Patents: Respective Jurisdiction of National Courts and the EPO - ITP SA v Technip Offshore UK Ltd

An interesting case from Scotland on the relationship between national courts and the Boards of Appeal of the European Patent Office was reported yesterday. It came just as I was transposing my case note on the Court of Appeal's judgment in Boston Scientific Limited and Another v Julio C Palmaz and Others [2000] EWCA Civ 83 (20 March 2000) where much the same point had arisen.

In ITP SA v Technip Offshore UK Ltd [2005] ScotCS CSIH_76 (15 Nov 2005) the "pursuer" (what the Scots call a claimant and what we used to call a plaintiff and the Americans and some other folk still do) brought proceedings for the infringement of a European patent. The defenders ("defendants") counterclaimed for revocation of the patent. The "proof" (trial to you and me) lasted three weeks (shades of the trial in Buchananan v Alba Diagnostics where they appear to have conducted experiments in the well of the court). The claim was heard by Lord Nimmo Smith who held on 26 Aug 2005 that the patent was valid and infringed.

While all this was going on in Edinburgh, the defenders had already started opposition proceedings in the European Patent Office and although these failed in the Opposition Division the defenders eventually succeeded before the Board of Appeal. The effect of the successful opposition was, of course, to render the patent void ab initio which meant that the defenders had to be "assoilzied" (lovely word isn't it - I believe it means "exonerated"). At the appeal hearing in Edinburgh, the pursuers argued that the decision in Munich violated their rights under the European Convention of Human Rights but the Inner House (the Lord President, Lord Macfadyen and Sir David Edward, Q.C) wouldn't buy it (see their "opinion" (judgment" of 23 Nov 2004)). As the Lord President pointed out at para [28]

"even if the application were held to be both admissible and well-founded, this would not, of itself, have any effect on the revocation of the pursuers' European patent. The ECHR cannot require the European Patent office to reinstate the pursuers' patent. It might, at most, award monetary compensation for loss of the patent. Whether, and with what effect, any measures might subsequently be introduced to enable the decision of a Board of Appeal to be reviewed cannot, at this stage, be more than a matter for speculation."

Now a three week trial must have cost quite a lot of money and the pursuers argued that having won all the way in Scotland they should be allowed to keep the "expenses" (costs) of the Scottish proceedings. The defenders countered not unreasonably that they had won at the end of the day. The matter came on again before the First Division of the Inner House of the Court of Session and their lordships found again for the defenders. The Lord President put the position very bluntly:

The revocation of the patent by the Board of Appeal provided the defenders with a conclusive answer to the pursuers' action and an unanswerable basis for their counterclaim. In the ordinary course the expenses of the proceedings are awarded in favour of the successful party. Is there any reason why there should be any other result? The pursuers rely on the fact that they were entirely successful before the Lord Ordinary. However, this is not a true situation of divided success. The defenders reclaimed against the merits of the decision of the Lord Ordinary in a number of respects. The grounds of appeal which they tabled for this purpose were not abandoned but, in the unusual circumstances which had occurred, withdrawn and superseded by a new ground founding on the decision of the Board of Appeal. In these circumstances the court is not in a position to say whether the decision of the Lord Ordinary would have been affirmed or reversed. The pursuers chose to raise the action against the defenders - mainly, it seems, with a view to recovering an account of profits - at a time when they knew that the defenders were insisting on challenging the validity of the patent. There is no question of their having been misled by the defenders into raising the action. They took the risk that the action might come to grief if the proceedings in the European Patent Office went against them, as is illustrated by their unsuccessful attempt to obtain the discharge of the proof." (my italics)

Hard not to agree with that. Nowadays, the Scots like the rest of us have the option of an opinion by Peter Hayward of the Patent Office on validity and infringement for £200. They can actually hear how the system works from the man himself if they travel to BPP Law School in Leeds on 24 Nov 2005. That's also the day we the new 24 hours licensing regime comes into effect in England and Wales.