England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Strand, London, WC2A 2LL
		14 November 2002

Mr Justice Jacob:

1. This appeal is from Mr Dennehey, the Comptroller’s Hearing Officer. Section. 72(1) of the Patents Act 1977 says:

"Subject to the following provisions of this Act, the Court or the Comptroller may on the application of any person by order revoke a patent for an invention …"

2. Oystertec own a patent for an invention, number 2314392. A firm of patent agents, Edward Evans Barker ("EEB") applied to the Comptroller to revoke it. This, Oystertec say, they are not entitled to do. The case turns on the true construction of s. 72. It is based on the fact that, as seems self evident, that EEB are not acting in their own interest but are acting for some undisclosed principal. At the heart of Oystertec’s contention is the proposition that when the Act speaks of "any person" it means the person who is actually applying for revocation, not some agent. What matters, they say, is substance, not the form.
3. Formally EEB do not admit that they are acting for a principal. They say whether they are or not is irrelevant. They are exercising the right of anyone to seek revocation. Notwithstanding the non-admission the fair inference from the known facts is that EEB are acting as agents for an undisclosed principal. Patent agents would not in the ordinary course of their profession themselves seek revocation of a patent. They act for clients. I intend to work on the basis that they are so doing.
4. Although there were some points about what is or should be on the application form 2/77 I do not think the case turns on that. In the end Counsel were agreed that is so. The question is one that turns on the true construction of the statute. Mr Miller QC for Oystertec contends that the statute, particularly when construed in the light of the Human Rights Act, requires that only the "true" applicant for revocation can apply. His agent cannot. The rival argument advanced by Mr Burkill QC is that the Act means exactly what it says: any person can apply for revocation; his motive, including whether he is acting for somebody else is entirely irrelevant. The Act requires no locus standi. That is the policy of Parliament. A patent is a monopoly, Parliament has provided that any member of the public can challenge a purported public monopoly. They may do so because they have a commercial interest in doing so, they may do so because they do not believe this monopoly is a good thing, they may even do so in order to annoy or harass the patentee. Unless the proceedings are conducted in such a way as to be an abuse of process they can proceed. Whether or not there is an abuse of process depends upon what is being advanced in the proceedings, not upon the motive behind them. I think Mr Burkill is right, notwithstanding the immense skill and charm with which Mr Miller advanced his arguments. It is to these I must now turn.
5. Mr Miller first submits that the applicant for revocation in this case is not really EEB but the unnamed principal. The short answer to that is simply that it is indeed EEB who are the applicants. Whenever any agent acts for an undisclosed principal he is, to the outside world, the principal. The outside world treats him as a principal and is entitled to treat him as a principal. Whether he has a private arrangement with someone else is no business of the outside world as far as its dealings with him are concerned. Of course it may be that in some circumstances the fact of the agency may give third parties rights against the undisclosed principal too. Here, for instance, it might well be said that the undisclosed principal is a maintainer of the proceedings. As such, if it came to the point, the maintainer might be liable for costs and for that purpose his name could be revealed under compulsion. But that is not to say that the proceedings themselves are improperly constituted. The undisclosed principal is a maintainer of the proceedings properly brought by EEB. It is those proceedings which he is maintaining.
6. Next, Mr Miller submits that s.72 requires that the applicant for the revocation be acting "qua" applicant and not in a nominal capacity. What does he mean by "qua" applicant? He means really, and can only mean really, someone who has no interest in revocation. But the Act does not require any interest in revocation.
7. In this connection there is a strong and marked contrast with the position under the prior Patents Act of 1949. Under ss.14 and 32 of that Act an applicant for revocation had to be a "person interested". You had to demonstrate a "locus". There is an evident and sharp change in the present Act. I enquired whether this matter had been considered. Counsel provided a copy of the relevant section of the committee which examined patent law some time before the 1977 Patent Act, the so-called "Banks Committee" report of July 1970, Cmnd. 4407. Paragraph 380 reads as follows:

"Sections 32 and 33 provide that a patent may be revoked at the instigation of any person interested. "Person interested" has been interpreted as meaning that the applicant for revocation must have a real, definite and substantial interest. It has been held to include a person manufacturing or trading in the same field as that to which the patent relates but to exclude a person who intends to manufacture or trade within that field and a mere user of the goods concerned. It has been suggested to us that this is unduly restrictive and that it would be a better principle, and in the public interest, to allow anyone to apply for revocation of a patent. It is argued that abolition of the requirement of locus would not result in any serious possibility of vexatious litigation, that there is a number of cases in which the issue of locus standi is raised as a preliminary point, and that these give rise to preliminary decisions which are subject to appeal and which can be time consuming. As a result, decisions on the substantive issues can be much delayed. We have some sympathy with this view but consider that to abolish the requirement of locus would result in a real danger of oppressive proceedings being brought by nominees of opponents who would wish to remain anonymous or, particularly before the Comptroller, by persons who merely wish to involve the patentee in trouble and expense. We do not think this would be in the public interest. We agree, however, that the present locus requirements are unnecessarily restrictive and we accordingly recommend that:

A person who establishes that he intends to manufacture or trade within the same field as the patent, and a user of the goods concerned should be regarded as having Locus Standi."

8. What is significant here is that, notwithstanding that express recommendation, Parliament decided to do away with locus standi altogether. Although Banks thought there might be persons who would litigate vexatiously to involve the patentee in trouble and expense, Parliament considers that such persons, provided of course they had reasonable cases, should be entitled to apply to remove invalid monopolies. They do so at their own risk as to costs just as any other applicant for revocation incurs such a risk.
9. Next, Mr Miller relies upon the Human Rights Act 1998. He submits firstly that legislation must, so far as possible, be read and given effect in a way which is compatible with conventional rights. This of course is the law, see sections 1(1) and 3(1) of the Act. He then goes to Article 6 of the Convention:

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing …."

10. Mr Miller submits that a hearing cannot be fair or public if one of the parties is merely a nominee for an unknown stranger. He says there is a lack of transparency in the proceedings and a potential for unfairness. Moreover, there is no proper public hearing because one of the protagonists is hiding his identity from the public. What could be more "unpublic" than a joust in which one of the knights gets someone else to do his jousting for him?
11. First then, fairness. Mr Miller submits that anonymity of the true applicant, as he would put it, may result in a number of procedural unfairnesses. The "true" applicant may have relevant disclosure which could be given, an expert may be called who has a connection with the true applicant which is not revealed – indeed he might even be the true applicant. Mr Miller gave an instance where knowledge of the identity of the "true" applicant for revocation would be vital. Suppose the patentee sued A for infringement successfully, the patent being held valid and infringed? Suppose A as an undisclosed principal then got B to continue the acts of infringement? Unless the patentee could know that B was really acting for A, no case of estoppel could ever be pleaded. Mr Miller submitted that the "true" applicant must have something to hide – why else use a "puppet"?
12. I am not impressed by these "unfairnesses". Disclosure in patent actions is nearly always of secondary importance. In any event it is a fairly adventitious process. The patentee may or may not have relevant disclosure. Whether he does or not may depend simply on whether he has bought the patent from the original inventors – as incidentally happened in this case where Oystertec are, I think, the third or fourth assignees of the patent. Similarly in relation to validity, although under current practice disclosure is ordered from the applicant for revocation, whether he has relevant documents can be entirely adventitious. It depends on whether he was in the relevant technical field at the time of making the invention. And in any event it is fairly odd to obtain disclosure which may help on the assistance of obviousness from just the parties. In theory if one is to order truly proper disclosure, I suppose one should order disclosure from everybody in that technical field throughout the world. Only then could you have a truly objective assessment of what everybody in the field was doing.
13. As to the expert point, it can be overcome in other ways. I have very considerable reservations about the inadmissibility of the evidence of an expert who has some connection with the litigating party, and therefore doubt the decision in Liverpool Roman Catholic Archdiocese Trustees v Goldberg [2001] 4 All ER 950 – see the decision of Stanley Burnton J in Admiralty Management Services v Para-Protect, 4^th March 2002. But a connection between expert and party may go to the weight of that expert’s evidence. However, that could be cleared up in other ways, in particular by a simple direct question as to whether the expert has any such connection. Mr Miller submitted that the expert may not even know himself. Well, if that were so, then any potentiality for bias in his evidence because of that connection would not exist.
14. Mr Miller further submitted that in relation to this and his other procedural unfairness points, that the real problem was that you could never know of such a connection unless you could properly investigate the matter for yourself. But that you could not do unless you could go past a nominee to find the name of the true applicant. As Mr Miller put it his clients are in a "Catch 22" situation. They do not have the name of the principal, and so cannot investigate procedural unfairness. To say something may turn up later is simply no use: it will not because they do not have the name.
15. The fundamental answer to Mr Miller’s "procedural unfairness points" however, is that there is no sufficient connection between them and the entitlement of "any person" to bring proceedings for revocation. Parliament has purposively made a patent vulnerable to attack from anyone. In this connection I do not wholly subscribe to the Hearing Officer’s view that the objections as to procedural unfairness were premature. It seems to me that the matter must be faced square and square, head on at this stage. For the reasons I have given I do not think the so called procedural unfairness is relevant.
16. Likewise, I reject the submission based upon public hearing. Given that anyone is entitled to challenge a patent then anyone can wear his own armour and mount the challenge. The fact that he is doing so for somebody else, an unknown fair lady, is neither here nor there. What the public sees is the joust between the two actual combatants.
17. Mr Miller took me to some well known cases in the European Court of Human Rights. He relied upon a passage in Dombo Beheer v Netherlands [1993] A274 at paragraph 33:

"Equality of arms implies that each party must be afforded a reasonable opportunity to present his case – including his evidence – under conditions that do not place him under substantial disadvantage vis a vis his opponent".

18. He submitted there was a substantial disadvantage here. But why? Every patent may be attacked by anybody. The patentee must take the attacker as he finds him. The facts of the Dombo Beheer case are, of course, miles from the present. They were concerned with a rule of law that a party could not give evidence in his own interest, a rule which in this country was abolished shortly after the case of Bardell v Pickwick. Mr Miller also relied upon Borgers v Belgium. The Advocate General had retired with the Judge and the applicant was not entitled to reply to the Advocate General’s submissions. The Court referred to the "the wider concept of a fair trial" and added:

"This has undergone a considerable evolution in the court case law, notably in respect of the importance attached to appearances and to the increased sensitivity of the public to the fair administration of justice."

19. From this Mr Miller derived the word "transparency". He said that the appearance of the revocation proceedings was wrong because one of the parties was not really there. The short answer to this is that the revoking party actually is there. The fact that he is acting for someone else does not mean that he is not exercising his own independent right to seek revocation.
20. Mr Miller also faced the formidable difficulty that there is significant case law against him. The principal cases are Indupak [2000] EPOR 81 and Cairnstores [2002] FSR 35. Indupak was a decision of the Enlarged Board of the EPO. Under Article 99(1) of the EPC "any person may give notice to the EPO of opposition to the European patent granted". The Board considered whether or not what they call "a straw man" could oppose. The key questions which were asked of the Board are as follows:

"1. Is an opposition filed by an indirect representative ("straw man") admissible?

2. If the answer to 1. is no, to what extent does the objection to a "straw man" have to be investigated if circumstances are cited raising reasonable doubt that the opponents are not acting in their own interests?"

21. Before I turn to what was decided, I should mention a little background. The European Patent Convention provides for a central examination and grant system for patents for countries designated by the applicant. Once the "patent" is granted what actually happens is that a bunch of national patents come into existence as if they had been granted by the national patent offices of the designated countries. Unfortunately, the European Patent Convention contains no proper system for the central amendment of a patent after grant. Each country has its own system of laws about amendment or, in some cases, no possibility of amendment. After grant patentees sometimes learn of defects in their patent and wish to amend to overcome those defects. A practice grew up at one point of "self opposition". The patentee would oppose his own patent under the procedure for "opposition". In that procedure central amendment still remains possible after grant – the procedure being notionally pre-grant, which is why it is called "opposition". So the patentee would get his amendment in that opposition proceeding. In due course it was held that "self opposition" could not be maintained. However, if a patentee could use a "straw man" as his puppet then he could still achieve the same result. Indupak was concerned with whether or not there could be a straw man applicant. In the past the EPO had considered that there were difficulties with this but Indupak has clearly held that, so far as the EPO is concerned, straw men can oppose.
22. Mr Miller sought to distinguish Indupak on a number of grounds. Firstly, he pointed to passages which indicate that the decision was based upon procedural grounds. The Board pointed out that the EPO has no machinery by which it can investigate whether a man is straw or not. They said (para 3.2.3):

"In this respect, investigating a straw man challenge would mean that more matters in dispute would have to be considered, which could delay the proceedings, setting limits, not provided for by the EPC on the admissibility of opposition would conflict with the public interest in each opposition being examined on its merits in having the proceedings brought to a swift conclusion".

23. The Board also considered allegations of unfairness. For instance they dealt with the question of expert evidence the following way:

"However, in the case of persons giving evidence to have some form of relationship with the principal, their position with regard to the pending proceedings would not be apparent. But this cannot be seen as significantly impeding the process of finding the truth. The EPC does not in any way guarantee that the person with the strongest interest in the revocation of the patent will act as the opponent. Even supposing that the opposition were inadmissible if the opponent had no interest of his own, the patent proprietor’s strongest competitor could hide behind an insignificant competitor as the opponent and provide him with material. The key criterion for the credibility of a person giving evidence in the present connection is that that person’s interest in the outcome of the opposition proceedings, which is not necessarily documented in a relationship to the opponent."

24. What they are saying here is there is no clear nexus between the possibility of bias in an expert and the identity of an opponent.
25. That is of course true. An applicant for revocation may have a variety of reasons for seeking revocation. He may be a representative of a number of parties who have clubbed together to attack the patent. He may have his own interest in revocation, he may indeed be a company formed specifically for the purpose of applying the revocation, as appears to be the case in the English case to which I will come shortly, Cairnstores. None of this matters.
26. Mr Miller also suggested that the Board did not purport to decide matters as far as national courts are concerned. It was argued that a decision of the EPO would be res judicata in a national court. (That is obviously not so given the structure of the EPC which makes the national courts ultimate judges of validity). Mr Miller suggested that the Board specifically contemplated that, so far as national courts were concerned, the true identity of the attacker could be exposed, taking me to the sentence:

"By contrast, the national courts can use all the customary and proper instruments of civil procedure to clarify facts."

27. I agree that here the Board do contemplate that in some circumstances a national court may cause the true attacker to be identified. But that is only if that is necessary. As I have indicated for example, it might be one wanted to know the name of a maintainer for costs purposes. What Mr Miller cannot get round is that most of his allegations of unfairness were as true in the Indupak case as they would be true in a national court. Although a decision of the Enlarged Board is non-binding on me, it would be with very great reluctance that I would not follow it. I would not do so here.
28. In the present case, however, Mr Miller faces the fact that Indupak has already been followed by a judge of this Division, Pumfrey J in Cairnstores. An "off the shelf" company, having no assets, trade or relevant objects applied for revocation of two patents. The patentees applied to strike out the application on the basis of abuse of process. They alternatively sought an order for disclosure of the name of any person on behalf of whom the company was acting. Pumfrey J said this:

"Having read Indupak and looked at the 1949 Act provisions which required a "person interested" in my judgment the words "any person" in s.72 of the Patents Act 1977 mean what they say: a person seeking to revoke a patent need not show an interest."

29. Mr Miller says that his point went by default in Cairnstores. Firstly, although the Human Rights Act came into force, no argument based upon it was advanced to Pumfrey J. Still worse, it was conceded that the "straw man" had a statutory entitlement to bring proceedings. The argument advanced in this case simply was not advanced. But Pumfrey J said this:

"In the present case, as I have indicated, the patentees accept, in my judgment quite correctly, that the applicants for revocation are entitled to bring proceedings".

30. There can be no doubt that I am being asked to differ from a Chancery Judge who has considered the point. That I am entitled to do but again only if I am completely persuaded that the Judge was wrong. I am not. Pumfrey J actually considered many of the arguments which have been advanced here, for example, the question of disclosure and res judicata. I would have to hold that all his reasons for rejecting those points on the grounds of abuse of process are now relevant in the different context of the right to a fair and public hearing. To my mind they are just different aspects of the same general requirement of fairness. So far as equality of arms is concerned, as it happens Pumfrey J considered it directly through an argument based upon the rules which require that the parties are on an equal footing.
31. In the end, therefore, the cases are all against Mr Miller. The Act means what it says. A consequence of that is that the motives of a person for seeking revocation of a patent are irrelevant. That being so, the fact that they are doing it at the instigation of another itself becomes irrelevant. I therefore dismiss the appeal.