Patents - Technetix BV and others v Teleste Ltd

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Jane Lambert

Intellectual Property Enterprise Court (HH Judge Hacon) Technetix BV and others v Teleste Ltd [2019] EWHC 126 (IPEC) (29 Jan 2019)

This is another case in which HH Judge Hacon applied the reasoning of the Supreme Court in Actavis UK Ltd and others v Eli Lilly and Company 017] Bus LR 1731, [2017] RPC 21, [2017] UKSC 48, the Court of Appeal's in Icescape Limited v Ice-World International BV [2018] EWCA Civ 2219, and his own in Regen Lab SA v Estar Medical Ltd [2019] EWHC 63 (Pat).  I have discussed those cases in The Supreme Court's Judgment in Eli Lilly v Actavis UK Ltd and Others: how to understand it and why it is important 13 July 2017, Patents Icescape Ltd v Ice-World International BV 11 Feb 2019 and Patents - Regen Lab SA v Estar Medical Ltd. 24 Jan 2019.  He also discussed the possible existence of a Formstein defence in English law.

Summary
This was a claim by Technetix BV and its licensees ("Technetix") against Teleste Ltd. ("Teleste") for alleged infringement of its patent, GB 2 382 473 B ("the patent") and a counterclaim by Teleste for revocation of the patent on grounds of anticipation and obviousness.  Technetix responded to the counterclaim with an unconditional application to amend the patent.  The action, counterclaim and application to amend came on before Judge Hacon on 28 and 29 Nov 2019 who delivered judgment on 29 Jan 2019.

The Invention
The invention is called a "cable tap unit".

At paragraph [9] of his judgment, Judge Hacon explained that a "tap unit" is apparatus within a cable TY distribution point such as a street cabinet that distributes a signal to subscribers to a cable network.  An abstract of the invention with an illustrative drawing appears on Espacenet. At paragraphs [18] and [19] His Honour further explained the advantage of the invention:

"[18] A tap unit according to the invention has at least one removable directional coupler in the signal path between the input of the signal from the network and a group of signal outputs. The engineer can select a directional coupler to suit the output level required. To effect repairs or changes to the tap unit the engineer need only carry in stock a range of directional couplers, which are relatively small and inexpensive.
[19] The arrangement of the invention was sometimes described in the evidence as a 'plug and play functionality', i.e. allowing the selection of the appropriate directional coupler and plugging it into a receptor in the base unit to achieve the required signal output level. This can be done without disturbing other components, in particular the group of signal outputs."

Claim 1 of the patent divided into integers was as follows:

"(1) A cable tap unit comprising
(2) a base unit with an input for a signal from a cable network,
(3) at least one group of signal outputs,
(4) at least one receptor means positioned in the base unit in a signal path between the input and the group of outputs,
(5) and directional coupler means,
(6) wherein the directional coupler means is received by and detachable from the receptor means such that the signal transmission characteristics of the path are selectable as required by choice of directional coupler means,
(7) wherein the directional coupler means is separable from and insertable into the base unit independent of the group of signal outputs."

Judgment
The claim failed because the judge found that the patent was invalid for lack of novelty and inventive step.  In determining validity, His Honour treated the patent as if it had been amended though he refused permission to amend on the ground that such amendment would be otiose.  Judge Hacon's finding on infringement was ambivalent. Construing the claim literally he found that it would not have been infringed.  Applying Actavis, Icescape and Regen he found that it would have been subject to the existence of a Formstein defence.

Lack of Novelty
As for whether an invention was new, it was common ground that the applicable principles had been set out by Lord Hoffmann between paragraphs [19] and [33] of his speech in Synthon BV v. Smithkline Beecham plc  [2006] RPC 10, [2005] UKHL 59, [2006] 1 All ER 685.  The judge considered two US patents and found that the patent lacked novelty over both of them.

Lack of Inventive Step
It was also common ground that whether there was an inventive step had to be assessed by the principles set out by the Court of Appeal in Pozzoli  SpA v BDMO SA and another  [2007] BusLR D117, [2007] EWCA Civ 588, [2007] FSR 37, [2007] Bus LR D117.  Considering the available expert evidence, His Honour held that the invention would have been obvious to a skilled person having regard to the above-mentioned American patents.

Infringement
Judge Hacon referred to Actavis, Icescape and Regen at paragraph [21] of his judgment and again at paragraph  [84]. 

He concluded at paragraph [107] that Teleste's product did not have the second or fourth integers mentioned above.  On what he called "a normal construction" it did not infringe. 

However, he had to apply art 2 of the Protocol on art 69 which required him to take due account of any element which is equivalent to an element specified in the claims.  He observed at paragraph [113] that the "starting point for an argument of equivalence is the identification of the inventive concept or core."  In this invention, the inventive concept or core was that a directional coupler in a cable tap unit might be separable from and insertable into the base unit independently of the group of signal outputs.  It was that feature that allowed plug and play functionality. 

He considered first whether the accused product achieved substantially the same result in substantially the same way as the inventive concept and he found that it did.  Next, he asked whether it would have been obvious to the skilled person at the priority date that that product achieved substantially the same result as the invention and in substantially the same way and again held that it did.  Finally, he pondered whether the skilled addressee would have concluded after reading the patent that a base unit containing circuitry as specified in the claim was an essential requirement of the invention and he decided that he would not.  He concluded at [125] that  Teleste's product fell within the scope of claim 1 pursuant to the doctrine of equivalents. 

That led him finally to consider the possible existence of a Formstein defence in England.

The Formstein Defence
At paragraph [95] the judge explained that the Formstein defence derived from a decision of the German Supreme Court in Case X ZR 28/25 Formstein GRUR 1986, 803.  The principle was explained by Thomas Kühnen in Patent Litigation Proceedings in Germany translated by Frank Peterreins who:

"According to this defence, a contested embodiment does not fall within the scope of protection of a patent or utility model if, with its (partly literally realized and partly equivalently realized) features, it is anticipated in the state of the art or is obvious from the state of the art. Background for the objection according to the [Formstein] decision is the consideration that the patent in suit must not be extended by means of equivalency on a subject matter which is within the known state of the art, and for which the proprietor of the patent in suit could thus not have obtained patent protection in examination proceedings."

There are similar defences in Dutch and US law and the judge cited dicta suggesting that such a defence could evolve here. It was unnecessary for Judge Hacon to decide the issue as he had already found the patent to be invalid but he opined at [133]  that if a Formstein defence exists in English law then Teleste would have been entitled to rely on it.

Further Information

I shall mention Technetix in my talk to C5's 11th Annual Forum on Pharma Biotech Patent Litigation in Amsterdam on 27 Feb 2019.  Anyone wishing to discuss this article or any topic raised in it should call me on 020 7404 5252 during office hours or send me a message through my contact page,