International Patent Litigation - Nicoventures Trading Ltd v Philip Morris

Basher Eyre / Junction of Fetter Lane and Rolls Buildings

Jane Lambert

Patents Court (Mr Justice Birss)  Nicoventures Trading Ltd v Philip Morris Products, SA ( [2020] EWHC 1594 (Pat) (16 June 2020)

This was an application by Philip Morris Products SA ("Philip Morris") to expedite the trial of an action that it had brought against British American Tobacco ("BAT") for the invalidation of European patents (UK) 3 398 460 and 3 491 944 for heated tobacco products which had been invented by John Howard Robinson and others ("the Robinson patents").  BAT resisted the application on the ground that the case for expedition had not been made out. However, there was also a contingent cross-application by BAT for expedition of the trial of an action that it had brought against Philip Morris for the invalidation of the Robinson patents and a counterclaim for the infringement of European patents (UK) 3 248 484, 3 248 486, and 3 248 483 for heated tobacco products which had been invented by Oliver Greim and others ("the Greim patents").

The Context
The tobacco industry has developed heated tobacco products that provide some of the pleasures of smoking but at less risk in order to counter falling demand for cigarettes.   At paragraph [1] of his judgment in Nicoventures Trading Ltd v Philip Morris Products, SA  [2020] EWHC 1594 (Pat) (16 June 2020), Mr Justice Birss described heated tobacco products as "devices in which tobacco, rather than being burned as in a cigarette, is heated, in order to release the tobacco flavour and, I guess, also, the nicotine."  One of those products is "Glo" which is marketed by BAT.  Another is "IQOS" which is marketed by Philip Morris.

On 9 April 2020 BAT sued Philip Morris for patent infringement in Germany. It complained that Philip Morris's IQOS products infringed its Robinson patents.  Philip Morris launched the invalidity action in England because it is not possible in Germany for defendants to infringement actions to challenge the validity of a patent in the infringement proceedings as they can in the UK and many other countries.  Mr Justice Birss explained the reason for seeking a judgment on the validity of the Robinson patents in England before the German courts had heard BAT's infringement action at paragraph [22] of his judgment:

"All contracting states of the European Patent Convention take a similar view. They are interested in the decisions of their colleagues in other EPC States. Precisely how these decisions are taken into account does not matter. What does matter is that we are all applying a common law -- common with a small c -- to patents, based on a common legal framework, and it is of interest to courts in the EPC how other courts have taken a decision on the very same patent. The claims are usually identical and the patent specifications will be identical."

Philip Morris's invalidity action in England would normally have been tried in April 2021.  It applied for expedition because BAT's infringement action is listed to be heard in Munich on 18 Feb 2021.

The Decision
Mr Justice Birss acceded to Philip Morris's application at paragraph [41] of his judgment.

The Applicable Principles
In reaching his decision the judge considered the Court of Appeal's judgement in Petter v EMC Europe and another [2015] EWCA Civ 480 (16 April 2015) which approved its earlier decision in WL Gore & Associates GmbH v Geox SPA [2008] EWCA Civ 622 (19 March 2008).  In Gore Lord Justice Neuberger (as he then was) laid down four principles to be taken into account when considering applications for the expedition of hearings:   "(1) whether the applicants have shown good reason for the expedition; (2) whether expedition would interfere with the good administration of justice; (3) whether expedition would cause prejudice to the party; and (4) whether there are any other special factors."

Mr Justice Birss added some further points of his own.

He said at paragraph [11]:

"there are likely to be a large number of litigants in the Business and Property Courts who would like their cases to be tried earlier, therefore granting expedition involves an inevitable degree of queue-jumping and therefore there has to be a good reason for it. What I want to add is that the way the court takes this point into account is by deciding this application according to the relevant principles and not simply by approaching them on the basis that someone who happens to come to the court wishing for their case to be speeded up will get it."

He added at [12]:   

"a mere wish for commercial certainty is not enough to justify expedition. The phrase that is used in Gore v Geox and in James Petter is that there needs to be a "good reason". That has to be established in evidence."

Mr Justice Birss's third point related specifically to patents.   He said at [15]:

"There have been different words used by different judges of the Patents Court over the years relating to the emphasis that this factor bears in the context of listing decisions and expedition. In a number of decisions between 2011 and 2017, and I refer in particular to HTC v Europe Ltd v Apple Inc [2011] EWHC 2396 (Pat), ZTE (UK) Limited v Telegonaktiebolaget LM Ericsson [2011] EWHC 2709 (Pat), and Garmin (Europe) Limited v Koninklijke Philips N.V. [2017] EWHC 8165 (Pat), Arnold J consistently expressed the view that it was a factor to take into account, however as he put it, it is not a strong factor and will never be sufficient on its own, but it is a factor."

Finally, he said at [19]:

"A party should, if it wishes to seek expedition, put forward evidence of the commercial context in which the dispute arises in order to establish why there is a good reason in commercial terms, if true, that the UK validity trial should be timetabled in the way that is sought. In other words, and I am probably repeating myself, if a party seeks expedition it will always need to support its application with evidence of a commercial context to explain why, in the words of James Petter and Gore v Geox, there is a good reason for expedition."

Applying the Gore Principles
Starting with the second of Lord Justice Neuberger's principles in Gore, the judge found that the case could be listed for January or February without too much difficulty.   Moving to the third, expedition was unlikely to prejudice BAT.   As for the fourth, there were no special factors in this case other than Philip Morris's desire to get a decision on validity and infringement of the Robinson patents before the 18 Feb 2020.   Had that been the only consideration, it would not have been enough to justify expedition.   However, he said at [33]:

"The real issue is the commercial position of Philip Morris. ..................   First, the IQOS UK market has been building slowly, but now recently it has begun to take off. This case does come, as Mr Lykiardopoulos QC put it, at a critical time for that market. Second, important decisions will have to be made for the UK market in early 2021. Those decisions relate both to the Philip Morris Group itself, for example relating to shops run by the group which I think are possibly contemplating being branded with the name IQOS; and also relate to third parties with which Philip Morris intends to work in the UK market. The details of what is planned to be done with third parties are confidential but that does not matter. It is clear in my judgment that investment decisions will have to be made and on that timescale, and that a trial in April will be materially later from that point of view."

BAT had argued that most of Philip Morris's profits came from conventional cigarettes and that the heated tobacco market was small.   The judge accepted that point at [34] but it was clear that the future lay in heated tobacco products which is why there had been a huge investment by Philip Morris and that IQOS was an important product for Philip Morris.  BAT also contended that the UK market was small.   Again the judge agreed but IQOS would be important to that market and decisions affecting the rest of the world will have to be taken at about the same time.  BAT submitted that Philip Morris had alternative heated tobacco products to IQOS.  That may have been true but none of them was advanced as IQOS.  Finally, BAT argued that Philip Morris had been aware of the Robinson patents since  July 2019 but had left it until April 2020 to act.  The judge described that argument as "unreal".   Everything changed when BAT launched its infringement proceedings in Germany.

BAT's Contingent Cross-Application
The judge rejected BAT's cross-application.   The claim against it by Philip Morris was for infringement of the Greim patents by the Glo products.  His lordship accepted that it would be commercially convenient for the case to be expedited but observed at [45]: 

"There is always the desire for litigants to have their cases decided earlier so that they can improve their decision-making but in this Greim case I am not satisfied it is a case for expedition and I will not order it. That is my decision."

The German practice of considering infringement and validity in separate proceedings which is known as "bifurcation" suits German patentees well enough but it causes grief to everyone else.  One of the advantages of the proposed Unified Patent Court (the agreement for which this Conservative government ratified the instrument of ratification the instrument of which Foreign Secretary Johnson deposited AFTER the brexit plebiscite) was that it would do away with bifurcation.  Sadly, this same government has now gone back on its word for purely ideological reasons.   Anyone wishing to discuss this article or patent litigation strategy generally should call my clerk on 07986 948267 or send me a message through my contact page.


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