Arrow Declarations - Mexichem UK Ltd v Honeywell International Inc

Jane Lambert

Court of Appeal (Lord Justices Floyd and Lewison) Mexichem UK Limited v Honeywell International Inc. [2020] EWCA Civ 473 (1 April 2020)

This was an appeal by the defendant company against Judge Hacon's refusal in Mexichem UK Ltd v Honeywell International Inc, 2019 WL 06877912 (2019) to strike out, or grant summary judgment in respect of, the claimant's application for an Arrow declaration. In Missed! Arrow Declarations - Pfizer v Hoffmann La Roche 5 Aug 2019 I described an "Arrow declaration" as "a declaration that a product or process was known or obvious at a particular date and therefore could not fall within the claims of a patent." They take their name from the judgment in Arrow Generics Ltd and another v Merck & Co, Inc [2008] Bus LR 487, [2007] FSR 39, [2007] EWHC 1900 (Pat) but they derive from the much older "squeeze" case of Gillette Safety Razor Co v Anglo-American Trading Co Ltd. (1913) 30 RPC 465.

The order that the claimant sought in Mexichem were:

"Declarations that, as at 25th October 2002 and/or 29th April 2004, it was obvious in light of the teaching set out in Japanese Patent Application H2-231618, published as H04-110388 ('Inagaki') to:
a) Use R-1234ze in the manufacture of a product for use as a refrigerant in a mobile air-conditioning unit;
b) Use R-1234yf in the manufacture of a product for use as a refrigerant in a mobile air-conditioning unit."

At the hearing before Judge Hacon, the defendant contended that the claimant had no real prospect of succeeding in obtaining such a declaration at the trial. It objected to the declarations on the grounds that they were not sought in relation to a specific product or process, that they were not sufficiently clear, and that they lacked utility. The judge rejected those contentions. He said at paragraph [23]:

"If the Arrow declarations sought by the claimant were made by the trial judge, then, subject to appeal, those declarations would determine precisely what the declarations state, namely that, as of one or both the priority dates, it was obvious to a skilled person, who has read Inagaki, to use ze and/or yf in the manufacture of a product for use as a refrigerant in an MAC. The declarations would foreclose any future argument in this jurisdiction on that point, but their effect would go no further."

He added at [27]

" The declarations sought in this instance seem to me to be entirely clear. The judge would have to apply well-established principles of patent law in deciding whether the use of ze and/or yf in the manner stated was obvious over Inagaki at the relevant dates. If the declarations are made, subject to appeal the trial judge's conclusion in that regard would be binding."

He decided that the applications could serve a useful purpose and was satisfied that there was a real prospect that the trial judge might decide that on the facts of the case, as they emerge at trial, it would be appropriate to make those declarations. He, therefore, dismissed the defendant's application.

In the Court of Appeal the defendant criticized the judgment as follows:

"i) The judge had been wrong not to require any product or process to be identified.
ii) A declaration in the broad general terms countenanced by the judge was deprived of any real utility because there would be no resolution of anything until a second round of contested proceedings
iii) The judge had been wrong to treat the question of inventive step as something which can be sliced up into a series of steps and dealt with step by step.
iv) The judge had made completely uncertain what was contemplated as being in issue in the proceedings in respect of the claimed declarations.
v) The judge had failed to keep clear the distinction in the patent system between instances where a class of products was being defined and instances where a specific product or process was being dealt with."

Lord Justice Floyd observed that the defendant's counsel developed some of these points at the hearing more fully than others. He also noted that the claimant's counsel supported Judge Hacon's decision on the grounds that the defendant was asserting a very broad monopoly in the use of certain compounds in mobile air conditioning systems through oppositions in the European Patent Office and litigation in Germany.

At paragraph [13] the learned lord justice said that the court enjoys a broad and flexible discretion to grant declaratory relief where it will serve a useful purpose to do so but a declaration should not be made where it will not. Subject to that principle, the approach is one of discretion rather than jurisdiction (see Messier-Dowty Ltd v. Sabena SA [2001] 1 All ER 275). Before a court can properly make a declaration, the underlying issue must be sufficiently clearly defined to render it properly justiciable (see Nokia Corporation v InterDigital Technology Corporation [2006] EWHC 802 (Pat) at [20 (iii)]). One circumstance when a declaration that every aspect of its product is old or obvious at a particular date so that no patent having a later priority date could ever validly cover its manufacture or sale is when a party is endeavouring to market a product in a sector where there is a complex network of patent protection owned by one of his competitors. However, the court has to be careful not to exclude protection for a feature of a claim that should be protected but which may not be seen by the court or the parties at the time the declaration is made. That is why a declaration, in order to be clear, has to operate in relation to specific features and combinations of features of a product. That is also why his lordship had stressed the need for clarity in Glaxo Group Ltd and others v Vectura Ltd. [2018] WLR(D) 400, [2019] Bus LR 648, [2018] EWCA Civ 1496.

Lord Justice Floyd emphasized that there is no threshold requirement for the grant of an Arrow declaration that the party seeking it must have a fully formulated product description, far less that it must have a product in actual production but he or she must satisfy the court that it would be useful for specified features of a product which the party wishes to sell to be declared old or obvious. The extent of generality or particularity of the declaration may affect the utility of the declaration but that is a matter of degree that the trial judge must assess. In a strikeout or summary judgment application, it is enough for the party seeking the declaration to show that there is a real prospect of its being able to establish those matters at a trial.

In this case. the patents relied upon by the defendant were pitched at a very high level of generality and the defendant had used one of those patents to persuade a court in Nuremberg to exclude a competing product from a trade fair in that city, The claimant was, therefore, right to submit that it had a real prospect of establishing at trial that a declaration in the terms would be of utility in fighting off claims to protection in equally broad terms. In that context, it was relevant to note that the defendant had offered to surrender a patent that was about to be challenged rather than risk a finding of invalidity.

The Court of Appeal held that Judge Hacon had been right to refuse to strike out the application for the declarations for all of the above reasons and therefore dismissed the appeal. Anyone wishing to discuss this article, Arrow declarations, Gillette squeezes or strikeouts generally should contact me through my contact page. Everyone in chambers including the clerks is working from home so callers are requested not to use the switchboard number for the time being.