Xena Systems Ltd v Cantideck and Another
Jurisdiction | England & Wales |
Judge | His Honour Judge Birss QC,HIS HONOUR JUDGE BIRSS QC |
Judgment Date | 18 January 2013 |
Neutral Citation | [2013] EWPCC 1 |
Docket Number | Case No: 1CL70035 |
Court | Patents County Court |
Date | 18 January 2013 |
[2013] EWPCC 1
IN THE PATENTS COUNTY COURT
Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
His Honour Judge Birss QC
Case No: 1CL70035
Hugo Cuddigan (instructed by DMH Stallard LLP) for the Claimant
James Abrahams (instructed by Arnold & Porter (UK) LLP) for the Defendant
Hearing dates: 9th, 12th November 2012
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.
Contents
Topic | Paragraph |
Introduction | 1 |
The heads of damage claimed | 21 |
The issues | 39 |
The law | 41 |
The witnesses | 51 |
Discussion | 72 |
(1) Are non-infringing rolling platforms substitutable for Patented Platforms? | 73 |
(2) What would hire customers of infringing platforms have done if they could not have hired infringing platforms from Cantideck? | 77 |
(3) What would customers purchasing infringing platforms from Cantideck have done if they could not have purchased infringing platforms from Cantideck? | 86 |
(4) Did Cantideck's hire of infringing platforms cause Xena to lose hires of fixed platforms? | 93 |
(5) Would Xena have been able to supply all of Cantideck's customers throughout the infringing period? | 100 |
(6) What would Xena have charged Cantideck's customers for platform hire if they had gone to Xena? | 102 |
(7) What additional costs would Xena have incurred if they had hired platforms to Cantideck's customers? | 103 |
(8) Can Xena claim for services provided to Cantideck's customers if they had gone to Xena? | 106 |
(9) What additional costs would Xena have incurred if they had provided additional services to Cantideck's customers? | 108 |
(10) What is the appropriate notional royalty on Cantideck's infringing sales/hires that would not have gone to Xena? | 109 |
(11) Calculation issues | 110 |
(12) Did Cantideck knowingly infringe the Patent? | 111 |
(13) Was Mintz Levin's letter of 4 June 2008 a deliberate attempt to mislead Xena? | 112 |
(14) Was Arnold & Porter's letter of 8 December 2010 a deliberate attempt to mislead Xena? | 113 |
(15) Should Cantideck pay Xena all its "unfair profits" and further damages for "moral prejudice"? | 114 |
(16) What is the appropriate rate of interest? | 115 |
(17) How should interest be applied? | 117 |
Heads of damages —calculations | 120 |
Conclusion | 121 |
Introduction
This is an inquiry into damages for patent infringement. Mr Hugo Cuddigan appears for the claimant (Xena) instructed by DMH Stallard. Mr James Abrahams appears for the defendants instructed by Arnold & Porter.
Xena owns European Patent (UK) No. 1 392 939 ("Rolling platform"). The invention is a kind of loading platform used in the construction industry. In the process of constructing a large building, loading platforms are installed temporarily in order to allow materials to be loaded on and off by crane. In the past this job was done by scaffolding but by the early 2000s dedicated loading platforms were in use. One kind of platform is a "fixed" platform. A fixed platform is little more than an open topped metal box which is fitted into the open side of a building with a part sticking out beyond the side of the building to allow access by the crane. A "rolling" platform is different because it rolls in and out of the side of the building. Both fixed and rolling platforms can be used alone or in groups. A group of rolling platforms can be installed one above the other up the side of a building. The units can be rolled in and out like a chest of drawers. Obviously a group of fixed platforms cannot be installed that way since the higher platforms would impede access to the lower ones.
The invention is an improved kind of rolling platform. One of the debates in this case related to the advantages of the invention and I will deal with that in context below.
The patent application was filed on 24 th May 2002 claiming priority from 25 th May 2001. It was granted on 21 st June 2006.
In 2006 Xena was the market leader in loading platforms in the UK. It hired out both fixed and rolling platforms. The rolling platforms were in accordance with the patent.
There was a single competitor in relation to rolling platforms, a company called Cranetech. Cranetech offered two kinds of rolling platforms over time, neither of which was covered by the patent. Initially Cranetech made and sold its own product, called Rollerdeck. The last three Rollerdecks were sold in early 2006. Then Cranetech started selling and hiring an Australian made rolling platform called Superdeck. This began in August 2006 and continued throughout 2007. The extent of Cranetech's impact on the market is an issue to be addressed below.
Both defendants are unlimited companies run by the Critchley family. The second defendant, Conquip, was by 2006 an established company in the construction industry selling and hiring equipment to contractors. In 2006 it decided to enter the market for loading platforms and set up Cantideck as a vehicle for that business. Conquip bought a rolling platform from Xena. Xena did not normally sell rolling platforms but made an exception in this case because the terms of the sale were that the platform would be exported and would not come back into the UK. Conquip (or Cantideck, the distinction does not matter for this purpose) sent the rolling platform to a German company (Florian Eichinger GmbH) and asked them to copy it. Eichinger made copies of the platform and shipped them back to the UK. Cantideck started hiring and selling the platforms to customers. Since they were copies of the Xena platforms, just as the Xena platforms fell within the scope of the patent, so the Cantideck platforms infringed the patent. Cantideck also dealt in fixed platforms.
On 5th July 2006 David Brown, then MD of Xena emailed Rob Critchley, Operations Director of Conquip. Xena thought that Conquip had hired a Xena platform for use on a UK site (to a customer called Getjar). The email states that this was regarded as a serious breach of contract. The email also states that Xena understood that Conquip were actively marketing Xena's platform for sale or hire and states "as you are aware we hold the patent for this equipment". The email ends by requiring Conquip to cease using all Xena products. Rob Critchley's reply states that Conquip do not sell or hire Xena platforms in the UK and states that the product they distribute was made in Germany. Mr Brown replied, still on 5 th July, that the platform was an exact copy of the Xena unit and is in contravention of Xena's patent. Mr Brown asked for the identity of the manufacturer and warned Rob Critchley that Xena took this seriously and would take "all necessary steps" regarding patent infringement. There was no reply to this email. On 4 th December 2006 Mr Brown sent another email to Rob Critchley, pointing out that the manufacturer had not been identified, stating that Xena regarded Conquip as acting in breach of contract and in infringement of the patent, and stating that solicitors had been instructed.
On 16 th February 2007 Cantideck's patent attorneys Mintz Levin wrote to Xena about the patent. The letter asserts that until December 2006 Cantideck had been unaware of the patent. The letter also states that Cantideck believes the patent is invalid and will file an opposition against it at the European Patent Office before 21 st March 2007, when the nine month opposition period expires. The letter ends by stating that Cantideck has decided to modify its rolling platforms in a particular way and that Mintz Levin has advised that the modified platforms would not infringe the patent.
In May 2007 Simon Constantine, the Chairman of Xena arranged a meeting with Andrew Critchley, Managing Director of Conquip and Robert Critchley at the defendants' site. Mr Constantine noticed there were 20 rolling platforms on site. The Critchleys denied that their platform infringed the patent and stated they would invalidate the patent at the EPO. They also denied any knowledge of copying of the Xena platform by the company they claimed had made their platforms, which they said was a Czech company. Mr Constantine's view later was that this statement about the Czech company was a careful play on words because it was true that after the initial stock produced by Eichinger, later platforms were indeed made by a Czech company for Cantideck. Although Eichinger directly copied the Xena platform, the Czechs had not been given the Xena platform to copy directly, they had copied Eichinger's platform.
Later in 2007 Cantideck started modifying their stock of rolling platforms. The modifications were similar to but not the same as the one proposed in the March 2007 Mintz Levin letter.
On 12th May 2008 Xena wrote to a contractor called Ardmore Construction stating that a rolling platform it had purchased was an infringement of the patent. The platform was in fact a modified Cantideck platform. On 4 th June 2008 Mintz Levin wrote to Xena stating that the letter to Ardmore was a groundless threat of infringement proceedings. The threat was groundless because the platforms did not infringe. Mintz Levin accused Xena of deliberately misleading Cantideck's customers and demanded undertakings from Xena not to make threats of patent infringement. Xena says that the Mintz Levin letter itself was misleading because although the modified platforms did not infringe, the letter takes no account of the fact that Cantideck had indeed been infringing in the past.
Xena's patent attorneys replied on 18 th June and...
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