Wagner International AG and Others v Earlex Ltd
| Jurisdiction | England & Wales |
| Judge | Judge Birss |
| Judgment Date | 15 December 2010 |
| Neutral Citation | [2011] EWHC 3897 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No. HC 10 C01989 |
| Date | 15 December 2010 |
[2011] EWHC 3897 (Pat)
His Honour Judge Birss, QC
(Sitting as a Judge of the High Court)
Case No. HC 10 C01989
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
St. Dunstan's House
Mr. R. Davis (instructed by Field Fisher Waterhouse LLP) appeared on behalf of the Claimant.
Mr. T. Mitcheson (instructed by Redd Solicitors LLP) appeared on behalf of the Defendant.
I have before me an application to order a trial of a preliminary issue in a patent action. The claim form was issued on 16 th June, 2010. The claimants are Wagner International AG and some other Wagner companies. The defendant is Earlex Ltd. The claim is for infringement of European Patent UK No. 0596939 entitled "Improved air cap for paint spray gun". The patent was filed in 1992, claiming priority from 1991 and was granted in 1998. It is in force in the United Kingdom. It expires in 2012. The patent relates to an air gun used for spraying paint.
Infringement is in issue in relation to two products of the defendant, which have been called the "Original Product" and the "Modified Product". Validity is in issue. The defendants having pleaded a defence that the patent is invalid on various grounds, including an alleged prior use which took place in 1991, added subject matter and obviousness over pleaded prior art.
It is estimated that the trial of this action will take something like four to five days. It may take a little less if the prior use issue is shaken out during the course of the pleadings.
The defence also includes a plea at paragraph 13 referring back to paragraph 11 of the Particulars of Claim. The Particulars of Claim at paragraph 11 plead as follows:
"By reason of the facts and matters aforesaid the claimants have suffered loss and damage. Moreover, unless restrained by this honourable court, the defendant threatens and intends to continue the said … whereby the claimants will suffer further loss and damage".
Paragraph 13 of the Defence says,
"Paragraph 11 of the particulars of claim is denied. Further or alternatively, upon the taking of any account or inquiry the defendant will say that prior to around 22 nd December, 2008 it was not aware and had no reasonable grounds for supposing that the patent existed".
This is a defence of innocence which arises under s.62(1) of the Patents Act 1977. That section provides as follows:
"In proceedings for infringement of a patent damages shall not be awarded, and no order shall be made for an account of profits, against a defendant or
defender who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed; and a person shall not be taken to have been so aware or to have had reasonable grounds for so supposing by reason only of the application to a product of the word "patent" or "patented", or any word or words expressing or implying that a patent has been obtained for the product, unless the number
of the patent accompanied the word or words in question".
The application for a preliminary issue is to determine this question of innocence as a preliminary matter. The claimant says it could be dealt with in one day before the summer vacation, whereas the trial is likely to be listed not before December 2011.
The claimants put their case in their skeleton argument to me on the basis that it was a pure point of law. I have to say, when I pre-read these papers, I could not quite understand why that was the case. But in the course of the submissions it emerged how this was being put forward. In order to understand this one needs to see some Further Information which was given by the defendant in September 2010. In September the claimants asked for Further Information from the defendant in relation to various matters. The relevant Request and Response are the following:
"Under para. 13 of the defence of 'Further or alternatively, upon the taking of any account or inquiry the defendant will say that prior to or around 22 nd December, 2008 it was not aware and had no reasonable grounds for supposing that the patent existed.'
Request 3: The defendant is requested to set out all facts and matters relied on in support of the contention that the defendant had no reasonable grounds for supposing that the patent existed.
Response 3: This request is premature and full particulars will be provided on the taking of any account or inquiry upon it if necessary at all. Without prejudice to the generality of the foregoing, the defendant will point to the absence of any marking on the claimants' products of the patent number and the absence of any notification of the patent (prior to the receipt of a letter from the claimants' agents dated 22 December, 2008) in spite of the longstanding contact between the claimants and the defendant and the claimants' knowledge of the defendant's alleged infringing product".
The reason the claimants submitted, at least initially, that this preliminary issue was a pure question of law was because what they had in mind was the following. First they would admit — and I should say that they have not so admitted — that the defendant was not aware that the patent existed as a matter of fact. Second they understood that the only matters which were put forward to satisfy the second limb of s.62, (that the defendant had no reasonable grounds for supposing the patent had existed), were the matters set out in the Further Information. They were first the absence of marking, second the absence of the notification of the patent despite longstanding contact, and third the claimants' knowledge of the defendant's allegedly infringing product. Furthermore, they would admit that it is right that the claimants' products were not marked, that it is right that there was longstanding contact between the parties, and that it is right that the claimants knew about the defendant's alleged infringing of product, although it is fair to say that the question of when that knowledge arose does not seem to have been dealt with. However, it was on the footing, as I understand it, that those factual matters were all going to be admitted that the only question that would arise, say the claimants, is a question of law, namely, that those three matters — the marking, the relationship, and the claimants' knowledge — were not sufficient to satisfy the second limb of s.62.
The claimants rely on the decision of Mr. Justice Neuberger (as he then was) in Steel v. Steel, a decision given on 27 th April, 2001 in the Chancery Division. It appears to be unreported. I was given a copy of that decision. The import of the decision was helpfully summarised in Mr. Davis' skeleton at para. 22. Mr. Mitcheson, I should say, quite rightly took me through the detail, but in the course of doing the detail it became clear that the summary, which I believe Mr. Davis had told me came from a legal textbook, was actually a fair summary. The criteria set out by Mr. Justice Neuberger are as follows:
"(a) whether the determination of the preliminary will dispose of the whole case or at least one aspect of the case;
(b) whether the determination of the preliminary issue will significantly cut down the cost and the time involved in pre-trial preparation and in connection with the trial itself;
(c) if the preliminary issue is an issue of law, the amount of effort involved in identifying the relevant facts for the purposes of the preliminary issue;
(d) if the preliminary issue is an issue of law whether it can be determined on agreed facts. If there are substantial disputes of fact it is unlikely to be safe to determine the legal issue until the facts are found;
(e) whether the determination of the preliminary issue will unreasonably fetter either the parties or the court in achieving a just result;
(f) the risk that an order will increase the costs or delay the trial and the prospects that such an order may assist in settling the dispute;
(g) the more likely it is that the issue will have to be determined by the court, the more appropriate it is to have it determined as a preliminary issue;
(h) the risk that the determination may lose its effect by subsequent amendments and statements of case; and
(i) whether it is just and right to order the determination of the preliminary issue".
I should deal with the primary point that the claimants rely on. They submit that the preliminary issue they propose is likely to be determinative of the action, or, to be exact, the way they put it is "likely to be close to being determinative of the action". The reason for this can be seen from looking at the chronology of events.
2004 is the starting point because that is the beginning of the limitation period running back from the date of the claim form in this case. At that stage the defendant's Original Product appears to have been on sale, but the Limitation Act means that damages could not go back before 2004. In December 2008 the defendant was notified of the existence of the patent by the claimants — or, to be more exact, by their German patent attorneys. In February 2009 the defendants produced a Modified Product. That replaced their Original Product. I did notice that in the claimants' evidence it was suggested that somehow that had been a design around the patent, as if that was some pejorative expression. As the claimants and their attorneys, and the defendants and their attorneys know perfectly well there is nothing wrong with designing round a patent. That is what they are for.
In November 2009 a Further Modified Product was produced. In June 2010 the...
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