Coflexip SA v Stolt Offshore MS Ltd (No 3)
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE JACOB,Mr Justice Jacob |
| Judgment Date | 31 July 2003 |
| Neutral Citation | [2003] EWHC 1892 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: CH 1006 C No 4344 |
| Date | 31 July 2003 |
[2003] EWHC 1892 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HONOURABLE MR JUSTICE JACOB
Case No: CH 1006 C No 4344
Mr Richard Miller QC and Mr Justin Turner
(instructed by Messrs Clifford Chance) for the Claimants
Mr Roger Henderson QC and Mr Thomas Hinchliffe
(instructed by Messrs Bird & Bird) for the Defendants
Hearing dates: 22 July 2003
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Approved Judgment
1. In 1996 Coflexip sued Stolt for infringement of Patent. On 31st July 2000 the Court of Appeal upheld a judgment and order of Laddie J whereby he held the Patent valid and infringed. The Court of Appeal went further than Laddie J on infringement, holding that Stolt had infringed both the main process claim and product claim of the Patent. Laddie J ordered:
“(3) There be an enquiry as to damages suffered by the Plaintiffs by reason of the acts of infringement of the Patent and of the rights conferred by publication of the application for the Patent by the Defendant and each of them or at the Plaintiffs’ option an account of profits made by the Defendants by reason of such acts. The costs of the enquiry or account are reserved.
(4) The Defendants pay to the Plaintiffs all sums found to be due to the Plaintiffs on the said account/or enquiry together with interest thereon pursuant to section 35A of the Supreme Court Act 1981 and/or pursuant to the Court's equitable jurisdiction”.
The Court of Appeal affirmed that order, ordering (so as to take into account its finding concerning the product claim):
“That the enquiry as to damages ordered in paragraph (3) of the order of the Honourable Mr Justice Laddie of the 29th January 1999 proceed having regard to the contents of the judgment of this Court.”
2. Stolt's Petition for leave to appeal from the decision of the Court of Appeal was dismissed. So the Court of Appeal's decision is well and truly final as between Coflexip and Stolt.
3. The enquiry ordered has been proceeding since. It covers (in addition to the specific contract referred to in the Particulars of Infringements), some 14 other pipe-laying contracts whose performance is said by Coflexip to fall within the scope of the Patent as construed by the Court of Appeal. The enquiry has been fixed for a hearing lasting 4–6 weeks in April 2004. Coflexip are claiming between £50 and £70 million plus interest.
4. Following Coflexip's success against Stolt, Rockwater sought revocation of the patent, basing their case on prior art which had not been relied upon by Stolt. Coflexip counterclaimed for infringement. Unlike Stolt, Rockwater were successful. On 15th April this year Laddie J ordered that the Patent be revoked, subject to a stay until after an appeal by Coflexip is finally disposed of.
5. Basing themselves on this order, Stolt seek a stay of the inquiry as to damages. At the heart of their submissions, advanced by Mr Roger Henderson QC, is the proposition that it would be monstrous if they have to pay an enormous sum in respect of a violation of a wholly non-existent right. This proposition has a lot to be said for it, but it does not follow that it is right. After all, Stolt lost their case and are seeking to take advantage of the success of others as though it applied to them too.
6. It is common ground that I have jurisdiction to order a stay. That jurisdiction derives from CPR Part 3.1:
“3.1.(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.
(2) Except where these Rules provide otherwise, the court may -
…
(f) stay the whole or part of any proceedings either generally or until a specified date or event.”
Moreover the Court has an inherent jurisdiction, as recognised by s.49(3) of the Supreme Court Act 1981. The power is to be exercised so as permit justice to be done or prevent injustice from being done.
The “Premature”point
7. Mr Miller QC for Coflexip submits first that this application is premature. Suppose, he says, Coflexip succeed in their appeal in the Rockwater case and the Patent is again held valid. Then the whole basis of this application will have gone. At present, he submits the application is based on a supposition and is potentially purely academic. The court does not deal with academic or hypothetical questions.
8. I do not regard the point as purely academic. It is real but contingent on the Court of Appeal upholding Laddie J. As matters stand there is an order for revocation of the patent, albeit suspended. As a practical matter there is a real live point of practical importance to both sides. As Mr Henderson pointed out if Stolt are right (or indeed wrong) on this point it could substantially affect settlement discussions.
9. Moreover there are good practical reasons for not leaving the question of estoppel over until after the decision of the Court of Appeal. So to do would inevitably put things back further. The point that has been fully argued before me would have to be reargued. There would be an inevitable appeal by the losing side. And there could well be a further appeal to the House of Lords.
Cause of Action estoppel
10. Next submits Mr Miller, there is no point in ordering a stay because it avails Stolt nothing that the Patent has subsequently been revoked. He accepts that the revocation relates back to the date of grant but says that cannot help Stolt: they are bound by the rule of cause of action estoppel. They, unlike anyone else, cannot be heard to say “There never was a patent.” The estoppel might sound odious to some, but estoppel it is.
Poulton
11. Mr Miller begins by rolling into Mr Henderson's way the formidable obstacle of Poulton v Adjustable Cover & Boiler Block Co. (1908) 25 RPC 529 and 661. The facts are not materially different from those of the present case. I take them from the headnote to the decision of the Court of Appeal (Vaughan Williams, Fletcher-Moulton and Buckley LJJ) who affirmed the decision of Parker J:
“The Plaintiff in an action for infringement of a Patent succeeded at the trial, and an injunction was granted, and an inquiry ordered what damage had been sustained by the Plaintiff by reason of the infringement by the Defendant of the Patent. Subsequently to this judgment, the Defendant obtained evidence of prior user of the invention, and presented a Petition for revocation of the Patent, and at the hearing of the Petition the Patent was revoked, and this decision was affirmed on appeal. On the inquiry in the action the Master found and certified that, by reason of the revocation of the Patent, the Plaintiff had not sustained any damage; but if it should be held that, notwithstanding the revocation of the Patent, the Plaintiff was entitled to damages, he found that they amounted to £110.”
12. It was held that notwithstanding the subsequent order for revocation, the defendants were bound by the earlier decision and had to pay damages. Parker J said this (p.532):
“Therefore the real question turns upon this, was there any estoppel operating to prevent the Defendants on that inquiry as to damages setting up the fact of the revocation as conclusive on the question of damage or no damage, or were they bound to allow matters to proceed without setting up the Order for revocation, so that, first the Master, and then the Court, should give a sum by way of damages on that state of affairs, assuming the validity of the Patent which did not exist. It is really a pure matter of estoppel.
I think that on principle it is absolutely clear that a judgment for an injunction and an inquiry as to damages in an action for infringement does estop a defendant from setting up upon the enquiry the invalidity of the Patent. So far as he is concerned he is estopped from denying the validity of the Patent at the date of the trial, which is the date with reference to which the inquiry for damages is directed, and, of course, estopped from denying its validity at the date of the infringement in respect of which the inquiry as to damages is directed.”
13. The argument for the defendant was that the revocation was in rem and related back, that the patentee could not be heard to say otherwise. In technical language the defendant was setting up an estoppel upon an estoppel. Parker J said of this:
“The question, therefore, for me to decide is whether or not I can apply that principle of an estoppel upon an estoppel in the present circumstances, so as to avoid having to give the Plaintiff in the action a sum by way of damages when as a matter of fact, the Patent having been ab initio void, he suffered no damage at all? Having regard to the practice that has been laid down in the Court of Appeal, and having regard to the fact that I am of opinion that a decree for revocation of a Patent is a judgment in rem, I think I am not justified in deciding that I ought to apply a principle for which I can find no authority, and, therefore, in my opinion, I am forced to the decision that the original estoppel is a good estoppel and that the Certificate must be varied by stating the finding as to the £110 damages.”
14. The Court of Appeal was equally clear. Vaughan Williams LJ said this (p.663):
“In my opinion this judgment of Mr Justice Parker is perfectly right....
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Damages due but Patent invalid
...SA & Others v Stolt Offshore MS Limited & Others [2003] EWHC 1892(Pat) Summary In June 2003 we reported on the High Court decision in Rockwater Limited v Coflexip SA & Others, in which Coflexip's patent was held to be invalid and an order for damages was made against Stolt. In l......