HTC Corpn v Nokia Corpn
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Arnold,Mr Justice Arnold |
| Judgment Date | 03 December 2013 |
| Neutral Citation | [2013] EWHC 3778 (Pat) |
| Docket Number | Case Nos: HC12A02048, HC12C02909 |
| Court | Chancery Division (Patents Court) |
| Date | 03 December 2013 |
[2013] EWHC 3778 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Rolls Building
Fetter Lane, London, EC4A 1NL
The Hon Mr Justice Arnold
Case Nos: HC12A02048, HC12C02909
Guy Burkill QC (instructed by Hogan Lovells International LLP) for the Claimant
Michael Tappin QC and Miles Copeland (instructed by Bird & Bird LLP) for the Defendant
Hearing dates: 28, 29 November 2013
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.
Introduction
On 30 October 2013 I gave judgment in these claims, concluding that the Claimant ("HTC") had infringed the Defendant's ("Nokia's") European Patent (UK) No. 0 998 024 ("the Patent"). On 28 November 2013 I heard argument on a number of issues with regard to the order that should be made in consequence of that conclusion and made decisions in respect of those issues. In particular, I decided to grant Nokia a final injunction to restrain infringement of the Patent, to grant HTC permission to appeal (albeit on more limited grounds than HTC had sought permission in respect of) and to grant HTC a partial stay of the injunction (and of an order for delivery up) pending the judgment of the Court of Appeal. I clarified the scope of the stay pending appeal at a further hearing on 29 November 2013 and also granted HTC a further stay until 4 pm on 6 December 2013 in order to enable HTC to apply to the Court of Appeal for permission to appeal against my refusal of a wider stay. These are my reasons for deciding to grant a final injunction and for granting a partial stay.
Final injunction
Nokia sought a final injunction in order to restrain HTC from continuing to infringe the Patent. HTC did not dispute that it intended to continue to commit the acts which had been found to infringe if it was not restrained, but contended that the court should exercise its discretion to refuse an injunction and to award damages in lieu.
Applicable principles
General principles. An injunction is an equitable remedy. Even if the claimant establishes that his legal rights have been infringed, and that there is a threat by the defendant to continue the infringing acts, the court has a discretion as to whether or not to grant an injunction. The court may in an appropriate case award damages in substitution for an injunction in the exercise of the jurisdiction originally conferred by section 2 of the Chancery Amendment Act 1858, commonly known as Lord Cairns' Act, and now found in section 50 of the Senior Courts Act 1981.
Section 2 of the Chancery Amendment Act 1858 provided:
"In all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction against a breach of any covenant, contract, or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract, or agreement, it shall be lawful for the same Court, if it shall think fit, to award damages to the party injured, either in addition to or in substitution for such injunction or specific performance; and such damages may be assessed in such manner as the Court shall direct."
As was explained in Jaggard v Sawyer [1995] 1 WLR 269 by Sir Thomas Bingham MR at 276D-27A and by Millett LJ at 284B-F, the principal purpose of this provision was to enable the Court of Chancery to award the claimant damages instead of sending him to the common law courts to obtain them, but from the outset it was recognised that it did more than this: it also enabled damages to be awarded in respect of future acts.
Section 50 of the Senior Courts Act 1981 now provides:
"Where the Court of Appeal or the High Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance".
The two leading authorities on the exercise of this discretion are the decisions of the Court of Appeal in Shelfer v City of London Lighting Co Ltd [1895] 1 WLR 287 and Jaggard.
Shelfer establishes that a claimant is prima facie entitled to an injunction to restrain a person from committing an act which invades the claimant's legal right. The wrongdoer is not entitled to ask the court to sanction his wrongdoing by purchasing the claimant's right on payment of damages assessed by the court. Accordingly, it is only in special circumstances that the court will exercise its discretion to award damages in lieu of an injunction. AL Smith LJ said at 322–323 that it was "a good working rule" that:
"(1) If the injury to the plaintiff's legal rights is small,
(2) And is one which is capable of being estimated in money,
(3) And is one which can be adequately compensated by a small money payment,
(4) And the case is one in which it would be oppressive to the defendant to grant an injunction:-
then damages in substitution for an injunction may be given".
He went on to make it clear that what constituted a "small money payment" was a relative matter. Subsequent cases have emphasised that AL Smith LJ's good working rule is only that: it is not a statute or straightjacket.
In Jaggard Sir Thomas Bingham MR stated at 283B-C:
"It is important to bear in mind that the test is one of oppression, and the court should not slide into application of a general balance of convenience test."
Similarly, Millett LJ stated 288B-C:
"The outcome of any particular case usually turns on the question: would it in all the circumstances be oppressive to the defendant to grant the injunction to which the plaintiff is prima facie entitled?"
As Millett LJ explained at 286B-D and 287B-F:
"It has always been recognised that the practical consequence of withholding injunctive relief is to authorise the continuance of an unlawful state of affairs. If, for example, the defendant threatens to build in such a way that the plaintiff's light will be obstructed and he is not restrained, then the plaintiff will inevitably be deprived of his legal right. This was the very basis upon which before 1858 the Court of Chancery had made the remedy of injunction available in such cases. After the passing of Lord Cairns's Act many of the judges warned that the jurisdiction to award damages instead of an injunction should not be exercised as a matter of course so as to legalise the commission of a tort by any defendant who was willing and able to pay compensation. …
Nevertheless references to the 'expropriation' of the plaintiff's property are somewhat overdone, not because that is not the practical effect of withholding an injunction, but because the grant of an injunction, like all equitable remedies, is discretionary. Many proprietary rights cannot be protected at all by the common law. The owner must submit to unlawful interference with his rights and be content with damages. If he wants to be protected he must seek equitable relief, and he has no absolute right to that. In many cases, it is true, an injunction will be granted almost as of course; but this is not always the case, and it will never be granted if this would cause injustice to the defendant. Citation of passages in the cases warning of the danger of 'expropriating' the plaintiff need to be balanced by reference to statements like that of Lord Westbury LC in Isenberg v East India House Estate Co Ltd (1863) 3 De G J & S 263, 273 where he held that it was the duty of the court not
'by granting a mandatory injunction, to deliver over the defendants to the plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may by possibility make, but to substitute for such mandatory injunction an inquiry before itself, in order to ascertain the measure of damage that has been actually sustained.'"
There is a considerable body of authority on the application of these principles in real property cases. It is clear from this case law that, in considering whether the grant of an injunction would be oppressive, the extent to which the claimant asserted his rights, what knowledge the defendant had of the claimant's rights when and what the defendant did when faced with the problem are particularly relevant considerations. Whether the claimant sought an interim injunction and whether the defendant sought negative declaratory relief appear to be relevant factors, but the weight of these factors appears to vary from case to case. A potentially decisive factor is if the claimant makes it clear that all he is really interested in is money. This is illustrated by Gafford v Graham [1999] 77 P & CR 73. In that case the plaintiff's solicitors had written a letter making it clear that the plaintiff would be prepared to accept a payment of £100,800 in settlement of the dispute. In those circumstances, Nourse LJ said at 85–86:
"His willingness to settle the dispute on payment of a cash sum can properly be reflected by an award of damages. Nor, once that is established, can it be an objection that the amount of damages may be large. The injury to the plaintiff's legal rights must be adequately compensated. In such a case the first and third conditions of the good working rule do not apply.
I summarise the position as follows. The essential prerequisite of an award of damages is that it should be oppressive to the defendant to grant an injunction. Here that prerequisite is satisfied. It would be oppressive and therefore unfair to the defendant to allow the judge's injunctions to stand. The plaintiff should receive an award of damages instead."
As both Sir Thomas Bingham MR at 280H-281A and Millett LJ at 285F-286B made clear in Jaggard, where damages are awarded in...
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