Regen v Estar was one of the notable High Court decisions of 2019 for its assessment of equivalents and numerical limits in patent claims (as discussed in our blog here) and we were waiting to find out what the Court of Appeal had to say. Now, however Lord Justice Floyd has struck out, in no uncertain terms, Regen's appeal against the finding of invalidity (his judgment is here). Let's take a look at why…
Quick recap of the facts
Regen sued Estar for infringement of its EP(UK) patent for its platelet purification technology, as part of a global dispute between the companies. In January 2019, the High Court revoked the patent for lack of novelty due to prior use. Regen was ordered to pay Estar interim costs of just over £250,000. In June 2019, the Court of Appeal gave Regen leave to appeal the decision.
Meanwhile in April 2019, the EPO's Opposition Division found that the EP patent was invalid as a whole. Regen has appealed to the EPO's Technical Board of Appeal – it is estimated that it could take two years to reach a hearing.
The Court of Appeal hearing was scheduled for 1 April 2020.
Applications by the parties
A few weeks before the appeal was to go ahead, Floyd LJ faced a series of applications from the parties which needed to be resolved before things could go any further. These included:
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An application by Estar to strike out Regen's appeal for failure to pay the interim costs.
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An application by Regen to stay the appeal pending (a) the final outcome of the EPO appeal and/or (b) the final outcome of criminal proceedings in Switzerland against Estar brought by an ex-employee.
As at 4 March Regen had not filed its bundles for the appeal (as required by the procedural rules), despite numerous requests from Estar and the court.
Floyd LJ, clearly running out of patience with the situation, summoned the parties to a hearing to progress matters. He refused Regen's request to postpone the hearing due to the Covid-19 outbreak, and instead held a telephone hearing on 19 March 2020.
Request for a stay
Spoiler alert: Floyd LJ concluded that "the scales came down very heavily" against Regen and therefore refused its request for a stay. His key reasons for reaching this conclusion were that:
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A stay would cause unacceptable commercial uncertainty for Estar with the validity of the UK patent hanging over its head and that of other operators in the UK market. Floyd LJ was not swayed by the fact that there were stays in France and Germany pending the EPO appeal.
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Regen had not made a formal request for the stay until a few weeks before the appeal hearing. Floyd LJ considered that by that stage Regen had ensured that the prejudice to Estar would be "extreme". Not only would Estar lose their date for the hearing of the appeal, but Regen had "banked a period of uncertainty at least until the appeal could be re-fixed".
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Regen's conduct had been "highly inconsistent". If Regen's approach to litigation was that validity should first be tested in the EPO, that approach should have been applied from the outset, so that the costs of a full UK trial of infringement and validity could have been avoided.
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The relatively small cost saving achieved by staying the appeal could carry no weight against the background of Regen's decision to launch litigation in multiple countries against Estar.
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Regen had provided insufficient material about the Swiss proceedings and their relevance to the appeal.
Adjournment of the appeal
Floyd LJ refused to adjourn the appeal finding that any difficulties Regen had in preparing for it were of its "own making" when it had had 14 months to prepare. He referred (among other things) to the fact that Regen had changed solicitors twice and said bluntly that if it was "not ready for its appeal that can only be because of its failure to put its solicitors in funds to deal with it."
Strike-out
Like the earlier part of his judgment, Floyd LJ does not mince his words when he comes to consider whether the appeal should be struck out and Regen's conduct. He said he would have expected Regen to have put forward an explanation of why it had not lodged the appeal bundles and that this was "particularly important as Regen had a history of procedural wrongdoing, one is tempted to say procedural vandalism".
The Lord Justice considered that Regen's failure to progress the appeal was "plainly part of a deliberate strategy on the part of Regen aimed at de-railing it. It believed that by dragging its feet it could achieve derailment of the appeal without the need to obtain a stay."
Comment
As Floyd LJ remarks towards the end of his strongly-worded judgment, the observance of procedural rules is required for the benefit of all users of the court system, not just an individual litigant. As he says the fact that a "valuable property right is at stake is a reason for pursuing an appeal with diligence and vigour, not for declining to instruct solicitors and deliberately allowing procedural deadlines to be missed".
It is not often that the conduct of a party is so poor that it leads to such damming comments from a judge as in this case. As a result the UK dispute between Regen and Estar has come to an abrupt ending, not due to an analysis of substantive patent law, but because of Regen's inaction and failure to follow the necessary procedural rules has led to it being struck-out.