England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		9th September 2013

MR JUSTICE BIRSS :

1. This is an application to amend the grounds of invalidity in two parallel actions between HTC and Nokia. The actions concern two Nokia patents, EP (UK) 0 998 024 entitled "Modulator structure for a transmitter and a mobile station", and EP (UK) 1 133 831 entitled "Method and arrangement for transmitting and receiving RF signals through various radio interfaces of communications systems". The action involves allegations of infringement as well as invalidity,
2. The timetable of this action is, roughly speaking, as follows. The action was begun in May 2012. Directions were given for a trial in July 2012, and a trial date was fixed on 2nd August 2012 to be heard at the beginning of term in October, that is to say, on about 1st October 2013.
3. Evidence-in-chief on validity was exchanged by the parties on 5th July 2013. That consisted of first reports from Professor Crawford for HTC, the party attacking the patents, and Professor Nauta for Nokia, the patentee. Evidence in reply on validity was exchanged on 2nd August.
4. The amendments, which involve new pleas of insufficiency against both patents, were raised on 2nd August and were said to be based on evidence in Professor Crawford's second report. A draft pleading was sent by the solicitors for HTC to the solicitors for Nokia at that stage. It is now 9th September and the trial is due on 1st October.
5. Originally, the draft amendments included two insufficiency pleas for each patent, in paragraphs 3 and 4 of each of the two sets of Grounds of Invalidity. Shortly before the hearing HTC dropped the application to amend to add the two paragraphs 4 (which were both in effect a form of AgrEvo allegation, insufficiency or lack inventive step). The remaining insufficiency pleas, which are both in paragraphs numbered 3, are the pleas which are in issue on this application.
6. HTC's position is that the amendments have been raised in time and as soon as practical, although they accept that they could have been raised earlier. They say that the prejudice to them and to the public if these amendments are not permitted is that patents, which may be invalid on these grounds, could be found to be valid. They also refer to the effect that this may have not just on themselves but on the wider public, bearing in mind that these patents relate to HTC phones which are being sold generally, as I understand it.
7. The infringement allegations relate to technology inside the phones which comes from Broadcom or Qualcomm. An important element in the timetable in this case is that a very large amount of work is being and needs to be done in the time up until trial to deal with the infringement side of this case as a result of documents which have been obtained using the US 1782 procedure from Broadcom and Qualcomm in the USA.
8. Nokia's contentions on this application are the following. First of all, Nokia submit the details of the amendments are unclear and that is a material matter to be taken into account. Second of all, and primarily, Nokia submit that there is not enough time between now and the trial to deal with the amendments. The amendments could have been raised sooner; and if they had been, then there would have been enough time to deal with them and therefore the prejudice as a result of the timing on which these applications have been made should fall against HTC.
9. Mr. Tappin, who appears for Nokia, has referred me to two important authorities in this matter, first of all in the Court of Appeal, Swain-Mason v Mills & Reeve [2011] 1 WLR 2735, in particular paragraphs 72, 73, 82 and 104. Paragraphs 72 and 73 are as follows:

"72. As the court said, it is always a question of striking a balance. I would not accept that the court in that case sought to lay down an inflexible rule that a very late amendment to plead a new case, not resulting from some late disclosure or new evidence, can only be justified on the basis that the existing case cannot succeed and the new case is the only arguable way of putting forward the claim. That would be too dogmatic an approach to a question which is always one of balancing the relevant factors. However, I do accept that the court is and should be less ready to allow a very late amendment than it used to be in former times, and that a heavy onus lies on a party seeking to make a very late amendment to justify it, as regard his own position, that of the other parties to the litigation, and that of other litigants in other cases before the court.

73. A point which also seems to me to be highly pertinent is that, if a very late amendment is to be made, it is a matter of obligation on the party amending to put forward an amended text which itself satisfies to the full the requirements of proper pleading. It should not be acceptable for the party to say that deficiencies in the pleading can be made good from the evidence to be adduced in due course, or by way of further information if requested, or as volunteered without any request. The opponent must know from the moment that the amendment is made what is the amended case that he has to meet, with as much clarity and detail as he is entitled to under the rules."

10. Also material to this application, and referred to by the Court of Appeal in Swain-Mason v Mills & Reeve in the passage above, was an earlier judgment of the Court of Appeal in 1998 in Worldwide Corporation v GPT Limited, [1998] EWCA Civ 1894. A particular passage from Worldwide relied on by Mr. Tappin's is as follows:

"[…] it can hardly have come as a surprise to those advising the plaintiffs that a late amendment which completely reformulates the claim would be resisted. Equally when a case has been prepared with witness statements and experts' reports on one way of putting the case, it is harsh to criticise advisers of the defendants for asserting that they would need some period in which to examine the extent to which the amendments affected them and their witnesses. The periods laid down for production of witness statements and experts' reports are there so that they can be served on the other side in good time and so that the conduct of a trial can be as expeditious as possible. Forcing a party to look again at those statements and the experts' reports at the same time as conducting the trial is not fair or conducive to the efficient conduct of the trial."

11. Mr. Tappin submits that the court should today be, if I can put it this way, more "robust" about late amendments than it might otherwise have been. He says that the indications in the judgment of the Court of Appeal Swain-Mason v Mills & Reeve citing Worldwide Corporation support that approach.
12. Mr. Tappin also refers me to the judgment of Hamblen J in Brown v Innovatorone [2011] EWHC 3221 (Comm) in which the learned judge also referred to those cases and then said the following in paragraph 14:

"As the authorities make clear, it is a question of striking a fair balance. The factors relevant to doing so cannot be exhaustively, listed since much will depend on the facts of each case. However, they are likely to include:

(1) the history as regards the amendment and the explanation as to why it is being made late;

(2) the prejudice which will be caused to the applicant if the amendment is refused;

(3) the prejudice which will be caused to the resisting party if the amendment is allowed;

(4) whether the text of the amendment is satisfactory in terms of clarity and particularity."

13. I should say that I respectfully agree with Hamblen J that these are factors which are likely to be relevant, and of course one cannot exhaustively list all the factors in a matter of this kind.
14. Mr. Tappin rightly submitted that in practice many of these factors are likely to interrelate with each other, and I agree.
15. Mr. Acland submitted that the prejudice caused to the resisting party, and in particular the question of whether the resisting party will be able to deal with the consequences of the amendments, is a more important factor than the question of whether and to what extent the amendment could or should have been made earlier. To some extent I accept Mr. Acland's submission, although one needs to be careful about making broad statements of that kind. Everything will depend upon the particular factors in a particular case.
16. It is convenient to use these four headings from Brown v Innovatorone as a way of dealing with the various factors in this case. It is also convenient to deal with the two patents separately since they raise different points.
17. The first patent is the 024 patent. Claim 1 of the 024 patent is as follows:

"A modulator using a Gilbert cell, the modulator comprising a switching arrangement for coupling a carrier wave to the modulator and a driver arrangement to couple an information signal to the modulator wherein said driver arrangement comprises current mirrors and at least one of said current mirrors comprises a pair of transistors

characterised by

at least one low-pass filter arrangement located between the pair of transistors to filter the information signal to the modulator before the information signal is mixed with the carrier wave."

18. The paragraph sought to be added by the amendment is paragraph 3 of the draft amended grounds of invalidity which reads as follows:

3. The specification of the 024 Patent does not disclose the alleged invention clearly and completely enough for it to be performed by a person skilled in the art.

PARTICULARS

Hereunder HTC will rely upon the following:

(a) The alleged invention as expressed in claim 1 of the patent requires:

"... at least one of said current mirrors comprises a pair of transistors characterised by at least one low-pass filter arrangement located between the pair of transistors to filter the information signal to the modulator before the information signal is mixed with the carrier wave. "

(b) All Gilbert cell modulators (with current-mirrors comprising a pair of transistors) have a bandwidth which falls-off at a given frequency thereby constituting a low-pass filter effect and will filter the information signal before the information signal is mixed with the carrier wave.

(c) Insofar as the Claimant contends that the said 'low pass filter arrangement' of the alleged invention stipulates an arrangement that would not be inherent in any such Gilbert cell modulator, the 024 Patent fails to provide any or any proper teaching of that arrangement.

19. Mr. Acland accepts that this amendment could have been made at least at the time on 5th July when Mr. Crawford's first report was served. He relies on evidence of Mr. Crawford's first report which bears on the point which is sought to be pleaded. I agree that there is no doubt that this amendment could have been made at that time. However, as Mr. Tappin says, it was not. It may be that the difficulty in dealing with it is a matter which rebounds on HTC but I also bear in mind in that respect, as Mr. Tappin accepted, it is not clear to what extent this amendment requires a significant amount of work between now and trial. Mr. Tappin's real concern with this amendment is that he does not understand it.
20. Prejudice to the applicant I have mentioned already. The point is simply that it is a ground of attack on the validity of the patent and therefore if it was not allowed, it is possibly the case that the patent would be found to be valid and in fact it is not. As far as prejudice to Nokia is concerned, Mr. Tappin accepts that this amendment in terms of the amount of work that will be required to deal with it does not necessarily involve a significant amount of work.
21. The real problem with the amendment to 024 is the text of the amendment and whether it is satisfactory in terms of its clarity and particularity.
22. It is said in the evidence, and this is agreed by Mr. Tappin, that any Gilbert cell, which is made up of transistors or any other components, will have an inherent low-pass filter property, in other words, the circuit itself will not be able to process signals above a certain frequency range. That is something which, as I understand it, any person skilled in the art would understand.
23. The plea asserts that if that sort of inherent filtering is not what the claim is talking about, then the patent fails to provide any or any proper teaching of the claimed arrangement, that is to say, of another arrangement, something that is not an inherent arrangement. Mr. Acland submits that the skilled person would not know what sort of arrangement the invention was supposed to be if it does not involve the inherent properties of the Gilbert cell.
24. Mr. Tappin points out that the patent itself answers the question posed by paragraph 3(c), for example, in figure 6 of the patent, as follows:

25. It can be seen in figure 6 that the two back-to-back transistors which form the Gilbert cell in this invention have between them an RC circuit, i.e. a form of low-pass filter. So, Mr. Tappin says, the patent actually explains clearly that one could have, for example, an RC circuit or some other low-pass filter in the Gilbert cell in the manner required by the claim.
26. In that respect Mr. Tappin also referred to the evidence of Professor Nauta in his second report as follows:

"20. In his discussion of the 'lowpass filter arrangement located between the pair of transistors' at paragraph 243 Mr. Crawford is right to note that current mirrors have an intrinsic low pass filtering characteristic in the sense that there comes a point at which, as a result of parasitic capacitance of the transistors, signal current leaks to the source of the transistor (and hence the power supply) so that the gain of the current mirror drops. This is an issue which is addressed by Itakura, but it is important to realise that this effect is one that (even in 1998) occurs at frequencies in the region of hundreds of MHz, orders of magnitude higher than that of the information signal that the 024 Patent is concerned with (see paragraph 274 of my first report). I do not think therefore that it is correct to say that there is an inherent lowpass filter effect of a current mirror on the information signal with which the claims of the 024 Patent are concerned."

27. I must say that I share with Mr. Tappin a degree of confusion about the nature of this pleading. It is not clear to me exactly what it is that HTC are seeking to convey by their pleaded case. It seems to me that the real problem is a point of construction and not a point on insufficiency. That said, I can foresee that it could happen, although it may not, and Mr. Tappin says that it will not, that a point will emerge as a result of the evidence dealing with this issue which may conceivably lead to an insufficiency argument in the future. For example, if the patentee turned round at a later date between now and the trial and pointed to something in the prior art which looks like a low-pass filter and said that it is not a low-pass filter within the requirements of the claim for some reason not so far explained in the evidence, then one could quite see that a problem of the kind, similar to but not exactly what is pleaded in paragraph 3(c), might arise. In that situation, it might well be fair to permit HTC to raise an insufficiency plea.
28. However, at this stage in this case, I do not see that it is legitimate to raise this insufficiency plea in the manner in which it is pleaded. As I said, it may be that there is a point which emerges later, but it has not emerged yet and it may well never emerge. Mr. Tappin tells me it will not because the two pieces of prior art relied on that have low-pass filter arrangements already in them.
29. Accordingly, I am going to refuse the application to permit the amendment to the 024 patent.
30. I will now turn to the 831 patent. Claim 1 is as follows:

"A transceiver configured to employ direct conversion in both the transmission and reception of RF signals associated with different radio interfaces of communication systems, comprising

- means (9) for generating a digital baseband quadrature signal on the basis of the information signal to be transmitted,

- digital-to-analog converter means (14) for converting the digital baseband transmission signal to analog,

- synthesizer (13),

- a controllable frequency divider (12) for diving a frequency of an output signal generated by the synthesizer (13) to produce a TX mixing signal, wherein the number (N2) by which the frequency divider (12) divides the synthesizer output signal depends on the selected transmit frequency band, so that the frequency corresponds to the selected transmission frequency, and wherein 90-degree phase-shifted components of the TX mixing signal are produced as quotients generated already in the frequency divider (12), wherein said frequency division is a division at least by two, so that a synthesizer operating frequency is used which is a multiple of the highest system frequency,

- mixing means (16) for producing a signal at a carrier frequency from the analog baseband transmission signal by means of the TX mixing signal,

characterised in that the transceiver further comprises

- a low pass filter means (15, FZ4) for filtering the analog baseband transmission signal, the cut-off frequency of the low-pass filter means (15, FX4) being controllable so as to correspond to the specification of the radio interface selected,

- controllable gain transmitter amplifier (17) configured to amplify a carrier frequency signal destined to be amplified by a power amplifier (18) and transmitted by an antenna means,

and wherein in a direct conversion transmitter portion of the transceiver, the controllable gain transmit amplifier and the controllable low pass filter means are configured to process transmit signals associated with different radio interfaces."

31. The proposed new plea is paragraph 3 of the draft Re-Amended Grounds of Invalidity:

"3. The specification of the 831 Patent does not disclose the alleged invention clearly and completely enough for it to be performed by a person skilled in the art.

PARTICULARS

Hereunder HTC will rely upon the following:

Controllable Lowpass filter

(a) The alleged invention as expressed in claim 1 of the patent requires:

A transceiver ... associated with different radio interfaces of communication systems

... a lowpass filter means for filtering the analog baseband transmission signal, the cut-off frequency of the lowpass filter means being controllable so as to correspond to the specifications of the radio interface selected.

(b) All multi-radio interface transceivers must have a lowpass filter means for filtering the analog baseband transmission signal in which the cut-off frequency of the lowpass filter can be controlled so as to correspond to the specification of the radio interface selected.

(c) Insofar as the Claimant contends that the said 'controllability' of the lowpass filter of the alleged invention stipulates a specific arrangement that would not be inherent in any such transceiver, the 831 Patent fails to provide any or any proper teaching of that arrangement. Specifically, insofar as the Claimant contends that the lowpass filter must be a single non-switched tunable filter, the skilled person would not know how to design or construct the same for any arbitrary selection of radio interfaces

Configurable transmitter amplifier

(d) The alleged invention as expressed in claim 1 of the patent requires:

A transceiver associated with different radio interfaces of communication systems

controllable gain transmitter amplifier configured to amplify a carrier frequency signal destined to be amplified by a power amplifier ...

... configured to process transmit signals associated with different radio interfaces

(e) All multi-radio interface transceivers must have a controllable gain transmitter amplifier configured to amplify the carrier frequency signal of the selected radio interface where such control is a requirement of the specifications of the radio interface selected.

(f) Insofar as the Claimant contends that the said 'configurability' of the controllable gain transmitter amplifier of the alleged invention stipulates a specific arrangement that would not be inherent in any such transceiver, the 831 Patent fails to provide any or any proper teaching of that arrangement. Specifically, insofar as the Claimant contends that the controllable gain transmitter amplifier must be a single non-switched tunable amplifier, the skilled person would not know how to design or construct the same for any arbitrary selection of radio interfaces."

32. It will be seen that the insufficiency plea relates to two elements in the characterising portion of claim 1, i.e. the low-pass filter means and the controllable gain transmitter amplifier.
33. In essence, as I understand it, the point of the invention is this. It contemplates a transceiver, that is to say a transmitter and receiver, which will operate with different radio interfaces. For example, as discussed in the submissions before me, it could be a telephone which could operate as a GSM transmitter/receiver but also as a CDMA transmitter/receiver. The idea is that the low-pass filter means and the amplifier have to be capable of dealing with both the GSM and the CDMA radio interfaces. I should say that the claim is not limited to CDMA and GSM; they are convenient examples.
34. The important word in the characterising portion of the claim relative to low-pass filter means is the word "controllable". The point of that element of the claim is to ensure that the low-pass filter is controllable so as to correspond to the specifications of the radio interface selected. Equally, in the second part of the characterising portion of the claim, the word "controllable" again does the same job but this time in relation to the amplifier. The words at the end of the claim "and wherein in a direct conversion transmitter portion of the transceiver, the controllable gain transmit amplifier and the controllable low pass filter means are configured to process transmit signals associated with different radio interfaces" require that the control ensures that the filter and the amplifier will be able to do the right thing in the right radio interface.
35. As quoted above, the draft pleading at paragraph 3(c) refers to any arbitrary selection of radio interfaces. In the course of this application, Mr. Acland proposed an amendment to 3(c) whereby instead of saying "any arbitrary selection of radio interfaces" the plea would refer to a "selection of (GSM or IS-54) and (CDMA or WCDMA)". The point he was trying to make was to limit the claim to a couple of concrete examples essentially with GSM or similar systems as one kind of radio interface and CDMA or WCDMA systems as the other kind of interface.
36. First of all, as far as the history is concerned, again Mr. Acland accepts that this is a matter which could have been raised on 5th July and was not. It was raised later. Again, the prejudice to the applicant is the same prejudice I have referred to before.
37. This time, however, Mr. Tappin makes a powerful case in relation to the prejudice for the respondent. Based on the evidence of Ms. Mutimear of Bird & Bird, the solicitors for Nokia, he submits that it will simply not be possible for Professor Nauta to deal with the issues which this pleading raises before trial. He says this pleading raises specific factual questions which need to be investigated and there is simply not enough time to deal with it.
38. The first thing I should say is that it does seem to me that there is no doubt that this plea will involve a significant amount of work to be done between now and trial if I permit it. Unlike the plea in relation to 024, this is not a mere point of construction. This is a classic insufficiency plea which asserts in the case of the filter -- maybe rightly or wrongly -- that a single non-switched tunable filter is not something which the skilled person would know how to design or construct, at least in the case where the selection is in effect a GSM-type system and a CDMA-type system. The point at 3(f) is made similarly for the amplifier.
39. At one stage, it seemed to me that Mr. Acland had a legitimate point to make based on the reply evidence from Professor Nauta. Since many of these matters are based on evidence raised in Professor Crawford's first report, albeit that the pleading did not emerge at that stage, in replying to the evidence, Professor Nauta had entered into the area which is now being pleaded. If that had been a good point, then it seems to me it would have been a powerful point in HTC's favour.
40. The paragraphs in question are paragraphs 39 and 41 of Professor Nauta's second report. Paragraph 39 positively asserts that there is a way of implementing a controllable gain transmitter amplifier in accordance with claim 1 of the patent, as I understand his evidence. However, Mr. Tappin pointed out that the evidence of Mr. Bennett, the solicitor for HTC, is that the particular item described by Professor Nauta in paragraph 39, which is to say a cascade of N amplifiers/attenuators, is not something within the ambit of the plea being relied upon by HTC. The plea relied on by HTC refers to a single non-switched tunable amplifier. I gather that HTC's position, from the evidence of their solicitor, is that the thing referred to by Professor Nauta in paragraph 39, the cascade, is not a single non-switched tunable amplifier. On that basis, it seems to me that it is not right and not fair to say that Professor Nauta's reply evidence has made material steps into the area of controversy being raised by this pleading. Mr. Acland is right, and it is a fair point, that it can be said that Professor Nauta's evidence at least begins to embark on considering this question. That is a very different thing from what I understood HTC's argument before me to be be at one stage, that Professor Nauta had positively made an assertion that the thing in question could be made and entered into the issue. He has not, and therefore I do not regard that as a fair point in HTC's favour.
41. In relation to the filters, paragraph 41 of Professor Nauta's evidence does again, like 39, enter into the area of debate of considering how to implement the invention with a GSM and a WCDMA system. Given the way in which Professor Nauta expresses himself in paragraph 41, again, I do not think it would be fair to say that he has significantly entered into the area which would be required to be entered into if this plea was permitted.
42. Accordingly, the position in relation to the work that the respondent would have to do is, as I have said already, that there will be a significant amount. Ms. Mutimear's evidence is that Professor Nauta simply does not have the time to do it.
43. HTC's argument is, first of all, that there was time that could have been spent on the matter in August. I do not accept that. On the evidence, and supplemented on instructions when Mr. Acland pointed out there was a small gap which was unaccounted for in the evidence but which was accounted for by Mr. Tappin on instructions, Professor Nauta did not have time, up until today, when he could have dealt with this point. I also bear in mind that the timetable for this case is highly compressed and there is something slightly bizarre about arguing whether Professor Nauta did or did not have two or three days in August when he might have dealt with this point.
44. Secondly, Mr. Acland submits that as a result of what is actually a failure by HTC to file evidence that they were supposed to file on Friday (they have not yet done so and this is Monday) Professor Nauta will have time, in which he was going to deal with the evidence that should have been filed, to deal with this new invalidity point instead. That is a fanciful argument. It might be a better point if HTC had actually abandoned the point which the evidence they were supposed to file on Friday had been addressed to, but they have not. All it would mean is that Professor Nauta will have to deal with the thing he was going to deal with at a later point in time, which Ms. Mutimear's evidence says he does not have, and then also would have to deal with this plea.
45. Nevertheless, as I read the evidence from Nokia, I do not think it is fair to say that it would actually be impossible for Nokia and Professor Nauta to deal with this argument. I suspect that it would be possible but on the evidence I have seen, I think it would be extremely difficult and burdensome.
46. I should mention the text and the clarity of this plea. This plea is a significant improvement on the plea in relation to the 024 case. Although there may be some difficulties with it, at the end it boils down to a specific point both in relation to the filter and the amplifier and is a plea, all other things being equal, which could be permitted.
47. I now turn to consider the balance of all these various factors. In the end, it seems to me that the determining factor is this. The evidence shows that it would be very difficult, but I do not think it would be impossible, but very difficult, for Nokia to deal with this plea between now and trial. That is a problem which is caused by HTC. If HTC had raised this plea on 5th July, there would be no difficulty.
48. It seems to me that on the facts of this case, the fair thing to do is to refuse this application. It is something for which HTC only have themselves to blame. They were clearly thinking about the issues which this plea raises at an earlier time when, if they had raised them, the issues could have been raised in a way which would have caused no significant prejudice to Nokia. They could have been dealt with in time.
49. I am struck by the fact, and it is not a trivial point, that this course raises at least the theoretical risk that a patent which is in fact invalid will be permitted to remain on the register. However, at the end, this is a commercial dispute between large, well-funded and sophisticated litigants. They are capable of bringing their matters to trial as and when they wish. They could and should bring points like this into the case at an appropriate time. In this case, bringing these points into the case at this time is not appropriate and I will refuse this application.
(See separate transcript for proceedings after judgment)