Case update on Vringo Infrastructure Inc. v ZTE (UK) Ltd [2015] EWHC 214 (Pat)SummaryMr Justice Birss has refused a post-judgment application from the Defendant (ZTE) for permission to re-open the
Case update on Vringo Infrastructure Inc. v ZTE (UK) Ltd [2015] EWHC 214 (Pat)
Summary
Mr Justice Birss has refused a post-judgment application from the Defendant (ZTE) for permission to re-open the trial, to amend the pleadings to plead new prior art against the validity of the patent-in-suit and then to have a new trial about the new prior art. The case provides a useful summary of the factors the courts will take into account when faced with such an application. Unfortunately for ZTE the application was too little too late and should have been made much earlier.
Background
Mr Justice Birss must have thought this case was all but over having handed down his judgment on 28 November 2014 in favour of the Claimant patentee (Vringo) - the case concerned the infringement and validity of a patent in the field of telecommunications. However, the case then took an unexpected twist shortly after. Just before the costs hearing in December 2014, the Defendant (ZTE) issued an application for permission to re-open the trial, to amend the pleadings to plead new prior art against the validity of the patent and to have a further trial on the new prior art. The prior art in question consisted of three documents which were found by employees of ZTE two weeks after the judgment was handed down.
The Legal Principles to be applied
Mr Justice Birss commented that applications like this (i.e. an application where a losing party in a patent case in which their challenge to validity had been rejected and the patent found valid at a full trial, had then attempted to rely on new prior art and to make a new case that the patent was invalid) had come before the courts before but such prior applications had not met with much success.
Mr Justice Birss reviewed the relevant case law and focussed on two in particular, namely Charlesworth v Relay Roads [2000] RPC 300, and Cofelxip v Stolt Comex [2001] RPC 9, from which he summarised the main principles to be applied. In particular, at paragraph 38, he stated:
"I can summarise the principles in this way. The court has a jurisdiction, at least before the order is drawn up, to entertain an application of this kind as in here. The principle to be applied generally is the overriding objective to deal with cases justly and at proportionate cost. This involves dealing with cases expeditiously and fairly and allocating an appropriate share of the court's resources to a dispute. In a case like this one, in which the application is to amend the statement of case, call fresh evidence and then have a further trial, the principles relevant to amending pleadings have a role to play but the Ladd v. Marshall factors are also likely to have real significance."
The Ladd v Marshall [1954] 1 WLR 1489 factors are as follows:
The Decision
Mr Justice Birss concluded that the first Ladd v Marshall factor was firmly against ZTE, the second factor was evenly balanced, and the third factor was in ZTE's favour. Mr Justice then considered a number of wider factors at play including the fact that neither party had acted to their detriment in reliance on the judgment, so there would be no irreparable harm caused by re-opening the trial, and the fact that the patent was a standard essential patent (SEP) (a patent claiming an invention that must be used to comply with a technical standard). As such, unlike some patent cases where it was perhaps only the two undertakings before the court which really cared about a particular technology, in this case, many in the industry would be affected. However he did not seem particularly taken with these factors and said that the fact that the patent was an SEP, whilst not irrelevant, was not strong.
In the end, Mr Justice Birss did not accept ZTE's application. He was not satisfied that the strength of this case was so clear that he would be leaving a patent on the register which was invalid – it was just an arguable piece of prior art. At paragraph 97, Mr Justice Birss set out the crux of the matter:
"The key issue, in my judgment, is about finality and the nature of the new evidence. This is a patent case in which the challenger wants to advance a new case based on a new item of prior art. It is an item of prior art which ZTE could readily have found earlier. It is not clear to me why they did not look for it much, much earlier, given the reference to IS-95 handover in the common general knowledge document."
Comment/Conclusion
This case serves to highlight the importance of searching and choosing prior art carefully in an invalidity action, and putting the best case forward from the start. Mr Justice Birss was fairly scathing of ZTE's conduct and could not see any justification why the application only arose after trial and why the prior art documents were not found earlier, especially when there were clear pointers to them. In his final paragraph on the application, Mr Justice Birss stated, "[t]his is an application which could and should have been made before trial and then it would not have had the serious consequences for the resources and finality which it now has and it would not have the serious impact on other court users which it now would have. To have a further trial witnesses will have to be cross-examined and there will be a significant usage of time and cost. There is simply no good reason why the court and third parties should be inconvenienced in any way as a result of this".
Summary
Mr Justice Birss has refused a post-judgment application from the Defendant (ZTE) for permission to re-open the trial, to amend the pleadings to plead new prior art against the validity of the patent-in-suit and then to have a new trial about the new prior art. The case provides a useful summary of the factors the courts will take into account when faced with such an application. Unfortunately for ZTE the application was too little too late and should have been made much earlier.
Background
Mr Justice Birss must have thought this case was all but over having handed down his judgment on 28 November 2014 in favour of the Claimant patentee (Vringo) - the case concerned the infringement and validity of a patent in the field of telecommunications. However, the case then took an unexpected twist shortly after. Just before the costs hearing in December 2014, the Defendant (ZTE) issued an application for permission to re-open the trial, to amend the pleadings to plead new prior art against the validity of the patent and to have a further trial on the new prior art. The prior art in question consisted of three documents which were found by employees of ZTE two weeks after the judgment was handed down.
The Legal Principles to be applied
Mr Justice Birss commented that applications like this (i.e. an application where a losing party in a patent case in which their challenge to validity had been rejected and the patent found valid at a full trial, had then attempted to rely on new prior art and to make a new case that the patent was invalid) had come before the courts before but such prior applications had not met with much success.
Mr Justice Birss reviewed the relevant case law and focussed on two in particular, namely Charlesworth v Relay Roads [2000] RPC 300, and Cofelxip v Stolt Comex [2001] RPC 9, from which he summarised the main principles to be applied. In particular, at paragraph 38, he stated:
"I can summarise the principles in this way. The court has a jurisdiction, at least before the order is drawn up, to entertain an application of this kind as in here. The principle to be applied generally is the overriding objective to deal with cases justly and at proportionate cost. This involves dealing with cases expeditiously and fairly and allocating an appropriate share of the court's resources to a dispute. In a case like this one, in which the application is to amend the statement of case, call fresh evidence and then have a further trial, the principles relevant to amending pleadings have a role to play but the Ladd v. Marshall factors are also likely to have real significance."
The Ladd v Marshall [1954] 1 WLR 1489 factors are as follows:
- Could this evidence have been found with reasonable diligence before trial?
- Would the evidence, if given, probably have an important influence on the results of this case? and
- Is the evidence on the face of it entirely credible?
The Decision
Mr Justice Birss concluded that the first Ladd v Marshall factor was firmly against ZTE, the second factor was evenly balanced, and the third factor was in ZTE's favour. Mr Justice then considered a number of wider factors at play including the fact that neither party had acted to their detriment in reliance on the judgment, so there would be no irreparable harm caused by re-opening the trial, and the fact that the patent was a standard essential patent (SEP) (a patent claiming an invention that must be used to comply with a technical standard). As such, unlike some patent cases where it was perhaps only the two undertakings before the court which really cared about a particular technology, in this case, many in the industry would be affected. However he did not seem particularly taken with these factors and said that the fact that the patent was an SEP, whilst not irrelevant, was not strong.
In the end, Mr Justice Birss did not accept ZTE's application. He was not satisfied that the strength of this case was so clear that he would be leaving a patent on the register which was invalid – it was just an arguable piece of prior art. At paragraph 97, Mr Justice Birss set out the crux of the matter:
"The key issue, in my judgment, is about finality and the nature of the new evidence. This is a patent case in which the challenger wants to advance a new case based on a new item of prior art. It is an item of prior art which ZTE could readily have found earlier. It is not clear to me why they did not look for it much, much earlier, given the reference to IS-95 handover in the common general knowledge document."
Comment/Conclusion
This case serves to highlight the importance of searching and choosing prior art carefully in an invalidity action, and putting the best case forward from the start. Mr Justice Birss was fairly scathing of ZTE's conduct and could not see any justification why the application only arose after trial and why the prior art documents were not found earlier, especially when there were clear pointers to them. In his final paragraph on the application, Mr Justice Birss stated, "[t]his is an application which could and should have been made before trial and then it would not have had the serious consequences for the resources and finality which it now has and it would not have the serious impact on other court users which it now would have. To have a further trial witnesses will have to be cross-examined and there will be a significant usage of time and cost. There is simply no good reason why the court and third parties should be inconvenienced in any way as a result of this".