Compensation for infringement where a patent is later held invalid by the European Patent Office.

If you have a European Patent, in force in the UK, you can exercise your rights by bringing infringement proceedings in the UK national court. However, a granted European Patent can, at the same time, be challenged for validity in Opposition Proceedings before the European Patent Office (EPO).

The crossover of issues between national courts had the EPO has again been brought to light in a case before the Court of Appeal for England and Wales, Unilin Beheer BV v Berry Floor NV, Information Management Consultancy Limited (t/a Responsive Designs and/or Tapis UK) and B&Q plc (http://www.bailii.org/ew/cases/EWCA/Civ/2007/364.html). The patent relates to a floor covering consisting of hard floor panels and methods for making the panels.

Unilin’s European patent was granted in 2002. Unilin sued Berry Floor and B&Q for infringement under their EP(UK) patent; Berry Floor filed an opposition against the European patent in 2003. In the UK proceedings, the patent was held valid and infringed. The opposition proceedings are still on-going (and are currently before the Enlarged Board of Appeal in G 3/06 regarding questions on divisional applications) but it is possible that they will result in Unilin’s patent being revoked or limited so as not to cover the Berry products.

The question before the court was:
If a patentee utterly prevails on infringement and validity and is held entitled to financial compensation in the Courts of England and Wales right up to the point where no further appeal lies, can all that be set at nought and utterly unravelled if the patent is later held invalid in the European Patent Office?

That is, if a patent holder wins a case for patent infringement in the UK and is awarded compensation from the infringing party, what happens if the patent is later invalidated by the EPO in Opposition Proceedings?

The judges’ ruling in the present case served to highlight the need for a European system for patent litigation. Jacob LJ, concluded a discussion of whether the national court or the EPO is “top” saying: “In truth asking which tribunal is "top" is simply not helpful ­ there is just the untidy compromise inherent in the EPC and one which cannot be properly resolved unless and until a rational patent litigation system for Europe is created".

Jacob LJ also concluded that it made sense to make a party pay damages for infringement even if the patent is subsequently held to be invalid, saying: "where a final decision has been made on a fair contest between the parties, that should stand as the final answer between them.”

In his view “a patent is always potentially at risk ­ someone may come up with a bang-on but obscure piece of prior art (my favourite pretend example is an anticipation written in Sanskrit wrongly placed in the children's section of Alice Springs public library), or simply with better evidence on known prior art. That is no reason for undoing what has been done or regarding a final decision as merely provisional. After a final decision businessmen should be able to get on with their businesses, knowing what the position is".

In this particular case, the court's ruling at this stage is somewhat academic. The parties have now reached an agreement in the UK case and the opposition proceedings are still ongoing.

Pawel Piotrowicz 01 Jan 2007

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