (14 February 2020)
  6. Geofabrics Ltd v Fiberweb Geosynthetics Ltd [2020] EWHC 444 (Pat) (05 March 2020)

1. Lufthansa Technik AG [2020] EWHC 83 (Pat) (14 January 2020)

This case somehow evaded my previous round up. It relates to the withdrawal of an admission in a patent infringement case.

Admissions serve an important purpose in UK litigation, by narrowing the issues in dispute. Maintaining unsustainable points to trial is liable to cause unfortunate costs consequences, and so parties should make admissions in their defence or in response to notices to admit. Sometimes, an admission that has been made needs to be withdrawn. This can’t be done lightly, as it is rescinding a concession, and broadening the scope of proceedings to include an issue that had previously been taken as read.

In this judgment Mr Justice Nugee relied on a summary of the law by Popplewell J in Bayerische Landesbank Anstalt Des Offentlichen Rechts v Constantin Medien AG [2017] EWHC 131 (Comm):

“It is apparent from that passage that each case turns on its own facts; all the circumstances of the case must be taken into account; Rule 14.1(5) confers a wide discretion; and that the fullness or adequacy of an explanation for the withdrawal of an admission is not a threshold condition, but one which may have greater or lesser importance depending on all the other circumstances of the case.”

In essence, in considering whether to allow a party to withdraw an admission, the Judge will do whatever they want.

In this case the Defendants, Astronics, sought to rescind an admission about supply of goods in the UK. Mr Justice Nugee was swayed by the prejudice to the Claimant this would cause. While the facts are not set out in detail, it would seem that there was an arguable case that shipments into the UK were not supplies by Astronics, and that instead the recipients of the goods might be liable on the basis that title for the goods passed outside the UK.

The Judge considered that the issue of claims against those 16 possible defendants would lose the Claimant two years in damages for limitation reasons and this was therefore a good reason to refuse the Defendants the right to rescind the admission.

2. IPcom GmbH & Co Kg v Vodafone Group Plc & Ors [2020] EWHC 132 (Pat) (28 January 2020)

This is a judgment that has garnered a lot of interest. In particular because it relates to the patent family that has been supporting IPCOM’s business, known as ‘100a’. EP’268 is a patent in the same family that IPCOM had previously litigated in the UK against Nokia and HTC in relation to 3G. Here it was litigated in relation to Vodafone’s operation of its 4G network.

The judgment is also of interest as being the first time Recorder Douglas Campbell QC has sat as a Judge of the Patents Court (required for the hearing of a high technical complexity claim such as this). With the need for a few more Judges on the roster this could well be a sign of things to come…

The judgment has already been covered extensively in other places, such as EPLAW, the Kluwer Patent Blog, etc. One element that is really of interest is the application of the law on Crown Use. Crown use is a defence to patent infringement based on government authorisation.

The interpretation of the relevant sections of the Patents Act had to deal with a number of difficult issues of statutory interpretation, which the Judge dealt with from §184 to to §206. The interpretation arrived at is impressively pragmatic, and makes the section a meaningful and functional statement of the state’s power to use patented inventions.

In short:

  • the authorisation from the government does not need to name the patents being licensed (or indeed any patents);
  • the interpretation of ‘services of the Crown’ was not limited to the examples in s.56(2) (foreign defence, drugs and medicines, atomic energy) and could include other matters; and
  • in carrying out the authorised act it is not required that the use of the patented invention was the only way of accomplishing the act.

This pragmatic scheme may well find itself in action in the current healthcare crisis, as considered in a recent article in the World IP Review where I also manage to sneak in a few words (link).

3. Take-Two Interactive Software Inc & Anor v James & Ors [2020] EWHC 179 (Pat) (29 January 2020)

The next case to look at relates to the best-selling game Grand Theft Auto V. It is a summary judgement application in relation to copyright infringement and breach of contract.

The global game industry is now worth more than $150 billion dollars. One of the consequences is that game studios are moving to enforce their intellectual property in a way that was previously the reserve of the film and music industries. The interactive nature of gameplay also creates another issue: acts by one player can have a negative effect on the in-game experience of another. Cheats no longer just let a user bypass levels while they play by themselves, but can give a player a leg-up in online battles against friends and other unknown players. This can negatively impact a company’s bottom line too, as it can allow players to avoid paying for in-game content (which can be a major source of revenue for game studios, taking revenue per game far beyond the sticker price).

Long-term readers will be aware I have previously covered some of the issues surrounding summary judgement in IP claims, see here and here.

This summary judgement application was at the challenging end of the scale. There was clearly meaningful technical evidence in play, as well as unresolved points of law. It may be surprising to some practitioners that the judge saw this as a fit occasion to grant summary judgement.

Summary judgement on the breach of contract point is more understandable, given the clear terms of the game’s EULA (End User Licence Agreement) but the copyright claim seems less suitable for summary judgment.

In particular the judge concluded that the player’s access to in-game weapons using the cheat system supplied by the Defendants involved an act of copying within the meaning of the CDPA 1988. The Judge explained it as follows:

The answer to this is that, because copying expressly covers anything that is transient, the way the cheat works does, it seems to me, involve a breach of copyright in the form of making transient copies.  To take an example, Epsilon would allow a player who is using it to access weapons or other objects which would not be available to a player in the same position if they were playing conventionally without cheating. The way that Epsilon does this is by taking information from the GTAV libraries in respect of the relevant object (for example, a weapon) and reproducing the image and functions of the object, instantiated in the game, so allowing the cheater to use it in gameplay. That, to my mind, clearly involves copying.

This paragraph raises some interesting questions. The judge’s reasoning does not give any indication of the level of technical detail at which the point was argued, but safe to say the process of using stored information to render on screen graphics can only be described at the roughest level as “taking information … and reproducing the image”. It is also not made clear what relevance the functions of the object have to the question of copyright in this case. Presumably the judge is dealing with copying of the software code as a literary work, rather than on-screen representation of the object as an artistic work, but this too is not clear.

Given that the Defendants were represented in person and the Judge had no expert evidence before her this is certainly a point which might have benefited from further argument at trial. Certainly I would not expect this decision to create any precedent as to the treatment of copyright infringement by use of cheat code devices. Given the growing market for such devices it is perhaps disappointing that the decision’s precedential value was not considered as a compelling reason for the claim to go to trial.

4. Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors [2020] EWHC 256 (Pat) (10 February 2020)

This was a hearing before Mr Justice Birss for disclosure of licences in a FRAND trial. As the patents lawyers in the audience will be aware, comparable licences are a key source of information in valuation. There are three points of interest.

The first point of interest is the parties’ intended approach to rate setting based on the use of figures in third-party licence agreements and recorded judgments. Huawei are running an interesting point based on the judgment in Hollington v Hewthorn (1943). K.B. 587 which states that findings made in one set of proceedings are not admissible in later proceedings. Conversant say this rule is avoided by virtue of the fact that the hypothetical negotiation played out by the court would see the parties having reference to the figures in these judgments in any event.

The second point of interest is the relevance of third party licences in FRAND rate setting. In the original Unwired Planet FRAND trial Birss J based his conclusions on information regarding the value of other Ericsson-derived patents. In Conversant v Huawei Birss J considered that equivalent information was not available, and that put in the position of the CMC Judge he would have been minded to allow a number of third party licences into the case to provide additional data. FRAND rate setting in the UK will continue to develop in sophistication, and I do not think the Unwired Planet decision was in any way intended to close off the categories of evidence that might assist the Court, or to set out the ‘correct’ way to price any given licence.

The third point of interest is that the issue was considered under the disclosure pilot scheme. Some of the Judges in the chancery division were slow to recognise that the pilot had been held to be applicable to all ongoing proceedings. It is therefore good to see that application being confirmed by the head of the Patents Court.

5. Eli Lilly And Company v Genentech, Inc [2020] EWHC 261 (Pat) (14 February 2020)

This judgment relates to a trial of a preliminary issue regarding issue estoppel and Henderson v Henderson abuse of process in litigation relating to a divisional patent.

This litigation follows on from two blockbuster judgments by Arnold J in [2019] EWHC 387 (Pat)) and [2019] EWHC 388 (Pat). Those judgments related to European Patent (UK) No. 1641822. See the IPKat article by Dr Rose Hughes for some more detail on those judgments. The key paragraph as regards this later hearing is paragraph 578:

 “In my judgment the skilled person would not regard it as plausible that an anti-IL-17A/F antibody would have a discernible therapeutic effect on psoriasis for the reasons given by Prof Krueger. I would emphasise five points. First, the absence from the Patent of any experimental data concerning the role or effect of IL-17A/F, let alone an anti-IL-17A/F antibody, in psoriasis. Secondly, the absence of any discussion of the role or effect of IL-17A/F in psoriasis. Thirdly, the limited support for IL-17A/A (let alone IL-17A/F) having a pathogenic role in psoriasis provided by the papers cited in the Patent, particularly given the common general knowledge as to all the other cytokines which were implicated in psoriasis. Fourthly, the fact that the Patent shows that IL-17A/F is an order of magnitude less potent than IL-17A/A. Fifthly, the fact that the specification claims efficacy against a broad list of conditions which it is wholly implausible that an anti-IL-17A/F antibody (or any form of IL-17A/F therapy) would be effective against. Moreover, there is no emphasis on psoriasis in the specification. Such emphasis as there is concerns RA, which the skilled dermatologist would appreciate raised different considerations to psoriasis. In short, the claim of efficacy against psoriasis is speculative.”

Arnold J held the claims of the EP084 patent to be invalid. In this later hearing the Judge (Mr Roger Wyand QC, sitting as a Deputy High Court Judge) had to consider the effect of those findings on the validity of Genentech’s divisional European Patent (UK) No. 2784084 B.

The Judge held that issue estoppel did apply in respect of all but one of the issues in dispute in the second set of proceedings. Summary judgement was therefore given on the majority of the issues in dispute. This required the Judge to grapple with some complicated legal questions regarding the scope of issue estoppel where a court makes findings in the alternative (as is often the case in patent litigation) and also where the a party may be deprived of the ability to appeal by the revocation of a patent in the EPO.

The one surviving issue for Genentech is that of plausibility. Bolstered by additional expert evidence Genentech argued that they were prevented from arguing plausibility at the filing date in the earlier action, but would do so in this action, and that could make all the difference. Lilly said this was prevented as an abuse of process following the rule in Henderson v Henderson but the Judge did not agree. Genetech had tried to introduce the issue in the earlier action but had been precluded from doing so for raising it too late in the day.

The reasoning in the judgment is notable, and the consequence is of interest to patentees. Where a patentee is unable to run a particular case for procedural reasons the first time around, a divisional may give the argument a life line, even if issue estoppel bites elsewhere.

6. Geofabrics Ltd v Fiberweb Geosynthetics Ltd [2020] EWHC 444 (Pat) (05 March 2020)

This is a patent claim tried by David Stone, sitting as a Deputy High Court Judge. It relates to synthetic track liners to prevent erosion of the ground under train lines. It raises quite a few interesting issues, including the amendment of the PPD, assessment of obviousness following long-felt want, and the (non-)requirement of pleading equivalents.

The first point of note is that the Defendant appears to have changed its mind about how its own product works in the course of the litigation. The individual responsible for the PPD, a Dr Wormald, appears to have backtracked on his understanding of the function of his product after the production of the Defendants’ expert report. This reverse ferret appears to have failed, as despite signing an amended PPD in line with this new explanation Dr Wormald recanted in the box, and conceded that the original PPD detailed the main mechanism by which the invention worked.

Also of interest to practitioners is the Judge’s approach to obviousness. As was predicted to be the case, the Supreme Court’s judgment in Actavis Group PTC EHF and Ors v ICOS Corporation and Anor [2019] UKSC 15 has seen little application in practice. Here we have a good example. The Judge cites the judgment in passing, before immediately going on to apply the Pozzoli approach, followed by a number of other authorities that pre-date the Supreme Court’s judgment. The Supreme Court’s intervention in this area is likely to have nothing like the effect of its judgments on equivalents and plausibility (and this may well be welcomed by many practitioners).

There has recently been a long-felt want for successful cases of long-felt want, with many patentees simply trying to put a bit of evidence in on the sly to influence the Judge. Here, however, it was pleaded front and centre and with some success. The judge held:

Both parties accepted that there was a clear demand for a product to prevent pumping erosion, and that the demand had been apparent for many years. Further, given the difficulties and costs of laying a layer of sand, it was clearly worth the expense to find a solution. Finally, the prior art relied on by the Defendant is not recent – Hoare is from 1995, Gore from 1974, and Jay from 2001. But Counsel for the Defendant was also right in his submissions that the answers to many of Laddie J’s factors can only be surmised from the evidence in this case. I do not, however, see long-felt want as a stand-alone answer to a claim of obviousness – I must still apply the statutory test and guidance set out in the case law. Unlike Haberman v Jackel, it was not put to me that this was a case of “apparent technical obviousness” that turns into one of non-obviousness by the application of a doctrine of long-felt want. Counsel for the Claimant simply asked me to keep it in mind in my assessment of obviousness.

The Judge ultimately found that the patent was not obvious over either piece of prior art.

Also of note was the Judge’s approach to equivalents. He determined that despite the issue not being pleaded it was within the court’s gift to decide the issue: it was inherent in a plea of infringement following the Actavis v Eli Lilly, and the court had before it the evidence to reach a conclusion. The Judge therefore distinguished the approach of Henry Carr in Illumina Inc and Ors v Premaitha Health plc and Ors [2017] EWHC 2930 (Pat).

That is all from me for now. I hope you are all keeping well.

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