Lufthansa Technik AG (a company incorporated under the laws of the Federal Republic of Germany) v Astronics Advanced Electronic Systems (a company incorporated under the laws of the state of Washington, USA)
| Jurisdiction | England & Wales |
| Judge | Douglas Campbell |
| Judgment Date | 12 May 2023 |
| Neutral Citation | [2023] EWHC 1136 (Pat) |
| Docket Number | Claim Nos. HP-2017-000085 /HP 2019-000019 |
| Court | Chancery Division (Patents Court) |
[2023] EWHC 1136 (Pat)
Douglas Campbell KC
(Sitting as a Judge of the Chancery Division)
Claim Nos. HP-2017-000085 /HP 2019-000019
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST(ChD)
PATENTS COURT
The Rolls Building
Fetter Lane
London EC4A 1NL
Mr. Hugo Cuddigan KC (instructed by Jones Day) on behalf of the Claimant.
Mr. Piers Acland KC, Mr. Miles Copeland and Ms. Alice Hart (instructed by Hogan Lovells International LLP) appeared on behalf of Astronics and Panasonic and (instructed by Pinsent Masons LLP) on behalf of Safran.
Hearing date: 27 April 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Friday 12 May 2023 by circulation to the parties or their representatives by email and release to the National Archives.
RECORDER Douglas Campbell KC:
Introduction
This application arises as follows. At the liability trial which was heard before Morgan J, the Claimant (“Lufthansa”) won against each Defendant on at least one act of patent infringement with respect to claims 1 to 3 of the Claimant's European Patent (UK) no. 0 881 145. All such acts related in one way or another to a product known as the EmPower In-Seat Power Supply System. Lufthansa had also pleaded certain additional ways in which it said that infringement of the same patent was established by other acts done by the same Defendants in relation to the same product, but it was not considered necessary by Lufthansa or the Court to consider those additional ways for purposes of the liability trial.
Lufthansa subsequently elected for an account of profits and served Points of Claim in relation thereto. However, in their Points of Defence the Defendants have taken the position that no, or very little, profit was made on the particular acts of infringement on which Lufthansa succeeded at trial. Lufthansa says these arguments are wrong in principle but wishes to deploy the additional routes to infringement which were raised in its pleadings for the liability trial (plus one more route to infringement, which was not raised at that trial) in order to combat them. This is resisted by the Defendants on the grounds that Lufthansa should be held to the particular acts of infringement on which it succeeded at the liability trial.
Lufthansa complains that the Defendants' argument is an unmeritorious one whereby the Defendants would wrongly and unfairly escape liability for millions, perhaps tens of millions, of pounds for what are in fact acts of infringement. Conversely the Defendants submits that the additional routes to infringement are all unavailable to Lufthansa for one good reason or another, as I will explain below.
There are two key questions to decide in relation to this application. The first question is the general one of whether Lufthansa can rely on additional ways of putting its case on infringement in the quantum stage which were not decided in the judgment on liability. The second question is whether Lufthansa is specifically prevented from advancing certain issues (“the adjourned issues”) by reason of the Order made by Morgan J following trial. The parties advanced a substantial number of arguments on these two questions, but I will only deal with those which seem to me the most important.
That summary omits much of the detail. I was supplied with coloured charts by both sides in which the precise legal status of various allegations of infringement was set out. I have found that prepared by the Defendants to be more helpful than that prepared by Lufthansa since the Defendants' table sets out the complete list of 12 issues upon which Lufthansa seeks to rely at the account. I annex that table to this judgment.
As will be seen the allegations made fall into a number of categories. No issue arises as to the 3 routes to infringement which were established before the Judge. These are called “determined issues” and it is not disputed that Lufthansa can rely on all of these, as it has already done. There are 3 further categories which are more controversial.
1) The first category is called “abandoned issues” by the Defendants and “unresolved issues” by Lufthansa. I prefer to use Lufthansa's term since (although chosen by Lufthansa) it is neutral and factually correct. Whether these issues were positively “abandoned” – which the Defendants interpret as meaning “abandoned for all time and all purposes” – is one of the very things which I have to decide.
2) The second category has been called “adjourned issues”, this being a term which was originally adopted during the liability phase. These are issues which, as I will explain later, were adjourned by orders of Nugee J and Marcus Smith J.
3) Finally there is another issue (“not previously alleged”) which is entirely new to the account and was not raised on the pleadings at all. It does however relate to the same patent, the same Defendants and to the same commercial activity as the other infringement issues. I was not told how significant this issue actually was, but both parties treated it as such and it was the subject of several rounds of written submissions after I had given the parties a draft judgment. I will treat this as the third question.
I will now address the two key questions.
Can Lufthansa rely on additional ways of putting its case on infringement in the quantum stage which were not decided in the judgment on liability?
Legal context
This is not a new issue in the context of split trials and has been considered in a number of intellectual property cases. In Unilin Beheer BV v Berry Floor NV [2007] EWCA Civ 364; [2007] F.S.R. 25, Jacob LJ said this:
“Now it is true that in an inquiry as to damages or account of profits the patentee is allowed to claim relief for types of alleged infringement not ruled on by the trial court. This saves the formal issuance of fresh proceedings in respect of these and is permitted as a matter of convenience, see General Tire & Rubber Co Ltd v Firestone Tyre & Rubber Co Ltd (No.2) [1974] F.S.R. 122 at 207. And of course if, in the inquiry or account, the patentee alleges a type of infringement not considered by the trial court, the court conducting the inquiry or account will have to rule on whether it falls within the scope of the patent.”
In AP Racing v Alcon [2016] EWHC 815 (Ch), [2016] Bus. L.R. 838, Henry Carr J cited the above passage and added as follows:
23 Mr Cuddigan QC, who appeared for AP Racing, emphasises that this is a well established practice in patent litigation in the High Court which saves time and costs. He points out that a liability trial almost invariably involves a challenge to validity. If the challenge to validity is successful and the patent is invalidated, then time and money spent on infringement allegations is wasted. Accordingly, he submits that whilst some infringements must be brought forward in order to establish a right to relief, others may be left for subsequent consideration, which is indeed what happened in the General Tire case [1975] RPC 203.
24 I would add that it is in accordance with the modern approach to intellectual property cases in general that the rights-holder should not be required to produce evidence of every possible infringement in the liability hearing but merely to bring forward sufficient examples so that the case of infringement can be dealt with in a cost effective and expeditious way. To require the claimant to specify all infringements and to introduce them into the liability trial would be wasteful, time consuming and a recipe for delay.
25 It follows that I consider that the practice to which Jacob LJ referred in the Unilin case of allowing further infringements, once infringement is established, to be considered at the damages inquiry is entirely in accordance with the aims of the IPEC, in particular in accordance with the aims of simplifying trials of infringement, shortening proceedings and rendering them cost effective.
AP Racing was an appeal from the IPEC, hence Henry Carr J's reference in paragraph [25] of the above. However Henry Carr J was clear that the rules in IPEC were no exception to the general law: see paragraph [28] of his judgment. I also note that the result in that case was that Henry Carr J permitted 7 new products into the damages inquiry which had not been considered at the liability stage.
I should mention two other cases in this context. The first is Fabio Perini v LPC, Norris J, [2012] EWHC 911 (Ch). In that case the Claimant sought to raise two issues at the quantum phase which had not been resolved at the liability phase. Norris J held that the first issue (an allegation that an offer was made in the UK to supply in the UK) was res judicata between the Claimant and a company called PCMC, which had been a party to the liability action, and could not be so raised: see [11], [20]–[25]. The other issue was whether a similar allegation could be made about a supply, or offer to supply, made in the UK to a company called Georgia-Pacific which had not been a party to the liability action. It was accepted by the Defendants that a different allegation based on a common design between Georgia-Pacific and PCMC could be pursued on the inquiry, but it was not accepted that the new allegations relating to supply could be so pursued.
As regards the new allegations...
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