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Supplementary publication 5

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Pages 199-210

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Citation: Supplementary publication 5, OJ EPO 2015, 199
Online publication date: 23.12.2015
NATIONAL JUDGES' PRESENTATIONS
Recent developments in European and national patent law and case law

GB United Kingdom

Richard HACON

Specialist circuit judge, Intellectual Property Enterprise Court

Recent developments in European and national patent law and case law

I. Recent case law in England and Wales – Introduction

1. In the last two years the Supreme Court has given judgment in only two cases relating to patents. The most recent was Virgin Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46; [2014] AC 160.1 This was explained by Sir Richard Arnold on Wednesday afternoon as part of the review of the effect of revocation of a patent by an EPO technical board of appeal following a finding of infringement by a national court. I will not duplicate Sir Richard's thorough analysis here. The other was Schütz (UK) Limited v Werit (UK) Limited [2013] UKSC 16; [2013] 2 All ER 177.

2. In the brief time available I will summarise the decision in Schütz and outline three judgments of the Court of Appeal. I will also mention a judgment at first instance concerning cross-border jurisdiction which was subsequently partially reviewed by the Court of Appeal.

II. The meaning of "makes" in patent infringement: Schütz v Werit

3. A person infringes a patent if he "makes" a product falling within the claims. So far as I am aware this is the case under all European national patent laws (in the UK pursuant to Section 60(1)(a) of the Patents Act 1977) and it will also be true under the Agreement on a Unified Patent Court (Article 25(a)). The question the Supreme Court had to address was whether installing a replacement part of a product amounted to "making" the product and therefore infringing the patent (Schütz (UK) Limited v Werit (UK) Limited [2013] UKSC 16; [2013] 2 All ER 177).

4. The product was an intermediate bulk container (an "IBC") which is used to transport liquids. It consisted of a metal cage into which a large plastic container, or "bottle", was fitted. Often the bottle had to be replaced because it had contained toxic liquids or had become damaged. The patent was concerned only with the cage – the invention concerned flexible weld joints to the cage, a dimple on either side of the weld and a central raised portion. The patent acknowledged that the bottle was replaceable.

5. The cage had a life expectancy about five to six times that of the bottle. So there was a market in selling replacement bottles to users of the IBC. The defendant exploited that market. It supplied its own bottles to another company which reconditioned IBCs. This company installed the defendant's bottles and sold the reconditioned IBCs to users. The claimant alleged that such reconditioning amounted to "making" the product and that the defendant therefore infringed the patent.

6. At first instance Floyd J held that there was no infringement because the inventive concept claimed in the patent was wholly embodied in the cage. This was reversed in the Court of Appeal which found that there was infringement because the IBC ceased to exist when the bottle was removed; all that remained was a component of the IBC.

7. The Supreme Court ruled that there was no infringement. The Supreme Court held that the word "makes" does not have a precise meaning. So it must be interpreted contextually, in a practical way, by reference to the facts of each case. The inventive concept of the patent was relevant but not exclusively so because the precise scope of the claim may be a matter of chance. Distinguishing repairing an article from making it can sometimes be helpful, but not always because the two may overlap. It was also legitimate to consider the extent to which the replacement bottle was only a subsidiary part of the patented article. Several judgments of the Bundesgerichtshof in Germany were referred to.

8. The Supreme Court decided that ultimately the question whether installing a new bottle amounted to making an IBC was a classic example of identifying the relevant facts, weighing them up, and reaching a conclusion: in this case that installing a bottle did not in law amount to "making" the IBC. Those facts were:

(a) the bottle

(i) is a freestanding, replaceable component of the patented article,

(ii) has no connection with the claimed inventive concept,

(iii) has a much shorter life expectancy than the other, inventive, component,

(iv) cannot be described as the main component of the article, and

(b) apart from replacing the bottle, the reconditioner did no additional work to the IBC beyond routine repairs.

III. The effect of central amendment of a patent: Samsung v Apple

9. The judgment of the Court of Appeal last March (Samsung Electronics Co Ltd v Apple Retail UK Ltd [2014] EWCA Civ 250) was part of the much publicised and never quite ending battle between Samsung and Apple for global dominance in the market for tablet computers and smart phones.

10. Samsung brought an action against Apple for infringement of three European patents. Only two are relevant. At the trial Samsung relied on both as granted but also proposed amendments in the event that the claims as granted were held to be invalid. In March 2013 Floyd J found that the two patents were invalid, both as granted and as proposed to be amended (Samsung Electronics Co Ltd v Apple Retail UK Ltd [2013] EWHC 468 (Pat)). Samsung appealed.

11. I mentioned this was part of a global battle. Just taking Europe into account, Samsung sued Apple for infringement of one of these patents in Germany and Italy. In April 2013 the Federal Patent Court in Germany found the patent invalid. This judgment has been appealed. Samsung sued Apple for infringement of the other European patent in Italy and France. So far as I am aware at the time of writing, there has been no judgment in either of those countries.

12. In November 2013 Samsung filed an application under Article 105a EPC for central amendment of the claims of both patents. The proposed amendments were not in a form which Floyd J had considered at trial, so the appeal was not concerned with these new amendments. There was self-evidently a risk that the Court of Appeal would hear argument and give judgment in relation to claims which, shortly thereafter, would be deemed never to have existed. Pursuant to Articles 64 and 68 EPC the effect of a central amendment is that the amended claims are deemed to have had effect from the date of grant of the patent.

13. Samsung sought an adjournment of the appeal pending the outcome of its application before the EPO for central amendment of the patents. Its case was simple: better for the Court of Appeal to know which form the claims were in before hearing argument on the appeal. Samsung also stated that if its proposed amendments were to be accepted by the court it would be perfectly feasible for the Court of Appeal to rule on the amended patents on the findings of evidence which had already been made. No further evidence would be required.

14. Apple's position was that Samsung had left it too late to apply for central amendment, at least so far as the UK designations were concerned. Apple sought an order that if Samsung went ahead with the central amendment the appeal should be struck out. In effect the UK patents would be revoked. Samsung would of course be left to continue the amendment proceedings in the EPO in relation to the designations in other contracting states.

15. The basis for Apple's position was a long-standing rule of English law that a party should bring before the court all the issues to be decided. Parties are not entitled to raise some issues and if they lose at trial go back and try again with different issues they could have raised earlier. Specifically, if a patentee wants to propose amendments to its claims, these must all be raised at trial. It is an abuse of process to apply to the court to amend after the patent has been found invalid. As Jacob LJ pointed out in Nokia GmbH v IPCom & Co KG [2011] EWCA Civ 6; [2011] FSR 15, the same principle applies in other European countries and indeed in the EPO. After the board of appeal has ruled that a patent is invalid, the EPC does not allow the patentee to start formulating new claims that might be valid. It is too late.

16. The Court of Appeal accepted that Samsung was trying to reformulate its claims after a final ruling that its patents were invalid, contrary to well- established principles of law. Yet the introduction of central amendment under Article 105a in EPC 2000 made this expressly permissible. Accordingly it was not an abuse of process for Samsung to make and pursue its central amendment applications. The appeal was therefore adjourned until after the outcome of Samsung's application for central amendment in the EPO. If the amendment were to be successful, the appeal would be concerned with the claims as newly amended.

17. The Court of Appeal found support from the Supreme Court of the Netherlands in Case No. C07.085HR Boston Scientific Scimed Inc v Medinol Ltd. After a judgment of the Dutch Court of Appeal finding Scimed's patent invalid, Scimed applied to the EPO for central amendment, which was allowed. Scimed appealed to the Supreme Court. The Supreme Court held that only the amended claims were relevant and remitted the the case to the Court of Appeal for fresh consideration of the newly amended claims.

18. This is one of those instances where there is a conflict between competing policy considerations. On the one hand a patentee should not be entitled to oppress a defendant by extending litigation with the introduction of claim amendments after the trial. Yet the central amendment system provides a relatively quick and simple means to amend a patent, on limited grounds, and this is beneficial to the public.

19. The short answer is that EPC 2000 has generally decided the matter in favour of patentees wishing to amend. But as the Court of Appeal pointed out, it is possible to envisage circumstances in which exploitation of Article 105a EPC would be held to be an abuse of process. For instance the position may be different if it is not possible for the Court of Appeal to rule on centrally amended claims without the need for further evidence.

IV. Article 56 EPC and the technical contribution: Generics v Yeda

20. The main issue in this appeal (Generics (UK) Ltd t/a Mylan v Yeda Research and Development Co Ltd [2013] EWCA Civ 925; [2014] RPC 4) was inventive step. Lack of a technical contribution to the art is of course not a ground of invalidity of a patent in the EPC. But the problem-and-solution approach to obviousness under Article 56 EPC requires the court to assess inventiveness by reference to what the invention brought to the art – what has the inventor contributed by way of technical effect or advance? In this context the questions addressed by the Court of Appeal were these:

(1) What is the relationship between the technical effect and the scope of the claims?

(2) Must the technical effect be rendered plausible by the specification of the patent?

(3) Was evidence required to show that the technical effect actually existed?

(4) Must evidence in relation to the technical effect be confined to what was published before the priority date?

21. The patent related to an improved composition of a synthetic mixture of polypeptides called "copolymer-1". It was used in the treatment of multiple sclerosis. In the course of that disease an inflammatory response leads to the removal of the myelin sheath around the nerves. Copolymer-1 served to mimic the myelin basic protein. Before the priority date of the patent it had been shown that copolymer-1 might be beneficial to the treatment of relapsing-remitting multiple sclerosis. This research concerned copolymer-1 having a molecular weight of 14-23 kDa (kilodaltons).

22. The patent claimed an improved composition of copolymer-1, in particular where over 75% is within a molecular weight range from 2-20 kDa. The technical contribution advanced in the patent was that the copolymer-1 as claimed caused less irritation at the injection site and/or a reduced incidence of systemic side effects.

23. The Court of Appeal considered first the relationship between technical contribution and inventive step and also which evidence was relevant to proof of a technical contribution. Having reviewed the EPO and English case law the Court set out the following propositions:

(i) Article 56 EPC is in part based on the underlying principle that the scope of the patent monopoly must be justified by the patentee's contribution to the art;

(ii) If the alleged contribution is a technical effect which is not common to substantially everything covered by a claim, it cannot be used to formulate the question for the purposes of judging obviousness;

(iii) In such circumstances the claim must either be restricted to the subject- matter which makes good the technical contribution, or a different technical solution common to the whole claim must be found;

(iv) A selection from the prior art which is purely arbitrary and cannot be justified by some useful technical property is likely to be held to be obvious because it does not make a real technical advance;

(v) A technical effect which is not rendered plausible by the patent specification may not be taken into account in assessing inventive step;

(vi) Later evidence may be adduced to support a technical effect made plausible by the specification;

(vii) Provided the technical effect is made plausible, no further proof of the existence of the effect is to be demanded of the specification before judging obviousness by reference to the technical effect propounded.

24. So a patentee is obliged to set out a plausible technical effect in the patent specification and this must be common to substantially everything covered by the claims. A failure to do this will lead either to a finding of invalidity or will require the patentee to reduce the scope of the claims. If that hurdle is passed, the investigation moves forward to assessing inventive step by reference to the technical effect, the prior art and other evidence.

25. What if the specification provided a plausible technical effect, but this subsequently turned out to be wrong? The defendant argued that evidence published after the priority date showed that the claimed technical effect was false.

26. The Court of Appeal held that the problem-and-solution approach meant that the patentee's monopoly had to be justified by a contribution to the art. If all the patentee had done was to make a plausible but untrue prediction, this was the very antithesis of a contribution and did not give rise to an entitlement to a patent.

27. It was true that inventive step must be considered by reference to prior art available to the skilled person before the priority date. But this was to be distinguished from an anterior, distinct and purely factual question: what was the invention? The Court of Appeal re-emphasised that when considering that question, it was essential to have regard to the well-established principle that the scope of the monopoly must correspond to the technical contribution of the art. Evidence relating to that question – what is the invention? – is not limited by time constraints and can include evidence made available after the priority date. It followed that it was always open to a defendant to challenge a technical effect made plausible by the patent specification and, in doing so, to make use of evidence published at any time.

28. Finally, the Court of Appeal observed it was not necessarily the case that if the claimed technical effect is shown to be false on later evidence the patent must be invalid. It may be open to the patentee to advance a less ambitious technical effect and limit the scope of the claims accordingly.

29. In summary: the assessment of inventive step under Article 56 EPC over cited prior art must of course be done only by reference to evidence available before the priority date; however, a patent remains vulnerable throughout its term to new evidence that the technical effect claimed to justify the invention was in fact no contribution to the art at all.

V. Failure to designate a contracting state: Virgin Atlantic Airways v Jet Airways

30. This judgment (Virgin Atlantic Airways Ltd v Jet Airways (India) Ltd [2013] EWCA Civ 1713; [2014] RPC 18) is a stage in another long-running dispute, this one about airline seats, of which the decision of the Supreme Court in Virgin Atlantic v Zodiac also formed part. I will discuss this case only briefly because the facts are sufficiently unusual that it is unlikely to be of frequent application.

31. The patent in issue was filed by Virgin as a divisional application. In a note at the end of the electronic application form Virgin expressly stated that "GB is NOT designated in this application". Despite this, the EPO published the application containing a designation of all contracting states, including the UK. Virgin then wrote to the EPO withdrawing the UK designation of the parent application and stated that it would withdraw the UK designation of the divisional application before grant. In fact it took no steps to do this. The divisional patent was granted with the inclusion of the UK as one of the designated states. In the usual way, the UK Intellectual Property Office (UKIPO) placed the divisional patent on the UK register.

32. An application was made to the EPO by one of the parties in the litigation, Premium, to correct what it called an obvious error and to remove the UK designation. The examining division refused to do so and this was upheld by the technical board of appeal.

33. Premium next made an application to the UKIPO to correct the UK register and remove the UK patent. The UKIPO refused on the ground that this was really an application to review a procedural decision of the EPO and it had no power to do that. Premium appealed to the Patents Court where Floyd J dismissed the appeal. Premium appealed further to the Court of Appeal, relying on Article 6 of the European Convention on Human Rights, that is to say the right to a fair and public hearing by an independent and impartial tribunal established by law.

34. The Court of Appeal held that the powers of the EPO derived from a surrender by the contracting states' of part of their sovereign power under the EPC. The actions of the EPO were factually and legally independent of the contracting states. The acts of the EPO were neither participated in nor adopted by the contracting states.

35. Article 6 ECHR therefore did not assist Premium. No responsibility for the acts of the EPO, as might be imposed by Article 1 ECHR, could attach to any of the EPC contracting states. Article 6 gave the defendants no right to raise the question of designation of a European patent in the United Kingdom.

VI. Territorial jurisdiction: Actavis v Eli Lilly

36. This last case I will also take briefly, because the main point of interest is a short one. The claimants, Actavis, sought a declaration of non-infringement of a European patent extended by supplementary protection certificates. Actavis sought this declaration not just in respect of the UK designation of the patent, but also in respect of the French, German, Italian and Spanish designations. The patentee, Eli Lilly, argued that the English courts had no jurisdiction to hear applications for a declaration of non-infringement in respect of anything other than the UK designation, or if there was such jurisdiction, it should not be exercised.

37. It was not suggested by Eli Lilly that there was any bar to jurisdiction under Council Regulation (EC) 44/2001, the "Brussels I Regulation". The objection raised was purely under English domestic law.

38. At a preliminary hearing Arnold J ruled that there is no such objection (Actavis Group HF v Eli Lilly and Company [2012] EWHC 3316 (Pat)). English courts may hear applications of this type in relation to any designation of a European patent.

39. The judgment was appealed. The Court of Appeal (Actavis Group HF v Eli Lilly and Company [2013] EWCA Civ 517; [2013] RPC 37) held that the English court had jurisdiction to hear applications in relation to all designations of the patent, principally on the ground that Lilly had consented to service of proceedings on them and for that reason alone the English court had jurisdiction. The Court of Appeal did not explore in full, as Arnold J had done, the jurisdiction to hear the applications even if there had been no consent.

40. As matters stand, and as they are likely to remain, a party may seek in an English court a declaration of non-infringement in relation to designations of a European patent for contracting states other than the UK. This may be conditional on the UK designation also being before the court.

41. Jurisdiction having been decided at the preliminary hearing, the dispute went forward to trial. Before trial Actavis discontinued the proceedings relating to the German designation. At the trial Arnold J heard expert evidence from both sides in French, Italian and Spanish law respectively. Each expert supported his opinion by reference to legislation, case law and commentaries from his jurisdiction. Arnold J found that Actavis was entitled to a declaration of non-infringement in relation to the French, Italian, Spanish and UK designations of the patent.

 

 

1 Members of the Supreme Court also sit on another body, the Judicial Committee of the Privy Council, which is the final appellate court for a small number of Commonwealth countries. Unusually, it recently heard an appeal concerning patents, from the Court of Appeal of Jamaica: Pfizer Limited v Medimpex Jamaica Limited [2014] UKPC 20. This raised two issues under the (Jamaican) Patent Act 1857, still in force. Interesting though they are, neither has any relevance to patent law governed by the EPC.


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