Breaking news: Court of Appeal affirms "no-stay" decision in IPCom/HTC patent scrap

This Kat has received an excited email circular from his friends at Bristows concerning the fiercely-contested battle between is-it-a-European-patent-troll IPCom GmbH [better known for its dramatic patent litigation against Nokia, on which see, e.g., earlier Katposts here, here, here, here, here and here].

"The ... Court of Appeal [for England and Wales, there being no UK Court of Appeal] today handed down a significant judgment for the enforcement of patents in the UK.

Is it the EPO's fault that its decisions are
so slow, or should we just blame the parties
and their professional representatives ...?

There has long been a question mark as to whether national courts should proceed with a patent dispute where the validity of the same patent is also being considered at the European Patent Office (“EPO”). Doing so brings the risk of inconsistent decisions, and as the EPO ultimately trumps national courts on questions of validity, faster moving national proceedings can be undermined by a subsequent EPO decision. EPO proceedings, however, can move very slowly, taking at least several years and in some cases a decade or more. Staying the national case may, therefore, deny the parties a resolution in a meaningful timeframe. Given the very large financial sums at stake in modern IP disputes, dealing with this dilemma is hugely important to industry.

The Court of Appeal has looked again at the guidelines which courts should use in exercising their discretion in such cases. Lord Justice Floyd concluded that, given the tensions inherent in the European patent system, judges should maintain their ability to exercise a discretion to progress or stay a case depending upon its facts. One factor in favour of a stay would be if the patentee were likely to irrevocably gain some compensation from the defendant which might later be found to have been wrongly bestowed. If the patentee is prepared to give an undertaking to return any such money, however, then allowing the proceedings to progress in parallel could achieve at least some certainty as between the parties in a sensible timescale".

Bristows acted for IPCom in this appeal, which affirmed the decision of trial judge Mr Justice Roth in the Patents Court back in January at [2013] EWHC 2880 (Ch).

Lord Justice Floyd, with whom Lady Justice Rafferty and Lord Justice Patten concurred, explained the background succinctly at [4] of his 95-paragraph judgment:

"The appeal arises in a case where IPCom, a patentee which does not itself manufacture or market products in accordance with its patent, seeks to cause HTC to enter into a licence rather than, on IPCom’s case, to continue infringing by selling its mobile telephones.  It is accepted that this is a case where no injunction will be granted: the patent is said by IPCom to be essential to the UMTS mobile telephony standard, and IPCom have undertaken to grant licences on fair, reasonable and non-discriminatory (“FRAND”) terms.  HTC characterises the case as just being about money, whereas IPCom maintains that its whole business depends on the exploitation of its patents, and a stay would prevent it moving towards a position where it can enforce them".

The decision of the Court wasn't on BAILII when this note was posted, but you can read it here or download it here.  When one or more of the Kats have had a chance to digest the court's words carefully, a follow-up Katpost may materialise.  In the meantime, Merpel comments that, as EPO proceedings seem to get slower and slower, while the commercially valuable life of a patent shrinks and British patent proceedings get faster and faster, prospects of securing a stay of British proceedings ahead of a definitive validity ruling should become increasingly remote.