Hand Held Products, Inc. v Zebra Technologies Europe Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee |
| Judgment Date | 23 March 2022 |
| Neutral Citation | [2022] EWHC 640 (Ch) |
| Docket Number | Case No: HP-2021-000036 |
| Court | Chancery Division |
[2022] EWHC 640 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Rolls Building, Royal Courts of Justice
Fetter Lane, London, EC4A 1NL
Lord Justice Nugee
Case No: HP-2021-000036
Brian Nicholson QC and Christopher Hall (instructed by Quinn Emanuel Urquhart & Sullivan UK LLP) for the 2 nd Defendant
James St Ville (instructed by DLA Piper UK LLP) for the Claimants
Hearing date: 9 March 2022
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.
Remote hand-down: This judgment was handed down remotely at 10.30am on 23 March 2022 by circulation to the parties or their representatives by email and by release to BAILII and the National Archives.
Introduction
In this patent action there has never been any dispute that the 1 st Defendant, Zebra Technologies Europe Ltd ( “ZTEL”), an English company with an office in Bourne End in Buckinghamshire, has been duly served. But the position is different with the 2 nd Defendant, Zebra Technologies Corporation ( “ZTC”), a Delaware corporation with a registered address in Illinois. The Claimants claim to have served it pursuant to CPR r 6.9(2) at ZTEL's office in Bourne End on the basis that this is a place of business of ZTC, or a place where ZTC carries out its activities. ZTC disputes that that is so, and denies that it has been duly served.
ZTC brought an application to resolve the question. I heard it on 9 March 2022. ZTC's application was in form an application under CPR r 7.7(3) for the Court to dismiss the action but the main substantive point argued was whether ZTC had been properly served at Bourne End, although there were also, as will appear, some further detailed arguments on the CPR raised by Mr James St Ville, who appeared for the Claimants. The argument took most of the day but, having reached the conclusion that ZTC's arguments were to be preferred, I thought it in the interests of the parties to indicate that straightaway. I therefore gave a short oral judgment accepting ZTC's contentions that it had not been duly served, and thereafter gave directions enabling the Claimants to bring an application for permission to serve ZTC out of the jurisdiction. I gave some brief reasons for my conclusions but indicated that I would give more detailed reasons in writing if either party wished. Mr St Ville indicated that he would indeed like a written judgment and this judgment therefore sets out my reasons for my decision on ZTC's application in more detail than I was able to on the day.
Background
The Claimants are two US companies in the Honeywell group of companies. The Honeywell Group (among other things) designs, manufactures, supplies and supports items such as bar code scanners and mobile computers. The Claimants are, or at any rate claim to be, the owners of three European patents (two in the name of the 1 st Claimant and one in the name of the 2 nd Claimant) in the field of bar code reading devices.
ZTC is the parent of the Zebra group of companies. The Zebra Group's business includes the design, manufacture and supply of products in similar fields. ZTC is listed on the NASDAQ stock market with the trading symbol ZBRA. It is the ultimate parent of ZTEL and a number of other subsidiaries.
ZTEL is responsible for sales and marketing of Zebra Group products in the EMEA (Europe, Middle East and Africa) region. Its registered office (and the head office for the EMEA sales region) is the office at Bourne End.
The evidence for ZTC is that ZTEL, although (indirectly) a wholly-owned subsidiary of ZTC, conducts its own business on its own behalf. It buys ZTC products from ZTC, stores them at a warehouse in the Netherlands operated by its direct wholly-owned subsidiary Zebra Technologies BV, enters into its own contracts, handles its own banking, makes its own financial arrangements, and itself leases its Bourne End office from a third party. All the employees who work permanently at Bourne End are employed by ZTEL, not ZTC.
In this action the Claimants claim that ZTEL and ZTC have infringed their patents. The details of the claims do not matter for present purposes but in the pleaded particulars of infringement the Claimants rely on ZTEL and ZTC offering to dispose of, disposing of, keeping and/or using in the UK and/or importing into the UK image readers, bar code reading devices and terminals pursuant to a common design. Two specific examples are pleaded: DS108 digital scanners and TC75 hand held scanners (or touch computers).
Procedural history
The Claimants issued the claim form on 29 September 2021.
There had been no letter before action and on 30 September 2021 the Claimants' solicitors DLA Piper UK LLP ( “DLA Piper”) wrote to ZTEL and ZTC informing them that proceedings had been issued and inviting resolution of the issues before service. DLA Piper acknowledged that ZTC's principal place of business was in Illinois and said the Claimants were prepared to make an application for service out of the jurisdiction but invited ZTEL to agree to accept service on behalf of ZTC, or for both ZTEL and ZTC to instruct solicitors to accept service, to avoid time and expense being taken up unnecessarily.
On 5 November 2021 the Defendants' London solicitors, Quinn Emanuel Urquhart & Sullivan UK LLP ( “Quinn Emanuel”), replied to the effect that they were instructed by both ZTEL and ZTC but had no instructions to accept service on behalf of ZTC. There followed further correspondence which it is not necessary to set out: the outcome was that Quinn Emanuel accepted service on behalf of ZTEL and it was duly served (with a deemed service date of 29 November 2021), but declined to accept service on behalf of ZTC, which refused to submit to the jurisdiction. The Claimants did not however apply for permission to serve out of the jurisdiction, taking the view that ZTC's insistence on this was unreasonable and that it should be possible for the parties to address the question as a matter of sensible case management.
By 17 December 2021 nothing had been resolved and Quinn Emanuel wrote a letter to DLA Piper which among other things included the following:
“For the avoidance of doubt, the Second Defendant (“ ZTC”) maintains its refusal to submit to the jurisdiction and nothing in this letter is or should be construed as a submission on its behalf to the jurisdiction….
… the position as to service on ZTC remains the same: (i) we do not have instructions to accept service on ZTC in this jurisdiction; (ii) your clients must obtain the Court's permission to serve the Claim Form on ZTC out of the jurisdiction…”
Then, after inquiring if the Claimants intended to discontinue against ZTC, it continued:
“In the event that your clients do not intend to discontinue, we hereby serve notice on behalf of ZTC pursuant to CPR 7.7(1) requiring your clients to serve the Claim Form on ZTC by 11 January 2022. Such service will need to be made outside the jurisdiction further to a successful application to serve out. If your clients do not seek permission to serve out, ZTC reserves its rights including under CPR 7.7(3) to have the claim against it dismissed.”
I give the text of CPR r 7.7(1) below but in essence it permits a defendant against whom a claim form has been issued but not served to serve a notice on the claimant requiring him either to serve the claim form within a limited time or discontinue it, and, if the claimant fails to comply, to apply to the Court for the claim to be dismissed.
The Claimants however did not apply for permission to serve ZTC out of the jurisdiction. Instead, they took the view that ZTC had a sufficient connection with the Bourne End office for it to be said that ZTC had a place of business in the UK, or a place where it carried on activities within the UK, so as to satisfy the requirements of CPR r 6.9(2). Again I give the text of this rule below but it enables a claim form to be served on a company which has a place of business, or a place where it carries on its activities, in the jurisdiction.
On 11 January 2022 the Claimants therefore purported to serve ZTC by leaving the claim form and other relevant documents at the Bourne End office. A certificate of service giving these details was signed by Ms Deborah Bould, the relevant partner in DLA Piper, on 17 January 2022 and presumably duly filed. (Her evidence is that service was effected “via a process server”, which I take to mean that she did not herself attend at the Bourne End office, and I have some doubts whether in those circumstances the certificate should have been completed by her rather than by the individual process server who personally left the documents; but no point was taken on this and nothing in any event turns on it.)
On 22 January 2022 ZTC issued an application pursuant to CPR r 7.7(3) for an order dismissing the claim against ZTC on the basis that the Claimants had failed to comply with ZTC's notice of 17 December 2021 under CPR r 7.7(1).
The application sought in the alternative an order under CPR r 3.4(2) striking out the claim form on the basis that the Claimants' refusal to serve it on ZTC was an abuse of process or failure to comply with the CPR. This was apparently designed to prevent judgment being entered in default (see CPR r 12.3(3)(a)(i) under which a claimant may not obtain a default judgment if the defendant has applied to have the claimant's statement of case struck out under rule 3.4 and the application has not been...
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