Introduction
It is common for parties to English patent litigation to settle their differences after the first instance judgment on the merits from the Court. This is for several reasons including the thoroughness of the Patents Court Judges, the Court of Appeal’s approach to issues such as obviousness (where only an error of principle will be overturned) and finally the cost both to winner and loser in terms of money and management time.
Settlement agreements between parties often provide for a “no-challenge” clause pursuant to which the parties agree not to contest the validity of each other’s IP or to support others in such challenges. This may include a provision whereby a challenger to a patent, having successfully invalidated a patent at first instance, agrees not to contest any attempt by the patentee to restore its patent on appeal. But what should the patentee (and the Court) do then? Until 20 years ago, the practice was for patents to be reinstated without further ado by a simple Consent Order filed at the Court of Appeal agreeing to overturn the first instance finding of the Court. However since the decision of the Court of Appeal in the Halliburton case in 2006, it has not been possible to reinstate patents unopposed. Instead, where a patentee seeks to persuade the Court of Appeal to reinstate a patent, pursuant to Practice Direction 52D para 14.1(6)(b), the UKIPO is notified of the appeal and it has the power to appoint an advocate to make representations to the Court of Appeal to ensure that a balanced hearing take place. Regardless of the outcome of the appeal, the patentee pays the costs of the UKIPO.
There have been quite a few “Halliburton” appeals in the last couple of decades and at least one example in the House of Lords/Supreme Court (Conor v Angiotech [2008]). A further instance took place in a judgment handed down on 22 March 2024, in which the English Court of Appeal overturned a finding of invalidity by the Patents Court in Bamford v Manitou. The appeal arose from the trial of a patent action concerning telehandlers between the appellant, J.C. Bamford Excavators Ltd (‘JCB’) and companies in the Manitou group (‘Manitou’). At first instance, discussed in a previous post here, Hacon HHJ found that that three of the four JCB patents that were asserted were invalid but one was valid and infringed by Manitou.
JCB appealed the decision but before the appeal was heard, the proceedings were settled. The terms of the settlement allowed JCB to continue its appeal against the finding of invalidity of one of the patents, without Manitou’s involvement.
The patent in issue at appeal was EP (UK) 2 263 965 (‘the Patent’), relating to a control system for a telehandler. The control system is designed to stop the telehandler becoming unstable by preventing the telehandler arm from being moved into a position where it causes the machine to tip about the front axle. The inventive concept of the Patent is to disable the control system when the machine is moving in order to prevent false indications of instability, thereby allowing the operator to move the telehandler arm at will.
The issue at appeal was whether claim 1 of the Patent lacked inventive step in the light of Japanese patent application No. 2000-329073 (referred to by the parties and the Court as ‘Aichi’).
It was accepted that the Patent was at least novel over Aichi as the latter related to a cherry-picker, rather than a telehandler (the difference being that the arm of a cherry picker can rotate). However, it was found at first instance that applying the control system of Aichi to a telehandler would be obvious and JCB did not challenge this finding on appeal. The question was whether the control system of Aichi fell within the claims of the Patent. If it did, the it was accepted to be obvious, it being straight-forward to transfer the control system of a cherry-picker to a telehandler. Ultimately, the Court of Appeal, construing the claims of the Patent purposively and in light of the specification, considered that the control system of Aichi (which enabled switching from one control system to another) did not fall within the claims (which required the control system to be disabled) and so the latter was not obvious. The first instance decision was overturned and the Patent ordered to be reinstated.
It may be thought the practice of requiring scrutiny of applications to reinstate patents might be unpopular with patentees which, whatever the outcome of the appeal, have to bear their own costs and those of the UKIPO. However this is in fact not the case. As was made clear back in the Halliburton case itself, patentees know that if a patent is reinstated without scrutiny on appeal following a finding of invalidity at first instance, that patent is as good as useless. It is much better for a patentee to have a finding “in the teeth of some opposition” (to quote the advocate for Halliburton). The JCB decision is a good example of the Court of Appeal applying its own views to a patent and reaching a different result.
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This case is also interesting as a resource for debating how to construe a claim properly, when looking at its validity over the prior art. How much weight does one give to the context, the specification? The courts in the USA have it, that the only meaning that matters in a claim is the one that is derived in the context of the specification whereas at the EPO they choose not to follow that approach.
JCB turned on the meaning of the word “disable”. One would think that this is about as clear a word as one could imagine, but see how the HC and the CA saw it differently. Birss LJ turned to the specification for assistance. Does the EPO still maintain that he was wrong to do so?