Stretchline Intellectual Properties Ltd v H&M Hennes & Mauritz UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Henry Carr |
| Judgment Date | 20 November 2015 |
| Neutral Citation | [2015] EWHC 3298 (Pat) |
| Court | Chancery Division (Patents Court) |
| Date | 20 November 2015 |
| Docket Number | Case No: HP 2013 000002 |
[2015] EWHC 3298 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
7 ROLLS BUILDINGS
FETTER LANE
LONDON
EC4A 1NL
Mr Justice Henry Carr
Case No: HP 2013 000002
Nicholas Caddick QC & Andrew Norris (instructed by Nelsons Solicitors Ltd) for the Claimant
Guy Burkill QC & Geoffrey Pritchard (instructed by Shoosmiths LLP) for the Defendant
Hearing dates: 27, 28, 29 and 30 October 2015
Introduction
The Claimant ("Stretchline") is the owner of UK Patent GB 2 309 038 ("the Patent"). The Patent was filed on 18 April 1996 and is entitled "Tubular fabric and method of making the same". The Patent is concerned, in particular, with tubular fabric in underwired garments such as brassieres.
In 2010 Stretchline brought a claim for infringement of the Patent against the defendant ("H&M"), alleging certain brassieres sold by H&M fell within the claims of the Patent. H&M denied infringement of the Patent and counterclaimed for revocation. Those proceedings, including the counterclaim, were settled following a mediation and an agreement dated 3 October 2011 was entered into between Stretchline and (amongst others) H&M ("the Settlement Agreement").
On the 28 March 2013 Stretchline commenced these proceedings, alleging that H&M was again selling brassieres that fell within the claims of the Patent. Initially, Stretchline alleged breach of contract and infringement of patent. H&M asserted in its defence that the garments did not fall within any claims the Patent and also claimed in its defence and counterclaim that the Patent was invalid.
In October 2014, H&M's invalidity defence and counterclaim were struck out by Sales J (as he then was) on the basis that the Settlement Agreement precluded H&M from raising the issue of invalidity in these proceedings. This decision was affirmed on appeal; Stretchline Intellectual Properties Ltd v H&M Hennes & Mauritz [2015] EWCA Civ 516. Following the Court of Appeal judgment Stretchline discontinued its claim for infringement and only pursues its claim for breach of the Settlement Agreement.
The Settlement Agreement
The Settlement Agreement contains the following recitals:
"A. Proceedings have been commenced by the Claimant against the Defendants by way of High Court Claim No. HC10C00278 filed on 30 July 2010 in the High Court of Justice (the "UK Proceedings") arising out of the Claimant's claim for infringement of United Kingdom Patent Number GB 2,309,038 (the "UK Patent") by the UK Defendant (the "UK Dispute") and US Civil Action no. 2:10-CV-371 (EDVA) filed on July 20 2010 in The United States District Court for the Eastern District of Virginia (the "US Proceedings") again arising out of the Claimant's claim for infringement of U.S. Patent Number 6,071,578 (the "US Patent") by the US Defendant (the "US Dispute"). In both the UK and US dispute the Defendants have denied all claims and liability.
B. Following mediation between the Parties on 31 May 2011, pursuant to a Mediation Agreement dated the same date, the Parties agree to compromise the UK and US Proceedings on the terms set out in this Settlement Agreement.
C. The Parties intend that this Agreement bring finality to this dispute worldwide with respect to the claims asserted or those that could have been asserted with regard to the products at issue."
Clause 1 of the Settlement Agreement includes the following definitions:
"1.1 "Claims" shall mean any claim made in either the UK Proceedings or the US Proceedings (including any claim for damages, interest and costs) and any other potential claims in relation to the subject matter of those proceedings elsewhere in the World.
1.2 "H&M Low Volume Fabric" shall mean any wire casing product with a volume of fusible yarn of approximately 0.3–0.7% of the total volume of yarn in any tubular fabric component, including but not limited to the samples provided the Defendant to the Claimant under cover of a letter of 16 May 2011 from Shoosmiths Solicitors to the Claimant c/o Potter Clarkson.
1.3 "Accused Product" shall mean:
1.3.1 any product which falls within any of the claims of any of the Patents;
but does not include the H&M Low Volume Fabric.
1.4 "Patents" shall mean:
1.4.1 United Kingdom Patent Number GB 2,309,038;
…
1.6 "Prohibited Acts" shall mean:
Making, disposing of, offering to dispose of, using, importing or keeping (whether for disposal or otherwise) in any of the Prohibited Jurisdictions any Accused Product; during the duration of the terms of the Patents in their respective jurisdictions so long as each Patent remains enforceable in that jurisdiction;
1.7 "Prohibited Jurisdictions" shall mean the United Kingdom, the United States of America, Germany, France, Belgium, and/or Italy.
1.8 "Sell-Through Period" shall mean the period from the date of this agreement until 31 December 2011.
…
1.13 "UK Proceedings" has the meaning set out in paragraph A of the Background to this Settlement Agreement."
Clause 3 of the Settlement Agreement provides, amongst other things, that:
"3.1 In consideration of the Claimant agreeing to compromise the Claims against the UK Defendant and the US Defendant (together the "Defendants") the Defendants each agree:"
3.1.1 between them to pay, by way of costs, to the Claimant the sum of £235,000 (the "Settlement Sum") in full and final settlement worldwide of all Claims present and future made by the Claimant and/or its subsidiaries/associate companies;
3.1.2 not now, or at any time in the future to do, or procure or authorise the commission by any third party to do any of the Prohibited Acts, nor collude with any company within the same group of companies in relation to the commission of any of the Prohibited Acts, whether by their directors, officers, servants or agents or any of them or otherwise whatsoever.
3.1.3 to ensure that by the date of the expiry of the Sell-Through Period no H&M retail stores in the United Kingdom, the United States of America, Belgium, Germany, France and Italy will at that time or in the future dispose or, offer to dispose of, use, or keep (whether for disposal or otherwise) any Accused Product.
…
3.3 If after the sell-through period has expired, the Claimant does discover a product in an H&M Store within the territory referred to in 3.1.3 above which it believes to be a violation of this Agreement, the Claimant will promptly bring such product to the attention of the UK and US Defendants who shall promptly investigate matters and thereafter the Parties hereto shall, without prejudice to the Claimant's rights as set out in this Agreement or generally, work together to resolve the situation to each other's satisfaction."
So, in summary, H&M agreed not to deal in any product which fell within any of the claims of the Patent and paid an agreed sum by way of costs to Stretchline. It was allowed a sell-through period and was entitled to continue to sell "H&M Low Volume Fabric", which meant any wire casing product with a volume of fusible yarn of approximately 0.3–0.7%. On this basis, the parties settled their differences and entered into the Settlement Agreement.
The main issue in these proceedings
The Patent is concerned, in particular, with tubular fabric used to encase underwires in garments such as brassieres. The Description states that there was a known problem with such fabric tubing at the priority date (page 1 lines 12–19):
"A considerable problem with known fabric tubing for underwires is that the ends of the underwires can penetrate the tubing, either during the course of garment manufacture or in use by a wearer.
At present, a significant proportion of brassiere (bra) manufacturers (sic) products are returned because of protrusion of the underwire through the fabric tubing."
The Patent proposes to solve this problem by inclusion of a fusible yarn which, on melting, strengthens the tubular fabric.
Claim 1 of the Patent is a process claim which provides for:
"a method for making a tubular fabric comprising providing a support yarn and an elastomeric yarn; characterised in that a fusible yarn is also provided and in that the yarns are formed into a tubular fabric whereby the fusible yarn is arranged within the fabric tube so that it is capable of forming a penetration barrier."
The dispute between the parties concerns the correct interpretation of the final words of the claim and in particular whether the garments allegedly sold in breach of the Settlement Agreement contain "a penetration barrier".
In summary, Stretchline contends that a penetration barrier is created by incorporating (in particular by weaving) a fusible yarn into the tubular fabric and heating it. A fusible yarn acts, in effect, as an adhesive. When heated during the fabric dyeing process, the adhesive melts and the fusible yarn ceases to exist. The adhesive spreads itself over the surrounding fibres in the fabric to form points of adhesion or bonding between those fibres. Stretchline submits that this is what is meant by "a penetration barrier". The Patent is claiming a structure that, by reason of bonding of the fibres, is better able to resist penetration (for example by wire) than would be the case if the fusible yarn had not been used.
H&M contends that the Patent requires that the fusible yarn must an identifiable, layer-like barrier or lining. On this basis, points of adhesion are not sufficient. H&M argues that the Patent describes and claims fusible yarn which, on melting, forms a substantially continuous liner which provides the required...
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