BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
SHORTER TRIALS SCHEME
Fetter Lane, London EC4A 1NL |
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B e f o r e :
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LISA DRÄXLMAIER GMBH |
Claimant |
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- and - |
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BOS GMBH & CO. KG |
Defendant |
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Mitchell Beebe (instructed by Powell Gilbert LLP) for the Defendant
Hearing date: 21st June 2022
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Crown Copyright ©
This judgment was handed down remotely by circulation to the parties' representatives by email. It will also be released for publication on the National Archives website. The date and time for hand-down is deemed to be Monday 27th June 2022 at 10.30am.
Mr Justice Mellor :
i) On 5th May this year, BOS issued an application for an extension of time in which to serve its defence (the EOT application (also referred to in some of the evidence as the Defence application));
ii) On 27th May, BOS issued an application to strike out this action alternatively for summary judgment (the Strike Out application).
These two BOS applications have relatively recently been listed in a 3 day window starting on 17 October 2022.
iii) On 14th June, Dräxlmaier issued two applications; in the third application overall, Dräxlmaier seeks an Order for an expedited trial of this action (the Expedition Application).
iv) The fourth application in time is a Dräxlmaier application for a combined hearing of those three applications, also seeking expedition of the combined hearing so that it is heard before the end of July (this is the Combined Hearing Expedition Application). Dräxlmaier's ultimate aim is to obtain an expedited trial and a decision in the UK before the German infringement trial. This can only happen if the application to expedite the trial is heard before the end of July.
'10. To that end it has initiated two unfounded applications, the substance of which I have addressed in my previous witness statements. The Defendant's conduct in issuing first the Defence Application, and then some weeks later when it became clear that the Defence Application might be resolved quickly on the papers, the Strike Out Application, was a transparent and self-serving attempt to delay the progress of my Client's claim.
11. S.71 allows the potential infringer to seek a declaration from the court that their product or process does not infringe a patent, in circumstances where the proprietor has not provided, when asked, an acknowledgement to that effect. That is the remedy to which my client is entitled and seeks.
12. Per Arnold J in TNS Group Holdings v Nielsen Media Research [2009] EWHC 1160 (Pat) and HTC Corporation v Yozmot 33 [2010] EWHC 1057 (Pat), it is permissible for a party to seek a judgment in order to export it to a court in another EPO jurisdiction.
13. My client is therefore entitled under s.71 to seek a declaration of non-infringement from this court, and to put that decision before the German court seized of the parallel infringement proceedings.'
'5. The Defendant's overall position has been clear from the outset - it has no interest in the UK part of the 631 Patent which is why it took no steps to prevent it from lapsing due to non-payment of the renewal fees. When the Claimant paid those fees, the Defendant confirmed in correspondence that it will not assert the 631 Patent in the UK.
6. The effect of this confirmation by the Defendant was clear and provided certainty to the Claimant in the UK for past and future acts. While the Claimant has not engaged with this confirmation at all, in order to try to pre-empt any future objections which the Claimant may develop, the Defendant is prepared to formalise the confirmation in the form of an undertaking. The Claimant's indication that it will actively oppose the surrender of the 631 Patent in the UKIPO (and the potential procedural delays in the UKIPO I have mentioned in paragraph 4 above) is a further reason for providing a formal undertaking. The Defendant provides an undertaking in the following form as reflected in the draft Order filed with the Strike Out Application (the "Undertaking"):
"The Defendant undertakes irrevocably not to enforce EP (UK) 3 266 631 B1 against any person, whether for an injunction, damages, an account of profits or any relief howsoever, for acts in the United Kingdom under s.60 of the Patents Act 1977, whether such acts occurred before or after the date of this undertaking."
7. The consequence of the Undertaking is to the same effect as the surrender of the 631 Patent under s.29 of the Patents Act, namely that the Defendant is foregoing any past or future entitlement to enforce the 631 Patent in an infringement action against a third party in the UK. In those circumstances, where the only substantive relief sought by the Claimant in these proceedings is a declaration of non-infringement, that declaration is entirely moot and serves no useful purpose. This undertaking is provided purely as a precautionary measure and to formalise the confirmation not to enforce the 631 Patent which the Defendant had previously given in correspondence on 4 May 2022.'
'7. The Defendant very deliberately validated the 631 Patent in a small number of countries excluding the UK. The validation in the UK occurred automatically upon the grant of the European Patent, and the Defendant did not intend to maintain the 631 Patent in the UK. Indeed, as the UK is not a significant market for the Defendant or its competitors, it allowed the 631 Patent to lapse in this jurisdiction by not paying the first renewal fee in respect of the 631 Patent. After some pre-action correspondence between the parties and their German representatives, proceedings for patent infringement were commenced by the Defendant in the Dusseldorf District Court based on the German part of the Patent on 16 August 2021. Germany is the jurisdiction in which the parties manufacture their products and the relevant car manufacturer customers are located. As a part of this pre-action correspondence, the Claimant wrote to the Defendant and sought an acknowledgement of non-infringement in respect of the 631 Patent under s.71 of the Patents Act. As the Defendant intended to commence proceedings in Dusseldorf and correctly believed that it did not hold a UK patent2, it did not respond specifically to the s.71 request.
8. The Claimant then waited some 3 months, paid the renewal fee in respect of the Defendant's lapsed patent in order to revive it, and 4 days later commenced these proceedings on 16 November 2021. Once served with these proceedings in Germany, over 4.5 months later on 31 March 2022, the Defendant promptly took steps to surrender the 631 Patent with the UKIPO and offered assurances and ultimately undertakings to the Court that, as it had never wanted the 631 Patent, it would of course not enforce the 631 Patent against anyone.
9. The UKIPO has advertised the Defendant's intention to surrender the 631 Patent. The Claimant has indicated that it will oppose the surrender of the 631 Patent but has not been prepared to explain on which basis.'
Applicable principles
'Applicable legal principles
6. These are not in dispute. The leading case on expedition is Gore v Geox [2008] EWCA 622 at [25], in which the CA identified four factors. I was also referred to the slightly wider discussion in James Petter v EMC Europe [2015] EWCA Civ 480 at [10]-[14] and these paragraphs which include an endorsement of the Gore factors:
16. … The correct principles have been debated between the parties but do not seem to me to be much in doubt. The court exercises its discretion to expedite proceedings against the backdrop that the courts are busy and that expediting once case will often slow the progress of others. For that reason, the overriding objective requires that there should be a good reason for expedition. But the categories of case in which expedition is appropriate are not closed. There may be many and varying situations in which expedition will be held to be just and appropriate, taking into account all aspects of the overriding objective and the court's resources, and the interests of other court users in particular.
17. Thus, as the judge was well aware from the authorities that had been placed before him, expedition will only be justified on the basis of real, objectively viewed, urgency. It is against that background that Neuberger LJ's four factors from W.L. Gore supra are to be considered, namely (1) whether the applicants have shown good reason for expedition; (2) whether expedition would interfere with the good administration of justice; (3) whether expedition would cause prejudice to the party; and (4) whether there are any other special factors.
7. At [22] of James Petter, Vos LJ (as he then was) emphasised that "the need for commercial certainty needs to be evaluated in its proper context" in each case.
8. Expedition of a patent claim to avoid the injunction gap in Germany has been considered many times, most recently by Birss J (as he then was) in Nicoventures Trading Limited v Philip Morris & or [2020] EWHC 1594 (Pat). To the Gore factors, Birss J added three particular points:
(i) First, in [11] he noted that "There are likely to be a large number of litigants in the Business and Property Courts who would like their cases to be tried earlier, therefore granting expedition involves an inevitable degree of queue-jumping and therefore there has to be a good reason for it," such that the Court decides applications for expedition "according to the relevant principles and not simply by approaching them on the basis that someone who happens to come to court wishing for their case to be speeded up will get it."
(ii) Second, in [12] he emphasised that "a mere wish for commercial certainty is not enough to justify expedition." Rather, he said, there needs to be a "good reason" which must be "established in evidence."
(iii) Third, in [13] he considered reliance on the German 'injunction gap' as a basis for expedition. He concluded (in [21]) that "the courts will take this factor into account as a factor, but it is never enough on its own".
9. He explained this third point in these paragraphs:
'14. A party who has sued for infringement in Germany often seeks to schedule the UK validity action or, rather, to be accurate the UK action which will involve both validity and infringement, in such a way that the outcome relating to validity is likely to be available and public before the German infringement court decides the matter.
15. There have been different words used by different judges of the Patents Court over the years relating to the emphasis that this factor bears in the context of listing decisions and expedition. In a number of decisions between 2011 and 2017, and I refer in particular to HTC v Europe Ltd v Apple Inc [2011] EWHC 2396 (Pat), ZTE (UK) Limited v Telegnaktiebolaget LM Ericsson [2011] EWHC 2709 (Pat), and Garmin (Europe) Limited v Koninklijke Philips N.V. [2017] EWHC 8165 (Pat), Arnold J consistently expressed the view that it was a factor to take into account, however as he put it, it is not a strong factor and will never be sufficient on its own, but it is a factor.
16. In Takeda UK Ltd v F Hoffmann-La Roche AG [2018] EWHC 2155, Henry Carr J said at paragraphs 11 and 12:
"In my view, it is important to give Takeda at least the opportunity
of obtaining a judgment from the UK court, which may have some
influence on the Düssseldorf court hearing the infringement action.
By a decision of the Bundesgerichtshof, dated 15th April 2010, Xa
ZB 10/09, Roll-Forming Machine, the Federal Supreme Court held
that:
'The German courts are required to consider decisions rendered
by organs of the European Patent Office and courts in other EPC contracting states and pertaining to a largely similar issue and, where appropriate, address the reasons leading to a diverging result in the earlier decision. Insofar as points of law are concerned, this also applies, for instance, to the question of
whether the subject-matter of a property right was obvious in the light of prior art.'
The UK courts are always very interested to see decisions of our
German colleagues and judges of other EPC Contracting States
pertaining in particular to equivalent patents. If I were hearing an
infringement case in the UK, I would be very interested to see what
decision the German courts had reached."
17. An important point of detail is that the decision of Henry Carr J was not about expedition as such but with the decision to list the case within the listing window, but nevertheless, in my judgment, he was making an important point that is generally relevant.
18. Despite what was suggested in argument, albeit it was never put quite as starkly as this, there is no conflict between the various statements by these judges. I agree with what was said by Henry Carr J and I also agree with what Arnold J said. As Arnold J said, this factor on its own is not enough. If a party did simply come to court and raised that as the only reason, no doubt they would get short shrift.
19. A party should, if it wishes to seek expedition, put forward evidence of the commercial context in which the dispute arises in order to establish why there is a good reason in commercial terms, if true, that the UK validity trial should be timetabled in the way that is sought. In other words, and I am probably repeating myself, if a party seeks expedition it will always need to support its application with evidence of a commercial context to explain why, in the words of James Petter and Gore v Geox, there is a good reason for expedition.'
'20. As is well known, the German courts operate a bifurcated system. It is not possible to raise invalidity of an EP(DE) directly as a defence in the infringement proceedings. If the infringement claim succeeds, there are then the following possibilities:
(i) First, a defendant may request in his Defence that the infringement proceedings are stayed on the ground that the patent in suit is likely to be found invalid in pending nullity proceedings either before the German Federal Patent Court or in EPO Opposition proceedings. Abbott assures me that each of its defences will include a request for a stay.
(ii) If there is no stay, then an order for an injunction usually follows.
(iii) In order to enforce an injunction the successful claimant must serve the judgment and put in place financial security as ordered by the Court, typically a bank guarantee, which is designed to cover the defendant's losses in the event the injunction is later lifted and usually amounts to the profits the defendant makes on the injuncted product for a period of 18 months going forward.'
…
28. In spite of the available procedures in Germany (summarised in paragraph 0 above), in theory the injunction gap problem in Germany is capable of producing some very unfair results. If a patent is pretty clearly invalid, there is no problem because the infringement court grants a stay. If a patent is weak but no stay is granted (because invalidity is not clear enough) and ultimately is declared invalid, it may suit a competitor to put up the required security. As I understand matters, the security does not amount to a cross-undertaking in damages. The competitor may calculate that he can inflict far more damage on his rival through an injunction than the value of the security he will lose. Whether such unfairness can occur in practice lies in the hands of the German courts, who I am sure are aware of the scourge of weak patents which turn out to be invalid when scrutinised.'
'22. Counsel for the defendant submits that paragraph 22 of Mr. Johnson's witness statement, and in particular the words "Such a decision may be 'exported' to other national Courts", demonstrates that the claimant's true purpose in commencing these proceedings is to obtain a judgment for use in other Contracting States of the European Patent Convention and, possibly, in the EPO. He submits that that constitutes an improper or collateral purpose as described by Pumfrey J., and accordingly an abuse of process.
23. In my judgment, what Mr. Johnson says in paragraph 22 of his statement is not evidence of any improper or collateral purpose. There is a clear line of authority which demonstrates that it is perfectly legitimate for a party to proceedings in the United Kingdom concerning the validity of a European patent to seek to rely upon what has been referred to as the "spin-off value" of a judgment of this court.
24. In Unilever plc v. Frisa N. V. [2000] F.S.R. 708, 713 Laddie J. said this: "Furthermore, there is an advantage of proceedings being conducted here in accordance with the fairly tight time tables which are now imposed, namely that judgments obtained from this court, or obtained from this court and then from the Court of Appeal on issues of infringement and validity have in the past, at least on occasions, helped to inform the parties so as to enable them to resolve their disputes on a worldwide basis earlier rather than later."
25. That passage was quoted by and relied upon by Kitchin J. in GlaxoSmithKline Biologicals SA v. Sanofi Pasteur SA [2006] EWHC 2333 (Pat) at [32] - [35] and again at first instance by Lewison J. in Glaxo Group Ltd v. Genentech Inc [2007] EWHC 1416 (Pat), [2007] F.S.R. 35 at [63] - [65]. On appeal in the latter case, [2008] EWCA Civ 23, [2008] FSR 18, Mummery L.J., giving the judgment of the Court of Appeal, referred to that part of Lewison J.'s judgment with apparent approval at [33].
26. In my judgment, those authorities demonstrate that it is perfectly legitimate for the claimant to seek to obtain a judgment of this court on the validity of the patent in suit in the hope that it will lead to a settlement of the dispute between the parties throughout Europe. Nor, in my judgment, would it be in any way illegitimate for the claimant, absent such a settlement being achieved, to seek to rely upon the judgment of the English court in proceedings before the courts of other Contracting States or the European Patent Office. It is commonplace for parties litigating on the same European patent in a number of Contracting States to put before the courts of one Contracting State decisions arrived at in one or more other Contracting States. I do not see that such conduct can possibly be stigmatised as an abuse of process. That is particularly so given that such judgments may come to the attention of courts in other Contracting States in any event. The courts of all the Contracting States are seeking to apply the same substantive law. It would be most unfortunate if anything were to be done which made it more difficult for the courts of the Contracting States to arrive at common answers to common questions.'
'9. …..it seems to me to be reasonably plain that HTC's objective in pursuing its claim for revocation was not limited to ensuring freedom of commercial action for itself, its distributors and its customers in the United Kingdom. On the contrary, having regard to the background of the parallel proceedings in Spain and threats that have been made to customers such as Vodafone in a number of European countries, it is evident that HTC hoped that a finding of invalidity by this court would be of assistance to it in foreign proceedings such as those in Spain. It may also be the case, although this is perhaps slightly more speculative, that HTC was of the hope that a judgment of invalidity of this court would assist in promoting a settlement between the parties on a European-wide basis.
10. It is perhaps worth interpolating at this point that, for the reasons I gave in my judgment in TNS Holdings Ltd v Nielsen Media Research Inc [2009] EWHC 1160 (Pat), [2009] FSR 23 at [23] to [26], it is legitimate, and I would add increasingly common, for parties to seek a judgment of this court on the validity of European patents in the hope that such a judgment will be of assistance to them in either of the two ways that I have just mentioned.
11. The conclusion I draw is that the open offer does not mean that the pursuit of the claim thereafter by HTC was commercially pointless.'
i) In my view they are consistent in holding that it is a judgment on validity that may be of assistance to the Court of another contracting state. That makes sense when one considers the injunction gap which can often arise in states such as Germany which operate a bifurcated system and where a decision on infringement may be issued a considerable time before a decision on validity.
ii) Where there is the possibility of an injunction gap, if there are otherwise reasons to expedite a trial which includes validity here, a factor in favour of expedition can be that the decision on validity in the UK may be of assistance in persuading the German infringement court to stay the grant of any injunction. But that factor is not enough to justify expedition on its own.
'22. I have been informed by Mr Axel Verhauwen, a German lawyer and partner at Krieger Mes & Graf V. Der Groeben8, who is instructed by BOS in respect of the German infringement action, that because the Duesseldorf District Court infringement proceedings between the parties are limited to the question of literal infringement, the Dusseldorf court will not take account of a foreign decision in relation to infringement.'
'16. Mr Haberl has explained to me that the position in Germany, following the 2010 decision of the Federal Court of Justice in "Walzenformgebungsmaschine" (docket Xa ZB 10/09), is that German courts have to consider decisions of the EPO or courts of other contracting states of the EPC which concern an essentially identical question and, in case of a divergent decision, to deal with the reasons. I am told that this approach was confirmed in the 2014 decision "Sitzplatznummerierungseinrichtung" (docket X ZB 1/13).
17. Mr Haberl told me that, although these two Federal Court of Justice decisions, and decisions following them, dealt with validity or infringement by equivalent means, the interpretation of a patent claim is a question which equally concerns each national part of an EP – i.e. it is an "essentially identical question". Considering the case law, the Düssseldorf court would take into account a UK decision on the same patent with regards to interpretation of the claims – as would be determined in any finding of noninfringement.'
"The UK courts are always very interested to see decisions of our
German colleagues and judges of other EPC Contracting States
pertaining in particular to equivalent patents. If I were hearing an
infringement case in the UK, I would be very interested to see what
decision the German courts had reached.'
i) First in this dispute, the so-called injunction gap will not arise.
ii) Second, it seems to me that the experienced infringement Court in Düsseldorf does not need assistance in the form of a judgment of this Court on infringement of the UK designation of the patent.
iii) Third, it appears that the only reason for the action here is to attempt to influence the German court. If the 'spin-off' value of a UK judgment is not enough on its own to justify expedition here in a case where validity is in issue, that factor is even less powerful where validity is not in issue (i.e. infringement only) and there is no injunction gap in Germany.
iv) Accordingly, I see no reason, let alone a good reason, why this case should jump the queue and displace other litigants.