F H Brundle (a private unlimited company) v Richard Perry Betafence Ltd and Another (Third Parties)
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Hacon,Judge Hacon |
| Judgment Date | 06 March 2014 |
| Neutral Citation | [2014] EWHC 475 (IPEC) |
| Docket Number | Case No: CC 13 P 00980 |
| Date | 06 March 2014 |
| Court | Intellectual Property Enterprise Court |
[2014] EWHC 475 (IPEC)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
His Honour Judge Hacon
Case No: CC 13 P 00980
and
Stuart Baran (instructed by Collyer Bristow LLP) for the Claimant
The Defendant appearing in person
Jeremy Heald (instructed by Wake Smith LLP) for the First Third Party
Hearing date: 23 rd January 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.
This is an action brought pursuant to section 70 of the Patents Act 1977 ("the Act") to restrain alleged groundless threats of proceedings for infringement of a patent.
The Defendant ("Mr Perry") is the proprietor of UK Patent No. 2 390 104B ("the Patent") which relates to a fence bracket.
The Claimant ("Brundle"), a private unlimited company, is a wholesaler of metal products, including fences and component items for fences. In its range are a bracket used to attach fence panels to a post called the "Nylofor 3D Bracket", which is sold in two forms: the "Beam" and "Universal" forms, and a fence panel known as the "Nylofor 3M Panel". These three products are all supplied to Brundle by the First Third Party ("Betafence").
Brundle was represented by Mr Baran. Mr Perry appeared in person. Betafence was represented by Mr Heald.
The letters
On 5 October 2012 Mr Perry wrote to Brundle ("the October Letter"). It was in the following terms:
" FAO: Chief Executive/Chairman
Notice Before Proceedings
Infringement of Patent GB2390104, 4 August 2003 — October 2011 Through Sales Of Betafence's Nylofor 3D Bracket And 3M Panel
Claim for Damages Under the Patents Act 1977.
Sirs,
I have written to your Company in the past to see if you would have any interest in stocking any of my fencing products and your reply was that you didn't sell any of these products or that type of fencing and your Company had no interest.
It has now been brought to my attention that your Company has been selling a product of Betafence known as Nylofor 3D bracket that is used to install Nylofor fencing, for over at least 5 years, according to your Southampton office and you in fact still sell these products.
This Nylofor product infringes my Patent and I demand that you provide an Account of Profits of direct profit on sales of:
1. The quantity of the Nylofor 3D bracket you have sold between August 2003 – October 2011.
2. The number of Nylofor 3M fence panels that have been sold during the same period that are installed using the Nylofor bracket.
3. The number of fence posts sold corresponding with the number of fence panels sold during the same period.
4. The quantity of add on products sold such as the allen key tool specifically designed to use with the Nylofor 3D bracket.
I am legally entitled to a share of these profits whilst the Patent was in force and which is currently being restored to the register, as it had lapsed temporarily due to Patent Office error in late 2011.
I intend to take proceedings against your Company in the High Court if no amicable solution can be reached regards paying me my share of the profits for your use of my inventions without any licence to do so. Please respond within 14 days or I will commence proceedings against your Company.
Sincerely,"
On 15 October 2012 Brundle's solicitors replied, denying infringement by Brundle and alleging that Mr Perry had made unjustified threats. Mr Perry was invited to undertake that he would make no more such threats.
Mr Perry responded in a letter dated 21 November 2012 ("the November letter"). He asked for information about Brundle's sales and addressed the sixth paragraph of the letter from Brundle's solicitors as follows:
"Para. 6 Just to clarify, according to you, your client will be ignoring the Cease and Desist Notice and will continue to sell the infringing products. As you and your client both take the Patent Infringement very seriously, you will be providing the information I have asked you for and in the meantime I will put a hold on taking any legal proceedings against your client."
In a letter dated 29 November 2012 Brundle's solicitors enclosed an invoice from Betafence to show that Betafence had supplied Brundle and invited Mr Perry to take up his complaint with Betafence. Mr Perry was again asked for undertakings.
Mr Perry's reply on 18 December 2012 ("the December Letter") included the following:
"In your initial letter you are claiming 'unjustified threats of legal action for alleged patent infringement' and I pointed out that your client may still have a liability to me between 2004 – 2011 whilst the Patent GB2390104 was in force, …"
Brundle alleges that the October, November and December Letters all contained threats within the meaning of section 70 of the Act; in the case of the latter two letters Brundle relies in particular on the passages I have quoted.
Brundle says that it is a person aggrieved by those threats, within the meaning of that section, and that the threats cannot be justified pursuant to section 70(2A) of the Act because sale of the relevant Nylofor products by Brundle (and any other acts done in relation to those products) did not infringe the Patent.
Counterclaim and Part 20 Claim
The Claim Form and Particulars of Claim were served on 13 February 2013. Mr Perry served a Defence on 11 June 2013 together with a Counterclaim. He repeated and expanded on his Counterclaim in a letter served on 26 June 2013. The Counterclaim alleges that Brundle infringed the Patent and Mr Perry's Part 20 Claim makes the same allegation against Betafence and Britannia Fasteners Limited.
I should also note that in the Counterclaim Mr Perry says, in the context of relief claimed (at paragraph 7), "I had filed designs on my products that have been copied at the OHIM". Nowhere has Mr Perry identified particular designs, or particular rights of any kind relating to designs of which he claims ownership. He referred to none at trial. I infer that Mr Perry in fact raises no claims in relation to designs and even if he had, I would have struck them out on the ground that they were not sufficiently identified and explained in the Counterclaim.
Opinion of the IPO under s.74A of the Act
On 18 April 2013 Mr Perry filed a request at the Intellectual Property Office ("IPO"), pursuant to section 74A of the Act, for an opinion as to whether Betafence and Brittania Fasteners had infringed the Patent. In Mr Perry's submissions to the IPO the only product alleged to fall within the claims was the 'Beam' variant of the Nylofor 3D Bracket.
The written opinion was prepared by Susan Dewar, an Examiner at the IPO, and issued on 17 July 2013 ("the IPO Opinion"). The Examiner concluded the Nylofor Beam 3D Bracket did not fall within the claims of the Patent and therefore there was no infringement. I will return below to her reasons.
In an application made on 16 October 2013 Mr Perry requested a review of the Examiner's Opinion before the Comptroller of the IPO pursuant to section 74B of the Act. I was informed that the IPO has told Brundle's solicitors that the review has not taken place and will not take place before the trial of these proceedings.
Lapse of the Patent
The Patent lapsed on 8 August 2011 due to non-payment of renewal fees. Mr Perry applied to the Intellectual Property Office and in a written decision dated 11 November 2013 G. J. Rose Meyer, Hearing Officer acting for the Comptroller, restored the Patent.
Issues set out at the CMC
A case management conference was heard on 22 July 2013 before Arnold J. at which the following were identified as the issues to be determined at trial:
1. Do the letters sent by D to C constitute a threat of proceedings for patent infringement?
2. Is C a person aggrieved by D's threats?
3. Were the threats unjustified as a result of the lapse of the Patent before the making of such threats?
4. Is any of the products in respect of which threats were made a product falling within the claims of the Patent, namely:
a. the Nylofor 3M fence panel
b. the Nylofor 3D bracket ("Beam" form); and/or
c. the Nylofor 3D Bracket ("Universal" form)?
5. Do C's acts in respect of which proceedings were threatened by D constitute an infringement of the Patent?"
Application to transfer
At a hearing before Arnold J on 20 November 2013 Mr Perry also applied to transfer these proceedings to the Patents Court, alleging in particular that he would be prejudiced by the £500,000 ceiling on damages in this Court. In response to this Brundle and Betafence agreed that this Court should have jurisdiction to award damages or profits in excess of that sum pursuant to CPR r.63.17A(3) in the event that Mr Perry were to succeed in his Counterclaim and establish an entitlement to an award above £500,000. Britannia Fasteners did not appear at the hearing. Arnold J adjourned the application to transfer but gave Mr Perry permission to restore it in the event that Britannia Fasteners did not agree to the lift on the cap for damages or profits.
As it turned out, Britannia Fasteners has neither served a Defence nor played any part in the proceedings. However the application to transfer the action to the Patents Court was not renewed.
The Issues
The issues set out in the Order following the CMC on 22 July 2013 are those which I have to resolve, save for a narrowing of issue 4 and a point about the scope of the alleged threats, as I will explain. I will...
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