Philip Morris Products, SA v Nicoventures Trading Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mellor |
| Judgment Date | 27 May 2022 |
| Neutral Citation | [2022] EWHC 1284 (Pat) |
| Docket Number | Case Nos: HP-2021-000029 |
| Court | Chancery Division (Patents Court) |
[2022] EWHC 1284 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Rolls Building, Fetter Lane,
London, EC4A 1NL
THE HON Mr Justice Mellor
Case Nos: HP-2021-000029
HP-2022-000002
James Abrahams QC and Tom Alkin (instructed by Powell Gilbert LLP) for the Philip Morris parties
Tom Hinchliffe QC (instructed by Kirkland & Ellis International LLP) for Nicoventures/BAT
Hearing date: 27 th April 2022
Approved Judgment
This judgment was handed down remotely by circulation to the parties' representatives by email and release to The National Archives and BAILII. The date and time for hand-down is deemed to be Friday 27 th May 2022 at 10.30am.
THE HON Mr Justice Mellor
As appears from the heading, there are two actions before the Court between two sets of parties. I shall refer to the Philip Morris Parties as PMI and to Nicoventures and BAT as simply BAT. The two actions are:
i) HP-2021-000029 (the 029 Action), brought by PMI for revocation of two BAT patents. BAT has consented to revocation of one of the patents (EP080) and counterclaimed for infringement of the other (EP830).
ii) HP-2022-000002 (the 002 Action), brought by BAT for revocation of one PMI patent (EP323).
On 27 th April 2022, I heard the following applications:
i) In the 029 Action, PMI applies for permission to amend its statements of case to introduce a claim for Arrow-type declaratory relief.
ii) In the 002 Action, PMI applies for a stay of proceedings pending final resolution of parallel opposition proceedings in the EPO.
iii) Also in the 002 Action, BAT applies for an order that the trial take place at the earliest possible date after 1 March 2023.
On these applications one side is attempting to alleviate the effects of legal and litigation uncertainty on their commercial plans, whilst at the same time seeking to obstruct (to differing degrees) a similar attempt by the other. In the 029 Action, BAT opposes PMI's application to introduce the claim for Arrow-type relief, relief which aims to provide legal certainty for PMI. In the 002 Action, BAT seeks an early resolution in this action of its claim that the PMI Patent in suit is invalid. It can be said that by its application for a stay, PMI seeks to delay the achievement of the legal certainty sought and thereby to prolong the uncertainty for BAT.
By the conclusion of the argument, I had reached a clear view on the first application, and I announced I gave permission to PMI to amend to include the claim for Arrow-type declaratory relief. On the stay application, I reserved judgment because the issues were more finely balanced but stated that if I were to refuse the stay, I would allow an early trial listing of the 002 Action. Having reflected, I have concluded I should dismiss PMI's application to stay the 002 Action. The 002 Trial will be listed to be heard in March 2023. This judgment contains my reasons for those conclusions.
Background
PMI and BAT are competitors in the consumer tobacco market, Nicoventures being a company in the BAT group. The patents in suit in both actions concern ‘heat not burn’ products (HNB), also known as ‘tobacco-heating products’ (THP), the idea being that tobacco is heated to generate a nicotine-containing aerosol, but the lack of burning is said significantly to reduce the levels of harmful chemicals in the aerosol compared to the smoke of combustible cigarettes.
Both sides have HNB/THP products. PMI's product is sold under the name IQOS. The IQOS system comprises an electrical heating device and compatible tobacco-containing consumables, called HEETS. The first version uses resistive heating. It was first launched in late 2014 in Japan and Italy and is now available in 70 countries around the world. It was first launched in the UK in 2016 and remains on the market. The second version product uses inductive heating and is called IQOS ILUMA, designed to work with TEREA sticks, and was first launched in Japan in August 2021. PMI intends to launch IQOS ILUMA in the UK ‘in the second half of 2022’. The 029 Action is a ‘clearing the way’ action ahead of that launch.
BAT's THP product is called ‘glo’. It contains a Li-ion battery which powers a heating chamber. A tobacco containing rod (called a ‘neostick’) is designed to be inserted into the ‘glo’ device. As with PMI's product, there are two generations of ‘glo’ product. The first used resistive heating and was first launched in Japan in 2016/2017. It is no longer on sale. The second generation product uses inductive heating, first launched in what BAT calls ‘test markets’ in the Czech Republic, Romania, Italy and Poland in mid-2019, but is now sold in 22 countries under the names ‘glo Hyper+' and ‘glo Hyper+ UNIQ’. BAT claims to be the first company to commercialise an induction heating THP.
The 029 Action
This action by PMI was commenced on 20 July 2021 seeking revocation of EP080 and EP830, each relating to an inductively heated THP and/or the sticks designed to operate with such devices. EP830 also concerns the Curie temperature of the susceptor to determine the maximum temperature to which it is heated. The Curie temperature is a property of the material from which the susceptor is made, being the temperature at which the material loses its permanent magnetic properties. At that point, it is no longer able to heat by magnetic hysteresis.
With the initial pleadings complete, albeit PMI had indicated it wished to rely on new prior art, on 8 th December 2021, PMI issued an application the following day to list the trial. This was heard on 12 th January 2022, when Meade J listed the action for a trial to be heard in September 2022 with a 6 day estimate, subsequently fixed for 20 September 2022. This listing was obtained on evidence from PMI that it had 'recently launched its new IQOS ILUMA product in Japan and Switzerland, with launch in the UK anticipated during the latter part of next year [i.e.2022]. While PMI believes there is no credible infringement read on either of the patents at issue, it brings this revocation action to reduce the risk of disruption of the UK launch. On 7 th February 2022, BAT indicated it would be amending its defence to plead infringement.
Directions to trial were made by HHJ Hacon by consent on 16 March 2022. This was perhaps a curious development in view of recent events and the fact that the action was clearly in a state of flux, but I infer that the parties wanted to get a timetable fixed in view of the trial date, even if it might have to be adjusted subsequently.
Shortly before those directions were made, on 8 March 2022, BAT indicated it would consent to revocation of EP080. On the same day, BAT informed PMI that it intended to counterclaim for infringement of EP830 and would rely on the doctrine of equivalents in relation to the location of the heater. Draft Particulars of Infringement were provided on 10 March 2022. Pursuant to the agreed directions, BAT served their Part 20 claim for infringement of EP830, the Amended Defence & Counterclaim and Particulars of Infringement on 17 March 2022 and Responses to earlier Notices to Admit Facts were served on 18 March 2022.
PMI's Application to Amend
On 25 March 2022 PMI served the application seeking permission to amend to include Arrow-type relief. The draft Grounds of Anticipation and/or Obviousness aver that the product particularised in the Annex was, on 31 August 2015 (the priority date of both the Kaufman and Blandino families of patents), anticipated by an unpublished PCT application Mironov and/or obvious over a Chinese utility model Wu. The particulars in the Annex are drawn from PMI's PPD describing the IQOS ILUMA system but at a slightly more general level.
There are two sets of applicable principles to which I was referred. First in terms of an application to amend I was referred to the useful summary by Lambert J. in Pearce v North and East Hertfordshire NHS Trust [2020] EWHC 1504 (QB) at [10]. It is not necessary to set out that passage, since the principles are well-known.
Second, so far as Arrow declarations are concerned, I was referred to the reviews by the Court of Appeal in Glaxo Group Ltd v Vectura Ltd [2019] RPC 2 (in particular [14] – [18] per Floyd LJ) and more recently in Mexichem UK Ltd v. Honeywell International Inc. [2020] RPC 11 (in particular [6] – [18] per Floyd LJ).
Although there was debate about whether BAT, by consenting to the revocation of EP080, was engaged in ‘shielding’ (i.e. preventing the Court from considering the validity of its patent), ultimately BAT realistically accepted that the jurisdictional threshold for Arrow declarations is low and that the issue of whether to grant this type of declaration is to be exercised at trial. BAT did not say that the claim sought would be strikeable. Accordingly, the parties seemed to agree that, at this interim stage, the only issue on the merits is whether the pleaded facts and arguments give rise to a realistic claim for Arrow relief which should go to trial. PMI contended that the declaration sought would serve a useful purpose and was, at least, of arguable utility in PMI's efforts to clear the way for a UK launch of the IQOS ILUMA system later this year. I agree.
BAT's resistance to the proposed amendments were based on case management concerns. BAT contended that this was a very late amendment, brought too late because it would prejudice BAT's ability to deal with the subject of the Arrow declaration properly by trial and would adversely affect its ability...
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