Lisa Dräxlmaier GmbH v BOS GmbH & Company KG
| Jurisdiction | England & Wales |
| Judge | Sir Anthony Mann |
| Judgment Date | 08 November 2022 |
| Neutral Citation | [2022] EWHC 2823 (Pat) |
| Docket Number | Case No: HP-2021-000041 |
| Court | Chancery Division (Patents Court) |
[2022] EWHC 2823 (Pat)
Sir Anthony Mann
Case No: HP-2021-000041
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
SHORTER TRIALS SCHEME
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Douglas Campbell KC (instructed by AA Thornton IPLLP) for the Claimant
Tom Alkin and Mitchell Beebe (instructed by Powell Gilbert LLP) for the Defendant
Hearing date: 19 th October 2022
APPROVED JUDGMENT
This judgment was handed down remotely at 10.30 am on 8 th November 2022 by circulation to the parties' representatives by email and by release to The National Archives.
The background to this application
This is a patent action in which the claimant (Dräxlmaier) seeks a declaration of non-infringement (“DNI”) against the patentee, the defendant (BOS) under section 71 of the Patents Act 1977. The subject matter of the EU patent (EP 3266631 B1) is part of a system of blinds installed in car windows. Dräxlmaier manufactures its own system which it supplies to Mercedes-Benz (and only to Mercedes-Benz) in Germany (on the evidence). In Germany BOS has sued Dräxlmaier for infringement in respect of those activities. It seems to be accepted by both parties that in the events which have happened these English proceedings no longer serve a useful purpose and can properly be brought to an end. The question which arose on the hearing before me is how these proceedings can properly be brought to an end, though (as in so much modern litigation) the real underlying question is one of costs.
As the hearing was constituted before me there were two competing contentions as to what should happen to the proceedings. BOS, in a properly formulated application, contended that the proceedings should be struck out, or alternatively that there should be defendant's summary judgment against the claimant. Dräxlmaier expressed a wish to discontinue the proceedings, but only if it could be assured it would not have to pay the costs of the action in doing so, so it wished to have it determined that in the event of discontinuance it would not have to pay the costs, and indeed that BOS should pay the costs of the action. It did not put its stance in a formal application; rather, it raised it by inserting a paragraph in its proposals for case management directions. In two paragraphs in a draft order it proposed an order that Dräxlmaier should discontinue and have its costs of the action; this proposal (not an application) was backed by an indication that it would give an undertaking to discontinue if it got its costs. It seemed to me that there were all sorts of difficulties in this course, including (a) not least the problems posed by the wording of CPR 38.6 (which seems to require a discontinuance before the court can decide whether the usual, or some other, costs order should follow); (b) the court deciding the hypothetical question which Mr Campbell KC for Dräxlmaier sought to pose, (c) what would happen if the court determined that some lesser order than a 100% costs order were appropriate, (d) and other difficulties. When these were put to Mr Campbell and he was asked whether he wanted to discontinue and then have the debate (which would have been acceptable to BOS) he declined to do so and abandoned his application (if that is what it was) to have the hypothetical application decided.
What I therefore have to decide is whether BOS's application should succeed. It seemed to have evolved as common ground that if I decided it should not, the action should nonetheless be stayed, though at one stage Dräxlmaier did seem to be arguing that if necessary the action should proceed to trial so that the question of costs could be decided in that framework. Those matters having been decided, there will then have to be a debate about costs, which will depend on the basis of my decision. Those costs are not insignificant. I was told that Dräxlmaier's costs in this action (which has not yet got as far as a Defence) are £156,000; BOS's costs are said to be £90,000 less than that.
This set of applications arises out of patent litigation in which there has been a level of procedural manoeuvring which it is impossible to admire. The history of this matter shows a patentee keen to indicate that it did not seek to enforce the patent, and indeed was content to let it lapse or even surrender it, and a potential infringer insisting on the patent being maintained and even going to the extent of paying a renewal fee and then resisting a surrender. A layman would be deeply, and justifiably, puzzled as to how this can have arisen and would wonder whether he/she had stepped through Alice's looking glass.
It will be useful at this stage to set out section 71 as the starting point of the procedural and technical manoeuvring in this case. It provides:
“ 71. Declaration or declarator as to non-infringement
(1) Without prejudice to the court's jurisdiction to make a declaration or declarator apart from this section, a declaration or declarator that an act does not, or a proposed act would not, constitute an infringement of a patent may be made by the court or the comptroller in proceedings between the person doing or proposing to do the act and the proprietor of the patent, notwithstanding that no assertion to the contrary has been made by the proprietor, if it is shown—
(a) that that person has applied in writing to the proprietor for a written acknowledgment to the effect of the declaration or declarator claimed, and has furnished him with full particulars in writing of the act in question; and
(b) that the proprietor has refused or failed to give any such acknowledgment.”
The factual background
The patent in suit is a UK patent which is spun off from an equivalent EU patent under the English opt-out procedure. Its publication date is 10 January 2018. It has not been asserted here by the patentee, but the equivalent German patent has been asserted by BOS against Dräxlmaier in German infringement proceedings commenced on 16 August 2021 and foreshadowed in June 2021. Until a recent discontinuance or abandonment, as appears below, it was on course for a hoped-for December trial date.
Not only was the English patent not asserted or relied on in this jurisdiction by BOS, BOS allowed the patent to lapse by not paying a renewal fee due on 12th June 2021. The explanation given in the evidence for that is that the patent was of no commercial significance in this jurisdiction and BOS did not particularly want the patent in this jurisdiction in the first place; it only had one because of the automatic grant under the European patent system. It therefore did not bother to renew it.
Thereafter the increasingly odd sequence of events was as follows.
The effect of non-payment was that the patent lapsed at the end of June, though it was revivable in the next 6 months if the renewal fees were paid. BOS did not seek to pay them.
On 17 June 2021 there was a first communication from BOS to Dräxlmaier in Germany regarding infringement of the patent. On 2 August 2021 Dräxlmaier wrote to BOS about the English patent and giving notice under section 71 of the Patents Act, requesting confirmation that Dräxlmaier's product did not infringe the English patent. There was a suggestion that this letter did not accurately identify the potentially infringing matter, but in the end that was not pursued before me and nothing turned on that for the purposes of what I have to decide. What might have been said about it is that was perhaps not entirely accurate in a statement made about infringing acts in this jurisdiction. It might also have been questioned whether or not its subsequent averment in its Particulars of Claim that it carried out or proposed to carry out an infringing act was really true, because the real weight of the evidence was that it sold its product in Germany and did not sell or import, or realistically intend to sell or import, its product into this country. However, that point was not taken by BOS and Mr Tom Alkin, who appeared for BOS, accepted that he had not challenged the material averment in the Particulars of Claim which was vouched by a statement of truth in the usual way. Since Mr Campbell had not had an opportunity to put in evidence specifically directed to a challenge on the point it was not pursued, and the significant question-mark about it was not resolved or debated further, though I return to the point below in considering the strength of that evidence and the realities of this case.
BOS did not respond to that letter. The evidence of Mr Wilson, BOS's solicitor, was that:
“As the Defendant intended to commence proceedings in Dusseldorf and correctly believed that it did not hold a UK patent, it did not respond specifically to the s.71 request.”
A footnote to his witness statement explains that the reason for the belief was the lapse of the patent which had already taken place. I find that averment inherently incredible. Mr Alkin invited me to accept that it was a reasonable and plausible view, and that Dräxlmaier would have assumed that that was the position, given that BOS would have received a reminder letter from the IPO, that BOS had patent attorneys looking after its portfolio of patents, and that Dräxlmaier knew those facts.
I find that to be highly unlikely. If BOS was looking after its portfolio in an organised way without the background of the threatened German proceedings, and protecting it where appropriate, it is far more likely that it would have responded to the section 71 notice in some way (if only to point out that the patent had lapsed or was about to lapse). I think that the real reason was that, for tactical reasons, BOS did not want to acknowledge...
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