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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Sudarshan Chemical Industries Ltd v Clariant Produkte (Deutschland) GmbH  EWCA Civ 919 (30 July 2013)
Cite as:  Bus LR 1188,  RPC 6,  EWCA Civ 919
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
John Baldwin QC sitting as a Deputy High Court Judge
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE KITCHIN
LORD JUSTICE FLOYD
| Sudarshan Chemical Industries Ltd
|- and -
|Clariant Produkte (Deutschland) GmbH
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
for the Claimant/Respondent
Antony Watson QC and Thomas Mitcheson (instructed by Taylor Wessing LLP)
for the Defendant/Appellant
Crown Copyright ©
Lord Justice Kitchin:
The subject matter and the parties
"8. The use of C.I. Pigment Yellow 191 as claimed in claim 6 for pigmenting varnishes, polymers, printing inks, aqueous or solventborne pigment preparations, electrophotographic toners and developers, powder coating materials, inks, preferably ink-jet inks, color filters, and for coloring seed."
"12. The use of C.I. Pigment Yellow 191 as claimed in any of claims 6 to 10 for pigmenting polymers and powder coating materials."
"13. The use of C.I. Pigment Yellow 191 as claimed in any of claims 6 to 10 and which has been subjected to fine division for pigmenting polymers and powder coating materials."
"13. The use of C.I. Pigment Yellow 191 as claimed in any of claims 6 to 10 for pigmenting polymers and powder coating materials and which has been subjected to mechanical fine division by dry grinding."
"Mr Howe initially objected to this proposed amendment being considered at all since it was introduced after the evidence had been completed and so he had been denied a proper opportunity to lead or cross examine to all matters which were relevant. He argued that if I were to consider it at all, then I must do so bearing in mind that the limited evidential support for his argument should not be held against him; in effect I was being invited to take a broad view of the evidence. Mr Watson agreed that he could not object to this course."
"EP 0 361 431 [the 517 patent] discloses the production of a pigment of Formula (1) as an aqueous suspension which is then filtered and washed and dried. We disclaim the said pigment as an aqueous suspension or in a form which has not been dried. "
i) Did the judge fall into error in finding that it was obvious to use wet cake for pigmenting polymers?
ii) Did the judge fall into error in concluding that it was obvious to water treat dry ground wet cake?
iii) Was the judge right to hold that proposed claims 12 and 13 would result in the specification disclosing additional matter?
iv) Was the proposed disclaimer allowable?
v) Did the judge fall into error in relation to the Gillette defence?
vi) Was the letter of 25 November 2009 a threat to Sudarshan's customers? If it was, does Clariant have a defence under s.70(2A)(b) of the 1977 Act?
Was it obvious to use a wet cake for pigmenting polymers?
"Furthermore Dr McHugh's evidence was to the effect that it was obvious to use pigment wet cake in the plastic, ink and coating/paint applications for the 338 patent. He described the rationale and technical advantages of using wet cake and explained that it would be obvious to the skilled addressee that he could use PY 191 wet cake for these various applications. The only real challenge to this evidence was based on the fact that it had not been done before; there was no real challenge to the rationale and advantages of doing it. Dr Heron pointed out that there are problems manipulating wet cake due to its sticky nature but he accepted that a benefit was that there were no dust problems. My conclusion on Dr Heron's testimony on the point is that pigments are most commonly sold in dry form but there are occasions where wet cake is the more suitable medium. Professor Schmidt said that to his knowledge it was not possible successfully to use wet cake pigment in plastics without drying the pigment before use, but I was not satisfied he had any basis for his remarks (and he had no relevant experience)"
"Example 1 provides for the drying of the press cake in order to make PY 191 and I can see no reason why a person skilled in the art following the example would carry out all the other steps of the example, but not the very last step. As I have said in paragraph 13 it is normal practice for multi-purpose pigments such as this to be sold as dry powders and so there would be no reason not to dry the product. Having a wet product would be particularly problematic when used in non-aqueous processes such as pigmenting of polymers and powder coating materials. Indeed, as far as I am aware PY191 has never been sold in the wet cake form."
Was it obvious to water treat dry ground wet cake?
"Depending on the desired field of application it may be sensible to subject the resulting pigment to mechanical fine division. This fine division may be carried out by wet or dry grinding or by kneading. The grinding or kneading operation may be followed by treatment with a solvent, with water or with a solvent/water mixture in order to convert the pigment into a useful form".
"Q. So how would water treatment be carried out on a dry-milled product?
A. It could, essentially, be dispersed in that pigment in water and heating it and then allowing it to cool and then you have opportunities for, we are back to almost pressed cake stage where you have water on the sample and you can change the smaller crystallites into agglomerates and potentially aggregates at that point, so you are increasing the particle size, perhaps, into a more desired range or a more refined range.
THE DEPUTY JUDGE. That sort of activity will be standard stuff. Standard optimisation.
A. I think so, yes. I think the grinding, at that step, may relate to -- I think Dr Schmidt related it to products coming off a dryer as being sausage-like or spaghetti-like. So, breaking those particles down and then solvent treatment afterwards which could be water or a mixed solvent. I do not think there is anything particularly unusual about that other than you have gone to the effort of drying a pigment and then you are going to wet it again to get a new -- but if that requires to be done to produce a product spec then that is what people will do.
MR HOWE. Indeed. We have discussed – you have mentioned a number of times – particle size and particle size distribution and crystallite size and form as important factors in the production of a usable pigment at the end of the day.
A. In adjusting the shade, yes."
Was the judge right to hold that proposed claims 12 and 13 would result in the specification disclosing additional matter?
"…. there is no disclosure in the original specification either that it is inventive or that there is technical significance in the use of PY 191 in polymers or powder coating materials in particular, or in such use when the pigment has been subject to mechanical fine division by dry grinding in particular. Accordingly, and following the approach set out in the above mentioned citations, the effect of the amendment is to add subject matter relevant to the invention. Therefore, the amendment is contrary to s.76 of the Act and is not allowable."
"Depending on the desired field of application it may be sensible to subject the resulting pigment to mechanical fine division. This fine division may be carried out by wet or dry grinding or by kneading. The grinding or kneading operation may be followed by treatment with a solvent, with water, or with a solvent/water mixture in order to convert the pigment into a useful form."
Was the proposed disclaimer allowable?
"To date only one crystal polymorph of PY 191 has been disclosed. It is referred to below as the [alpha] polymorph and has the following characteristics lines in the X-ray powder diagram …"
"The [alpha] phase is formed in the synthesis of PY 191 if the coupling of the disulfo acid with the sulfonated pyrazolone is conducted in accordance with the details given in [the 517 patent]."
"It has now been surprisingly found that by treating PY 191 with certain solvents, a new crystal polymorph is formed. The new polymorph is called the [beta] form. It features the following characteristic lines …"
"This gives Pigment Yellow 191 in the alpha polymorph."
"EP 0 361 431 [the 517 patent] discloses the production of a pigment of formula (1) as an aqueous suspension which is then filtered washed and dried. We disclaim the said pigment as an aqueous suspension or in a form which has not been dried."
"33. The law on added matter was considered again by the Enlarged Board of Appeal, in a case where the amendment involved a disclaimer narrowing the claim, in G 1/03 PPG/Disclaimer  EPOR 331. The effect of that decision is that a specific disclaimer does not add matter (contrary to Article 123(2) of the European Patent Convention – equivalent to section 76), if it is inserted into a claim to avoid an "accidental" anticipation, but it does add matter if it is inserted to avoid a "non-accidental" anticipation – see Part 2 of the decision. An accidental anticipation involves a "disclosure … belong[ing] to a remote technological field or [one whose] subject-matter suggested it would not help to solve the problem [addressed by the patent in question]". In other words, "the disclosure has to be completely irrelevant for assessing the inventive step" – see paragraph 37.
34. A little later in the same paragraph, the Enlarged Board identified an accidental anticipation in slightly different words, but to much the same effect, namely that "the disclosure in question must be so unrelated and remote that the person skilled in the art would never have taken it into consideration when working on the invention". In conclusion on this topic, in paragraph 44, the Enlarged Board said that:
"When an anticipation is taken as accidental, this means that it appears from the outset that the anticipation has nothing to do with the invention. Only if that is established, can the disclaimer be allowed."
Did the judge fall into error in relation to the Gillette defence?
Q. You would not suggest that the actual process in its full details, temperatures, pH, the choice of co-couplers, the further addition of rosin, you would not suggest that that is an obvious example of carrying out example 1. I mean, if you did example 1, you would not come up with that process, would you?
A. If someone asked me to repeat example 1, I would not come up with that process. If someone asked me to produce a commercially viable pigment, that is the kind of process I would probably come up with, based on what is in example 1.
Q. It is the kind, I understand that, that you would optimise example 1. But whether anybody would optimise example 1 to arrive at the Sudarshan old process, you simply do not know. Mr. Satya spent a lot, 70 iterations?
A. Of course, I could not tell you what anyone is going to optimise that process, all that I am saying is that you would always take that patent example and, based on the skeleton of that particular patent, develop your own product with your own knowledge and your own expertise.
THE DEPUTY JUDGE: Is this the sort of thing you would come up with, or do you think this is pretty extraordinary?
A. No. This is normal process development, normal product development. These are using, effectively, a toolbox of materials, a toolbox of process variables to arrive at something that is commercially sensible.
MR. WATSON: I accept all that, but I think what my Lord is after, or certainly I am after anyhow, is this, that, yes, you are using the toolbox of putting in some co-couplers, choosing your co-coupler, your co-amine, using the tool box of putting in a rosin. You are using your tool box to adjust temperatures. You are using your tool box to adjust pHs. But the final recipe is something which is going to be almost unique. You cannot say that another worker, starting with example 1, would arrive at that recipe.
A. No, I could not say that.
"Certainly you will not be interested in continuously effecting a patent infringement, which may involve the most serious penalties to the infringer and his customers."
"70. Remedy for groundless threats of infringement proceedings.
(1) Where a person (whether or not the proprietor of, or entitled to any right in, a patent) by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats (whether or not he is the person to whom the threats are made) may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming any relief mentioned in subsection (3) below.
(2) In any such proceedings the claimant or pursuer shall, subject to subsection (2A) below, be entitled to the relief claimed if he proves that the threats were so made and satisfies the court that he is a person aggrieved by them.
(2A) If the defendant or defender proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent –
(a) the claimant or pursuer shall be entitled to the relief claimed only if he shows that the patent alleged to be infringed is invalid in a relevant respect;
(b) even if the claimant or pursuer does show that the patent is invalid in a relevant respect, he shall not be entitled to the relief claimed if the defendant or defender proves that at the time or making the threats he did not know, and had no reason to suspect, that the patent was invalid in that respect.
(3) The said relief is:
(a) a declaration or declarator to the effect that the threats are unjustifiable;
(b) an injunction or interdict against the continuance of the threats; and
(c) damages in respect of any loss which the claimant or pursuer has sustained by the threats.
(4) Proceedings may not be brought under this section for-
(a) a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process, or
(b) a threat, made to a person who has made or imported a product for disposal or used a process, to bring proceedings for an infringement alleged to consist of doing anything else in relation to that product or process…."
Actionable threat to sue Sudarshan's customers?
"… But using language in its ordinary sense, it is difficult to see that an intimation ceases to be a threat because it is addressed to a third person in answer to an enquiry, or because it is addressed to the person himself. We are not dealing with libel or questions of publication – we are dealing with threats. If I threaten a man that I will bring an action against him, I threaten him none the less because I address that intimation to himself, and I threaten him none the less because I address the intimation to a third person."
"…What is said by Lord Justice Bowen, I entirely agree with; if we had not had in this section circulars or advertisements, a threat to a third person by a letter might have been argued not to have been a threat within the section…"
"The argument is founded upon the words which appear at the beginning of the section, namely, "Where any person by circular, advertisements, or otherwise threatens any person "with an action for infringement of patent," etc. The question which would appear to arise is, do the words, "threatens any person" mean only "communicates a threat to any person," or do they also include the meaning "expresses a threat in relation to any person"? Although in the absence of a context the words would more usually, I think, bear the first of these meanings, the second is not necessarily inapt – unless one assumes that the threat is made in such circumstances that it could not possibly come to the knowledge of the person threatened.
Hitler undoubtedly threatened Britain with invasion in 1940, but it is not known that he wrote to Mr. Churchill acquainting him of his intention to do so. Be that as it may, there is in Sec. 36 a context and one which negatives any such assumption as I have mentioned. The section envisages that the threats may be expressed through the medium of "Circulars, advertisements or otherwise." The assumption to which I have referred cannot be reconciled with the conception of publicity which is involved in such words as "circulars" and "advertisements". But, further, these words and particularly the word "advertisement" point, in my judgment, with some force to the conclusion that a person can be "threatened" for the purposes of Sec. 36 by documents sent or published to persons other than himself. It may be that it was to some extent with reference to this context that Bowen, L.J., in Skinner & Coy v Perry (supra) said (at 10 R.P.C. p. 7 and he was speaking, of course, of the threats section):
"If I threaten a man that I will bring an action against him, I threaten him none the less "because I address that intimation to himself, and I threaten him none the less because I address the intimation to a third person."
It is true that the letter to which the Lord Justice was referring in making that observation was in some sense at threat to the addressee as well as being a threat to the plaintiff in the subsequent threats action. Nevertheless the observation, directed, as it was, to the threats section appears to be in perfectly general terms and I respectfully agree with it.
Fortified then by the views of Bowen L.J., and mindful (though, I hope, not too mindful) of the motives of the Legislature to which I have already referred, I hold that the words in Sec. 36 "threatens any person" do not only mean "communicates a threat to any person" but include also the expression of a threat, by circulars, advertisements or otherwise, in relation to any person."
The object of the section is to stop patentees using a threat of proceedings in such a way that the business of third parties in the manufacture and sale of alleged infringing articles is curtailed or hampered. If patentees want to stop alleged infringers they must do it by taking proceedings for infringement and not making threats. Nothing can be more mischievous than a threat, whether directed against a customer or a customer's supplier, that has the result of the cancellation of an order. Unless such a threat were justified, it should in my view be stopped. Of course, I have held that in this case such a threat was justified.
What we have here is in fact a case in which a person, the plaintiffs, threaten another person, though not to their face, with proceedings for an infringement of a letters patent. That resulted in the cancellation of an order, and, in my view, the defendants, though not directly threatened, could claim to be aggrieved by that threat; and, had it not been a justified threat, I think it would have been actionable.
"The company's primary rules of attribution together with the general principles of agency, vicarious liability and so forth are usually sufficient to enable one to determine its rights and obligations. In exceptional cases, however, they will not provide an answer. This will be the case when a rule of law, either expressly or by implication, excludes attribution on the basis of the general principles of agency or vicarious liability. For example, a rule may be stated in language primarily applicable to a natural person and require some act or state of mind on the part of that person "himself", as opposed to his servants or agents. This is generally true of rules of the criminal law, which ordinarily impose liability only for the actus reus and means rea of the defendant himself. How is such a rule to be applied to a company?
One possibility is that the court may come to the conclusion that the rule was not intended to apply to companies at all; for example, a law which created an offence for which the only penalty was community service. Another possibility is that the court might interpret the law as meaning that it could apply to a company only on the basis of its primary rules of attribution, i.e. if the act giving rise to liability was specifically authorised by a resolution of the board or an unanimous agreement of the shareholders. But there will be many cases in which neither of these solutions is satisfactory; in which the court considers that the law was intended to apply to companies and that, although it excludes ordinary vicarious liability, insistence on the primary rules of attribution would in practice defeat that intention. In such a case, the court must fashion a special rule of attribution for the particular substantive rule. This is always a matter of interpretation: given that it was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rules (if it is a statute) and its content and policy. "