Global Flood Defence Systems Ltd and another v Johan Van Den Noort Beheer B.v and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Arnold |
| Judgment Date | 26 July 2016 |
| Neutral Citation | [2016] EWHC 1851 (Pat) |
| Docket Number | Appeal Nos: CH-2016-000034, CH-2016-000040 |
| Court | Chancery Division (Patents Court) |
| Date | 26 July 2016 |
[2016] EWHC 1851 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
RollsBuilding
Fetter Lane, London EC4A 1NL
Mr Justice Arnold
Appeal Nos: CH-2016-000034, CH-2016-000040
Michael Hicks (instructed by Shakespeare Martineau LLP) for the Claimants (Appellants)
Tom Alkin (instructed by DTM Legal LLP) for the First and Second Defendants (Respondents)
Hearing date: 18 July 2016
Introduction
These appeals from orders of His Honour Judge Hacon sitting in the Intellectual Property Enterprise Court raise two difficult issues in the law of groundless threats of patent infringement proceedings. The first issue is whether, if one person (A) threatens another person (B) with proceedings for infringement of a granted patent at a time when A only has a pending patent application, it is open to A to attempt to justify that threat once the patent has been granted. If the answer is that A can seek to justify the threat, the second issue is what to do about the timing of the trial of the issue of justification.
The reason why these issues arise is that it is commonplace for a period of some years to elapse between the date on which a patent is applied for and the date on which the patent is granted. In the United Kingdom, the proprietor cannot bring proceedings for infringement unless and until the patent has been granted. Once the patent has been granted, however, the proprietor can retrospectively claim relief dating back to the date of publication of the application (subject to questions of limitation).
Factual background
The Second Defendant ("Mr van den Noort") is the inventor of a product called a self-closing flood barrier ("the SCFB"). Mr van den Noort is owner and managing director of the First Defendant ("BV"). On 13 May 2008 BV filed a patent application in respect of the SCFB in the Netherlands. On 2 April 2009BV filed an international patent application under the Patent Cooperation Treaty claiming priority from the Dutch patent application which was published under number WO 2009/ 13922 on 19 November 2009. The international application entered the regional phase in December 2010. On 14 May 2011 it was published as European Patent Application No. 2 315 880 designating many Contracting States of the European Patent Convention, including the United Kingdom ("the Application").
In November 2010 BV and the First Claimant ("Global Flood") entered into a licence agreement ("the Licence"). Global Flood was jointly owned by Mr van den Noort and the owners of the Second Claimant. Under the Licence, Global Flood was exclusively licensed under the Application inter alia to make and distribute the SCFB. For a little over three years the Claimants manufactured and supplied SCFBs under the Licence. In December 2013 the commercial relationship broke down. The Licence was terminated in either January or February 2014. Thereafter the Claimants stopped selling the SCFB and started selling an alternative product called a self-activating flood barrier.
In February and March 2014 Mr van den Noortand BV made certain threats of patent infringement proceedings. These were contained in three notices posted on BV's website on 17 February 2014, 4 March 2014 and 7 March 2014 and in a letter to Sir Peter Luff MP dated 3 March 2014. For present purposes, it is sufficient to refer to the second website notice, which included the following passage:
"Global Flood Defence Systems Ltd and UK Flood Barriers Ltd are, however, still marketing the Self Closing Flood Barrier as is shown on their website.
At this stage, we have taken legal proceedings against Global Flood Defence Systems Ltd and UK Flood Barriers Ltd for infringing our patent rights as well as our intellectual property rights.
Under these circumstances we need to advise you that infringements of our patents by any party (also buyers), without our explicit and written approval, will be brought to court."
The letter to Sir Peter Luff contained a similar passage.
Mr van den Noort and BV accept the judge's finding that these were threats of imminent proceedings for infringement of a granted patent. They also accept that the Claimants are aggrieved by the threats.
Procedural history
On 6 May 2014 the Claimants started proceedings against BV, Mr van den Noort and the Third Defendant for groundless threats. The claim against the Third Defendant was settled at an early stage. Accordingly, in the remainder of this judgment I shall refer to BV and Mr van den Noort as "the Defendants". The Defendants counterclaimed for royalties due from Global Flood under the Licence and for a declaration that a trade mark was invalid. The Claimants then amended their claim to add an allegation of misrepresentation.
On 17 October 2014 the Claimants applied for summary judgment in respect of their claim for threats against the Defendants. This application was heard on 21 January 2015. The Claimants' main argument in support of the application for summary judgment was that, as matter of law, the threats could not be justified because they were threats of proceedings for infringement of a granted patent whereas the Application had not been granted. In a reserved judgment handed down on 29 January 2015 ( [2015] EWHC 153 (IPEC)) the judge rejected this argument.
After the handing down of the judgment, there was a case management conference. The judge granted the Claimants an interim injunction restraining the Defendants until judgment from threatening any person with proceedings for patent infringement where the Claimants were aggrieved by such threats. He also gave directions for the conduct of the proceedings, and fixed the trial for 8 and 9 December 2015, which was the next available slot for a two-day trial in the IPEC diary. Among the directions he made was one for a further case management conference in October 2015.
Although the judge granted the Claimants permission to appeal against the dismissal of their summary judgment application on the ground that the threats were incapable of justification, the Claimants did not at that stage pursue the appeal because they thought it unlikely that the Application would be granted by the trial. BV requested the European Patent Office to expedite the processing of the Application, however.
The second case management conference was held on 5 October 2015. The Defendants applied to adjourn the trial of the threats claim in order to allow time for the Patent to be granted. The judge declined to adjourn the trial of the threats claim for the reasons discussed below.
On 19 November 2015 the EPO issued a decision to grant the Application. This meant that the form of the claims was fixed, and the patent would be granted in that form on 16 December 2015. European Patent No. 2 315 880 ("the Patent") was duly granted on 16 December 2015. I was informed that since then the Claimants have commenced opposition proceedings in respect of the Patent in the EPO.
At the start of the trial on 8 December 2015, the Defendants renewed their application for the trial of the threats claim to be adjourned. The judge acceded to this application for the reasons he subsequently gave in a reserved judgment handed down on 1 February 2016 ( [2016] EWHC 99 (IPEC)). That judgment also dealt with the aspects of the trial that went ahead, which are not relevant for present purposes.
In the order he made following the handing down of his second judgment, the judge gave directions for the trial of the threats claim, including permitting the Defendants to re-amend their Defence and Counterclaim to include "any additional defences which such Defendants may wish to rely upon in the light of the fact that European Patent No. 2315880 has been granted". The judge refused the Claimants permission to appeal against the decision to adjourn the trial.
On 11 April 2016 Warren J granted the Claimants an extension of time for filing an appellants' notice to pursue the appeal against the dismissal of their summary judgment permission for which had been granted by the judge, and granted the Claimants permission to appeal against the judge's order adjourning the trial. In the light of this order the parties agreed a stay of the threats claim until the appeals had been determined.
Relevant provisions of the Patents Act 1977
Section 69 of the Patents Act 1977 , which is headed "Infringement of rights conferred by publication of application", provides, so far as relevant:
"(1) Where an application for a patent for an invention is published, then, subject to subsections (2) and (3) below, the applicant shall have, as from the publication and until the grant of the patent, the same right as he would have had, if the patent had been granted on the date of the publication of the application, to bring proceedings in the court or before the comptroller for damages in respect of any act which would have infringed the patent; and (subject to subsections (2) and (3) below) references in sections 60 to 62 and 66 to 68 above to a patent and the proprietor of a patent shall be respectively construed as including references to any such application and the applicant, and references to a patent being in force, being granted, being valid or existing shall be construed accordingly.
(2) The applicant shall be entitled to bring proceedings by virtue of this section in respect of any act only—
(a) after the patent has been granted; and
(b) if the act would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent, but also the claims (as interpreted...
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...of a patent owned by AbbVie Bermuda and not the subject of an exclusive licence to justify such a threat (cf. Global Flood Defence Systems Ltd v Johan van den Noort Beheer BV [2016] EWHC 1851 (Pat)). I accept that there is no evidence that AbbVie UK intends to threaten FKB's customers. I d......
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...fulfilling certain defences raised in Suit 1229 (citing Global Flood Defence Systems Ltd & Anor v Johan Van Den Noort Beheer BV & Ors [2016] EWHC 1851 (Pat) at [36]). Second, there is substantial overlap in both Suits between the infringement claims and the counterclaims for declarations of......