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IP Snapshot – July & August by Tom Carver

Every case is interesting to someone and no case is interesting to everyone, and so we provide snapshots of each intellectual property decision reported by bailii.org (British and Irish Legal Information Institute) from the Patents Court (which deals with all registered rights), the Intellectual Property Enterprise Court (for smaller or simpler claims), and the appeal courts, and a contents table so that you can see quickly whether there is anything interesting to you.

InterDigital Technology Corporation & Ors v Lenovo Group Ltd & Ors

This decision relates to the royalties and interest payable under a FRAND licence.

The Court of Appeal dismissed the defendants’ appeal against the judge’s decision that limitation periods are not relevant. An implementer requires a licence from the first day it implements the relevant standard. Allowing the limitation period of six years to apply would encourage implementers to delay seeking licences. For similar reasoning, the Court dismissed the defendants’ appeal against the imposition of compound interest.

The Court allowed the claimants’ appeal, holding that the first instance judgment was internally inconsistent in relation to taking account of discounting royalties for past sales. The judge was very clear that the heavy discounting for past sales which had been forced upon the claimant in their negotiations was not FRAND. However, he then declined to make any correction at all to the blended rate per unit in order to eliminate these non FRAND factors when determining the FRAND rate. One of the Lords Justices commented that a possible explanation for the internal inconsistency might be the long period of time over which the decision had been written, with the hearing in February 2022 and the draft judgment being sent to the parties in March 2023: “The writer’s thinking develops over time but after spending so long with a document, when returning to it after an absence it is very hard, and only human, to fully reabsorb material which has already been finished.”

Lifestyle Equities CV & Ors v Royal County of Berkshire Polo Club Ltd & Ors

The Court of Appeal dismissed the appeal, holding that the judge was correct that the existence of a ‘crowded market’ was relevant to the likelihood of confusion and saying that “…experience shows that third party use of similar signs does tend to diminish the distinctiveness of a trade mark. In a crowded market it is harder for one mark to stand out.” As a connected point, the Court discusses the relevance of the context of use, but notes that the issue is best decided in a case in which it actually matters.

The Court holds that coexistence agreements can be relevant to the assessment of the likelihood of confusion, because they may form part of the factual background against which the court or tribunal must make its assessment and therefore it may be necessary to take any effects they have on the relevant market into account. Even if they have no effect on the market they may give some insight into what market participants consider to be acceptable or unacceptable.

Comptroller General of Patents, Designs and Trade Marks v Emotional Perception AI Ltd

This is the appeal against the somewhat surprising decision by the High Court that the claim to a system containing an artificial neural network (and much other detail) is not a claim to a computer program at all. an artificial neural network (hardware or emulated) does not involve a computer program ‘as such’. The Court of Appeal explained clearly that an ANN is a computer program and therefore the exclusion from patentability of a programme for a computer as such in s.1(2) of the 1977 Act is engaged in this case. A computer programme is a set of instructions for a computer to do something. There is no justification for drawing a distinction in law between instructions created by a computer and those created by a human.

Further, the Court of Appeal found that there is no technical effect claimed by the patent in suit. The programme in this case provides improved file recommendations. What makes the recommended file worth recommending are its semantic qualities which are a matter of aesthetics, and subjective and cognitive in nature. They are not technical and do not turn this into a system which produces a technical effect outside the excluded subject matter.

Pfizer Inc & Anor v Modernatx Inc

This decision is a precursor to the one immediately below, and concerns the effect of Moderna’s pledge not to enforce its COVID-19 patents against others making vaccines intended to combat the pandemic.

The decision turns on the interpretation of the wording of the pledge and the claimant was held to have had non-contractual consent to perform acts that would otherwise infringe the patents in suit between the date of the pledge and the date of a later statement of retraction.

Modernatx Inc v Pfizer Ltd & Ors

This decision deals with the validity of two patents.

The first is held to be valid (and conceded to be infringed), surviving an obvious to try attack based on an exercise that the judge says is one of “blind trial and effort [sic] with no idea of what is likely to succeed or why, uninformed by any concrete expectation of success and without any incentive of some immediate practical application.”.

It was also held to be novel, in agreement with the EPO Opposition Division but in disagreement with the Court of the Hague, over prior art which required a selection from two lists of at least 96 and five long, with the judge explaining that there was no set length of list at which the individual items became individually disclosed, that it is important to have in mind whether the lists are independent or not, and that it all depends on the facts.

The second patent, unusually for a biotech case the two were heard together despite having different CGK, different experts and different legal teams, was found to be obvious to try, based on the factors set out in Actavisv ICOS:

1. whether something was “obvious to try”;
2. the routine nature and/or established practice/s of research;
3. the burden and cost of the research programme;
4. the necessity for and the nature of the value judgments the skilled team would have to make in the course of a testing programme;
5. the existence of multiple or alternative paths of research;
6. the skilled person’s motive;
7. whether the results of research are surprising or unexpected;
8. avoidance of hindsight, particularly if the analysis is approached step-by-step; and
9. whether a feature is a bonus effect or added benefit where the claimed invention is otherwise obvious.

Panasonic Holdings Corporation v Xiaomi Technology UK Ltd & Ors

The defendant in this FRAND litigation applied for and was refused a declaration that the claimant would grant an interim licence to protect it from the effect of a potential injunction granted by the German courts and UPC before the FRAND trial has been heard by the English Court.

The procedural details of offers and counter-offers are substantial, but in summary the defendant failed to show that the declaration sought served a useful purpose (because, inter alia, no injunction was threatened in the UK) and the judge found that the declaration would be an exercise in jurisdictional imperialism.

Hill v Touchlight Genetics Ltd & Ors

This decision relates to the costs order following a two day hearing when the application being heard was withdrawn shortly after the hearing and before judgment was handed down. The defendant/respondent sought to recover all of its costs of the application on the indemnity basis. The indemnity basis means that doubts as to whether an item of cost in question was reasonably incurred or reasonable in amount are resolved in favour of the receiving party, as opposed to in favour of the paying party under the standard basis.

The claimant/applicant sought to limit the costs order only to certain aspects of the hearing (the details of which will go beyond the scope of this snapshot).

The judge ordered that the defendants were entitled to all of their costs but on the standard basis, not the indemnity basis. This is despite the “hard fought” application heard over two days having been wholly abandoned. The judge found that this conduct was not so far out of the norm for complex commercial proceedings that it justified an award of indemnity costs.

Alcatel Lucent SAS v Amazon Digital UK Ltd & Ors

This was a case management decision in which the judge agreed that the trial should be heard on an expedited basis.

Lenovo Group Ltd & Ors v InterDigital Technology Corporation & Ors

The judge granted expedition of the trial, relying on the WL Gore guidelines:

1. Is there good reason for expedition?
2. Will expedition interfere with the good administration of justice – including taking into account the interests of other litigants?
3. Will expedition cause prejudice to the other party?
4. Are there any other special factors?

Lufthansa Technik AG v Astronics Advanced Electronic Systems & Anor

This 61 page judgment deals with the application by the defendants to re-re-Amend its Points of Defence in an enquiry as to damages. The legal principles were not in dispute: the court will refuse permission to amend a case which does not have a real prospect of success.

There was also no dispute as to the legal principles applicable to a late amendment. The key statements relating to the degree of lateness are “… An amendment is late if it could have been advanced earlier, or involves the duplication of cost and effort, or if it requires the resisting party to revisit any of the significant steps in the litigation (such as disclosure or the provision of witness statements and experts’ reports)” and “(b) An amendment can be regarded as ‘very late’ if permission to amend threatens the trial date…”.  The question as to whether amendments should be permitted is to be decided as at the date of the hearing, and not the date on which they were first served or the application for permission made.

The judge held that the disputed amendments were very late and that amending would involve duplication of cost and effort and would threaten the trial date. He refused to grant permission for all save two points.

Samsung Bioepis UK Ltd v Janssen Biotech Inc

The patent was held invalid in this long and technically detailed judgment, the only point of legal interest being that it was held (and agreed by the parties) that the common general knowledge included that a particular compound was in phase III trials for use in a second type of inflammatory bowel disease. Normally common general knowledge is to be found in textbooks, being information that is widely known and that is accepted as a good basis for future action. It is a rare set of facts which mix the phase III trials for a second medical use for a compound common general knowledge.

The patent was held to be invalid over the patentee’s own clinical trial data, but the judge noted that this unfortunate outcome had arisen as a result of the loss of an earlier priority date for the patent.

R2 Semiconductor, Inc v Intel Corporation (UK) Ltd & Anor

The patent was held to be obvious, but infringed if not obvious. There were no disputes as to the law.

The infringement decision was based on some experiments the judge found to be “not a shining example for all to follow”. Notwithstanding that, the construction of the claim was such that the bar for infringement was low, requiring only a modest effect (protecting voltage regulators from voltage spikes) over a period of five years to fall within the scope of the claim.

Motorola Mobility, LLC v Telefonaktiebolaget LM Ericsson (Publ)

The claimant applied for the construction of clause 2.4A of a licence to be tried as a preliminary issue. The checklist for ordering the trial of a preliminary issue is:

1. “First, would the determination of the preliminary issue dispose of the case or at least one aspect of it?
2. Second, would the determination of the preliminary issue significantly cut down the cost and time involved in pre-trial preparation or in connection with the trial itself?  
3. Third, where as here the preliminary issue was one of law the Court should ask itself how much effort would be involved in identifying the relevant facts.
4. Fourth, if the preliminary issue was one of law to what extent was it to be determined on agreed facts?
5. Fifth, where the facts were not agreed the Court should ask itself to what extent that impinged on the value of a preliminary issue.
6. Sixth, would determination of the preliminary issue unreasonably fetter the parties or the Court in achieving a just result?
7. Seventh, was there a risk of the determination of the preliminary issue increasing costs and/or delaying the trial?
8. Eighth, the Court should ask itself to what extent the determination of the preliminary issue may turn out to be irrelevant.
9. Ninth, was there a risk that the determination of the preliminary issue could lead to an application for the pleadings to be amended so as to avoid the consequences of the determination?
10. Tenth, taking into account the previous points, was it just to order a preliminary issue?”

On the facts of the case, the preliminary issue would dispose of a core issue in the case and have a very significant impact on the scope of the trial, while not, on the evidence available at the hearing, having any of the downsides listed in the checklist.

Parsons v Convatec Ltd

This decision was for directions as to the content of the statements of case required for an entitlement dispute, specifically how the invention the subject of the dispute should be identified for s.40(1) Patents Act. Should it be identified by reference to claims in the patent (authorities under s.125 Patents Act being the starting point), or by reference to the invention(s) or inventive concept(s) more broadly (authorities under s.8 being the starting point).

There was no direct authority on the point, Markem Corp v Zipher Ltd being held to be most relevant, and the judge agreed with the claimant that an approach under s.8 is more appropriate, with the claimant in entitlement proceedings not being required to follow a claim-by-claim approach but rather being required to identify by clear reference to specific parts of the relevant patent(s)/application(s), including at least the description and at least one representative claim, the inventions which he says have enabled the defendant to achieve outstanding benefit.

AGARangemaster Group Ltd v UK Innovations Group Ltd & Anor

The decision relating to the company director co-defendant’s liability is the most significant part.  The director was found not liable as a joint tortfeasor on the basis that the relevant facts had not been pleaded and he had not been cross-examined on the matter, and therefore the judge could not find he had the requisite knowledge as to the effect of the corporate defendant’s activities.  This was said to be unsurprising, given that the Supreme Court decision in Lifestyle Equities (reported by us here) had not been handed down, but nevertheless is a reminder that the law on joint tortfeasorship has changed.

The corporate defendant was found to have infringed valid trade marks. The defendant converted fossil fuel AGAs to electric, which is permitted, but their website marketing taken as a whole was found to be likely to give customers the impression that what the defendant offered was an AGA and that there was a commercial connection between the electric system (eControl) being fitted and the claimant.