29 May 2009

Patents: TNS Group Holdings Ltd. v Nielsen Media Research Inc

A fascinating little case on judicial discretion.  The claimant in TNS Group Holdings Ltd. v Nielsen Media Research Inc. claimed the revocation of the defendant's patent for a television audience management measurement system. It had also launched opposition proceedings in the European Patent Office under art 99 of the European Patent Convention.   Shortly before the issue of the claim form in the present proceedings the patentee had offered the claimant a licence the terms of which were not disclosed but which are unlikely to have been burdensome.  

The patentee applied to strike out the claim under CPR 3.4, alternatively asking for a stay on the following grounds:
(1) the revocation proceedings were pointless and wasteful and served no commercial purpose in view of the offer of a licence;
(2)   the proceedings had been brought for an improper purpose; and
(3)   the English revocation proceedings duplicated wastefully the opposition proceedings at the EPO.

Mr Justice Arnold accepted that he had power under CPR r. 3.4(2)(b) to strike out a properly constituted claim on the ground that it is an abuse of process in circumstances where it is plain that the litigation is pointless and wasteful and that such power may have been properly exercised in the defamation cases upon which the patentee relied, but in his judgment a case such as the present could not be struck out on that basis:
"In the present case it is not disputed by the defendant that the claimant has a properly constituted and arguable claim for revocation of the patent in suit, nor is it suggested by the defendant that there is anything in the conduct of the present claim for revocation, as opposed to its institution, that amounts to an abuse of process. Given that any person can apply to revoke a patent and that the applicant's motive is irrelevant, in my judgment it follows that it is not an abuse of process to apply to revoke a patent even if, as counsel for the defendant argues, the claimant has no sufficient commercial interest in bringing the present claim. There is no requirement that the claimant should have any commercial interest at all. It is sufficient that the claimant contends that the patent is invalid and should be revoked. The position is different to that in defamation cases because a patent is a monopoly and section 72(1) of the 1977 Act reflects the public interest in ensuring that invalid monopolies are revoked."
The key point lies in the last sentence.    The public has an interest in the dispute.

The "improper purpose" alleged in this case was that a judgment of the English court would be used in litigation elsewhere in Europe.   The judge's answer to that was that:
"it is perfectly legitimate for the claimant to seek to obtain a judgment of this court on the validity of the patent in suit in the hope that it will lead to a settlement of the dispute between the parties throughout Europe. Nor, in my judgment, would it be in any way illegitimate for the claimant, absent such a settlement being achieved, to seek to rely upon the judgment of the English court in proceedings before the courts of other Contracting States or the European Patent Office. It is commonplace for parties litigating on the same European patent in a number of Contracting States to put before the courts of one Contracting State decisions arrived at in one or more other Contracting States. I do not see that such conduct can possibly be stigmatised as an abuse of process. That is particularly so given that such judgments may come to the attention of courts in other Contracting States in any event. The courts of all the Contracting States are seeking to apply the same substantive law. It would be most unfortunate if anything were to be done which made it more difficult for the courts of the Contracting States to arrive at common answers to common questions."
As to the third point on costs, he agreed that the point was well made but looking at matters in the round, Mr Justice Arnold concluded that the present case was not one in which he should exercise his discretion to grant a stay.

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