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Friday, 30 January 2015

Flood's patent threats action runs dry

The making of unwarranted threats to sue someone else for patent infringement is actionable in the United Kingdom.  The principle is plain  -- but its execution in statutory terms and the subsequent case law has revealed convolutions and curlicues that can scarcely have been imagined back in the mid-1970s when the provision was drafted.  Here's a note on the most recent case on the subject, concerning which the IPKat is delighted to have received the following guest post from our good friend and occasional contributor Paul England:

Flood’s summary threats action sinks

Patent actions are highly unusual territory in which to see successful summary judgment applications, and His Honour Judge Hacon continues that almost unbroken line in Global Flood Defence Systems & Another v Van den Noort Innovations BV & Others [2015] EWHC 153 (IPEC). However, this case was not concerned with the normal difficulty of trying to prove summarily that there had been infringement and/or invalidity. Instead, it is about the defence of justification in the context of making unwarranted threats to sue for patent infringement that were based only on a patent application.

At the heart of the dispute is a European patent application (No. 2315880) "Self closing flood barrier and method for protecting a hinterland using same", designating the UK, in the name of the first defendant. For a while the application was exclusively licensed to the first claimant, permitting it to sell a flood defence device called the ‘self closing flood barrier’ (SCFB). The agreement came to an end, at which point the first claimant began to sell a flood defence product called a ‘self activating flood barrier’ (SAFB). The defendants thought that the SAFB was not significantly different to the SCFB and that it fell within the claims of the patent.

The defendants objected to the sale of the SAFB and did the following:
• they placed three notices on the first defendant’s website, alleging infringement of their patents and

• they sent a letter by email to Sir Peter Luff MP, an organiser of a House of Commons reception called “Britain Prepared – A Flood Resilient Society”, complaining that the second claimant was infringing the patent.
Patent litigation: a worse threat than floods?
A few weeks after these actions, the claimants filed a claim alleging, among other matters, that the steps taken above amounted to groundless threats. However, the basis of the unjustified threats action – Section 70(1) of the Patents Act 1977 – refers only to threats of proceedings for infringement of a “patent”. Did this mean that the section applies to threats of proceedings on the basis of Section 69 Patents Act (the right to claim relief after grant for infringements committed prior to grant)? If so, is the defendant entitled to rely upon a defence of justification under Section 70(2A) Patents Act?

On the first point, the judge referred to the Court of Appeal in Patrick John Brain v Ingledew Brown Bennison & Grant [1996] FSR 341 as authority for the principle that the cause of action under Section 70(1) is available for such threats. As a matter of logic, the Court of Appeal held, it must follow that the defence of justification (then under Section 70(2)) should also be available. However, and as made explicit by Laddie J when later considering Brain in [1997] FSR 271, in order to rely on the defence of justification, the patent must be granted by the time of trial.

The parties agreed that the test to be applied to the defence under Section 70(2) was whether it lacked reality, and the claimants advanced three reasons why it fell short, beginning with the point in Brain:
1. There was no prospect that the patent would be granted by the time of trial;

2. The defendant’s threat to bring imminent proceedings for infringement of a granted patent could never be justified at trial and

3. The threats were made in respect of sale of SAFB products, which fell outside the claims of the application.
There was just sufficient evidence on the first point for Judge Hacon to conclude that it was plausible that the patent would be granted before trial, and the third point could not be accepted because no evidence had been admitted on the claims of the application.

As regards the second point, there was an issue of construction: were the website notices and the letter to Sir Peter Luff threats to bring imminent proceedings or were they contingent on the grant of the patent? The judge understood the claims to mean that proceedings had already been brought against the claimants, including claims for infringement of a granted patent, and that other infringers would be pursued, including purchasers of SAFBs. Finally, the claimants argued that the defendant’s threats to join in third party purchasers to imminent proceedings for infringement of a patent were unjustified because they could not be made good (ie it is not possible to bring proceedings against a patent that has not granted). Judge Hacon rejected this argument, agreeing with the defendant: the issue is not whether it is possible for the defendants to do what they have threatened, but whether there is a real prospect of establishing at trial that the sale of SAFBs between the date of the threats and the grant of the patent infringed its Section 69 rights.

In light of the above, the claimants’ summary judgment application was dismissed.
Thanks, Paul!

1 comment:

Anonymous said...

Flood, Flood, glorious Flood!
Just try to threaten, t’will turn out a dud!
Summarily follow
Threats that are hollow
That no one will swallow
Your name will be mud!

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