Nikken Kosakusho Works & Anor v Pioneer Trading Company & Anor

LORD JUSTICE JACOB: This is an appeal from the second judgment of Mann J in these proceedings. By the first, unappealed judgment, 8th October 2004, 2004 EWHC 2246 Ch, he held that Nikken's UK patent, No. 2332316, was invalid. By the second judgment, 19th October 2004, 2004 EWHC 2426 Pat, he refused to allow Nikken an opportunity to amend the patent in a way which they contend would save its validity. Mann J's reasons were twofold: first, by the exercise of his discretion and, second, on the basis that the proposed amendment would contravene section 76(3) of the Patents Act 1977.

Mann summarised the invention of the patent in paragraphs 2-6. It is for a high speed tool chuck. The patentee's proposal was to have a groove cut into a flange as shown in the drawing in the judge's judgment. He set out the relevant part of claim 1 in his paragraph 7. The key words giving rise to the dispute before him were "an annular groove of predetermined depth" which he underlined when he set out the claim.

I am bound to say that it beggars belief that a patent agent could draft a claim in such words or that the Patent Office would accept them. "Predetermined depth" cries out for the question, by whom? And what does it mean? That has some effect on the current matter in dispute because it would or ought to have raised the possibility of amendment at an early stage.

Mann J had to make the best of these words. He decided that it meant "a groove whose depth the maker has decided in advance" (paragraph 29 of his judgment). From that there has been no appeal. In the course of reaching his decision he rejected a construction that "predetermined depth" meant "approximately 3 to 5 millimetres" (paragraphs 26 to 29). It may be noted that this construction was only advanced early on the second day of trial. No evidence was directed by either side to the claim on the basis that it had this meaning.

After the evidence had been given, Mr Baldwin for the patentees indicated that he might want to amend the patent if the judge was against him on his construction. He asked the judge to make certain findings of fact, not merely to construe the claim. The judge did not do so and said that he would not do so.

In the event, the judge construed the claim in the manner I have indicated. He then held that the claim lacked novelty over a prior patent called Diashowa 1. He went on to say that if he had been wrong on this he would have rejected an obviousness attack based on Diashowa 1 and certain other pieces of prior art. He held that claim 8 (relating to the provision of an O-ring in the groove) was obvious over Diashowa 1. Thus, by his first judgment Mann J held all the existing claims invalid.

When his judgment was received the patentees sought his permission to apply for an amendment and asked him to stay the order for revocation meanwhile. The proposed amendment is to substitute for the words "predetermined depth" the words "approximately 3 to 5mm in depth". This the judge refused the patentees permission to proceed with.

He first considered the question of discretion. This arises under section 75 of the Act:

Clearly, if the amendment is proposed in sufficient time before trial the defendant has a full opportunity to attack the proposed amended claims, not only on their allowability or in the exercise of discretion, but on their ultimate validity. The existing procedure for an application to amend the patent specification is governed by CPR Part 63.10. The procedure is by way of an application notice, service on the Comptroller, subsequent advertisement and so on. The procedures can, in appropriate circumstances, be gone through quickly or gone through provisionally on the basis that probably no third party will ever come in to oppose. It may be noted that the rules specifically require by Part 63.10 that the patentee must state whether he will contend that the claims prior to amendment are valid. That means that in advance of trial everyone knows where they stand. The patentee is either saying that the original claims are all right or not, and he is plainly also saying that the proposed amendment claims are all right.

In case (b), after trial but where effectively no more than claim dependency is being dealt with, again the position is clear. Following a conclusion that some claims are valid and others are not, the patentee is normally entitled to relief pursuant to section 63 of the Act. Normally the court will impose as a condition of relief that the invalid claims be amended by deletion. Problems may arise if it were held that the patentee had been covetous in some way or other and ought not to be allowed to amend at all. Nothing of the question arises here.

Class (c) involves something different, a proposed claim which was not under attack and could not have been under attack prior to trial. If the court is to allow such a claim to be propounded after trial, there is almost bound to be a further battle which would arise in the proposed amendment proceedings. That battle will be over whether or not the proposed amended claim is valid. I say "almost bound" because I can just conceive a case where the point was covered by the main litigation in some way or other.

That is not the case here. Mr Baldwin frankly accepted that if the proposed amendment proceedings were to go ahead, it would be open to Pioneer to advance a case on obviousness, a different case from the one they were advancing before. This would be a case that one obvious way to implement Diashowa 1 would be to make one an embodiment with a groove of 3 to 5mm, not for the patentee's purpose but for Diashowa's purpose. He gave no explicit purpose except that he wanted to put something in the groove. No evidence was directed to whether or not it was obvious to implement Diashowa in that way and there was no need to put any such evidence in because it was not an issue before Mann J at the first trial.

So what is proposed here will or could lead to two trials instead of one. In my judgment, an exercise of discretion to allow that would be improper for three distinct reasons, which in the end all amount to the same.

Firstly, there is the straightforward application of the principles of Henderson v Henderson, as the judge noted.

Secondly, specifically in the field of patents, the courts have made it plain that this sort of post trial amendment should not be allowed if it would involve a second trial on validity. In Windsurfing v Tabur Marine [1985] RPC 59, Lord Oliver was considering a post trial application for amendment. He rejected it, as did the court, noting that as follows:

Applying that here, plainly there would be a second trial, the very thing that Oliver LJ is saying ought not to happen. Mr Baldwin's only answer is that the second trial would be a little one. That will not do.

Aldous LJ was to exactly the same effect more recently in Lubrizol Corp v Esso Petroleum Co Ltd. [1998] RPC 727,790 which epitomises it all:

It may be noted in passing that in no patent case since the modern system of amendment came in has Mr Baldwin been able to find an instance where somebody was able to make a validating amendment post trial of the kind we are now considering.

Thirdly, the CPR are dead against the kind of procedure which Mr Baldwin seeks to invoke. The whole code is governed by the overriding objective contained in Part 1.1.1. 1.1.2 specifies some examples of cases of dealing with a case justly. 2(b) is "saving expense". Plainly a second trial would cause increased expense. 2(d) is ensuring that it is "dealt with expeditiously and fairly". Having two bites of the cherry is doing neither of those things.

The rules descend into more detail. Under the court's duty to manage cases, 1.4 requires the court actively to manage cases and 1.4.2 says that active case management includes "identifying the issues at an early stage and dealing with as many aspects of the case as it can on the same occasion." Henderson v Henderson is fully reinforced by the new rules.

Mr Baldwin says that all these matters can be dealt with by compensation in costs, whereas his clients might lose an otherwise valuable patent. That sort of argument can be made by every claimant who wishes to assert a claim when he could have asserted earlier, and is met by the Henderson v Henderson rule. He can always say: "I am going to lose a case which may be a good case. That is not fair. The other side can be compensated in costs." It is no different that it is a patent that is going to be lost instead of a good case.

Moreover I am not satisfied that this case is only about costs. Always when the question of a patent validity is in issue commercial uncertainty is created, not only for any of the parties involved but the public in general. The court is particularly entitled to have regard to that.

Mr Baldwin says that he did his best to raise the point but he also accepts that it could have been raised a lot longer before trial. It was too late when he raised it. The evidence was closed. Mr Purvis's client had no chance whatever of running a case that one obvious way of implementing Diashowa was to use it with the specified groove depth.

Mr Baldwin also advanced before us a suggestion of multiple difficulties and possibilities if people, who, faced with possible different constructions to their patent claims, have to think about it well in advance of trial. They will, he suggested, offer amendments of a variety of different sorts depending on the various pieces of prior art that are pleaded, so that they can cater for all eventualities. The result would be that the court would be faced with a whole host of potential issues and cases would become unmanageable. I regard that as a spectre and not something real. It has never happened before, and yet nobody has been allowing amendments of this part after trial before.

In the real world patentees, faced with a real problem about their construction of their claims, ought to face up to them early and decide whether they need an amendment or might need an amendment. That is one of the purposes of the rule, to make people face up to their cases at an early stage, not at a late stage.

Mr Baldwin says that the judge failed to take into account or got wrong a variety of matters. Firstly, he did not consider the effect of depriving Nikken of the patent compared with compensation to Pioneer in costs. This is a point that I have dealt with. It always happens when somebody is debarred from bringing a claim pursuant to the Henderson v Henderson principle.

Secondly, he said that the judge should take into account that the issue had been raised at trial and that an attempt was made to get the judge to resolve issues that were not before him on the pleadings as they stood. I regard that as quite unfair. The judge was entitled to deal with just the issues which were before him. He would not have been entitled to do what Mr Baldwin did because they were not issues in front of him.

Mr Baldwin's third point was that the judge was wrong to say that it was oppressive and was wrong to say that the relevant issues seemed to have got themselves decided on the way. I do not see that as so at all. The relevant issue was not decided on the way. That is why it would have to go to another trial. The judge concludes, quite rightly, that it would not be fair to Pioneer to force on them a further round of litigation.

Mr Baldwin's fourth point was that the judge did not take into account that Pioneer did have an opportunity to lead evidence or cross-examine about the claim on the basis that it had the construction of 3-5mm. But there was no reason for them so to choose. They could stand pat on their view of the construction of the patent. Because it was not in issue, if they had started cross-examining on that basis, the judge might have said: "Why are you asking these questions?" It certainly was not necessary to ask any such questions.

Fifthly, Mr Baldwin relied upon the fact that the judge indicated that it might not be necessary to have any more evidence (paragraph 24). I am bound to say that I am not convinced of that. A quite different case of obviousness, one based on the way of implementing Diashowa 1, would be the one that would be likely to be advanced in a new trial. That would not have involved anything to do with the patentees' inventive concept. It would just be a question of, how would you implement a piece of prior art which you are entitled to do because it in the public domain?

Sixthly, Mr Baldwin took issue with what the judge said in paragraph 25 about the fact that the trial would have taken a different shape. "What different shape might it have had?" Mr Baldwin asks forensically. The answer is the one I have just given.

Seventhly, Mr Baldwin said that the judge should have had but did not have regard to the impracticalities of his view. His view required the patentee to decide whether he was going to apply for an amendment at an early stage so that the matter could be dealt with at trial. I regard that as the practical way to proceed in a patent action. In this regard patent actions are no different from any other actions. The judge was plainly right in exercising his discretion. It follows that it is not necessary to consider the question whether or not he was wrong about the question of added matter. I would not for my part wish to be taken as endorsing his approach it. I would dismiss the appeal.

LORD JUSTICE LAWS: I agree. I wish only to underline my firm support for the view, which is a major and emphatic theme of my Lord, Jacob LJ's judgment, that the result of this appeal is driven by the principle of the general law given by Henderson and clothed with renewed vigour by the overriding objective of the CPR, that in any given litigation the parties are required to bring forward their whole case. It provokes certainty of economy and minimises expense, and it applies as powerfully in this area of the law as any other.

LORD JUSTICE WALLER: In one sense the question is whether there should be some special rule in patent cases. In any other litigation it would be unfair to allow a party to amend his case post judgment so as to allow an opportunity to succeed after a further trial, however small. The question is whether there is something special about patent litigation. The authorities do not support the proposition that there is something special. Indeed, those authorities cited both by the judge and by my Lord go to the opposite effect. Those are reinforced, as I would see it, by the new CPR. I am relieved to find the position to be so.