OOO Abbott and Another v Econowall Uk Ltd and Others

Hearing date: 14 March 2016

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 13 April 2013 Birss J gave judgment in an action in the Patents County Court brought by the claimants in the present proceedings (collectively "Abbott") against two defendants ("the PCC Defendants"). He found that the PCC Defendants had infringed Abbott's European Patent (UK) No. 1,816,931 ("the Patent").

The invention claimed in the Patent concerns a snap-in insert made from resilient metal which is used in display panels for shops. These inserts permit the connection of shelves to a wooden panel with slats. Merchandise is then displayed on the shelves.

Both the PCC Defendants sold snap-in inserts made from aluminium. Sales of the inserts were found to infringe the Patent and the Patent was held to be valid.

On 3 July 2015 Abbott issued the claim form in the present proceedings. The case against the defendants as subsequently pleaded is in summary as follows. The first and second defendants ("Econowall" and "Project Consulting" respectively) have purchased inserts from the PCC Defendants and sold them to customers. Neither Econowall nor Project Consulting deny that the sales would infringe the Patent, but they say that such sales were made pursuant to a licence agreement Econowall and Project Consulting entered into with Abbott ("the Licence Agreement").

Abbott alleges that the fourth defendant ("Retail Display") has made and sold infringing inserts, including sales to Project Consulting, outside the terms of the Licence Agreement. Abbott's claims against Econowall, Project Consulting and Retail Display turn on whether the acts complained of were licensed.

Retail Display's customers are said to have included the third defendant ("Smithbrewer"). Smithbrewer says that no such claim is pleaded, or adequately pleaded, and I return to this below.

There is in addition a separate allegation against Econowall and Project Consulting concerning minimum royalty payments said to be due to Abbott under the Licence Agreement.

Both sides have made a number of interim applications.

The applications

Defendants' application

The claim form was not served until after the expiry of the period permitted for its service under CPR 7.5(1) as extended by agreement between the parties. Also the statement of truth in the claim form was not signed. The defendants seek:

(i) A declaration that the Court does not have jurisdiction to hear Abbott's claim, alternatively an order striking out the claim pursuant to CPR 3.4(2)(c) because the claim form was served out of time;

(ii) alternatively, an order that striking out the claim pursuant to CPR 22.2(2) because the claim form was not signed;

(iii) if no order is made under either (i) or (ii), an order that the claim against Smithbrewer be struck out pursuant to CPR 3.4(2) because the particulars of claim disclose no reasonable grounds for bringing any claim against Smithbrewer;

(iv) in the alternative to (i)-(iii), an order that the proceedings are stayed pursuant to s.9 of the Arbitration Act 1996 and CPR 3.1(2)(f) or the inherent jurisdiction of the court, so that the dispute may be heard by an arbitrator.

Abbott's application

Abbott's application arose in response to the defendants' complaint regarding late service of the claim form. Abbott seek

(i) an order pursuant to CPR 6.15(1) and (2) that service of a photocopy of the (unsigned) copy claim form on 6 July 2015, just after issue, was good service;

(ii) in the alternative to (i), an order pursuant to CPR 3.9 that Abbott be granted relief from any sanction that would otherwise be imposed for failure to serve the claim form in good time;

(iii) an order pursuant to CPR 3.1(2)(a) retrospectively extending the time for service of the particulars of claim to 25 November 2015 (the date on which the claim form and particulars of claim were finally served).

The chronology relating to service of the claim form and particulars of claim

The key events relating to the timing of service of the claim form and particulars of claim were these:

27 February 2015 Letters before action sent to the defendants.

3 July 2015 The claim form is issued. (Final date for service pursuant to CPR 7.5(1) therefore 3 November 2015, subject to the parties agreement to the contrary).

6 July 2015 The defendants' solicitors receive a letter dated 3 July 2015 from Abbott's solicitors. It included this:

"We enclose a photocopy of the claim form we have today issued against your clients ("the Defendants"). Our next step in the action will be to serve the Defendants each with a sealed copy of the claim form, together with the particulars of claim and Infringement etc. Our intention, having regard to the incidence of holidays, is to commence drafting of the particulars of claim and Infringement in the middle of this month."

The letter inquired whether Birss J's findings of infringement and validity of the Patent were challenged by the defendants. It went on:

"We will assume, unless otherwise advised, that you do not have instructions to accept service on behalf of any of the Defendants." (original underlining)

9 July 2015 The defendants' solicitors reply, stating that they act on behalf of all four defendants and giving a detailed denial of the allegations raised in the claim form.

6 October 2015 Following several exchanges, Abbott's solicitors write to the defendants' solicitors:

"As you know, our deadline for service of the claim form and particulars of claim is now less than one month away, and we must commence preparations to meet it at the latest by next Monday 12 October if we do not hear from you by then.

If on the other hand we should hear from you by then, and you ask us to consider responding in some way other than by commencement of such preparations, then you should please also extend our time for service of the claim form and particulars of claim by one calendar month."

9 October 2015 A letter from the defendants' solicitors further rejecting Abbott's claims, includes this (nothing turning on the mistaken use of the singular):

"If your client does require time to consider his position, then our client may be prepared to grant your client an extension of time for service of the claim form and particulars of claim. We shall await hearing from you in this respect with a suitable consent order for approval."

13 October 2015 The claimants' solicitors write:

"We refer to the final paragraph of our letter of 6 October 2015 [regarding an extension of time, quoted above]. Please tell us, by return, whether or not your clients will extend our time for service of the claim form by one calendar month, so that the deadline under CPR 7.5 will be midnight on 3 December 2015." (original underlining)

15 October 2015 The defendants' solicitors write:

"We do not consider that your clients require a particularly long period of time to assess their position. However, on the basis that your clients will give very serious consideration to disposing of these proceedings and/or disclosing documentation to our clients, our clients are prepared to agree an extension, on the basis that there is a costs saving to be had.

We cannot see that your client will require more than a month from now to be able to consider the documentation that our clients have provided to you and the position with your client generally.

If your [client] requires more than a month, we should be pleased to know why, at which point our clients will consider increasing the period of the extension up to the date that your client has requested."

Pausing there, the extension proposed by the defendants in the second quoted paragraph of the letter of 15 October was until 15 November 2015, the key words in that paragraph being "a month from now". Mr Turner, the partner acting for the defendants who also appeared for them at the hearing, gave written evidence that when he read that paragraph in October 2015 he overlooked the words "from now" and so he took the letter to be an agreement to the one month extension of time for service of the claim form and particulars of claim he had requested, i.e. until 3 December 2015. I return to the chronology.

21 October 2015 Mark Taylor of the defendants' solicitors sent Mr Turner an email

chasing a response to his firm's letter of 15 October.

On the same day Mr Turner replied:

"Thank you for agreeing to the requested extension of one month.

I cannot see that your letter referred to otherwise a response at this stage."

Pausing again, it seems to me that a reasonably careful reading of Mr Turner's email and his thanks for the agreement to "the requested extension of one month" would have indicated to Mr Taylor that Mr Turner thought that his original request – an extension until 3 December 2015 – had been agreed. In his witness statement dated 17 December 2015 Mr Taylor said this about it:

"[27] At the...