Trial C Appeal - Optis Cellular Technology v Apple Retail UK Ltd.

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Jane Lambert

Court of Appeal (Lords Justices Arnold, Nugee and Birss) Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others [2023] EWCA Civ 438 (25 April 2023)

This was an appeal from Mr Justice Meade's judgment in Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others [2021] EWHC 3121 (Pat) (25 Nov 2021) in which the learned judge revoked EP 2 093 953 B1, EP 2 464 065 B1 and EP 2 592 779 B1 for a method for transmitting and receiving control information through PDCCH.  The action had been trial "C" of a series of trials between the three Panoptis companies (Optis Cellular Technology LLC, Optis Wireless Technology LLC and Unwired Planet International Ltd. ("Optis")) and Apple Inc. and its subsidiaries ("Apple") over the terms of a FRAND licence of the claimants' portfolio of allegedly standard-essential patents.

The Appeal

Mr Justice Meade had held that claims 1 and 4  of EP 2 093 953  were obvious over Slides R1-081101 of a presentation entitled PDCCH Blind Decoding - Outcome of offline discussions made to a meeting the Radio Access Network Working Group 1 (RAN1) between 11 and 15 Feb 2008.  Permission to appeal was granted to Optis by Lord Justice Arnold.  

The appeal came on before Lord Justice Arnold, Lord Justice Nugee and Lord Justice Birss on 14 and 15 March 2023.  The proceedings were filmed and counsels' arguments can be viewed on the Court of Appeal's YouTube channel:

• 14 March 2023   Morning
• 14 March 2023   Afternoon
• 15 March 2023  Morning, and
• 15 March 2023 Afternoon.

In its judgment which was handed down on 25 April 2023, the Court of Appeal allowed the appeal, Lord Justice Birss dissenting (see Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others [2023] EWCA Civ 438 (25 April 2023).

The Judgment

Each of the Lords Justices delivered a full judgment. 

Lord Justice Arnold's covered the following topics:

• The skilled addressee in para [3];
• The expert witnesses in paras [4] and [5];
• Agreed common general knowledge between paras [6] and [23];
• Disputed common general knowledge between paras [24] and [36];
• The presentation in paras [37] and [38];
• EP 2 093 953 between paras [39] and [45];
• Claim 1 of EP 2 093 953 in unnumbered paragraphs between para [45] and [40];
• Claim 4 of EP 2 093 953 in para [49];
• Other reference works between paras [50] and [71];
• Mr Justice Meade's assessment between para [74] and [97];
• Appeals on obviousness between paras [98] and [99];
• Grounds of appeal between paras [100] and [107];
• Ground 1 between paras [108] and [110];
• Ground 3 between paras [111] and [120] ;
• Ground 4 between paras [121] and [130];
• Ground 5 between paras [131] and [141];
• Ground 6 in para [142]; 
• Ground 7a in para [143]; and
• Conclusion in para [144].   

Lord Justice Nugee addressed Ground 3 between paras [148] and  [152].  He explained why he agreed with Lord Justice Arnold that the appeal should be allowed on Ground 5 between paras [153] and [164].

Lord Justice Birss stated why he would have dismissed the appeal between paras [165] and [192].

Grounds of Appeal

Lord Justice Arnold listed the claimants' grounds of appeal as follows:

"[100] Optis appeal on eight grounds. Grounds 1-6 concern claim 1, while grounds 7a and 7b concern claim 4. Ground 2 can be ignored because it is the consequence of grounds 1 and 3-6.
[101] Ground 1 is that the judge was wrong not to find that the skilled person would have perceived hashing functions and RNGs as separate and distinct from one another, and ought to have found that the skilled person would have seen a relevant conceptual difference between them. This concerns step 2.
[102] Ground 3 is that the judge erred in concluding that the skilled person starting from Ericsson would retain the mod C part of the function and focus on changing the K*x + L part. This also concerns step 2.
[103]  Ground 4 is that the judge erred in finding that the skilled person would look in the literature for an appropriate RNG with which to replace K*x + L. This concerns steps 3 and 4.
[104] Ground 5 is that the judge erred in finding that the statements in NRC3 deprecating LCGs were of low relevance to obviousness. This concerns steps 5 and 6.
[105] Ground 6 is that the judge failed to stand back and consider whether taken as a whole, the steps from Ericsson to claim 1 were obvious.
[106] Ground 7a is that the judge erred in finding that the skilled person would ignore the teaching in Knuth that, in selecting D, the period should be much larger than the numbers that would actually be used. This concerns step 10.
[107] Ground 7b is that there was no evidential foundation for the judge’s finding that A=39827 was an obvious choice, particularly given his finding that the “max hits” metric for simulations was not common general knowledge. This concerns step 11. In oral submissions, counsel for Optis did not pursue this ground, but did rely upon the point about “max hits” as part of his argument in support of ground 6."

To understand these grounds and the submissions in support of them it is necessary to read paras [81] to [87] of Lord Justice Arbold's judgment for the 7-step progression from the presentation to the invention. 

Appeals on Obviousness

Before considering those grounds Lord Justice Arnold directed himself at [98] that obviousness involves a multi-factorial evaluation.  Referring to paras [78] to [81] of Lord Hodge's judgment in Actavis Group PTC EHF and others v ICOS Corp and another [2019] UKSC 15, [2019] Bus LR 1318 and paras [72] to [78] of the Court of Appeal's judgment in Re Sprintroom Ltd, Prescott v Potamianos and another [2019] BCC 1031, [2019] 2 BCLC 617, [2019] EWCA Civ 932 he said that the Court of Appeal was not justified in intervening in the absence of an error of law or principle on the part of the judge. In this appeal, the claimants faced the additional difficulties that Mr Justice Meade's assessments of the expert witnesses could not be challenged and his judgment contained a very careful, detailed and nuanced consideration of the evidence and the issues.

Ground 1

Lord Justice Arnold said that Ground 1 appeared to be a challenge to a primary finding of fact by the judge that could succeed only if there was no evidence to support the finding which was not the case. However, the learned lord justice noted that Lord Justice Birss had reformulated the ground as even accepting everything the judge said, those points do not justify the breadth of his conclusion.  However, even on that reformulation, his lordship found no error in the judge's finding. 

Lord Justice Nugee agreed that Ground 1 should be dismissed

As he said that he agreed with everything in Lord Justice Arnold's judgment except for his findings on Ground 5 it may be assumed that Lord Justice Birss would also have dismissed Ground 1.

Ground 3

After summarizing the claimants' argument in para [111], Lord Justice Arnold acknowledged that it was powerful at first blush.  He considered the evidence of the parties' experts.  He concluded that there was nothing in their reports or oral testimony that invalidated the trial judge's conclusion,

Lord Justice Nugee said that he was troubled by this ground, particularly step 2 of the above-mentioned 7-stage progression because it seemed to him that the skilled addressee could have made different choices.   However, he agreed that there was evidence to support the trial judge's finding.

Ground 4

A preliminary point was why should a skilled addressee search the literature at this stage rather than earlier.  Lord Justice Arnold replied that the addressee would consult the literature once he or she had identified what to look for.

Lord Justice Arnold summarized the claimants' argument at [121] and acknowledged its force at [123]. Once again he considered the expert evidence. He concluded at [130] that he could not say that the conclusion that Mr Justice Meade had reached was one that was not open to him. There was no error of principle on his part, and there was some evidence to support his conclusion.

Ground 5 

This was the ground upon which Lord Justice Arnold and Lord Justice Nugee allowed the appeal.

Lord Justice Arnold summarized the claimants' argument in support of Ground 5 in para [131] which he described as powerful in [132].   He then enquired how the trial judge could have reached an opposite conclusion.   Lord Justice Arnold reproduced paras [252] to [255] of Mr Justice Meade's judgment.  From those paragraphs, he detected an error in principle. the judge had relied on the defendants' expert for the interpretation of a key document,  By so doing he had also failed to consider how a skilled person would act upon the document.

Lord Justice Nugee agreed.

Lord Justice Birsss set out in full and analysed Mr Justice Meade's reasoning and concluded at [187]  that the judge was entitled to reach his finding.

Ground 6

Lord Justice Arnold dealt with this ground briefly.  In his view, the defendants' case on this point smacked strongly of hindsight.   It would not have been enough to justify an appeal on the point but it reinforced his finding that the appeal should be allowed on Ground 5.

Further Information

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