Nokia GmbH v IPCOM Gmbh

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeMr Justice Norris,Lord Justice Sedley
Judgment Date20 January 2011
Neutral Citation[2011] EWCA Civ 6
Docket NumberCase No: A3/2010/0454/0939/2678
Date20 January 2011

[2011] EWCA Civ 6

[2009] EWHC 3492 (Pat)

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION (PATENTS COURT)

Before: The RT Hon Lord Justice Sedley

The RT Hon Lord Justice Jacob

and

The Hon Mr Justice Norris

Case No: A3/2010/0454/0939/2678

Between
Nokia GMBH (a company incorporated under the laws of Germany)
Claimant
Nokia UK Ltd
(Counter-action Defendants)
Nokia OYJ (Nokia Corporation) (a company incorporated under the laws of Finland)
Respondents
and
IPCOM GMBH & Co KG (a company incorporated under the laws of Germany)
(Defendant/Counter-action Claimant) Appellant

Mr Daniel Alexander QC and Mr Brian Nicholson (instructed by Bristows) for the Appellants

Mr Richard Meade QC and Mr James Abrahams (instructed by Bird & Bird LLP) for the Respondents

Hearing dates: 14/15/16 December 2010

Lord Justice Jacob (giving the first judgment at the invitation of Sedley LJ):

1

Although I am mainly responsible for this judgment I would like, at the outset, to acknowledge the valuable help provided by Norris J in writing the first draft of the technical background section.

2

The matters before us arise from three judgments of Floyd J:

20 th November 2009, [2009] EWHC 3034 (Pat) ("the first amendment judgment");

18 th January 2010, [2009] EWHC 3482 (Pat) ("the main judgment");

and 31 st March 2010, [2010] EWHC 789 (Pat) ("the second amendment judgment").

3

I shall call the two sides Nokia and IPCom. The appeal is concerned with two of IPCom's European Patents (UK), 0,540,808 ("the Synch Patent") and 1,186,189 (the "Access Rights Patent"). By his main judgment Floyd J held both patents invalid but that if they had been valid Nokia would have infringed. He gave permission to appeal his Main Judgment but not either of the amendment judgments.

General Background

4

IPCom and Nokia are engaged in an international patent battle. It arises this way. Robert Bosch GmbH was in the mobile telephone business in the 1990s and decided to get out. Bosch sold its mobile telephone business to Siemens but retained its mobile phone portfolio with a view to licensing it to mobile phone manufacturers. It negotiated with Nokia but negotiations broke down in 2003. Bosch then sold the portfolio to IPCom. This is a "non practising entity", i.e. a patentee with no business of its own in products covered by the patents. IPCom's business purpose is to persuade actual manufacturers to pay it licence fees under its patents. IPCom attempted to negotiate licences with Nokia and others. Nokia would not pay what IPCom asked. So IPCom started infringement proceedings on a number of its patents before a Landgericht in Germany: it was, adapting von Clausewitz, using litigation as a continuation of negotiation by other means.

5

Nokia retaliated. Not only did it start revocation proceedings in respect of a number of IPCom's patents in Germany before the Bundespatentgericht ("BPG"), but it also started revocation proceedings in respect of no less than fifteen IPCom patents before the Patents Court of England and Wales: it escalated the war.

6

At a case management conference Kitchin J ordered that these cases (to some of which IPCom had responded by counterclaiming for infringement) be tried in succession. The proceedings under appeal were the first of the five cases to come to trial. The case was selected by IPCom to be heard first and both patents were from what it called its "Proud List". The Judge inferred (second amendment judgment [9]) that that meant that IPCom considered them to be amongst its strongest patents.

7

Things have now moved on. IPCom has now consented to orders for revocation of all thirteen of the patents the subject of the four remaining batches of cases. That left the two patents the subject of Floyd J's judgments now under appeal.

8

Another proceeding has, however, come into being. It concerns an application for revocation by Nokia of a "divisional" of the Access Patent together with a claim for its infringement by IPCom. The proceedings were only commenced after Floyd J's second amendment judgment. It was not possible to start them earlier because the patent concerned had only recently been granted by the European Patent Office. It should not be thought that this late grant was due to an unjustified delay by the Office, for it was not. It was caused because IPCom (as it was entitled to do under the EPO rules of procedure then in force) only made the divisional application leading to the patent concerned years after the original, so-called "parent" application was made (in 1999). We were told that there are at least six other divisional patent applications pending from the same basic disclosure: there may be others, as yet unpublished.

9

IPCom were, of course, far from alone in making use of the "divisional" procedure in this way. I doubt that the public interest is well served by such an uncontrolled procedure. It is not surprising that the EPO has taken steps to curtail it. Similar steps have been taken (or are being taken) in the USA to curtail its equivalent – which goes by the name "continuation in part". There ought to be a time, reasonably soon after a parent application, when the public are able to know the maximum extent of a patentee's claimed monopoly.

10

The trial of the proceedings concerning the divisional patent is now set for April 2011.

11

IPCom's skeleton argument contains a bit of a complaint (an Australian would call it a "whinge") that Nokia had escalated the dispute by coming to the English Patents Court at all. There is even a suggestion that Nokia chose to litigate here to maximise costs: "IPCom believes that Nokia has sought to involve IPCom in litigation at maximum cost in the UK instead of co-operating to resolve matters in a single jurisdiction." This merely reminds me of that good old French dog (Cet animal est très méchant: si on l'attaque il se défend). IPCom were, we were told, asking for €12b. It could hardly expect anything other than that Nokia would fight back really hard. I have no sympathy for the "maximum cost" complaint: we were not even told what resources are available to IPCom. Nor do we know what it paid for the Bosch portfolio, a portfolio from which it now seeks to derive very large sums from Nokia and other mobile phone makers. All that can be said is that IPCom's investors could only reasonably have expected that mobile phone companies would not pay large sums without a fight.

12

It of course may sometimes make commercial sense to agree to resolve matters in a single jurisdiction. But for one party to choose its jurisdiction first and then expect the other to agree it is another matter. It is rather like one football team challenging another after it has picked a home advantage, if not quite challenging someone to a duel but only after having made one's choice of weapons.

13

It is hardly surprising that IPCom chose Germany. For within the bifurcated system there, the infringement court is generally faster than the validity court. So, unless a patent is rather likely to be held invalid (the infringement court will stay proceedings if it is), a party can get a commercial advantage by an early infringement decision in its favour. And, judging by results so far (not only here but also in Austria and the US, though things are not over in either country), it would seem that IPCom's position on infringement is stronger than that on validity. That may well have been its perception at the outset. If so, Germany would clearly be a commercially good place to sue – the hope would be of getting an early win on infringement followed by negotiation of a commercially advantageous deal.

14

I should also in passing mention that IPCom itself did not confine its actions to Germany before Nokia retaliated in the UK. It started proceedings in Bologna against Nokia for infringement of not only 41 EP Italian patents but also 44 EP UK patents (including the Access Rights Patent). Eventually the proceedings were dropped (not surprisingly since there can hardly have been jurisdiction over the UK patents) but their existence serves to show how one-sided the whinge was. The thought seemed to be: "IPCom's chosen jurisdictions are ok, Nokia's are not".

15

These matters are relevant because they form part of IPCom's argument concerning the Access Rights Patent. They have no relevance to the Synch Patent.

16

On appeal IPCom challenged the finding of invalidity of the Synch Patent. Nokia contingently challenged the finding of infringement, only seeking to raise points about it if we were to hold the patent valid. Accordingly we heard the argument from both sides on validity first. Having considered these we concluded that the Judge was right and so informed the parties. So it was unnecessary to hear Nokia's contingent cross-appeal. This judgment contains my reasons for upholding the judgment on the invalidity of the Synch Patent and my reasons and decision concerning the Access Rights Patent.

17

As regards the Access Rights Patent, despite having permission to do so, IPCom decided not to challenge the finding that it is invalid as it stands. What it says is that by one or other or both of his amendment judgments the Judge wrongly refused it permission even to apply for amendment. The result was an order for revocation even though IPCom wanted to advance arguments which would or might have saved the Access Rights Patent, albeit with reduced scope.

18

Thus it sought permission to appeal the amendment judgments. We heard full argument from both...

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