Smith & Nephew Plc (Respondent/Appellant) v ConvaTec Technologies Inc. T J Smith & Nephew Ltd and Another (Third Parties)

JurisdictionEngland & Wales
JudgeLord Justice Kitchin
Judgment Date30 July 2015
Neutral Citation[2015] EWCA Civ 803
Docket NumberCase No: A3/2014/0284
CourtCourt of Appeal (Civil Division)
Date30 July 2015

[2015] EWCA Civ 803

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION (PATENTS COURT)

The Hon Mr Justice Birss

[2013] EWHC 3955 (Pat)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Kitchin

Lord Justice Briggs

and

Lord Justice Christopher Clarke

Case No: A3/2014/0284

Between:
Smith & Nephew plc
Respondent/Appellant
and
ConvaTec Technologies Inc
Appellant

and

(1) T J Smith & Nephew Ltd
(2) Smith & Nephew Medical Ltd
Third Parties

Piers Acland QC and Thomas Alkin (instructed by Bird & Bird LLP) for the Appellant

James Mellor QC and Charlotte May QC (instructed by Bristows LLP) for the Respondent/Appellant and Third Parties

Approved Judgment on Form of Order for handing down

Lord Justice Kitchin
1

This is the judgment of the court.

2

The parties have been unable to agree a form of order in the light of our main judgment ( [2015] EWCA Civ 607) concerning European Patent (UK) No 1,343,510 ("the Patent") and have identified a series of issues upon which we have been asked to rule. We shall address them in turn.

Permission to appeal

3

Smith & Nephew seek permission to appeal to the Supreme Court on the basis that our decision raises a significant point of general public importance. We disagree. The general approach to the interpretation of a patent claim was explained by the House of Lords in Kirin Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] RPC 9. We have concluded that this approach is as applicable to a claim containing a numerical range as it is to a claim containing descriptive words or phrases. In both cases the critical question is what the skilled person would understand the author to have been using the words or numerals appearing in the claim to mean.

Stay of injunctive relief and order for deliver up or destruction

4

Smith & Nephew have made it clear that they intend to apply to the Supreme Court for permission to appeal. The Patent is also the subject of ongoing opposition proceedings before the European Patent Office (the "EPO"), as we shall explain. Smith & Nephew accept that ConvaTec is entitled to a final injunction to restrain infringement of the Patent and to an order for delivery up or destruction of all infringing products but invite us to stay these orders pending the outcome of their application for permission to appeal and any subsequent appeal, and pending the outcome of the opposition proceedings.

5

The position in relation to the opposition proceedings may be summarised as follows. The Patent was granted on 19 May 2010. On 18 February 2011 Smith & Nephew filed a notice of opposition. The opposition proceeded to an oral hearing and, in its written decision issued on 21 December 2012, the Opposition Division upheld the Patent with claims in an amended form corresponding to the amended claim held valid by Birss J in the Patents Court ( [2012] EWHC 1602). Both Smith & Nephew and ConvaTec appealed against this decision. Oral proceedings took place before the Technical Board of Appeal (the "TBA") in November 2013 and the written decision was issued on 29 January 2014. The TBA held the Patent invalid for lack of inventive step. However, it then remitted the case to the Opposition Division for consideration of the admissibility and allowability of various auxiliary requests. A further oral hearing took place before the Opposition Division in October 2014 and it issued its decision on 16 December 2014. It declined to admit further evidence upon which ConvaTec sought to rely and revoked the Patent. ConvaTec have now appealed against that decision.

6

Both sides express confidence that these opposition proceedings will be resolved in their favour. Smith & Nephew's firm belief, and that of their patent attorney, is that the lack of inventive steps arguments which prevailed before the TBA in relation to the main request are equally applicable to the remaining auxiliary requests, and that ConvaTec's appeal will be dismissed. ConvaTec, on the other hand, maintain that Smith & Nephew's confidence is misplaced and that revocation of the Patent is unlikely. It is of course impossible for this court upon an application of the kind now before us to form any firm view as to the likely outcome of these opposition proceedings. But we can say that there is plainly a real prospect that the Patent will be revoked.

7

The second matter which arises in relation to these opposition proceedings is their likely timescale. ConvaTec say that the TBA hearing is likely to take place in about April 2016. Smith & Nephew maintain that they have requested acceleration of the proceedings and that the hearing is likely to take place in about November of this year. Once again, it is not possible for this court to resolve this dispute but it does seem very likely that the hearing will take place by April 2016, that is to say a few months after the application for permission to appeal to the Supreme Court is resolved.

8

There is one further aspect of the timing which we should mention. ConvaTec say that it is likely that if, following the hearing before the TBA, their evidence is not admitted, they will petition the Enlarged Board of Appeal (the "EBA") for infringement of their right to be heard, and it could take up to two years for the EBA to decide the matter. We do not think there is anything in this point for it now seems tolerably clear that any such petition would not have suspensive effect.

9

What then is to be done pending the decision of the Supreme Court whether to grant permission to appeal (and any appeal thereafter) and pending the forthcoming hearing before the TBA? ConvaTec say that they have now established their right to an injunction and that it is unlikely that the Supreme Court will grant permission to appeal. As for the pending appeal before the TBA, they have referred us to the decision in Adaptive Spectrum and Signal Alignment Inc v British Telecommunications plc [2014] EWCA Civ 1513. There this court refused British Telecom's application for a cross-undertaking in damages to cater for the possibility that the EPO might subsequently revoke or materially amend the patent in issue. Floyd LJ, giving the judgment of the court, said this at [9]:

"A cross-undertaking is appropriate to take account of the possibility that an earlier judgment is wrong (e.g. an interim injunction or an injunction pending appeal). In the present case, revocation by the EPO would not show our judgment to be wrong, or the injunction to have been wrongly granted. A subsequent EPO revocation or amendment would mean that the injunction would become ineffective or have to be discharged from the date of revocation/amendment, but not ab initio. There is no reason for ASSIA to pay for the harm during the period when the injunction was rightly granted."

10

ConvaTec argue that this principle is equally applicable to Smith & Nephew's application for a stay of the injunction pending the decision of the TBA. This court has upheld the validity of the Patent and has now found it to have been infringed. If the Patent is subsequently revoked or materially amended, this will not show those judgments to be wrong or that the injunction was wrongly granted. ConvaTec also say that Smith & Nephew chose to bring proceedings in this jurisdiction and pushed for their early determination, but are now seeking to avoid the consequences of their own actions. Furthermore, they continue, a stay would simply give Smith & Nephew a chance to design and introduce a new non-infringing product under the name Durafiber Ag and so retain the market share they have secured by their infringements.

11

Smith & Nephew say that if this court declines to grant a stay then they will suffer severe and irreparable harm, and that will be so even if they win before the TBA or on appeal to the Supreme Court. The imposition of an injunction pending the decision of the Supreme Court or the TBA would, they say, devastate the market for Durafiber Ag. They have filed evidence from Mr McKinlay, a senior executive responsible for new product development, who explains that Durafiber Ag has now been on the market for some 18 months, that Smith & Nephew have and are continuing to suffer damage as a result of the wrongful grant of interim relief in relation to the Durafiber product, and that the grant of the injunction sought would cause significant harm to Smith & Nephew's reputation, would seriously affect Smith & Nephew's ability to sell other products, would result in a significant number of employees losing their jobs and would bring a halt to the manufacture and sale of Durafiber Ag throughout the world. Indeed, he continues, the impact on Smith & Nephew of the grant of an injunction would be such that he has doubts that it would ever be possible to re-launch the product.

12

We have refused permission to appeal. However, we recognise that the Supreme Court may take a different view. There is therefore a real prospect of a further appeal. We have also taken careful account of all of the matters on which ConvaTec relies. Nevertheless, we have come to the conclusion that the balance of justice lies in favour of suspending the injunction at least until the Supreme Court decides whether to grant permission to appeal. The question whether to grant any further stay will be a matter for the Supreme Court. In reaching that conclusion we have taken into account all of the matters relied upon by the parties in their extensive evidence and submissions, and consider the following matters particularly material. First, we recognise that Smith & Nephew first sought revocation of the Patent and then,...

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