Koninklijke Philips Electronics NV v Nintendo of Europe GmbH

What is before me is the final matter to be resolved following my judgment in these proceedings [2014] EWHC 1959 (Pat). My conclusion was that patent 2,093,650 was in a state of partial validity, in the following sense:

Before the court at trial there was an application to make the appropriate rewriting amendment to claim 1 to cure the added matter. Also before the court at trial, the patentee made it clear that it maintained the independent validity of claim 2 over claims 1 and 3. That meant that it was clear to everyone, the patentee, the court and Nintendo, that a possible outcome could be that although claim 1, or for that matter claim 3, were invalid, claim 2 might be valid. Therefore in addition to the rewriting amendment to claim 1, amendments would be sought to concatenate claim 2 into claim 1 and delete claim 3. That would arise if the court found claim 2 to be valid and claims 1 and 3 to be invalid. In the result, that is the conclusion that I reached, claims 1 and 3 lacked novelty and inventive step but claim 2 did not.

Accordingly, ordinarily it would be a simple matter to amend claim 1 so as to encompass claim 2 and to delete claim 3. The matter would proceed. The claim dependency of other claims would be sorted out and no problem would arise. That would involve accepting the application that the patentee had made to amend in order to deal with that added matter, and then applying the jurisdiction under section 63 of the 1977 Act on a finding of partial validity.

I should say, and I wish to emphasise this, that the conclusion which I reached and its consequences were an entirely foreseeable outcome as the matter was argued at trial.

Once judgment had been given, the patentee initially applied to make the amendment I have just described. That would, as I have said, be the ordinary amendment you would have expected. However, at that time Nintendo submitted that the court should not allow the amendment, because in the judgment one of the points which I decided was that claim 2 had a narrow meaning. I held that its reference to motion-sensing means did not include a camera. One of the reasons I gave for reaching that conclusion related to claim 3 (in which a camera was mentioned). It was not the only reason given but I will not in this judgment seek to qualify or change anything in my earlier judgment. All I am seeking to do is refer to and characterise it. Part of the judgment was that the way the claims were drafted was a factor in the construction which led to the conclusion I reached. This was a foreseeable outcome albeit as it happens it was contrary to Nintendo’s submissions.

Counsel for Nintendo submitted after trial that deleting claim 3, which had played a part in the construction, would alter the construction of claim 2. The deletion would alter it in such a way that claim 2 would then become invalid because it would include cameras. It would be invalid for the same reason that claim 3 was invalid. Therefore, counsel for Nintendo submitted, the court should not permit the amendment to delete claim 3. Moreover, since the result of refusing the amendment to delete claim 3 meant that an invalid claim remained in the patent, the submission was that the court should then revoke the patent altogether.

This would have the result that even though the court had decided that claim 2 was valid claim which had been infringed by the Nintendo product, nevertheless the 650 patent would have to be revoked.

This all arose after judgment at the hearing to deals with costs and consequences. Since the matter was not fully argued before me on the occasion, I decided to deal with all the other matters that could be dealt with (see the judgment dated 17^th July 2014), but to adjourn this question to a further hearing, which has taken place today.

Before me today, Philips’ position is as follows. They do propose to amend claim 1 to deal with the added matter. However they have thought about the problem and decided that rather than seek to delete claim 3 and make an amendment to put claim 2 into claim 1, what they wish to do is take the exceptional course of not amending the patent in that way, despite the fact it contains an invalid claim. They will invite the court to declare that claims 1 and 3 are invalid, but that claim 2 is valid, and any claim dependent on claim 2 is valid insofar as it depends on claim 2. They offer certain undertakings concerning not asserting the claims which are invalid against anyone else and not assigning the patent. They seek to make sure, as best they can, that the Comptroller is informed about what has taken place and is invited to put an appropriate entry on the Patents Register to make sure that the public is aware of the true position, i.e. that claims 1 and 3 are invalid, that claim 2 is valid, but the patent remains in its effectively unamended form. They submit that the court has the jurisdiction to do take this course, although they recognise that it is a jurisdiction which is very rarely exercised. That is because the normal practice is to remove a claim which is invalid by requiring a deletion amendment to delete invalid claims.

Mr Nicholson, who appears for Nintendo, submits that Philips should not be permitted to do this for essentially two reasons. First, he submits that the court has no jurisdiction or, alternatively, if it has a jurisdiction, it is one which should be so sparingly exercised that it should not be exercised in this case, to permit a patent to remain in a form in which it contains an invalid claim. That is a point of law which I will come back to. Second, he submits that the various proposals by Philips to give undertakings and so on in order to deal with the problem created by leaving a patent with an invalid claim in it are not sufficient to deal with the matter.

After hearing discussion on the point and the matter going backwards and forwards in the skeleton arguments and before me, the point on the undertakings comes down to an issue about whether Philips should be barred from making any further application to amend the patent. Mr Nicholson’s stance is that since Philips are not prepared to offer what he would regard as an appropriate undertaking not to make certain amendments in future, although he is not prepared to characterise exactly what that undertaking should be, the court should require Philips to give an undertaking not to amend the patent in any form in any tribunal at all.

The first matter I need to address is exactly what the legal context is in which this point arises. The relevant provisions are as follows. Section 63 of the 1977 Patents Act provides:

“63.

Relief for infringement of partially valid patent.

(1)

If the validity of a patent is put in issue in proceedings for infringement of the patent and it is found that the patent is only partially valid, the court or the comptroller may, subject to subsection (2) below, grant relief in respect of that part of the patent which is found to be valid and infringed.

(2)

Where in any such proceedings it is found that a patent is only partially valid, the court or the comptroller shall not grant relief by way of damages, costs or expenses, except where the plaintiff or pursuer proves that the specification for the patent was framed in good faith and with reasonable skill and knowledge, and in that event the court or the comptroller may grant relief in respect of that part of the patent which is valid and infringed, subject to the discretion of the court or the comptroller as to costs or expenses and as to the date from which damages should be reckoned.

(3)

As a condition of relief under this section the court or the comptroller may direct that the specification of the patent shall be amended to its or his satisfaction upon an application made for that purpose under section 75 below, and an application may be so made accordingly, whether or not all other issues in the proceedings have been determined.”

Section 72(4) of the Act provides:

“An order under this section may be an order for the unconditional revocation of the patent or, where the court or the comptroller determines that one of the grounds mentioned in subsection (1) above has been established, but only so as to invalidate the patent to a limited extent, an order that the patent should be revoked unless within a specified time the specification is amended under section 75 below to the satisfaction of the court or the comptroller, as the case may be.

Also relevant is Article 138(2) of the European Patent Convention but I will come back to that. Art 138(2) is plainly not irrelevant but I note, as Mr Hinchliffe submits, that s63 and s72(4) are not sections in the Act which s130(7) provides are framed so as to have the same effect as corresponding parts of the EPC.

Mr Hinchliffe submits that there are three relevant cases, starting with Gerber v Lectra, an unreported decision of Aldous J (as he then was) on 5 May 1993; then Kirin-Amgen’s Patent, a decision of Neuberger J (as he then was) [2002] EWHC 471, [2002] RPC 43; and then Zipher v Markem, a decision of Lewison J (as he then was) [2007] EWHC 154, [2007] FSR 18. He contends that these cases show that while the court will almost always require an amendment to delete an invalid claim, in fact it has the jurisdiction to leave an invalid claim in a patent which is partially valid, albeit doing so is a course which would rarely be adopted.

The course was adopted in Gerber v Lectra. That was a case in which the revocation of the patent and its amendment were to be considered under the 1949 Act, but the relief which fell to be granted fell to be determined under section 63 of the 1977 Act. Aldous J found that claim 1 of the Gerber patent was invalid, but that claims 5, 6, 8 and 21 were valid and infringed. In Gerber the defendant submitted that because claim 1 had been found to be invalid, the patent was invalid and no relief could or should be granted unless it was amended, or, alternatively, that if there was a discretion as to whether to require amendment, then as a condition of relief the court should order amendment. Aldous J thought that the real issue was that the defendant was seeking to require the patentee to make an application to amend which might be refused and, if that happened, the defendant would not have to pay damages or costs in the proceedings, even though the court had found that it infringed a valid claim.

Aldous J decided that section 63 of the 1977 Act meant that the court had the power to grant relief when a patent was partially valid and did not necessarily have to require a patent to be amended to delete the invalid claim. On the facts, that is the course he decided to take. Aldous J required the patentee to give undertakings not to issue proceedings or assign the patent, and to serve a copy of the order on the Comptroller.

The situation before Aldous J was quite different form the situation before me. There the patent had already expired some 3 years before and the patentee was not aware of any other putative infringers. Nevertheless, it is clear that in that case the court did take the exceptional course of allowing a patent to remain which contained an invalid claim because the patent had been found to be partially valid.

In Kirin-Amgen’s Patent the court had to deal with a situation in which it had again found that a patent was partially valid and partially invalid. Certain claims were valid, but others were invalid. The issue arose in the context of the patentee’s amendment application and the question of whether the specification was framed in good faith and with reasonable skill and knowledge.

Neuberger J analysed the legislation I have already referred to, and the cases, including Gerber. He rejected a submission that if a patent was partially valid but also contained an invalid claim, it had to be revoked unless it was amended. He held that where an amendment is solely a deleting amendment, it should, save possibly in an exceptional case, be granted. An important aspect of the situation before Neuberger J in Kirin-Amgen, in particular when one is understanding part of what is said in paragraph 57 of the judgment, is that at this stage the law was such that the discretion on amendments was different and involved wider considerations that the discretion applicable to amendments today under the current form of section 75. Therefore, it was more likely then that a patentee might fail to satisfy the court that an amendment should be permitted on discretionary grounds than it is today.

Mr Nicholson submitted that the reasoning of Neuberger J, in which he decided that the court had the power if it found a patent was partially valid to grant relief without deleting the invalid claim, was obiter. I do not accept that submission. In my judgment, Neuberger J’s reasoning on that subject was a key part of his overall reasoning in his judgment on the precise nature and extent of the discretion which he had to exercise on the facts of the case before him.

Finally, I can turn to Zipher v Markem. There I was referred to paragraph 18 of Lewison J’s judgment, which says as follows:

“It is true also that Zipher has conceded that the patent is partially invalid. But the important word, I think, is "partially". If it is partially invalid, it is also partially valid so Zipher is, in my judgment, asserting a legal right. Section 63 of the Patents Act 1977 recognises that relief may be given where a patent is partially valid. The practice of revoking a partially invalid patent is, in my view, just that; a practice. Nothing compels its revocation.”

Again this at first sight support’s Mr Hinchliffe’s submission.

Mr Nicholson submitted that the changes in the EPC as a result of EPC 2000, which took place after Gerber and Kirin-Amgen are such whatever the position was in Gerber and in Kirin-Amgen it is different today. I was not told if the changes took place before or after Zipher v Markem.

Mr Nicholson reminds me that the terms of Article 138 of the Convention are different today from the terms that they were in before and considered by Neuberger J. The two forms of Art 138(2) are:

As Mr Nicholson rightly submits, one reason for the changes to Article 138 related to the fact that under EPC 2000 all contracting states were required, insofar as they did not already, to adjust their law to permit patents to be amended. The previous version of Article 138 had to deal with the fact that not every contracting state allowed patents to be amended after grant. Of course the United Kingdom did allow such amendments.

There is some force in Mr Nicholson’s submission that the way Article 138 is drafted today could be read as saying that if a patent is partially invalid, the court shall amend it and revoke it in part. He submits that that is precisely what is not happening in the case before me.

Nevertheless, as Mr Hinchliffe has pointed out, neither section 63 of the 1977 Act or s72(4) were changed when EPC 2000 was implemented. Accordingly he submits (a) as a matter of construction of s63 in its face and (b) based on the cases I have mentioned, the section permits the court to grant relief on a partially valid patent and does not require the court to always delete an invalid claim, although no doubt a deletion would almost always be required. If and to the extent that the current form of Article 138 permits no alternative (if that is really what it means), that does not mean s63 should be construed differently since it is not a section listed in s130(7).

I accept Mr Hinchliffe’s submissions on jurisdiction. On its face s63 gives the court the jurisdiction to take the course proposed by Philips if it is satisfied that that is the right thing to do. The three cases referred to reinforce that conclusion. While it is plain that the Patents Court would in almost all circumstances require the deletion of an invalid claim, as a matter of law the court has the jurisdiction to grant relief on an invalid patent without requiring the deletion of a claim it has found to be invalid. To leave a patent in a state where it contains an invalid claim would be wholly exceptional and require truly exceptional circumstances.

I turn to consider whether I should take the course proposed by Philips, given that I have found I have the power to do so.

Mr Hinchliffe submits that the circumstances in this case are truly unprecedented. I agree. Both counsel, both firms of solicitors and, for that matter myself, have never come across a case like this one in which the deletion of an invalid claim runs up against the problem that deleting it might lead to a change in the interpretation of a different claim which was valid, and indeed might be said to lead to a fundamental change which goes to the heart of whether the valid claim is valid or not. That, submits Mr Hinchliffe, is a sufficiently exceptional circumstance to justify the course he is proposing should be carried out.

Mr Nicholson submits that the course the patentee is adopting is an attempt to get around the decision of the Court of Appeal in Nikken v Pioneer [2005] EWCA Civ 906. After judgment by Mann J was handed down the patentee applied to amend. Mann J refused to permit the application to be made. On appeal Jacob LJ said this:

“8.

He [Mann J] first considered the question of discretion. This arises under section 75 of the Act:

"75(1) In any proceedings before the Court or the Comptroller in which the validity of the patent is put in issue, the court or, as the case may be, the Comptroller, may, subject to section 76 below, allow the proprietor of the patent to amend the specification of the patent in such a manner and subject to such terms as to advertising the proposed amendment and to costs, expenses or otherwise as the Court or Comptroller thinks fit."

There are different situations in which the exercise of the discretion to allow amendment of a patent may be sought: (a) before a trial; (b) after trial, at which certain claims have been held valid but other claims held invalid, the patentee simply wishing to delete the invalid claims (I would include here also the case where the patentee wishes to re-write the claims so as to exclude various dependencies as in Hallen v Brabantia [1990] FSR 134. There the patentee is in effect continuing to claim which he had claimed before but in a much smaller way); and (c) after a trial in which all claims have been held invalid but the patentee wishes to insert what he hopes are validating amendments.

9.

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.

10.

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.

11.

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.”

As can be seen from the paragraphs I have referred to, the situation faced by Mann J in Nikken was that after a judgment the patentee sought to make a rewriting amendment to a claim in order to save it from the findings of invalidity which the court had reached. The court refused to permit these post-trial amendments. The problem identified by Jacob LJ in paragraph 11 was that to allow a rewriting amendment in this way would mean that one produced a claim which was not under attack at trial and could not have been under attack prior to trial. There would almost be bound to be a further battle as a result of the proposed amendment. On the other hand, as Jacob LJ explained, in what he described as “case (b)”, post-trial deletions of invalid claims are clearly allowable and commonly undertaken. They raise completely different issues and do not normally give rise to problems.

Mr Nicholson submits that the deletion of claim 3 in this case would run into the problem identified by the Court of Appeal in Nikken. He says that by deleting claim 3 what one would create is claim 2 with a different construction post trial which had not been dealt with.

If the patentee had not explained its case on independent validity and made its application to amend to remove the added matter well before trial, then I think there would be some force in Mr Nicholson’s submission. However, Mr Nicholson’s submission ignores the fact that the patentee made it absolutely clear that in particular claim 2 was said to be independently valid of claims 1 and 3. Thus the outcome which the patentee had hitherto proposed of deleting claim 3 and concatenating claims 1 and 2, was an entirely foreseeable outcome which Nintendo could and should, if they had thought that it would give rise to a problem, have raised at trial. They did not.

In my judgment, the Nikken case has nothing to do with the problem before me. If the deletion of claim 3 was something which had been wholly unforeseeable until after judgment, then Mr Nicholson’s point about Nikken would be right, but, as I say, that is not this case.

Mr Nicholson’s next submission is that this is a problem entirely of the patentee’s own making, and that the time has come to draw the line, particularly given the history of these proceedings and particularly the history of the patentee’s applications to amend the patent. He reminded me to the comments I made about that in my main judgment. To put it metaphorically, he submitted the patentee had reached the end of the road. Its proposal to delete claim 3 has been dropped, its current proposal creates too many problems, its current proposal should not be accepted and, therefore, the only solution is that the patent should be revoked because it contains invalid claims.

In my judgment revocation would be unfair given that the court found on all the issues that were argued before the court that claim 2 of this patent was valid, (provided that the amendment to deal with the added matter was sorted out by accepting an application to amend which had been made well before trial). I am not prepared to revoke this patent in these circumstances unless there is no sensible alternative. It seems to me that I should consider the merits of the two obvious alternative choices, (i) whether to direct that claim 3 be deleted and claims 1 and 2 be concatenated, or (ii) whether to accept Philips’ proposal to leave the patent with invalid claims in place, and to include the various safeguards which have been proposed.

I will explain in more detail what those proposed safeguards proposed by Philips are. In addition to a declaration dealing with the validity and invalidity of the various claims, Philips puts forward four undertakings to the court. They are as follows:

Its primary submission is that undertakings (a) and (b) would suffice but it is prepared to give undertakings (c) and (d) if required by the court.

The aspects which are underlined and in italics have been advanced by Philips as attempts to mitigate points that have been made by Nintendo. If I am to accept these undertakings, then I should accept them in the form they are now proposed with the insertions added in. They do seem to me to be an important part of mitigating some proper points taken by Mr Nicholson. It also seems to me that if I am to accept undertakings then they should include (c) and (d).

The real problem is this. If I take the course proposed by Philips, the result will be that there will be a patent on the register which will remain in force for another 9 years, assuming for present purposes my judgment is upheld and nothing that happens in the EPO changes anything (and I will return to the EPO below). It will contain claims which have been found to be invalid. This could mislead the public. Two things will operate to mitigate that. First the Register would contain some reference to the problem and one can expect that the Controller will put a copy of this order on the Register. (I will say on that score that I accept Mr Hinchliffe’s submission that to put a copy of the order on the register would be a proper exercise of the Comptroller’s power under Rule 47, having regards to the terms of section 32(2)(b) of the 1977 Patents Act, as being an event affecting rights in or under patents and applications). Second Philips will be bound not to act contrary to the undertakings they have given to the court.

Mr Nicholson rightly points out that the undertakings are not the same as the undertaking which was extracted by Aldous J from Gerber. Those related to a situation post expiry of the patent. The key undertaking there was not to assert the patent at all whereas the undertaking offered by Philips only prevents assertion of the invalid claims.

Mr Nicholson submits that the course proposed by Philips should not be accepted as an exercise of the court’s discretion because (a) it would prejudice his clients in future if, for the sake of argument, they come up with another different product and have to litigate this dispute again, and (b) it will not fairly protect the public, given the highly undesirable outcome of a patent containing invalid claims being on the Register.

My assessment of these submissions is as follows. As I have already said, the outcome whereby this patent is revoked seems to me not to be a fair outcome unless there is no sensible alternative. The real issue is to focus on the other two courses I should adopt. Neither course is ideal, but the course proposed by Philips before me today seems to me to be the better course. It will have the effects I have described. It provides sufficient safeguards to ensure that Philips do not obtain an unwarranted advantage from this position either vis a vis Nintendo or the public as a whole. The public interest is protected as well as it sensibly can be in the circumstances. I will accept it.

In reality, whichever course I adopt, anyone looking at this patent will have their attention drawn to my main judgment (and no doubt to this judgment as well), and no doubt to any judgment of the Court of Appeal dealing with this patent. They will not be misled.

Finally, I should mention the position of the EPO. I think the position in the EPO is of no real relevance to these problems. The EPO has its own independent jurisdiction over both the validity of the patent and over amendments to it. If I can put the matter colloquially, the EPO can look after itself. If it concludes that the patent is wholly invalid, it will revoke it, in the Opposition Division or Technical Board of Appeal. If the EPO concludes that the patent should only be upheld in an amended form, and that takes effect after anything that happens in the UK, then that decision will have the effect it would normally have when circumstances like that take place. Mr Nicholson is not right that I should refuse to permit Philips to take this course as a result of any impact on the position in the EPO.

For those reasons, I will accept Philips’ submission.