25 January 2017

Patents: Wobben v Siemens - Blowing in the Wind

Offshore Wind Farm
Photo Anke Hueper
Source Wikipedia
Creative Commons Licence

Jane Lambert

Wobben Properties GmbH v Siemens Public Ltd Company and Others [2017] EWCA Civ 5 (19 Jan 2017)

The claimant company, Wobben Properties GmbH is the registered proprietor of European patent  EP0847496 for a method of operating a wind power station.  The invention is described as follows:
"The invention pertains to a method of operating a wind power station, especially to limit the load on a wind power station, preferably a pitch-controlled wind power station. The invention also pertains to a corresponding wind power station. The invention is designed to increase the output of a wind power station and yet limit the load on the wind power station at very high wind velocities. This is accomplished by reducing the power of the wind power station as a function of wind velocity as of a predetermined wind velocity, preferably by reducing the operating velocity of the rotor of the wind power station when a wind appears with a wind velocity above a maximum wind velocity or maximum velocity in the blower stream."
The patent specification is very short and consists of four claims:
  1. "Method of operating a wind turbine with pitch control, in which the power of the wind turbine as well as the operating speed of the rotor is continuously reduced when a wind velocity is reached which is in danger of overloading the wind turbine, in dependence on the rise in the wind velocity or incident-stream velocity.
  2. Method according to Claim 1, characterized in that the operating speed (n) of the rotor is reduced such that the load level acting on the rotor of the wind turbine remains approximately constant or is reduced when the wind velocity rises above the wind velocity which is in danger of producing overloading.
  3. Method according to Claim 1 or 2, characterized in that the reduction in operating speed is associated with a change in power matched to the load level.
  4. Wind turbine with pitch control, characterized by a means for automatic power and rotor-speed reduction when a wind velocity is reached which is in danger of overloading the wind turbine, in dependence on the rise in the wind velocity or incident-stream velocity or the true or relative wind velocity."
Wobben accused Siemens Plc and its subsidiaries ("Siemens") of infringing claims 1 and 4 by installing wind turbines in the UK. In particular, the off-shore sites at the London Array, Westermost Rough and Gunfleet Sands.  Wobben estimated the value of its claim in the order of £13 mn. Siemens denied infringement and contended that the patent was invalid for anticipation and obviousness.

The Trial
The action came on before Mr Justice Birss in Wobben Properties GmbH v Siemens Plc and Others [2015] EWHC 2114 (Pat) (20 July 2015). After a 6 day trial, His Lordship concluded at para [211]  that the patent was invalid and would not have been infringed even if it had been valid.

The Appeal
Wobben appealed with the permission of Mr Justice Birss contending:
"that the judge wrongly directed himself as to the legal test for obviousness and made a series of fundamental errors in assessing the evidence of the expert witnesses. It also argues that the judge erred in assessing infringement and made findings which had no basis in the evidence. Siemens responds that the judge's findings are properly supported by the evidence and are correct, essentially for the reasons that he gave."
The appeal was heard by Lords Justices Longmore, Kitchin and Floyd.

The Judgment
The Court of Appeal unanimously dismissed the appeal.

Delivering the lead judgment, Lord Justice Kitchin summarized the technical background and the common general knowledge between paras [7] and [23] and the teaching of the patent between paras [24] and [32].

Turning to the question of obviousness, the learned Lord Justice considered the prior art relied on by Siemens which was an article by Dr Ervin Bossanyi entitled "Probabilities of sudden drop in power from a wind turbine cluster" which had been published in 1982 ("Bossanyi") between paras [33] and [47] and the judges findings between paras [48] and [59]. He summarized the appellants' argument between paras [60] and [71] and considered them in paras [72] and [81]. He said at para [82]:

"In my judgment the judge was entitled to hold that the skilled person given Bossanyi in 1995 would consider implementing it on a VSVP machine and so would think about how to implement the ramp down above the normal shut down speed. That requires the power to be reduced as the wind speed increases and the skilled person would appreciate that this could be achieved by keeping the torque constant and reducing the rotor speed; by reducing the torque and keeping the rotor speed constant; or by reducing both the torque and the rotor speed. These findings had a proper basis in the evidence and the judge has made no error of principle in his reasoning. Mr Silverleaf has not established any ground upon which it would be appropriate for this court to interfere with the judge's evaluation of the evidence or to set about re-evaluating that evidence for itself."
Lord Justice Kitchin then considered infringement.  At para [32] he had summarized Mr Justice Birss's construction of claim 1 as follows:
"First, the claim covers any suitable measure of wind speed. Secondly, the claim calls for a dependency between the reduction in rotor speed and the rise in wind speed. To satisfy the claim, there must be a causal relationship between the rotor speed and the wind speed. So also, there must be a causal relationship between the power of the turbine and the wind speed. Finally, the claim covers a method in which two different approaches to determining wind speed are used, one to control power and the other to control the rotor speed."
He then considered the evidence that had been before the trial judge and the reasons for his finding that the claim had not been infringed.

Wobben had alleged that Siemens's variable speed, variable pitch ("VSVP") turbines infringed the patents by High Wind Ride Through (HWRT) which reduces the speed of rotation and the power output of the turbine in high-speed wind conditions. At para [108] Lord Justice Kitchin observed that at the end of the day the case was concerned with the operation of HWRT and whether it may fairly be said that the operating speed of the rotor is continuously reduced in dependence upon the rise in the wind speed. That required a consideration of both the way in which and the level at which the control algorithms in HWRT work. Lord Justice Kitchin believed that the judge was entitled and indeed right to find that HWRT reduces rotor speed in dependence upon a rise in filtered rotor acceleration and that it does so to protect the turbine from dynamic loads associated with accelerations and decelerations. It followed that HWRT was not using filtered rotor acceleration as a surrogate for wind speed and was therefore not infringing claim 1 or indeed claim 4.

Lord Justices Floyd and Longmore agreed with Lord Justice Kitchin.

There was no dispute between the parties as to the law to be applied. The leading authorities on anticipation, obviousness and the construction of claims were considered at first instance and the judge's analysis was impliedly confirmed on appeal.  Anyone looking for an exposition of those doctrines could do worse than look at Mr Justice Birss's judgment. The analysis of the facts and the construction of the claims were, of course, specific to this appeal.

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

19 January 2017

Case Note: Bhayani v Taylor Bracewell LLP - Goodwill generated by a Partner or Employee

Jane Lambert

Bhayani and Another v Taylor Bracewell LLP [2016] EWHC 3360 (IPEC) (22 Dec 2016)

In Reckitt and Colman Products Ltd v Borden Inc, and Others[1990] 1 WLR 491, [1990] RPC 341, [1990] 1 All ER 873, [1990] WLR 491, [1990] UKHL 12 discussed the elements of an action for passing off. The first of those elements was
 "a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services."
His Honour Judge Hacon considered that element in the above-mentioned case

This was an application by Taylor Bracewell LLP for summary judgment in, or, alternatively, the striking out of, a passing off action that had been brought against it by its former fee earner, Jay Bhayani, and her law firm, Bhayani Law Limited.

Ms Bhayani is a solicitor specializing in employment law. The judge observed that it was common ground that she was "an employment lawyer of some note in Sheffield." Taylor Bracewell wanted to open an office in Sheffield with an employment law department. In 2011 it offered to employ Ms Bhayani as a salaried partner in charge of an office in Sheffield from where the firm was to carry on business in the name or style of 'Bhayani Bracewell'.

On 14 Feb 2014 Taylor Bracewell applied to register

as a British trade mark for a wide range of services in classes 35 and 45 under registration number UK3042588.

The parties fell out and Ms, Bhayani left Taylor Bracewell on 17 Oct 2014. For a while, it continued to practise from Sheffield in the name or style of 'Bhayani Bracewell'. Ms Bhayani sued Taylor Bracewell alleging:
"that by use of the 'Bhayani Bracewell' name Taylor Bracewell has falsely represented that Ms Bhayani is still involved with their business and has thus passed off its services, particularly its employment law services, as being those of Ms Bhayani. The claimants allege further and more specific acts of passing off: that Taylor Bracewell has (i) stated that Ms Bhayani is still a team member on pages of the Website and on the website hosted at www.taylorbracewell.co.uk, (ii) kept a voicemail message recorded by Ms Bhayani which clients are liable to access out of hours, (iii) told a Mr Greaves of AAG Systems Ltd that Ms Bhayani was still carrying out work for Taylor Bracewell, (iv) maintained a Google business account in relation to 'Bhayani Bracewell', (v) used the Domain Name and refused to surrender it and (vi) used the Trade Mark and refused to surrender it."

Ms Bhayani also claimed revocation of the trade mark under s.46 (1) (d) of the Trade Marks Act 1994.

Taylor Bracewell applied for summary judgment or a striking out on the following grounds:
"[20] First, Taylor Bracewell says that in law Ms Bhayani does not own goodwill to found a case in passing off. It is common ground that Ms Bhayani has never practised as a sole practitioner. Before she joined Taylor Bracewell she worked at a firm called Watson Esam, initially as an employee and then as an equity partner from 1996 to 2011. Mr Moss argued that any goodwill generated by her activities as a solicitor before October 2014 can only have vested in Watson Esam and subsequently in Taylor Bracewell. In each case the goodwill was associated only with those firms' respective trading names. Ms Bhayani has never owned any relevant goodwill herself.
[21] Secondly, on a correct construction of the 2014 Partnership Agreement Taylor Bracewell is entitled to use the trading name 'Bhayani Bracewell'.
[22] Thirdly, the contractual right to use that name means that the Trade Mark cannot be invalid pursuant to s.46(1)(d)."
In her reply, Ms Bhayani argued that
"[23] ...... the goodwill she generated while she worked at Watson Esam and Taylor Bracewell was associated with her own name and was at all times owned by her. Mr Keay submitted that in law it is not necessarily the case that goodwill generated by an employee or partner is vested in the employer or partnership, as the case may be. It will depend on the facts. Those facts have to be explored at trial.
[24] On a correct construction of the partnership agreements, Ms Bhayani's consent to use 'Bhayani Bracewell' terminated once she had left. To the extent that there was any doubt about that, the agreements have to be construed in the light of the relevant factual matrix, which should be left until trial.
[25] Finally, even if Taylor Bracewell were to own the relevant goodwill, its use of the 'Bhayani Bracewell' name and other representations that Ms Bhayani was still part of the firm rendered the Trade Mark liable to deceive the public."
The case thus turned on whether Ms, Bhayani or her former employer owned such goodwill as may have been generated by her activities as a solicitor in relation to the "Bhayani Bracewell" name. The judge first drew a distinction between reputation and goodwillH:
"[26] During the course of her career at Watson Esam Ms Bhayani acquired a significant reputation, particularly in the Yorkshire area, as a solicitor with a high level of expertise in the field of employment law. It is not in dispute that reputation by itself does not found an action in passing off. The question is whether Ms Bhayani also acquired goodwill.
[27] Goodwill cannot in law subsist as a thing alone – it is indivisible from the business with which it is associated, see Star Industrial Co Ltd v Yap Kwee Kor [1976] FSR 256, at 259, recently endorsed by the Supreme Court in Starbucks (HK) Ltd v British Sky Broadcasting Group plc [2015] UKSC 31; [2015] FSR 29, at [23] and [51]-[52].
[27] This is to be distinguished from reputation which exists by itself. A solicitor celebrated for his or her expertise may enjoy the highest possible reputation and this will be personal, attaching only to that individual. But reputation alone cannot form the basis of an action for passing off, no matter how high the wattage of celebrity."
He then turned to whether Ms Bhayani, as opposed to her employer or partners, had acquired any goodwill by virtue of her activities.

Judge Hacon observed at para [29]:
"In the general run, goodwill generated by the acts of an employee will be vested in the employer, see Asprey & Garrard v WRA (Guns) [2002] FSR 31, at [36]; Kingston, Miller & Co. Ltd. v Thomas Kingston & Co. Ltd. (1912) 29 R.P.C. 289, at 295. Similarly, where an individual works in a partnership the goodwill generated by his acts will in the normal course vest in the partnership, see Leather Cloth Co. v American Leather Cloth Co. [1865] 11 H.L.C. 523."
However, there were exceptions. Ms Bhayani's counsel had argued that any person who acquires a reputation by carrying out acts under their own name, real or otherwise, generates actionable goodwill on which they can personally rely. It makes no difference whether the person is employed or works for a partnership.  The judge rejected that contention as contradicting well-established authority. He accepted Taylor Bracewell's contention that an employee or partner acquires goodwill only in respect of actvities outside the scope of the employer's or the partnership business and relied on Edmund Irvine Tidswell Ltd. v Talksport Ltd. [2002] FSR 60, [2002] EWHC 367 (Ch), [2002] 2 All ER 414, [2002] EMLR 32, (2002) 25(6) IPD 25039, [2002] 1 WLR 2355, [2002] WLR 2355, [2002] EWHC 367 for support. He said at para [38]:
"Mr Irvine was under contract with Ferrari. The terms of the contract were apparently not relevant and so not made clear, but even if it had been a contract of employment, it was unlikely that his duties were stated to include the endorsement of products under his own name. The business conducted by Mr Irvine in the field of endorsement was quite separate from his business as a racing driver. It generated a distinct goodwill which was his and on which he could found an action for passing off."
The judge concluded at paras [42] and [43] that as there were no special facts any goodwill in the  "Bhayani Bracewell" name accrued to the firm and not to Ms Bhayani. Moreover, even if he was wrong on the passing off point, the partnership agreements were sufficient to transfer the goodwill in the "Bhayani Bracewell" name to Taylor Bracewell.

Taylor Bracewell had argued that the same partnership agreements afforded a cast iron defence to a claim for revocation under s,46 (1) (d). His Honour was not persuaded and allowed that portion of the claim to go to trial.

Accordingly, he allowed the application in respect of the claim for passing off but not for revocation of the trade mark.

Should anyone wish to discuss this case, or passing off or trade mark law in general, he or she should call me on +44  (0)20 7404 5252 during office hours or send me a message through my contact form.

18 January 2017

Just where does Mrs May's Speech leave the Unified Patent Court?

Rt. Hon. Theresa May MP
Author: Home office
Source: Wikipedia
Creative Commons Licence

Jane Lambert

In her Lancaster House speech of the 17 Jan 2017 (the transcript of which can be found on The Independent's website) the Prime Minister acknowledged that "Britain might at times have been seen as an awkward member state" However, there is one policy upon which we have always been impeccably communautaire  That has been the scheme to establish a single European patent for the territories of all the EU member states with a single European patent court.

We were one of the few parties to ratify the Community Patent Convention in 1975 shortly after we joined the EEC. Ever since then our government has participated constructively in deliberations and negotiations both for a Community patent within the framework of the EU (see Community Patent on the Eur-Lex website) and a European patent litigation agreement ("EPLA") as an optional protocol to the European Patent Convention (see European Patent Litigation Agreement on the Wikipedia website).  The Gowers Review of Intellectual Property recommended the establishment of a unitary Community Patent (COMPAT) in 2006 to reduce substantially the cost of patent applications in Europe which were then twice as expensive as in the USA. Similarly, Professor Hargreaves urged the government to "attach the highest immediate priority to achieving a unified EU patent court and EU patent system, which promises significant economic benefits to UK business" (see page 8 of Digital Opportunity A Review of Intellectual Property and Growth May 2011).

The reason why different governments of different political parties have always supported these initiatives is that patent litigation is considerably more expensive in England and Wales than it is anywhere else. In The Enforcement of Patent Rights Nov 2003, the Intellectual Property Advisory Committee reported at page 50 that the cost of an action in the Patents Court was £1 million and between £150,000 and £250,000 in the Patents County Court compared to €30,000 - 50,000 in France, €25,000 - 50,000 for Germany and €10,000 - 20,000 for summary proceedings and €40,000 for a simple action in the Netherlands.  According to Taylor Wessing's Patent Map - European Litigation Guide typical first instance costs are between £200,000 and £1 million in England despite the changes to CPR Part 63 (see New Patents County Court Rules 31 Oct 2010) and nearly as much in Finland, France and Ireland but considerably less in Germany, the Netherlands, Italy and Spain while in Poland they are between €2,000 and €25,000 depending on the value of the claim.

The relatively high cost of enforcement in England is often cited as one of the reasons why the UK trails not just Germany and France in the number of European patent applications but also the Netherlands with one third of our population and Switzerland with one eighth.
European Patent Applications 2015
South Korea
Source: European Patent Office

A single European patent for the territories of the UK and the other EU member states with a single court would clearly level the playing field for businesses in the UK.

The initiative for the EPLA stalled in 2007 when the legal service of the European Parliament opined that such an agreement would breach art 292 of the Treaty of Rome. The proposal for an EU patent and patent court failed over a disagreement with Italy and Spain as to the languages that to be used in EU patent proceedings. The remaining member states including the UK decided to press ahead with a European patent for the territories of those states to be known as a unitary patent with a single court to be known as the Unified Patent Court ("UPC").  An Agreement on a Unified Patent Court was reached on 19 Feb 2013 and implementing regulations were adopted by the European Council.

As I reported in Preparing for the Unified Patent Court 23 Jan 2016 the British government acted with considerable alacrity:
"The United Kingdom ....... has passed primary legislation to enable the UK to ratify the agreement (see s.17 of the Intellectual Property Act 2014). The government has recently responded to to replies to a Technical Review and Call for Evidence on Secondary Legislation Implementing the Agreement on a Unified Patent Court and EU Regulations Establishing the Unitary Patent (see Government Response to the Technical Review and Call for Evidence on Secondary Legislation Implementing the Agreement on a Unified Patent Court and EU Regulations Establishing the Unitary Patent of 14 Jan 2016). It has also taken a lease to space in Aldgate Tower for the London section of the Central Division and the British Division of the Court of First Instance. Germany, the last of the three, is thought likely to ratify the UPC Agreement in September (see the interview of Wouter Pors of Bird & Bird by the Kluwer UPC News blogger on January 4, 2016, 2016: Countdown to the start of the Unified Patent Court Kluwer Patent Blog)."
Until the June referendum there was every chance that the UPC would open at the beginning of this year.

The result of the referendum has delayed the launch of the UPC and unitary patent but it has not killed it off altogether. On 28 Nov 2016 Lady Neville Rolfe, the former Minister for Intellectual Property, announced in UK signals green light to Unified Patent Court Agreement that:
"the UK will continue with preparations for ratification over the coming months. It will be working with the Preparatory Committee to bring the Unified Patent Court (UPC) into operation as soon as possible."
However, the problem for the UK is that art 84 (1) of the UPC Agreement makes clear it is open only to EU member states and that disputes shall be resolved ultimately by the Court of Justice of the European Union.

The Prime Minister did not address the question about what to do with the Unified Patent Court in her Lancaster House speech though she did include four short paragraphs into her 10th negotiating principle headed "The best place for science and innovation."  However, she did give two pointers in saying that the UK intends to renounce the jurisdiction of the Court of Justice upon its departure from the EU but nevertheless wishes to remain a close partner of the EU.

Mrs May's negotiating strategy seems to be to exit the EU altogether and then negotiate ad hoc arrangements on such matters as appear to be in both British and the remaining states' interests as she did with justice and crime when she was Home Secretary. That may be what she hopes to do about the UPC if it is on her agenda at all. The possibility of such an ad hoc agreement for the UPC was floated by Richard Gordon QC and Tom Pascoe who were consulted by the IP Federation, the Chartered Institute of Patent Attorneys and the Intellectual Property Lawyers Association.  However, they flagged up several difficulties and concluded that in the absence of such an agreement any divisions of the UPC in the UK would have to close.

Even though it seems likely that the UK will have to leave the UPC it is clearly in the interests of British business (as it is is also in the interests of American, Chinese, Japanese and Korean business) to promote the unitary patent and the UPC since it will reduce patent prosecution and enforcement costs. But if the UK excludes itself from the UPC and unitary patent by its renunciation of the jurisdiction of the jurisdiction of the Court of Justice it will make it very much harder for it to achieve the aim of being the best place for science and innovation.