England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		Date: 05/03/2008

MR. JUSTICE LEWISON :

1. On 8th February 2008, Floyd J made an order by consent. The Order which he made related to directions to be followed in an action between W.L. Gore & Associates GmbH and Geox SPA. The action is a patent action. The field of technology is the design and manufacture of soles for footwear of a type known as "brown shoes".
2. There are four patents in suit in the action, each of which Gore wishes to revoke. Gore also claims declarations of non-infringement as regards two different forms of footwear sole which it has designed and proposes to license to others to manufacture.
3. The Order made by Floyd J contained a timetable for the making of standard disclosure, inspection, the exchange of expert evidence and so on and culminated with paragraph 12 of the Order which said that the trial should be before an assigned judge alone in London, estimated length five to six days to be fixed for not before the first mutually convenient date in or after November 2008 with a pre-reading estimate for the judge of one day. It was agreed that the complexity of the technical issues would be level 2 to 3 and paragraph 14 of the Order contained liberty to apply on two days' notice to apply for further directions and generally.
4. As I have said, the action concerns four patents for methods of manufacturing soles for footwear. In fact, Gore does not itself manufacture but licenses others to manufacture in accordance with its technology.
5. The general background to the industry is described by Mr. William Fletcher in his first witness statement of 26th February 2008. He explains the various stages that need to be undertaken before a new product is ready to go to market and he explains that the target date for Gore's new products about which this action is in reality concerned has a target launch date of February 2009 so that the products are available for sale to the consumer at the start of the Spring/Summer season of 2009.
6. In paragraph 15 of his witness statement he says this:

"For a Spring-Summer season launch of a new shoe, the commercial scale production of the final product for the retailers would typically take place in or around the December of the preceding year at the latest (i.e. November/December 2008 in this case). This in turn requires all tooling (moulds, cutting dies, etc) and material selection and sourcing required to make the shoe to have actually been made well in advance. As explained above, demonstration samples (of a standard size) are produced first before the production of the other required sizes are rolled out. The tooling and material required for the sample shoe would need to be ready in around July of the preceding year (June/July 2008) with a view to taking orders from the retailers in the period from July to September 2008 -- in that regard, one of the biggest trade exhibitions takes place in September each year in Germany. If companies do not have at least their sample products ready also for that exhibition, they are at great risk of missing the boat for the following Spring-Summer season. Having taken the orders, the tooling for the other required sizes would be made in around September/October of the preceding year (i.e. September/October 2008) to be ready for production start in November/December 2008."

7. The action in the present case was begun by a claim form issued on 26^th September 2007 and served on the same day. The action thus far has not proceeded at break-neck speed. Various matters have been dealt with in terms of pleadings but the parties did correspond with each other about the agreement of the directions which ultimately were embodied in the Consent Order made by Floyd J on 8th February.
8. One of the matters that was discussed between the parties' respective solicitors was the trial date. The claimant's solicitors proposed a trial date of July 2008. That was met by a response from the defendant's solicitors proposing a trial date in January 2009 and ultimately the parties compromised on November 2008 as embodied in the Order. It was, however, pointed out by Herbert Smith on behalf of the defendant before the compromise that a trial of this length was not likely to be listed until January 2009 at the earliest. That, then, was the background against which the directions were agreed and embodied in the Consent Order. The agreed trial date was agreed after give and take on both sides.
9. What then appears to have happened is that the date for trial having been offered of January 2009, Gore went back to its licensees and discovered that the January 2009 trial date was something which changed the risk so far as the licensees were concerned. What Gore had not appreciated was the impact on its licensees of having a trial in January 2009. From what Mr. Fletcher says, it seems also to be the case that Gore had not appreciated that much the same effect would have been imposed upon the licensees had a trial been offered for November 2008. Mr. Mellor QC did not suggest that there was any difference between a trial in November 2008 and a trial in January 2009. Either way the trial would be later than the critical period described by Mr. Fletcher.
10. The claimant's solicitor, Mr. Price, says, in paragraph 24 of his witness statement, that they were aware of the general commercial situation when the directions were agreed but not the true seriousness of the situation until a meeting in London on 5th February 2008. Thus it comes about that on 21^st February 2008 an application was made to vary the Consent Order in the terms of a draft which will propose a new timetable culminating in a trial to be fixed for the first mutually convenient date not before 1st July 2008 and to be heard, if at all possible, with expedition and before the end of July 2008. The application is made by invoking the court's power to vary an order under Part 3.1 sub-rule 7 of the Civil Procedure Rules.
11. The principles upon which the court acts in exercising that power are conveniently set out in a summary of the decision of Patten J in Lloyd's Investment (Scandinavia) Limited v. Ager-Hanssen [2003] EWHC 1740 (Ch) as approved by the Court of Appeal in Collier v. Williams [2006] EWCA Civ 20. In the light of the decision of the Court of Appeal in Collier v. Williams the only circumstances in which the court should exercise the power to vary is where there has been some material change of circumstances or where the judge who made the earlier order was misled in some way, whether innocently or otherwise, as to the correct factual position before him. It is not suggested in the present case that Floyd J was misled so the application is based on a material change of circumstances.
12. It is, of course, to be noticed that the order in the present case is an order made by consent and in the ordinary way that, in my judgment, would impose a higher hurdle on a party who seeks to have it varied. But, as Lindsay J pointed out in Russell-Cooke Trust Co. v. Prentis [2002] EWHC 1435 (Ch) where an order contains liberty to apply, it, itself, contemplates that a further application may have to be made.
13. This is much the same as the position considered by the Court of Appeal in the case of Chanel Ltd. v. F.W. Woolworth & Co. Ltd . [1981] 1 W.L.R 485. In that case undertakings were given until trial or further order. An application was made to release the party who gave the undertakings. Buckley LJ expressly said that this was an application made in accordance with the terms of the Consent Order but, nevertheless, held that it was necessary to show what he described as "some significant change of circumstances".
14. Has there, then, been a significant change of circumstances and, if so, when did that change take place? The factual circumstances surrounding the proposed entry of Gore into the market for licensing its technology for the manufacture of footwear has not, in my judgment, changed at all. What has changed is Gore's appreciation of the effect of what it agreed on the attitude of its licensees towards committing themselves to take up the licences. That, to my mind, is not a change of circumstances at all. It is simply a change of perception of the significance of those circumstances. As Mr. Price himself says, Gore was aware of the general commercial situation but unaware of the true seriousness of the situation until after the agreement was made. That is simply, to my mind, a change in the appreciation of the significance of what was agreed rather than a subsequent change of circumstance in itself.
15. In addition, I accept the submission of Mr. Arnold, QC, that simply to say that the change of circumstance, if such it was, took place in the last few weeks does not lead to the conclusion that the change of circumstance took place after the directions were agreed in mid-January 2008, still less after the Order was made on 8th February 2008. The evidence does not pinpoint when the penny dropped.
16. I must, I think, also bear in mind the impact of the variation which I am asked to make. The impact of the variation is potentially to displace other litigants from their position in the queue of cases waiting to be heard. I, of course, appreciate that there are serious commercial consequences for the claimant in this case, but every party who brings his claim before the courts has serious commercial consequences at stake. Each are entitled to their place in the queue and there must be very cogent reasons indeed for giving preference to one litigant over all the others who are waiting for their cases to be heard. The fact that the parties have been offered a trial date in January 2009 shows what is the current state of the lists in the ordinary course. Accelerating the trial of this action is likely to delay other trials which, in the ordinary course, would come on earlier. I am not satisfied that this would have been an appropriate case to displace other litigants waiting to have their cases being heard given the current state of the lists in this division.
17. For those reasons, therefore, the application is refused.