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Cite as: [2001] EWHC Patents 30
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Dyson Appliances Ltd v. Hoover Ltd [2001] EWHC Patents 30 (11th January, 2001)
HC 1999 No. 02754
IN THE HIGH COURT
OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Before: R.M.Fysh,
QC
(Sitting as a Deputy High Court Judge)
BETWEEN
|
DYSON APPLIANCES LIMITED
|
Claimant |
|
|
- and -
|
||
|
HOOVER LIMITED |
Defendant |
Mr Peter
Prescott QC and Mr Guy Burkill instructed by Messrs Olswang for the Claimant
Christopher Floyd QC and Mr Mark Vanhegan instructed by Messrs Weightmans for
the Defendant
Hearing date: 13 October and 15 November 2000
JUDGMENT (No 2)
|
This is the official judgment of the court and I direct that no further note or transcript be made |
R.M.Fysh QC
DATED: 11 January 2001
Part I
Introduction
1. On 3 October 2000 I gave judgment in this action and counterclaim, holding that the Claimant's ("Dyson's") European Patent (UK) no. 0042723 ("the Patent") had been infringed by a domestic vacuum cleaner manufactured and sold by the Defendants ("Hoover"), the Hoover Triple Vortex ("the infringing HTV"). I dismissed Hoover's counterclaim to revoke the Patent.
2. On 13 October, I heard argument on the form of order to be made and in the end, the order was in part agreed. Hoover was given leave to appeal but did not seek a stay pending disposal of the appeal. There was an order for delivery up of infringing HTV vacuum cleaners alternatively an order that they be rendered non-infringing by destruction on oath of the cyclones therein. However, on behalf of Dyson, Mr Peter Prescott QC sought further relief of a novel kind which has given rise to this further judgment.
3. Dyson's argument focussed on the fact that within a year (in fact, on 19 June 2001) the Patent will expire. In the light of this and on the basis of facts and argument which I shall consider below, Dyson invited me to grant additional injunctive relief which will in effect restrain Hoover from manufacturing or selling vacuum cleaning appliances which make use of the invention of the Patent for a specified period after the date of expiry of the Patent (the 'Post-expiry injunctions'). They also sought immediate injunctive relief but limited to 6 months duration, which would prevent Hoover marketing any vacuum cleaner (alternatively, any bagless vacuum cleaner) under its trade mark VORTEX or in connection with a particular logo (the 'Trade Mark injunction'). In essence, Dyson sought to justify such relief on the basis that having got into the market for vacuum cleaners working on the cyclonic principle as infringers, Hoover should not be able to reap the fruits of their antecedent wrongdoing to Dyson's further commercial detriment in ways which would not be caught by the relief usually granted on a finding of infringement of a valid patent. This they said, was a legitimate secondary loss which flowed forseeably from infringement of the Patent. I shall refer to this relief generally, both the Post-expiry injunctions and the Trade Mark injunction, as 'springboard relief'. Mr Christopher Floyd, QC for Hoover, opposed these applications (in particular the Trade Mark injunction), characterising the relief sought as 'new law injunctions'. Mr Floyd's epithet is valid to this extent: that the question of post-expiry relief in patent infringement actions seems not to have been the subject of direct judicial attention in this jurisdiction for some considerable time. As will be seen, post-expiry injunctions (but not as far as I am aware, the trade mark type of injunction presently sought) have nevertheless been granted to successful patentees in patent infringement cases in other jurisdictions.
4. In what follows, I have had to refer to my judgment ("the Judgment") from time to time and where I have done so, I have in general referred to paragraph numbers therein, rather than by quotation from it. References to affidavits are to those which have been filed for the purposes of this further hearing.
5. The springboard relief sought by Dyson is as follows:
2. A. " For a period of
[12 months] following expiry of such patent, selling or otherwise disposing
of
(i) any Hoover Triple Vortex vacuum cleaner (meaning the vacuum cleaner the subject of this action and referred to in the judgement herein at paragraphs 5 and 81-105), or
(ii) any other vacuum cleaner made in accordance with the invention as claimed in the said patent; provided it shall not be a breach of this provision of this Order if the vacuum cleaner was not designed or tested to certification within the jurisdiction while the patent was in force."
3. These are the Post-expiry
injunctions. In its final form, the Trade Mark injunction reads as follows:
4. B. " For a period of
[6] months following the date of this Order, marketing any [bagless] vacuum
cleaner under or by reference to the trade mark or name VORTEX (or any colourably
similar mark or name), or by using the Triple Vortex logo (being the logo
used by the Defendant on its Triple Vortex vacuum cleaners before the date
of this Order, or any other logo colourably similar thereto), except that
it shall not be a breach of this part of the Order to use the same mark or
logo in a context where there is no likelihood of deception."
5. This proposed Trade Mark
injunction is not that which Dyson sought at the beginning of the recent hearing,
the original relief sought having been modified by Mr Prescott in the light
of comments by Mr Floyd (and observations of the court), during the course of
his argument.
6. As noted, Dyson filed affidavit evidence in support of their application very shortly before the hearing and this was answered within 24 hours by a single affidavit from Hoover. At the hearing, a question arose as to whether an adjournment might be required so that further evidence could be filed, but in the event, both Mr Prescott and Mr Floyd chose to proceed without adjournment. No deponent was cross-examined. Having regard to the issues which now require adjudication, particularly those arising under the Trade Mark injunction, some of this evidence has not been of much assistance.
Some preliminary matters
7. I should next mention certain preliminary matters.
(a) After the conclusion of the hearing, it became apparent that I lacked the precise final wording for the form of order which Mr Prescott sought for the Trade Mark injunction, this having been amended viva voce during the course of argument. The transcript (which became available only after the day's hearing), was unhelpful in this respect. I therefore invited counsel to submit in writing and hopefully after agreement between them, the final form of wording for the Trade Mark injunction which had been under consideration by the close of argument. Unfortunately, this development revealed a dispute between counsel on the very point which, unknown to me at the time, had been running since the conclusion of the hearing. This difficulty was resolved at a further short hearing which took place on 16 November 2000 and the final form of order sought is accordingly that which is set out in paragraph 5B above. The resumed hearing had an unforeseen benefit however in that Hoover put before the court for the first time, an authority which is germane to present matters: Union Carbide Corp. v BP Chemicals Ltd [1998] FSR 1. I therefore also heard argument on this further authority.
(b) Mr Floyd raised in effect, a pleading point, noting that none of the material facts which now fall to be considered, had been pleaded. Mr Prescott submitted that the issues presently in debate in any event fell under the time-honoured prayer for 'Such further or other relief etc', the practical purpose of which, he said, was to enable a successful plaintiff to raise any matter after judgment which would not have been apparent at the time that the claim was originally formulated. I have sympathy for Mr Floyd on this point not least because a number of unjust enrichment/springboard cases have been terminated by a refusal to allow amendment to a pleading so as to add such a cause of action or by an application for strike out of part of an existing pleading relating thereto. But having regard to the wish of Hoover not to seek an adjournment, to the evidence in reply which they were able to file at short notice and to the fact that so far as the Post-expiry injunctions are concerned, the main evidential matters were not in dispute, I do not regard this omission as prejudicing Hoover's ability to meet the issues raised at this adjourned hearing. Nonetheless, as Mr Floyd reminded me, the springboard relief is proposed as being final relief (see (d) below). If such relief is to be granted, it must therefore be only on the basis of facts which have been clearly established on present evidence. From this, two further matters need to be considered.
(c) Following the latter submission, Mr Floyd drew my attention to an authority to which I shall refer later in this judgment, Gerber Garment Technology v Lectra Systems Ltd [1995] RPC 383 a decision of Jacob J on an inquiry as to damages for patent infringement, which was largely upheld on appeal. On the question of onus, Jacob J said this (at page 402):
" I hold that infringement of a patent is another case where secondary loss can be recovered, provided the secondary loss is a foreseeable consequence of the infringement."
6. The learned judge then
gave examples of such secondary loss and continued:
" In all these cases it remains critical that the patentee can establish the factual basis: that his loss is caused by the infringement and foreseeably so."
7. Since Dysons' purpose
in seeking springboard relief was avowedly to avoid altogether the likelihood
of secondary damage arising either now or post-expiry, it seems to me axiomatic
that Dyson bear the onus of first proving that such damage may legitimately
be taken into account at all and further, if that is established, that the facts
in evidence are sufficient to give them the basis for the relief now sought.
(d) The second point touches the nature or quality of the relief sought. Dyson have stated in argument that they are here seeking final and not interlocutory relief. Dyson justifies this application essentially on the basis that avoidance is better than cure. Mr Prescott said that ordinary considerations of balance of convenience therefore do not apply. Thus the hypothesis that there will in due course be an inquiry as to damages or an account is presently irrelevant. This being an application for final relief, Dysons' success would thus seem to obviate any need for an assessment of secondary damages allegedly based on Hoovers' springboard activities to be undertaken at the forthcoming inquiry or account. And in accordance with this position, Mr Floyd's argument proceeded on the basis that this is indeed an application for final relief. I was puzzled therefore that Dyson has offered a cross-undertaking in damages. They have put before the court the accounts of their holding company, Dyson Appliances (Holdings) Ltd for the year ended 1998 which show a comfortable trading position. Hoover regard this as being irrelevant and offered no argument directed to the adequacy or otherwise of the cross-undertaking or to the fact that it was being offered by the parent company. In my judgment, this application is not a 'holding operation' pending full investigation of law or fact at the inquiry or account stage. I accept the position taken by Mr Floyd when he said:
" [Dysons'] offering of a cross-undertaking is irrelevant when one comes to assess the evidence. Your Lordship is making a final assessment of the evidence and being asked to make findings of fact to support this relief. It is an entirely different exercise from an interlocutory injunction."
8. The implications of
the penultimate sentence, so Mr Floyd submitted, are most acutely felt when
one considers the evidence (or lack of it) touching the Trade Mark injunction:
see Transcript, page 142.
Part II
The Facts
8. Early Days
9. It will be recalled that
in the early days of the exploitation of the device described and claimed in
the Patent, Mr James Dyson's invention was greeted by the industry both here
and abroad with to say the least, scepticism. Evidence was given at trial of
a television programme which was transmitted on 19 November 1995 by the BBC
called The Money Programme. This featured a discussion between Mr Dyson and
Hoover's then Vice-President for Hoover Europe, Mr Mike Rutter, during which
the latter admitted that Hoover would have liked to have acquired Dyson's cyclone
technology but only so as to "take it off the shelf to make sure that nobody
else can use it." He added: "It would have lain on the shelf and not have been
used".
9. Hoover develop and launch the HTV
(a) At some undisclosed time, Hoover nonetheless decided to break into the cyclone-based domestic vacuum cleaner market and this resulted in the infringing HTV. At trial, Hoover gave no evidence concerning their commercial thinking in this respect or of their design process, or of the development, prototyping, testing of or official approval for this appliance.
(b) According to the affidavit of Mr. Alberto Bertali, the managing director of Hoover's European Appliance Group, the infringing HTV was launched in February 1999, and was the first Hoover vacuum cleaner which made use of cyclones. Up to the time of its withdrawal, Mr Bertali stated that some 175,000 units had been sold (para 9). Mr Andrew Thomson, head of engineering at Dyson Research Ltd, swore an affidavit in which he exhibited an article in the trade journal "Rapid Prototyping". In this article, Hoover's head of engineering, a Mr John Taylor, was quoted as saying that
"Vortex's time-to-market constraints were very high…With a total project time of 12 months…the demands…were considerable."
10. Mr Thomson also stated
(para 12) that in his experience, the normal period which it would take for
a company to get a product like the infringing HTV onto the market from scratch,
would be from 16-19 months. These approximate timings were not disputed by Hoover.
Between the time of its launch and its subsequent withdrawal (see below), Hoover
progressively put four 'model variants' of the infringing HTV on the market,
details of which are given by Mr Martin Bowen, the head of Dyson's legal department
in his affidavit. Mr Bowen also states (para 17):
"Each of these…roughly correlates to a Dyson model in terms of the features each has."
10. The trade mark and broken 'O' logo.
(a) Throughout the period during which it was sold (that is, for some 18 months), the infringing HTV prominently displayed the words HOOVER TRIPLE VORTEX. In addition, a special logo was used for this model which forms the 'O' of the word VORTEX , being that letter represented in a broken, tripartite form.
(b) A trade mark HOOVER VORTEX is registered in Class 7 in Hoover's name under UK registered trade mark no. 2170098 as of June 1998 for inter alia 'vacuum cleaning apparatus'. During the hearing, Hoover made available a copy of the relevant entry in the Register of Trade Marks. This shows that the mark was first registered by a Netherlands company, Domicor Holdings BV and that in pursuance of an application dated 6 September 1999, Hoover replaced it as registered proprietor.
(c) Before leaving the subject of trade marks, I should mention that Hoover appears to sell its vacuum cleaning appliances by reference to some three trade marks: the trade mark 'HOOVER' itself, the Hoover 'name and logo' device and a particular 'model mark'. The first two marks are well-known 'house' marks and in the normal way, serve simply to identify the provenance of the product as coming from Hoover. The model mark however enables the purchaser identify a particular one of a number of models of vacuum cleaner made and sold by Hoover. Thus the Hoover Junior (and other Hoover models) were in evidence at trial. The word 'VORTEX' is in this category and was evidently chosen as the model mark for a particular new Hoover appliance. In addition, all the HOOVER TRIPLE VORTEX models were identified to the trade (and possibly more broadly) by reference to the letter 'V' followed by a four figure number. These were what I have referred to in para 9(b) as model variants.
(d) In his affidavit (paras 8 and 28-30), Mr Bertali suggests that since 'the Hoover name is still pre-eminent in the UK vacuum cleaning market', it is primarily that name only which sells their products and that this went for the infringing HTV as well. He adds:
"…it is not the case that customers buy vacuum cleaners by reference to minor mechanical details such as in the present case, whether there is a frusto-conical cyclone or a cylindrical one."
11. The reference to 'a cylindrical
cyclone' is to a modification to the infringing HTV which I shall consider below.
(e) Dyson gave evidence on the matter referred to in the preceding sub-paragraph which in my judgment must qualify the evidence of Mr Bertali. A Mr Richard Storey who is strategic planning director of M&C Saatchi, advertising agents, has sworn an affidavit in which he deposes (para 6) to the fact that Hoover spent some £5 million on 'brand equity and goodwill' in launching the infringing HTV. Though Mr Bertali has taken issue with another part of Mr Storey's evidence, this fact was not denied. Mr Storey has stated that in his view,
"..this[spend] would have generated around 55% awareness of the brand name VORTEX and device among buyers and considerers of white goods."
12. Mr Storey has also exhibited
contemporaneous articles from the trade press in support of his evidence. The
item from one, 'Domotechnica' for 4 March 1999, under the headline ' Hoover
joins the Bagless Battle', states :
"The VORTEX cleaners will be supported by a £5 million spend on TV and press advertising."
13. The use of the word 'VORTEX'
alone will be noted. This is in fact not the only evidence that infringing HTV
appliances were referred to simply as 'VORTEX vacuum cleaners'. Mr Storey also
gives evidence as to the effectiveness and persistence of such an advertising
spend to which I shall return.
11. Third parties' cyclonic vacuum cleaners
14. Mr Bertali's affidavit
(para 7) shows that before the launch of the infringing HTV, a mutual competitor,
Electrolux, had launched a domestic vacuum cleaner which made use of a cyclone
to clean the dirty air. In addition, after the introduction of the infringing
HTV, another competitor, Sanyo, also launched a 'cyclonic' vacuum cleaner on
the UK market. I was informed that neither of these appliances infringed the
Patent as both made use of a single cyclone-though I should record that the
matter was not gone into in any detail. As will be seen, Mr Prescott made much
of the approach adopted by such other manufacturers such as Electrolux (whom
he characterised as 'law abiding') in developing his 'springboard' argument
against Hoover.
12 Hoover suppress the HTV
15. Mr Bertali (para 10)
states that production of infringing HTVs ceased on 8 September 2000, that is,
before Judgment was handed down. On this date, final modification of the mould
for the second separation unit (SU 2) of the infringing HTV had been completed,
modification of the mould for the frusto-conical separation unit (SU 3) having
been completed the week previous (para 15). After judgment, a further 61 infringing
HTV units were apparently sold but sometime before the resumed hearing, all
sales of infringing HTVs had ceased. As of 8 October 2000, Hoover still held
some 13,000 units of the infringing HTV. Hoover wish however to retain the 'carcasses'
of the infringing HTVs and offered to destroy just the 'cyclonic units' which
were designed to work within them (Bertali, para 35). This position is reflected
in the relevant part of the Order which has been made.
13 Hoover's new models.
(a) Hoover's policy, as Mr Bertali reminds us, is one of continuous product development (para 12). Accordingly, after introducing the infringing HTV, Hoover decided to advance its interests in the field of vacuum cleaners operating on the cyclonic principle with some new models. Hoover's commercial plans in this respect were also the subject of correspondence between solicitors prior to the recent hearing (see Exhibit MB 7 to Mr Bowen's affidavit). In the light of their product development policy, Hoover now have in production and on sale, one new appliance based on cyclonic action. Another model will follow in due course. They gave some evidence of these models.
(b) First, according to Mr Bertali (paras 13-15), a "modified HTV" has been manufactured as from Monday 11 September 2000. It will be recalled that manufacture of the infringing HTV had ceased the previous Friday, 8 September. The 'modified HTV' comprises three cylindrical cyclones (which Mr Bertali refers to as 'Cylindrical Cyclonic Units'). In the correspondence referred to (letter to Olswang, Dyson's solicitors, dated 10 October 2000), Weightmans, Hoover's solicitors, described this machine as 'the second generation HTV'. This says Mr Bertali, was developed 'for reasons of improved efficiency and cost savings' and he adds, 'It does not have any frusto-conical part and therefore…does not fall within the scope of [the Patent]'. According to Weightmans, it is 'identical to the original HTV save that the cyclonic system will be replaced with …three cylindrical cyclones'. It is produced using the moulds of the infringing HTV but with appropriate modification; see para 12 above. It was I think accepted by Dyson that this product indeed did not infringe the Patent.
(c) At the time of the recent hearing, Hoover had sold over 2000 units of the 'modified HTV' and had another 7550 units to sell ( Bertali, para 18). These 'modified HTV' appliances are still being sold as the HOOVER TRIPLE VORTEX and make use of the 'same exterior body as the HTV'. It would seem that this product has been presented to the purchasing public in the same way as the infringing HTV. But this is not to continue indefinitely. According to Mr Bertali, the same 'modified HTV' with some improvements will in due course be marketed as the new HOOVER WHIRLWIND. This model will make no use of any of the sales indicia under present discussion which are used for the modified HTV (Bertali,para 19).
(d) Secondly, there is a bagless product which is now in production as the HOOVER VORTEX POWER, an example of which (together with its packaging material) was brought to court for the recent hearing. It was launched in July 2000 according to Mr Bertali (para 17) as a 'totally new product' and was delivered to retailers in October 2000. It operates using a single cyclone and a filter. Again, Dyson agree that it does not infringe but characterise it as a 'stop-gap' product. The word 'VORTEX' is used on this product together with the broken 'O' logo, as it was on the infringing HTV. I have made a cursory inspection of this product and have compared it with the infringing HTV. To the eye of the uninitiated, the appearance of the HOOVER VORTEX POWER seems to be very similar to that of the infringing HTV; only in its trade marking, in the omission of the word 'TRIPLE' and in the use of the word 'POWER' with VORTEX, does there appear to be any noticeable difference. The product, so Mr Floyd informed me, was launched so as to be 'next to' and 'in parallel with' the infringing HTV, as an addition to Hoover's 'cyclonic' range.
14 And the future ?
16. No undertaking has been
offered by Hoover not to sell the infringing HTV or any other appliance which
would presently infringe, after the expiry date of the Patent. Mr Bertali states
that "[Hoover] will not be producing any more products as 'Hoover Triple Vortex
System'. I am unsure what exactly that means though I have noticed that
the phrase '1.Triple vortex system' is printed in capitals in a prominent position
on the front plastic casing of both the infringing HTV and the modified HTV.
Mr Floyd stated that after the date of expiry of the Patent, Hoover does not
intend to sell any appliance which would now infringe – at any rate, not 'at
the moment' . In argument, Mr Floyd's position concerning his clients' future
plans emerged in the following sequence (Transcript, p 108):
19. No undertaking was offered.
I shall therefore proceed on the basis that resumption of sales by Hoover of
the infringing HTV (or possibly of some other appliance which may fall within
claims of the Patent) after the date of its expiry, is at least a possibility.
15 Conclusions on the facts
(a) With merely two 'rounds' of affidavit evidence to go on, all of it filed rather late, and without the possibility of elucidation under cross-examination and without discovery, I have found it difficult to reach firm conclusions upon a number of factual matters. It does however seem to me to be tolerably clear (and free from dispute- see (b) below) that after some commercial prevarication, Hoover dived with enthusiasm into the bagless vacuum cleaner market with an accelerated development programme and costly advertising campaign. Having thereby achieved an 18 month sales platform by means of the infringing HTV, they have been able to take full advantage of the commercial benefit which that infringing activity has given them, so as to enhance and accelerate their presence as major players in the field of vacuum cleaners which work on the cyclonic principle. As a result, I believe that when Mr Bowen states that 'Hoover were able to establish a significant springboard in the market' (Affidavit, para 38), such evidence is on its face credible.
(b) Dyson's evidence that in the normal course of events it would have taken Hoover some 16-19 months to have a competitive product on the market after the expiry date, is unchallenged. Similarly, there appears to be no dispute that the actual development time for the infringing HTV took some 12 months.
(c) In the light of the foregoing, if they wished, Hoover would evidently be in a position to re-commence sales of the infringing HTV verysoon after the Patent expires. They have carried out all the required design and development work, they already possess the necessary product authorisations, they have 'carcasses' into which the original cyclonic units could soon be re-inserted and above all, they have a proven product having a track record in the UK market. However, I do not think Mr Prescott is correct in saying that Hoover would be 'ready to go' at once since, assuming they obeyed the current general injunction not to infringe, they would still need appropriate mould tools to 'resurrect' their former SU2 and SU3 separation units. From Mr Bertali's evidence on the recent modification of these two mould tools so as to make corresponding parts for the modified HTV and thus render the appliance non-infringing, there must be some lead-in period. This is one of the areas where Mr Bertali's evidence is unsatisfactory as it stands. However, since Hoover presumably still possess the engineering drawings for their 'infringing' moulds, I doubt whether a great deal of time would be likely to be involved in practice.
(d) With regard to the sale of bagless vacuum cleaning appliances other than the infringing HTV (cf the relief prayed for in para 5A (ii)), there is no evidence whatever that Hoover have a viable alternative to the infringing HTV ready for launch or even in preparation. Appropriate design, development, product clearance and other work would no doubt have to be carried out before a product would be ready for the market but in view of the general injunction against infringement which is running against Hoover (Order, para 1(a)), in-house activity of this kind in the United Kingdom is unlikely to have taken place in preparation for expiry. Perhaps Hoover's past experience with their infringing HTV might hasten their entry into the market with a new model after the Patent expires but there is no evidence about this. By contrast, the wording of the proposed first paragraph of the Post-expiry injunction, para 5A(i), is quite specific since it relates only to the infringing HTV.
(e) However, Mr Bertali does disagree with Dyson's evidence concerning the present sales power of and goodwill which has already been generated by the VORTEX mark, contrasting it dismissively with the well -established drawing power of the HOOVER name alone (paras 8 and 28-31). I regard this simple approach with some suspicion for three reasons: first, it seems to me to be quite inconsistent with the unchallenged evidence of Mr Storey of M&C Saatchi to the effect that Hoover launched the infringing HTV on a dedicated £5 million advertising spend and, in addition, Mr Bertali's own evidence that at all material times, HOOVER was a household name within this jurisdiction. A 'spend' of that order merely as a gratuitous advertising reminder would I think, be gilding the lily. Secondly, I have already noted that even the present evidence shows that the infringing HTV is clearly referred to as the 'VORTEX' vacuum cleaner simpliciter: see para 10 above. In summary, I believe it to be likely that Mr Storey may be justified in saying that
"Hoover will benefit from the existing awareness and goodwill in the VORTEX name and device if they are able to position the new product as VORTEX POWER".
20. On present evidence,
and without cross-examination, it is nevertheless very difficult to gauge either
the qualitative or the quantitative effect in the UK market of any of these
factors.
(f) I also believe it likely that the modified HTV (which is apparently still on sale), may be perceived by some members of the public as being the same product as the infringing HTV. As Mr Bertali himself says, it differs from it only in 'minor mechanical details' which so he believes, will not affect the purchasing attitude of the public.
(g) In my judgment, the unchallenged evidence relating to the use of the trade mark VORTEX (and the broken 'O' logo) on infringing HTVs for some 18 months since the start of sales, establishes that Hoover is likely to have generated at least some valuable goodwill in these two trade marks in the minds of the purchasing public as a result of the advertising and sale of this product.
(h) Unlike competitors, Hoover did not respect the Patent; as Mr Prescott said, they 'jumped the gun'. Furthermore, in the light of the evidence which I have reviewed in this section, it is clear that Hoover who at all times were major players in the UK vacuum cleaner field, have lost no time in continuing to exploit to the full
(i) the commercial benefit which has accrued to them as a result of their early but illegal entry into the market, and
(ii) the benefit of the goodwill which they have built up in the mark VORTEX (and to a lesser extent perhaps, in the broken 'O' logo) whilst the product which enabled such goodwill to be generated, was still an infringing product.
(i) Evidence at trial established that the use of a frusto-conical profile for the secondary cyclone separating unit in the invention led to a definite technical benefit: Judgment, paragraphs 27 and 28 and 62-77. This is of course an essential feature of claim 1of the Patent which has not yet (as far as I am aware), been used by third parties in the UK. They have not 'jumped the gun' and in this respect have been as Mr Prescott put it, 'law abiding'. If they wish to make use of this feature when the Patent expires, on the evidence, it will take these competitors a certain amount of time to be in a position to have an approved product to sell which incorporates the secondary cyclone unit having a frusto-conical profile. By contrast, Hoover will be ready to re-launch their infringing HTV almost immediately, unless restrained by the first of the Post-expiry injunctions.
Part III
The Post-expiry injunctions
The Law
16 Dyson's purpose in seeking the Post-expiry injunctions is to impose a commercial handicap on Hoover which in the words of the European Court of Justice:
'[places] the proprietor of the patent in the position in which it would, in principle, have been had its rights been respected.'
21. The origin of the 12
month period of handicap in the Post-expiry injunctions has already been noted:
see paragraph 9 (a) above. In essence, in order to justify the Post-expiry injunctions,
Dyson rely on the inherent equitable jurisdiction of the court and the wording
of the Patents Act 1977, s. 61 when read with The Supreme Court Act 1981, s.
37.
17 On its face, the notion of an injunction to restrain the use of an invention after the date of expiry of the patent to which it relates, seems anomalous, going against the very purpose of the patent system. The consideration which the patentee gives for his original grant is that once the period of monopoly has expired, anyone is free to work the patent. In addition, Parliament has spelled out what constitutes infringement in s 60 and the remedies for patent infringement in s. 61 of the Act. Such statutory statement one might think, should be the end of the matter. Furthermore, from the procedural point of view, the proposition that an injunction can legitimately be granted in respect of past infringement and in the absence of a basis of threat, actual or implied, to infringe the patentee's rights in the future, makes the injunction prayed for, on its face, implausible. Injunctions in general protect existing rights and threats to infringe such rights. Nonetheless, as what follows will show, Dyson's case cannot be dismissed so easily.
18 First, post-expiry injunctions have, so it appears, been granted in the past. In Crossley v The Derby Gas Light Co (1834) 4 LT 25, the defendant manufactured gas meters in infringement of a patent. Very shortly before the expiry of the patent, the patentee moved for an injunction to restrain the sale of meters which had been manufactured (and stocked) during the life of the patent, after its expiry. Both the Vice-Chancellor and on appeal (after the patent had expired), the Court of Chancery granted the relief. The Lord Chancellor, Lord Brougham, said:
"…I am of opinion that the court would interfere, even after a patent has expired, to restrain the sale of articles manufactured previous to its expiration in infringement of a patent right; and that a party would not be allowed to prepare for the expiration of a patent by illegally manufacturing articles, and immediately after the expiration to deluge the market with the produce of his piracy; thus reaping the reward of his improbous labour…..this court may grant an injunction even after the expiration of the patent."
22. According to the report,
delivery up of infringing meters had not been sought. Mr Floyd criticised this
authority as an antique which had rightly attracted little interest in modern
textbooks of patent law. It was he said a case which under modern practice would
have been covered by an order for delivery up. On the other hand, Mr Prescott
drew attention to the underlying basis of the decision namely, that as part
of its broad equitable jurisdiction, the court had power by injunction to prevent
a defendant enjoying the fruits of its own wrongdoing ('improbous labour') to
the detriment of the party wronged. The injunction was granted not in respect
of a cause of action arising after expiry of the patent but in respect of a
cause of action which had already arisen. Damages could no doubt have been awarded
because of the defendant's 'springboard' activities but the court had granted
an injunction to prevent such damage arising in the first place.
19 A later authority upon which Mr Prescott also relied was Chappell & Co Ltd v. Colombia Graphophone Co [1914] 2 Ch 745, a copyright infringement case involving the score for a song with piano accompaniment entitled 'Where my caravan has rested' . The defendants made a recording master of this song and gramophone recordings from that master. They duly paid the statutory licence fee to the author for mechanical reproduction of the music which by virtue of regulations made under the Copyright Act 1911, had the effect that neither the master nor the recordings made from it infringed any copyright. However, in making the master recording, they made use of an orchestral accompaniment to the song which they had adapted and arranged from a printed copy of the original song and piano score. In so doing, the plaintiff, who was copyright owner by assignment, successfully contended (both at first instance and on appeal) that their copyright in the sheet music had been infringed. It was held that both the master recording and the records should be delivered up for destruction not as infringing copies, but as the fruits of the defendants' wrongdoing. Kennedy, LJ said (at p. 754):
" With regard to the remedy, I should be sorry to suppose that in this, which is practically an action of tort, it could have been successfully argued that all the damage the plaintiffs were entitled to was the damage up to the date of the bringing of this action, by reason simply of the defendants having infringed their copyright with regard to the musical score, so that the defendants could reap all the proceeds of their wrongdoing by the further sale of records….."
"The appellants cannot be allowed, having done this thing, to retain the benefit, and the Court has the power to take care that that which has been created by the infringement shall cease to exist in derogation of the rights in law unquestionably possessed by the plaintiffs." [my emphasis]
23. Delivery up of the master
recording and the records thus had the effect of stopping further damage to
the plaintiff which would be likely to arise as a result of the original infringement.
See also per Lord Cozens-Hardy, MR at page 752.
20 The Chappell case is relevant for another reason. In his judgment, Swinfen Eady, LJ also considered the basis for the order for delivery up and at page 756, said:
" …articles may be ordered to be delivered up for destruction, because they are articles which are manufactured in violation of the plaintiffs' rights and there is general jurisdiction in the Court to order such articles to be destroyed."
24. In support of this, Swinfen
Eady LJ cited with approval the judgment of Fry, J in Hole v Bradbury
(1879) 12 Ch D 886 at 903, where he said:
" There remains this question, Whether there is any authority in the Court, independently of the statute, to cause to be delivered up any copies which may have been printed, even to a person who is not the registered proprietor at the time they were printed, simply from the general jurisdiction of the court to order delivery up for destruction of all articles which have been created in violation of the plaintiffs' rights. It appears to me that there us distinct authority in favour of that view." [My emphasis]
25. Delivery up was therefore
regarded as a remedy and not a cause of action. Mr Prescott argued that the
basis of the practice for ordering delivery up in Chappell is the same
as that upon which injunctive relief was ordered in Crossley, namely,
that as part of its inherent equitable jurisdiction, the court could grant appropriate
relief of a practical nature so as to prevent a party from continuing to enjoy
the fruits of its own wrongdoing to the detriment of the party wronged, rather
than merely pointing the party wronged to an appropriate future remedy in damages.
21 It will however be observed that in both Crossleyand Chappell, the injunction and delivery up were ordered in relation only to existing articles and moreover in the Crossley case, not to articles manufactured after expiry of the patent. By contrast, Dyson's proposed Post-expiry injunctions are not aimed at any finished articles of commerce which are presently in existence but rather at articles which might come into existence in the future, after the Patent expires. At present, the only material which is likely to exist relating to the infringing HTV would, I would think, be on paper (drawings, data, clearance applications and certificates and suchlike). There could perhaps also be prototypes. There is however no evidence specifically touching the existence (or utility) of such items and I do not think this aspect of the case can be taken further.
22 I shall next refer to three authorities which are relied on by Hoover with a view to establishing that once a patent expires, no relief of the kind presently sought is available to the former patentee. These authorities are Saccharin Corp v Quincey (1900) 17 RPC 337, a South African case, Monsanto Co v Stauffer Chemical Co [1988] FSR 57 and Union CarbideCorp v BP Chemicals Ltd [1998] FSR 1.
23 In the first of these cases, the court (Cozens-Hardy, J as then was) was concerned solely with the infringement of one or other of three process patents by a single sale of saccharin made by one or other of them. The plaintiffs claimed an injunction and damages. It was established that the plaintiff's three patents covered every possible way of making saccharin and one of the patents in suit must therefore have been infringed. The plaintiff was in the difficulty that it did not know (and could not prove) which of the three patents had been used to produce the single batch of saccharin complained of. The defendants called no evidence and claimed a nonsuit. One of the three patents in suit had recently expired. Cozens-Hardy J said this at page 339:
"An injunction cannot properly be granted except in respect of a patent which the defendant has infringed or threatened to infringe and only during the continuance of the patent. I am satisfied that the parcel of saccharin …was made under one of the three [patents], though I cannot tell under which of the three. It may have been made under the 1885 patent which has now expired and in respect of that patent no injunction could now be granted. The plaintiffs have therefore not established that which is necessary to entitle them to an injunction."
26. The judge then referred
to the claim to damages and held that from that point of view, it did not matter
which of the patents had been infringed since whichever it was, the measure
of damages would be the same. At page 340, he said this:
" I shall therefore direct an inquiry, without mentioning any particular patent, whether any and what damages have been sustained by the plaintiffs by reason of the use … of 33lb of saccharin purchased by the defendant .."
and dates are given. The discussion on the form of order (pages 340-341) shows the limited scope of the inquiry which the judge had in mind bearing in mind that one of the patents had expired. The injunction which was refused was simply an injunction to restrain infringement and not an injunction to restrain continuing loss in respect of infringement already committed. This case therefore had nothing to do with springboard sales or post-expiry injunctions of the kind under discussion. The sentences relied on by Hoover must be read in context and when so read, do not I believe, assist them.
24 The second case relied upon by Hoover is Monsanto Co v Stauffer Chemical Co[1988] FSR 57, in which 'post-expiry' issues very similar to those raised in these proceedings, arose. In addition, the Crossley case was specifically disapproved and Saccharin v Quincey was applied. This was an appeal from the Commissioner to the Transvaal Provincial Division and was part of extensive litigation concerning products which were competitive to Monsanto's herbicide ROUNDUP. As with pharmaceutical drugs, herbicides require approval by a regulatory authority before use and in order to do this, testing over one or two seasons is normally needed. In South Africa, the defendants' testing had been carried out over the two seasons prior to the expiry of the South African patent using insecticide which had been imported from Hungary. It was common cause that these tests and field trials constituted an infringement of the patent in suit. Based on these trials, approval for the defendants' product had been sought about a month after the expiry of the patent and the product received approval a few weeks thereafter. In an action for infringement, which was brought some months after approval had been given, Monsanto sought (a) an order restraining the defendants from selling etc their herbicide in respect of which approval had been obtained, and (b) delivery up of the relevant application for registration and the certificate of registration. The plaintiffs' argument was stated by the judge (page 60) to be that:
"By conducting tests in a secretive manner the appellant had obtained an improper advantage over the respondent. It used this period as a springboard in order to apply for and obtain a certificate shortly after the expiry of the patent."
27. The court accepted that
this argument was attractive but unanimously rejected it. The reasoning of the
court turned on the wording of two sections of the South African Patents Act
1978, s. 45(1) ('The effect of a patent') and section 65(3) ('Relief in respect
of infringement'). Section 45(1) read as follows:
" The effect of a patent shall be to grant to the patentee…..for the duration of the patent, the right to exclude other persons from making, using, exercising or disposing of the invention, so that he shall have and enjoy the whole profit and advantage accruing by reason of the invention."
" A plaintiff in proceedings for infringement shall be entitled to relief by way of an interdict, delivery up of anything involving infringement and damages."
29. The court held first
that the remedies provided by s 65(3) cannot be used to extend the 'right to
exclude' in section 45(1) beyond the life of the patent, this being the section
which creates the rights of a patentee. Stressing that an interdict is not a
remedy for past invasion of rights, it drew support from the single sentence
from Saccharin v Quincey upon which Hoover rely (and which I have considered
in para 23 above). It also disapproved of Crossley on the basis that
the passage relied upon by Dyson in this case was obiter (which, with respect,
it was not). Similarly, since delivery up was merely an adjunct to an interdict,
once the patent went so also did any right to delivery up. In the latter connection
a decision of Lloyd-Jacob J on delivery up, Leggatt v Hood& Hood
(1950) 67 RPC 134 at 143, was applied.
25 The corresponding provisions of the Patents Act 1977 (s. 60 and particularly, s.61(1)) which I shall consider below (see paragraphs 31 and 32), are crucially different in wording to those in the South African Act and for this reason, though the facts in Monsanto are very much in point, the citation is in my judgment not of persuasive utility in resolving matters presently under consideration.
26 Hoover's third citation, Union Carbide Corp v BP Chemicals Ltd [1998] FSR 1, was a decision of Jacob J. The issue before the court was whether amendment of a statement of claim in a patent infringement action should be allowed so as to include a new cause of action relating to unjust enrichment on the defendants' part. The plaintiffs' argument was again similar to that advanced by Dyson namely, that as a consequence of the defendants' in-house infringement of the two process patents in issue, they had generated useful data (and nothing else) and had established the feasibility of their own process. This process had thereafter been licenced abroad and the defendants were allegedly deriving profit as a result of its exploitation by their licencee. Essentially, the plaintiff wished to add a cause of action based on the law of restitution which was additional to that of infringement but based on the same facts. They also sought 'an inquiry into damages or at the plaintiffs' option an account of profit due to unjust enrichment'. Jacob J refused the application, saying (page 6):
" The Patents Act goes a long way to setting out the remedies available to a patentee….. I do not think Parliament began to contemplate the kind of wide-ranging cause of action which Mr Thorley suggests, nor do I find anywhere in Goff & Jones anything which supports anything as strong as that." [My emphasis].
30. Nevertheless, Jacob J
rejected the defendants' argument that the Act was a complete code so far as
remedy was concerned and in doing so, reviewed Crossley, SmithKline
& French v Generics BV and Monsanto v Stauffer Chemicalsnoting
that in these cases a remedy was sought which went 'beyond the actual infringement'.
He summarised the position thus (page 7):
" I think there may be cases where the strict rights set out in s. 61 of the Patents Act do not limit what the court can do in furtherance of the policy of the Patents Act. The Dutch case is an example of 'jumping the gun'. By infringement, the generation of the data enabled the defendants to be in a position to market the day the patent expired in a way which would not have happened if the patent monopoly had been observed. The court in granting the injunction, as the Dutch court did, for a limited period put the defendants back to where they would have been if the had applied for authorisation and set about generating data the day the patent expired. The court was furthering the policy of the Patents Act that there should be a monopoly of the set term."
31. The penultimate sentence
of that quotation actually expresses in other words, what is essentially Dyson's
argument in this case. Though the reference in the last sentence is no doubt
to the Dutch Patents Act, since the Netherlands is also a signatory to the European
Patent Convention which generated both the UK Act of 1977 and the corresponding
Dutch Act, the distinction is in my view, unimportant.
27 Basically then, this authority keeps cause of action and remedy distinct. Refusal to allow amendment was on the basis that there was no place for an unjust enrichment claim within a patent infringement action which was in addition, based upon the same facts; this was simply not contemplated by the Act. Nevertheless, with regard to possible remedy, the court maintained an open view, particularly (as appears from one or two observations of the learned judge) since there seems to have been a distinct lack of enthusiasm on the plaintiffs' part to argue the case in this way.
28 Jacob J held (page 7) that where the remedy (as in that case) concerned only the licensed use of 'essentially novel data generated by the defendants' as a result of carrying out their process rather than 'marketing data' for a particular product as was the fact in the Dutch SmithKline & French case, the court might never accede to that sort of relief.
29 Since the issue in relation to the Post-expiry injunctions is one of relief alone, Union Carbide can therefore be distinguished from the present case. And in so far as it endorses the approach of the Dutch courts to those who 'jump the gun' with marketing data for a product, it is I would have thought, palpably helpful to Dyson. Furthermore, the interaction of section 37 of The Supreme Court Act 1981 with section 61 of the Patents Act 1977 (see below), does not seem to have been argued.
The Patents Act 1977, ss 60 and 61
30 Mr Prescott next invited me to consider historical aspects of Hoover's relevant wrongdoing in this case. Relying on certain verbs used in section 60 of the Patents Act 1977, Mr Prescott's argument first focussed on Hoover's in-house acts at the development stage of their infringing HTV. Making prototypes and using and testing those prototypes are he argued, infringing acts. The submission of samples of the finished appliances to the regulatory authorities for testing and approval under UK and EU law was disposing of or using the patented product and therefore further infringing acts. The upshot of this section he said, was that a person wishing to exploit an invention relating to a product after the patent had expired must wait until expiry before undertaking any practical steps to this end - save perhaps on paper. Only then, is he free to do the sort of preliminary work with prototype products which Hoover undoubtedly undertook in the present case. These propositions were not challenged by Hoover and in my judgment are correct. It seems to me therefore that Dyson have correctly characterised these in-house activities of Hoover as discrete infringements which collectively culminated in the eventual offer for sale and sale of the infringing HTV – the latter having been the substantive infringing activities of which Dyson complained in the action.
31 Hoover's reaction to the Post-expiry injunctions was both predictable and understandable: In the first place, the court should presently be concerned only with relief pleaded and prayed for. Moreover, in a patent infringement action wherein the claimant has succeeded, s. 61 (1) of the Act enumerates by list particular remedies for infringement which does not include any of the relief now sought by Dyson. That should be the end of the matter; the list is a complete code. Furthermore, Hoover say that since a patent is a monopoly having effect only during a prescribed period, how can an injunction possibly be granted having effect after the expiration of the statutory monopoly period, so as to restrain use of an invention subject of expired claims? Mr Floyd submitted that recourse to old authority to support the contentions advanced on Dyson's behalf, was unhelpful. Hoovers' arguments closely resemble those adopted in the Monsanto and Union Carbide cases.
32 Under the rubric 'Proceedings for infringement of a patent', section 61(1) of the Act provides that
'…..civil proceedings may be brought… by the proprietor of the patent and (without prejudice to any other jurisdiction of the court) in those proceedings a claim may be made-…'
and there follows a list of possible relief (injunction, delivery up, damages etc). Pointing to the phrase in parenthesis, 'without prejudice to any other jurisdiction of the court', Mr Prescott noted that the list of remedies is not exhaustive since the section specifically (and for his purposes, critically) preserves 'any other jurisdiction of the court'. The source of that jurisdiction so he submits, is to be found in section 37 of the Supreme Court Act 1981.
33 Before leaving this point and looking back to the Monsantocase (para 25 above), the phrase in parenthesis does not occur in the corresponding section in the South African Act. I regard this as being a crucial difference between the corresponding sections of the United Kingdom and South African Patents Acts.
The Supreme Court Act 1981, section 37
34 The Supreme Court Act 1981, section 37, provides as follows:
(1) The High Court may by order (whether interlocutory or final) grant an injunction….in all cases in which it appears to the court to be just and convenient to do so.
(2) Any such order may be made unconditionally or on such terms and conditions as the court thinks fit.
32. I was informed that this
section has its origin in the Judicature Act 1873, section 25(8). I shall deal
with the question of discretion in Part IV of this judgment. For present purposes
however, I will consider the requirement of the circumstances being 'just and
convenient'.
35 In Fry on Specific Performance 6th ed (1921) p. 544, commenting on section 25(8) of the 1873 Act, it is stated:
"These provisions give the court a wide if not unlimited power of granting an injunction at any stage of any case where it would, according to sufficient legal reasons or on settled legal principles, be right or just to do so."
In Astro Exito SA v Southland Enterprise [1982] QB 1248, a letter of credit case, the Court of Appeal in a unanimous judgment, was concerned with the scope of the Supreme Court Act 1981, section 37(1). At pages 1267E-1268H, under the section 'Did the judge have jurisdiction to make the orders?', Ackner LJ considered a case entitled Smith v Peters (1875) L.R. 20 Eq 511 . In that case, Sir George Jessel MR said at pp 512-513:
"…..there is no limit to the practice of the court with regard to interlocutory applications so far as they are necessary and reasonable applications ancillary to the due performance of its functions, namely, the administration of justice at the hearing of the cause. I know of no other limit." [emphasis added]
"Here a positive order, which was not restorative of something that was wrongfully undone, was made."
34. Mr Prescott cited this
authority for the proposition that the court possessed wide-ranging powers to
grant injunctions where the circumstances were both 'just and convenient', alternatively,
'necessary and reasonable'. In aid of his submission, Mr Prescott has cited
a number of other authorities in diverse fields where the court has granted
injunctive relief under the powers it had under section 37. I need not review
these authorities as there is no dispute as to the principles involved.
36 As a result, I conclude that by virtue of section 37 (and probably in addition, to its inherent equitable jurisdiction), the court indeed has jurisdiction to make inter alia post-expiry injunctions of the kind sought - where it is just and convenient to do so; indeed, I can see no reason why it should not have such power and Mr Floyd has not advanced any argument or authority which would make me think otherwise.
37 Before considering whether Dyson's application for the Post-expiry injunctions is indeed both 'just and convenient' in the light of the facts, it will be necessary briefly to consider some law relating to the extent to which post-expiry damages may be recoverable by a successful claimant in a patent infringement action. This consideration founds an important link in Mr Prescott's argument, which is, that since springboard damages are difficult to assess, it is better to arrange matters that they do not arise in the first place. Hence the present application.
Post-expiry damages
38 In more detail, Mr Prescott prayed in aid recent developments in the law relating to the availability of so-called 'bridgehead' or 'springboard' damages in patent infringement actions. In brief, these show that the court may award damages on sales made after the expiry of a patent provided they are caused by infringements arising whilst the patent subsisted. Relying on the fact that damages in such cases are notoriously difficult to assess, he asked 'Is it not just that an injunction should lie to prevent such damage arising in the first place - or at least to minimise it?'
39 The principal authority on damages in patent infringement actions upon which Dyson rely is the recent decision of the Court of Appeal in Gerber Garment Technology v Lectra Systems Ltd [1995] RPC 383 at 396-404. This was a decision of Jacob J which in all respects which are material for present purposes, was upheld on appeal: [1997] RPC 443. In addition to conventional primary loss, Gerber inter alia argued that as a result of being able to build up a substantial business in the machines found to have infringed during the subsistence of the patent, the infringers were better able to compete during the post-expiry period and had thus caused secondary loss by establishing a 'bridgehead' or 'springboard' for post-expiry sales. The court agreed holding that Gerber could recover for the foreseeable damage which would not have been suffered but for the infringing sales. On this basis, it awarded inter alia, 'accelerated entry' or 'springboard' damages which were substantial – some $250,000. On appeal, at [1997] RPC 452, Staughton LJ upheld Jacob J's decision on this point. He held that the basic principles of recovery of damages which apply to torts, applied without modification to the infringement of patents. These were that
(2) that the victim can recover loss which is (i) foreseeable (ii) caused by the wrong and (iii) not excluded by public or social policy.
35. In relation to the heads
of damage then under consideration, these conditions had been met.
40 In the light of Gerber, the court evidently has power in certain circumstances to award compensation in relation to post-expiry sales; Hoover did not suggest to the contrary. Indeed, Dyson seek to justify their post-expiry injunctions in this case on a basis which is virtually identical to that advanced by the successful claimant in Gerber in order to justify its claim to post-expiry damages.
41 There is however this further important element in Mr Prescott's argument on Gerber: secondary damages of the sort under consideration that case are exceedingly difficult to quantify with a reasonable degree of accuracy. Thus at p.396, Jacob J said:
"Quantification of damage in a case such as the present (of a patentee manufacturer) is a much harder and less certain task than I had hitherto thought. Although I have had to reach an answer I do not pretend it is an accurate measure of the damage. It is just the best assessment I can make."
36. Referring to 'bridgehead'
sales, the learned judge said at p.418:
"I find it quite impossible to be precise about this head of damage."
42 In this connection, Mr Prescott also drew support from the opinion of Jacobs A.-G in SmithKline & French Laboratories v Generics BV [1997] RPC 801 at 821, para 62:
" First, on the suggestion that damages might have been awarded rather than an injunction, I would observe that that it might be very difficult to calculate a fair level of damages."
43 Mr Floyd did not suggest that in this case, there were any special factors which I should take into account which would have the effect of diminishing the force of these observations. I therefore accept as a general proposition, that if the springboard damages of the kind in issue in this case were held to be justified on an inquiry or account, they would be difficult to assess with accuracy.
Are the Post-expiry injunctions 'just' or 'reasonable' ?
44 In relation to the question of whether the Post-expiry injunctions are 'just', or 'reasonable', Dyson submitted that the court should approach the question as a matter of common sense, in particular inquiring whether the relief sought was 'in accordance with equity' and not a 'disproportionate form of reparation'. In this connection, Mr Prescott cited the judgment of the European Court of Justice in the SmithKline & French v Generics BV case, supra. This case was on reference from the Dutch Supreme Court which (like the other Dutch courts a quo) had decided that an injunction should be granted for a certain time to restrain the use of any information which had been obtained in infringement of the plaintiffs' patent. The issue before the European Court of Justice was whether such injunctions were contrary to Articles 30-36 of the Treaty of Rome. I have already made reference to this case in relation to a number of propositions. This reference was a chapter in the litigation which was conducted by the patentees of the anti-ulcer drug, cimetidine. In the Netherlands, Generics BV had 'jumped the gun' in applying for a product licence for this drug from the Dutch authorities some 14 months before the Dutch patent had expired. In this connection, they had submitted data together with samples of cimetidine (which was covered by relevant product claims) with the intention of being ready to market cimetidine when the patent expired. In a patent infringement action, all the Dutch courts granted SmithKline & French an injunction which had the effect of handicapping Generics for 14 months after the expiry of the patent in issue, from selling the drug – the 14 month period corresponding of course to the time Generics had taken to achieve clearance.
45 The European Court of Justice could see no vice under Community law to the injunctions made by the Dutch courts. Jacobs A-G having proposed what I have quoted in para 42 above, continued:
" Moreover, an account of profits might not suffice because Generics would have benefited from an additional 14 months of presence upon the market in order to build up its reputation, thus increasing the degree of competition for the future. If that were so it might make the type of injunction ordered in the present case the only fair remedy, and it is not unreasonable for the national court to wish to grant a remedy to SK & F…[My emphasis].
And at para 67, he submitted:
" It must follow that the length of an injunction which is calculated so as to place the patentee in the position he would have been had that right been respected is equally justified. Moreover, the injunction puts Generics as well as SK & F, in approximately the situation in which it would have been if it had not infringed the patent. The result is therefore in accordance with equity." [My emphasis].
37. The court accepted the
opinion of Jacobs A-G. It held that a prohibition on the sale of products after
expiry of the patent was not contrary to the principle of proportionality. It
held (paragraphs 27-28) that:
" [I]f Generics had respected SK & F's patent right, it could not have submitted the cimetidine samples until after the patent had expired. SK & F would thus have been able to continue to market its product without competition from the generic product ….throughout the period to obtain the marketing authorisation.
The moratorium imposed by the court on the infringer….in so far as it seeks to place the proprietor of the patent in the position in it would, in principle, have been have been had its rights been respected, cannot in itself be held to be a disproportionate from of reparation."
38. However, whether or not
such a moratorium should be imposed is of course, a matter for the national
courts alone.
46 I accept that the approach to the question of what is 'just' or 'reasonable' which Dyson have proposed, though it may not be the only approach, is both sensible and in this case, workable. In the circumstances, in my judgment, both the Post-expiry injunctions are on their face, 'reasonable' in the sense considered by the European Court of Justice and thus in that regard, fulfil the requirements of English law. The live issue however is whether these injunctions are 'convenient' or 'necessary'.
The Post-expiry injunctions: Conclusions
47 It will be recalled that Hoover have given no undertaking that they will not sell etc a vacuum cleaner after the date of expiry of the Patent which falls with its claims. Uncertain though it may be, as Mr Floyd said in argument, "One never knows".
48 I shall consider the second of the Post-expiry injunctions first. In my judgment, this injunction is neither convenient nor necessary. No evidence is before the court that any new appliance is under design or construction – or even in contemplation, within the jurisdiction. I therefore see no reason why the power of the court requires to be invoked to assist Dyson against an unsubstantiated possibility. It is not necessary. Neither in my view would it be convenient. The second injunction contains the phrase
'any other vacuum cleaner made in accordance with the invention claimed in the [Patent]'.
39. If there were to be a
breach of this injunction, contempt litigation might well arise which could
saddle the court and the litigants with a fresh infringement inquiry, possibly
comparable in complexity to that undertaken at trial. Though contempt proceedings
must remain a possibility whilst any injunction is running, this procedure is
an undesirable and inconvenient way of resolving patent infringement disputes.
Indeed, it has in the past actually been so described: see per Romer, LJ in
Multiform Displays v Whitmarley Displays [1956] RPC 143 at 158
('highly inconvenient') and later per Viscount Simonds [1957] RPC 260 at 262
('inconvenient'). To prolong the period of potential contempt for a year beyond
the date of expiry of the Patent in respect of a product presently unknown,
would in my judgment certainly not be convenient.
49 The possible resurrection of the infringing HTV which is subject of the first Post-expiry injunction, is another matter and here, the following facts and matters appear to me to be relevant. Subject to some short 'hiatus' whilst moulds for the SU2 and SU3 separation units were 're-amended' (see paragraph 15(c)), Hoover, if they are minded to do so, will be ready to re-launch this very product soon after the date of expiry of the Patent. In practical terms, I also have in mind the findings in the Judgment as to the technical benefit of making use of a secondary frusto-conical separating unit and I do not recall this benefit being questioned at trial. This, coupled with Hoovers' failure to give an appropriate undertaking, makes me think that a re-launch of the infringing HTV is no mere speculation. Furthermore, on the question of timing, Hoover does not dispute that it took them a period of approximately 12 months to do all that was necessary to achieve launch of the infringing HTV (including incidentally, obtaining clearances from two certifying authorities based on its prototypes). This activity did not consist of a mere collection of paper 'process data'. Dyson have argued correctly in my view that Hoovers' construction within the jurisdiction of prototypes of the infringing HTV (which is not suggested to be speculation), was indeed an infringing act which was a necessary step to for example, the product clearances. On the contrary, the development of the infringing HTV was work destined with careful deliberation to achieve a market break-in some 18 months before the Patent expired; and the infringing HTV indeed achieved significant sales whilst it was on the market. The fact that it was found to infringe the Patent was a risk which Hoover took when they 'jumped the gun'.
50 In my judgment, Hoovers' in-house development of the infringing HTV up to the marketing stage and prior to the expiry of the Patent involved infringing activity and to have been legitimate, should have awaited the expiry of the Patent. Hoover have undoubtedly achieved an advantage in time over competitors through this wrongful activity and moreover will be able thereby to secure an accelerated re-entry for a product which is owes its existence entirely to their pre-expiry infringing activities. The situation is thus factually not unlike that in which Generics found themselves in respect of the 14 month advantage which they achieved for their cimetidine in the SmithKline & French case. In Union Carbide supra, it will be recalled that Jacob J said that the Dutch courts in their approach to 'jumping the gun', were following the policy of the Dutch Patents Act 'that there should be a monopoly of the set term'. In my judgment, the same is true of Hoovers' conduct in relation to the policy of the Patents Act 1977. A propos the SmithKline & French case, Mr Floyd did not as such characterise the approach of the Dutch courts on those facts as being contrary to English law but rather used the ratio and conclusion of that case to highlight and contrast Hoovers' bolder attempt to secure the Trade Mark injunction. With regard to what Generics had done, Mt Floyd said (Transcript, page 126);
" There is then a direct cause or nexus between your presence on the market and the fact that you had infringed."
40. By analogy with the Gerber
case, were Hoover to re-enter the market with their infringing HTV immediately
after expiry of the Patent, Dyson would be likely in my judgment to be in a
position to recover secondary damages by reason of the antecedent infringement.
51 Mr Prescott submitted that both the Post-expiry injunctions were necessary because such damages in the common law measure were not an adequate remedy. If necessity alone was the relevant criterion, I would be much on the balance as to whether to grant the first of the Post-enquiry injunctions. After all, in spite of the court's jeremiads in the Gerber case, Jacob J was in the end able to ascribe a monetary figure of $ 250,800 in respect of springboard damages there in issue. It is when one comes to consider convenience that I am persuaded that the injunction is appropriate. It is the fact that the first of these injunctions is directed to an appliance which has already been the subject of adjudication, which in my judgment makes a difference. Handicapping Hoover in this way for the 12 month period puts Dyson 'in the position it would, in principle, have been had its rights been respected'. Subject to the exercise of the discretion and in particular, the form of the injunction, I would be prepared make an order in the terms of the first sub-paragraph of the Post-expiry injunctions, but not the second .
Part IV
The Trade Mark injunction
52 The facts referred to in Part III of this judgment and a good deal of the law which I have reviewed in relation to the Post-expiry injunctions, apply with equal force to the question of the propriety of granting the Trade Mark injunctions. I shall not repeat it. But there are certain important aspects wherein the cases differ.
53 This is the only injunction which interferes with what Hoover are doing at present. Since about July 2000 it will be recalled (supra, para 14(d)), Hoover have been selling their VORTEX POWER vacuum cleaner which Mr Bertali said, has been promoted as a 'totally new product'. Moreover, it is a non-infringing machine. If the Trade Mark injunction is made, this will obviously have drastic practical consequences for Hoover including so Mr Floyd suggested, that of being forced to abandon the use of their own registered trade mark VORTEX altogether. Whether or not the latter is true, it is obvious that the consequence of granting this relief is going to be hugely inconvenient to Hoover. In the circumstances therefore the court will be concerned to see first that the relief sought is proportionate to the seriousness of the damage which on the evidence, is apprehended. If it is not, it would obviously be unjust (having regard to the approach of the European Court of Justice to the question: see para 46 supra) to order such relief.
54 Before considering the arguments, there is a general issue which arises on the face of this injunction. The Trade Mark injunction is in the broad form for which one might expect a successful plaintiff in a trade mark infringement action to be asking in the order after trial. I have in mind the phrase 'colourably similar to' which occurs twice and also to the concluding phrase:
'…except it shall not be a breach of this part of this order to use the same mark or logo in a context where there is no likelihood of deception.'
41. Such phrases often give
rise to uncertainty in practice and normally take meaning from the events which
have occurred at trial. Here there is no context apart from the short affidavit
evidence, which serves to shed light on their scope. Though this perhaps is
a matter which is primarily relevant to considerations of discretion (see below),
it nonetheless must come into the statutory question of convenience. It is an
obvious and primary requirement of any injunctive relief that those affected
should know with sufficient precision just what they can and cannot do: see
for example, Coflexip SA v Stolt Comex (C.A., unrep, transcript, para
60)relied on by Hoover and Lawrence David v Ashton [1989] FSR 87 at 95,
a breach of confidence case, which was not cited.
55 Consider in connection with the exception in the last phrase, the question of the outward appearance of a future Hoover vacuum cleaner. The question could arise: how far away in outward appearance does it have to be in order to escape the bite of the injunction? Mr Floyd reminded me how notoriously difficult are cases in the field of passing off wherein judgments have to be made about likelihood of deception when it is the external appearance of products which are in question and he referred to the well known passing off case, Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1995] FSR 169. I accept Mr Floyd's submission on this point. In the circumstances of this application, I am of the view at the outset, that the injunction is framed in a way which makes it most inconvenient to grant the relief sought under this head.
56 Dyson's case for relief under this head is epitomised in paras 42 to 46 of Mr Bowen's affidavit. He says (para 45):
" Hoover have only ever used the terms VORTEX and TRIPLE VORTEX machine to refer to infringing vacuum cleaners…In consequence, the term VORTEX and TRIPLE VORTEX is understood by the public to refer to Hoover's infringing vacuum cleaners."
57 As this is an application for final relief wherein an injunction is suggested to be a more appropriate remedy than damages, Dyson has first to establish whether on the facts, it would be in a position to obtain springboard damages under this head at all. Unfortunately, this was not gone into in depth at the recent hearing but having myself given the matter some consideration, I have serious doubts whether the sort of damage suggested can properly be said to flow as a foreseeable consequence of the tort of patent infringement, this of course being a condition for the award of secondary damages: see per Staughton LJ in Gerber, supra at page 452. No doubt that sales of the infringing HTV provided the occasion for the alleged loss, but this is not enough. The notorious 'but for' test is not alone a sufficient condition for damage to be recoverable. Mr Floyd has submitted that here there is not sufficient nexus here between the act of patent infringement and ongoing competitive benefit to Hoover arising from use of its VORTEX trade mark, which is the cause of the alleged damage. It is not in other words, a foreseeable consequence of the infringement. The mark VORTEX may have generated a certain amount of goodwill during the period of infringement but it did so by the message it conveyed about a particular new Hoover product regardless of the details of how it was made. The goodwill generated and thus the allegedly wrongful competition which ensued, owed little or nothing to the construction of the parts of the interior of the infringing VTR which were in issue at trial. This I would add, accords with the unchallenged evidence of Mr Bertali in para 30 of his affidavit, about when and why customers buy vacuum cleaners.
58 I am also concerned that the affidavit evidence which Dyson has filed does not go nearly far enough to support the breadth of their proposed Trade Mark injunction. Evidence of the sort one would expect to find in a trade mark infringement or passing off action is laconic or lacking. For example, the nature, quantity and quality of the goodwill which Hoover may have built up during the relevant 18 months, remains unexplained. I suspect, but the evidence on the matter is not clear, that to a member of the public, the marks HOOVER TRIPLE VORTEX may simply mean, a new vacuum cleaner made by the well-known Hoover company working on some unspecified triple cyclonic principle. Again, there is no evidence as to whether upon launch of the HOOVER VORTEX POWER , a misrepresentation would be likely to have arisen (or did arise), particularly in view of the fact that it was intentionally launched as an entirely new product. The sales power of word of mouth recommendation in this field, a factor which Mr Prescott relied upon, is another area where there is simply no evidence.
59 A factor stressed by Mr Floyd which he said, would make it unjust in any event to grant the Trade Mark injunction, is that it is what he described as a 'blunt instrument'. Basing himself on Mr Bertali's unchallenged evidence that people buy new vacuum cleaners about every 8-10 years, numerous customers would be likely to purchase the VORTEX POWER who would never have even heard of the HOOVER TRIPLE VORTEX prior to its removal from the market. Sales of the VORTEX POWER to such persons were sales of which Dyson could have no possible objection, even on present showing. Yet the language of the Trade Mark injunction would catch such non –infringing and innocent sales. This said Mr Floyd, would be unjust. In my view, in addition to being unjust, on this basis the Trade Mark injunction would be open to objection as being a disproportionate remedy on this ground alone.
60 I have come to the clear conclusion that for all these reasons it would neither be just nor convenient and certainly not necessary, to grant Dyson the relief they seek in the Trade Mark injunction.
Part V
Discretion and Conclusion
61 The grant of injunctive relief involves the exercise of the court's discretion. A number of the factors which arise under this head such as the requirement for clarity of language, have already been sufficiently canvassed in this judgment.
62 I am prepared to grant only the first of the Post-expiry injunctions sought, the form of which was not criticised by Mr Floyd. However, in Coflexip, supra, an authority cited by Hoover, Laddie J granted the successful claimant in a patent infringement action an injunction and incorporated into it the defendant's product and process description, the latter being a narrative comprising three pages of typescript and four pages of diagrams. On appeal, Aldous LJ held that this form of injunction was incorrect in ambit and in addition, was unclear. For that reason, he ordered that the injunction should be discharged and more appropriate wording substituted: see paras 62-67 of the transcript. At para 66 he said:
" The usual form of injunction which protects the right established by the patentee, with its ambit construed by the court, does in general provide a fair solution. However each case must be determined on its own facts and the discretion exercised accordingly."
63 The first Post-expiry injunction as proposed incorporates into it 25 paragraphs from the Judgment. In my view, in the light of Coflexip, this is not a satisfactory form of wording having regard to the limited scope of relief which I had in mind in this respect. I therefore believe that the words 'referred to in the judgment herein at paragraphs 5 and 81-105', are inappropriate and should be removed and reference made in their place to an actual example of the infringing HTV, as I inspected (and used) it at trial. The sample could be retained for the 12 month period proposed in the offices of one of the parties' solicitors. I shall hear counsel on the form of wording which best reflects this requirement.
Michael Fysh, QC
10 January
2001
© 2001 Crown Copyright