Philip Morris Products, SA v Rai Strategic Holdings, Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Meade |
| Judgment Date | 09 March 2021 |
| Neutral Citation | [2021] EWHC 537 (Pat) |
| Docket Number | Case No: HP-2020-000012 |
| Court | Chancery Division (Patents Court) |
| Date | 09 March 2021 |
[2021] EWHC 537 (Pat)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Rolls Building
Fetter Lane
London, EC4A 1NL
Mr Justice Meade
Case No: HP-2020-000012
Iain Purvis QC, Tom Alkin and Edward Cronan (instructed by Powell Gilbert LLP) for the Claimant and Fourth Party
Adrian Speck QC, Nicholas Saunders QC and Kathryn Pickard (instructed by Kirkland and Ellis LLP) for the Defendant and Third Party
Hearing dates: 5, 8, 9, 11 and 12 February 2021
Approved Judgment
I direct that pursuant 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 | 3 |
| Conduct of the trial | 3 |
| The issues | 3 |
| The witnesses | 4 |
| The skilled team | 5 |
| The common general knowledge | 6 |
| Agreed common general knowledge | 6 |
| Tobacco | 6 |
| Conventional cigarettes | 7 |
| Heat Not Burn products | 7 |
| Disputed common general knowledge. . | 9 |
| Ruyan e-cigarette | 9 |
| Materials relating to gathered sheet reconstituted tobacco | 10 |
| The Patents | 10 |
| Claims in issue | 11 |
| Teaching of the specification | 13 |
| Issues of claim interpretation | 17 |
| “a cigarette for use with a powered aerosol generating device …”: EP944 claim 1 | 17 |
| “a controller mechanism including a sensor that is capable of selectively powering the electrical resistance heating element at least during periods of draw”: EP460 claim 1 integer [d], EP944 claim 1 integer [d] | 18 |
| Validity | 20 |
| Added matter | 20 |
| The allegations of added matter in this case | 29 |
| Combination of gathered sheet reconstituted tobacco and elongated heating element | 30 |
| Removal of puff-actuated controller from claim 1 of the Grandparent Application | 31 |
| Intermediate generalisation | 31 |
| The pleading issue | 33 |
| Added matter points specific to EP944 | 34 |
| Obviousness over Morgan | 34 |
| Legal principles | 34 |
| Teaching of Morgan | 36 |
| Pozzoli analysis | 37 |
| Allegations of arbitrary choice and lack of technical contribution | 42 |
| Infringement | 43 |
| Infringement Facts | 43 |
| Analysis | 46 |
| Whether the Third Party is an Exclusive Licensee | 47 |
| Conclusions | 47 |
Introduction
This action concerns a family of heat-not-burn (“HNB”) tobacco products and devices called “IQOS” which are being brought out internationally by companies in the Philip Morris group.
It is alleged that the IQOS products infringe two patents, with priority dates of 18 October 2006, which are owned by the Defendant, and under which the Third Party is alleged to be an exclusive licensee. I will refer to them together as “the Patents” except where it is necessary to refer to them individually, in which case I will refer to them as “EP460” and “EP944”. I give more details of them below.
I will refer to the companies in the Philip Morris group that are parties to this action as “PMI”.
I will refer to the Defendant and Third Party together as “BAT”, which stands for British American Tobacco, to which group they belong.
The proceedings began as a claim for revocation of one of the Patents, but by trial had taken on the shape of a conventional infringement claim and so the trial was organised with BAT in the role of claimant, going first.
Adrian Speck QC appeared for BAT with Nicholas Saunders QC and Kathryn Pickard, and Iain Purvis QC, Tom Alkin and Edward Cronan appeared for PMI. Mr Speck and Mr Saunders split the oral advocacy between them.
There are proceedings in numerous other jurisdictions, and at the European Patent Office. A trial on infringement in Germany was due to take place in March this year but has (since the end of the hearing before me) been postponed to November. This trial was expedited, in part because of the parallel proceedings, as well as the commercial situation.
Conduct of the trial
The trial was conducted fully remotely, supported by a third-party IT provider retained by the parties, and worked well apart from some brief internet outage and lag (not the fault of the third party provider). Mr Flinchum, BAT's expert, gave evidence from the USA and to accommodate this, and to allow him to watch the proceedings during PMI's evidence, the Court sat some time-shifted hours, outside the normal Court day.
I am grateful to the Court staff and the shorthand writers for helping with these extended hours, and to the parties for providing electronic bundles and putting them on the Caselines platform, which I found useful for bundle updates and electronic searching.
The issues
The issues narrowed considerably just before and at the start of trial. The remaining issues are:
i) The nature of the skilled addressee (a very modest dispute, at most).
ii) The scope of the common general knowledge (this is mainly relevant to obviousness).
iii) Added matter. There are three main attacks against all the relevant claims of both Patents, and two subsidiary attacks against EP944 only.
iv) Obviousness over prior art referred to as Morgan.
v) An allegation by PMI in support of obviousness that a key claim feature was arbitrary or reflected no technical contribution.
vi) Whether the IQOS products infringes. This depends purely on claim construction, there being no dispute of fact.
vii) Whether the Third Party is an exclusive licensee. PMI made no admission as to this so I have to decide it.
The witnesses
BAT called one expert witness, Mr Gray Flinchum, who worked for the tobacco company R.J. Reynolds from 1983 to 2019. He worked on process design and handling of tobacco and on two HNB products called “Premier” and “Eclipse”, of which I give more detail below. He did not, however, work on the initial design of those products.
Mr Flinchum was a good and knowledgeable witness who was clear and helpful when explaining things. He was fair and balanced. In closing submissions PMI compared him with its own tobacco expert Dr McLaughlin (see below), to the effect that the latter had more experience of actual initial product design. That is true but it is well established that the assessment of expert evidence in patent cases is not an exercise in determining which expert in fact approximates more closely to the notional skilled person. So I did not think the comparison was material.
Mr Flinchum expressed strong views about the nature of the invention of the Patents in his written evidence which were very different from the case argued for by BAT at trial. This was because of a tactical change of position forced on BAT by the added matter case, as I explain below. It is not in any way a personal criticism of Mr Flinchum that this happened but it does bear on how his evidence is to be weighed in the balance, and I return to it below.
PMI called two expert witnesses.
The first was Dr David McLaughlin, who worked for the tobacco company Gallaher from 1993 to 2009. Between 2004 and 2007 (the priority date, it will be recalled, being 2006) he worked in product research and innovation with a specific focus on HNB products.
Dr McLaughlin was also a good, knowledgeable and clear witness.
PMI submitted that Dr McLaughlin had an unduly narrow appreciation of the skilled team's focus and that he was wrongly affected by hindsight. These are not personal criticisms of Dr McLaughlin and they are best addressed in the context of the skilled team and obviousness issues, so I come back to them there. It was also said that Dr McLaughlin's hindsight was revealed by his considering the Patents obvious over every and any starting point in the prior art, but there was not enough exploration in his cross-examination of the art that was not pursued by PMI at trial for me to form a view on this.
PMI's second expert witness was Mr Mark Beard, an electronics engineer. He did not work on tobacco products generally or HNB specifically but did work on portable electronic therapeutic medical devices. His role was to explain the control and heating circuitry of the Patents and of the IQOS products. He did this very well and clearly. BAT criticised him for not drawing attention to what it said was a key paragraph in the PPD. I did not see the force or relevance of this as a criticism of Mr Beard since the contents of the PPD were clear and he did not and could not try to conceal them.
The reason BAT did not have a direct equivalent of Mr Beard is simply that Mr Flinchum was also able (and competently so) to deal with the topics that Mr Beard addressed. There is no dispute between them that I need to resolve.
The skilled team
It was common ground, as I understood it, that the skilled addressee would have skill and experience in the areas of technology identified above in relation to the expert witnesses (essentially: development of new tobacco products, and electronic heating control) in this case. Whether that would mean one person or a team is unimportant. I refer below to skilled team and skilled addressee interchangeably.
It was also common ground that the skilled team would have an interest in developing HNB products. As I will explain below, the HNB products previously commercialised had been off the market for some time because they had not been successful. However, it was agreed that at the priority date there was a real desire to progress the field and there were real teams working on it, for example that to which Dr McLaughlin...
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