Samsung v Apple patent appeal on hold pending outcome of EPO applications
This month has seen the latest UK instalment in the global patent war between Samsung and Apple. The Court of Appeal granted Samsung's application to stay an appeal from the High Court's decision that two of Samsung's patents were invalid (see here for judgment). The Court of Appeal agreed with Samsung that the trial should be adjourned pending determination from the European Patent Office (EPO) on its applications for central amendment, which was likely to be in the near future. The Court of Appeal rejected Apple's counter-application for an order that, in effect, required Samsung to choose between pursuing the appeal or the central amendment applications. It said that the relevant patent legislation specifically contemplated the possibility of concurrent proceedings in the UK and in the EPO and that Samsung's applications were not an abuse of process.
The European Patent Convention (EPC) 2000 introduced a procedure allowing a patentee to amend a patent, either by having the claims of its granted patent limited or by having the whole patent revoked, in either case, for all designated states. When a patent is amended centrally at the EPO, the procedure is known as a 'central amendment'. The central amendment scheme has been implemented into UK law by the Patents Act 1977 (the 1977 Act) and allows for a granted patent to be amended during the course of legal proceedings.
The UK proceedings are part of a global battle between Samsung and Apple which run alongside litigation in the USA, Japan, Korea, Germany, France, Italy, Netherlands and Australia. Samsung sued Apple in the UK in June 2011, asserting that Apple had infringed three of its patents, only two of which are the subject of this appeal.
The trial at first instance took place in late 2012 (see judgments here and here) and Floyd J held that neither patent was entitled to its claimed priority date and that each was invalid by reason of intervening prior art. He further held that even if the patents had been entitled to their claimed priority dates, they would have been invalid for obviousness. Samsung had also made two conditional applications to amend the British limb of each of the patents before the 2012 trial. Floyd J dealt with the second application which he rejected on the basis that it would not render the patents valid. Samsung was granted permission to appeal in respect of the two patents found to be invalid. Separately in November 2013, Samsung filed the central amendment applications at the EPO, which, if granted, would have effect in all designated states, including of course the UK. Samsung also applied for an adjournment of the appeal pending determination by the EPO of its applications.
The rival arguments
Samsung argued that the purpose of the central amendment procedure was to allow a patentee to consider a judgment in one designated state and, in response, narrow the claims for the other designated states and that was all Samsung was doing in this instance. It would be a waste of costs to proceed to the appeal when the final form of the claims had not been determined.
Apple argued that the amendments now sought were different to those previously sought. The revised amendments could have been put before the judge before but were not and as a result, the parties had not addressed them in evidence, nor had Floyd J considered them in his judgment at first instance. The action would therefore have to be remitted for re-trial on the amended claims. Apple argued that Samsung's actions constituted an abuse of process and accordingly, unless Samsung undertook to take no further steps with its central amendment applications, then permission to appeal granted by the judge should be set aside, the notice of appeal struck out and the patents revoked.
Apple also argued that Samsung's request for a central amendment was an attempt to avoid the inevitable rejection of any post-trial application to amend (permissible under the 1977 Act) and relied on previous case law stating that post-trial applications to amend should ordinarily be refused if they would require a second trial on validity.
Underpinning all of Apple's arguments was its concern that it would have to face an entirely new case on appeal which it had not had the opportunity to address. Samsung argued these concerns were misconceived because the court could consider the patents in their amended form based on the findings it had already made.
The Court of Appeal (Kitchin LJ) confirmed that the 1977 Act specifically contemplated the possibility of concurrent proceedings in the UK and in the EPO and did not prohibit filing a central amendment application in the course of infringement or revocation proceedings in any designated state or in the period between a first instance judgment and appeal in any designated state (although the court had a discretion as to whether it would permit the patentee to apply to amend). Samsung's application to centrally amend could not be classed as an abuse of process or an act with which the court could properly interfere for any other reason. Kitchin LJ also made it clear that the amendments, if allowed, would have retrospective effect in all designated states.
Even though the English courts had not had to deal with the effect of a central amendment made after trial, it would respect a decision of the Supreme Court of the Netherlands, faced with the same scenario, which held that it was obliged to consider the patent in its amended form following a central amendment application. Based on this decision, and although it was not binding, Apple would find it very difficult to ask the court to order Samsung to withdraw its applications for central amendment.
Kitchin LJ also thought that the applications would be determined by the EPO in the near future and it therefore made sense to grant an adjournment of the appeal, otherwise the court might find itself proceeding to hear an appeal on a false basis. Although Kitchin LJ agreed with Apple that the fact that the central amendment proceedings were pending did not prevent the national court from considering the claims of the patent in their existing form and revoking them, he said in this case there had been a previous order for revocation to be suspended pending appeal and while that suspension was in place, the patents continued to subsist and could be amended.
Kitchin LJ was therefore clear that the appeal should be adjourned. It would not cause Apple any prejudice but a refusal of the adjournment might have resulted in the appeal proceeding on a false basis and would be a waste of time and money. However, this in no way prevented Apple from advancing any submissions or applications it felt were necessary once the outcome of the central amendment applications was known.
This is an interesting decision given that the judges have never before had to deal with the effect of a central amendment application made after trial. It seems the logical and sensible decision based on the facts, previous case law and on the relevant legislation, which allows an application for central amendment to be made at any time. Given that the EPO central amendment process (unlike EPO opposition proceedings) is supposed to be relatively quick, the parties should not have to wait too long for an outcome. It will then be interesting to see whether the amendments, if allowed, can be addressed by the court based on the findings it has already made, or whether Apple was right in thinking that it would have to face a second trial.
This article was written by Rebecca Pakenham-Walsh, Senior Associate (PSL) and David Knight, Partner, in the IP Enforcement and Litigation group of Field Fisher Waterhouse LLP in London.