12 October 2015

Civil Restraint Orders in IPEC: Perry v Brundle

CPR 3.11 provides:
"A practice direction may set out –
(a) the circumstances in which the court has the power to make a civil restraint order against a party to proceedings;
(b) the procedure where a party applies for a civil restraint order against another party; and
(c) the consequences of the court making a civil restraint order."
Neither the rule nor the glossary defines "civil restraint orders" but para 1 of Practice Direction 3C - Civil Restraint Orders refers to limited civil restraint orders, extended civil restraint orders and general civil restraint orders. Those orders restrict the proceedings that can be issued, and the applications that can be made, by the person against whom they are issued without the permission of the court.

Para 3.2 (1) of the Practice Direction provides:
"Unless the court otherwise orders, where the court makes an extended civil restraint order, the party against whom the order is made –
(1) will be restrained from issuing claims or making applications in –
(a) any court if the order has been made by a judge of the Court of Appeal;
(b) the High Court or the County Court if the order has been made by a judge of the High Court; or
(c) the County Court identified in the order if the order has been made by a designated civil judge or their appointed deputy, concerning any matter involving or relating to or touching upon or leading to the proceedings in which the order is made without first obtaining the permission of a judge identified in the order;"
This case note discusses the power of a judge of the Intellectual Property Enterprise Court to make an extended civil restraint order under para 3.2 (1) (b).

In FH Brundle (A Private Unlimited Company) v Perry [2014] EWHC 475 (IPEC) one Richard Perry was sued for groundless threats. Mr. Perry counterclaimed for patent infringemenet. The action and counterlaim came on before His Honour Judge Hacon who concluded at paragraphs [81] and [82] that Mr Perry had no defence to the threats action and that his claim for infringement failed.  In FH Brundle (A Private Unlimited Company) v Perry (No 2) [2014] EWHC 979 (IPEC), [2014] 4 Costs LO 576 the judge awarded costs of £49,645 against Mr Perry. Mr Perry was unable to pay that sum and was adjudged bankrupt on 30 April 2015. He appealed unsuccessfully against his bankruptcy and also applied for permission to remain a company director notwithstanding his bankruptcy. Both of those proceedings failed

In Perry v F H Brundle and Others [2015] EWHC 2737 (IPEC) (2 Oct 2015) Mr Perry sued the claimant and the defendants to his counterclaim in the previous litigation for patent infringement notwithstanding his bankruptcy. The defendants applied for Mr Perry's claim to be struck out.  At the hearing of the defendants' application, Mr Perry made the following additional applications:
"The first was to add two defendants and a further complaint of "theft" of UK Patent No. 2 401 616 and a complaint of fraud. The second was to amend the (already lengthy) Particulars of Claim "based on new evidence, criminal activity of the defendants and legal advice". The third was to lift the damages cap in these proceedings. The fourth was to add the Defendants' solicitors, Collyer Bristow LLP, as a defendant "for colluding to conceal criminal activity and breach of their practice licence in bringing malicious prosecutions to help other defendants conceal criminal activity."
Not surprisingly, the judge dismissed the applications and struck out the action on the ground that Mr Perry's the right to bring proceedings vested in his trustee in bankrutcy and that in any case the action was res judicata.  

It is worth noting that in all those proceedings Mr Perry acted in person. His opponents on the other hand were represented throughout by patent counsel.

Having succeeded in striking out Mr Perry's claim the defendants applied for an extended or, in the alternative, limited civil restraint order. As para 2.1 of the Practice Direction provides that a judge of any court may make a limited civil restraint order which has the effect of limiting the applications that the litigant against whom the order is made can bring in the proceedings in respect of which the application is made without the leave of the court it was clear that Judge Hacon could make a limited civil restraint order. However it was less clear whether he had jurisdiction to make an extended order as a s.9 judge sitting in IPEC. The learned judge decided that he did as extended civil restraint orders had previously been made by deputy judges and IPEC had been designed as a specialist list of the High Court in 2013 (see para 1 of my article What does the Intellectual Property Enterprise Court mean for Litigants in the North West? of 12 Oct 2013 in IP North West).

The law on extended civil restrain orders had been considered by Edward Bartley Jones QC in  Courtman v Ludlam and Another [2009] EWHC 2067 (Ch), [2010] BPIR 98 where he had considered the previous case law. From those cases, Judge Hacon drew the following principles at para [27]:
"(1) When considering the appropriate order in relation to an application for a CRO, the court should engage in a graduated and proportionate response to the identified abuse.
(2) Where the application is for an extended CRO, the litigant against whom the order is sought must have made a minimum of three claims or applications which were totally without merit in order to be taken to have 'persistently' issued such claims or applications within the meaning of paragraph 3.1 of PD3C.
(3) Subject to that minimum, the persistence of the litigant in issuing such claims, in particular the likelihood that such persistence will be maintained in the future, is to be assessed by reference to his conduct as a whole.
(4) The categorisation of a claim or application as being totally without merit need not have been done at the time they were made; the court hearing the application for the CRO is entitled retrospectively to adjudge a claim or application to be totally without merit."
Taking Mr Perry's bankruptcy appeal and company application into account as well as his unsuccessful patent action there was no doubt that the second criterion had been met. The only question was Mr Perry's persistence in making claims and whether he was likely to renew such claims in the future. Apparently Mr Perry had appeared "reassuringly restrained" in court but had behaved quite differently outside. The judge concluded at para [34]:
"In my view there is a very real prospect that notwithstanding Mr Perry's calm and measured submissions in court, his sense of injustice will shortly be rekindled and that this will lead to further hopeless claims and/or applications. A limited CRO would not be sufficient because such claims and applications will probably be made wholly or in part outside these proceedings. I also accept Mr Baran's submission that Mr Perry's applications have necessitated the expenditure of considerable sums by the Defendants which are unlikely to be recovered and that if Mr Perry is left alone the pattern of wasted expenditure will continue."
He therefore made an extended civil restraint order against Mr Perry.

Although everything that Judge Hacon said at para [34] was no doubt true it is hard not to feel sorry for Mr Perry. Everybody who practises intellectual property law has met inventors with a keen sense of injustice who are driven to do very imprudent things. Mr Perry's troubles started when he sent a threatening letter to FH Brundle and the other fencing manufacturers. Had he consulted specialist solicitors, patent attorney litigators or counsel under the public access rules he would have been warned against such action. This all arises from the abolition of civil legal aid for business disputes by the so called Access to Justice Act 1999. It is good that the Agreement on a Unified Patent Court provides for legal aid in proceedings before the Unified Patent Court under art 71.

Should anyone wish to discuss this case note or patent litigation in general, he or she should call me on 020 7404 5252 during office hours or send me a message through my contact form.

08 October 2015

Summary Judgment in Patent Cases: Fontem Holdings 1BV and Another v Ten Motives Ltd and Others

In Fontem Holdings 1BV and Another v Ten Motives Ltd and Others [2015] EWHC 2752 (Pat) Mr Justice Norris set out his reasons for dismissing on 21 July 2015 the defendants' application under CPR Part 24 to dismiss the claims against them for patent infringement or, alternatively, a stay in the proceedings pending the disposal of opposition proceedings in the European Patent Office in respect of the patent under art 99 of the European Parent Convention.

The patent in suit was European Patent (UK) No. 2 022 349 B1 for an aerosol electronic cigarette.  Claim 1 of the patent was for
"An aerosol electronic cigarette comprising a battery assembly, an atomizer assembly, a liquid storage component (9) and a hollow shell (a, b) having one or more through-air-inlets (al); wherein the battery assembly connects electrically with the atomizer assembly, and both are located in the shell (a, b); the atomizer assembly includes a porous component (81) and a heating body in the form of a heating wire (83); characterised in that the atomizer assembly includes a support member (82) having a run-through hole (821); the porous component (81) is mounted on the support member (82) and is wound with the heating wire (83) in a part that is on the side in the axial direction of the run-through hole (821); and the liquid storage component fits with the porous component of the atomizer assembly and is located in one end of the shell (b) which is detachable."
The claimants complained that the defendants' Cirro and V2 Rechargeable products infringed that claim.

The defendants submitted:
"a) That neither the Cirro nor the V2 products infringed Claim 1 because they divided into a battery assembly on the one hand and an atomiser and liquid storage assembly on the other, whereas Claim 1 contemplated a different sort of "detachability" ("the detachability point");
b) That the Cirro products did not infringe Claim 1 because they did not utilise a shell with a liquid storage part within the shell ("the liquid storage point"), it being accepted for the purposes of the application that it was arguable that the wadding in the brown barrel of the V2 "cartomiser" was a method of liquid storage located in a shell."
The judge was unconvinced. In his view the claim was capable of more than one construction and the claimants indicated that they intended to adduce expert evidence as to how the specification would be read by a skilled addressee.

In considering whether there should be a stay his lordship referred to IPcom GmbH & Co Kg v HTC Europe Co Ltd and Othes [2013] EWCA Civ 1496, [2014] Bus LR 187, [2013] WLR(D) 456, [2014] RPC 12 where the Court of Appeal decided that a judge's "discretion to grant a stay must be exercised to achieve a balance of justice between the parties having regard to all the relevant circumstances of the particular case." Having regard to such factors as the delay and the likely commercial disadvantage to the claimants if a stay were allowed Mr Justice Norris decided not to grant the application.

There are two interesting points from this case. The first is that the judge approved Mr Justice Lewison's dicta in  Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) that
"it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it."
but was mindful of Lord Justice Floyd's observation in  Nampak Plastics Europe Ltd v Alpla UK Ltd [2014] EWCA Civ 1293 that patent claims have to be construed from the perspective of the skilled addressee upon which the judge may require expert evidence. The second point is that Mr Justice Norris took account of very much the same factors he would have considered in determining the balance of convenience in an interim injunction application.

Should anyone wish to discuss this case he or she should call me on 020 7404 5252 or use my contact form.

    05 October 2015

    Cross Border Litigation: Tech 21 UK Ltd v Logitech Europe SA

    Logitech Europe SA is a Swiss company which makes a protective case for iPads called "Big Bang". This YouTube video shows how it works. Tech21 is a British company on Eel Pie Island which is not far from where I grew up which makes something very similar called an "Impact Folio". Here's their video. Spot the difference if you can.

    Between Jan 2013 and Jan 2014 the two companies tried to work together to develop a range of cases to be sold by Logitech but they fell out. Shortly afterwards Logitech started to sell Big Bangs and Tech21 Impact Folios. On 10 Sept 2014 Tech21 received the following letter from Jonas Rechtsanwaltsgesellschaft mbH of Cologne in the Federal Republic of Germany:
    "We are representing our client Logitech Europe S.A., Daniel Borel Innovation Center, CH-1015 Lausanne, Switzerland in matters of Intellectual Property.
    We have been informed that you entered into a manufacturing and sales agreement with our client dated October 11, 2013 that covers inter alia the development, manufacturing and sale of tablet products for and to our client. You were asked to develop for manufacturing the products based on our client's designs that were presented to you by Logitech and by Design Partners, a partner company of our client. Furthermore it was agreed that our client will maintain exclusive ownership rights to the design and product intellectual property. Moreover, you have undertaken not to take our client's designs, IP and/or discussions and reproduce a Tech21 or other branded version of the product and that such rights will survive termination (see Schedule G, "IP Rights").
    Therefore, our client is the exclusive owner of all IP rights including design rights that have been implemented in its protective Pad Air/ Ipad mini cases "Big Bang" which is based on the design of our client and has been put on the European market some months ago. Moreover, considering the innovative and unique design of the Big Bang products our client has become the owner of an unregistered Community Design accordingly.
    Our client noticed recently that you are distributing a protective case for iPad Air/ Ipad Mini named "IMPACT FOLIO" in Germany through various Apple stores. Your products are nearly identical to the product of our client and give the same overall impression. Hence, your products are a clear infringement of our client's unregistered Community Design. Our client therefore asserts claims for injunction, rendering of accounts and damages. Moreover, you are obliged to compensate our client for any legal costs so far accrued from our services.
    With its request to sign a cease and desist declaration, our client hereby gives you the opportunity to avoid a legal dispute. In the name and on behalf of our client we hereby ask you to sign the enclosed cease and desist declaration we have already prepared or sign a cease and desist declaration that covers the claims cited above. We look forward to receiving the enclosed cease and desist declaration — duly signed — at the latest until 15 September 2014.
    The receipt of the signed declaration via fax by this time will be deemed in due time if the original document is then received without further notice.
    If you do not comply with the before-signed claims not fully or not in due course our client will reserve its rights to take legal action against you which would cause further costs."
    The letter was accompanied by a draft undertaking that had been settled by the German lawyers.

    Tech21's solicitors asked the Germans for an extension of time which was granted until the 17 Sept. In the meantime the solicitors issued a claim form seeking declarations that
    • Tech21 had not infringed and would not infringe any unregistered Community unregistered design owned by Logitech by making, processing, offering, putting on the market, importing, exporting or using protective iPad Air and/or iPad mini cases sold under the name "Impact Folio" within the European Community, nor any UK unregistered design right or other rights subsisting in the same designs; and 
    • Logitech has made unjustifiable threats to bring proceedings for infringement of an unregistered Community design right in respect of Tech21's possessing, offering, putting on the market, and/or using such cases. 
    Tech21 also claimed an injunction to restrain further such threats, dissemination of the judgment and costs.

    The German lawyers responded by applying to the D├╝sseldorf district court  for an interim injunction to restrain further infringement of their client's designs. Tech21 lodged evidence that it had designed the Impact Folio which was accepted by the court. The presiding judge refused Logitech's application and advised that company to withdraw its claim which it did. Immediately after it discontinued the German proceedings Logitech applied to set aside Tech21's claim form and a declaration that the court had no jurisdiction to grant the relief that had Tech21 sought.

    Logitech's application came on before Mr Stephen Jourdan QC sitting as a deputy judge of the High Court. At paragraph [124] of his judgment in Tech 21 UK Ltd v Logitech Europe SA [2015] WLR(D) 389, [2015] EWHC 2614 (Ch) Mr Jourdan concluded that:
    "(a) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any Community unregistered design right vested in Logitech.
    (b) This Court has jurisdiction to hear the claim under regulation 2 of the UK Regulations in respect of the threat made by the Letter to bring infringement proceedings in the UK courts.
    (c) This Court has no jurisdiction to hear the claim for a declaration of non-infringement of any UK unregistered design right vested in Logitech."
    The learned deputy judge decided that the court had no jurisdiction to hear a claim for a declaration of non-infringement because art 82 (1) of the Community design regulation (Council Regulation (EC) No 6/2002of 12 December 2001 on Community designs (OJ EC No L 3 of 5.1.2002, p. 1)) provides:
    "Subject to the provisions of this Regulation and to any provisions of the Convention on Jurisdiction and Enforcement applicable by virtue of Article 79, proceedings in respect of the actions and claims referred to in Article 81 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment."
    Actions for declarations of non-infringement are referred to in paragraph (b) of art 81.

    Reg. 2 (1) of the Community Designs Regulations 2005 provides:
    "Where any person (whether entitled to or interested in a Community design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of a Community design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in paragraph (2)."
    The remedies provided by paragraph (2) include declarations that the threats are unjustifiable, injunctions against the continuance of the threats and damages. Paragraph (5) provides:
    "Proceedings may not be brought under this regulation in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything."
    Tech 21 argued that
    • Jonas's letter made a threat to sue in the UK which is a statutory tort under art under reg. 2 of the Community Design Regulations 2005; and
    • art 5 (3) of the Lugano Convention entitles Tech21 to sue Logitech in "the place where the harmful event occurred or may occur";  and 
    • that place was the UK as Logitech threatened to sue in the UK, the threat was received in the UK, and if the threat had been carried out, the litigation would have taken place in the UK. 
    Logitech contended that:
    "First, the Letter did not make a threat to sue in the UK courts. Second, in any event, the Lugano Convention does not apply at all, because it is implicitly excluded by the terms of the EC Designs Regulation. Third, even if the Lugano Convention applies, it is subject to the specific jurisdiction provisions in the EC Designs Regulation, and this claim is within article 81(b), as an action for a declaration of non-infringement of Community designs."
    It also argued that it was within the exception provided by reg. 2 (5) since Tecg21 was a primary infringer.

    Mr Jourdan considered and dismissed each of those contentions in turn. As to the first, he said at paragraph [81] of his judgment:
    "Accordingly, in my view a reasonable reader of the Letter in Tech21's position would clearly have understood it to indicate that proceedings in the UK were likely or, at the very least, that there was a realistic possibility of UK proceedings in respect of alleged infringement of Logitech's claimed Community design right, either immediately or in the future."
    As to the second, he said at paragraph [85]:
    "The Lugano Convention is a treaty binding on the EU and on the UK and its jurisdiction rules will apply to proceedings relating to a Community design, save to the extent that those jurisdiction rules are inconsistent with specific provisions of the EC Designs Regulation."
     As to the argument that Tech21 was a primary infringer, Mr Jourdan relied on the Court of Appeal's decision in Cavity Trays v RMC Panel Products [1996] R.P.C. 361. Finally, the deputy judge decided that a threats action was altogether different from an application for a declaration of non-infringement and therefore fell outside the scope of art 82 (1) and art 81 (b) of the Community Design regulation.

    Mr Jourdan held that he had no jurisdiction to grant a declaration of non-infringement of national unregistered design right because Logitech had never complained of infringement of such right.

    Should anyone wish to discuss this case or registered design law in general he or she should call me during office hours on 020 7404 5252 or send me a message through my contact form.

    04 October 2015

    When one charity sues another - NOCN v Open College Network Credit4Learning

    An open college network is a regional organization that accredits adult education courses offered by educational institutions and employers. The claimant was established to coordinate some of those organizations. It trades under the following signs:

    It has registered those signs as trade marks as well as the letters OCN and NOCN for accreditation and certification services in class 42 as well as other goods and services.

    The defendant is an open college network which was affiliated with the claimant until 2006. Until judgment in these proceedings, it traded under the following sign:

    The claimant sued the defendant for trade mark infringement and passing off. The defendant counterclaimed for invalidation of the claimant's registrations.  The action and counterclaim came on before His Honour Judge Hacon in NOCN (Formerly National Open College Network) v Open College Network Credit4Learning [2015] EWHC 2667 (IPEC) (25 Sept 2015)

    It will come as little surprise even to those who have not read the judgment that the claim failed except in respect of the use of the dots device. The judge held that such use infringed the combined device and word marks under s.10 (2) of the Trade Marks Act 1994 and amounted passing off. It will be equally unsurprising that he found that the letters "OCN" were and remain entirely descriptive. Consequently, none of the claimant's marks was infringed by the use of those letters and such use did not constitute passing off.  His Honour also declared the OCN letter mark invalid under s.47 (1) of the Act,

    In a postscript to his judgment Judge Hacon made this final observation:
    "I now know that between them the parties, both charities, have incurred well over £400,000 on fees in this litigation. A very strong recommendation to settle at the case management conference was not taken up. The laudable cause of encouraging adult education will presumably have to endure an equivalent cut in funding solely because this dispute was not resolved at an early stage. Such an outcome is much to be regretted."
    There is, however, some good stuff in this judgment.  At paragraph [22] he reaffirmed that goodwill is capable of subsisting in a business which consists of educational and charitable work of the sort carried on by the parties and other open college networks and referred to British Diabetic Association v The Diabetic Society [1996] FSR 1 as an example. Secondly his analysis of the origin and ownership of the goodwill where he rejected both parties' claims to goodwill associated with those letters in paragraphs [45] to [55].

    Should anyone wish to discuss this case note or trade mark or passing off law in general, he or she should not hesitate to call me on 020 7404 5252 during office hours or send me a message through my contact form.