COFLEXIP S.A. and another and STOLT OFFSHORE MS Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Neuberger,Sir Martin Nourse,Lord Justice Peter Gibson |
| Judgment Date | 27 February 2004 |
| Neutral Citation | [2004] EWCA Civ 213 |
| Docket Number | Case No: A3/2003/1852 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 February 2004 |
[2004] EWCA Civ 213
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION, PATENTS COURT
Jacob J.
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Peter Gibson
Lord Justice Neuberger and
Sir Martin Nourse
Case No: A3/2003/1852
A3/2003/1852/A
Mr. Richard Miller Q.C. and Mr. Douglas Campbell (instructed by Messrs Clifford Chance of London) for the Respondents
Mr. Roger Henderson Q.C. and Mr. Tom Hinchliffe (instructed by Messrs Bird and Bird of London) for the Appellants
Introductory
Coflexip SA is the registered proprietor of European Patent (UK) No 0478742 ("the Patent") . The Patent contains product and process claims relating to the laying of flexible conduits on the seabed, which are of particular value to the off-shore oil industry.
In 1996, Coflexip SA and the exclusive licensee of the Patent, Technip Offshore Limited (together "Coflexip") brought proceedings against Stolt Offshore MS Limited and other companies in the same group ("Stolt") for infringement of the Patent. Coflexip's Particulars of Infringement alleged:
i) In paragraph 1, that Stolt had infringed "by using the process described in the Specification" of the Patent and by, inter alia, "using and/or keeping … a product made in accordance with the invention described in the … Patent";
ii) In paragraph 2, that "in particular" Stolt had kept and used a vessel called the Seaway Falcon "together with the Flexible Laying and Module Handling Systems installed therein" in the "Magnus Swift Field in the North Sea for the purposes of laying flexible flowlines for British Petroleum plc" and that the Seaway Falcon together with the aforesaid system was "being offered for use and disposal" in connection with the laying of flexible flowlines more generally.
Stolt denied infringement of the Patent, and counterclaimed that it was invalid and should be revoked on grounds of anticipation and obviousness. Their case relied on certain prior art.
The claim and counterclaim came before Laddie J and the hearing lasted around five days. He gave judgment on 29 January 1999 ("the first judgment") . He held that the Patent was valid, and that Stolt had infringed it. Stolt appealed the first judgment. On their appeal, Stolt sought to put in evidence of further prior art. On 31 st July 2000, the Court of Appeal refused Stolt permission to adduce this further evidence, and dismissed Stolt's appeal. They allowed a cross appeal by Coflexip, as a result of which the extent of Stolt's infringement was rather greater than that found by Laddie J, and the form of order was amended.
On Stolt's application to adduce fresh evidence in the form of fresh prior art, Aldous LJ said, in paragraph 55 that:
"[Stolt] carried out searches which they believed were appropriate and which they believed and still believe were reasonable. It was their decision not to search more widely and it is not right to allow them to reopen their case in this court. There are no exceptional circumstances which would make this an appropriate case for amendment requiring a new trial."
Chadwick LJ came to the same conclusion. At paragraph 70, he said:
"This is not a case in which it can be said that the prior art on which [Stolt] now wish to rely … would compel the court to hold that [Coflexip's] patent is invalid. The most that can be said is that [the fresh prior art] provides a further basis for [Stolt's] attack on the validity of [Coflexip's] patent. In those circumstances it is clear that, if [Stolt] cannot succeed without relying on the prior art which they seek to introduce by amendment, permission to reamend would, necessarily, lead to a retrial."
At paragraph 72, Chadwick LJ agreed with the reasoning of Aldous LJ which I have already quoted. He then said at paragraph 73 that to order a retrial would involve ignoring "the interests of other court users" in light of the "limited number of nominated patent judges and the heavy demands on the Patents Court". At paragraph 74, Chadwick LJ referred to a further argument by Stolt, to the effect that it was in the public interest that the fresh prior art should be considered by the court, because the Patent would continue in force, with monopolistic consequences, possibly wrongly. He also observed that, if there was prior art, which had not been referred to at trial and which would invalidate the Patent, then "it may be expected that the Patent will be challenged by another party in other proceedings". He concluded on this issue:
"The court should not allow a party to pursue its own private interests in a way which is wasteful of the court's resources under the guise of promoting an alleged public interest in challenging the monopoly conferred by the patent."
The Court of Appeal altered the injunction granted at first instance. The form of injunction granted by Laddie J restrained Stolt "from using or offering … a process laying flexible conduit employing a Flexible Lay System of the design installed in the Seaway Falcon …". At paragraph 58 Aldous LJ made this criticism:
"That injunction makes no reference to the patent nor to the rights stemming from the patent. But it applies whether or not the patent lapses or is revoked and, unless an application is made to the court, it will continue even when the patent expires. It therefore needs some modification."
Accordingly, the Court of Appeal effectively substituted the more familiar form of injunction.
The order resulting from the first judgment, as amended by the Court of Appeal was to this effect:
"(2) [Stolt] … be restrained … from infringing [the] Patent …
(3) There be an inquiry as to damages suffered by [Coflexip] by reason of the acts of infringement of the Patent … by [Stolt] or at [Coflexip's] option an account of profits made by [Stolt] by reason of such acts … the Inquiry [to] proceed having regard to the contents of the judgment of [the Court of Appeal].
(4) [Stolt] pay Coflexip] all sums found to be due to [Coflexip] on the said account/or Inquiry together with interest thereon …."
Stolt was also ordered to pay the costs of the action, the counterclaim and the appeal.
The inquiry as to damages ("the Inquiry") has been proceeding. In addition to the specific contract relating to the Magnus Swift field with British Petroleum plc ("the Magnus Swift contract") referred to in paragraph 2 of the Particulars of Infringement, it covers fourteen other pipe-laying contracts ("the fourteen other contracts") . The hearing of the Inquiry is fixed for 26 April 2004 with a time estimate of between four and six weeks. Coflexip has elected to seek damages rather than an account of profits, and its case currently discloses a claim for around £80 million.
Meanwhile, during 2002, a company unconnected with Stolt, Rockwater Limited ("Rockwater"), issued proceedings against Coflexip for revocation of the Patent. On 15 April 2003 Laddie J gave judgment in that action ("the second judgment") in which he found the Patent to be invalid on the basis of prior art, which had not been referred to by Stolt either at first instance or in the Court of Appeal. Accordingly, he ordered that the Patent be revoked, albeit that he stayed the revocation pending Coflexip's appeal to this court.
In light of the revocation of the Patent, Stolt applied for a stay of the Inquiry. The application is ultimately based on Stolt's submission that the revocation of the Patent "provides a complete defence to the claim for damages", or constitutes "a bar to enforcement of the adjudged infringement whether by pursuit of the Inquiry for damages or otherwise", to quote from the skeleton argument prepared by their counsel Mr Roger Henderson QC and Mr Thomas Hinchliffe. If, as a result of Coflexip's appeal against the second judgment, the revocation of the Patent is confirmed, then (subject to any further appeal to the House of Lords) this argument, if correct, will come into its own. On the other hand, if the second judgment is reversed, the Patent will not be revoked, and Stolt accept that this argument could no longer proceed.
If Stolt are right on the basic point, namely that the revocation of the Patent would effectively put an end to their liability in the Inquiry, then, particularly in light of the fact that Laddie J, in the second judgment, concluded that the Patent should be revoked, there would obviously be a very powerful case for saying that the Inquiry should be adjourned to await the outcome of the Coflexip's appeal against the second judgment. However, in a decision given on 31 st July 2003, Jacob J declined to grant a stay, on the grounds that, even if the Patent was revoked, it would not assist Stolt in the Inquiry, and that, in particular, it would not lead to Stolt's liability for damages to Coflexip, as a result of the first judgment, being effectively discharged. It is against that decision that Stolt now appeal.
The reason Jacob J reached his conclusion was essentially on the basis of a decision of the Court of Appeal in Poulton Adjustable Cover & Boiler Block Co [1908] 2 Ch 430. Jacob J described the facts of that case as "not materially different from those of the present case". I did not understand Mr Henderson to suggest otherwise. His contention on behalf of Stolt was that we should not follow the decision in Poulton for a number of reasons, namely:
i) the decision in Poulton is, on analysis, wrong.
ii) the law relating to res judicata, on which the reasoning in Poulton was based, has...
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