The Big Bus Company Ltd v Ticketogo Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Arnold,Mr Justice Arnold |
| Judgment Date | 28 April 2015 |
| Neutral Citation | [2015] EWHC 1094 (Pat) |
| Court | Chancery Division (Patents Court) |
| Date | 28 April 2015 |
[2015] EWHC 1094 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Rolls Building
Fetter Lane, London, EC4A 1NL
The Hon Mr Justice Arnold
Hugo Cuddigan QC (instructed by Charles Russell Speechleys LLP) for the Applicant
Christopher Thornham (of Taylor Wessing LLP) for the Respondent
Hearing date: 15 April 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 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
This is an application by The Big Bus Company Ltd ("Big Bus") for pre-action disclosure against Ticketogo Ltd ("Ticketogo") pursuant to section 33(2) of the Senior Courts Act 1981 and CPR rule 31.16. In a nutshell, Big Bus seeks disclosure of patent licences previously granted by Ticketogo in order to enable Big Bus to quantify the value of a claim for patent infringement which has been intimated against it by Ticketogo. The application is unprecedented, but that in itself is not a bar to it being granted. More importantly, it raises an important point of principle.
Factual background
Ticketogo is the proprietor of United Kingdom Patent No. 2 391 101 entitled "Ticketing system" ("the Patent"). The Patent discloses and claims a method of issuing over the internet a ticket containing a bar code in an image file format. It was granted on 20 October 2004 and has a claimed priority date of 9 May 2001.
As at 13 April 2015, the Register of Patents records that licences under the Patent have been granted to 38 companies. It is evident that the Register is out of date, since Ticketogo has referred in correspondence to other licensees who have recently taken licences under the Patent. Furthermore, Ticketogo's solicitor told me that Ticketogo had now granted over 60 licences.
So far as the evidence before me goes, Ticketogo does not conduct any business other than patent licensing.
Big Bus is an operator of open top bus sightseeing tours. It is a subsidiary of Big Bus Tours Ltd, which claims to be the largest operator of such tours in the world.
On 2 October 2012 solicitors instructed on behalf of Ticketogo wrote to Big Bus notifying it of the existence of the Patent. The letter stated:
" Our client has recently concluded a licence agreement for the Patent with a major coach travel operator in the UK. Our client is also prepared to license the Patent to you, provided that suitable commercial terms can be agreed."
Big Bus replied to this letter that it did not require a licence under the Patent. Ticketogo's solicitors responded that their client believed that Big Bus did require a licence for its ticketing system and asked Big Bus to elaborate on its statement that it did not require one. Accordingly, on 18 December 2012 Big Bus' solicitors wrote to Ticketogo's solicitors explaining Big Bus's case that its system did not fall within the claims of the Patent.
On 13 January 2013 Ticketogo's solicitors replied with an explanation as to why Ticketogo contended that the system did fall within the claims. This letter also stated:
" For your client's information — and in the spirit of openness with which this correspondence is being conducted — the closest prior art document of which our client is aware was found by the UK Intellectual Property Office's search during the prosecution of the Patent. It was the British Airways patent application, no. GB 2361570, a copy of which is enclosed with the hard copy of this letter. The UK IPO's objection to the grant of the Patent based on this prior art citation was overcome.
Furthermore, you will no doubt have advised your client that a challenge to the validity of a patent is always a complicated and expensive exercise, by the time that technical experts and Counsel have got involved. You will also have seen that National Express Group PLC is a licensee of our client. We invite you to revisit the list of licensees of the Patent on the UK IPO's website, where you will note that a further licence has recently been granted to The Ticketline Network Limited. Both of these companies are substantial organisations who presumably decided after due consideration not to attempt a challenge to the validity of the Patent, but to take a licence instead."
Big Bus' solicitors acknowledged receipt of this letter in a letter dated 21 January 2013. After that the record is silent for some time, possibly because the parties were engaged in without prejudice negotiations.
On 22 April 2014 Ticketogo's Chief Legal Officer sent a representative of Big Bus an email saying:
" Since our last communication, Ticketogo has managed to secure various new clients/licensees, a list of the current licensees is attached to this email.
I would welcome the opportunity to meet with you to discuss your company also becoming a licensee of the Patent."
It is not clear from the evidence what response Big Bus made to this email, if any. Again, it is possible that there were without prejudice negotiations.
On 24 February 2015 Ticketogo's current solicitors wrote to Big Bus' solicitors saying that they had been retained to act in place of Ticketogo's previous solicitors. The letter stated:
" Our client … believes that your client requires a licence of the Patent. Many others have decided to take a licence, once they have considered the Patent and taken advice. Attached, for ease of reference, is a current list of licensees.
If your client says that it does not require a licence, please explain its position fully regarding infringement and validity. We remind you of your client's obligations under paragraph 6 of the Practice Direction — Pre-Action Conduct in the Civil Procedure Rules, which requires parties to exchange information and to behave reasonably, so as to facilitate a full understanding of each party's position, before legal proceedings are contemplated.
If you do not comply with the Practice Direction by failing to respond to our correspondence, your client may be penalised in costs when this matter comes before the court."
Many of the licensees listed in the list enclosed with this letter are companies in the transport sector, but others are companies in the entertainment sector.
On 10 March 2015 Big Bus' solicitors replied asking for pre-action disclosure of four categories of documents, including the licences granted under the Patent. On 13 March 2015 Ticketogo's solicitors replied declining to give such disclosure. The letter also stated:
" If the Big Bus Company's strategy is to bury its head in the sand in the hope that our client's claim will disappear, it is mistaken. The Big Bus Company should be in no doubt that our client's claim will not disappear, and the size of the claim grows with each day of unlicensed activity."
Big Bus launched the present application on 30 March 2015. By its application Big Bus seeks an order for the disclosure and inspection of all licences granted by Ticketogo under the Patent, and in particular the licences granted to 44 named licensees, being those named in the list enclosed with the letter dated 24 February 2015. The proposed order contains provision for a confidentiality club to be agreed or determined by the court in the event that any of the documents contain confidential information.
The application is supported by a witness statement made by Ian Wood of Big Bus' solicitors. As well as pointing out that Ticketogo has repeatedly relied on the fact that others have taken licences in its efforts to persuade Big Bus to take a licence under the Patent, Mr Wood explains that, while Big Bus considers that its system does not fall within the claims of the Patent and that there is a strongly arguable case that the Patent is invalid, Big Bus is concerned at the considerable expense of patent infringement proceedings and at the irrecoverable costs it may incur even if it is successful. Big Bus is therefore conscious of the desirability of resolving the dispute through a commercial agreement. Big Bus considers that disclosure of the existing licences is desirable since it would allow Big Bus to establish the value of Ticketogo's claim and thus assist the resolution of the dispute by an informed settlement. Ticketogo did not serve any evidence in opposition to the application.
The relevant provisions
CPR rule 31.16 provides, so far as relevant, as follows:
"(3) The court may make an order under this rule only where—
(a) the respondent is likely to be a party to subsequent proceedings;
(b) the applicant is also likely to be a party to those proceedings;
(c) if proceedings had started, the respondent's duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; and
(d) disclosure before proceedings have started is desirable in order to —
(i) dispose fairly of the anticipated proceedings;
(ii) assist the dispute to be resolved without proceedings; or
(iii) save costs.
(4) An order under this rule must —
(a) specify the documents or the classes of documents which the respondent must disclose; and
(b) require him, when making disclosure, to specify any of those documents —
(i) which are no longer in his control; or
(ii) in respect of which he claims a right or duty to withhold inspection."
The applicable principles
It is well established that CPR rule 31.16 requires a two-stage approach to an application for pre-action disclosure. The first stage is to consider whether the jurisdictional tests of sub-rule (3)(a) to (d) are satisfied. If they are, the second stage is to consider whether, as a matter of discretion, an order should be made: see ...
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