England and Wales High Court (Patents Court) Decisions

1) This is an action for infringement of patent, infringement of copyright, infringement of trade mark and breach of contract between two suppliers of adhesives. The action was started in 1993 and has been fought doggedly on both sides. No claim has been omitted, however small: Aldous J gave judgment under RSC Ord 14 in respect of certain debt claims between the parties (his order was for £7500 odd) yet an issue remained for investigation which involved a further claim of £1700, the dispute centering on whether the second plaintiff had imposed a price increase in the agreed manner. The real dispute turns on the allegations of patent and copyright infringement, although the defendant persists in an allegation that the second plaintiff is guilty of repudiating the agreement between them, and claims damages. The parties have agreed that the defendant has infringed the plaintiff’s registered trade mark, and the defendant has agreed to submit to an inquiry as to damages.

2) The agreement in question was a distribution agreement, and the subject matter was a particular type of adhesive, a 2-component acrylic adhesive. On 31 October 1990, the second plaintiff ("Adlock") entered into an Asset Sale Agreement with the defendant ("Eurobond").By clauses 2 and 3

3) The Assets are defined as 'collectively, the Goodwill, the Customer List and the Stock', and the Goodwill is itself defined as 'the goodwill of [Adlock] in relation to its business'. It is now necessary to describe that business.

4) The first defendant ("Uni-Continental") was started by Mr Grant in 1979 under the name Uni-Continental Distributors (UK) Limited, in association with his wife and his father-in-law, Mr Coyne. Mr Coyne had a South African company called Uni-Continental Distributors Pty Ltd which acted as the exclusive agent in South Africa for a Japanese manufacture of superglues (properly called cyanoacrylate adhesives). In 1980 or 1981 Mr Grant became managing director of Uni-Continental, holding one-third of the issued shares. In 1984, Adlock was incorporated under its then name Advanced Adhesives Limited. Mr Grant, Mr Nicholas and Mr MacLaren were directors and shareholders. Mrs Grant was a shareholder. Adlock's business, according to Mr Grant, was to act as a packaging and distribution company for the adhesives imported by Uni-Continental. Mr Nicholas and Mr MacLaren, both of whom gave evidence by way of witness statement and were cross-examined before me, said that the original approach had come from them, but I think that they accepted that Mr Grant was the leading light. In any event, it is not in dispute that at the time, UniContinental were importing bulk 1:1 acrylic adhesives from Japan, and selling them on in bulk to either one or two customers in the United Kingdom.

5) The adhesives with which this action is concerned, 1:1 acrylic adhesives, have two components, a resin and an activator. When activator is added to the resin, both set rapidly. In contrast to familiar adhesives such as Araldite, intimate mixing of the two components is unnecessary, and I understood the evidence to be that it was quite possible for the resins to set if merely kept in too close communication with each other. The bulk components have therefore to be stored separately and existing dispensing systems did not work with them.

6) It was clear, therefore, that if 1:1 adhesives were to be sold to end-users, a satisfactory method of dispensing the adhesive would have to be found and offered to the customer. Mr Grant's evidence is that in late 1985 he was approached by a company called Supermix Systems who had designed a 50ml cartridge system to be used for two-component systems. This cartridge system consisted of two side by side cylinders about 4 inches long. Each tube is closed at one end by a nozzle containing a sealing membrane, and, when filled, by a piston at the other. In use, the cartridge is fitted to a dispensing gun (exhibit D4) similar to the guns commonly available for dispensing bathroom sealants and the like but with the difference that it is arranged to operate the two pistons in the cartridge simultaneously. The Supermix cartridge was intended to be sold with a so-called static mixer. (An example, intended for a larger cartridge, is D6). This was a tubular device which attached by a bayonet arrangement to the cartridge nozzle. When the membranes had been pierced and the dispensing gun operated, the contents of the two cylinders were forced into the mixer, which was provided internally with baffles whose purpose was to promote thorough mixing as the two components of the adhesive passed through the mixer. It was intended to operate with any 1:1 two-component adhesive, not just acrylics, and so the mixer was necessary. It is less so in the case of the acrylics.

1. Supermix also made a larger cartridge. This had concentric, rather than side-by-side, cylinders to hold the two adhesive components. The nozzle was accordingly offset, but again the two components appeared side by side at the outlets of the nozzle when the cartridge was operated by a suitable gun.

7) Plainly, the material in the static mixer will set if it left for any period of time. It seems that the limit is about 4 minutes, after which the static mixer is blocked and useless. Mr Grant's evidence is that the hardening effect propagated back into the cylinders, soon rendering the whole cartridge useless. He considered that it was necessary to devise some delivery system in which this hardening effect was diminished or much reduced. Mr Grant's evidence was that he devised a nozzle which channelled the two resins up two separate channels within the nozzle. The two components then emerged side by side at the tip of the nozzle through small holes. The tip of the nozzle was flat ended, and he says that he "chamfered the nozzle distally from the mid-point of each channel to the outside edge of the nozzle." It appeared from the cross examination of Mr Grant that cartridge A referred to by Mr MacLaren was this nozzle. It fitted to the Supermix cartridge in the same way as the static mixer, with a bayonet arrangement. There is a slight chamfer, but it is not substantial. It is probably more accurate to describe the end of the nozzle as conical. This nozzle did not work, according to Mr Grant, although laboratory tests on the prototype had been successful. So he produced another design. He describes the process in paragraphs 22-5 of his witness statement. His first thought was to cut slits into the side of the channels carrying the adhesive components. This he rejected.

2. I am not sure I understand Mr Grant's use of the terms proximal or distal, but the general meaning is clear enough.

8) In fact, the first results of Mr Grant's attempt to design a system are shown in the priority document to the patent in suit (exhibit LRP 7) It was filed on 11 July 1986. The only embodiment described and illustrated is a coaxial nozzle which could be attached to the dispensing cartridge in the same way as a static mixer, with no other distinguishing feature. It says that keeping the components separate until they emerge is advantageous. By the time the application which matured into the patent in suit was made (3 March 1987) I believe that it can be said that Mr Grant's idea was that contact should cease between the adhesive components when pressure ceased to be applied to cylinders by the gun. In the application, he described two different nozzles which could be attached to the dispensing cartridge in the same way as a static mixer.The idea of these nozzles was that at least one of the openings of the nozzle through which the adhesive component emerged should be upstream of the point at which the components came into contact. This is made clear by claim 1 of the application.

3. The first nozzle was simply the co-axial nozzle described in the priority document, in which the inner cylindrical tube protruded somewhat from the outer tube. Of particular relevance in the present case is the second embodiment of his invention which Mr Grant describes in the specification with reference to figures 9-15. The specification, which is clearly addressed to the designer of containers for adhesives, describes the figures in the following terms:

10) The claim is as follows, divided into features in a way Mr Meade and Mr Birss agreed was appropriate:

13) Having regard to the disclosure of the priority document, which made no reference to wedge-like partitions and the like, Mr Meade realistically accepted that all the claims of the patent in suit were entitled to priority only from its filing, that is, 2 March 1997.

14) The alleged infringement consists of a double-barrelled cartridge equipped with a nozzle. Two passages for the adhesive components run through the nozzle, and emerge at two holes which are separated by a wedge if the nozzle is used as Eurobond intend. As manufactured, the nozzle has two "ears" or "horns" moulded so as to protrude from the opposed faces of a wedge. In use, the horns are intended to be removed with a knife so as to open the passages which they block, leaving two holes in opposite faces of the wedge. The horns are quite substantial.

16) Four attacks were made on the claim, prior use by Adlock itself, by selling its DB50 cartridge: anticipation by illustrating that cartridge in a brochure; anticipation by a cartridge known as the "Supermix II"; and anticipation or obviousness in the light of a single prior publication, Australian specification number 4369/66 (Mitchell). Eurobond led evidence from Mr MacLaren and from Mr Nicholas that in fact two models of DB50 had been sold before the priority date: the type A, and a version of the type A in which the sides of the nozzle had been cut away with a craft knife, Stanley knife or similar tool to produce a chisel shaped end which was very similar to that now sold by Adlock and that sold by Eurobond (Cartridge B). If Eurobond infringe, there is no doubt that cartridge B falls within the claim. So the only question in relation to anticipation by prior use is whether that cartridge had been made available to the public before the priority date, 2 March 1987.

17) Evidence of an alleged prior use which took place shortly before the priority date some ten years ago has to be looked at with care. It is a striking feature of this case that a crucial fact, that the allegedly prior used nozzle, nozzle B, had been cut by hand, and nozzles had been cut by hand on a small commercial scale, is not referred to in either the witness statement of Mr Nicholas or that of Mr MacLaren. The evidence of the different witnesses was not entirely consistent, and Mr Meade submitted that one or more of the witnesses must have been untruthful. I do not think that is necessarily the case, but in any case I should set out my impressions of the witnesses.

18) On the issue of prior use by Cartridge B, Eurobond called two witnesses, Mr MacLaren and Mr Nicholas. Mr MacLaren is now a farmer in Devon. It was he who provided the existing example of Cartridge B, from an old box of samples which he had in a shed at his farm. He left Adlock, of which he was a director, in 1987 as a result of growing disagreements with Mr Grant. He said that when he left in 1987, part of his financial settlement with Adlock was that he would take the company car, and he had a "whole load of odd samples and experimental things in the back of the car which we used for testing on various different products and I left at Christmas time and they came with me." Subsequently he had put them in a shed on the farm. I have carefully considered his evidence both in his witness statement and under cross-examination, and I considered him truthful. It was suggested to him that he had had parted from Mr Grant on bad terms. I think it was plain that they were not on good terms when Mr MacLaren left, but I do not consider that it was established that Mr MacLaren had any grudge towards Mr Grant. He seemed to be telling the story as accurately as he could remember.

19) Mr Nicholas is an employee of Eurobond, and plainly was loyal to his employer. Mr Nicholas also seemed to me to be an honest witness. He was rather more uncertain than Mr MacLaren on certain points, but I found him trustworthy. It was suggested to him, as it was suggested to Mr MacLaren, that he had animus towards Mr Grant, and it was put to him, as it was put to Mr MacLaren, that this was shown by a letter which he and Mr MacLaren had written to Mr Coyne. Mr MacLaren was plainly reluctant to say anything about the letter; Mr Nicholas scarcely more so, but his answer at day 5 page 110 lines 4-14 I found entirely convincing in its explanation of his reluctance. Furthermore, he refused, as Mr MacLaren refused, to take any credit for the idea of the wedge-ended nozzle. Both agreed that it was Mr Grant's idea.

20) I should add that Mr Nicholas did not hear and was not told about Mr MacLaren's cross-examination. They corroborated each other on a point not referred to in their witness statements, that the cutting had taken place on their desks in the small factory in Sunbury where Adlock were located. This was significant evidence, since it meant that both Mr and Mrs Grant were available to give evidence as to whether it had happened.

21) The plaintiffs called two witnesses, Mr Grant and Mr Miller. Mr Miller is the head barman at a public house in Sunbury, having worked as a warehouse foreman from 1986 to 1988 for Adlock. I did not find him a convincing witness. He seemed to be aware of a party line, even when it was inconsistent with his witness statement (see day 3 page 36 lines 23-33). I am very reluctant to discount the evidence of a witness because of his demeanour, but I though that Mr Miller made no effort of recall and no effort to place the full facts as he should have known them before me.

22) Mr Grant was in a quite different category. He is obviously intelligent and fluent. On the whole, my impression of him was that he was doing his best to tell the story as he remembered it. Mr Birss made one criticism of him as a witness which I consider wholly justified. The criticism is that he was too willing to give evidence on the basis that of what he thought should have happened. There was a particular example of this during the investigation of certain delivery notes bearing wrong product codes. Mr Grant said that an apparent error could not be an error because it had been printed by the computer: but it subsequently became apparent that the computer had been stolen. His evidence in day 2 pages 27 line 23 to 28 line 13 and 92 line 9 to 97 line 27 is not really consistent, and I think that the answer at page 92 line 19 also shows a tendency to reconstruct events on the basis of what should have happened. I have also to bear in mind that he has been fighting this action since 1993. Taking everything together, I prefer the evidence given by Mr MacLaren and Mr Nicholas to that of Mr Grant and Mr Miller. I am also surprised that Mrs Grant did not give evidence, although she was a witness to the alleged prior uses if Mr MacLaren and Mr Nicholas were right.

23) Mr Meade submits that the evidence of Mr MacLaren and Mr Nicholas was inconsistent. On detail, this is to some extent true. But they agreed that they cut the nozzles; that they did so in the office area; that the nozzles so cut were sold. They could both date the sales to before the priority date. Mr Meade's first inconsistency is that Mr MacLaren said that the base of the nozzle in product B was an improvement over product A, whereas Mr Nicholas accepted that the problem at the base of the nozzle (cross-contamination at the joint) was not solved until an integrally moulded nozzle was used. But this is not what Mr MacLaren said. As I understood his evidence, it was that the problem at the base of the nozzle did not matter so much, because of the greatly decreased likelihood of blockage at the mouth of the nozzle, and hence the reduced likelihood of excessive pressure in the nozzle. Mr Meade also submits that it was Mr Nicholas thought that only he and Mr MacLaren cut the nozzles, whereas Mr MacLaren thought that all three had cut them. I do not so read his evidence, since the answer on which Mr Meade concentrates was not followed up and was in the context of a series of answers stressing Mr Grant's involvement in the development generally. I do not find the various expressions used to describe the numbers of cut nozzles sold inconsistent.

24) I am left, therefore, with the fact that the cutting was not referred to at all in the witness statements and on the fact that Mr Grant's evidence was that both Nicholas and MacLaren knew that sale of the nozzles would imperil his patent.

25) The later explanation I find unconvincing. The patent as filed claimed priority from the application made the previous July. Mr Grant said he would not have allowed its sale before filing. This is a consideration, but there is the matter of the claim to priority, and the incorporation of the old, unsold design in the application, which would not have been necessary if there had been no prior sales.

26) I should also add that exhibit D1, which is a brochure dated February 1987 produced for the purpose of venture capital financing, says this on page 15:

12. The word 'shaving' is, in this context, significant. Both Mr MacLaren and Mr Nicholas place their cutting activities at the end of 1986 or the beginning of 1987, which is consistent with this account, and Mr Grant accepted (day 2 pages 40 lines 29-37) that the original idea had been in the context of the detachable nozzle. Furthermore, although the statement in paragraph 4.6.1 of this document, that "a prototype of a new dispensing syringe is currently being tested in the market" is consistent with the nozzle in question being the type A, in its context I consider that it is far more likely to refer to type B, which is the nozzle described beyond any doubt in the passage I have quoted.

27) I have accordingly come to the conclusion that this patent is invalid by reason of prior use by the patentee by manufacture and sale of Cartridge B. This conclusion is sufficient to dispose of the patent proceedings, but since invalidity was also argued on the other grounds which I have indicated, I should give my conclusions on those grounds also.

30) The crucial passage is on page 1:

32) At this point, I should add a word about the experts. Mr Shires was knowledgeable about packaging generally, but it is clear that Mr Penn had the greater experience of cartridge design. Both gave their evidence fairly, but both were willing, I think, to fight their corner. In the result, I was left with the clear impression that without hindsight Mitchell did render the invention obvious. Applying Oliver LJ's test, the difference between what is disclosed in Miller and what is called for by the claim (the 'inventive concept') is the boss and the fact that the outlets are separated by a wedge-like partition rather than by the chamfered walls of a cylindrical tube. It seems to me that the skilled man would immediately appreciate that Mitchell was plainly concerned to get the two components together at the tip without previous mixing. Having identified the chamfer as a means for ensuring that the materials do not mix, I think the skilled man would make the nozzles meet along a line if it was convenient to do so. It is a simple workshop variation merely to make the nozzles parallel and meet along a line, while keeping the chamfer to prevent mixing. I do not believe that this can involve invention.

33) Mr Birss mounted an attack based on the Supermix II. A sample is exhibit D3. Supermix II is an example (on Mr Penn's evidence) of the application of common general knowledge. It is similar to the figure 1-4 embodiment of the patent in suit, with the difference that there is no wedge, but rather a thin baffle. This baffle is, in fact, very slightly wedge-shaped, but only to the extent necessary for it to be withdrawn from the mould (a so-called 'draw'). This cartridge is intended to be used with a simple nozzle or a static mixer, and a thread is provided for their attachment. It is not intended to be used alone. I do not consider that it is a dispensing nozzle as the claim requires. It is true that the specification contemplates (page 5 line 25) that a supplementary nozzle may be used with the dispensing nozzle of the invention, but I believe that there must be a dispensing nozzle identifiable as such. Supermix II does not have such a nozzle until the static mixer or other nozzle is attached to it. It does not anticipate. It adds nothing to the allegation of obviousness.

34) On this part of the case I should say a word about Cartridge A. This is the cartridge which was cut manually to make Cartridge B. Mr Birss says that it illustrates the fact that it was obvious to use a chamfer to prevent the adhesive components mingling at the openings of the dispensing passages. I think he is right in this. He also suggests that it is an anticipation. In this, he is wrong. There is no wedge-like partition, and there is no thin edge. While Cartridge A reinforces the conclusion on obviousness which I have reached above, it does not itself invalidate the claim.

35) This is a claim for 'old' copyright infringement, that is, a claim for infringement of the artistic copyright which subsists in pre-1989 drawings as artistic works. Three drawings are pleaded, one of which was introduced by consent at trial. They are to be found at bundle E pages 1250A and 1255A, and X2. Any case on the drawing at page 1250A was abandoned by the Plaintiffs, leaving the so-called Sears drawings, 1255A and X2.

36) The pleaded case is that Eurobond has infringed the copyright by "making or authorising or procuring the making by another of the [Eurobond syringe] nozzles which reproduce a substantial part of the drawings and each of them"". Only the nozzles are alleged to infringe. This is no doubt because all other parts of the plaintiff's syringes are indubitably copied from the Supermix syringe which forms the body of Cartridges A and B.

37) It is possible to summarise the plaintiff's task in such a case as follows. He must establish that he owns the copyright in drawings which were copied, directly or indirectly, by the defendant. 'Indirect' copying means copying an article which is made according to the drawing. He must also show that what is taken is a substantial part of the work sued on, in a visual sense. As a practical matter, therefore, a chain of copying from the work sued on to the alleged infringement must be shown.

38) In the present case, the connection between the plaintiff's drawings sued on and the alleged infringement is far from clear. For reasons which will become apparent, it is convenient to consider the question from the far end, viz, did Eurobond copy, and, if so, what did they copy? There is no dispute that they did copy. This was admitted by Mr Marchant (the reference to the Supermix cartridge is a reference to the standard 50ml Supermix twin-bore cartridge upon which all the Adlock designs are based, and which formed the body of the Type A and Type B cartridges):

30. It is also clear that Mr Marchant sent a sample of the Uni-Continental cartridge to his tool makers, Impala. Thus, on the face of it Mr Marchant copied the version of the Adlock syringe which was current at that date. Mr Grant's evidence is that X2 was used to make the change in the mould from Cartridge C to Cartridge D: essentially, a matter of making the tip more robust and widening and lengthening the cylindrical part of the nozzle which lies immediately upstream of the tip. Mr Birss cross-examined Mr Grant on the manifest differences between X2 and Cartridge D, and Mr Grant said that there had been subsequent modifications to the mould. I found the description of the evolution of the design unsatisfactory (see day 2 page 94 line 22 - 95 line 25) because it suggests that the mould had been built up, which is a difficult and uncertain process. The cross-examination (day 2 page 95 line 26 to 97 line 27 reveals that there is some uncertainty in the sequence of events in arriving at Cartridge D. Cartridge E was made from entirely new drawings (made as a result of the insolvency of the original toolmaker, whose tooling was unusable). The drawings actually used to make Cartridge E are X3 and X4. These are manifestly far closer to the Defendant's cartridge, but, because they were made after 1989, they are not entitled to a relevant copyright.

40) I turn to the question of infringement of the copyright in drawing 1255A. I have shown the relevant parts of the drawings of the Eurobond cartridge above, but the comparison is between the article and the drawing. I have come to the conclusion that the presence of the "horns", together with the other obvious differences from drawing 1255A makes an article which does not look sufficiently similar to the drawing to amount to a reproduction of it. There is no infringement of copyright.

41) Mr Birss concedes that there has been a breach of clauses 9.1.2 and 9.1.3 of the Licence and Technical Support Agreement. He has submitted to an enquiry as to damages for infringement of trade mark, and I need not consider this aspect of the case further. However, there is a claim for an outstanding debt ("1700 or so) by Adlock, and a counterclaim for damages against Adlock for repudiation of the Licence and Technical Support Agreement.

34. Aldous J gave Order 14 judgment on part of this claim because there is plainly a minimum sum (8% of the existing cost) to which Adlock was entitled. But the sum which could be added to the price under clause 4.2.2 was in dispute. Mr Birss submits that Adlock have failed to prove what the price increase should have been. Mr Meade, relying on the document F(iv) page 2106 says that there never was any dispute as to the yen exchange rate, which underlies the increase which his clients sought to impose. The only question, it seems to me, is whether an incorrectly calculated price imposed under clause 4.3 could give rise to a claim for a lesser, correctly calculated price. Aldous J has already held that it can, since he can have given Order 14 judgment on no other basis. Accordingly I conclude that this claim is made out, and damages are recoverable on this basis.