Meter-Tech LLC and Another v British Gas Trading Ltd
| Jurisdiction | England & Wales |
| Judge | Daniel Alexander,Mr Daniel Alexander |
| Judgment Date | 16 September 2016 |
| Neutral Citation | [2016] EWHC 2278 (Pat) |
| Docket Number | CLAIM NO: HP 2015-000019 |
| Court | Chancery Division (Patents Court) |
| Date | 16 September 2016 |
2016 EWHC 2278 (Pat)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION PATENTS COURT
Rolls Building
110 Fetter Lane,
London
EC4A 1NL
Mr Daniel Alexander QC
Sitting as a Deputy High Court Judge
CLAIM NO: HP 2015-000019
Mr Hugo Cuddigan QC and Mr Christopher Hall ( instructed by Williams Powell) appeared for Meter-Tech LLC and Vanclare SE LLC
Mr Roger Wyand QC and Mr Richard Davis ( instructed by Mathys & Squire LLP) appeared for British Gas Trading Limited
Hearing dates: 5–6 May 2016, 9–10, 12–13 May 2016
Approved Judgment
I direct that, pursuant to CPR PD39A 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.
Daniel Alexander QC
Mr Daniel Alexander QC
INTRODUCTION
The case in a nutshell
This is an action for revocation and alleged infringement of UK Patent GB 364 420 ("the Patent") concerning so-called "smart meters". It is, in substance, about whether British Gas ("BG") should pay the claimants ("Meter-Tech", in which term I include Vanclare SE LLC, "Vanclare", the proprietor of the Patent) royalties in respect of BG's past, current and proposed smart meter systems.
Meter-Tech is the exclusive licensee of the Patent, which is entitled "A prepayment utility metering system", with a filing date of 22 May 2000. There is no claim to earlier priority. The Patent was bought from the administrators of its former proprietor Secure Electrans Limited.
Meter-Tech contends that it has a valid patent which covers those BG systems and says that the claim for infringement is significant because it potentially affects, among other things, a £600 million contract for the installation of up to 16,000,000 smart meters throughout the United Kingdom. Meter-Tech values the claim at in excess of £10 million although it (or more strictly Vanclare) appears, from the correspondence, to have purchased the Patent as well as a number of other rights in 2014 for a much more modest sum (£160,000). There is material in the correspondence referring to it as a "£30 million infringement claim".
The case focusses commercially on BG's current installed and proposed systems since the historic systems were not rolled out in significant quantities.
The Patent and the prior art is not complex. The central important issue may be (somewhat tendentiously but not unfairly) summarised as follows. Was it inventive, at the filing date of the Patent, to adopt and use a number which uniquely identifies a specific meter for directing a pre-payment to the right meter in a wireless system which requires the unique identification of that meter for that purpose? For reasons given in greater detail below, I consider that it was not inventive and have formed the view that the key claims of the Patent are invalid.
However, since its inception, the case has grown to encompass a large number of other points, some on infringement, relating to the various systems, including questions of experimental use. The dispute has generated multiple questions of construction and multiple sub-arguments on validity. As Meter-Tech says, there are now "very many" issues.
That may be partly because of the nature of the case it has advanced against BG. This is not a case in which there is a standards body to which patentees submit allegedly standards essential patents and give undertakings to grant licences to others on FRAND terms. As Birss J said in an earlier judgment concerning adjournment of the trial, it is not a conventional standards essential patents case. On Meter-Tech's pleaded case, BG is facing a threat of disruption to an important national roll out and may have not felt justified in leaving any art uncited, or any argument unmade, in defence of its position. Equally, Meter-Tech has sought to advance quite complex points on construction to try to limit the claims to avoid the prior art and common general knowledge.
Parties and relevant procedural history
The proceedings were originally commenced in IPEC as a claim for revocation of the Patent by British Gas Services Limited. Meter-Tech issued a claim for infringement in the High Couty against British Gas Trading Limited, together with an application to transfer the IPEC invalidity proceedings to the High Court. That case was transferred to the High Court by order of Mr Justice Arnold on 17 June 2015 (see [2015] EWHC 2087 (IPEC)) and the proceedings consolidated. Upon that application, BG had contended that the issue of validity should be determined first and separately from the issue of infringement. Arnold J did not agree and ordered the case to proceed as an ordinary infringement action with both infringement and validity in issue. He gave directions to trial, including provision for amended statements of case from both sides. Those were to include a statement of case as to the essentiality of the Patent, setting out its alleged relevance to the UK Department of Energy's Smart Metering Implementation Programme.
In the event, it has been agreed that all matters concerning alleged essentiality as well as any other relief should be determined at a separate hearing.
In his judgment on that occasion, Arnold J also said that the arguments on validity were not of particular complexity but that it would not be safe to conclude at that stage that BG had anything approaching an unanswerable case. His view was that BG was realistic to recognise that the claims would require a trial for their proper resolution even though BG maintained that the claims were, in its words, "hopelessly invalid".
Issues on the pleadings
The statements of case
Statements of case on infringement and validity have been provided. These are useful but the lengthy expert evidence in the case has developed the points made in the statements of case considerably further. Meter-Tech contended that BG was, in effect, confined to its statements of case and where, for example, it had suggested that the identifier which would be natural to use was in particular the MPxN (as to which see further below) that was inconsistent with its case developed at trial that the meter serial number (MSN) or some other unique location identifier specific to the meter would have been obvious.
While I have considered these statements of case, including what they do not say, a case of this kind must be determined by reference to the evidence given at the trial. Some forensic mileage can be made by pointing to the fact that a case advanced at trial was not put forward or not developed in a statement of case at an earlier stage of the proceedings but it would make little sense if, instead of such statements of case standing as documents to assist the parties in the preparation of their cases, they became instruments which preclude the court from deciding the case on the evidence actually given.
Specifically on the point about the MPxN, BG explained that the point made relating to that identifier in its statement of case on validity was because it was thought that Meter-Tech was contending that the identifier in question had to identify specifically the geographical location of the meter (which the MPxN could be said to do) rather than identify the meter itself. Since it is now clear that this is not Meter-Tech's case and the focus is much more on identification of the specific meter as opposed to the premises, other identifiers of the meter themselves are more naturally considered. Thus the case developed by BG, which was not framed as limiting, has reasonably responded to the way in which Meter-Tech's approach to the Patent has developed.
In the event, neither side adhered rigidly to the statement of case or its own opening skeleton argument at trial. In my judgment, this is a case which must be determined by the evidence taken as a whole and the arguments as they were ultimately refined. I am not satisfied that there was any material departure from the parties' statements of case. The evidence and argument developed these but was not inconsistent with them.
The argument based on obviousness over common general knowledge alone
There is, however, one aspect where greater caution is required, namely the case advanced of alleged obviousness over common general knowledge alone.
Meter-Tech points to the fact that BG's pleaded case in this respect amounted simply to a statement of what it contended the common general knowledge was and not why such rendered the relevant claims obvious. It differed materially from the detailed particulars given for the case of obviousness over the specific prior art citations, for which BG set out, in each case, what the prior art document was alleged to disclose, by reference to the integers of the claims, how they differed from the patent on various constructions and why the subject matter of the claim was obvious.
Meter-Tech contended that it would be unfair to permit BG to develop a case based on common general knowledge alone which was not foreshadowed by the pleadings although it did not go so far as to seek to strike out all of the evidence on this issue. That, so Meter-Tech argued, was particularly the case because arguments based on common general knowledge alone are more susceptible to hindsight by ignoring inconvenient features of actual prior art references.
I think there is force in this aspect of Meter-Tech's argument. That is partly because of the care with which "common general knowledge alone" arguments need to be treated, as the authorities relating to this issue show. Three extracts from the leading judgments merit comment.
First, in Ratiopharm GMBH v...
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