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England and Wales High Court (Patents Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> HTC Corporation v Nokia Corporation  EWHC 3778 (Pat) (03 December 2013)
Cite as:  EWHC 3778 (Pat),  Bus LR 217,  WLR(D) 468,  RPC 30,  BUS LR 217
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Fetter Lane, London, EC4A 1NL
B e f o r e :
| HTC CORPORATION
|- and -
Michael Tappin QC and Miles Copeland (instructed by Bird & Bird LLP) for the Defendant
Hearing dates: 28, 29 November 2013
Crown Copyright ©
MR JUSTICE ARNOLD :
"In all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction against a breach of any covenant, contract, or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract, or agreement, it shall be lawful for the same Court, if it shall think fit, to award damages to the party injured, either in addition to or in substitution for such injunction or specific performance; and such damages may be assessed in such manner as the Court shall direct."
"Where the Court of Appeal or the High Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance".
"(1) If the injury to the plaintiff's legal rights is small,
(2) And is one which is capable of being estimated in money,
(3) And is one which can be adequately compensated by a small money payment,
(4) And the case is one in which it would be oppressive to the defendant to grant an injunction: –
then damages in substitution for an injunction may be given".
He went on to make it clear that what constituted a "small money payment" was a relative matter. Subsequent cases have emphasised that AL Smith LJ's good working rule is only that: it is not a statute or straightjacket.
"It is important to bear in mind that the test is one of oppression, and the court should not slide into application of a general balance of convenience test."
Similarly, Millett LJ stated 288B-C:
"The outcome of any particular case usually turns on the question: would it in all the circumstances be oppressive to the defendant to grant the injunction to which the plaintiff is prima facie entitled?"
"It has always been recognised that the practical consequence of withholding injunctive relief is to authorise the continuance of an unlawful state of affairs. If, for example, the defendant threatens to build in such a way that the plaintiff's light will be obstructed and he is not restrained, then the plaintiff will inevitably be deprived of his legal right. This was the very basis upon which before 1858 the Court of Chancery had made the remedy of injunction available in such cases. After the passing of Lord Cairns's Act many of the judges warned that the jurisdiction to award damages instead of an injunction should not be exercised as a matter of course so as to legalise the commission of a tort by any defendant who was willing and able to pay compensation. …
Nevertheless references to the 'expropriation' of the plaintiff's property are somewhat overdone, not because that is not the practical effect of withholding an injunction, but because the grant of an injunction, like all equitable remedies, is discretionary. Many proprietary rights cannot be protected at all by the common law. The owner must submit to unlawful interference with his rights and be content with damages. If he wants to be protected he must seek equitable relief, and he has no absolute right to that. In many cases, it is true, an injunction will be granted almost as of course; but this is not always the case, and it will never be granted if this would cause injustice to the defendant. Citation of passages in the cases warning of the danger of 'expropriating' the plaintiff need to be balanced by reference to statements like that of Lord Westbury LC in Isenberg v East India House Estate Co Ltd (1863) 3 De G J & S 263, 273 where he held that it was the duty of the court not
'by granting a mandatory injunction, to deliver over the defendants to the plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may by possibility make, but to substitute for such mandatory injunction an inquiry before itself, in order to ascertain the measure of damage that has been actually sustained.'"
"His willingness to settle the dispute on payment of a cash sum can properly be reflected by an award of damages. Nor, once that is established, can it be an objection that the amount of damages may be large. The injury to the plaintiff's legal rights must be adequately compensated. In such a case the first and third conditions of the good working rule do not apply.
I summarise the position as follows. The essential prerequisite of an award of damages is that it should be oppressive to the defendant to grant an injunction. Here that prerequisite is satisfied. It would be oppressive and therefore unfair to the defendant to allow the judge's injunctions to stand. The plaintiff should receive an award of damages instead."
"It seems to me that I have to consider the position as of today. In theory the copyright may last another one hundred years. Who is to know whether or not it is likely to be valuable or not? Certainly the defendants wish to press more records. I, accordingly, do not think that this is a case which falls within head (3) of A.L. Smith LJ, one to be adequately compensated by a small money payment. It does not follow, however, that this is a case for the grant of an injunction. As I have said, it stands out a mile that what the plaintiff wants is a monetary payment commensurate with the amount of use of her work.
I have found it difficult to decide which way to go. On the one hand, if I grant the injunction the parties will be left to negotiate the payment. On the other hand, if I do not grant the injunction, damages will have to be assessed on the basis that this was an exclusive right of the plaintiff and the defendants were paying for invasion of that exclusive right.
In the end, I have come to the conclusion that the better course is to withhold the injunction. In so doing, I wish to make it absolutely clear that I regard this as a wholly exceptional case outside head (3) of Shelfer. The fact is that here the defendants have been exploiting these lyrics for now eleven years. Probably most of the commercial use has already occurred. That seems to be accepted by both sides. There is a large element of trying to shut the stable door after the horse has bolted. The plaintiff having made it plain that what she really wants is money, I think the best way to proceed is that there should be a claim as to how much that sum should be. I therefore refuse to grant an injunction."
"101. … the grant or refusal of a final injunction is not merely a matter of the balance of convenience. Justice requires that the court observe the principles enunciated in Shelfer's case and remembers that if the effect of the grant of an injunction is not oppressive the defendant cannot buy his way out of it, even if the price, objectively ascertained, would be modest. My understanding of the word 'oppressive' in this context is that the effect of the grant of the injunction would be grossly disproportionate to the right protected. The word 'grossly' avoids any suggestion that all that has to be done is to strike a balance of convenience.
113. Is it oppressive, in the sense that I understand that word is used in Jaggard v Sawyer, to require the database to be altered so as to accommodate this finding? The evidence is that the work can be done: data can be migrated from the old table into the new in the live database. The whole process is described in Mr Pritchard's fourth witness statement. On the other hand, much testing and checking must be done, and the operation is attended with some risk. Mr Arnold Q.C. submits that the fault is slight, and the cure grossly disproportionate. Because I consider that easyJet are entitled to know what the data stored in the OpenRes history table was and are entitled to require BulletProof to design a journal-type database table that will accommodate the existing data after migration, I think that this submission is justified. The breach is small. Damages can be assessed upon a willing licensor/licensee basis, on the footing that the licensee is entitled to receive the information that I have described in respect of the data to be migrated into the new database. I will order an enquiry accordingly."
1. Member States shall provide for the measures, procedures and remedies necessary to ensure the enforcement of the intellectual property rights covered by this Directive. Those measures, procedures and remedies shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
2. Those measures, procedures and remedies shall also be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.
Member States may provide that, in appropriate cases and at the request of the person liable to be subject to the measures provided for in this section, the competent judicial authorities may order pecuniary compensation to be paid to the injured party instead of applying the measures provided for in this section if that person acted unintentionally and without negligence, if execution of the measures in question would cause him/her disproportionate harm and if pecuniary compensation to the injured party appears reasonably satisfactory."
"I should add a word about the Judge's references to proportionality and the passage of time. Whether or not conventional English law principles as to the grant of an injunction embody that concept (I rather think they do, though the now fashionable word 'proportionate' is not to be found in the older case law), in the case of enforcement of an intellectual property right, the requirement is explicit. The Enforcement Directive (2004/48/EC) by Article 3(2) inter alia requires that measures to enforce intellectual property rights shall be proportionate. It is accepted that a claim for misuse of technical trade secrets such as the present is a claim to enforce an intellectual property right. So the Judge was right to consider proportionality. "
"Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties."
In my view Article 30 permits the recognition of a limited jurisdiction to withhold an injunction in special circumstances. In considering whether there are special circumstances, account may be taken of the legitimate interests of third parties, but not so as unreasonably to prejudice the legitimate interests of the patent owner.
Stay pending appeal
"It is not in dispute that where a plaintiff has at first instance established a right to a perpetual injunction, the court has a discretion to stay the operation of the injunction pending an appeal by the defendant against the judgment. On what principles ought such a discretion to be exercised. The object, where it can be fairly achieved, must surely be so to arrange matters that, when the appeal comes to be heard, the appellate court may be able to do justice between the parties, whatever the outcome of the appeal may be. Where an injunction is an appropriate form of remedy for a successful plaintiff, the plaintiff, if he succeeds at first instance in establishing his right to relief, is entitled to that remedy upon the basis of the trial judge's findings of fact and his application of the law. This is, however, subject to the defendant's right of appeal. If the defendant in good faith proposes to appeal, challenging either the trial judge's findings or his law, and has a genuine chance of success on his appeal, the plaintiff's entitlement to his remedy cannot be regarded as certain until the appeal has been disposed of. In some cases the putting of an injunction into effect pending appeal may very severely damage the defendant in such a way that he will have no remedy against the plaintiff if he, the defendant, succeeds on his appeal. On the other hand, the postponement of putting an injunction into effect pending appeal may severely damage the plaintiff. In such a case a plaintiff may be able to recover some remedy against the defendant in the appellate court in respect of his damage in the event of the appeal failing, but the amount of this damage may be difficult to assess and the remedy available in the appellate court may not amount to a complete indemnity. It may be possible to do justice by staying the injunction pending the appeal, the plaintiff's position being suitably safeguarded. On the other hand it may, in some circumstances, be fair to allow the injunction to operate on condition that the plaintiff gives an undertaking in damages or otherwise protects the defendant's rights, should he succeed on his appeal. In some cases it may be impossible to devise any method of ensuring perfect justice in any event, but the court may nevertheless be able to devise an interlocutory remedy pending the decision of the appeal which will achieve the highest available measure of fairness. The appropriate course must depend upon the particular facts of each case."