Compactgtl Ltd v Velocys Plc and Others
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Arnold,Mr Justice Arnold |
| Judgment Date | 22 September 2014 |
| Neutral Citation | [2014] EWHC 2951 (Pat) |
| Court | Chancery Division (Patents Court) |
| Date | 22 September 2014 |
| Docket Number | Case No: HC10C01570 and HC13B01040 |
[2014] EWHC 2951 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Rolls Building
Fetter Lane, London, EC4A 1NL
The Hon Mr Justice Arnold
Case No: HC10C01570 and HC13B01040
Iain Purvis QC and Henry Ward instructed by Bird & Bird LLP for Velocys
Andrew Lykiardopoulos QC instructed by, and Tim Powell of, Powell Gilbert LLP for CompactGTL
Hearing dates: 22–24, 28 July 2014
Approved Judgment
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.
| Contents | |
| Topic | Paragraphs |
| Introduction | 1–2 |
| The witnesses | 3–8 |
| Technical background | 9–52 |
| Background to FT synthesis | 10–14 |
| The FT reaction | 15–18 |
| Synthesis gas | 19–21 |
| FT terminology | 22 |
| FT reaction conditions | 23–26 |
| FT catalysts | 27–33 |
| Catalyst deactivation | 34–37 |
| Commercial FT reactors | 38–40 |
| Fixed bed reactors | 41–45 |
| Fluidised bed reactors | 46–49 |
| Slurry phase reactors | 51–52 |
| The Patents | 53–65 |
| The claims | 66–67 |
| The skilled team | 68–69 |
| Common general knowledge | 70–73 |
| Amendment | 74–108 |
| The first application | 75–102 |
| The law | 76–80 |
| Assessment | 81–102 |
| The second application | 103–108 |
| Construction | 109–112 |
| Porous structure/porous support | 110 |
| Buffer layer | 111 |
| For Fischer-Tropsch synthesis | 112 |
| Novelty over Hunter | 113 |
| Hunter | 114–120 |
| Assessment | 121–124 |
| Novelty and obviousness over Schanke | 125–172 |
| Schanke | 126–140 |
| Novelty of claim 1 of 508 | 141–144 |
| General points on obviousness | 145–148 |
| Obviousness of claim 1 of 509 | 149–166 |
| Obviousness of claim 9 of 509 | 167–171 |
| Obviousness of claim 1 of 508 | 172 |
| Infringement | 173–178 |
| Porous structure/porous support | 174–175 |
| Buffer layer | 176 |
| Claim 16 of 509 | 177 |
| Conclusion | 178 |
| Summary of conclusions | 179 |
Introduction
In these proceedings Velocys Inc, which is a subsidiary of Velocys plc, alleges that CompactGTL Ltd has infringed European Patents (UK) Nos. 1 206 508 and 1 206 509 ("the Patents"). The Patents are owned by Battelle Memorial Institute and exclusively licensed to Velocys Inc. I shall refer to Battelle Memorial Institute and Velocys Inc collectively as "Velocys". The specifications of the Patents are almost identical, although neither is a divisional of the other or of a common parent, and they differ mainly in their claims. Both Patents relate to catalysts for use in the Fisher-Tropsch ("FT") process, which is used for so-called gas-to-liquid ("GTL") conversion of hydrocarbons. In brief summary, the key feature of the inventions disclosed and claimed is the use for the purposes of FT synthesis of "structured" catalysts of a kind which had previously been used in other fields, and in particular the automotive industry, but not in FT synthesis. CompactGTL denies infringement and contends that the Patents are invalid. There is no challenge to the claimed priority date of 17 August 1999. Velocys has applied to amend both Patents.
In general, the legal principles to be applied in this case are well-established principles which I have set out in numerous previous judgments. I shall therefore not repeat them here. The case also raises two legal points which are less familiar, however.
The witnesses
Velocys' expert was Dr John Brophy. He obtained a BSc and a PhD from King's College London between 1966 and 1972. From 1976 to 1981 he was a Lecturer in Chemistry, first at Leeds University and then at Birmingham University. From 1981 to 1992 he worked for BP successively as Senior Technologist, Project Leader Exploratory Gas Conversions and Corporate Research Coordinator. During this period he was heavily involved in various aspects of BP's GTL programme, including work on catalysts and on the scaling up and development of catalytic processes. From 1992 to 1997 he was employed by BP Chemicals as Technology General Manager. In that capacity, he was responsible for the research and development of catalytic processes for chemicals production. Since 1997 he had been an independent consultant advising several international oil companies on GTL technology, including methods of manufacturing synthesis gas and FT synthesis as well as other chemicals-related catalyst and reactor technologies. Between 2000 and 2007 one of his clients was Velocys.
Counsel for CompactGTL submitted that Dr Brophy had at times found it hard to differentiate what the skilled person would have known in August 1999 and what he had learnt, in particular from Velocys, subsequently. It is always hard for expert witnesses in patent cases to distinguish between what was known at the priority date and what became known subsequently, but Dr Brophy was clear that he had attempted to put himself in the shoes of a skilled person in August 1999 when considering the interpretation and validity of the Patents. I am not persuaded that his evidence on these topics was significantly affected by knowledge he acquired later.
For his part, counsel for Velocys submitted that Dr Brophy was a very knowledgeable and practical expert with a great deal of experience in the commercial application of FT reactors. I agree with this.
CompactGTL's expert is Dr Charles Mauldin. He obtained a degree in Chemistry from Southern Methodist University in 1972 and a PhD in Organic Chemistry from the University of Texas at Austin in 1976. From 1976 to 2005 he was employed by Exxon (later ExxonMobil) Research & Development Laboratories. From around 1980 until about 1989 or 1990, he was engaged in laboratory research on FT catalysts for fixed bed reactors. From about 1989 or 1990 he was engaged in research on FT catalysts for slurry phase reactors. After an initial focus on catalyst composition, his work expanded to include other aspects of FT catalysts, including preparation, activation and regeneration. He also acquired experience of FT processes in pilot and demonstration units. Since 2005 he has been an independent consultant in relation to FT catalysts and processes.
Counsel for Velocys submitted that it was evident from Dr Mauldin's evidence that his background in laboratory research and testing of catalysts meant that he was far more interested in the intrinsic properties of the catalysts themselves than he was in the practical implementation of systems that made use of those catalysts. I agree with this.
Counsel for Velocys also submitted that, whether through lack of care and through the adoption of an unduly partisan approach or both, Dr Mauldin's reports had contained a great deal of assertion that was revealed in cross-examination to be little more than speculation, or even to be based on incorrect assumptions. For example, he gave evidence that it would be obvious to choose Fecralloy from Table 1 of Schanke on the basis of its thermal conductivity, but it turned out that he had not checked the thermal conductivity of Fecralloy or compared its thermal conductivity with that of the ceramics used by Schanke and indeed without any firm understanding of how thermal conductivity was even measured. Furthermore, counsel submitted that Dr Mauldin had not approached the Patents in a balanced way, but had read them in a critical spirit. He accepted, however, that Dr Mauldin had mostly been fair in his oral evidence. I accept these submissions.
Technical background
The following account of the technical background is based on the primer agreed between the parties, which is in turn a synthesis of the relevant sections of the experts' reports. (It would have been better if the parties had agreed the primer first, before the experts prepared their reports.)
Background to FT synthesis
FT synthesis provides a means for producing synthetic hydrocarbons such as oils or fuels from (typically) coal, natural gas or biomass. The process was first developed in Germany in 1923 by Franz Fischer and Hans Tropsch. In response to inadequate supplies of petroleum following World War I, many German chemists researched ways in which hydrocarbons, especially liquid fuels like gasoline and diesel, could be synthesised from smaller building blocks, particularly carbon monoxide and hydrogen derived from coal. Fischer and Tropsch devised the first successful process, which resulted in the first commercial FT plant in Germany in around 1936.
After the Second World War, South Africa, faced with embargoes on imports of crude oil, continued development of FT for utilisation of its substantial coal reserves. Later, it further developed the process for utilising local natural gas. The USA also had development programmes based on its coal reserves, but these were not commercialised due to the availability of relatively cheap crude oil.
Many of the world's largest natural gas fields are located far from markets for that gas, which consequently has had low value compared to crude oil which is relatively easily transported. GTL is a process that can potentially add value to this "stranded" gas by converting it to longer-chain premium hydrocarbon products such as diesel, jet fuel, kerosene and lubricating oils that are free of sulphur, aromatics and metals. To date, the only commercial GTL plants have been on a very large scale located close to large fields with security of supply.
Other opportunities for GTL include gas produced with crude oil ("associated gas"), which in the past has been flared i.e. the gas is released as a waste...
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