Schutz (UK) Ltd and Others v Delta Containers Ltd (No 1)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jacob,Lord Justice Patten,Lord Justice Ward |
| Judgment Date | 22 November 2011 |
| Neutral Citation | [2011] EWCA Civ 303 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2010/1274 |
| Date | 22 November 2011 |
[2011] EWCA Civ 303
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION PATENTS COURT
The Hon Mr Justice Floyd
Before: the Rt Hon Lord Justice Ward
The Rt Hon Lord Justice Jacob and
The Rt Hon Lord Justice Patten
Case No: A3/2010/1274
Mr Richard Meade QC and Miss Lindsay Lane (instructed by Messrs SNR Denton UK LLP) for
the Appellant
Mr Simon Thorley QC and Mr Thomas Mitcheson (instructed by Messrs Hogan Lovells
International LLP) for the Respondent
Hearing dates: 9 and 10 February 2011
Lord Justice Jacob:
1. The exclusive licensee of EP (UK) 0 734 947 (the "Patent"), Schütz, appeals Floyd J's dismissal of its infringement claim against Werit, ( [2010] EWHC 660 (Pat)). Werit cross-appeals the judge's finding that the Patent is valid. The patentees, Protechna, are formally parties to the proceedings (and hence bound by the result) but have taken no part.
2. The Judge had a number of issues to decide (including infringement of another patent). Most (including a dispute about another patent, No. 0 370 307) have now fallen by the wayside. We were left with three points, namely:
a) whether the Patent was invalid for insufficiency or was so ambiguous that it could not be infringed;
b) Whether the Patent was invalid for added subject matter; and
c) Whether, if valid, what Delta does, amounts to an infringement within the meaning of s.60(1) of the Patents Act 1977 (corresponding to Art. 25 of the Community Patents Convention 1989). I call this the "Making?" point.
Although '307 (which the Judge held valid but not infringed) is no longer directly in issue before us, the first of the validity points was the same for that patent as for the Patent. The Judge dealt with the point in the context of '307 rather than this Patent, so it is necessary to refer to '307.
3. The first two points have no general importance – they concern only the Patent. The Making? point (which both sides called the "main point") is of more general application. It of course only arises if the Patent is valid, so I consider the cross-appeal about that first.
The Background
1. The Patent is for an intermediate bulk container (IBC). An IBC is a large (about 1000 litres, so about a metric tonne or more) container used for the transport of liquids. They have to be able to withstand the tough conditions of transport – they must be leak proof, capable of being stacked in threes or fours (so the bottom one may have about 6 tonnes on it), capable of withstanding prolonged or violent vibration and withstanding the forces caused by the liquid within sloshing around.
2. Before the date of the Patent, IBCs of a two-part construction (ignoring the pallet) were well known. They consisted of a cage into which a large plastic container ("bottle") was fitted. The bottle had to fit the cage well – obviously if it could "rattle around" the cage would not provide protection and the walls of the bottle would not be supported. The general idea is shown by the prior art IBC made by Sotralentz and Mauser which looked like this:
3. IBCs are used for a wide range of types of liquids. Sometimes the bottle cannot be reused because it contains residues of a toxic liquid; in other cases the bottle may become somewhat damaged. The upshot is that a cage has more life than a bottle – we were told that on average the useful life of a cage is about five times that of bottles.
4. Thus it is that people, called "reconditioners", engage in "rebottling" or "cross-bottling" used IBCs. In either case the old bottle is removed, any damage to the cage repaired and a new bottle is fitted within the cage. "Re-bottling" is a term of art meaning replacing the bottle with a fresh bottle from the original manufacturer, whilst "cross-bottling" means replacing the bottle with a bottle from a different source. Reconditioners offer these products to the market in competition with the products of the original manufacturers.
5. Opinion in the industry is divided about cross-bottling. Because the bottle is not specifically designed for the cage, the "fit" is not necessarily as good as with a bottle from the original manufacturer. For instance stabilising loops in the top of the bottle may not match with bars on the cage, or the bottle may not fit in such a way that it will drain properly without tipping.
6. Despite the divided opinion about cross-bottling, there is clearly a market for cross-bottled products. Schütz objects to its cages being used by cross-bottlers. Apart from the effect caused by competition, Schütz says it has a concern that publicity about any accident with a cross-bottled product made with one of its cages might rebound on its reputation.
7. In this case in particular, Werit sells bottles for IBCs to a company called Delta, a reconditioner. Delta buys discarded Schütz IBCs, removes and discards the original Schütz bottles, makes any necessary repairs to the cage, replaces them with Werit bottles and offers the resulting IBC to the market in competition with Schütz. It is common ground that if Delta thereby infringes Patent, then so also does Werit.
The Patent
1. The Patent cross-refers to the priority document for '307 and is closely related to the invention there disclosed, also of course disclosed in '307.
2. '307 was the first disclosure of an IBC having a cage made from tubes as opposed to solid rods. It says advantages are obtained thereby, namely that the cage (called a "grid box container") "saves weight and achieves substantially higher stability." The particular form of crossover connection between the tubes is said to facilitate "an optimum connection … by resistance pressure welding." The crossover connections were said to be "distinguished by a high resistance to external forces [which it was agreed meant forces on the cage from the outside] as well as to the internal forces arising from the contents [i.e. caused by sloshing].
3. At the crossover points the tubes are flattened (the claim says "trough-like double-walled recesses"). Figures 9–12 show this and how the flattened portion of one tube is placed at right angles against the flattened portion of another.
4. As shown the cage has a flush grid surface – the tubes are all in the same plane. That was feature [F] of claim 1:
[F] and in that the grid rods are so connected together by resistance pressure welding of the four contact locations at each crossover point that the rods have common tangential planes inside and outside.
The italicised portion meant a flush grid surface.
1. The actual Schütz cages do not have that feature. The outer tubes (diameter 18mm) project rather a lot – 7.5 to 10 mm. The Judge held that they projected too far to fall within feature [F]. Hence there was no infringement of '307. There is no appeal from that.
16. However before the Judge, Werit took another point of non-infringement of '307. This was about feature [E]:
[E] and, at each crossover point between the longitudinal edges of the indentations of two grid rods lying one over the other at right angles, there result four contact locations disposed in a plane, each with a build-up of metal corresponding to four times the grid rod wall thickness,
2. The Judge rejected that point. Claim 1 of the Patent has effectively the same feature, though the wording is somewhat different. It is common ground that the Judge's construction of [E] in '307 is equally applicable to the construction of the corresponding feature in the Patent. Werit challenges that construction albeit in the context of the Patent rather than '307.
3. With that preliminary I turn to the Patent. I can gratefully adopt the Judge's description:
[22] 967 is also concerned with IBCs. The starting point is the weld joint in the cage of the '307 patent. The weld in this joint is said to be subject to static bending stresses because of stacking of containers and vibration during transport. The object of the invention is stated to be to increase the durability of the joint by relieving the stresses on the joint. The patent explains that this can be achieved by introducing a dimple on either side of the weld and a central raised portion. The idea is that the dimpled portions create more readily bendable portions, thus relieving the stress on the weld itself.
[23] Everything is shown in Figure 2 which is a perspective view of the configuration:
Claim 1 is in the following form (again without numerals and with added reference letters):
[A] Pallet container for the transporting and storing of liquids, having a flat pallet, an exchangeable inner container made of plastic material with an upper, closable filler opening and a lower emptying device and also, surrounding the inner container, one outer sleeve which consists of vertical and horizontal lattice bars made of metal which support the plastic inner container filled with liquid,
[B] the lattice bars which are configured as tubes being indented at the intersection points to form trough-like, double-walled recesses extending in the longitudinal direction of the lattice bars
[C] in such a manner that at each intersection point between the longitudinal edges of the recesses of two lattice bars lying perpendicularly one above the other there arise four contact points with a material accumulation respectively corresponding to the quadruple lattice bar wall thickness, and the four contact points of the two lattice bars...
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