[View without highlighting]
[Printable RTF version]
[Buy ICLR report:  Bus LR 1753]
||Neutral Citation Number:  EWCA Civ 741
||Case No: A3/2007/0572
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
THE HON MR JUSTICE PUMFREY
HC 06 C03955
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
THE RT HON LORD JUSTICE PILL
THE RT HON LORD JUSTICE RIX
THE RT HON LORD JUSTICE JACOB
|| Nichia Corporation
||- and -
Adrian Speck and James Whyte (instructed by Messrs Powell Gilbert LLP)
for the Claimant/Respondent
Daniel Alexander QC and James St Ville (instructed by Messrs DLA Piper UK LLP)
for the Defendant/Appellant
Hearing date : 24 May 2007
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Jacob:
- Patent litigation has always been notoriously expensive in this jurisdiction. As long ago as 1892 Lord Esher MR said:
A man had better have his patent infringed, or have anything happen to him in this world, short of losing all his family by influenza, than have a dispute about a patent. His patent is swallowed up, and he is ruined. Whose fault is it? It is really not the fault of the law: it is the fault of the mode of conducting the law in a patent case. That is what causes all this mischief, Ungar v Sugg (1899) 9 RPC at 117.
- What causes cost is time: time spent by lawyers, experts and the parties themselves. Lawyers' and experts' time is normally measured and costed. Because they are highly skilled, lawyers' and experts' time is expensive. Time spent by the parties themselves is generally irrecoverable.
- It follows as night follows day that every issue or topic in a patent action which causes significant expenditure of time will contribute to the overall cost. That is why the main point at issue on this appeal is so significant.
- The background is simple enough. Nichia, a Japanese company is the owner of two patents EP (UK) 0 622 858 and EP (UK) 0 952 617. They are for and relate to white light emitting diodes. Argos, the defendant, is a well-known retailer. In 2005/6 it offered for sale and sold chains of Christmas lights consisting of 120 white LEDs. Nichia claim that they infringe the two patents. Argos asserts that the patents are both invalid. The particular ground of attack is obviousness in the light of common general knowledge and certain cited prior publications. The matter is proceeding to trial later in the year.
- At a case management conference before Pumfrey J there was a dispute about what disclosure should be ordered. Nichia proposed that they should not have to give any. Argos said Nichia should, and in particular it should disclose documents about the making of the invention and about certain experiments which it had conducted to prove infringement. Argos, of course, being only a retailer, has no technical documents, and so, whatever view one takes about disclosure of documents concerning obviousness, it has nothing to disclose touching that subject. By his judgment of 23rd February 2007,  EWHC 545 (Pat) Pumfrey J refused both kinds of disclosure.
The Relevant Rules
- The rules no longer provide for an automatic duty of disclosure. A duty only arises if and when the court makes an order for it. Save in fast-track cases or where the parties agree otherwise, however, the normal practice is for the court to make an order for "standard" disclosure. The relevant general provisions about disclosure of the CPR about this read as follows:
Disclosure limited to standard disclosure
31.5 (1) An order to give disclosure is an order to give standard disclosure unless the court directs otherwise.
(2) The court may dispense with or limit standard disclosure.
Standard disclosure – what documents are to be disclosed
31.6 Standard disclosure requires a party to disclose only –
(a) The documents on which he relies; and
(b) The documents which –
(i) adversely affect his own case;
(ii) adversely effect another party's case; or
(iii) support another party's case; and
(c) the documents which he is required to disclose by a relevant practice direction.
- For patent actions what is meant by "standard disclosure" is modified by the Practice Direction to Part 63:
Standard disclosure does not require the disclosure of documents where the documents relate to -
(2) any ground on which the validity of a patent is put in issue, except documents which came into existence within the period –
a. beginning two years before the earliest claimed priority date; and
b. ending two years after that date; and
(3) the issue of commercial success."
Disclosure of inventor's records in cases of alleged obviousness
- Obviousness is the objection to validity in this case. How far, if at all, is what the inventor actually did to make the invention relevant to this issue? If what he did is relevant, then disclosure of the related documents may follow. But if not, not. The question calls for a fundamental examination of the objection of obviousness and how it is to be determined.
- A patent must involve "an inventive step" (s.1(1)(a) of the Patents Act 1977, enacting Art.52 of the European Patents Convention). "An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art." (Art. 56, enacted by s.3). "The state of the art shall be held to comprise everything made available to the public ….." (Art.54, s.2(2) – I omit unnecessary detail).
- It follows that the statutory question is whether the invention is obvious to a notional "person skilled in the art." I set out the attributes of this notional individual in Rockwater v Technip  RPC 919:
 It is settled that this man, if real, would be very boring – a nerd. Lord Reid put it this way in Technograph v Mills & Rockley  RPC 346 at p.355
"… the hypothetical addressee is a skilled technician who is well acquainted with workshop technique and who has carefully read the relevant literature. He is supposed to have an unlimited capacity to assimilate the contents of, it may be, scores of specifications but to be incapable of a scintilla of invention. When dealing with obviousness, unlike novelty, it is permissible to make a "mosaic" out of the relevant documents, but it must be a mosaic which can be put together by an unimaginative man with no inventive capacity."
 The no-mosaic rule makes him also very forgetful. He reads all the prior art, but unless it forms part of his background technical knowledge, having read (or learnt about) one piece of prior art, he forgets it before reading the next unless it can form an uninventive mosaic or there is a sufficient cross-reference that it is justified to read the documents as one.
 He does, on the other hand, have a very good background technical knowledge – the so-called common general knowledge. Our courts have long set a standard for this which is set out in the oft-quoted passage from General Tire v Firestone Tire & Rubber  RPC 457 at 482 which in turn approves what was said by Luxmoore J in British Acoustic Films 53 RPC 221 at 250. For brevity I do not quote this in full – Luxmoore J's happy phrase "common stock of knowledge" conveys the flavour of what this notional man knows. Other countries within the European Patent Convention apply, so far as I understand matters, essentially the same standard.
 The man can, in appropriate cases, be a team – an assembly of nerds of different basic skills, all unimaginative. But the skilled man is not a complete android, for it is also settled that he will share the common prejudices or conservatism which prevail in the art concerned.
- Laddie J, in Pfizer's Patent  FSR 201 at  also described the attributes of the skilled man in a passage so characteristically vivid that it is worth reciting:
The question of obviousness has to be assessed through the eyes of the skilled but non-inventive man in the art. This is not a real person. He is a legal creation. He is supposed to offer an objective test of whether a particular development can be protected by a patent. He is deemed to have looked at and read publicly available documents and to know of public uses in the prior art. He understands all languages and dialects. He never misses the obvious nor stumbles on the inventive. He has no private idiosyncratic preferences or dislikes. He never thinks laterally. He differs from all real people in one or more of these characteristics.
- The structured approach to considering obviousness is well-settled (see per Oliver LJ in Windsurfing v Tabur Marine  RPC 59 at 73). I recently restated it in Pozzoli  EWCA Civ 588 at :
(1) (a) Identify the notional "person skilled in the art"
(b) Identify the relevant common general knowledge of that person;
(2) Identify the inventive concept of the claim or if that cannot readily be done, construe it;
(3) Identify what, if any, differences exist between the matter cited as forming part of the "state of the art" and the inventive concept of the claim or the claim as construed;
(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?
- For present purposes what matters is that this basic formulation does not involve expressly what the inventor actually did or thought. Nor for that matter what his opponent did or thought. The inventor may have thought that what he did was little short of, or actually, a work of genius - that he was a latter day Edison. He may be able to show that he struggled manfully for many years before finally conquering the problem. On the other hand he may have said "I think what I did was dead easy, but given how soft Patent Offices sometimes can be, I'll give it a go." No matter what it was, the test is not what he did or thought but whether the step would have been obvious to the man skilled in the art.
- It is quite possible that what the inventor did was, given his particular circumstances, actually very clever, yet his patent be held invalid for obviousness. A clear example would be where the prior art relied upon was published shortly before the priority date and was only trivially different from what was claimed. If the inventor did not know of this, what he did could well be clever, yet his invention obvious.
- Accordingly there is a strong argument for saying that logically what the inventor (and objector) actually did is completely irrelevant. The inventor can say what he thought was clever in his patent, though it is well-settled that he need not do so – it is not an objection to validity that the patentee has failed to distinguish what is new from what is old. But whether it actually was inventive depends on the expert evidence establishing the common general knowledge of the person skilled in the art and the teaching of the cited prior art.
- And there are more reasons why that should be so. A patent is a public document. Any member of the public ought in principle to be able to make his own assessment of not only what the monopoly actually is, but whether that monopoly is valid. Obviousness is an objective question. If it depends on the private evidence or documents of the patentee (or of anyone else) the purely objective nature of the question will be impaired.
- And of course the granting authority, the Patent Office, will have no knowledge of these private matters. It must make up its mind whether or not the invention is obvious from publicly available prior art, what is said in the patent application, and its own view of the common general knowledge and abilities of the notional person skilled in the art.
- Further, it may be that in a particular case the patentee himself has no documents or knowledge about the making of the invention. Patents are assignable pieces of property. So whether or not that information is available to the patent owner at the time the patent comes under attack depends on the happenstance as to whether it is in its original hands or not.
- Things could be the other way round. The objector to validity may itself be a research organisation which was trying to tackle the problem at the time. If so it will have documents about that. On the other hand it may, as in the case of Argos in this case, have none.
- On the logic so far, the evidence about the making of, or the difficulty of the making of, the invention of both the patentee and his particular opponent is irrelevant. The corresponding disclosure would be irrelevant too – it would not relate to an issue in the proceedings.
- However things are not as simple as that. For many years the evidence of the inventor and the efforts (or absence of them) of the objector has been held admissible. Sometimes it is the patentee who prays this in aid, sometimes the objector. Why is this so? I think the answer lies in the ultimate (Windsurfing/Pozzoli step 4) question: is there an inventive step? The question involves a value judgment which takes into account a variety of factors. Some are purely technical, others not. That is why, for instance, an apparently simple technical step may be held inventive where it can be shown to have led to commercial success – and all the more so if there was a long-felt want. Again the age of the prior art may matter. "If it was so obvious, why was it not done before?" is a powerful question for the patentee to ask when the cited art is old, and more so when it is old and well-known.
- Because obviousness is a multi-factorial question, it is impossible to devise a more detailed sort of question, suitable for all cases. Windsurfing (4) cannot be further refined. The statutory question is the statutory question and none other. Attempts in the past to try to devise a question have all been built around the circumstances of the particular case, see e.g. Graham J's discussion of the "Cripps' question' in Olin Mathieson v Biorex  RPC 157 at 188-189. Similarly, attempts to force all questions of obviousness into a "problem-solution" approach can lead to trouble, though often the test can be a helpful guide.
- It is not uninteresting to see that the US Supreme Court has recently taken much the same view in KSR v Teleflex, 30th April 2007 in rejecting the "teaching, suggestion or motivation" test. It reaffirmed the objective nature of the question and an approach similar to Windsurfing saying:
In Graham v John Deere Co of Kansas City, 383 U.S.1 (1966), the Court set out a framework for applying the statutory language of §103, language itself based on the logic of the earlier decision in Hotchkiss v Greenwood, 11 How. 248 (1851), and its progeny. See 383 U.S., at 15-17. The analysis is objective:
"Under §103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented." Id., at 17-18.
- Now one of the factors which is relevant in the overall assessment is what people in the art were doing at the time – the history. To form a proper view of this, in theory the thing to do would be to make a world survey – for it is not only what the patentee, and his opponent, but also what all others in the field were doing and thinking which would inform the court as to what the notional skilled man would readily perceive having regard to his own knowledge and any particular piece of cited prior art.
- Laddie J put it well in Pfizer:
 This does not mean that evidence from those in the art at the relevant time is irrelevant. It is not. As I have said, it may help the court to assess the possible lines of analysis and deductions that the notional addressee might follow. Furthermore, sometimes it may be very persuasive. If it can be shown that a number of ordinary workers in the relevant field at the relevant time who were looking for the same goal and had the same prior art, missed what has been patented then that may be telling evidence of non-obviousness. This is particularly the case where the commercial benefits of the development would have been apparent and a long time had passed between the publication of the prior art and the priority date of the patent. Hence, the impact and interrelationship between the familiar concepts of long felt want and commercial success. Likewise evidence that ordinary men in the art and working from the same prior art at the relevant time independently came to the same development may be some evidence that the notional skilled man would have done likewise.
- A world survey is of course impossible. But one can at least see what the patentee and the defendant were doing at the time, in cases where both were conducting research at the relevant time. It is difficult to suppose that this is wholly irrelevant even though it is only a part of the picture. Thus, for instance, disclosure by a defendant who was a major player in the art at the time showing that it recognised, and struggled unsuccessfully with, the problem solved by the patent can sometimes play a significant role in the assessment of obviousness. The Mölnlycke case,  RPC 49, is an example: disclosure showed one of the leading companies in the field of disposable nappies, P&G, struggled for years over the problem and its concern when it learned of the patentee's success in solving it. The trial Judge, Morritt J, had particular regard to these matters, see p.88 ("The concern of P&G to find a workable multiple taping system is apparent from the documents disclosed on discovery"). Likewise he took into account P&G's reaction when it learned of the patented product, p.89 ("Thus allowing for a measure of exaggeration I think the bi-weeklies [P&G disclosed documents] constitute a valuable pointer to whether the arrangement disclosed in the patent in suit was obvious").
- As I have already observed, it has long been the practice to allow the patentee to call the inventor. Terrell has contained a passage to this effect for many editions, at least since 1965:
322 In coming to a conclusion as to whether or not a claim contains a real inventive step over what was previously known or used, the court usually attaches considerable weight to the evidence of the inventor himself. Evidence which shows that the invention was not obvious to the defendants at the priority date will be of considerable weight if the defendants were persons skilled in the art. e.g. (i) where the defendants at first contended that they had made the invention and offered to help the plaintiff to get a patent if they were granted a free licence, or (ii) where the defendants introduced into a subsidiary claim of a patent specification of theirs the feature alleged to be obvious. The evidence of a director of the defendant company that the invention was new to him has been held to be relevant on the issue of obviousness [all citations omitted].
- The authorities cited for the first proposition do show that the evidence of the inventor has counted in his favour. They do not (and there are only two) go so far as to justify the words "usually attaches" or "considerable." More accurate would be to say "sometimes attaches some weight." The first of the two citations is one of the strongest examples one can find of weight being attached, Lightning Fastener v Colonial Fastener (1934) 51 RPC 349. In giving the advice of the Privy Council to His Majesty, Lord Blanesborough said at p.367:
It is certain that the general mechanical idea of combining in this class of work all the necessary operations in one machine was novel and a perusal of the evidence of the inventor Sundback given before the Trial Judge satisfies their Lordships that, so far from the combination being obvious, it was only after years of work at the problem of how to produce stringers that the combination was recognised to be desirable or found to be possible, and that the inventive element necessary to constitute subject-matter is made sufficiently evident.
- But although it makes this statement, the same edition of Terrell also says that:
301 In considering whether or not an invention is obvious, the way in which the inventor arrived at it is of no importance.
The authority given for this is very old indeed, being Crane v Price (1842) 1 W.P.C. 393 at p.411.
- So we have long been apparently inconsistent: on the one hand recognising and saying that obviousness is purely objective and on the other hand admitting evidence from inventors and paying attention to how the individual defendant struggled with the problem (or, in favour of obviousness had no problem and readily reached the alleged invention with no knowledge of it) or how he reacted upon learning about the invention.
- Sir Donald Nicholls V-C giving the leading judgment of the Court of Appeal in Mölnlycke very much helped to resolve the conundrum at p.113:
In applying the statutory criterion and making these findings the court will almost invariably require the assistance of expert evidence. The primary evidence will be that of properly qualified expert witnesses who will say whether or not in their opinions the relevant step would have been obvious to a skilled man having regard to the state of the art. All other evidence is secondary to that primary evidence. In the past, evidential criteria may have been useful to help to elucidate the approach of the common law to the question of inventiveness. Now that there is a statutory definition, evidential criteria do not form part of the formulation of the question to be decided.
In the nature of things, the expert witnesses and the court are considering the question of obviousness in the light of hindsight. It is this which may make the court's task difficult. What with hindsight, seems plain and obvious, often was not so seen at the time. It is for this reason that contemporary events can be of evidential assistance when testing the experts' primary evidence. For instance, many people may have been industriously searching for a solution to the problem for some years without hitting upon the allegedly obvious invention. When this type of evidence is adduced, the court can quickly find itself caught up in an investigation of what was or was not obvious to certain identified individuals at certain dates during the history of the development of the product or process involved. This gives rise to complications because the state of knowledge of these individuals, though skilled, may not correspond to the statutory definition of the state of the art. A particular inventor may have been unaware of some aspect of the state of the art as defined in section 2(2), and may therefore have genuinely taken what was actually an inventive step, but nevertheless be unable to claim a patentable invention since the step was, in the terms of the statute, obvious. Further, this type of evidence invites the court to speculate whether particular individuals were of an inventive disposition, because the earlier making of the same invention by another or others does not necessarily mean that at a later date the invention was obvious. Yet again, evidence of the commercial success of the invention can lead into an investigation of the reasons for this success; there may be commercial reasons for this success unrelated to whether the invention was or was not obvious in the past.
Secondary evidence of this type has its place and the importance, or weight, to be attached to it will vary from case to case. However, such evidence must be kept firmly in its place. It must not be permitted, by reason of its volume and complexity, to obscure the fact that it is no more than an aid in assessing the primary evidence.
- The resolution of the conundrum lies in the last paragraph. The evidence (and hence the disclosure) by the patentee and the defendant is only "secondary". It must be "kept firmly in its place." As will be seen I think this is of great importance when one comes to proportionality.
- And actually I think that is borne out by what has happened in practice over the years. Although inventors could be called to support their patent, this was far from standard practice at all times. When I was a pupil in 1967, I well recall Mr John Whitford QC (perhaps the leading silk at the time) saying "never call the inventor." And it certainly was not the practice for discovery of inventor's notebooks or the like to be sought or ordered. The 1965 edition of Terrell, although it has a section on "discovery" does not even mention this.
- It was only during the 1970s that the practice of seeking and giving discovery of inventors' records seems to have begun. And it was not until 1982 that the Court of Appeal endorsed it. That was in SKM v Wagner Spraytech  RPC 497. At p.508 Oliver LJ said:
Knowledge of the inventor's experiments will assist the defendant in two respects. He can obtain his own expert's opinion upon whether the steps taken by the inventor were the steps which the ordinary skilled man would or could take and whether such steps were no more than steps which would or should have been obvious to any skilled man: and he can, as was suggested in the Australian case, utilise any knowledge which he acquires regarding the inventor's experiments or researches in cross-examination of the plaintiff's technical witnesses by reference to what an admittedly skilled man did.
- In passing I note, with respect, that the second reason cannot be right. It proceeds on the basis that the inventor was "an admittedly skilled man". But that is just what he is not – he claims to have been inventive. In fact it may be that he approximates to the man skilled in the art and has his common general knowledge. Or he may not. He may have no knowledge of the art at all – a complete outsider can make an invention. He will normally try to write his patent to be read by those skilled in the art – for it is to them that it is addressed. But he claims to be an inventor, the very antithesis of the man skilled in the art.
- Following SKM, discovery of inventor's records became routine. No-one doubts that it has very considerably increased the expense of patent actions. Consider what is involved. First the documents have to be searched for and identified. This will involve reading them not only by the lawyers but also perhaps by an expert or experts whose assistance in understanding may be needed. The expert may come from within the client, or may be an outside expert. Both sorts of expert may be involved. The inventor may be called in if available to explain his documents. Normally several lawyers and perhaps a patent agent will be required. The relevant has to be sifted from the irrelevant. Often translation will be involved. When all this has been done, the documents are disclosed. The other side's lawyers aided by their experts then crawl all over them. As is usual they look for references to documents mentioned but not disclosed. This leads to inquiries about missing documents and disputes about that. Not infrequently there are disputes about confidentiality and the formation of complicated "confidentiality clubs" of designated lawyers, patent agents and independent experts, not to mention painfully detailed work on redaction of material said to be irrelevant. On both sides many many hours are spent and many pages are involved. Not infrequently the whole lot ends up being copied for trial.
- And all for what? Only "secondary evidence" which must be kept "firmly in its place."
- Prior to the hearing, my own subjective impression over the many (too many) years I have been concerned with patent litigation is that there have been few cases where disclosure of the parties' records was crucial – Mölnlycke was the only example which came to mind. It is perhaps worth mentioning that I was counsel in the SKM case at trial and on appeal. The documents disclosed pursuant to the Court of Appeal decision helped neither side; their disclosure and translation just increased the costs.
- So, before this hearing, the parties were asked to research the question of disclosure on the issue of obviousness covering the last 15 years. Mr Speck, for Nichia, looked at the headnotes of all reported cases during that period. He found only one which referred to disclosure of documents at all– the Hoechst case cited above. Mr Alexander QC for Argos found a bit more. He included unreported cases in his search and delved into the text. He cited some cases where the parties' work around the date of the patent was referred to by a trial judge considering obviousness. But the instructive thing is that in most of them the Judge expressly only used the material to confirm the view he had already formed and no more. And the cases where it mattered rather more were "big battle" cases, for instance Chiron v Organon No 3 (Hepatatis C and testing kits therefore), Mölnlycke (disposable nappies). In short Mr Alexander's researches confirmed my impression.
- Moreover there was no case where, when the patentee did not lead evidence from the inventor, disclosure of the inventor's records played any part at all at trial. An objector could clearly in principle rely on such documents to say, e.g. "look, all they did was to do what I say was obvious" but it has not happened in practice.
- At the hearing we asked for a little more research to be done – to find out whether patent actions involving allegations of obviousness included disclosure of inventors' records in the 1950s and 1960s. Neither side could find any reference to such disclosure at all – again confirming my own impression that it was not the practice until the 1970s.
- Even before the Woolf reforms, there was concern at the costs of this discovery. Hence the introduction in 1995, following consultation with the Patents Court Users Committee, of the "two-year" window, see RSC 104 r.11(1)(b). I do not need to set it out. Its substance was carried into the new CPR by the Practice Direction to Part 63, the relevant part of which I set out above. All this achieved, however, was a partial, and, I would say from my experience, minor, reduction in the vast amount of work involved.
- So it was that even with the window the concern about the cost continued. Laddie J adverted to it in Hoechst Celanese v BP  RPC 547 at 565:
The other piece of historical evidence relied on by the defendants consisted of the steps taken by Dr Hilton, the inventor, to reach the invention. Dr Hilton was called by the plaintiff and was cross-examined. From time to time the courts have said that the way in which the inventor reached his invention is immaterial. He may think that he has made a marvellous invention or he may have worked out his development by a process which, to him, was entirely logical. But to use what he did and thought he had achieved as evidence for or against obviousness is to put the cart before the horse. Once the court has decided whether the step was obvious it can then assess whether what the inventor did was what the notional man in the art would have done from the pleaded art or not. Evidence from the inventor that he took a long time to make the invention and thought he was very clever is no evidence that he was. Similarly, analysis after the event of the logical steps he took to arrive at the invention is no evidence that it is obvious. If he is an inventive man he will no doubt see things more clearly than his notional non-inventive colleague. It would be strange if the fact that the inventor got to the invention was used as evidence that others would also. These propositions seem to me to be supported by cases such as Re I. G. Farbenindustrie A.G.'s Patent (1930) 47 R.P.C. 289 and Allmanna Svenska Elektriska A/B v. The Burntisland Shipbuilding Co. Ltd (1952) 69 R.P.C. 63. In addition to this, for the same reasons as are set out above, the evidence of what the inventor did or thought is even more irrelevant if he never had before him the prior art on which the defendant is relying. In this case, it is quite clear that Dr Hilton did not have the Hingorani document at the time he made his development. It appears that he did have the results of a literature search which included a number of documents, including the Hingorani abstract, none of which is relied on by the defendants for the purpose of their obviousness attack.
In the light of these considerations, I have come to the conclusion that all the historical evidence of what individuals did or are thought to have done at or about the priority date is of no assistance in determining whether or not Dr Hilton's development was obvious. Furthermore, although there was extensive discovery, including discovery of Dr Hilton's research work, very little of it was referred to in court and even the small number of documents which were took the case no further. This is a great pity because it has meant that the parties have spent much more on this litigation than was necessary and the trial lasted longer than it ought. In saying this, I do not mean to direct any criticism at the lawyers involved. In the absence of clear guidance from the court as to what is or is not admissible or of probative value, the parties and their advisers cannot be blamed for covering all the possibilities. Furthermore, in view of what was said by the Court of Appeal in SKM, the fact that the plaintiff felt obliged to give discovery of its research and development leading to the making of the invention cannot be faulted.
However, there is much pressure now to reduce the cost of litigation in general and patent litigation in particular. Parties and the court must be astute to prevent the expenditure of time, effort and money on the filing and challenging of unnecessary evidence and discovery. As the Vice Chancellor said in Mölnlycke, secondary evidence on the issue of obviousness must be kept firmly in its place. If the evidence is of no weight it should be excluded from the outset. Evidence that others in the art did or did not make essentially the same development at or before the priority date of the patent should not be given unless it can be shown that those others were starting from or had brought to their attention all or some of the prior art pleaded in the case or the evidence is in some other way really relevant to the issues in dispute.
- Following the Woolf reforms, and notwithstanding its changes, practitioners (and I think not just in patent actions) carried on much as they did before. The cost of patent and large commercial actions did not reduce: if anything it went up. This was despite two important changes: the very important introduction into our scheme of civil procedure of the notion of proportionality, and a change in the nature of what documents are to be disclosed on a normal order for disclosure (formerly called discovery).
- I start with the latter – the introduction of "standard disclosure". Prior to the CPR the test under the rules was that any document "relating to any matter in question" was discoverable. The courts took a very wide view of what was covered by this. The test was laid down a long time ago when no-one had the quantities of paper they have now. In the very well-known Peruvian Guano case, (1882) 11 QBD 55 Brett LJ said:
We desire to make the rule as large as we can with due regard to propriety; and therefore I desire to give as large an interpretation as I can to the words of the rule, "a document relating to any matter in question in the action." I think it obvious from the use of these terms that the documents to be produced are not confined to those, which would be evidence either to prove or to disprove any matter in question in the action;
It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may--not which must--either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words "either directly or indirectly," because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences.
- It is manifest that this is a much wider test than that for "standard disclosure." I have a feeling that the legal profession has been slow to appreciate this. What is now required is that, following only a "reasonable search" (CPR 31.7(1)), the disclosing party should, before making disclosure, consider each document to see whether it adversely affects his own or another party's case or supports another party's case. It is wrong just to disclose a mass of background documents which do not really take the case one way or another. And there is a real vice in doing so: it compels the mass reading by the lawyers on the other side, and is followed usually by the importation of the documents into the whole case thereafter – hence trial bundles most of which are never looked at.
- Now it might be suggested that it is cheaper to make this sort of mass disclosure than to consider the documents with some care to decide whether they should be disclosed. And at that stage it might be cheaper – just run it all through the photocopier or CD maker – especially since doing so is an allowable cost. But that is not the point. For it is the downstream costs caused by overdisclosure which so often are so substantial and so pointless. It can even be said, in cases of massive overdisclosure, that there is a real risk that the really important documents will get overlooked – where does a wise man hide a leaf?
- Turning back specifically to disclosure of the inventor's work, it seems clear that standard disclosure no longer requires automatic wholesale disclosure of all the inventor's work. A lot will depend on the nature of the case of obviousness advanced. One of the patents here, for example, is for the use of gallium nitride as a semi-conductor. It is said that this was the coming thing, that all the patentee did was to try out the new semi-conductor in place of the previous silicon carbide. In relation to this patent, only a document relating to the decision to try gallium nitride could conceivably be relevant – the actual experiments would not be so.
- So, when an order for standard disclosure is made in respect of an inventor's work, the disclosing party should take care to ensure that only documents called for by standard disclosure are disclosed.
- There is more to be said about the change to standard disclosure and indeed to the express introduction of proportionality into the rules of procedure. "Perfect justice" in one sense involves a tribunal examining every conceivable aspect of a dispute. All relevant witness and all relevant documents need to be considered. And each party must be given a full opportunity of considering everything and challenging anything it wishes. No stone, however small, should remain unturned. Even the adversarial system at its most expensive in this country has not gone that far. For instance we do not include the evidence of a potentially material witness if neither side calls him or her. Nor do we allow pre-trial oral disclosure from all potential witnesses as is (or at least was) commonly the practice in the US.
- But a system which sought such "perfect justice" in every case would actually defeat justice. The cost and time involved would make it impossible to decide all but the most vastly funded cases. The cost of nearly every case would be greater than what it is about. Life is too short to investigate everything in that way. So a compromise is made: one makes do with a lesser procedure even though it may result in the justice being rougher. Putting it another way, better justice is achieved by risking a little bit of injustice.
- The "standard disclosure" and associated "reasonable search" rules provide examples of this. It is possible for a highly material document to exist which would be outside "standard disclosure" but within the Peruvian Guano test. Or such a document might be one which would not be found by a reasonable search. No doubt such cases are rare. But the rules now sacrifice the "perfect justice" solution for the more pragmatic "standard disclosure" and "reasonable search" rules, even though in the rare instance the "right" result may not be achieved. In the vast majority of instances it will be, and more cheaply so.
- Patent actions range in their commercial importance from the very great, with many millions and even billions of pounds at stake, to modest disputes between smallish companies about a widget or some such. Proportionality requires that the procedure to be adopted be tailored to the size of the dispute. The real question in this case is whether disclosure from the patentee (or objector) should be required when the objection is straightforward obviousness, that is one where there is no attempt to rebut the attack based on commercial success or a long-felt want.
- I think the time has now come to hold that proportionality requires that normally such disclosure should not be ordered. Only in the largest kind of case, where the legal costs, although very substantial, form a small proportion of what is at stake, does what is involved by disclosure of this sort of material become proportionate. It is no good having the overriding objective, the specific requirement of dealing with a case in ways which are proportionate and a specific power to dispense with standard disclosure otherwise. You need millions at stake before costs of hundreds of thousands on an issue which is only "secondary" and which must be "firmly kept in its place" are warranted.
- It should be remembered, however, that the position may not be entirely black or white (disclosure or not) in all cases. Intermediate positions may be possible. For instance in some cases the "window" may be narrowed (it would difficult to justify post-priority date disclosure on the issue of obviousness for instance). In others short, tightly drawn, interrogatories might be the way forward. The pragmatic good sense of the patent judges at case management conferences will be able to tailor orders appropriate to the individual case. The parties must try to help, for instance the patentee ought to be able to indicate whether he intends to call the inventor and why. So also for the objector – does he intend to lead evidence of independent development as indication of obviousness? And even where disclosure is ordered, it should normally be confined to proper standard disclosure, not massive overdisclosure.
- I would add that I do not consider the SKM case itself to remain the governing rule. I have already quoted Oliver LJ's two reasons for ordering disclosure and pointed out that one of them (the assumption that the patentee is an "admittedly skilled man") is erroneous. His other reason was that:
He can obtain his own expert's opinion upon whether the steps taken by the inventor were the steps which the ordinary skilled man would or could take and whether such steps were no more than steps which would or should have been obvious to any skilled man
This is not the stuff of "standard disclosure" at all. It is "chain of inquiry" stuff of the Peruvian Guano kind appropriate at the time SKM was decided.
- Mr Alexander suggested that without disclosure from the inventor, the patentee's independent expert witness might be able to tailor his evidence by reference to that material to which he alone would have access. That he said would be unfair. There are two answers to this: first if that were a compelling reason, then no amount of proportionality would preclude disclosure. But secondly I think that it is wholly improbable that the exercise would be undertaken. Never in my experience did I ever see any attempt at such "tailoring". It is not the way that patent actions work. Take this case. Mr Speck and Nichia's legal team proposed no disclosure without themselves knowing what might be in it. The whole point is not to have to spend lots on even looking at it. It is not realistic to expect the English expert even to attempt to tailor his evidence by reference to Nichia's internal documents. He just will not see them. And if he did and had not disclosed that in his expert report that itself would almost certainly emerge in cross-examination with all the likely consequences of his evidence being rejected.
- And that is not all. For in reality it is difficult to imagine how an expert could tailor his evidence as suggested. I repeat what I said in Rockwater about the function of an expert in a patent action:
 I must explain why I think the attempt to approximate real people to the notional man is not helpful. It is to do with the function of expert witnesses in patent actions. Their primary function is to educate the court in the technology – they come as teachers, as makers of the mantle for the court to don. For that purpose it does not matter whether they do or do not approximate to the skilled man. What matters is how good they are at explaining things.
 But it also is permissible for an expert witness to opine on an "ultimate question" which is not one of law. I so held in Routestone v Minories Finance  BCC 180 and see s.3 of the Civil Evidence Act 1972. As regards obviousness of a patent Sir Donald Nicholls V-C giving the judgment of the Court of Appeal in Mölnlycke v Proctor & Gamble  RPC 49 at p. 113 was explicit on the point.
- Consider this a little more in the light of the Windsurfing/Pozzoli approach. The nature of the skilled man and his common general knowledge has to be identified. The expert can help on that but his evidence about it cannot realistically be "tailored" from the patentee's documents, no matter what they say. He has to help identify the differences from the prior art – and again the patentees' documents could not help on that. And he may give an opinion, with reasons, as to why what is claimed is or is not obvious. It is difficult to imagine the patentee's documents helping on this.
- Mr Alexander also submitted that disclosure would assist in keeping a sense of reality about the case. I do not see that as true or necessary. The independent experts engaged by the parties will do that. It is part of their function. They are or should be familiar with the art. It is their job to say what was going on in the field at the time. And to substantiate it where they can from public references, not private files.
- I turn to consider whether disclosure is appropriate in this case. There is no evidence filed as to what is at stake. Mr Alexander makes play of that. But is it really necessary to have evidence in what one can see is a plain case? The production of evidence itself would entail costs. The Judge took judicial notice of "the huge expense that this operation customarily entails." I do not think he can be faulted in this: it is self-evident that the disclosure sought would involve finding and reading and understanding the notes of a range of experiments. Lawyers could not do it on their own with this technology – they would need assistance from the client, or a patent agent or an expert. Realistically this could not cost less than £100,000 between the two sides and probably a lot more like £250,000 by the time one has reached trial.
- What then is at stake financially? The case is about Argos' Christmas tree light sales. You do not need evidence to conclude that the potential damages at stake cannot be very large. If as many as half a million sales were achieved (which is probably a very substantial overestimate) the total value retail would be about £10 million (Argos' retail price is £20). Damages on that would at best run to a few percent. So the costs of the disclosure sought are going to be of the order of what is at stake financially.
- There is also this: the disclosure in this case would be one-sided. Argos have no documents. Probably their unknown manufacturers do but they are not parties to the action and are very likely abroad. So disclosure would give an even less complete picture than would be the case if both sides were research based companies working in the field.
- So I think the Judge was right to refuse disclosure. It is true that he was brief in his reasons. But he is a very experienced Judge who was clearly aware of the cost implications of the proposed disclosure and would readily have seen how proportionate it was, given how (to use his word) "peripheral" secondary evidence of this nature was. What he actually did was not to refuse it altogether. As he said, something might turn up in the experts' reports or experiments to justify an order for it. But as things are now, he clearly held disclosure was not proportionate: "At the moment I do not think the court is likely to be greatly assisted in the scrutiny of the experts' reports by disclosure on the issue of validity from the claimant." That was not wrong in principle.
- Accordingly I would dismiss the appeal about disclosure of the inventors' records. I am sorry my brethren do not agree. It may well make sense for the rules about disclosure of inventors' records to be reconsidered in the light of this decision.
Disclosure of experiments
- I turn to the second question. When the matter came before us, the position was that Nichia had disclosed certain experiments said to prove infringement. Argos was seeking disclosure of any other experiments conducted – so called work-up experiments. Nichia claimed privilege. The Judge refused disclosure. Virtually without considering the matter in detail. Before us Mr Speck sought to maintain privilege but also argued that the experiments were irrelevant. He submitted that either the disclosed experiments proved infringement or they did not. Any experiments done to decide what the final experiments were to be would be irrelevant. Such experiments were different in nature from experiments put in to prove anticipation. For the latter the test in law is whether a prior document contains "clear and unmistakeable directions" to make or do something within the claim. So any experiments which did not work would be as material as those that did.
- As the debate proceeded, it became clear that it was on the wrong footing. Mr Alexander indicated that he did not want "work-up" experiments. What he wanted was any material which might indicate that the experiments actually conducted were in some way unreliable. Mr Speck was not disposed to object to this. And it seemed to us that an obligation to disclose such experiments (if any exist) would be covered by standard disclosure as adversely affecting Nichia's case. Moreover they would clearly not be covered by privilege – you cannot disclose the part of privileged material you like but not the part you do not. In the end Mr Speck agreed that a check would be made as to whether there was any material going to the reliability of the experiments actually relied upon. So the point evaporated by consent. There should be standard disclosure, but no more, of any other experimental work.
Lord Justice Rix:
- I gratefully adopt Lord Justice Jacob's masterly review of the history and jurisprudence of the role of disclosure in the context of obviousness to a claim for patent infringement. I agree with his analysis, and in particular with the need to concentrate again on Sir Donald Nicholls' wise words in Mölnlycke, quoted above, about the need to keep "secondary evidence" relating to the contemporaneous activities of the parties "firmly in its place".
- Above all, I am conscious of Lord Justice Jacob's vast experience in this field, both at the bar and on the bench. And I am certainly at one with him in seeking to control unnecessary and disproportionate expense, whether caused by disclosure or other aspects of litigation. It is therefore with the greatest diffidence and reluctance that I find myself unable, at the end, to follow him in his final disposition of this appeal.
- This is because I am concerned that if, on such an appeal, where the parties never assisted the judge with any evidence relating to the difficulties or undesirability of disclosure on the particular facts of this case, and where the judge came to his conclusion dispensing (subject to any future applications) with the process of disclosure as a matter of principle (saying in discussions after his judgment, in the context of refusing permission to appeal, "I have waited nine years actually to do this"), then our decision would in practice mean the automatic end of all disclosure in this context (in the absence of pleas of commercial success or long-felt want), save possibly in cases of exceptional size or other exceptional circumstances.
- In my judgment, it is necessary before that stage is reached to concentrate in this connection on the new regime of standard disclosure: see CPR 31.5/7. The primary documents which are required by standard disclosure are those which adversely affect a party's own case or support another party's case. For these purposes a "reasonable search" is required: and what that entails will depend inter alia on the number of documents involved, the nature and complexity of the proceedings, the ease and expense of retrieval, and the significance of any document which is likely to be located during the search (rule 31.7(2)). Prima facie, the practice direction to Part 63 requires disclosure of such documents, where they relate to "any ground on which the validity of a patent is put in issue", limited to a period of two years on either side of the earliest priority date: and see CPR 31.6 (c). The parties may agree to limit or dispense with disclosure; and so may the court (rule 31.5 (2) and (3)).
- If it be the case that standard disclosure in a straightforward obviousness challenge costs hundreds of thousands of pounds, as Lord Justice Jacob has said, then I fear that litigants and their lawyers are paying mere lip service to the change of regime from Peruvian Guano discovery to standard disclosure. It is suggested nevertheless that it is cheaper to look for and disclose everything, than to carry out the reasonable search required: and that even so the cost is likely to be enormous. I am reluctant to accept these suggestions, particularly in the absence of evidence, for they seem to me to fly in the face of the new regime. A reasonable search should be tailor-made to the value and significance of the likely product of such a search. If the value of such "secondary evidence" is not likely to be high, then the reasonable search should be correspondingly limited. There is no need to translate everything in advance, if the cost of such translations is disproportionately high. Indeed, there may be no need to translate anything, other than what requires to be disclosed. Above all, it would be against the interests of justice if documents known to exist, or easily revealed, which would harm a party's own case or assist another party's case need not be disclosed because of a blanket prima facie rule against any standard disclosure. Once such a principle of disclosure were known to hold sway, dishonest or cavalier litigants would reap an unmerited advantage, contrary to the interests of justice.
- In my judgment, rather than move directly, and in principle, to a blanket, albeit prima facie, rule of no disclosure, it would be preferable to explore, in a way which these parties have not done at all so far, how the concerns which Lord Justice Jacob has expressed in this context, and which I emphasise I share, might be met by a rigorous application of the rationale of standard disclosure.
- Thus, the parties and the trial court might wish to explore the desirability of limiting the search in the first place temporally, to documents which came into existence within a period of one year before the earliest priority date; and/or secondly, by reference to the nature of the document itself, eg to documents in which the invention is contemporaneously recorded or reported on to management. There may be other ways in which the essence of the limited nature of standard disclosure against the background in this context of the Mölnlycke dictum can be emphasised and regulated. To revert to the question of translations: I do not see why the reasonable search cannot be conducted without any initial need for translating. Above all, there must remain the consciousness of the fact that documents need only be disclosed which harm the discloser's case or help the other party's.
- It seems irrelevant to me that the alleged infringer, Argos, will have no documents of their own to disclose, and therefore might be absolved of disclosure altogether. It may be relevant, however, to know how much is involved in the litigation; or why any difficulty might be expected in carrying out a reasonable search at a proportionate cost in the circumstances.
- It is because this exercise has never been carried out that I am reluctant to embark on it for the first time in this court, without any evidence or focussed submission. I regret that it might therefore prove necessary for the matter to be revisited by the judge, but I would rather expect that the parties should be able in the light of this court's reasoning, emphasising the limited scope and usefulness of such disclosure, to agree on a proper and proportionate way forward, without any further need to bring the matter back to court.
- I am concerned above all to emphasise that the switch from Peruvian Guano discovery to CPR standard disclosure should be properly taken on board by litigants and their advisers. Once attention is focussed on the rationale of standard disclosure in the context of any relevant issue, it is possible to appreciate that it is those parties and their advisers who are in the best position to adopt procedures which are both commensurate and proportionate. Indeed, it is hard to think that even before launching proceedings such as these, a claimant has not carried out, in its own interests, such a review of its own documents as will in all probability have already met, or all but met, the requirements of a reasonable search for the purposes of standard disclosure. I would therefore hope and expect that the present issue of this disclosure could be dealt with, timeously and with only limited expense, without the need for a return to the court below.
- In sum, while accepting much of the substance of the submissions of the respondents, I would allow this appeal on the narrow basis set out above.
Lord Justice Pill:
- I should first like to echo Rix LJ's tribute to Jacob LJ's review of the role of disclosure, and his acknowledgement of Jacob LJ's vast experience in this field. I too am conscious of the Court's duty to work towards limiting the costs of litigation in this jurisdiction, in this as in other fields, by action consistent with its other duties.
- However, I agree with Rix LJ that this appeal should be allowed and essentially for the reason he gives. The judge, has found, and Jacob LJ has endorsed his approach that, as a matter of principle and in the absence of pleas of commercial success or long-felt need, disclosure should not normally be required in the context of the defence of obviousness to a claim for patent infringement. It would follow that documents, which it is accepted by Jacob LJ would be relevant to the determination of the issue between the parties, need not be disclosed. Jacob LJ has provided a detailed justification for that principle.
- The rules for disclosure are stated in the CPR and Rix LJ has analysed the regime of standard disclosure provided. I agree with his analysis of the regime, of the responsibilities of the parties, and of the opportunities it provides for the court, by case management, to limit costs. I agree with the practical suggestions made by Rix LJ in his judgment and will not repeat them. That, in my judgment, and not applying a rule of thumb, is the way forward in this as in other fields.
- The decision making judge should consider, with the help of the parties, the features of the particular case with a view to making an order tailored to achieving a just outcome, which includes limiting, as far as possible, the costs incurred.
- Patent infringement disputes undoubtedly have features of their own but they are but one species of a very wide range of commercial disputes which come before the courts. It would not inspire confidence if businesses and their advisers were met with different standard of disclosures depending on the type of dispute involved. Of course, the amount of disclosure required in particular cases will vary widely but this should be achieved by case management and not by applying different standards in different types of case.
- I respectfully agree with the approach of Sir Donald Nicholls in Mölnlycke, cited by Rix LJ and Jacob LJ. The Vice-Chancellor referred, at page 113, to the primary evidence of the man skilled in the art, as to whom the authorities are replete with descriptions, and to the hindsight with which that person inevitably considers the question of obviousness. He added:
"It is for this reason that contemporary events can be of evidential assistance when testing the experts' primary evidence."
- The possibilities are obvious. A party claiming that a technical change is obvious and did not require an inventive element may have documents demonstrating that it had been trying hard, and without success, to achieve the result achieved by what its opponent claims as an inventive concept. If that party can litigate, confident in the knowledge that it need not disclose documents revealing its work, injustice may be done. A party could decide unilaterally whether or not to disclose, depending on whether the material helps its case. Unmeritorious claims will be encouraged.
- Further, an expert's opinion may well be influenced, and sometimes rightly influenced, by disclosures in the particular case which may, on Jacob LJ's view, be withheld even from him by the party preparing to litigate. That gives a party an opportunity to manipulate disclosure to further its own interests in the particular case.
- Oliver LJ gave another example in JKM v Wagner Spraytech  RPC 497, cited by Jacob LJ at paragraph 34; knowledge of the inventor's experiments may assist the other party. I accept that there is ambiguity in the second of Oliver LJ's reasons because he used the expression 'skilled man', which has a technical meaning in this field, when he referred, and intended to refer, to the 'inventor'. The reason is, with respect, a sound one if the word 'inventor' is used. The principles stated must, of course, be applied in the context of the now established principles of standard disclosure.
- I obviously express views on the practice of experts in this field with diffidence, in the face of Jacob LJ's experience, but the need to scrutinise their evidence in the interests of justice, and to have the appropriate tools with which to do so, appears to me to be no different in this field from that in the many other fields, with which most members of this court have wide experience, in which expert evidence is called.
- I see no merit in making distinctions between 'justice', 'perfect justice' and 'rough justice'. In aspiring to achieve justice, the principle of proportionality is important. However, I do not accept that it was 'introduced' by the CPR; it has long been a feature of judicial decision making though now given a specific identity and prominence in the Rules. It does not require or justify a blanket approach which has no regard to the needs of the particular case.
- I agree with Jacob LJ's proposition, at paragraph 55, that: 'The pragmatic good sense of the patent judges at case management conferences will be able to tailor orders appropriate to the individual case'. Jacob LJ acknowledges, in the same paragraph that 'intermediate positions may be possible'. My disagreement with the judge is that, with respect, he did not attempt to consider the needs of the case but dispensed with disclosure as a matter of principle stating: 'I have waited nine years actually to do this'.
- There will be cases in which disclosure on this issue may be severely limited, or refused altogether, but consideration should be given to the needs of the particular case. That does not appear to have been done and, on that narrow basis, the appeal should, in my judgment, be allowed.
Copyright Policy |
Donate to BAILII