BACKGROUND: The High Court has recently upheld the decision of the Patent Office (otherwise known as the Intellectual Property Office (IPO)) in the case of Nampak Cartons Ltd v Rapid Action Packaging Ltd [2010] EWHC 1458 (Pat), 18 June 2010. The hearing officer in the Patent Office had held that a patent for a carton for holding a sandwich with a specific means for tearing the carton open was valid.

The appellant (Nampak) appealed the decision of the hearing officer of the Patent Office that the patent (owned by Rapid Action) was valid.  In particular, Nampak sought to revoke a patent on the grounds that it was obvious in the light of cited prior art.

The Judge in the High Court, the Honorable Mr Justice Floyd held that he could interfere with the decision of the hearing officer if the hearing officer had erred in principle or was clearly wrong.  The Judge also referred to a previous case which stated that: “Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge’s evaluation” (as per Lord Hoffmann in Biogen v Medeva [1997] RPC 1 at page 45).

COMMENT

This decision is good news for those companies who are reluctant to spend millions of pounds litigating patents in the High Court.  If a company simply wants clarity on whether a patent is valid or invalid, and/or whether a product or process infringes a patent, then such an applicant may apply to the Patent Office for a declaration in this respect.  Such an application is likely to be a fraction of the price of making such an application in the High Court and crucially even an unsuccessful applicant will not be exposed to such a high level of legal costs as would be the case if such an application was made to the High Court.

Expect more companies to lodge such applications in the Patent Office in order test whether certain patents are valid.

If you would like to discuss making such an application to the Patent Office, please feel free to call us in confidence.

One of the first questions often asked of the inventors by the Dragons is “who owns the rights to this product”.  Frequently, this translates as to meaning who owns the intellectual property rights in a product.  In the most recent episode broadcast of Dragons’ Den, a 21 year-old inventor, Vernon Kerswell, faced what came close to threats of patent infringement from Peter Jones, who is a 25% owner of a competing toy company.

Peter Jones claimed that there was no way this inventor could sell his wheeled helicopter device because his company owned the “worldwide patent” on this invention.  Strictly speaking, there is no such thing as a unitary worldwide patent, so Peter Jones can be quite legitimately accused of over-stating his position right at the outset.  In any event, patent issues are rarely simple enough to make broad sweeping generalisations, without a careful consideration of the issues.

In assessing whether the wheeled helicopter device does amount to an instance of patent infringement, a court would analyse the claims of the patent to see if they cover the new product.  The court would also usually be asked to decide whether the patent in question was valid.

Many granted patents are in fact invalid, hence perhaps Peter Jones’ sensitivity by claiming the patent in question was “watertight”.  Also, the wider the claims of a patent are, the more chance they often have of being judged invalid.  Furthermore, patents are time-limited, generally to around 20 years, so while they offer a monopoly over the invention in question, it is a monopoly right that does not last forever.

In the field of helicopters, which have clearly been around for well over 20 years, one issue would be how much longer such patents will be in force.  On the other hand, novel applications of existing technologies can, on occasion, give rise to the right to a fresh patent.

Conclusion: inventors should not take at face value broad statements from patentees / patent licensees, such as Peter Jones.  The law in this area is complex, so much so that the great Evan Davis clearly is muddled himself referring to this patent infringement issue as a “copyright infringement” matter.

A specialist intellectual property lawyer can often find a new company an effective and safe way through what it called the “patent thicket”.  As is no doubt one of the Dragons’ mantra (so long as they don’t have a competing vested interest), perseverance pays dividends.

The relevant provision in UK patents law is s.70 of the Patents Act 1977, which states that:

70 Remedy for groundless threats of infringement proceedings

(1)Where a person (whether or not the proprietor of, or entitled to any right in, a patent) by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats (whether or not he is the person to whom the threats are made) may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming any relief mentioned in subsection (3) below.

(2)In any such proceedings the plaintiff or pursuer shall, if he proves that the threats were so made and satisfies the court that he is a person aggrieved by them, be entitled to the relief claimed unless-

(a)the defendant or defender proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent; and

(b)the patent alleged to be infringed is not shown by the plaintiff or pursuer to be invalid in a relevant respect.

(3)The said relief is-

(a)a declaration or declarator to the effect that the threats are unjustifiable;

(b)an injunction or interdict against the continuance of the threats; and

(c)damages in respect of any loss which the plaintiff or pursuer has sustained by the threats.

(4)Proceedings may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process.

(5)It is hereby declared that a mere notification of the existence of a patent does not constitute a threat of proceedings within the meaning of this section.

This case started when a letter was sent to a large number of Boots stores who were stocking the patented “Zeno” device (the invention claimed in the patent is a hand-held unit for the treatment of insect stings and insect bites) and to other retailers in Europe. The letter set out the patent and continued:

“Our client has now found out that your company offers in the United Kingdom under the trademark Zeno a medical device for the treatment of acne which is also based on the principle of the application of heat over a specific period of time …

Up to this point we cannot see any difference to the technical solution for which our client was granted protection, all the more so since the temperature range is also within the limits of the range that is protected by the patent, and the patent discloses a lower limit in respect of the period of time.”

The Judge had to decide whether the sole purpose of this letter was to: “make enquiries of the other person for the sole purpose of discovering whether, or by whom, the patent has been infringed”. This is because is it permitted to make such enquiries without incurring liability for unjustified threats pursuant to s.70 of the UK’s Patents Act 1977.

In this case, the Judge held that the letter was not designed just to find out if the patent had been infringed.  In effect the Judge held that the letter amounted to a “veiled” threat of infringement. Case law has long-established that a threat can be made in a “veiled or covert, conditional or future” manner.

It will be interesting to find out the level of damages, which will have to be paid out as a result of these unjustified threats. Even if the damages are not great, the level of legal fees incurred by the losing party before the High Court will no doubt be significant and act as a large deterrent to others. All of which goes to emphasise that companies must consider carefully how to approach the issue of a potential patent infringement claim. A well thought out letter before action for patent infringement may ensure that the matter does not spiral disastrously in the wrong direction from the outset.

A new set of proposals by some of the leading individuals involved in intellectual property law, the Intellectual Property Court Users’ Committee, has set out to try and reduce this injustice and produced a report.

The report points out that the (London) Patents County Court has failed in one of its key aims: to offer a more cost-effective alternative to litigating intellectual property rights in England and Wales, as opposed to the High Court in London.  There are several proposals made by the Intellectual Property Court Users’ Committee, but one of the most significant is the proposal to limit costs recovery from the losing party from £25,000-£50,000 for intellectual property litigation.

If the government acts upon the proposals of the Intellectual Property Court Users’ Committee and make such proposals legally binding in terms of the Civil Procedure Rules, then this might go a significant way towards making legal proceedings in the UK more affordable, in the way in which other countries have already provided for.

As such, the proposals have the support of Strickland LLP, which is committed to providing IP litigation services to range of companies, from SMEs through the large blue-chip companies.

UK Customs’ made the following statement:

“Our [previous] practice has been to seize these items accepting a witness statement from the right holder as confirmation that the goods are infringing and therefore liable to forfeiture. Should the owner disagree with this determination they have the right to challenge this through judicial proceedings.

We now accept that the burden of proof should be upon the right holder who must confirm the infringing nature of the goods by taking legal proceedings. More pertinently any proceedings must ordinarily be instituted within ten working days but no later than twenty working days after notification of detention. Right holders must therefore be prepared to institute proceedings within the time period set out in the Regulation. Goods will be seized only if the right holder gains a successful judgment and we are directed by the court to seize the items in question.“

UK Customs has defended these changes on the basis that they are needed to comply with Article 13 of Article 13 of Council Regulation 1383/2003, which has been implemented into the UK via SI 2004 No. 1473.

This is a blow for intellectual property rights holders, as UK Customs had been a very effective (and cheap!) way of acting against infringements coming into the UK.

However, no doubt some rights holders may have been over-using UK Customs in this respect.  This may be another reason why UK Customs felt that the balance needed redressing by putting the burden of proof on the intellectual property rights holders.

The new regime may well impose a significant costs burden onto intellectual property rights holders.  Issuing court proceedings for each infringement will certainly be an expensive business.  Also, while some intellectual property infringements will be quite straightforward, others, such as those involving parallel / grey imports, may be legally much more uncertain.  Therefore, intellectual property rights holders may even be forced to issue proceedings on weak / uncertain grounds, which is a recipe for even more expensive potential litigation.

In a time of recession and continuing problems with counterfeit goods, this news has probably gone down with intellectual property rights holders about as well as a cup of cold sick. Nice.

Mind you, HM Customs may end up saving some money, which might  go some way to repaying the Government’s £Gazillions of debt. Some good news for Gordon, at last.

One of the most interesting aspects of the case was to decide whether the claimants had inadvertently invalidated their own patent by disclosing details of it before filing for a patent.

Pursuant to s.1(1)a of the UK’s Patent Act 1977, a patent may only granted to an invention which is “new”, i.e. it must have novelty, in line with s.2 of the Patent Act 1977.  Many people do not realise that the law in this area is very strict and even a very small disclosure may be enough to destroy the novelty of a patent.

Here the patentees had invited the Irish Minister for Trade and Tourism and a photographer of the Irish Times to their factory in order to publicise their new ladder product.  The Minister was apparently shown a test unit of the product and the photographer took a few photographs.  In this case, the Judge held that the disclosure to the Minister and/or the photographs did not sufficiently divulge the important features of the patented invention to count as an anticipating disclosure which would have invalidated the patent.

Although the claimants / patentees were successful in overcoming this invalidity challenge to the novelty of their patent, the decision, on this specific issue, appears to have been a relatively close run thing.  Another Judge could have quite easily ruled the other way on the same facts.

Accordingly, one of the key lessons from this case is: be very careful before disclosing details of your invention to third parties, before you have got a patent application filed.  If you desperately need to disclose your invention to third parties (such as those providing funding etc), then make sure that all concerned parties have signed up to sufficiently well drafted confidentiality / non-disclosure agreement.

Being responsible for invalidating your own (valuable) patent is one business mistake no-one wants to make.

The introduction states that:

“The European Patent Office (EPO) does not grant patents for computer programs (“software patents”) or computer-
implemented business methods that make no such technical contribution. In this respect the granting practice of the EPO
differs significantly from that of the United States Patent and Trademark Office (USPTO).

The EPO is bound by European patent law as laid down in the European Patent Convention (EPC), which has been adopted by the 35 member states of the European Patent Organisation, and as interpreted by the independent EPO boards of appeal, the judiciary of the Organisation.“

A full copy of the EPO report can be found here.

The Claimant admitted intention was to use a finding of invalidty from an English Court in other European jurisdictions.  The Honourable Mr Justice Arnold, of the High Court, held that such a motive was legitimate, as consistency of decisions was desirable.  The Judge also refused to stay the action pending opposition proceedings in the European Patent Office (“EPO”), following the principles laid down in Glaxo v Genentech, because the EPO proceedings would take at least two years longer than a final decision in the UK courts.