The Community Patent is Dead - Long Live the Unitary Patent

Despite such setbacks as the decision of the Court of Justice of the European Union on the incompatibility of the proposed European Patents Court with EU Law and the objections of the Italian and Spanish governments to an EU patent (see my case note on the CJEU's decision), the European Commission has proposed two regulations for a single European patent for the other 25 member states (see the press release "Commission proposes unitary patent protection to boost research and innovation" 1P/11/470).

The first proposed regulation would be for enhanced co-operation in the area of the creation of unitary patent protection. The second would be for translation requirements. The combined effect of those regulations would reduce the cost of patenting in the participating member states (which would include the UK, Germany and France) by 80%. Under the proposals applicants could apply to the European Patent Office for a European patent that would designate all the member states of the EU less Italy and Spain as a single territory for a single fee. The obvious saving lies in translation as the EPO operates only in English, French and German. Inventors and other applicants could file their applications in any language but they would have to lodge a translation of the specification in one of the EPO's three official languages and a translation of the claims in each of the other two.

The big lacuna in the Commission's proposal lies in enforcement. Clearly there is no point in having a unitary patent if it has to be enforced separately in each of the member states. The obvious solution would be a single EU patents court but, as I have already said, the previous proposals have been held to be invalid by the CJEU. According to the accompanying FAQ, "the Commission is in the process of analysing the opinion and considering ways to address the Court's concerns."

A single patent for the whole of the EU has been under negotiation for the over 40 years. It is undoubtedly in the interests of European industry and particularly private inventors, start-ups and other small and medium enterprises. I have followed every initiative from the ill fated Community Patent Convention to the attempt to revive the Community patent by means of a regulation in 1997 and, most recently, the proposed unitary patent for the member states less Spain and Italy and I shall continue to do so. If anyone wants to discuss the latest initiative they can do so by calling me on 0800 862 0055 or getting in touch through my contact form.

Patents County Court: £500,000 Financial Limit

The recommendation of the Intellectual Property Court Users' Committee that was not implemented on 1 Oct 2010 when the New Patents County Court Rules came into effect was a £500,000 limit to claims. The reason for the late implementation of that proposal is that it had a mixed reception. According to the Committee

"Some approved of the Working Group’s proposal. Some thought that there should be a higher limit. Some thought that there should be a limit not on the damages or profits claimed, but on the value of the claim as a whole e.g. by reference to the annual sales, or projected sales, of products protected by the IP right (i.e. total sales made by the right owner, its licensee and/or the alleged infringer). Some thought that there should no limit."

Although there was no official limit to the value of a claim that could be brought in the Patents County Court, Judge Birss QC certainly took the value of the claim into account when he transferred Alk-Abello v Meridian Medical [2010] EWPCC 14 to the High Court on 9 Nov 2010 (see my case note of 9 Nov 2010).

Immediately after Alk-Abello the Intellectual Property Office carried out a consultation on setting a financial limit which I also blogged ("Settling the Limit on the Value of Claims Heard in the Patents County Court" (10 Nov 2010)). As a result of the consultation we now have a draft statutory instrument that sets a £500,000 limit (The Patents County Court (Financial Limits Order 2011). Art 2 (1) of the draft Order provides:

"In relation to all proceedings within the special jurisdiction of a patents county court and in which a claim is made for damages or an account of profits, the amount or value of that claim shall not exceed £500,000."

Art 2 (2) excludes from the value of the claim interest other than that payable under an agreement and costs.

There are also to be transitional measures in art 3 to cover claims that exceed that amount brought or transferred before these rules come into force. That date is likely to be 14 June 2011.

Anyone who wants to discuss this draft statutory instrument or intellectual property litigation generally can call me on 0800 862 0055 or through my contact form.

Practice: Media CAT v Adams and Others - The End

After the party comes the bill. In this final episode of the Media CAT saga (Media CAT v Adams No, 4 [2011] EPC 10) His Honour Judge Birss QC decided who was to pay for episodes 1, 2 and 3. Or, to be more accurate, whether the solicitors who brought this litigation and their principal Andrew Crossley, should pay for them under s.51 (6) of the Senior Courts Act 1981,

This sub-section provides:

"In any proceedings mentioned in subsection (1), the court may disallow, or (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with rules of court."

The proceedings mentioned in s.51 (1) are proceedings in the Civil Division of the Court of Appeal, the High Court and any county court. Wasted costs are defined by s.51 (7) as "any costs incurred by a party—

(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative; or

(b) which, in the light of any such act or omission occurring after they were incurred, the court considers it is unreasonable to expect that party to pay."

The relevant rules of court are now CPR 48.7 and Section 53 of the Costs Practice Direction.

As I said in my article on the New Patents County Court Rules,

"CPR 45.42 provides that unless a party has behaved unreasonably the maximum costs that can be awarded against him are:

(a) £50,000 on the final determination of a claim in relation to liability; and

(b) £25,000 on an inquiry as to damages or an account of profits."

In a short extempore judgment which, unfortunately, has not been reported, Judge Birss QC removed those limits on 16 March 2011.

After considering the rule. practice and case law, the judge directed himself that the wasted costs jurisdiction was a "narrowly confined procedure and the court should concern itself with specific areas of costs specifically wasted by the specific improper/unreasonable or negligent conduct in the context of the litigation" [para [28]]." He therefore limited himself to the following issues:

(1) hopeless claim;

(2) champerty;

(3) failure to join the copyright issues;

(4) the Norwich Pharmacal orders;

(5) the letter of claim;

(6) negligent correspondence;

(7) £3,000 damages limit; and

(8) abuse of process by the attempt to avoid judicial scrutiny by discontinuing the proceedings.

The judge considered each of those issues individually applying the two-stage merits and proportionality test set out in the Practice Direction. He found that only champerty - that is to say the revenue sharing agreement between ACS and Media CAT - and the attempted discontinuance merited a wasted costs order.

Orders of this kind are very difficult to get and I have only once succeeded in obtaining one. That was from the Vice-Chancellor of the County Palatine of Lancaster in the days when legal aid was available for commercial litigation. My clients were the majority shareholders of a theatrical agency who had appointed the respondents as directors of their company. For one reason or another they decided to remove the directors but before they could do so the directors managed to persuade a s.9 judge in Manchester to grant them an ex parte interim injunction. The order was a nonsense on several grounds. No undertaking as to damages had been offered and there had been an obvious failure to disclose all material facts. I applied to the judge who had made the order to discharge it but he was unable to hear me because he was busy with another case. So I applied to Mr Justice Lightman in London to hear it instead. The judge discharged the order and awarded me indemnity costs but as my clients owned the shares of the company the effect of the order was that they would end up paying the Legal Aid Board. So I had to apply for wasted costs against the solicitors and the very inexperienced junior barrister who had made the ex parte application. At the hearing in Newcastle, the Vice-Chancellor ordered the solicitors and barrister to pay those wasted costs.

Patents: Merck Sharp & Dohme Corp v Teva UK Ltd

In my article "Divided by a common language: US and UK patent law" which was published in Science, People & Politics (April to June 2011) I noted that one of the differences between US and UK patent law was that 35 USC 102 (b) of the US act permits an application for a US patent even where the invention has been described in a publication or application for a foreign patent that has been made in the last 12 months. In England such publication would be prior art. Right on cue a case that illustrates the point is the decision of the Court of Appeal in Merck Sharp & Dohme Corp. v Teva UK Ltd. [2011] EWCA 382.

This appeal from the decision of Mr. Justice Floyd in Teva UK Ltd v Merck & Co, Inc [2009] EWHC 2952 (Pat) (20 Nov 2009). [2010] FSR 17 was in respect of an application by Teva UK Ltd. ("Teva") for the revocation of Merck Sharp & Dohme Corp ("Merck")'s European patent no. 0509752 on grounds of obviousness. The patent in suit was for "ophthalmic compositions comprising combinations of [MK 507] and [timolol]" for the treatment of glaucoma which had been filed on 17 April 1991. Six days earlier one George Nardin and other representatives of Merck had published a paper in the attendees' materials for the annual meeting of the Association for Research in Vision and Opthalmology in Sarasota, Florida that related to the additive effect in reducing IOP [intraocular pressure] of administering an eye-drop including 2% of a drug then known as MK 507 some ten minutes after the administration of an eye-drop containing 0.5% of a drug called timolol. The paper suggested, on the basis of experimental tests carried out on humans over a period of 8 days, that such consecutive administration improved reduction of intraocular pressure (that is to say, glaucoma) by about 17%. Teva had argued successfully before Mr. Justice Floyd that the invention was obvious in view of the conference paper.

At trial, Merck had applied to amend its patent to meet Teva's objections but the judge took the view that the patent would be invalid even if it was amended in the way proposed by the patentee. Merck applied for permission to appeal against the trial judge's finding of obviousness in respect of one of the proposed amended claims. The Court of Appeal allowed Merck to appeal on the following ground:

"Further the learned judge failed to deal adequately or at all with [Merck]'s case that the step by step project proposed by [Teva] as the obvious way forward would not arrive at a formulation with the features called for by the independently valid claims, even if it was not abandoned outright. In particular the learned judge addressed the possibility that the skilled person would abandon the project but he failed to consider the impact on the later steps in [Teva]'s step by step approach of the outcomes of the tests [Teva] contended would be performed at earlier steps. [Teva] needed to establish that the outcome of its step by step approach would be a formulation formulated at a pH range of 5.5-6.0 required by proposed amended claim 18 and (or) with the amounts of the two drugs such that the concentrations fell within the scope of the claims, and in particular claim 6. [Teva] failed to do so. Although the judge expressed the conclusion that the use of a formulation within claim 6 does not involve an inventive step his reasoning does not adequately support that conclusion. The correct conclusion is that the claims are not obvious on this basis."

As the Court had refused permission to appeal on other grounds the only issue before their lordships (Sir Andrew Morritt, the Chancellor of the High Court and Lord Justices Richards and Patten) was "whether Teva had established that the outcome of its step by step approach would be a formulation of timolol and dorzolamide in the proportions specified in claim 6 at a pH range of 5.5-6.0 as required by proposed amended claim 18."

The crux of Merck's argument was that a skilled addressee could not possibly have come up with the patented invention within the 6 days between the publication of the conference paper and the application for the European patent. The Court of Appeal rejected that submission on the ground that neither the test for want of novelty nor the test for obviousness imposed a minimum time limit between the publication of the invalidating matter and the patent application. As the Chancellor put it at paragraph [36]:

"There is no additional time requirement in that case either. If by reference to the relevant state of the art the invention is obvious then it matters not that it may take time to perform the necessary routine tests. It is a matter of simple comparison between the relevant art and the claimed invention."

The trial judge had applied the correct test of obviousness referring to Hallen v Brabantia [1989] RPC 307; St Gobain v Fusion Provida [2005] EWCA Civ 177, Conor v Angiotech [2008] RPC 28, [2008] UKHL 49 and Pozzoli v BDMO [2007] EWCA 588, [2007] FSR 37. His approach to this case could not be faulted.

Since the leading judgment was delivered by the Chancellor, I should like to add that Sir Andrew Morritt is a lovely tribunal. I remember appearing before him in Newcastle once when he was Vice-Chancellor of the County Palatine of Lancaster. I had settled a rather iffy passing off or breach of confidence action with one of the local silks and the terms of settlement required a mention to the court. Knowing that he had a very heavy list I opened with the words "I regret that I have to inform your lordship"....... his face dropped, " ...... that my lord will be deprived of the pleasure of deciding a most interesting point of law". Beaming again, he replied "I'm sure we can live with that."

WIPO Day Road Show

“Designing the Future” is the theme of this year’s World Intellectual Property Day 2011. In his message, Francis Gurry, the Director General of the WIPO, said:

“Design touches every aspect of human creativity. It shapes the things we appreciate from traditional crafts to consumer electronics; from buildings and bicycles to fashion and furniture. Design has been called “intelligence made visible”.

Design is where form meets function. It determines the look and feel of the products we use each day – from everyday household items to the latest tablet computers. Design marries the practical with the pleasing. It brings style to innovation.”

In everyday language design can refer either to an object’s appearance or to the way it works. Thus, we speak of “fashion design” and “engine design”. The former is ornamental and the latter functional.

Most countries protect ornamental design by one means or another. For example, EU member states are required by art 3 (1) of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs to protect by registrations designs that are new and have individual character. In the USA, patents known as “design patents” are available for new, original and ornamental designs for articles of manufacture under 35 USC 171. In the UK we protect new designs having individual character by registration in compliance with the Directive, but we also protect functional designs by an intellectual property right that is almost unique to this country known as unregistered design right. Superimposed on our national design law is EU or Community design law which provides a system of design registration for new designs having individual character known as registered Community designs and automatic short term protection against copying for designs that could be registered known as unregistered Community design. Design right protects the shape or configuration of articles or parts of articles including components and even features that cannot be discerned by the human eye. However, surface decoration is specifically excluded from design right protections. Thus, such things as the design of fabrics and wall coverings can be protected by artistic copyright, design registration or possibly even as unregistered Community designs.

Confused? “You should be” as they used to say on Soap. I shall try to demystify design law in a quick presentation consisting of me, Peter Groves and A N. Other. Together we will present a whistle-stop road show around Yorkshire to celebrate World Intellectual Property Day on 26 April. We shall visit Leeds, Bradford and Sheffield at 10:00, 14:00 and 18:00 respectively. As Peter has just published his excellent Dictionary of Intellectual Property Law there may even be the odd Fat Rascal or samosa washed down by Black Sheep or sweet lassi. Gradely!

If you want to learn more about this intellectual feast contact me on 0800 862 0055 or fill in my contact form. If you are interested in intellectual property in Yorkshire generally you can also follow my IP Yorkshire blog.

Patents: Schütz (UK) Ltd v Werit (UK) Ltd

The main point of Schütz (UK) Ltd v Werit (UK) Ltd [2011] EWCA Civ 303 (29 March 2011) was whether a patent for an intermediate bulk carrier - essentially a large plastic bottle tightly encased in a tight metal cage constructed from tubes flattened at each join - could be infringed by inserting the bottle into a cage constructed from differently connected members.

The relevant claim was as follows:

"Pallet container for the transporting and storing of liquids, having a flat pallet, an exchangeable inner container made of plastic material with an upper, closable filler opening and a lower emptying device and also, surrounding the inner container, one outer sleeve which consists of vertical and horizontal lattice bars made of metal which support the plastic inner container filled with liquid ..."

There was nothing special about the pallet or the bottle. The photo shown above is not a picture of the patented invention but of the prior art. Lord Justice Jacob inserted that picture into his judgment to give readers some idea of how the invention worked and the issue that the Court had to decide. The reason for the litigation was that the frames wore out or otherwise needed to be replaced much sooner than the bottles and there was demand for reconditioned frames.

The question boiled down to whether the substitution of the defendant's frame for the claimant's constituted making the invention within the meaning of s.60 (1) of the Patents Act 1977 and thus an infringement or a repair which is impliedly licensed. Both sides relied on United Wire Limited v. Screen Repair Services (Scotland) Limited and Others [2000] UKHL 42, [2000] 4 All ER 353, [2001], RPC 24 (20th July, 2000). At first instance, the judge had interpreted that case as requiring the court to identify the inventive concept of the invention - a term that is used in determining obviousness (see Pozzoli SpA v BDMA SA and Another [2007] EWCA Civ 588, [2007] FSR 37). He identified the cage as the inventive concept which led him inevitably to the conclusion that there was no infringement since the defendant's cage fell outside the patent. After analyzing thoroughly the speeches in the United Wire appeal and other cases the Court of Appeal rejected that test. Lord Justice Jacob concluded at paragraph [90]:

"It suffices to say that [the intermediary], when it fits [the claimant's] bottles into [the defendant's] cages, is making [the patented product] which fall within the Patent and are doing so without the licence of [the claimant]. That they themselves on their own website say they are "re-manufacturing" says it all."

That seems to suggest that there is no general approach and that each case is to be determined according to its own circumstances. The tribunal looks at what the claim says and then considers whether the defendant's product falls into it. It is not too far removed from the old rule that one should construe the patent as though the defendant had never been born.