England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		20/05/2014

MR. JUSTICE MANN :

Introduction

1. Before me are in substance, although not quite in form, first, an application for the adjournment of a trial in relation to the patent in suit in this case, that application being made by the claimant; and second, an application in unusual form by the defendant, requiring the claimants to make an application to amend its patent in circumstances to which I will come.
2. The patent in suit is a European patent which I will call for short, and in traditional fashion, the 372 patent, after the last three digits of its number. The patent relates to technology which resides in TV set top boxes and which is said to allow focused advertising, or focused programme direction, by virtue of an ascertainment of the demographic of the watchers. I need say nothing about the substance of the patent because nothing in this application turns on it.
3. There is a litigation background to this whole case, which is relied on to a certain extent by the defendants, whom I will call Virgin. The claimant, whom I will call Rovi, has a number of patents relating to the television field, which it is pressing or has been pressing against Virgin, Virgin being the well known media group of companies. It has so far asserted 11 patents and, on the count of Mr. Mellor QC, who appears for Virgin today, it has so far lost in relation to all those which have come to trial, either here or in Europe, that is to say, 7 out of the 11.
4. The trial, in relation to the patent in suit, which is set for 23rd June of this year, would try not only the 372 patent but also another patent, as to which absolutely no question arises today. Accordingly, the trial in question is currently going to deal with the next two patents.
5. A history of the conduct of the patent litigation which has been brought to an end and other patent litigation which is still outstanding is said to demonstrate, and indeed does demonstrate, a tendency on the part of Rovi to make late applications for amendments to their patents. It is a proposed amendment to its patent which lies at the heart of the applications today. As a result of an application for an amendment at least one of those trials has had to go off for at least a year. I have merely a chronology with some remarks made by Mr. Mellor's instructing solicitor by way of a gloss on certain aspects of the history to go on, and I must be careful about drawing excessive adverse inferences from a relatively bold chronology such as that which has been put before me. But it is certainly right to observe that there is a tendency to late amendment on the part of Rovi in the history of this litigation. That apparent tendency requires the present situation to be treated with particular care.
6. The history of the present action so far as material is as follows. The claim form was issued on 2nd May 2012. It was a claim which, in the usual way of patent litigation, claims infringement of a patent and it was in due course met by a defence and counterclaim seeking revocation of the patent on what I will call the usual bases. Nothing turns on the detail of the pleading.
7. In due course a PPD was prepared and served by Virgin, but it was said by Rovi to be completely inadequate. As a result of that complaint a further PPD was prepared by Virgin in relation to the allegedly infringing product, and the result of serving that was that, two days after service, Rovi indicated that it was abandoning its infringement claim. Technically, Rovi claims to have had a residual infringement claim in relation to some beta products, but it has recognised that in substance it no longer has an infringing claim in relation to any of Virgin's distributed STBs, or at least those which are the subject of this action.
8. Having indicated within two days that it was abandoning the infringement (on 23rd March 2014) Rovi formally discontinued the infringement claim shortly thereafter. Accordingly, this action is now about revocation only.
9. Some of the heat has been taken out of the revocation claim, but only some of it, by an assurance, which I think is the best word, which has been tendered by Rovi, that it does not claim and will not claim that any of Virgin's current products infringe the patent. That form of assurance, or something like that, was proffered yesterday. A wider form of assurance was proffered early today, the width being extended to include Virgin's future products.
10. The merits of accepting such an assurance are currently being considered by Virgin. Had it not been for the fact that instructions need to be taken from Denver, which is seven hours behind our time, on the further form of reassurance (which has some attraction to Virgin), then it might have been the case that the entire heat would have been taken out of the action, to the extent that there would have been scope for settling the whole action. However, that has not happened and, for at least timing reasons if not other reasons, had not happened by the time the application was called on. In the circumstances I considered it right to proceed with the application, although I acknowledge it may be that the trial of this particular patent will go off for entirely different reasons.
11. Experts' reports were due in this litigation on 14th May. Virgin seek an extension to 23rd May, with a commensurate extension for reply reports to 9th June. That application and that timetable is not controversial as such. However, on 9th May, something happened which generated the present applications. On that date, and without complying with its notice obligations under the Patents Practice Direction, paragraph 11.1, Rovi made an application to the EPO in the form of what is described as a central amendment application (that is to say, an application made under Article 105a of the European Patent Convention) for an amendment of the patent in suit. For reasons that will appear, that has the potential effect of rendering unclear what form of patent should be argued about at the forthcoming trial. Because that presents problems of that nature, Virgin decided to get in first and made an application intended to resolve the position and the difficulties that the parties might otherwise find themselves in. It sought an order in terms which I will read.

"The claimants shall by 4 p.m. on the day following the date hereof (a) make (and serve upon the Defendants) an application under section 75 of the Patents Act 1977 and in accordance with CPR rule 63.10 to amend the Patent as set out in the annex hereto; and, (b), serve upon the Defendants a notice stating which claims of the Patent (both as granted and as proposed to be amended) the Claimants will assert at trial to be independently valid..."

12. The annex set out the terms of the amended claims which Rovi hoped to achieve via its central amendment application. That application for an order to compel Rovi to change the shape of its patent was met by a counter-application, not formalised in a notice but nonetheless advanced before me, that the trial in relation to the present patent, that is to say the 372 patent, should be adjourned until the result of the amendment application has been ascertained.

The legislative background

13. The legislative background, and in particular Article 105a, can be seen from the judgment of the Court of Appeal in Samsung Electronics Company Limited and Apple UK Limited [2014]EWCA Civ 250. In that case, patents were held invalid and were revoked by the trial judge. There was then an appeal to the Court of Appeal but in the intervening period the patentee made a central amendment application. The Court of Appeal were faced with the question of what to do with the appeal in the light of that. It came to a conclusion which I will deal with shortly.
14. In the course of his judgment, Kitchin LJ set out the scheme of Article 105a and made references to the English jurisdiction to amend patents under the 1977 Act. He did so in paragraphs 19 to 29 of his judgment and I shall not read them elaborately into in judgment. Nor shall I read in the provisions of Article 105a and the supporting rules; they can be seen from there or from other sources. It is against that legislative background that the present applications come to be made. In short, the question is what should I be doing with the trial, bearing in mind the outstanding application? The application being one which is dealt with largely administratively and without formal opposition type proceedings, and in respect of which there may be some to-ing and fro-ing between the EPO and the patentee and some further alterations of the proposed amendments.
15. As in the Samsung case, the patent before me is a European patent so an amendment of the patent will have effect in all European jurisdictions. That is a benefit which Rovi claims to wish to have. It is worth reflecting on what the circumstances and result of Samsung were. As I pointed out, the amendment application was made between judgment and the hearing of an appeal. The Court of Appeal decided that, "in these circumstances" (paragraph 30) the filing and pursuit of the amendment application was not an abuse of process and it was not one in which that court could interfere. The "circumstances" in the quotation which I have just cited were simply the circumstances of the legislation and at least not, at that part of the judgment, all the circumstances of the appeal of the case. The Court of Appeal took the view that in the case before it the proper course was to adjourn the appeal, pending a determination of the amendment application.
16. In paragraph 39 Kitchin LJ said this:

"We also believe there to be a real possibility, put at its lowest, that these applications will be determined before the final conclusion of these proceedings. It therefore seemed to us to make obvious sense to accede to Samsung's request for an adjournment of the appeal until the outcome of the applications is known, subject of course to any prejudice that this might cause Apple, for had we proceeded to hear the appeal in the meantime it might well have turned out that we had done so on a false basis, that is to say on the basis of claims which, in due course, will be deemed never to have existed."

17. I note in particular the anxiety not to proceed on a legally false basis, that potentially false basis being the form of the patent. Kitchin LJ took the view that even though an English amendment application would probably be too late, the legislation permitted a late central amendment application (paragraph 52).
18. In the circumstances of that case, and bearing in mind that the Court of Appeal considered that the result of the amendment application would be known in the near future (paragraph 57), and bearing in mind that, until it was known, the form of patent would not be clear, it was clear that the proper course was to adjourn the appeal pending the outcome of the application.
19. Kitchin LJ repeated in paragraph 57 that pursuing the amendment application in the circumstances was not an abuse. He said:

"The pursuit of the applications is not in itself an abuse of the process of this court, permitted as it is by the EPC, the Implementing Regulations and the 1977 Act. The applications may or may not be successful. Moreover, it cannot be predicted with any certainty what form the amendments will take, if allowed, for their final form may depend upon interaction between Samsung and the EPO during the course of the application process."

Thus, again, the important factor of the uncertainty as to the form of the patent emerged in that case.

20. For Rovi, Mr. Abrahams advanced a simple case, that since one cannot know the form of the patent which will be argued about, one cannot sensibly have a trial. One cannot assume that the form of the amendments will be as per the amendments applied for; there might be changes, as in Samsung. He invited me to note, in particular, that there is one whole new claim as well as amendments to existing claims. He submitted that this present case was even stronger than Samsung, and he submitted that his clients' conduct in this case was no more abusive of the process than it was held not to be in Samsung.
21. For Virgin, Mr. James Mellor QC advanced a more complex case. I have already read his original application. When pursued by me on what the jurisdiction was to make the order that he sought, he shifted his stance. He relied on the court's case management powers. He said that there were three potential outcomes: first, a stay of the proceedings, as sought by Mr. Abrahams; second, adding English amendments to the mix and considering those along with the original grant; and third, doing nothing, so as to have a trial on the original claims. As things stood, that last course would be the course that would happen. That, however, would not be appropriate, because Rovi are not actually propounding the original patent, he said. It would be wrong to allow them to do so. So what the court should do is indicate to Rovi that the present situation would be an abuse by Rovi, because they would be propounding a patent which they did not support, and indicate that their Defence to the revocation claim would be struck out as an abuse unless Rovi applied for an amendment under section 75 of the Patents Act 1977 to amend the current form into line with the amendments which they seek in their central amendment application. He submitted that there should be no real difficulty in Rovi doing that, because that was an amendment which they were actively seeking.
22. It was implicit in Mr. Mellor's submissions that the amendments were not objectionable and would not be held to be objectionable by the EPO or the English patent authorities, because his client had not spotted any objections (in the form of widening a protection, added matter, or anything similar) which would stand in the way of an amendment. The parties could and should get ready for trial on that basis, that is to say, with an English amendment to the patent before the court.
23. In support of his case that something should be done, Mr. Mellor submitted that the history of all the actions between these litigants demonstrated that Rovi made late applications to amend and that the present amendment application and Rovi's application to adjourn the trial, coupled with its offers to comfort Virgin on the question of infringement, demonstrated that Rovi were desperate not to have a trial. The court should not allow Rovi to push off a trial in those circumstances. So far as Rovi relied on the risk of further amendments (or alterations) being generated by the central amendment process, Rovi had not even attempted to evaluate that risk, which, Virgin said, was small. There was no reason why Rovi should not be compelled to have a trial on the footing of an English amendment, because that was an amendment which Rovi apparently wanted. If there were an adjournment, Virgin would incur very significant wasted costs. His solicitor, in evidence, put the wasted costs at a sum in the region of £300,000. I pause to observe that that figure was not substantiated and, at first blush, seems to me to be wildly extravagant.

Conclusions

24. It seems to me that Rovi has given rise to a very unfortunate situation. It has made what is, on any footing, a late amendment application. That has to be dealt with in the EPO, and I am told that there is as yet no general experience which enables a reliable forecast to be made as to how long it will take the EPO to deal with the application. No explanation has been given in evidence as to why an application was made so late that it is capable of derailing the trial. Mr. Abrahams advanced some possible suggestions, centreing around a reconsideration of validity questions once infringement was out of the way, but, apart from the reference in the evidence to the decision being taken in conjunction with settling expert evidence, no real explanation has been given in the evidence, which is where one would expect to find it. That is in contravention of the general principle that a party which seeks a form of indulgence should explain those parts of its conduct which need explaining in order to be able to get it. It is particularly undesirable that Rovi did not point out to the EPO when it made its application that there was an English trial in the offing and seek expedition.
25. Had the fate of Rovi's adjournment application depended on the merits of its own position and its own conduct, I rather think the application would have failed at a very early stage. However, there remains the real difficulty of having a trial in the current circumstances. Just as in Samsung v. Apple, one does not know what the final form of the patent will be, on the assumption that the EPO will not have pronounced by the time of the trial. If one assumes that some amendment will be allowed, one does not know whether the amendments will be precisely in the form of those applied for by Rovi or in some other form. Without knowing that, one does not know the form of the patent which should be tried. Certainty cannot be achieved until the EPO rules on the amendment application.
26. Had it been the case that the amendments would be either allowed or disallowed in toto, one could have had a trial of the patent in its original form and as amended, but the possibility of further alterations cannot be ruled out, and that generates material uncertainty in the form of patent which ought to be under consideration in the revocation claim. That seems to me to be an important factor in favour of taking out the present trial, just as it was appropriate for the Court of Appeal in Samsung v. Apple to adjourn the appeal. It does not of course follow that I should adjourn the trial merely because the Court of Appeal adjourned the appeal in Samsung v. Apple, but the factors which induced the adjournment in that case operate in the present case just as strongly.
27. However, I need to consider Mr. Mellor's solution. I do not think that Mr. Mellor's solution to the problem is a satisfactory one. He did not seek to demonstrate that there was any jurisdiction positively to order that Rovi should apply for an English amendment, and his route to that result, involving averments of abuse, does not seem to me to work either. It is not an abuse for Rovi to seek to justify the unamended patent and it is not apparent to me that it would be appropriate to debar them from defending the revocation claim if they did not apply for an amendment in this jurisdiction which they did not wish to apply for.
28. Mr. Abrahams also pointed out the difficulties that would or might result if the English court ruled on one set of amendments and it ultimately transpired that the EPO allowed a different set. Whether or not difficulties were created would depend on whether one set was wider than the other, but there is a real potential for difficulties.
29. All in all, I accept that Mr. Mellor's route is not a sensible one to go down.
30. I, myself, wondered whether an alternative course would be to leave the action as it is, to require Rovi to seek expedition of its application (supported, if appropriate, by a letter from this court) and then to take a view close to the trial as to whether or not the trial should be adjourned. It might be that expedition would by then have generated an appropriate amended form of the patent. The parties could probably sensibly have prepared the trial on the footing of the present amendments and adjusted their respective cases at trial to cater for any probably relatively slight differences between the presently proposed amendments and the final form. If there still had to be an adjournment of the trial because the amendments were not finalised, then there would have to be an adjournment, and Rovi would have to pay the even greater wasted costs brought about by their late application.
31. However, in the end I was persuaded that that was not a particularly practical course and could be excessively wasteful of costs. I think that Mr. Abrahams is right to say that there would have to be some cut-off date at which a decision would have to be made as to the fate of the trial, and it would not be easy to determine what that cut-off date should be. Accordingly, I do not think that this course would be the attractive one, at least in this case.
32. In the circumstances, it seems to me that an adjournment of the trial in, the circumstances of this case, is the best course. In reaching that conclusion, I pay particular attention to the fact that infringement is no longer in issue and that the assurances that have been given by Rovi to remove other threats to Virgin in the meanwhile are of some materiality. Virgin has not demonstrated an immediate need to clear the path for any particular future development it has in mind in the next six months, though it is justified in considering carefully the present offer of assurances by Rovi. I say six months, because if the trial is adjourned it will be possible for the court to reinstate it in December. While there will be some wasted costs, they can be dealt with by an appropriate costs order. Had Virgin presented some more reliable and credible evidence as to what costs would be thrown away, I might have been minded to make an order now that something be paid on account of those costs or by way of security for those costs, but the material before me does not enable me to do that.
33. Any adjournment of the trial would not be for as long a time as Rovi had immediately wished, because I have ascertained, as I have indicated, that the trial can be accommodated in December and not in something like a year's time, which is what I believe Virgin may originally have feared. Nor will the June trial slot be wasted. There is still the other patent to be tried in that slot. The two patents are related only by virtue of their priority dates. The patents would have been tried in what would, in substance, have been two separate trials brought on the same occasion.
34. On balance, therefore, and with some misgivings, I think that the right order is to vacate the trial date so far as this patent is concerned.
35. Some of the misgivings I have arise from the fact that it may appear that merely making a late application to amend a European patent would be a way of getting an adjournment of a trial if it became apparent to the patentee that an adjournment was desirable. That is not an impression which should be taken from this judgment. A patentee cannot assume that self-generated uncertainty arising from a late central amendment application will always and easily get an adjournment of the trial. If the court gets the impression that the application is a device, then the court's case management powers will enable it to resist an application or take alternative steps to make sure that manipulation does not succeed. If infringement is in issue, then there may well be much more telling reasons for preserving the trial date than exist in the present case. An applicant can also be expected to give a good reason for a late application, an area in which Rovi fell well short in the present case, and a failure to ask the EPO for expedition may well be taken as supporting a submission by the other side that a late application is a device, and not a meritorious application.
36. For the above reasons, therefore (and despite the shortcomings in Rovi's case), I shall vacate the trial date of this patent, but only on terms. The first is that Rovi shall forthwith explain the position to the EPO and seek expedition of its application, to try to make sure that it is dealt with in good time before a December trial date.
37. Second, Rovi will have to undertake to prosecute its amendment application as quickly as possible, which I anticipate will, in practice, mean responding extremely promptly to any requests or responses by the EPO, and to keep Virgin fully informed of the progress of the application by copying in Virgin on all correspondence and other communications with the EPO, so that Virgin can police the expedition with which Rovi is (or as Virgin no doubt fears, is not) pursuing its application.
38. Third, Rovi will have to pay the costs thrown away by the adjournment. I shall therefore so order.