Year in Review: notable 2020 patent cases in the UK

Setting a global FRAND licence – Unwired Planet v Huawei; Huawei and ZTE v Conversant (Supreme Court)

In a much-anticipated judgment, the UK Supreme Court held that the English court can settle the terms of a FRAND licence on a global basis, where a UK patent was found infringed. Since the underlying claim was for infringement of a UK patent, the English Court was the proper forum even if the UK constituted only a minority of the defendants’ global sales. Furthermore, the court would grant an injunction to restrain infringement in the UK where a defendant who had been found to infringe a standard essential patent (“SEP”) refused to enter into a licence on the terms found by the court to be fair reasonable and non-discriminatory (“FRAND”).

The court agreed with Unwired Planet’s arguments that companies in the mobile telecommunications industry did not negotiate licences on a country-by-country basis and therefore it was commercially unrealistic to determine a licence for only a single country in determining FRAND terms. The European Telecommunications Standards Institute (“ETSI”) policy, from which the obligation for FRAND licensing derived, empowered a national court to determine the terms that were FRAND and this therefore included determination of terms on a global basis.

The Supreme Court also considered the meaning of the “non-discriminatory” part of the FRAND obligation in circumstances where Unwired Planet had settled with one of the defendants, Samsung, on terms including a lower royalty rate than the court held was FRAND. The court held that FRAND was a single obligation, and, although in principle, the licensor should offer a single price list to all market participants, there was no obligation to grant licences on terms equivalent to the most favourable one granted.

Scheduling of FRAND trials

The following cases illustrate the current trend for SEP/FRAND litigation in the English courts, with multiple technical trials assessing essentiality of one or a few patents and a FRAND trial to determine licensing terms under the principles recognised in Unwired Planet.

Interdigital v Lenovo (Patents Court)

This decision adds to the increasing body of case law making clear that the court will look to resolve the dispute as speedily as possible. Mr Justice Birss (as he then was) confirmed that the court will consider relevant foreign decisions where possible, but will not countenance significantly delaying the English court case to allow this. He therefore refused to delay the listing of the FRAND trial until all the technical trials were complete, even though doing so would allow the decisions in Delaware and China to be given beforehand.

Conversant v Huawei (Patents Court)

Despite the speed with which the judges want to resolve SEP/FRAND disputes, in this instance, the Patents Court re-scheduled the FRAND trial that had been due to commence in April 2020 to January 2021 because of the COVID-19 pandemic. The judge considered that features of common law trials such as holding them in public and calling and cross-examining witnesses were fundamental to the system of justice and dealing with the matter largely by way of written submissions was not appropriate.

Optis v Apple (Patents Court)

The court refused to make a reference to the Court of Justice of the European Union (“CJEU”) on the basis that to do so would cause substantial delay to the procedural timetable. Subsequently, in the first technical trial between the parties, Apple was found to have infringed one of the patents asserted, a patent previously successfully asserted in the Unwired Planet litigation. The trial judge, Birss J, discussed and approved the possible application of ‘Agrevo’ obviousness, i.e. lack of inventive step in an arbitrarily limited claim, to this and other technologies, although the argument failed on the facts of this case.

Jurisdiction in related FRAND proceedings – Philips v Tinno (Patents Court)

This was an early tussle in a FRAND dispute over jurisdiction, something we have seen increase in number in 2021. In this case, the English court refused to stay proceedings pending the outcome of French court proceedings.

In the English case, the defendants had admitted infringement and validity of the SEPs and a FRAND trial was listed. The defendants commenced proceedings in France for various relief under Philips’ FRAND undertaking to ETSI. The French court had refused Philips’ challenge to its jurisdiction, holding there to be no lis pendens (notice of pending action) because Philips’ English claim was based in tort (patent infringement) whereas the French claim was based in contract. The defendants then challenged the jurisdiction of the English Court to hear the FRAND trial, contending the French court was first seised of the dispute in part because the FRAND case had not yet been pleaded in detail in England.

Mann J held the French and English courts were each first seised of the subject matter of their own actions, which were not the same. The FRAND claim had been part of Philips’ original claim, commenced prior to the French proceedings, and had only been amplified in the later pleadings.

Interim and final remedies

The following four cases illustrate the English court’s detailed approach to granting interim and final injunctions and other remedies such as declarations.
The principles governing the grant of interim injunction are well developed but ultimately each case will be judged by its own facts. A final injunction will almost always be granted but it is a matter of the court’s discretion, meaning that flexibility is possible to deal with unusual circumstances.

The discretion to grant declarations is also broad, permitting parties to obtain commercial certainty from the court; for example, an Arrow declaration.

Interim injunction refused permitting generic launch – Neurim/Flynn v Mylan (Patents Court and Court of Appeal)

In a rare departure from the norm, the Patents Court refused an interim injunction application brought by the claimant patentee to restrain the defendant’s launch of a first generic prolonged-release melatonin product for treating insomnia.

The judge, Marcus Smith J, held that the critical issue was whether the damage to claimant’s protected market was likely to be adequately compensated in damages. In concluding that it could – and that therefore no interim injunction should be granted – the judge held that there was a difference between the claimants’ market being irrecoverably damaged (by permanent price depression) and the proposition that this could not be addressed with an award of damages. He also held that it would be materially harder to assess the defendant’s damages if the injunction were granted.

The Court of Appeal agreed with the judge’s reasoning but stated that they “had not decided any principle of general application”, seeking to confine the decision to the facts. At trial, the patent was held valid and infringed but the second claimant, Flynn, was found to have no standing to bring its claim since it was not in law an exclusive licensee of the patent. Shortly thereafter, the patent was revoked by the EPO.

Relevance of public interest in granting final injunction after trial – Evalve v Edwards Lifesciences (Patents Court)

In this decision, Birss J had to assess whether to grant injunctive relief following final trial. He had found that the claimant’s two patents were not obvious over the prior art cited and that the defendant’s PASCAL transcatheter heart valve device infringed them. The defendant submitted that no final injunction should be ordered because to do so would be contrary to the public interest. This argument was based on evidence that several doctors held a reasonable opinion that the defendant’s PASCAL device was clinically preferably to the claimant’s MitraClip device for some patients.

The judge granted the final injunction with a carve-out limited to cases where implantation of the claimant’s MitraClip product had failed, finding that it was not sufficient to engage the public interest that some doctors might consider that they would prefer to use PASCAL rather than MitraClip for a particular patient. The judge did, however, stay the injunction pending appeal if the defendant gave undertakings limiting their supply of PASCAL.

The decision is subject to appeal, due to be heard in October 2021.

Injunctions after trial pending appeal – Fisher & Paykel Healthcare v Flexicare Medical (Patents Court)

The defendants’ assisted breathing circuit device infringed the claimant’s patent which was found to possess an inventive step compared to the prior art cited in its solution for avoiding problems caused by condensation build-up. The defendants had admitted that their products fell within the claims but the judge agreed to a limited suspension of the injunction pending resolution by the Court of Appeal as to whether that court would grant permission to appeal.

The defendants were permitted to continue supply to existing customers except that, in respect of the NHS wholesaler, the supplier would be limited in quantity since the NHS wholesaler effectively acted as an intermediary for a large number of hospitals and NHS trusts.

Declarations on obviousness to protect launch of future products – Mexichem v Honeywell (Court of Appeal)

The Court of Appeal refused to strike out a claim for a declaration, said to be in ‘Arrow’ declaration form, that it was obvious at the priority dates of the patents in suit to use certain chemicals as refrigerants in mobile air conditioning systems in cars. It was not necessarily the case that an Arrow declaration had to be defined by reference to a particular product. The issue would be decided at trial.

The defendant argued that the claimant’s claim was excessively broad as it covered a broad class of potential products and in particular was not founded on a specific product that the claimant sought to clear for entry onto the market without infringement of patents in the defendant’s portfolio. The defendant also argued that the declarations would not serve a useful purpose or alternatively would prejudge the issue of whether any product of the claimant would infringe patents in the claimant’s portfolio or would instead benefit from a Gillette defence.

Interim declaration on infringement – Shenzhen Carku v The NOCO Company (Patents Court)

Carku, a car battery jump starter manufacturer, failed in its application for summary judgment or, in the alternative, an interim declaration.

Carku's application was based on the submission that its products did not fall within the scope of NOCO's patent. The judge, Douglas Campbell QC, held that the case was not suitable for summary judgment because a full investigation at trial was needed. There was no supporting evidence as to how many of Carku's products worked and the evidence in relation to three of their products was unsatisfactory and unreliable. Furthermore, since the doctrine of equivalents was relied upon, the court had to be cautious.

Applications for interim declarations are very unusual and Carku's counsel could not identify a single case where one had been granted. The test was whether it was appropriate to grant a declaration where the question only permitted a final answer rather than a temporary one. Carku sought relief for threats relating to NOCO's successful complaints to Amazon to delist Carku's products. Since the key issue was whether there was infringement or not, which did not permit a temporary answer, the application failed.

Intention as a factor in assessing equivalence – ViiV v Gilead (Patents Court)

The judge, Birss J, refused to strike out the allegation in the claimant’s pleading that the defendant’s anti-HIV drug had been designed to operate similarly to the claimant’s drug which was protected by the patent. The pleading cited a published paper which, it alleged, showed that the defendant had knowledge of the patented product and had developed its own drug with the aim of maintaining the characteristics of the patented drug by using similar structural features in its own.

The claimant contended that these matters were relevant to whether the defendant’s drug infringed the patent by way of equivalence. In refusing to strike out the pleading, the judge did not decide whether subjective intention would ultimately be relevant to assessing infringement by equivalents but acknowledged it was arguable that it might be.

Joint liability for patent infringement – Lufthansa Technik v Astronics Advanced Electronics Systems (Patents Court)

Contrary to the decision of the German Federal Patent Court, which held the German equivalent patent obvious, Morgan J held the patent valid. The patent, which related to power sockets in airline seats, was also infringed.

The three defendants dealt in different ways with the components of the allegedly infringing "System". Astronics manufactured the components in the USA and supplied them to UK customers. At the time of supply, they were not connected to form the System, however, the components constituted means essential for putting the invention into effect and Astronics admitted that it had the requisite knowledge for contributory infringement. Safran used the components of the System to manufacture a seat and committed an act of direct infringement.

Panasonic made inflight entertainment ('IFE') systems, almost finished versions of the System, and supplied them with the knowledge that they would be assembled into Systems in the UK. It did not do the assembly itself and therefore submitted, unsuccessfully, that it was not liable for direct infringement. Morgan J concluded that Panasonic was jointly liable by reason of its common design – the common design being to connect the components to form the System. As noted in earlier cases, someone who supplied kits of parts with instructions for assembly was liable as a joint tortfeasor and here Panasonic supplied an IFE with assembly instructions and colour coding to assist the installer, the components being connected in the same way regardless of the type of seat.

The decision is subject to appeal, due to be heard in November 2021.

Instruction of experts – Akebia Therapeutics v Fibrogen (Patents Court)

The judge, Arnold LJ, discussed the instruction of expert evidence in a case involving six technically complex patents and disputes over validity and infringement.
He found that two of the expert witnesses had been let down by those instructing them with respect to the preparation of their expert reports. This was due to (i) a number of instances of poor drafting that did not represent the opinion an expert was attempting to convey; (ii) a failure in one instance to disclose all of an expert’s relevant publications; and (iii) an unfair ad hominem attack in cross-examination that should not have happened.

As regards the six patents in the suit, five were found to be invalid. In relation to the insufficiency of these five, the judge held that it was not plausible that substantially all compounds claimed would have therapeutic efficacy. In addition, the invention could not be performed across the scope of the claims without undue burden and the scope of the claims were uncertain.

Regarding infringement, the judge considered infringement by equivalence. He found that it would be contrary to the public interest for the file history to be excluded from consideration. The skilled person would conclude that the patentee intended that strict compliance with the normal meaning of the claim was an essential requirement of the invention for various reasons, including because the claim had been amended during prosecution to narrow it for reasons of validity. Additional reasons, based on the specification, pointed to the same conclusion.

The decision is subject to appeal, due to be heard in June 2021.

The role of commercial success in inventive step – Emson v Hozelock (Court of Appeal)

In an unusual decision, the Court of Appeal upheld a finding of obviousness in respect of a patent for a space-saving design of garden hose which had previously been found valid and infringed in separate proceedings between different parties. A further unusual characteristic of the decision was that the two patent specialist judges, Arnold and Floyd LJJ, disagreed.

Arnold, in the majority, upheld the judge’s finding that the commercial success of the patentee’s product could not overcome a finding that the patent was obvious over an item of obscure prior art. Commercial success was persuasive only where the relevant prior art had been known in the relevant field. Floyd, in the minority, expressed the view that the finding of obviousness was based on hindsight, the prior art in question having been only a ‘paper proposal’ which the parties’ experts agreed was not clear in its teaching and thus one that the skilled person would have treated with scepticism.

Insufficiency of overbroad claims – Regeneron v Kymab (Supreme Court)

An invention that was defined in its claims by a range must be disclosed sufficiently clearly and completely that it could be put into effect across substantially the whole range of the claim provided that the range was relevant to the invention.

Regeneron’s patent claiming a transgenic mouse with a reverse chimeric locus of human genetic material substituted into the mouse genetic material for improved production of monoclonal antibodies was found invalid by the Supreme Court. The reverse chimeric locus, an element of the claim, covered a wide range of loci lengths (in terms of base pairs).

Challenging Regeneron’s patent, Kymab showed that at the priority date the skilled person would only have been able to make transgenic mice with reverse chimeric loci within the very shortest portion of the range claimed. The court noted that the benefit of the reverse chimeric loci approach for making transgenic mice, being that the mice suffered reduced ‘immunological sickness’ and that the monoclonal antibodies produced had high binding efficiency, was related to the proportion of the relevant locus that was substituted with human genetic material. The length of the locus was therefore a relevant range.

The Supreme Court rejected as irrelevant to satisfying the requirement for sufficiency of disclosure Regeneron’s argument, accepted in the Court of Appeal, that the reverse chimeric loci approach was a principle of general application that, when used successfully, realised the benefit across substantially the whole of the claimed range. What was relevant was whether the skilled person was enabled to make mice across the whole of the range claimed, not whether the mice if so made would possess the same benefit across that range.

Inventor must be a natural person – Thaler’s Patent (Patents Court)

The judge, Marcus Smith J, held that an “inventor” under the UK Patents Act 1977 must be a natural person. In particular, and as concerned this appeal from the UK Intellectual Property Office, an AI entity could not be named as an inventor. The judge did not make any finding as to whether or not the AI entity in question, known as DABUS, had in fact performed the activity that was claimed as an invention in the appellant’s patent application.

The decision is subject to appeal, due to be heard in July 2021.

Treatment of confidential information during litigation – Mitsubushi/Sisvel v OnePlus and others (Court of Appeal)

The Court of Appeal considered the principles that should be applied to determining how to restrict access to confidential information in documents disclosed during IP litigation. The decision confirmed that “external-eyes only” regimes are permissible but should be rarely used. It also clarifies how confidential information will be treated in the future, setting out a non-exhaustive list of important points to be considered where the court is required to determine a dispute over the terms of a regime governing access to confidential information.

Crown use defence to infringement – IPCom v Vodafone (Patents Court and Court of Appeal)

This decision related to the infringement of IPCom’s patent by Vodafone’s 4G network. The judge, Douglas Campbell QC, found the patent valid and essential. However, part of implementation related to access to the network in civil emergency situations which the judge held was covered by the defence of Crown use. This defence to infringement permits certain infringing acts to be carried out under the authority of the government without the permission of the patentee. The patentee is compensated for the use made.

The Court of Appeal disagreed, overturning the decision on Crown use in a decision issued on 19 February 2021. The lead judgment was delivered by Arnold LJ who rejected Vodafone’s interpretation of the Crown use defence. According to Vodafone, the defence applied if an activity (which is found to infringe) is authorised by the government even if that activity does not necessarily involve infringing a patent. Arnold LJ expressed the view, obiter, (since the rejection of Vodafone’s interpretation disposed of this part of the appeal) that the correct interpretation was that the Crown use defence was engaged only if the infringer was expressly authorised to work the patent or to conduct an activity that would necessarily infringe the patent. He also rejected an alternative interpretation that the Crown use defence required express authority to work the patent (including by way of authority to work any patent).

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.

You can view the other articles in this series for Germany, Spain, The Netherlands, France and Italy.