Huw Evans: Harris. Well what can I say. A man who does not need any introduction at all. But without his leadership over the last 30 years or so, we would not be the team we are today. Thank you so much Gordon for that.
Gordon will, for the 24th time, deliver his annual review. A must on the calendar for all patent practitioners.
Next up Seiko Hidaka. Seiko joined the team last year as a director and her practice is all things technical and forward thinking policy shaping. Seiko will be picking up on some of the SEB cases over the last year and touch on how 5G may shake things up a bit.
Finally we have Chris Freeth. Chris is a patent and life sciences specialist. He straddles both transactions and litigation. In short, if you have something life sciences, he is your man. Chris will be taking a look at what we may see coming down the line in the course over the next year.
Before we start, I do have a few housekeeping points to cover off. Nothing on fire escapes or fire alarms, but I do want to pick up on a few points.
Given the time constraints, we are aiming to have a Q and A at the end of the session but please do send in your questions as we go along, by using the Q and A button at the bottom of the screen. We will try to deal with as many questions as possible, but we are aiming to finish by 4.30 and so any questions unanswered or indeed all the questions afterwards we will circulate a question of the list of the Q and A's to all participants.
At the end of the survey, there will be a pop-up survey which is your chance to provide feedback. We would really appreciate you taking the time to complete as it does help us for future seminars.
So, let us kick off and over to Ailsa.
Ailsa Carter: Thank you Huw. I am here talking about the numbers today that we have been collecting on patent judgments. This slide shows in light blue the number of reported judgments in patent cases for each of the last seven years. 2021 had the highest number of reported judgments – we found 80. The previous highest – 79 – was in 2016.
The number of reported judgments in patent cases includes judgments deciding substantive issues of infringement and/or validity - i.e. deciding the outcome on the merits. But those infringement and/or validity judgments are only a portion of the total judgments in patent cases, which include judgments on many other types of points, such as when and what relief should be granted and how the litigation is conducted. Those other judgments are not the focus of our numbers.
In 2021 there were 26 judgments in patent cases addressing substantive issues of infringement and/or validity. This was also the highest number in the last seven years. The previous highest number, 24, again being in 2016.
On the slide the infringement and/or validity judgments are indicated in dark pink.
To the right of the dark pink bar, the darker blue, red and grey bars indicate which courts handed down the judgments on infringement and/or validity that recorded in the dark pink bar. In 2021, four of the 26 judgments were given by the Intellectual Property Enterprise Court or the IPEC, 16 by the Patents Court, and six by the Court of Appeal.
Here is a pie chart showing the outcome in 2021 of the 26 judgments on infringement and/or validity.
For each judgment, we have identified the outcome according to our colour system.
Greens and blues are good for patent owners; reds and yellows are good for non-patentees. The colours run clockwise from 12 o'clock in the same order as the legend shown on the right of the slide.
If validity was not in issue, only infringement, then the outcome is recorded as infringed - in green or not infringed - in yellow, as shown at the top of the pie. If one claim is found infringed, that is considered the dominant finding.
Similarly if a single patent claim was found valid and infringed, then that is the outcome we have recorded for the judgment – valid and infringed is shown in the darker blue. In 2021, this was the outcome in nine of the 26 judgments.
If all patents in issue were found invalid, then invalidity is recorded – shown on the red in the slide. The invalidity outcome is recorded irrespective of what the court decided about any issue of infringement. In 2021, invalidity was the outcome in 11 of the 26 judgments on infringement and validity.
If infringement was not in issue and some or all of the claims in issue were found valid, then this is recorded in a lighter shade of blue – 2021 had just one of those.
Finally, if the outcome is that the patent in issue is valid but not infringed, that is recorded in purple – in 2021 there were three of those judgments. For the party alleged to infringe, purple is a successful outcome. However for the patentee, purple is rather more favourable than red, because the patent continues in some form and therefore remains of potential benefit for the patentee in the future.
Looking at the balance of outcomes in patent judgments in 2021, the picture is pretty consistent with the total for the previous six years. There was a higher number of valid but not infringed outcomes than seen in previous years, but otherwise a fairly consistent spread.
When we break down the outcomes into sectors, the numbers for 2021 become quite interesting.
Here are the 2021 judgments broken down into the sectors we are tracking.
Outcomes in Tech cases in 2021 show a spread that is fairly consistent with the previous six years. The pie chart for 2015 to 2020 for Tech has the dark blue slice continuing around to six o'clock, so 2021, although a little less successful for patentees, is in a similar sort of place.
The other category is also marginally less favourable for patentees in 2021 than in the previous six years, for which the pie chart is pretty much fifty/fifty.
For medical devices, the figures for 2015 to 2020 show eight blues and five reds, so 2021 has been notably less successful for patentees than the average for the previous six years. But the numbers are small – in 2021 there were only three relevant judgments that we have categorised in the medical device sector. Those cases concerned patents about a comfort layer for an ostomy bag, an insulin patch pump, and apparatus for controlling a ventilator.
Against the background of swings away from the patentee in the tech, medical devices and other sectors, the reason the total figure for 2021 has been stacking up as comparable with the totalled picture for the previous six years is because in the judgments we have categorised as pharma have seen outcomes going more in favour for patentees than has previously been seen in this other six years.
I should flag here that in 2021 we have included the Illumina versus Latvia MGI case as a pharma case. This is because although the technology is about DNA sequencing, and so arguably could fall in the medical devices category, it is also about chemistry and biology – about building DNA chains - and so we think it is better captured in the broader life sciences sector, which is what our sector here called pharma has always been about.
This slide shows 2021's outcomes in pharma judgments against the outcomes in pharma judgments in the previous six years. The 2021 judgments number only seven, but the difference is nevertheless notable.
Of the seven judgments in 2021, four were in the Patents Court. They were given by: Birss J, Meade J, Mellor J and Judge Hacon. Just one of those judgments went against the patentee.
Pausing here, the crop of judges hearing Pharma patent cases in the Patents Court has evolved. There was no Arnold J in 2021 – he was already in the Court of Appeal. Birss J heard just one pharma case at first instance amongst his move to the Court of Appeal. So now is a sensible point to have a look at how their outcomes over the last seven years in the Patents Court compare.
Here we have charts showing the outcomes of infringement and/or validity disputes determined by Birss J and Arnold J in the Patents Court in the years 2015 to 2021.
For Birss J, the pie charts for tech and pharma are comparable. Slightly more than half of Birss J's judgments resulted in success for the patentee.
For Arnold J, the picture is different. For tech sector disputes, his outcome pie chart is similar to that for Birss J, although he heard fewer tech cases. But for pharma cases, Arnold J determined only two of 12 cases in the patentee's favour.
So it could be that the change seen to the pie chart for pharma outcomes in 2021 in the Patents court is not just a blip, but indicates a change of wind in that court, accompanying the change in personnel. Time will tell.
Also interesting in 2021 is the profile of outcomes in the Court of Appeal. Again, this could just be a blip, but the difference shown on the slide is notable.
Half of the Court of Appeal's relevant judgments in 2021 were in pharma patent cases. Two were in tech.
In the pharma cases, two confirmed the first instance outcomes that covers off the red slice and one of the dark blue cases. The third was the Fibrogen v Akebia case, in which Birss LJ overturned Arnold LJ's first instance finding that certain key claims were invalid for insufficiency. So one of the dark blue slices was purple at first instance.
On the other hand, in one of the tech cases, Optis v Apple, Arnold LJ overturned Birss J's first instance finding of infringement and essentiality – turning a previously blue slice purple.
Returning to the Patents Court, here is a look at outcomes by Judge, all infringement and validity judgements in the years 2015 to 2020 so not including this year. That is 76 in total.
The majority were given by Arnold J or Birss J. a further ten were given by the late Henry Carr J. The remainder were given by a smattering of deputies, Ipec incumbents and wider High Court Judges.
Here are the outcomes in 2021, again in the Patents Court.
Meade J gave six judgments, Judge Hacon gave two judgments in the Patents Court and three in IPEC, which are not shown on the slide. The newly appointed Mellor J and a newer profile of judges – Pat Treacy, Nicholas Caddick QC and Marcus Smith J – all delivered judgments too.
This slide includes all the patent judgments in the years 2015 to 2021, from the IPEC, the Patents Court, the Court of Appeal and the Supreme Court, separated according to the sector of the dispute – tech, pharma, medical devices, automotive or other.
The slide shows a drop between 2016 and 2020 in a proportion of patent judgments given in respect of cases in the pharma sector, but a slight increase in 2021. Perhaps the results in 2021's patent cases will encourage that upward movement further.
Simultaneously, the years 2015 to 2021 have shown a steady increase in judgments emerging in the Tech sector. Many of these concern standards essential patents.
Cases in the Tech and Pharma sectors are almost entirely heard in the Patents Court. The IPEC has a higher proportion of the other category of sectors than the Patents Court.
Finally, as we have looked at the activity in the Patents Court, let us wrap up with a brief comparative look at what has been happening in the IPEC, which gets less patent activity than the Patents Court. In the years 2015 to 2021, the IPEC has given 21 infringement and validity judgments - the Patents Court has given 92.
The IPEC pie chart on this slide shows that outcomes for patentees in the IPEC, overall, have not been as favourable as in the Patents Court. Why?
Most of the patents judgments emerging from the IPEC have been given by Judge Hacon – are his judgment outcomes perhaps aligning with those seen for Arnold J in the pharma sector? Let us have a look.
Here are Judge Hacon's outcomes in the IPEC. They are indeed showing a strong majority of cases being decided against the patentee – just three of 16 were decided by him in the patentee's favour.
However, Judge Hacon has also heard a number of cases in the Patents Court, and there, although the numbers are small, the outcome pie chart is more favourable for patentees, who succeeded in four of the six cases.
Back in the IPEC, the other judgments, given by Judge Clark or a deputy judge, also show a pattern of patentees being less successful than patentees tend to be in the Patents Court.
So perhaps the difference between the outcomes seen in IPEC and those seen in the Patents Court reflect the types of patents being asserted in the IPEC, rather than a difference in approach by the judges concerned.
It will be interesting to see how this trend develops.
That is it from me. I will hand over now to Gordon.
Gordon Harris: Thanks very much Ailsa and welcome to everybody. I was going to say great to see you, unfortunately, I cannot see you but hopefully as Huw says, next year we will be back in person again.
Right. There is a lot to get through so I am not going to hang around, I am going to get started.
At the outset of last year's annual review looking back at 2020, I said that it could not have been described as a normal year in any sense of the word. The world was coming to terms with the worst global public health crisis for a century, and this has then impacted on so many aspects of our daily lives. Including the conduct of patent litigation in the UK.
Now I praised the courts and the Judges for what I described as their ingenuity, inventiveness, determination and hard work in delivering an almost seamless service to litigants in the IP Courts. This was reflected in the substantial volume of judgments handed down. Much of what seemed inventive and ingenious last year has now become the new normal.
We have a fully stocked bench of IP specialist Judges at all levels, this is a really very welcome development and one that bodes well for the medium term future of patent litigation in the UK despite all the many challenges that lie ahead. With Lord Kitchin in the Supreme Court, Lords Justice Arnold and Birss and Lewison in the Court of Appeal, Meade and Mellor in the High Court and both His Honour Judge Hacon and Her Honour Judge Melissa Clarke in IPEC we have proven experienced and reliable judges at all levels.
Further, as we will see they are ably supported by a growing rank of deputies who is showing themselves to be more than capable of handing down strong, clear and indeed very helpful judgments.
The upshot of all this, has been a fascinating set of judgments in 2021, the most we ever had across the full range of patent topics. Whilst there are the usual highly technical cases in the life sciences and tech fields, as someone very much at home in the world of planes, trains and automobiles, I am delighted to see really important patent ball being discussed in cases about fixing tools and seat drills.
There is, as will become clear, a very welcome trend towards pulling the threads together and providing some clear summaries of the established positions as a bedrock for future judgments. This has been a year when in many respects, the case law has taken us back to basics.
None of this should be taken as acknowledgment that everything is now perfect. This presentation would not be complete without at least one major rant about a judgment which to my mind, flies in the face of all sensible and proportional reasoning. You will have to wait a little while for that.
So, it is time to get started on the review of the 2021 cases. As we have heard from Ailsa, there were 80. This presentation can only deal with a very limited number of them. However, they are all dealt with in the accompanying paper, which will be made available online after today.
If you read that, you will need to read nothing else to be fully up-to-date with the UK case law. I will adopt my usual format, we will start with construction, infringement, defences and remedies, then move onto validity and finally a few technical issues, though there is much interest to be had there this year.
Right. Construction. Four full years after the Supreme Court's judgment in Actavis and Lilly which overhauled the law of patent infringement, the task for the court when construing a patent is now fairly well settled. So before we plunge in, let us just take a step back.
There is now a doctrine of equivalence. But as Lord Neuberger clearly pointed out when he started all of this off in Actavis, the question of assessing equivalents is one of infringement and scope of protection. It is a separate exercise to the task of construing the patent.
That exercise is still conducted largely on the basis of the old established law which probably reached its most complete statement in Virgin Atlantic and Premium in the judgment of Lord Justice Jacob. Now that process has come to be known as normal construction and Judge Hacon summed it up in Kwikbolt and Airbus when he said "since Actavis and Lilly there have been two steps to ascertaining the scope of a patent claim. The first is to decide what the claim means in accordance with the general rules of construction of a document. This has sometimes been referred to as the normal construction of a claim. Melissa Clarke continues to give some very good revision statements of legal principles in A Ward and Fabcon, she said "it is for the court to construe the patent objectively. Adopting the mantle of the notional skilled addressee to whom it is directed and in the light of the common general knowledge with which the skilled addressee is assumed to be imbued".
It is heartening to see the return of the mantle to patent language, adding a suitably Dickensian feel to twenty first century judgments.
In the Court of Appeal in Fibreweb and Geo-Fabrics, this was a case about railway tracks, Arnold said "the claim must be interpreted purposefully but without taking into account equivalents. Infringement by equivalents now falls due to be separately considered".
So there we have it. The position is quite clear on the approach to be taken.
Let us have a look at a couple of cases of purposive construction in action. Turning to what exactly amounts to a purposive construction, case which stands out this year and in fact turns up in many many areas is Optis and Apple. The Judge, Meade J noted that the parties were in such fundamental disagreement about the meaning and scope of the claims that they could not agree what simple words or phrases were in issue.
Meade sorted it out. He considered the most fundamental question to be about the word "counting" and what that meant in the context of the claimed method. We seem to have lost our slides for a moment here. Perhaps someone else will bring them up. If Ailsa has disappeared, bit of I.T. problem there.
Against the background of that context, which the Judge explained, he said if the skilled person put their mind to it, they would know that counter-based mechanisms operated in units whereas windows based mechanisms operated in percentages – here we go we are back again.
So this paved the way to his construction of the term "counting" and he gave this explanation. Where are we, we are nearly there. He said "I do not find the overall language patent at all difficult. A tram is similar to, but different from a bus and I claim a bus". Right, we will be on the right slides in just a moment, so apologies for this.
So let us move on to look at the doctrine of equivalence. The most significant case law in infringement in 2021 has emerged in the context of the developing doctrine of equivalence. First a procedural point that popped up in a case called Facebook and Voxer. To cut a long story short, the case for infringement by equivalents was made very late in the case. Birss LJ was asked by the parties to give a ruling on how and when a pleading of equivalents should be made.
He said that an allegation of infringement on the doctrine of equivalents must be pleaded in the particulars of infringement, right upfront. The patentee's statement of case on inventive concept and other aspects of the Actavis test should then be produced when claim charts or a statement of case of infringement is produced. Now this is a welcome development.
There have been far too many instances of ambush by equivalents 2017 - since 2017 rather with it being raised very late in the day.
So just by way of reminder, in Actavis and Lilly, Neuberger described the second stage of the assessment of infringement, the doctrine of equivalents as addressing the following issue – does the variant nonetheless infringe because it varies from the invention in a way or ways which is or are immaterial.
Now in this context Lord Neuberger considered that the old improver protocol questions were still helpful but they needed some reformation, that has been done and they are now generally known as the Actavis questions.
Judge Hacon used the reformulated questions in his judgment in Kwikbolt and Airbus. Kwikbolt's patent concerned a temporary blind fastener, a widget that could be used by fitting from one side of the workpiece to hold two panels together during a manufacturing process and then subsequently removed.
Following the Judge's conclusions on construction, the accused product did not infringe on the normal interpretation because integer eight requiring the screw member to have a screw head adjacent first member head was not met.
Turning to the doctrine of equivalents, Judge Hacon said that the reformulated Actavis questions require the variant to be identified. But this is the important bit. He said that the identification of the inventive concept must be done without reference to the variant.
He said the important point in my view is that a correct assessment of the inventive concept cannot be achieved with the variant in mind. The correct identification of the inventive concept must be done through the eyes of the skilled person who has no notion of what the variant is. A skilled person has only the relevant claim, the specification as a whole and his or her common general knowledge to work with.
This may have a material effect on the manner of instructing expert witnesses in relation to this question. The Insulet case was decided by Deputy Judge Pat Treacy. It involved a micro-pump device for dispensing insulin. The patentee's product was entirely automatic, whereas the alleged infringement had a sort of bolus pump where a specific dose could be dispensed in anticipation of taking on food.
Now the pump could be turned off, after which the allegedly infringing device functioned in exactly the same way as the patent claims. The Judge addressed the question of identifying the inventive concept and said, the first part of the second Actavis question requires the identification of the inventive concept not a high or generalised level, but having regard to means identified in the patent to achieve the result desired by the patentee.
The phrase 'inventive concept' follows and to my mind encompasses not only the result which is the overall subject of the patent, but also to the means by which that result is to be achieved. In other words, the result and the means used to achieve it are all part of the inventive concept and it is on this that the court must focus when considering infringement.
Now the Judge concluded in this case that the inventive concept was for a small inexpensive disposal device. The introduction of the bolus pump, rendered it larger and more expensive and so less disposable and therefore it did not achieve substantially the same result by substantially the same means and did not infringe.
Now then! We have heard a lot about the German Formstein defence in recent years and the concept behind it turned up although not decisively, in two judgments in 2021. So what is all this about?
Think of the scope of a patent for assessing infringement, like an archery target with only two rings. The inner ring is the scope of the patent on a normal interpretation. The outer ring is the penumbra created by the doctrine of equivalents. Now if a patent is found to have been infringed, either on a normal or an equivalents basis, it is quite clear that the infringer will be saved if they fire a prior art arrow that hits the inner circle, because the patent is then going to be invalid, for either anticipation or obviousness.
But, what if the prior art arrow hits the outer ring? It would not anticipate or render obvious the patent on a normal construction. But it does fall within the area occupied by the equivalents. Now does that render the patent invalid or does it just mean, that it is not infringed?
Now we can go back in time and get a little bit of assistance from the Gillette defence. The gist of the Gillette defence is that if the alleged infringement can be found to be obvious over prior art at the priority date of the patent, either it does not infringe the patent as a matter of construction, or the claims are invalid.
Now as we have seen, the assessment of infringement by equivalents is not a matter of construction, it is simply a question of infringement. On that basis, should the appropriate defence, if the prior art arrow hits the outer circle, be more in line with the law behind recent arrow declaration cases. The finding of obviousness over prior art in those cases renders the otherwise infringing product or process, safe from an infringement action but it does not necessarily impact on the patent itself, other than possibly to limit its scope.
Now the German Formstein approach arising from the case of the same name, adopts the arrow solution. The fact that in infringement which is caught by the doctrine of equivalents is in itself obvious over prior art, gives a good defence to an infringement action but it does not render the patent invalid.
That approach which might have been seen as unique to the German biofacted system was actually also adopted by the Dutch Courts in Eli Lilly and Fresenius.
Now in two cases in 2021, Lord Justice Birss and Meade J grappled with this question, although only Birss actually mentioned Formstein directly. So we will look at that one first.
In Facebook and Voxer, Birss was not actually called upon to decide the case on this basis but he said, "if I did have to decide the matter, I would hold that the right approach is the Formstein approach so that the conclusion if the equivalent device lacks novelty, or is obvious is that the claim scope must be confined to its normal construction in that respect. I would do so for two reasons. If a claim on its normal construction is valid, then it seems harsh to invalidate it on this ground. What else could the patentee do but write their claim in a way which normally construed did not cover the prior art.
So that approach promotes certainty. Secondly, since it is clear that other EPC countries work that way and this is a reason in itself for this EPC state to take the same approach, so it is good to see that Lord Justice Birss is still a good European.
In Optis and Apple, Mr Justice Meade was also asked to consider this issue, although not by name as Formstein. Apple contended that although it's prior art had failed to defeat the patent on the ordinary interpretation, nonetheless it did anticipate the area of equivalents in which infringement was sought and this should render the patent invalid.
Now Meade as I said did not mention Formstein but he did say this, "the present case raises the issue of whether, as a matter of law, equivalents is available to broaden a claim as to the target for an anticipation attack or only applied to infringement."
This is an extremely important point for UK patent law. It seems certain to need the consideration of the Court of Appeal and very probably the Supreme Court. When it is first ruled on in a case where it is decisive to the result, it will need to be fully argued, including with reference to the law of other EPC jurisdictions and with regard to how and whether people can be prevented from practising the prior art of if not, how and why not. So a clear statement from Meade.
He did not actually find infringement in this case so the question was moot, but he has clearly put down a marker that the issue needs to go much higher in the judicial hierarchy for a definitive decision. As things stand, it looks very much as though the Judges favour the Formstein approach.
The Patent Office would probably be quite inclined to agree with that as otherwise examiners may have to start considering equivalents in the prosecution process.
Right, let us move onto evidence now. In several cases in 2021, Judges kindly reminded us that the role of an expert is to educate the court on the technology concern from the perspective of the notional addressee, the skilled person not to try to be the person skilled in the art.
The assessment of expert evidence is not an exercise in determining which expert in fact approximates most closely to the skilled person. Nevertheless, in order to put themselves in the position of the person skilled in the art and assist the court accordingly, it does help if the expert knows what they are talking about.
An example of this going wrong can be found in Meade's judgment in Optis and Apple. Now this was one of these multi-trial FRAND cases. At trial B, the expert, appointed by Optis gave evidence on how the ETSI system worked and how its IPR policy had developed.
Meade had said that she was an excellent, well-qualified witness who supported her opinions with careful and complete analysis of the facts. However, in trial C, the same expert gave evidence in respect of the technical issues in the case. Now Meade said he remained of the view he had formed in the earlier trial of her personal qualities, but in trial C she was materially outside her area of expertise. He said her evidence was a very limited help, she misunderstood the key concepts and made errors in modular arithmetic and she put far too much emphasis on secondary evidence. As a result, the Judge said that in general it was the evidence of Apple's expert that he preferred and Optis' three patents were found invalid for obviousness.
It is very unusual for the inventor to give evidence and even rarer for an inventor to give expert evidence. The role of an expert is to educate the court about the knowledge and perspective of the notional uninventive person skilled in the art. By the very nature of things, the inventor tends to be hmm, inventive! And may well have a challenge showing real objectivity. But, such a person tried this in Tehrani and Hamilton and came unstuck.
Judge Hacon said, "I am sorry to say, that Professor Tehrani did not provide the necessary indication of her objectivity. I think she came to the court to argue her case and that her evidence was given in that spirit. I do not suggest that Professor Tehrani had the intention of misleading the court, but it was my strong impression that she could persuade herself of the truth of matters that fitted her view of the case. It does not follow that she was wrong about such matters. However, I was not always sure that what she said was fair and accurate. In contrast, Hamilton's expert, a professor at Aalborg University in Denmark was an impressive and helpful witness". And Professor Tehrani's patent was found invalid for lack of novelty and obviousness but had it not been, it would have been infringed.
The moral of the story is pretty clear. Experts win cases. Choose a good one and make sure to instruct them properly.
Now, a trend appeared in 2021, which has been the determination with which litigants have pushed and explored the extent to which they can maintain confidentiality in or force the disclosure of, highly sensitive commercial information in the course of litigation.
This really arises from the prevalence of FRAND cases where of course details of licences granted, royalty calculations etc. are very relevant to the question of setting comparables.
Natural justice requires a party to know the case against them and the evidence on which it is based but in the Supreme Court in Al Rawi and The Security Service, it was also recognised that where the whole object of the proceedings is to protect a commercial interest, full disclosure may not be possible if it would render the proceedings futile.
Now this problem arises in the SEP FRAND arena. Back in 2020 in OnePlus and Mitsubishi, Lord Justice Floyd had made clear that the court should not facilitate the granting of a competitive advantage and inflict a competitive disadvantage unless justice absolutely required such a course to be taken.
He said in the context of discovery, it was not wrong in principle for prima facie highly confidential documents to be disclosed first on an external eyes only basis. Especially if the sharing of pricing information might contravene competition law which is a real hazard.
Against that background a number of disputes about confidentiality fell to be considered in the Patents Court in 2021. In Interdigital and Lenovo, Birss preferred not to be make any order for specific disclosure rather than using the external eyes only formula. He was not persuaded that the gaps in the information actually available through public sources was so significant as to make it impossible for the court to produce a fair estimate.
He said there was significant value in terms of open justice in producing a decision in this case based on formation which was publicly available.
In Facebook and Voxer, the issue was around who could join a confidentiality club for visibility of Facebook's product and process description. Now, this was an odd case. The case for Facebook's running being run by three teams of lawyers – one in the USA one in the UK one in Germany.
Acknowledging that the rules on confidentiality were somewhat different in Germany and noting that the UK team did not actually include patent specialists, the Judge ordered that the product and process description in the UK should be disclosed to one lawyer in the US – that was strictly on the condition that he should not communicate with the German team about the PPD otherwise than with the knowledge and consent of the UK team.
Now this just illustrates the sort of complexities in cross-border confidentiality issues and that leads me onto the next point.
The judgment in Autostore and Ocado serves as a warning to everyone involved in multi-national settlement discussions. So these discussions took place in London in 2018 involving three meetings and associated email exchanges. At the outset of the first meeting, it was expressly agreed that the discussions were confidential and would take place on a without prejudice basis.
By the time we get to the third meeting, Autostore had offered to provide Ocado with some advance materials, which they did and one particular document – we'll call it 'the document' was disclosed on each page of that document it said, 'confidential and without prejudice provided for the purposes of settlement negotiations only'.
So the third meeting duly took place and it opened according to the attendance note, prepared by Ocado's London based lawyers, with this statement, "SA stated that this meeting was a continuation of the confidential and without prejudice discussions between Ocado and Autostore and that any US law discussions were to be governed by Rule 408 of the Rules of Evidence.
The parties agreed there was no intention to waive privilege.
Now in 2021, three years later, Ocado's solicitors became aware that Autostore had referred to the London discussions in a document, 'the document' served in proceedings before the US International Trade Commission. Ocado applied to the High Court in London for an interim injunction restraining the use of information from the London discussions in any proceedings including the ITC proceedings.
The matter went to court, Hacon focussed on the merits of the case and said it was agreed that the US law discussions were to be subject to Rule 408. So in his view, the attendance note should not be read as meaning that the English without prejudice rule also applied. If the point went to trial, it could not be said there was a high degree of probability that Ocado would succeed so he did not grant the injunction.
Ocado appealed and there was a split judgment. Now the majority in the Court of Appeal – Geoffrey Vos and Nicola Davies dismissed Ocado's appeal. Their reasoning was the same as Judge Hacon. They said that the agreement was effectively varied at the third meeting to provide that any US law discussions were to be governed by Rule 408 instead of the English without prejudice rule, so a US Court would need to deal with any alleged breach.
Lord Justice Nugee gave a dissenting judgment that is well worth a read. His view was that the use of the word 'and' as in 'and that any US law discussions were to be governed by Rule 408 of the Rules of Evidence' was consistent with the parties wishing to maintain the protection of the without prejudice rule.
He said he saw nothing in the facts that was inconsistent with that. The effect of the statement was not to abandon the without prejudice protection for the document and to replace it, but merely to recognise that the discussions would as well as being without prejudice attract the consequences of Rule 408. He said he would have allowed the appeal and would have granted the injunction.
Now I would have thought that he could also have pointed to the use of the word 'continuation' in the attendance note. That more than implies that the ongoing meetings were on the same terms as those held previously and it is hard to see where Judge Hacon and the majority of the Court of Appeal found the grounds to identify a variation.
So I think the courts got that wrong but the judgment definitely serves as a stark warning of the dangers of referring to foreign law when identifying material discussions as without prejudice, reference to the foreign law could water down the protection available under English law.
Now at this stage I would normally be handing over to Alex Brodie to talk about SEP FRAND matters but Alex, instead of talking about case law is actually conducting case law. Today is the last day of the Interdigital and Lenoovo litigation so she is not here but as Huw said, we are delighted to have Seiko Hidaka who is a genuine expert in this field. Seiko is going to talk to you for a little while about SEP FRAND cases while I rest my voice and come back to validity later. Seiko – over to you.
Seiko Hidaka: Thanks Gordon. Thank you. Really very much indeed for involving me in this very significant event for the firm. Gordon has already mentioned some standard essential patent cases but I am going to just focus on the jurisdiction side of the SEP disputes.
Now most of you would be familiar with standardised technologies and the fact that they are global in nature usually and in the case of cellular communications where the bulk of SEP disputes lies, devices for work in accordance with the same standards so they are inter-operable, meaning they can communicate with each other regardless of which company made them and where they are located.
It therefore follows that SEP cases tend to have an international flavour and that is why we see a lot of jurisdictional wranglings in SEP disputes. So today I am going to go and discuss three cases that relate to the jurisdictional side of things.
The first is the case of Optis and Apple and the UK Court's treatment of unwilling licencees. Secondly I am going to talk about what the UK Court's response was when the implementer objected to the UK Court determining the terms of a global FRAND licence and thirdly, a case dealing with the question of whether an implementer could ask the UK Court to determine the terms of a global FRAND licence.
So going over to the Optis and Apple case but before I do that, I just wanted to look at the Unwired Plan and Huawei case which is a very well-known case and it forms a backbone of the Optis and Apple dispute.
Now in Unwired Planet and Huawai, Unwired Planet who was the sole essential patent‑holder asserted four of its SEPs. What Unwired Planet had to do was to win on showing that its patent was valid and it was essential and therefore infringed. In fact they managed to win on two patent trials but now it was down to the court to decide what the appropriate relief was.
That was going to be determined at the FRAND trial and the really important point here is that the UK Court decided that where a SEP holder has a global SEP portfolio and the implementer seeking a licence under that has a global client base, then the territorial scope of a FRAND licence would usually be global.
So following a FRAND trial, the court settled terms of the global FRAND licence between them and the implementer Huawei had a choice, so accept the FRAND licence as determined by the UK Courts or accept that it has to be injuncted, but was not a normal injunction it was a FRAND injunction which means that as soon as Huawei decides after all that it wanted to accept the FRAND licence that injunction is lifted. In a normal patent case an injunction will last until the expiry of the infringed patent but that was not the case here.
Next slide please.
So I wanted to just labour one point first, which is that a lot of the other courts of other jurisdiction, thought this was quite a striking decision because what the court was deciding, was what the licence terms should be on foreign patent rights as well. But the UK Court says, well no it felt that it was competent to determine a FRAND licence terms on the global basis because the proper characterisation of the case was of a dispute concerning UK patent infringement, namely UK patent right it was not about determining FRAND licence terms.
So having that background under our belt for this dispute and also the next dispute I am going to talk about, let us get onto the Optis and Apple case.
Now background to the case was very similar, Optis and Unwired Planet are in the same group of companies and they were negotiating with Apple and it was not going well.
Optis decided that it had basically wants to get on with getting the licence and getting the revenues that it was due under that licence and sued Apple in the UK. That was February 2019.
Now in the course of litigations - if you could turn to the next slide that would be great – in the course of the litigation, it became clear that Apple was not necessarily promising that it would take the court determining determined FRAND licence following a FRAND trial which was listed in June 2022. Why should Optis wait until then only for Apple to turn its back away and exit the UK market.
Optis said that such behaviour of Apple was unwilling and they should be injuncted. Optis then went along and succeeded in winning its two patent trials and Apple was determined to have had infringed Optis' patents.
The court agreed to decide at that point whether Apple's behaviour was indeed unwilling and therefore should be injuncted and these sets of slides goes to essentially summarise the thought processes of the court. The court asked itself is the implementer, Apple infringing? Well, yes! It had succeeded in showing that its patents were valid, essential and therefore infringed.
Next question. Does Apple have the means to obtain a licence? Well of course it does. Optis had offered various licences to Apple. Apple was not content that they were FRAND so Optis said, well if you do not agree with us, we will promise that we will accept whatever the UK Court said is FRAND. Apple are you prepared to take that licence?
Well, is Apple intending to take that licence? Well no not necessarily. What Apple said was, well they do not know what the terms are going to be like. How could they possibly agree to the court determined FRAND licence without knowing the content.
The UK Court said that Apple was being unwilling. That licence that was due to be determined by the UK Court was by definition going to be guaranteed to be FRAND. That was on the table. Apple is infringing. Why have they not promised the UK courts that it will not accept it.
So Optis said, well that must mean that Apple is unwilling, it is not even entitled now to take a FRAND licence. It is not acting in a FRAND way. The court had to consider, is Apple too late to take any FRAND licence that it might then go onto decide. For this, the court looked at various background facts relating to the IPR policy of the relevant stance of setting organisation in this case, ETSI and decided that the main objective of ETSI's IPR policy was to make sure that standardised technologies were available for use by any implementer and therefore Apple could still ask for a FRAND licence, it just has to promise that it would take that FRAND offer.
It did not stop there. Apple said, hang on a minute. Optis had been behaving abusively, in particular, the FRAND rates asks were way too high and it amounted to an abuse. Therefore an injunction should be withheld. Now what did the court say to that?
The court said, well even assuming that Optis' behaviour was abusive, that did not justify the withholding of an injunction because there was no risk that Apple would be coerced into taking up a non-FRAND licence because the UK Court was going to decide it for them and therefore a FRAND injunction was the appropriate order to make.
The result was, so it avoids that, Apple undertook to the court to enter into the licence due to be determined by the UK Court, although provisions were made in that undertaking to enable Apple to cancel it, depending on how the appeal processes panned out.
So ostensibly this is a very SEP owner friendly decision. It is. But it could also mean that a licensee can behave robustly against a SEP owner, at least in the eyes of the UK Court provided that it agrees to accept what the UK Court says is FRAND.
Now moving onto the next case, which is where the implementer complained about the UK Court deciding the terms of a global FRAND licence.
This was the case in Nokia and Oneplus but before we go onto that, I want to talk about the backbone of this case which was Conversant and Huawei. Very similar to Unwired Planet and Huawei, except for one twist. Which is that Huawei challenged the UK Courts jurisdiction. How? Well Huawei said look, look at our turnover. The great majority of our sales takes place in China.
Another whopping 90% of their sales takes place in a non-patented territory, all of these devices in these non-patented territories are actually made in China so the Chinese standard essential patents are the relevant ones and the UK sales only accounted 1%. Surely the Chinese courts is more appropriate than the UK Courts to decide the terms of a global FRAND licence.
What did the court says about that? Well as against the UK Huawai defendants, the courts said well the Recast Brussels Regulations apply and it had no leeway to decline jurisdiction or stay the proceedings on forum non conveniens grounds.
As against the non-UK defendant, that is the main Chinese Huawei company, the court harked back to that Supreme Court decision that said the proper characterisation of the case was of a dispute concerning UK patent infringement/UK patent right. It was not about determining FRAND licence terms and in any event, there was no alternative forum at the time that said there were competent to determine the terms of a FRAND licence on a global basis.
So UK was the only possible forum for the whole dispute. It felt it could grab jurisdiction but then, Brexit happens and with it, the Recast Brussels Regulation dies. Six months on, Nokia and Oneplus' licence agreement expires. During the period of the licence agreement, they were trying to negotiate a renewal of that licence and it was not going well. So Nokia promptly sued Oneplus in the UK as soon as that licence expired, the following day in fact.
It asserted eight of its standard essential patents and it asked for a declaration that the cross licence offers that it had made to Oneplus was FRAND. Oneplus sued promptly in China in retaliation asking the Chinese Court to declare that Nokia's behaviour was not FRAND and also for the Chinese Court to determine the terms of a global FRAND licence.
Subsequently, Oneplus the defendants in the UK case, challenged the court's jurisdiction and the backstory is it was exactly the same as the Conversant Huawei case, it said that it only 0.5% of its sales is in the UK, half of its sales are in China, surely the Chinese Court was the most appropriate jurisdiction to hear and determine the terms of the global FRAND licence.
You might think, well the decision in Conversant and Huawei should apply, but there were two material differences between the Conversant and Huawei case and Nokia and Oneplus. One was that there was Brexit and therefore the Recast Brussels Regulation no longer applied and secondly, the Chinese Courts had declared themselves quite able to determine the terms of a global FRAND licence, so there was in this case an alternative forum.
The UK Court went onto decide whether it had jurisdiction. This is the test when deciding whether the courts in UK should take/accept jurisdiction. It is not just about IPR patents/cases it applies to any case – this is the test that the UK court considers and the third question, in this case was the main point.
Is England clearly the most appropriate one to hear the claim.
His Honour Judge Hacon felt very comfortable in accepting jurisdiction. It went back to that Supreme Court characterisation of the case which was, it was all about UK patent infringement, it was not about determining FRAND licence terms, so it went on and accepted jurisdiction and that case is pending at the moment.
What about an implementer? Can an implementer ask the UK court to set the terms of the global FRAND licence for them? Well that was the issue between Vestel which is an consumer electronics company which sold items including T.Vs that incorporated video codec technology and Access Advance, a patent pool comprised of video codex, standard essential patents and Phillips which was a member of that patent pool.
There is a same sort of back story here where the two parties try and negotiate a FRAND licence and they do not get anywhere so Vestel decided to sue Access Advance and Phillips and ask the UK court to determine the global FRAND licence.
Access Advance and Phillips challenged the court's jurisdiction and in this case, they succeeded. They succeeded because, in effect, it was not pleaded quite right. Vestel's claims were not really based on the existence or non-existence of the legal right and what Lord Justice Birss said was, for future reference by the way, Vestel could have claimed that it did have an entitlement to be offered a FRAND licence under the UK standard essential patent rights.
If that were the case, they would have been quite happily accepting of the jurisdiction because the UK SEP right is a property within the UK jurisdiction and then the court would have gone onto decide what the licence terms would have been of these two parties.
No doubt, they would have said that the territorial scope would have been global given that Access Advance has a global patent portfolio and Vestel has a global client base.
So there we have it! Even though the implementer, on this occasion, failed to get the court determined global FRAND licence, it could but you just have to make sure that your case is pleaded right.
What does the SEP dispute landscape look like right now? Well I think it is looking more and more really interesting with other jurisdictions now claiming to have the ability to determine a global FRAND licence. China declared themselves competent pretty much soon after the Supreme Court decision in Unwired Planet and Huawei. Recently the French courts have said that they are also able to do that. Possibly the Dutch court as well and there is a question mark over the UPC.
It has been three years since Lord Justice Kitchin as he then was, stated that it would be desirable that an internationally accepted approach should ultimately emerge but FRAND trials have been few and far between and that is not really surprising really (go onto the next slide) because FRAND trials are extremely complex, very heavy, evidence is extremely extensive with a lot of expert evidence having to go in and so it is not really that surprising that our colleagues are just now dealing and handling the second ever trial to determine the FRAND terms.
It may well be a few years yet before we reach the desired outcome hopeful by Lord Kitchin but the SEPs base promises to be interesting with courts from different territories getting involved and the licence terms of a variety of connected devices will come to be implicated as we move into the era of 5G, IOT, the metaverse and beyond.
So that is all I have to say and it is a pleasure for me to hand the session back to Gordon, who will be dealing with the other meatier topics of the patent law including obviousness and insufficiency.
Gordon: …Remembers to unmute. Right thanks very much Seiko, there we are. I am going to start rattling on and Ailsa will catch up the slides with me. We are going to move on first of all to look at - we are moving onto issues of validity. Now we are first of all going to look at common general knowledge and the skilled person and where are we? We are nearly there Ailsa, nearly there. Go on, keep going, keep going, keep going (laughs).
All right – you are going to get a picture in a minute of the skilled person clutching her – wearing her mantle but, never mind. The identity of the hypothetical addressee of the patent also known as the person skilled in the art has been a seemingly settled area of patent law but there are always complications. Yes there she is. There she is in her mantle.
In an old case heard by Lord Justice Jacob at Schlumberger he said that there is a clear recognition that the person skilled in the art for obviousness is not necessarily the same person skilled in the art for performing the invention once it is made. He said this is because inventions are art changing sometimes, so different expertise may be required to understand the changes fully and implement them.
So in Illumina and Latvia which I am going to skip very very quickly over here, this point popped up and Lord Justice Birss was asked to consider – actually it was not, it was Birss J before his promotion in January 2021. He was asked to consider this question of, was the skilled person going to be different for obviousness from assessing the implementation of the patent.
And he said that there was a three part test that he was going to bring into play to make that work so you can move on a slide there Ailsa.
He said that the correct approach to take is, to start by asking what problem does the invention aim to solve. Secondly, that leads one in turn to consider what was the established field that existed in which the problem in fact can be located and then, it is the notional personal team in that established field which is the relevant team making up the person skilled in the art for the art of assessing obviousness.
So this places that team before the invention is made, when there is a problem and asking themselves, well what are the solutions to that problem and then you may, for different purposes be looking at a different skilled person if you are then looking to assess how the invention actually works.
He said in the present case, it did not really matter it would have been the same person either way but we will probably hear a lot more about it in the future.
Moving onto common general knowledge, the mindset of the person skilled in the art is often considered in the context of CGK in Insulet and Roche Pat Treacy gave a useful little quote, "that which is generally known to, and generally regarded as a good basis for further action by those who are engaged in the particular art." No rocket science there, that is standard terminology but she also said, that there are a couple of finer points you might need to consider.
A piece of particular knowledge as disclosed in, for example, a scientific paper does not become CGK merely because it is widely read and still less because it is widely circulated. Such a piece of knowledge only becomes CGK when it is generally known and accepted without question by the bulk of those who are engaged in the particular art. In other words, when it becomes part of their common stock of knowledge relating to the art.
Now that sets a fairly high bar for demonstrating that something is CGK but no big changes to the principles this year.
Now, normally at this point I would find myself saying, as usual there is very little to say about the well settled law of anticipation. Not this year. I promised you a rant and here we go. Are you sitting comfortably, then we will begin.
I refer to the case which I have now labelled the case of Schrödinger's seed drill. The 1977 Patents Act novelty is defined in section 2. Both section 2 and it's equivalent, the Article 54 of the European Patent Convention, defined the state of the art as comprising everything which has been made available to the public by written or oral description by use or in any other way.
Now before the 1977 Act, the relevant law was the 1949 Patents Act and section 14 said that the invention so far as claimed in any claim of a complete specification would be invalid if it was used in the United Kingdom before the priority date of that claim. So no need for making available, use alone was enough regardless of whether anyone did or could have seen that use.
Now why does this matter in a review of the 2021's Patent Case Law? It matters because it looks as if aspects of the test under the 1949 Act had been imported through case law into the modern law despite the very carefully chosen wording of the EPC and the 1977 Act.
The result is a mess that brings to mind Doctor Erwin Schrödinger's thought experiment. If a cat was placed in a box with a single radioactive atom which had the capacity to kill it, and then until the box was opened, it was conjecture as to whether the cat was alive or dead and as such it was, in a sense, in both of those states. It was not until it was observed that its status was ascertained and I will leave that thought with you and that nice picture of my cat in that box – Puss in Boots, do you get it? Anyway.
The case of Claydon and Mzuri was a dispute about two Claydon patents. Two apparatus for cultivating and sewing seed. The invention of the 296 Patent concerned a method for tilling soil and sewing seed whilst better conserving the soil and helping not to encourage the germination of weeds. The spirit of Jethro Tull lives on.
The claimed apparatus which is dragged behind a tractor, comprised the first row of tines to prepare the soil, a second row of tines for direct placement of the seeds and behind that, levelling means or a wheel as it is known for firming the soil over the planted seeds.
Mzuri's devices which were alleged to infringe, were within the claimed invention on the normal interpretation. So everything comes down to validity. The validity of the patent was challenged by reference to an alleged prior use by Mr Claydon himself. It was not in dispute that before the priority date of the patent, Claydon tested a prototype that had all the features of the relevant claim. The testing took place in a field on the Claydon farm, for about ten hours over two days.
Alongside the field ran a public footpath. The footpath was unmarked and unmaintained and there was a hedge between the footpath and the field where the testing took place. The hedge was six foot tall but had gaps at three points. It was not in dispute that there was never anyone present at the tests, other than Mr Claydon and his brother and here are some picture of the site reproduced in Judge Hacon's judgment.
So the issue of the court was whether the use made of the invention made the invention available to the public. On the law regarding prior use, the Judge took a look at some old case law, Lux and Pike to invalidate a patent the disclosure has to be such as to enable the public to make or obtain the invention, folding at its stairs and loft stairs in as much as the public had a right to be there, they are deemed to have the right to access the information and then a very recent case that I talked about only last year, Mishan and Hozelock.
It is one thing to say that if the public is given access to information in whatever guise that information is made available to the public and it does not matter that no member of the public, in fact took up that opportunity, it is quite another thing to say that the law treats information as available to the public when no member of the public could in fact have accessed e.g. in that case, if a member of the public had tried to observe the inventor's activities, the inventor would have stopped what he was doing.
Now the Judge said it was common ground that – the Judge in Claydon that is – in a prior user case in which it is said that the invention was made available to the public even though nobody in fact had advantage of that availability the invention made available is that which would or could have been noticed or inferred by a person skilled in the art, who hypothetically had taken advantage of the access to the invention established on the evidence.
So there we have it. Those were the live issues. Hacon concluded that an observer of the prototype being tested would have believed that the tines in the first and second rows were aligned etc. He said that if Mr Claydon or his brother who were conducting the testing had noticed such a person, they could not have taken action that would have prevented the skilled person from seeing or inferring each of those features including the alignment of the tines.
This was to differentiate the position from Hozelock where it was felt that the inventor operating the device in his front garden could have just packed it up and put it away if he had seen someone looking.
So the Judge said that applying the relevant law, the prototype was made available to the public and so the patent lacked novelty. He had not finished. He went on and said there was no bar in law to the enablement of an invention by reason of the hypothetical skilled person having gained an understanding of it with the assistance of technical equipment!
So the situation we seem to have reached is that the reasoning in some recent cases is operating on a kind of reductio ad absurdum taking increasingly unlikely scenarios and drawing conclusions and lines on flimsy evidence and purely hypothetical circumstances.
Perhaps we should go back to the House of Lords in Merrill Dow Norton when Lord Hoffman said, "to be part of the state of the art, the invention must have been made available to the public. An invention is a piece of information. Making matter available to the public within the meaning of section 2 therefore requires the communication of information. The use of a product makes the invention part of the state of the art only so far as that use makes available the necessary information."
Now in his judgment in Claydon and Mzuri he did not cite that case Merrill Dow. It did however draw on Lux and Pike, a decision of Aldous in the patents court which has since tended to be cited as a sort of key authority on the relevant principles here.
In Lux and Pike, Aldous said, "it is settled law that there is no need to prove that anybody actually saw the disclosure provided that relevant disclosure was in public. Thus an anticipating description in a book will invalidate a patent if the book is on a shelf of a library open to the public, whether or not anybody read the book and whether or not it was situated in a dark and dusty corner of the library."
Well the Lux judgment was the first to address the law after the 1977 Act so how they can say there is settled law at that point, is hard to imagine unless it has been somehow imported from the 1949 Act regime.
There is, in my view, a world of difference between a book sitting in a dusty corner of a library and a fleeting instance of disclosure in a field alongside an overgrown and unused footpath. What if there was no footpath only a road? But although there were no parking restrictions, it would have been dangerous to pause as it might have caused an obstruction. Would that amount to making available to the public? Could photographs have been taken? And then digitally enhanced by the skilled person to reveal the concept. Sounds as though that might have amounted to making it available to the public.
What steps could Mr Claydon have reasonably taken? He had to test his new apparatus. There are very few fields in England not flanked by either a road or a footpath and none that would be inaccessible to a drone. What if he did not own such a field? What was he supposed to do? He could not shut a public footpath. Is he supposed to post big notices saying, private tests do not look.
Now, the judges taking the additional wording of the 1977 Act and saying 'at any time' and somehow construing that as meaning, 'at any moment in time'. We know the skilled person is blessed with compendious knowledge and language skills, but are they also supposed to have the ability to see and digest information after a fleeting glimpse? That they have a photographic memory, of instant recognition along with all their many other qualities?
Peter Prescott said in Folding Attic Stairs that the law has to draw a line somewhere. Now in my view, that line should be allowing for examination. A partly hidden library book, once found can be read at leisure, even if translation is needed, time is not of the essence. What is more, the written publication has been deliberately put in the public domain. In Lux, Aldous said, "there is a difference between circumstances where the public have an article in their possession to handle measure and test and where they can only look at it. What is made available to the public will often differ in those circumstances."
Now if the legal test applied was that the relevant information had in fact been made available to someone to examine free and law and equity etc. the inconsistencies between unlikely hypothetical scenarios could be ironed out.
Lord Hoffmann thought that communication was important. This is a lot more than the hypothetical possibility that a skilled person with or without a powerful phone or camera might have been lucky enough to be in the right place at the right time to observe a short-term test of a moving item, whether it is in a suburban garden in Florida like Hozelock or in a field in Suffolk.
This needs straightening out. To require an opportunity for reasonable examination, enabling information actually be made available, does not do harm to the principles underlying the law. It creates a more real world environment for the establishment of any proper assessment of the extent of any prior disclosure and its impact on the validity of potentially valuable patent rights and it respects the patent bargain.
Right. Obviousness. We spent an unusually long time on anticipation so I am going to flick very quickly over obviousness this year. The most thoroughly reasoned judgment of the year came from Birss J as he still was at that point in Illumina and Latvia.
The fourth Illumina patent found valid and infringed gave rise to one of the longstanding controversies in the field of obviousness and that is of co-location. There were two main items of prior art, Milton and Arnost. I do not need to go into the science, you will be relieved to hear.
We all know that it is not permitted to use different items of prior art to create a mosaic which gives rise to an obviousness attack.
Now MGI did not contend that Arnost and Milton could be mosaicked, but they said that the combination of their disclosures in a single molecule amounted to a mere co-location of two known things and therefore the claimed invention was obvious.
In view of the Judge's conclusion on the disclosures of Arnost and Milton, if MGI was correct on co-location then the patent would be invalid for obviousness. But applying the authorities, Birss disagreed that the co-location principle applied. He found the person skilled in the art who believed the two components were capable of interacting with each other, they would not be regarded as individual inventions.
In other words, for them to combine in an obviousness attack will involve creating a mosaic. Now this went onto the Court of Appeal. Lord Justice Arnold took a look at the principles, referred to the nineteenth century case of Williams and Nigh, the patent for a sausage machine that was a combination of a known mincing machine and a known skin-filling machine, was found lacking invention.
Before asking whether the claimed invention involves an inventive step, it has to be decided what the invention is. Is it one or two inventions or more? Two inventions do not become one just because they are included within the same hardware. For example, a car may contain many inventions. Operating completely independently of each other. So Arnold explained that the Judge had found that the patent claimed as single invention, that made a technical contribution that neither Milton or Arnost made, even when taken together.
He thought the Judge's finding was correct. So it was not obvious to combine them and the patent was not invalid for obviousness.
Right. Insufficiency. Well there is an area that has been rather turbulent in recent years so the emergence of some impressive judgments in 2021 is welcome. Unfortunately not all the issues have been ironed out but there we are. Let us start with the one that has not been ironed out.
Let us just step back and build a bit of revision. So insufficiency is a single ground of invalidity. It embraces distinct types of objection, in particular classical insufficiency, can you make it from the recipe and the patent? Excessive claim breadth. Biogen, lack of plausibility and sufficiency and uncertainty which used to be called ambiguity insufficiency.
Underpinning all of these is the patent bargain. The inventor obtains a monopoly in return for disclosing the invention and dedicating it to the public for use after the monopoly has expired. Now for all three types, there has been uncertainty as to the correct date for the assessment of insufficiency. Is it the date of filing of the application of the patent or is it the priority date claimed. If they are different.
For many years this was considered completely settled by the House of Lords judgment in Biogen and Medeva and it was the filing date, but then in 2020 in Regeneron and Kymab in the Supreme Court, a non-IP specialist panel said that it was, in fact, the priority date.
Supreme Court gave no reason for departing from this settled understanding and indeed it appeared to understand the reasoning of the House of Lords judgment in Biogen supported its assertion that the correct date for assessment was priority date.
Last year I said that was transparently wrong and drew their attention to the 19th edition of Teralon patents which appeared to make it clear. Unsurprisingly, the point fell to be addressed in case law in 2021 in one of the early interim hearings in Interdigital and Lenovo. Judge Hacon considered the date as to which a patents specification is to be construed. He noted the commentary in Terrell that the specification must be construed at the date of its publication, but he went onto say, "it seems to me that to contrary to what is implied, not implied actually said but never mind, implied in Terrell the correct date for the assessment of sufficiency is the priority date. Unless priority is lost, in which case it will be the date of filing the application."
Now, he has got that from the Supreme Court obviously. Lord Hoffmann's reasoning in Biogen was now to be read according to Hacon in the light of the Supreme Court judgment in Regeneron. He thought there was no room for doubt that the Supreme Court had interpreted Biogen to mean that sufficiency was to be assessed at the priority date, even though it said the opposite and they did not actually consider Biogen in that context.
It is an odd thing to say. Lord Hoffmann clearly said the correct date was the filing date and that was picked up by subsequent legal textbooks. However, Judge Hacon considered himself now to be bound by the Supreme Court's decision in Regeneron. This is as clear as mud!
At some point a case will emerge in which the date at which sufficiency is assessed make a material difference to the outcome of the case because of additional common general knowledge inputed to the skilled person at the filing date compared with the priority date or a new piece of prior art which emerged.
Then the Supreme Court can be asked to revisit the point but in the meantime, the date to work to unfortunately seems to be the priority date.
So now skipping through the three main types of insufficiency. First of all, classical insufficiency. Earlier in 2021 in Illumina and Latvia, Birss gave a detailed judgment explaining how the Supreme Courts findings in Regeneron and Kymab worked not just in the context of product claims, but all claims.
Birss said in detail one of the issues of principle relating to insufficiency which frequently arises is undue burden. How much can the skilled person reasonably be expected to do by way of tests and experiments to make the recipe and the patent work.
He said whatever the correct principles are about undue burden, none of them were addressed by the Supreme Court in Regeneron but that is an aside.
He then addressed historical case law and said a patent will not be insufficient just because the skilled person cannot make it work immediately. It is permissible for there to be a reasonable period of trial and error but not prolonged research or experiments.
Where the boundary lies, is a question of fact and degree depending on the nature of the invention.
He said a functional definition cannot help covering things which are not yet invented that that does not necessarily matter. A skilled person must be able to come up with components which will work and if that involves testing that is fine, just not too much testing.
So, he took an example of a new teapot which was invented and useful because its spout was shaped in a way so as not to drip. Now the claim would be to a teapot with a spout shaped in a special way. The claim might not say anything about the material used to make the teapot because it is irrelevant to the invention or it might say, a teapot made of any suitable material. Either way, it would be to a range of teapots made of different materials. A skilled person could choose. Identify and test suitable materials.
China would work, chocolate would not. If later a new form of Pyrex was invented and used to make the teapot, the claim would still be infringed. Birss said the fact that the skilled person could not make such a teapot at the priority date of the teapot patent does not matter. What does matter is that the descriptive feature of the claim which is at least implicit in the claim, that the teapot has to be made of a suitable material, is not a relevant range.
Now what he means by relevant range, is one that is key to the actual operation of the inventive step. In the case of the teapot, that is not true about the possible materials. The inventive core of the patent would be the shape of the spout.
Now that is a fair few words but they are quite important. It is a good judgment and it may well stand the test of time.
Moving onto excessive claim breadth. Now the existence of this as a distinct type of insufficiency emerged for the first time in Biogen and Medeva and has become known as Biogen insufficiency.
It seemed easy enough to assess. The question to be answered was, did the extent of the monopoly claimed exceed the technical contribution to the art made by the invention as described in the specification.
However, as is usually the case, what that actually meant in practice has been the subject of a lot of litigation and it finally got to the Supreme Court and then there was no IP specialist on the panel in that one either in Warner Lambert and Generics, so four separate judgments were handed down that did 0% of nothing to clarify the law.
In 2020, Lord Justice Arnold sitting down as a high court judge in the Patents Court, gave a kind of workable way forward here in Akebia and Fibrogen. That case went on appeal and Lord Justice Birss had a very rare opportunity to mark his colleague's homework.
And Birss re-steered things a little, in a judgment that might hopefully have settled this area at least a bit. Birss' judgment I would say is now where to go in order to understand excessive claim breadth or Biogen insufficiency and he started by going back to the judgment of Lord Justice Kitchin the Regeneron case which has become a good starting point in this area.
"It must therefore be possible to make a reasonable prediction, the invention will work with substantially everything falling within the scope of the claim or put another way, the assertion that the invention will work across the scope of the claim must be plausible or credible." Oh what a can of words that choice of words opened.
Birss said that he preferred to refer to the question as one of reasonable prediction rather than plausibility although it was a similar principle. As to what it requires, he said "to apply the reasonable prediction at principle, one has to take three steps. First one must identify what it is which falls within the scope of the claimed class. Second one must determine what it means to say that the invention works. In other words, what is it for. Once you know those two things, the third step can be taken. To answer the question, whether it is possible to make a reasonable prediction the invention will work, with substantially everything falling within the scope of the claim.
Now it maybe that after some years of high controversy, the entirely non-statutory concept of plausibility is in retreat and maybe this clearer test can do away with the question of whether the bar is a high one or a low one. For what it is worth in 2021, Meade J still using the old terminology, he thought the bar was a low one.
Finally on insufficiency, the uncertainty type was covered by Birss in Fibrogen and Akebia. He said claims can often be difficult to construe. Sometimes these difficulties are due to avoidable obscurity for which the patentee should get no sympathy but it can be because trying to fairly describe an invention in words, is not always an easy task. The existence of a fuzzy boundary in a claim is not objectionable. The contrast is between that and a claim which is conceptually uncertain.
And then he went onto say, "when a defendant has been found to infringe, demonstrating that the claim scope is at least clear enough to work that out, the argument that the claim should be regarded as conceptually uncertain, is likely to be met with scepticism.
He said, a finding of infringement does not preclude a finding of conceptual uncertainty but I maintain it ought to cause the court to look closely at what the alleged uncertainty really amounts to."
I think there is a bit of a question mark over that but we will move on now. So with a sigh of relief, we come close to the end of insufficiency. The mist is clearing a little thanks to the sterling work of Lord Justice Birss. Hopefully in future years, the picture will become clearer through the lens of his analysis.
One last word on insufficiency. Patent law relies on quite a few fictions and hypotheticals. The idea that any patent is ever really sufficient is probably one of them. Consider the great British bake-off. There is a round called the technical round in which the bakers are given a recipe and all the necessary ingredients and asked to make the desired baked comestible. All the contestants are skilled bakers, at least to the level of the person skilled in the art of baking. Do they all come out the same? No they do not. Many of them appear to be utterly inedible and no two ever look closely alike.
It has been interesting to hear one of the key arguments made against the proposed patent waiver to accelerate vaccination globally, which is that the patents alone are not enough to make an effective vaccine. Where the hell does that leave the law of sufficiency and patent matters? Should the courts be stricter in the light of this? Or more generous? Discuss.
Right! We are onto the technical bits now. Very brief touch on Covid litigation. Just to say that the courts have been great. We get some courts fully in court, some are remote, some are hybrid. Hours have been changed to accommodate witnesses in different parts of the world. It is all good. Very good performance from the judiciary. All in all, it would appear that improved court procedure is a silver lining in the Covid cloud.
Now then. Judgment hand-down. We have never talked about this before but this has been an accident waiting to happen for some years now and boy was there an accident in 2021. This is a must read judgment for all litigators, not just IP lawyers. Meade expressed what might, with some understatement be described as his frustration and this was in one of the hearings in Optis and Apple. And the usual course of events occurred. Monday 20 September 2021 an embargoed judgment was provided to the parties.
The usual rules apply of course, you can only talk to the parties, no-one else until it is handed down properly but a leak soon become suspected. In fact it had never happened and a sorry sequence of events ensued. So the leak was suspected after an unrelated individual of third party company learnt through a barrister not involved in the case at all, that hand-down of the judgment was imminent.
The unrelated individual reached out to an individual at Optis with a message saying, big day keeping my fingers crossed. Argh, what followed was a car crash in slow motion. I will spare the participants a full description of the facts. Suffice to say that accusations were levelled that the judge's office leaks like a sieve. Allegations were made about calls that were made or not made, offending documents/emails/Whatsapp messages were not collected and collated still less sent to the Judge in a timely manner.
The Judge was informed in general terms but the worst communications e.g. that his office leaked like a sieve were initially kept from him. Recounting the sequence of events, the various assertions made and the gradual unmasking of what had transpired, Meade's judgment on the issue included phrases like, 'disastrous lack of thought'. 'obviously and completely untrue' and 'deplorable and far short of what the court is entitled expect'. I cannot help but note at that point that if you swapped court for parliament, it all begins to sound quite familiar.
He noted that breaches of the restrictions of confidentiality are backed by the sanction of contempt but he stepped back from escalating to that, he said that would be a big distraction from the real substance of the litigation. His scathing judgment alone expressing severe dissatisfaction is in itself a form of sanction and Optis was directed to pay the costs of the episode on an indemnity basis.
There are a lot of learning points for lawyers here. Treat embargoed judgments like trade secrets. Remember that this is a trust relationship and one party is the judge. If there is a breach, make full honest and complete disclosure to the court however painful that may be and do not use email exploders carefully, so you have been warned.
Right. Here is the word you have been waiting for. Finally. We wrap up our review of the cases with a look at the Court of Appeal's judgment in Thaler against the Comptroller. Now this name will ring bells with you. Last year in the judgment under appeal, Marcus Smith said he would like to think that an alien from outside the galaxy would not be denied legal personality before the Courts of England and Wales simply on the grounds of unforeseen extra territoriality.
The Court of Appeal steered clear of alien analogies. So Doctor Thaler's patent applications were being pursued as a test case. He was the applicant but he did not assert himself to be the inventor of the inventions for which the patent protection was sought. On the contrary, the inventor was an AI machine called DABUS owned by Doctor Thaler.
The question for the courts was whether in such circumstances the requirements of the Patents Act of 1977 was satisfied. In particular, sections 7 and 13. Now section 7 says any person may make an application for a patent whether alone or joint with another. The patent for the invention may be granted primarily to the inventor or joint inventors or to any person or persons who by virtue of any enactment or rule of law or any foreign law or treaty blah blah blah was or were at the time of making invention entitled to the whole of the property in it.
And then goes on at subsection 4 to say that except so far as the contrary is established, a person who makes an application for a patent shall be taken to be the person who is entitled under subsection 2 above to be granted it.
And then we have section 13, the inventor or joint inventors shall have a right to be mentioned in the patent, they shall also have the right to be mentioned if possible in a publication for an application etc. unless he has already given the patent office the information hereinafter mentioned, an applicant for a patent shall within the prescribed period, file with the Patent Office a statement identifying the person or persons who he believes to be the inventor or inventors, and if he fails to do so the application shall be withdrawn.
Now the Patents Court dismissed Doctor Thaler's appeal from the UKIPO and confirmed that an AI machine was not a natural person so did not satisfy the meaning of inventor in section 7/2 nor was an AI machine capable of owning or transferring any rights pursuant to section 7/2 so the owner of the machine was not entitled to a patent for the relevant invention. And they said the provisions of section 13 did not affect that in any way.
In the Court of Appeal, the majority, Arnold and Lang dismissed Doctor Thaler's further appeal applying the same grounds. Lord Justice Birss dissented and needless to say, his judgment makes rather more interesting reading.
Now he pointed out the key provisions of the current law, sections 7 and 13 for these purposes were all enacted against the background of the 1970 Bank's Committee Report on the British patent system which made recommendations on the procedure relating to patent applications and said the law should be simplified in various ways.
Birss' finding was that section 74 created a presumption that the applicant was the person entitled to the ownership of the patent and that would need to be rebuted by someone else challenging that position. It was clear it did not have to be the inventor and as regards section 13, he said that Doctor Thaler had indeed served a statement identifying the inventor. The fact that the inventor identified was not a legal person was neither here nor there as regards to the job of the controller, to grant the patent. Said there was no suggestion of dishonesty that this was the intended consequence of the reforms implemented in the 1977 Act. A simplified system based on rebuttable presumptions to reduce the enquiry required by the Patent Office and consequently the time and cost of the application.
I agree with him! He also made some comments on the general circumstances here. Just because all inventors are people he said, this case demonstrates that it does not follow that all inventions have a person who invented them. The absence of a named inventor when it is clear why no name has been given and it cannot be said the applicant is not giving their genuine belief, is no basis on which to find that section 13/2 has not been complied with.
He said there was more than a hint in this case of the idea that if only Doctor Thaler was not such an obsessive and instead of calling DABUS the inventor, he named himself then none of these problems would arise. But since inventors can actually waive their right to be mentioned under section 24, even if the Comptroller suspects that Doctor Thaler is really the inventor, well he would have waived his right would he not?
And so that should be the end of that. The gist of the judgment is that sections 7 and 13 are there to address entitlement and recognition. They are not designed to impose strict conditions. If they were, they would not include allowable presumptions. Birss identified a simple construction of the statute which would allow an invention by an AI machine to be patented even if the invention itself could not be identified as the inventor – the machine itself rather.
As usual, he is running ahead of the pack! He is acknowledging that life moves on and the law has to keep up with the technology.
And think of this. Acknowledging that the law is different in the USA, what if for the UK purposes, Doctor Thaler had just made up a name for the inventor. Or given his machine a nickname – Michael Mouse, for example. Would there have been an enquiry by the Patent Office into whether that is a real person? The fictional Mr Mouse is no more a legal person that DABUS but the patent would have been granted nonetheless. The post 1977 Act regime does not require that enquiry to be made.
Anyway! For the time being, he lost but we believe possibly, the Supreme Court maybe going to have a look at this.
Right! Summary and conclusion. After quite a few grumpy years, I ended last year's review in a positive frame of mind and overall nothing has changed. As I said right at the beginning, we have an expert panel of judges at all levels and although there are still one or two mavericks, the service and consistency is strong and reliable. We are about to enter the first full year of Birss and Arnold alongside each other in the Court of Appeal. I do not know how often they will sit on the same panel, but when they do I doubt that it will be boring. They do seem to have somewhat different mindsets, leading to a perception that maybe one favours patentees a little more than the other.
We have had a full year of Mr Justice Meade and I have to say the impression is very favourable. Last year I had a chat with Robin Jacob just before this talk and he told me that he thought the new judicial team was the equal of his day when it was Lord Hoffmann, Lord Justice Aldous, Jacob Laddie Pumfrey and Ian Harness together. I think he may well be absolutely right about that and if so, the timing could not be any better.
Why? Well after many years of speculation I decided to omit any mention of the proposed unified Patents Court last year but now it is upon us. We have had a flurry of court activities, some diplomatic progress with ratifications and now the express support of the French Presidency of the European Commission and the chances are the EPC will be with us before the end of this calendar year.
My view. For what it is worth is that that is a good thing for patent litigation in the UK. As long as we can shed the image we once had, that the UK was where patents came to die. But the fear of losing valuable patents across the whole of the European Union and the UK remaining an important market for pretty much all goods and services, why would companies not consider litigating in the UK as a first step to European enforcement? A positive judgment from a strong UK court might be more than influential in the wider European market.
Why not? Well for one thing. Cost. Last year I mentioned my pet scheme. The costs cap for shorter trial scheme cases. When I first had that idea I set the costs cap at £500,000 to match the maximum recoverable costs circa €600,000 in the UPC. That is now more relevant than ever and I would really like to see that being pushed through this year.
If we take away the conspicuous costs cap, the attractiveness of the UK system in terms of the quality of the judges and rigorous procedures would far outstrip a brand new court with untried judges and rules.
So I think that the innovative spirit and can do attitude that marked the initial response to the Covid pandemic and the lockdown has continued through 2021 with the courts responding positively and constructively, forging new practices which will enhance the practice of justice in this country for the future.
A lot of credit for that must go to the Deputy Head of Civil Justice in this country. Now we have all known him for many years and admired his energy, enthusiasm and innovation as a leading QC and then a judge. Now we have to share him with the wider legal community in the Court of Appeal but we cannot begrudge them that. If there was no other reason, his effective untangling of the complex knot into which the concept of insufficiency have managed to become tied via a couple of rambling Supreme Court decisions, is in itself grounds for rewarding Lord Justice Birss – this year's coveted Judge of the Year award.
I am only sorry that he never got his hands on that wretched seed drill. That is it! For another year. It only remains for me to thank Ailsa Carter without whose efforts throughout the year, mapping and reporting cases as they arrive, none of this would be possible. I will see you next year. Who knows, hopefully in person and maybe we will even have an early UPC hearing to report.
Now, last year at this point I handed over to Michael Carter who gave a little prediction about the future. Michael is with Alex today, probably just finishing right now the Interdigital and Lenovo case, so standing in as introduced by Huw at the beginning is Chris Freeth. Chris, over to you.
Christopher Freeth: Thank you Gordon for another most interesting talk this year. Hello everyone. As Gordon mentioned, I am Chris. A Principle Associate here at Gowling. I am filling the daunting shoes of Michael Carter. He is off far too busy being patent litigator so I have got the more luxurious job on pontificating about is yet to come.
Actually, it is a little unfair to myself. I am also a patent litigator as was mentioned and am heavily involved in the Neurim and Mylan litigation saga that is ongoing. I will touch on that later.
I will now dive straight in as I have just ten minutes. I should add, that a lot of this will be recapping on points already made today. My aim is to draw together some of what we have heard and fill you in on some things to look out for this coming year.
So, in keeping with our theme for today, the first thing to look at is indeed Back to Basics.
Well I say basics, just a few years ago equivalents was not so much our basics, or at least not in quite the same way in with the great prominence it now enjoys. As anyone who does infringement analyses will know well, equivalents is tricky to say the least and has introduced a degree of uncertainty into our law, if I may be so bold. Or has at least made infringement analyses more difficult. I say that as someone who does many of them.
As we have heard today, there have been two key decisions touching equivalents over the past year and the problem for validity gap that it has caused. There is Facebook and Voxer and Optis and Apple. Recalling in Facebook and Voxer the point came in late but it was allowed in, in case management grounds. Going forward, if you want to run equivalents it is now clear it needs to be pleaded out fully.
Does that mean we will see satellite litigational pleadings of equivalents? I think that is unlikely, in the sense of meaning standalone hearings but I expect we will see the argument being made at trial. I agree with Gordon that ambush including by equivalents is too common. But I must admit, my experience is pleadings points so arguing something was not pleaded, do not tend to get you very far in first instance trials. Hopefully Facebook and Voxer means that is not the case or at least not for equivalents.
As Gordon noted, with Facebook and Voxer the Formstein defence was given a strong albeit [unclear 01:44:46] by Lord Justice Birss sitting in the High Court has been the solution to this validity gap. We are not aware of that case going to appeal, but Lord Justice Birss' comments were [unclear 01:44:56] so we would not expect them to go to appeal in any event. However in Optis and Apple, what is essentially the same core issue came up in the context of anticipation by equivalents. As Gordon mentioned.
Now I was going to make a joke here about sticking my neck out and how this all [unclear 01:45:11] up to the Court of Appeal and very probably the Supreme Court but Gordon has given it away! I would certainly be parroting Mr Justice Meade. This is an extremely important point for UK patent law, it seems certain to need the consideration of the Court of Appeal and very probably the Supreme Court.
So thank you Mr Justice Meade for making my speculations a little easier. Optis and Apple heads to the Court of Appeal in May this year so watch this space. We all agree here at Gowling, this is an extremely important issue.
Changing topic, FRAND. I am no FRAND specialist, so thank you to Seiko for so deftly taking us through a monolith of a topic. We heard from Ailsa about the amount of FRAND disputes happening in the courts at the minute and the number of judgments that we are seeing in the context of FRAND disputes. Nonetheless Unwired Planet remains the lead case on FRAND itself. However, as Seiko mentioned, there are other FRAND trials happening. Interdigital and Lenovo FRAND trial commenced last month, that is the one that Alex and Michael are working on, that concludes as Gordon said, quite possibly any moment now.
As we have heard, it is the first FRAND trial since Unwired Planet and so it is an important one to be watching out for this year. The Optis and Apple FRAND trial is also scheduled for June this year so we are soon going to have two significant FRAND judgments to digest.
So we have spoken about a major topic up for the Court of Appeal which is anticipation of equivalents. The major topic coming up at first instance, which is FRAND. Well how about the Supreme Court? At the time of writing this talk, there was nothing on the Supreme Court website yet for me to note. I say yet, because the January permission to appeal decisions are not online yet but I am watching very closely for whether a case Gordon talked about appears, that is Thaler and Comptroller.
It will be a little surprised if Doctor Thaler is interested in appealing to the Supreme Court, in our view the questions that the case raises is certainly suitable for hearing by the Supreme Court especially given Lord Justice Birss' frankly excellent dissenting judgment. However as was said, there is no news yet on permission.
Looking internationally for a moment, there are parallel cases being run by Doctor Thaler in several other jurisdictions. Australia is of particular interest because it went first the opposite way to the UK at first instance and found that DABUS was an inventor. That is being appealed. There is no news on when that will be heard either. My experience of Australian system is it is quite a lot slower than ours. That is certainly the case at first instance. I must admit I cannot speak to appeals.
There have also been decisions from the German Federal Court and the US Virginia Eastern District Court, agreeing with the respective patent offices refusals of Doctor Thaler's patents. I see reports that the US is being appealed but I have not seen any reports on the German appeal yet.
There is also a written EPO decision to look out for this year. Just before Christmas on 21 December, the EPO's Legal Board of Appeal announced orally that it would dismiss Doctor Thaler's appeals against the earlier refusals to grant his patent. A written decision will follow but there is no sign of that yet. Again, my experience is those things do take time.
And just to show it does not go all one way. In South Africa at least one of Doctor Thaler's patents applications was granted. However in South Africa my understanding is only basic formality to check by the Patent Office. So that patent could yet be challenged. My overall point is, expect continued activity in the Thaler case and not just in the UK this coming year.
Now having mentioned Lord Justice Birss' dissent which I must admit does feel like a rather mean Segway to make and apologies Lord Justice Birss for that but as Gordon noted, the judgement in Thaler is the first judgment on which both Lord Justice Birss and Lord Justice Arnold sat on the panel.
So one panel and already a disagreement but admittedly on a highly unusual topic. It is interesting to think about Ailsa's stats and historically the two have differed at least statistically speaking. It is also interesting to think of the cases we have had today. Akabia and Fibrogen which Ailsa mentioned and Gordon mentioned where Lord Justice Birss overturned Lord Justice Arnold on appeal. Lord Justice Arnold having sat down in the High Court.
As Gordon said, we can expect to see more from this pair over the coming year. Assuming they continue to sit on the same panels like Lord Justice Kitchin and Lord Justice Floyd before them.
I will now turn to a quick sweep of some other important topics we expect are yet to come.
The first is exhaustion. Well the government sat on its hands and said no post Brexit legislation yet. So this is now an area ripe for case law. This really is back to basics. If you trace back case law, the leading authorities on the implied licence or bets of Wilmore doctoring date to the 1800s and the principals involved are even older than that.
For goods imported from outside Europe, no authority has definitively overturned that old [unclear 01:50:06] case law which arguably remains good law. On the other hand, for goods imported from the EEA, EEA exhaustion seems to be retained EU law. There is no legislative basis in patent law for distinguishing between genuine goods depending on which parts of the world they are imported from.
So how are the courts going to reconcile that position? There is more than one course they can take but for today it suffices just to say that exhaustion is an area where there is uncertainty in the law, at least certainly for goods imported from outside the EEA and we can expect litigation testing this position. If not this year, then in due course. Appeals are expected to go to the Supreme Court.
Now as a litigator, I could not resist picking up once again on satellite disputes. I now expect those sadly to increase. The new trials witness statements we will also hear. The goal has been to prevent over lawyering and using witness statements to argue or spin a case, rather than as a vehicle for evidence. I certainly agree with the goal, but it is quite clunky to do. The disclosure pilot is also here to stay for another year. And as Gordon explained, the courts continue to push back on confidentiality clubs and certainly against the trend of lawyers on his only disclosure.
I expect we will continue to see points being taken of all of these. Now hopefully again as part of CNC's [unclear 01:51:21] trials not standalone hearings which might help keep costs down.
Speaking of costs, I said I would return to Neurim and Mylan. Mylan now being Viatris, their new name. I will just briefly note that the appeal on costs in that case is due to be heard in March by the Court of Appeal. The first instance costs decision is one that first appears confined to its facts and it is actually quite wide reaching if you think about it.
Neurim succeeded at the UK trial showing its patent was valid and infringed. Its patent was then revoked a few weeks later at an EPO appeal. Mylan well now Viatris, was awarded its costs of the UK trial in which it had been unsuccessful. The proximity in time clearly weighed on the court but the decision raises the question of whether the flow of UK costs can now be changed by a decision of the EPO. Potentially even many years after the UK court decision. That problem has been lurking in the background even since Version and Zodiac which was another case in which Gowling acted.
We may now see some guidance from the Court of Appeal this year. As I said, watch this space in March.
And finally, like Gordon how could I look forward without acknowledging the EPC. Well it is coming, [unclear 01:52:32] the EPC, Gordon has already given away that that is coming or do I mean a fabulous Gowling webinar to explain everything you need to know. Well both are coming so patent owners and exclusive licensees, if you are not already prepared for the EPC, consider your opt in and opt out position and get your admin ready. Now is the time. And that admin should include signing up to our webinar. There will be more details to follow in the near future.
Now with that shameless plug made on what is a genuinely serious topic, I will hand back to Huw for closing remarks and questions.
Huw: Thanks Chris and thank you Gordon, Seiko and Ailsa for your talks, they were all fantastic.
We have got a little bit of time for some Q and A so I will post some questions to each of the speakers but before doing that I just wanted to remind everyone that Gordon's paper will be made available at the end of this session. There will also be a link to the webinar as well which is being recorded, so for those of you who would like to watch it again in your own time or share with colleagues.
I also mentioned at the start that there will be a pop-up with a feedback survey and so would be great if you could feel you could answer that as it is really useful for us.
So, just a few quick questions. We have got a few minutes left. I am going to go back to Chris first actually because – and Chris you touched on the Neurim case and the costs appeal, I have to say that case is all pretty fascinating the way it has gone backwards and forwards and everything and it is a pretty difficult case to fully understand.
There is a divisional patent that is being litigated on this. What is – any news on that that you can share with us?
Chris: Sure Huw. Happy to. You are quite right, it has gone back and forth a lot. It is a knotty dispute to say the least and I can appreciate a difficult one to follow from the outside. In short, so Neurim and its licensee Flynn are trying to enforce against Mylam, a divisional patent that was granted to Neurim last year. Neurim and Flynn have argued that Mylam ought to be stopped from challenging that divisional patent on the basis that the UK judgment that found the parent patent, i.e. the patent that was revoked by the EPO, valid and infringed in the UK.
Mr Justice Meade gave a judgment at the start of this year that refused estoppal but ordered a trial before Mr Justice Marcus Smith who was the judge in the original UK trial. That is a trial really in name only at least in terms of procedure. And Mr Justice Meade made it clear it should be seen very quickly.
I say it is a trial, I can now say it was a trial past tense because I can share with you some breaking news and I have been very careful to check my emails again on this and it is very clear. Eight and a half minutes before this seminar, Mr Justice Marcus Smith confirmed that the following is public and not subject to an embargo. So as of 1.30 p.m. this afternoon, Mr Justice Marcus Smith has said that he is going to impose his original judgment so the one on the parent patent finding that it was infringed, that it was valid and that permission to appeal was refused. It is going to impose that on divisional patent.
The one caveat is that is a provisional judgment. I hasten to add that does not mean a draft judgment. It is not embargoed. It is provisional in that there can yet be a court hearing for the parties to make some more arguments.
However nonetheless he has made his judgment. So there we go! That is the latest update for you.
Huw: Thanks Chris and pretty timely so that is good to hear. Fascinating case as I said. Now Chris also mentioned the UPC and I know we are going to be speaking a bit more on that but I just thought I would throw a question to Gordon and his views. Do we think anyone is going to be using the UPC? Is it going to be popular?
Gordon: someone will because somebody always wants to be the first to do something do they not and no doubt someone will dive in fairly quickly. I think it will be slow to get started. For all the reasons that I sort of hinted at in my summary there. And I am sure an untried jurisdiction. So the upside is terrific. I mean if you are looking at getting some kind of injunction, then a pan European injunction could be brilliant so could pan European damages.
On the other side the revocation action, one I will take down across all of Europe. Very tempting. I suspect we will see a lot more revocation actions than we do infringement actions because putting your entire European portfolio at risk by exposing it in that way, would be very dangerous. I think you will see a lot of people with valuable European portfolios opting out and we will be talking about that in the next webinar, about how to do that.
To avoid the risk of – particularly in the life sciences sector where there tend to be a reduced number of patents around a particular product. The risk of losing them is too great. You know, to have a generics company come in and wipe them out across Europe in one go, is far too great a risk so I do not see much of that. So you will see revocation actions if people are stupid enough to forget to opt out and leave their patents dangling there, then they could be hit by revocation actions and of course they have nothing to lose with the revocation action. It is all upside. Maybe I can clear the path right across Europe.
What will be interesting is to see what happens to the UK. Because we are perched on the edge. Our judgments have no binding effect in Europe at all but the UK courts have always been very highly respected and as I said, we have got great judges right now so there is no reason, I would have thought more than ever our judgments would be highly respected at the moment and it would be a great place to test where there is only one country at stake before you dip your toe in the water of the UPC.
So in summary, long-winded answer, I think it will be slow to get going particularly slow on the infringement side but revocation actions willy-nilly provided people have not opted out.
Does that help?
Huw: Yes, no that is good and I am going to ping a question to Seiko on I suppose a sort of related in the sort of court landscape and I am going to ask for a very quick answer and then…
Gordon: She will remember to take her mute off first.
Huw: and then I am going to give one to Ailsa and hopefully also a quick answer as well. So Seiko, you touched on 5G internet of things, we see communication devices now health care products, automotive. Will we see more patent litigation?
Seiko: Yes but only as against implementers. These cases are really big. I mean, I forgot to mention actually that the last slide was a picture of a single full set of the FRAND trial bundles. So, that is the sort of volume of evidence we are talking about. It is very very complex and therefore really it is going to be a litigation between a SEP owner and a big implementer.
Huw: Good thank you. Well we will wait to see that and see how those predictions go next year. And the final question for Ailsa. The statistics were fantastic. Really interesting. We can all draw some conclusions from it but of course, perhaps selfishly speaking, I would like to know out of those statistics, how did Gowling do?
Ailsa: Gowling has done pretty well. We are very pleased but my number crunching needs to be checked so I expect that we will come back, but I will leave it there for today.
Huw: There you go, another shameless…
Gordon: Shameless shameless plug.
Huw: That just leaves me to draw the session and the afternoon to an end. So thank you very much to everyone who has joined us this afternoon. We will be circulating Gordon's paper and also a link to the webinar and very much hope to see you in person next year and also see you over the coming months as well.
Gordon: Huw, if I can just make one comment again on the paper. The paper is not just a duplication of what I said today. It is a hell of a lot more than that. It deals with all the cases we did not refer to today and actually it is totally comprehensive so the fact that you have attended today, great thank you it is wonderful and very good of you to give up your time. If you really want an education in last year's patent cases, get and read the paper.
Huw: I mean as Gordon said, if you want to know what happened it is the only thing you need to read.
Gordon: That is it!
Huw: Great. Thank you very much everyone.
Gordon: Thank you.
Huw: Goodbye. Thank you.
Gordon: Goodbye all.