29 May 2009

Patents: Leo Pharma v Sandoz Ltd.

In Leo Pharma (a/s Leo Laboratories Ltd) v Sandoz Ltd [2009] EWHC 996 (Pat) (15 May 2009) the defendant admitted that it had infringed the patent in suit but contended that the patent was invalid for lack of novelty and obviousness. The case was decided on its facts rather than on the law.  

On anticipation, Mr Justice Floyd summarized the principles expounded by Lord Hoffmann in Synthon BV v. Smithkline Beecham plc [2005] UKHL 59 (20 October 2005) as follows:
"(1) There are two requirements for anticipation which it is important to keep separate, 
(a) disclosure and 
(b) enablement;

(2) So far as disclosure is concerned, the prior art must disclose subject-matter which, if performed, would necessarily result in an infringement of the patent."

In Leo Pharma the relevant subject-matter contained in the prior art document was said to disclose the invention not because it described the product in terms (which it did not), but because it was said that carrying out the disclosure would inevitably produce that product.   The judge disagreed.   Experimental and other evidence did not support the claim that the patented product would be the inevitable result.

As to obviousness, his lordship followed Lord Justice Jacob's reformulation of the Windsurfing questions as set out in Pozzoli v BDMO SA[2007] EWCA Civ 588[2007] FSR 37 at [23].

"(1) (a) Identify the notional "person skilled in the art"

(b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the "state of the art" and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?""

The defendant put its case on obviousness in several ways none of which appealed to the judge.   The attack on validity having failed, the judge found for the claimant.

Patents: TNS Group Holdings Ltd. v Nielsen Media Research Inc

A fascinating little case on judicial discretion.  The claimant in TNS Group Holdings Ltd. v Nielsen Media Research Inc. claimed the revocation of the defendant's patent for a television audience management measurement system. It had also launched opposition proceedings in the European Patent Office under art 99 of the European Patent Convention.   Shortly before the issue of the claim form in the present proceedings the patentee had offered the claimant a licence the terms of which were not disclosed but which are unlikely to have been burdensome.  

The patentee applied to strike out the claim under CPR 3.4, alternatively asking for a stay on the following grounds:
(1) the revocation proceedings were pointless and wasteful and served no commercial purpose in view of the offer of a licence;
(2)   the proceedings had been brought for an improper purpose; and
(3)   the English revocation proceedings duplicated wastefully the opposition proceedings at the EPO.

Mr Justice Arnold accepted that he had power under CPR r. 3.4(2)(b) to strike out a properly constituted claim on the ground that it is an abuse of process in circumstances where it is plain that the litigation is pointless and wasteful and that such power may have been properly exercised in the defamation cases upon which the patentee relied, but in his judgment a case such as the present could not be struck out on that basis:
"In the present case it is not disputed by the defendant that the claimant has a properly constituted and arguable claim for revocation of the patent in suit, nor is it suggested by the defendant that there is anything in the conduct of the present claim for revocation, as opposed to its institution, that amounts to an abuse of process. Given that any person can apply to revoke a patent and that the applicant's motive is irrelevant, in my judgment it follows that it is not an abuse of process to apply to revoke a patent even if, as counsel for the defendant argues, the claimant has no sufficient commercial interest in bringing the present claim. There is no requirement that the claimant should have any commercial interest at all. It is sufficient that the claimant contends that the patent is invalid and should be revoked. The position is different to that in defamation cases because a patent is a monopoly and section 72(1) of the 1977 Act reflects the public interest in ensuring that invalid monopolies are revoked."
The key point lies in the last sentence.    The public has an interest in the dispute.

The "improper purpose" alleged in this case was that a judgment of the English court would be used in litigation elsewhere in Europe.   The judge's answer to that was that:
"it is perfectly legitimate for the claimant to seek to obtain a judgment of this court on the validity of the patent in suit in the hope that it will lead to a settlement of the dispute between the parties throughout Europe. Nor, in my judgment, would it be in any way illegitimate for the claimant, absent such a settlement being achieved, to seek to rely upon the judgment of the English court in proceedings before the courts of other Contracting States or the European Patent Office. It is commonplace for parties litigating on the same European patent in a number of Contracting States to put before the courts of one Contracting State decisions arrived at in one or more other Contracting States. I do not see that such conduct can possibly be stigmatised as an abuse of process. That is particularly so given that such judgments may come to the attention of courts in other Contracting States in any event. The courts of all the Contracting States are seeking to apply the same substantive law. It would be most unfortunate if anything were to be done which made it more difficult for the courts of the Contracting States to arrive at common answers to common questions."
As to the third point on costs, he agreed that the point was well made but looking at matters in the round, Mr Justice Arnold concluded that the present case was not one in which he should exercise his discretion to grant a stay.

28 May 2009

Trade Marks: Daimler AG v Sany Group Company Ltd

In Daimler AG v Sany Group Company Ltd [2009] EWHC 1003 (Ch) (14 May 2009) the registered proprietor of the following marks 

sought injunctions and other relief against Sany Group Co. Ltd. in respect of its use of the following sign:

The claimant's marks had been registered in the UK and at OHIM for various goods and services for may years and it brought proceedings under s.10 (2) (b) and (3) of the Trade Marks Act 1994 and art 9 (1) (b) and (c) of the Community Trade Marks Regulation.

The Defendant acknowledged that it has sold and intends to sell construction machinery (including self-propelled and truck-mounted construction machines) in the UK under and by reference to the above sign but contended that "on a 'real world' assessment of the factors germane to the question of liability, the claims for infringement and passing off should be rejected". 

The action was listed for trial in July 2009 with an estimated duration of 3 to 5 days. In an attempt to simplify its position the claimant applied for summary judgment under Part 24 upon the basis that the degree of similarity between the Defendant's marks and the protected trade marks was so great as to be clearly sufficient to justify a finding of infringement .  Mr. Hobbs regarded that as "a pragmatic narrowing of its claim for infringement rather than the identification of a discrete claim or issue arising in the context of the proceedings as a whole."

Rejecting the application, the learned deputy judge explained:
"The central question in an action for infringement presented upon the basis encapsulated in the application for summary judgment is whether X times Y equals Z, with X representing the degree of similarity between the marks in issue, Y representing the degree of similarity between the goods in issue and Z representing the existence of a likelihood of confusion. In contrast to the position in registration proceedings, the relevant assessment must be made in the light of the specific circumstances characterising the allegedly infringing uses."
That usually required evidence of similarity of goods. There was an additional factor in this case, namely the defendant had counterclaimed for revocation of the claimant's registrations in respect of some specified goods on grounds of non-use.

Those were matters that should be tried.

Jurisdiction to make Declarations before Trial: Hayim v Couch

It takes a lot of courage for a deputy judge to extend the envelope of settled practice and Mr. Stephen Smith QC is to be congratulated for doing just that in Hayim and others v Couch [2009] EWHC 1040 (Ch). In this case Mr Smith was asked to make declarations of right without there having been a trial, or indeed any hearing on the merits of the claims.

The request was made in order to give effect to a compromise that had been negotiated shortly before a very complex and probably messy share dealing claim between relations was due to come on for trial. The parties had reduced the terms of their settlement to writing and their settlement agreement provided for a consent order that contained a number of declarations on the validity of share dealings that had been the subject of the dispute.

Both parties referred the judge to authorities dating back to Williams v Powell [1984] WN 141 that the court does not make declarations of right either on admissions or in default of pleading.  In Wallersteiner v. Moir [1974] 1 WLR 991, for example, Lord Justice Buckley had said at page 1029
"It has always been my experience and I believe it to be a practice of very long standing, that the court does not make declarations of right either on admissions or in default of pleading. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] WN 141, where Kekewich J, whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence."
However, Mr. Smith noted that the rule was not immutable and that judges had become increasingly willing to make declarations, particularly since the CPR came into force. He drew the following conclusions about the rule:
"(1) That the rule that a court should not grant a declaration except after a trial was only ever a rule of practice.
(2) That the rule should not be followed if following it would deny the claimant the fullest justice to which he is entitled.
(3) That the rule is less strong since the coming into force of the Civil Procedure Rules than it was when the Rules of the Supreme Court held sway.
(4) That where the parties' consent to (or agree not to oppose) the grant of declaratory relief and that consent forms part of a
bona fide commercial bargain entered into between them to avoid the need for a trial, the Court is likely to consider it necessary to grant the declarations sought in order to do justice between them."
Applying those principles the learned deputy judge acceded to the parties' request and made the declarations in the terms sought.

Declarations as to the subsistence of intellectual property rights or whether they have been infringed are routinely sought in statements of case and the reluctance of courts to grant declarations of right without trial can occasionally be a stumbling block.   The problem is that some rights such as patents confer monopolies that affect the public at large as well as the parties to the action. Mr Smith's judgment may assist in some negotiations such as over whether an original work has been copied or not but probably not much further.

24 May 2009

Trade Marks and E-Commerce: L'Oreal and Interflora

Over the last few months there have been a spate of claims by luxury goods manufacturers against eBay. In RG 07/11365 L'Oréal SA c eBay France SA in which the Tribunal de Grande Instance of Paris dismissed trade mark infringement claims by L'Oréal against eBay for providing an on-line market for counterfeit goods on 13 May 2009.   A similar case came before Mr Justice Anold in  L'Oreal SA and others v eBay International AG and others [2009] EWHC 1094  on 22 May 2009.   The questions that arose in both cases were summarized by the judge as follows:
In this case the well known cosmetics, skincare and toiletries multinational, L'Oréal, sued a number of alleged counterfeiters and parallel importers for trade mark infringement.   These were defendants 4 to 10.   They also sued various eBay companies for providing a sales outlet for those counterfeiters (defendants 1 to 3).   The judge found that it was by no means easy to identify counterfeit products. Often chemical; analysis was required.  Of course, eBay did not condone counterfeiting or other IP infringement.   On the contrary it provided a procedure by which IP owners could identify and remove infringing goods from its auction.     But the judge still found that there were things that eBay could have done to inhibit counterfeiting.    

His lordship identified the following issues:
    i) Were the goods sold by the Fourth to Tenth Defendants infringing goods? This issue divides into four sub-issues concerning (a) counterfeits, (b) non-EEA goods, (c) tester and dramming products and (d) unboxed products.
    ii) Are eBay Europe jointly liable for any infringements committed by the Fourth to Tenth Defendants?
    iii) Are eBay Europe liable as primary inf ringers for use of the Link Marks in relation to infringing goods?
    iv) Do eBay Europe have a defence under Article 14 of the E-Commence Directive?
    v) Do L'Oréal have a remedy under Article 11 of the Enforcement Directive?
    vi) Are the Distance Selling Regulations relevant to any of the foregoing issues, and if so how?
Upon those issues the judge reached the following conclusions:

    i) The fourth to tenth defendants had infringed the claimants' trade marks. In the case of the fourth to eighth defendants the goods they sold were put on the market outside the EEA and L'Oréal did not consent to those goods being put on the market within the EEA. In the case of the ninth and tenth defendants the goods they sold were counterfeits.
    ii) Whether the sale by sellers on the Site of testers and dramming products and of unboxed products amounts to an infringement of the trade marks depends upon questions of interpretation of the Trade Marks Directive as to which the law is unclear (see paragraphs 319-326 and 331-342 above). Although these questions are academic so far as the acts committed by the fourth to tenth defendants are concerned, they are potentially relevant to the question of what relief, if any, L'Oréal are entitled to. Accordingly, guidance from the ECJ was required on these points.
    iii) eBay Europe are not jointly liable for the infringements committed by the fourth to tenth Defendants.
    iv) Whether eBay Europe have infringed the claimant's trade marks by use in sponsored links and on the eBay site in relation to infringing goods again depends upon a number of questions of interpretation of the Trade Marks Directive upon which guidance from the ECJ is required (see paragraphs 388-392, 393-398 and 413-418 above).
    v) Whether eBay Europe has a defence under art 14 of the E-Commerce Directive is another matter upon which guidance from the ECJ is needed (see paragraphs 436-443 above).
    vi) As a matter of domestic law the court has power to grant an injunction against eBay Europe by virtue of the infringements committed by the fourth to tenth defendants, but the scope of the relief which art 11 requires national courts to grant in such circumstances is another matter upon which guidance from the ECJ is required (see paragraphs 455-465 above).

    i) selecting the Interflora Signs as keywords;

    ii) nominating the Interflora Signs as keywords;

    iii) associating those keywords with M & S's URLs;

    iv) setting the cost per click in relation to those keywords;

    v) scheduling the timing of the display of M & S's sponsored link; and

    vi) using the Interflora Signs in business correspondence relating to the invoicing and payment of fees and/or the management of an AdWords account.

The question whether the purchase of sponsored links infringes a trade mark had come before several other courts and there had been several references to the European Court of Justice. Marks & Spencer applied to Mr Justice Arnold for a stay pending those references.   Interflora opposed such a stay without undertakings from Marks & Spencer which that company refused to offer.    In the course of argument the judge indicated that he would make yet another reference to Luxembourg without extracting undertakings from Marks & Spencer.

The precise formulation of the questions is still to be decided in both cases.   The European Court's decision will be relevant not just to the issues in these two cases but also to the domain name disputes.   Panellists up to now have held that parking a domain on a site that generates sponsored links is usually but not invariably evidence of bad faith.   An instance where it was not is Admiral Insurance Services Limited v. Mr. Adam DickerWIPO Case No. D2005-0241.   I had to wrestle with those same issues in Case No. D2008-1531 Intesa Sanpaolo S.p.A. v. George Papadakos. I shall be personally interested in the ECJ's guidance.