England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		23/05/2013

MR. JUSTICE BIRSS :

1. This is a patent case. The claimant Epson claims that the defendant DCI has infringed four patents which relate to replacement printer ink cartridges. DCI sells ink cartridges which fit Epson printers. DCI denies infringement and claims the patents are invalid. DCI has also pleaded a number of further defences and counterclaims based on competition law, estoppel arising from an earlier piece of patent litigation which was settled, abuse of process and unlawful interference ("the Further Allegations"). Epson denies these Further Allegations.
2. The claim form was issued in April 2011. The four patents in the case are UK Patent 2347649, European Patent (UK) 1004450, UK patent 2433473 and UK Patent 2465293. Two of them relate to the storage of ink quantity information in the memory of the ink cartridges. The issues today do not relate to those two patents. The other two, the 473 and 293, patents relate to the detection of short circuits between terminals on the cartridges. The application before me relates to those two patents.
3. As I understand it, the point of the short detection is that cartridges have two devices on them, one of which needs a higher voltage than the other, so a short circuit risks subjecting the low voltage device to the higher voltage intended for the other device. The invention relates essentially to the arrangement of terminals with certain properties on the cartridge so that shorts can be detected. One of the items of prior art relied on by DCI is a prior use of a Hewlett-Packard printer plus cartridge referred to in this case as the HP10 system. In summer 2011 DCI conducted some tests on an example of the HP10 system to look at short detection. The tests were not relied on at that stage.
4. In January 2012 a case management conference took place before Norris J. He ordered that there be a staged trial with what have been called the Further Allegations being stayed pending the resolution of the patent action. The estimate for the trial of the patent action is 10 to 12 days and the trial is due to start in the window beginning 17th June, that is to say, in about three weeks' time.
5. No provision at that stage was made about experiments. Thus, since in the absence of any other order, the proper time to apply for directions generally is the case management conference, the time to make an application under PD 63 paragraph 7.3 was the case management conference and so, on the basis of PD 63, paragraph 7.1, the proper time to serve a notice of experiments was 21 days before the case management conference. No notice was served at that time.
6. In autumn 2012 DCI changed its legal team and that led to a reappraisal of DCI's case. The approach DCI had been taking as regards the functioning of the HP10 system was that it could be inferred that the HP10 worked in the manner described in a Hewlett-Packard patent called Juve. Juve was also cited as prior art by DCI. I also note that Epson themselves in this case have been working on the basis that Juve shows how relevant terminals in the HP10 function.
7. In December 2012, no doubt because the trial was now about six months away, the proceedings began to get going. Epson had already made an application to amend the 473 patent in 2011 and in December 2012 Epson applied to make further amendments to the 473 patent. They also applied to amend the 293 patent. The number of claims in dispute at that stage -- and, as I understand it, still today -- is very large. DCI also began to seek to try and reduce the number of items of prior art they were relying on.
8. In early 2013 neither side covered themselves in glory in the conduct of these proceedings. As far as I can tell each side did not give the other party information about their case which would have been helpful and reduced the issues in dispute. It is a fair inference that the claimant held back admissions at a point of time when it must have known what its position on certain issues was. Equally, it is a fair inference that the defendant held back from telling the claimant what prior art it was going to drop when it had already decided to do so. During this period the defendant, in a series of discussions with its expert Professor Heinzl, decided that it did not wish to rely on inferences from Juve to demonstrate how the HP10 systems work. It decided to perform experiments to show how the HP10 worked. The tests are the same as the tests carried out in 2011 but include an additional element. The tests involve connecting wires to the various terminals to see how they behave. The additional element involves measuring the voltages across the terminals.
9. The experiments were performed and a notice was served on 17th April 2013. The notice is over 100 pages long. It is plainly miles out of time. The claimant objected. Without obtaining the permission of the court, which was plainly needed, the defendant served an expert's report which relied on the experimental results on 2nd May. The claimant says that the defendant was seeking to present the claimant with a fait accompli. I think that is a fair inference.
10. Eventually, and far too late, DCI applied for permission to serve the notice. DCI says permission should be given. They say the tests are quite simple -- they show how the HP10 works and a report can be arranged at short notice -- and will be easy to perform. Although the notice is very late, it and any experiments in reply can still be dealt with at trial. Once it was realised that an experiment was needed, the notice was given promptly, albeit a long time after the time required by the rules.
11. The claimant says the tests are controversial, repeats will be necessary and very possibly experiments in reply and that there is not enough time before trial to accommodate them. Also a repeat cannot be arranged at which Dr. Hawkins (the claimant's expert) could attend in person. That is because Dr. Hawkins works in New York and has no time before 10th June to come to the United Kingdom to see a repeat.
12. During the course of argument I asked Mr. Vanhegan if his clients would be prepared for the repeat to take place in New York and he said that, reluctantly, they would be.
13. The claimant also says that, in truth, this is the same test that was done in 2011 and the claimant says no good excuse has been given as to why a proper notice of experiments was not given before the case management conference over a year ago. There was a point about disclosure of work-up experiments but the defendant accepts that they must do that and they have done so.
14. In response, DCI also says that the reason the experiments were not raised at the case management conference was a reasonable belief that Epson would make admissions. I regard that as an absurd suggestion. Since at the CMC it was not admitted, the issue could and should have been raised at that point. DCI says the reason that the experiments were not raised a month or two earlier than they were this year was difficulty caused by the case dealing with the wholesale amendments which had happened in December 2012. I also regard that with considerable scepticism. I am not satisfied that I had a good explanation for why this notice of experiments was not provided much earlier.
15. Neither side seeks to adjourn the trial, although I must say it looks like a distinct possibility. But Mr. Vanhegan says that what I should do is let in the experiments and if the claimant wants to seek an adjournment once it has tried to deal with them, then it should apply at that stage.

Principles

16. Mr. Carr in his skeleton argument referred me to a note in the White Book which I think comes from a case (but I am not sure which one) that says as follows:

"The regime for managing experimental evidence provided by the CPR should not be undermined. Poorly documented, unrepeated experiments coming into the proceedings at a late stage should be strenuously avoided. Experimental evidence should be kept to a minimum, and that minimum should consist of inspected experiments."

I believe, although I am not certain, that that was an observation of Pumfrey J.

17. In Monsanto v. Cargill International SA [2007] EWHC 1204 Kitchin J (as he then was) said at paragraph 28:

"Lewison J's order of 15th July 2006 was in the usual form in accordance with the practice direction to CPR part 63 and provided, as I have indicated, for service of notice of experiments by 27th October 2006. The importance of compliance with such an order was explained by Jacob J in Richardson-Vicks Inc.'s Patent [1995] RPC 568 at 581:

"'The reason is that experiments done specifically for legal purposes (as opposed to scientific research) are liable to be one-sided or incomplete. Fairness requires proper notice of experiments, the opportunity to inspect where practicable, and the opportunity to perform counter-experiments.'


"29. Similarly, in Electrolux Northern Ltd v. Black & Decker [1996] FSR 595 at 610, Laddie J said in relation to the provisions of RSC, Order 104, rule 12:

"'Directions in substantially those terms were made in this action. That rule and the directions made in this action pursuant to it are intended to serve a purpose. Experience teaches that experiments are an expensive, time-consuming and frequently ineffective way of proving a technical issue. Furthermore, unless a party is given adequate warning of them and a proper opportunity to witness their repetition, they can result in litigation by ambush. Where a party intends to rely on experiments he must serve a notice as required by Ord. 104, r.12. The rule is mandatory not permissive. Such experiments will not be admissible in the absence of a notice unless, in the light of special circumstances, the court exercises its discretion to allow them in. If a party wants to have them admitted, in the absence of agreement from his opponent, he should normally make a formal application to the court to that effect. What he should not do is introduce them by way of the witness or expert statements or in counsel's skeleton arguments. That course is unfair to the other side. The latter may only realise at the trial what is being put forward and may thereby be deprived, in the absence of an adjournment of the trial, of the option of carrying out experiments in reply or of finding an expert who can answer the points to be made. Furthermore he will be deprived of the opportunity to have his experts witness the experiments.'


"30. It is apparent from these citations that the normal form of order has at its heart the requirement of fairness. If a party is not given adequate notice of experiments, his expert cannot witness them, he may not be able to answer them or criticise them effectively and he may be deprived of the opportunity to conduct experiments in reply."

18. Although some of what was said in the passages I have referred to relates to the need for a notice, the passages I have referred to also deal with the general principles relating to experiments and how one deals with notices in the course of proceedings.
19. Mr. Vanhegan says that he must have these experiments: it is the only way he can prove his case on HP10. Although it is disruptive, he said it would not derail the trial. He also draws attention to the fact that Epson's expert accepts that the HP10 was common general knowledge. He infers that this means that Epson must know how the HP10 works, but I reject the argument that an inference like that can be drawn.
20. I asked Mr. Vanhegan to explain how the experiments are probative. He showed me how the experiments show that the HP10 falls within claim 1 of 473. I am told that the experiments also show that the relevant terminals in HP10 (the thermal printer terminals) work in the manner described by Juve.
21. I asked Mr. Carr to explain why the experiments are not probative. He explained that there was a point on construction of the claim which, if correct, means that the experiments do not demonstrate that the HP10 is within the claim. It is not clear to me whether this point is a squeeze on infringement or not. Mr. Carr also pointed out that a number of the oscilloscope traces in the notice raise questions. Terminals which ought to be the same appear to be different. These and other matters are matters that Dr. Hawkins wishes to look into. Mr. Cunningham's evidence (the solicitor for the claimant) explains that Dr. Hawkins is likely to wish to run further experiments.
22. Although they look simple at first sight, I am satisfied there is a real risk that these experiments raise a number of serious questions. If the notice had been served when it should have been, then no doubt that could have been sorted out. That is why the regime for experiments requires a proper notice well in advance of trial. To serve a 100-page notice of experiments eight weeks before trial is a remarkable thing do. There are now only three weeks to the trial. In this case I am not satisfied that it will be fair on the claimant to force them, in the time between the notice and trial, to grapple with these experiments.
23. In my judgment, Mr. Vanhegan is wrong to say that his client will be unable to prove his case without the experiments. Both sides hitherto have been working on the basis that Juve shows how the relevant terminals work. Neither side has suggested any good reason why that is not a proper inference to draw. I am not satisfied that I will deprive the defendant of a means to establish, on the balance of probabilities, how the relevant terminals in HP10 function. Nor am I satisfied that the probative value of these experiments means they should be admitted in circumstances where we now are, so close to trial, in the interests of justice and I will refuse to admit these experiments.

MR. CARR: My Lord, there are two questions that remain, one of which I think you do not need to order at the moment. There will have to be some deletion from the defendant's expert report evidence. I leave that as a matter for them and will come back if there is a problem.

The second question is costs. We say, obviously, that we should have the costs. Mr. Campbell points out to me that, hot off the press, the new costs rule in the supplement (which is not that different to the old one actually) is at page 75 and is now rule 44.2(8) which says that a party whom the court has ordered to pay costs, subject to detailed assessment and order, is to pay a reasonable sum of costs on account unless there is good reason not to do so. So what I ask for is ----

MR. JUSTICE BIRSS: You are not asking me to summarily assess them; it is a half day. It is up to you, Mr. Carr.

MR. CARR: If you can. I will hand this up. My experience of summary assessments has been that judges then ask me extremely difficult questions about costs and how ours were incurred, which I never know the answer to. So if we get into that ----

MR. JUSTICE BIRSS: You are inviting me to not do that, make an order under 44.2(8) ----

MR. CARR: I would rather not do that, and if you start to ask those questions I will ask for a payment on account.

MR. JUSTICE BIRSS: I see.

MR. CARR: My Lord, if you can do a summary assessment based on this -- the hours are quite detailed and so on -- then so be it. If not, I will ask for a payment on account.

MR. JUSTICE BIRSS: What do you say, Mr. Vanhegan?

MR. VANHEGAN: My Lord, we have three points. We need to deal with costs, but I will also flag up that I need to ask for permission to appeal and I will also ask for permission to amend to reintroduce Juve into the case. Let me deal with costs first.

We say this is not suitable for summary assessment. Obviously we have lost the application, so in principle they are entitled to their costs. However, the costs which they have incurred are absolutely enormous. If you look at the solicitors' hours spent on this application, it comes to 130 hours. They could have seen this experiment repeated four or five times collectively for that. All we have is one witness statement in reply. We do not have any times, apparently, from the expert. He does not appear to have considered it at all, so it is simply a witness statement from Mr. Cunningham.

MR. JUSTICE BIRSS: I see. You do not resist an order for costs against you, but you say I should not summarily assess.

MR. VANHEGAN: The sums are so large and unreliable that it is not fair and you do not have sufficient information to make that assessment. If you were to summarily assess them, then obviously we would say that, because of the quantum here, one ought to be very sceptical as to whether or not these are sums which they would -- and would properly -- have incurred and they should be dramatically reduced. One would have thought it should be in the ballpark of £25,000 to £30,000, which is a more reasonable sum, as opposed to what they appear to be seeking, which is in excess of £70,000.

As to permission to appeal, my Lord, we say as a matter of evidence that we will be deprived from effectively establishing that the HP10 system is an anticipation without this evidence. The basis of inference, we say, is quite clear, but my Lord has heard my submissions. It is a very important point and one which we say could be decisive of this case. In respect of that, we would ask for permission to appeal so that we can deal with this and get the matter sorted out, if the court is on my side, as quickly as possible.

MR. JUSTICE BIRSS: I am afraid, Mr. Vanhegan, it seems to me that the application is a matter of the court's discretion and that is a matter that I am not going to give you permission to appeal on.

MR. VANHEGAN: As to permission to amend, obviously my Lord was very persuaded by the fact that in essence the ----

MR. JUSTICE BIRSS: Why do you need permission to amend to rely on Juve as evidence of how the HP10 worked?

MR. VANHEGAN: Because in the absence of HP10 as a starting point for anticipation, as a fall-back position for obviousness we would now wish to reintroduce Juve as a starting point.

MR. JUSTICE BIRSS: I see.

MR. VANHEGAN: Bearing in mind the materiality of that document, as my Lord has appreciated from this hearing, and bearing in mind that it was in until only a month or two ago, we say there would be no material prejudice to the other side. I obviously do not want it in, but it would at least allow us the possibility of having a fairer trial in all the circumstances.

MR. JUSTICE BIRSS: What do you say about that, Mr. Carr?

MR. CARR: On the costs, of course, the 130 hours -- this is a big piece of litigation -- includes all consideration of the experiments. I did not just pop up with those traces.

MR. JUSTICE BIRSS: Mr. Carr, I can tell you that I am certainly persuaded by Mr. Vanhegan that I should not summarily assess them. So you were right all along!

MR. CARR: I was right. What my Lord should then do is order a payment on account and the normal course is 50% because then you can feel confident that ----

MR. JUSTICE BIRSS: The final figure is £70,000, is it -- £70,776? Why does it include VAT?

MR. CARR: I am told it is the new form and it has to.

MR. JUSTICE BIRSS: Your clients are not registered.

MR. CARR: That is the reason. We seek £35,000.

In relation to Juve, although it is obviously of itself disruptive because we are going to have to deal with it by a further report, in principle I do not object. However, if it is a case of "We are introducing Juve or obviousness and relying on HP10", it seems duplicative. Therefore, what we suggest is that if the defendant wishes to reintroduce Juve it should be put to an election on which does it want to rely on. Otherwise it is just more and a more prior art.

MR. JUSTICE BIRSS: Mr. Vanhegan, I will give you permission to amend to plead Juve. I am not persuaded by Mr. Carr that I should put you to an election. It seems to me, in the circumstances, that it is only fair to give your clients the opportunity to run that argument since they expected to move on in the HP10 argument in a different way, so I will give you that permission.

MR. VANHEGAN: I am grateful, my Lord.

MR. JUSTICE BIRSS: In so far as the costs are concerned, I am not satisfied that I should make an order for a payment at 50% of the £70,000; it is a very large sum. I understand why perhaps it is fair in the circumstances, given that it will include all the time that the claimant has spent on the experiments, but it is a high figure. Accordingly, bearing that in mind, I will make an order for a payment on account of £25,000. I can be sure that that will not overcompensate Mr. Carr's clients.

MR. CARR: My Lord, we ask for that within 14 days.

MR. VANHEGAN: I cannot resist that, my Lord.

MR. JUSTICE BIRSS: Right, 14 days.

MR. VANHEGAN: Is that it, my Lord?

MR. CARR: There will obviously have to be some directions for service. I have in mind the defendant will need to amend its report within a certain amount of time. We will need to serve a further report in relation to Juve. If my learned friend and I discuss these points, I am sure we can agree them.

MR. VANHEGAN: The parties have to agree sums and timetable, then, working together.

MR. JUSTICE BIRSS: If you cannot agree, then I will ----

MR. CARR: I rather suspect we will.

MR. JUSTICE BIRSS: Before you go, can I understand very broadly just how big this case actually is? How many claims are now said to be independently valid?

MR. CARR: It is not as many as you might think. The position on the claims that are independently valid is that our side has produced a set of claims that were both independently valid and said to be infringed which was relatively modest.

MR. JUSTICE BIRSS: How many is that?

MR. CARR: I do not know but I probably can tell you ----

MR. JUSTICE BIRSS: I know there is a point.

MR. CARR: I have in mind about seven or eight.

MR. JUSTICE BIRSS: In the whole case -- all four patents.

MR. CARR: I do not know the answer to that. Then the defendant asked for not just those that were said to be infringed but every claim that was said to be independently valid. One issue with that is, of course, there were lots of independent claims in the opinions so that expanded the list. Can I give you a little clip of correspondence and we can see what is in there.

The first letter of 25th January specified the claims that are said to be independently valid and infringed. Then there was a request for 18th February, "That is not good enough. We want all the claims that are said to be independently valid". That then expanded the list on 28th February, particularly in relation to the 473 patent as proposed to be amended. But then, by a letter dated 18th April, the amount of claims, as you see from the final page that was said to be independently valid, were then reduced.

MR. JUSTICE BIRSS: I see. The last letter is a subtraction. You look at those and you take those off the previous letter, which ----

MR. CARR: I am not clear why we cannot focus the trial on those which are said to be independently valid and infringed, as is normally done.

MR. JUSTICE BIRSS: As I understand it, the reason is DCI think, having been once bitten twice shy with the litigation last time ----

MR. CARR: Fair enough. Then it is inevitable. But I think you might find several of these claims are said to be independently valid because they are independent claims and, therefore, by definition, rather than some ----

MR. JUSTICE BIRSS: What I will say is that this is a very large number of claims and I am far from convinced that it will be a real position that this kind of number of claims in these patents are genuinely valid independently of each other. Just because they are independent claims it does not mean they are valid independently and I will say nothing more than strongly urging both sides, but obviously in this particular case the claimant, to look a bit more carefully at that issue and bear in mind what is feasible in a 10 to 12-day estimate trial.

MR. CARR: That is, if I may say so, very helpful. I will convey that and we will see what we can do.

MR. JUSTICE BIRSS: OK. I do not know who is hearing this trial, although I did hear a rumour that it was me.

MR. CARR: We look forward to seeing you.

MR. JUSTICE BIRSS: The only other thing that occurred to me is, if it is me, how long are you expecting the reading to be because there does appear to be a rather large amount of material in this case?

MR. CARR: The patents are actually quite simple -- and I am not putting this in an adversarial way at the moment -- but the length of the claimant's expert report is 80 pages and the length of the defendant's is 454 pages. That is because in respect of every claim said to be independently valid, rather than referring back to the prior art, it is all repeated again. So you get to lots and lots of pages. Therefore, once one has the gist, one has the gist. I would have thought -- and I do not know whether my learned friend wants to add to this -- you would need two to two and a half days for reading.

MR. JUSTICE BIRSS: You had better make sure that is conveyed to listing.

MR. CARR: I think it is two days at the moment, so I am suggesting perhaps an extra half a day.

MR. VANHEGAN: All I would say is that I have come into this very cold for this application and, from my reading of the case, my Lord will be doing very well to do that in two and a half days. Three days, I would have thought, is a safe estimate.

MR. JUSTICE BIRSS: I cannot tell you how long it will take. All I can do is react to the materials I have seen, and seeing a 400-page expert report does make one think.

MR. CARR: In that case, we will convey to listing a reading estimate of three days.

MR. JUSTICE BIRSS: That would be wise, thank you. Gentlemen, you will draw up a minute of order and you had better take these papers back. Thank you very much.