UK court backs rights holder in ‘essential’ patent dispute

The latest decision is the second of four technical trials listed in a long-standing patent and licensing dispute between Optis and Apple, all concerning patents from Optis’ portfolio of telecoms network standard essential patents (SEPs).

SEPs are patents that protect technology believed to be essential to implementing a technical standard. In other words, you cannot operate a standard compliant device without necessarily using the patented invention. Rights holders must make them available for others to use by way of a licence on fair, reasonable and non-discriminatory (FRAND) terms.

In this trial, Apple failed to convince the judge that the patent, which teaches a mechanism for radio link control (RLC) polling for continuous transmission within a LTE network, was invalid.

Apple had argued before the court that Optis’ patent was invalid as it lacked novelty, or was ‘anticipated’ by other existing, similar patents. The judge in this case, Mr Justice Meade, disagreed.

Patent litigation experts at Pinsent Masons, the law firm behind Out-Law, said that the judgment raised interesting points in relation to whether the ‘doctrine of equivalents’ can be used in respect of patent validity claims as well as infringement claims, in addition to points about the process by which declarations of patent essentiality are made.

The doctrine of equivalents is a legal principle which, in UK terms, stems from the 2017 decision in the case of Actavis UK v Eli Lilly , in which the UK Supreme Court ruled that a patent may be infringed by a product or process which is considered equivalent to that protected by the granted patent. In one of its arguments as to validity, Apple referred to the doctrine of equivalents, arguing that the Optis patent was anticipated by equivalence.

The law in respect of the doctrine of equivalents is evolving, and the courts have not yet had the opportunity to fully consider if, or how, it applies to the validity of a patent. However, this is a rapidly developing area of patent law in the UK and the courts are considering wider issues in respect of it. This was demonstrated by recent comments of Lord Justice Birss in the Facebook v Voxer case in respect of the so-called ‘Formstein defence’ to infringement by equivalence. 

In that case, Lord Justice Birss suggested that the UK courts could find in future that, if a patent is not infringed under a normal interpretation but would be under the doctrine of equivalents, the scope of that patent could be confined to a normal interpretation if the consequence of the broader interpretation under the doctrine of equivalents is that the patent would be invalid. This was for two reasons. First, if the claim on its normal construction is valid, then the judge said it “seems harsh” to invalidate it on this ground. He said that approach would promote certainty. Second, as other European Patent Convention (EPC) countries work that way – the principle has been applied by the Dutch courts, for example – this is a reason for the UK as an EPC state to also take the same approach. The judge’s comments were, however, ‘obiter’, meaning they did not form part of the judgment itself.

The Voxer case did, however, in an earlier interim decision in April 2021, establish that those arguing infringement by equivalence must specifically plead it at an early stage of the proceedings in their particulars of infringement. According to Mr Justice Meade, it therefore followed that Apple, and others arguing anticipation by equivalence in the future, must also do so. However, he said that allowances would be made where cases were already on their way to trial before the Voxer judgment was handed down.

Although Mr Justice Meade rejected Apple’s case on other grounds, he went on to consider whether, and to what extent, the doctrine of equivalents could be extended to patent validity attacks in the future. This was, he said, “an extremely important point for UK patent law”, one which will almost certainly need to be considered by the Court of Appeal if not the UK Supreme Court.

The judge said: “When it is first ruled on in a case where it is decisive to the result, it will need to be fully argued, including with reference to the law of other EPC jurisdictions and with regard to how and whether people can be prevented from practising the prior art, or if not, how and why not”.

He also issued general guidance to those seeking to plead anticipation by equivalence, noting that their particulars of infringement must “identify the claim feature(s) to which it is directed and from there answer the Actavis questions by reference to each such feature”. He added: “A general pleading that equivalence will be relied on wherever purposive construction fails is not good enough”.

Sarah Taylor of Pinsent Masons said: “Mr Justice Meade’s comments are helpful and while the courts have not yet had to determine the correct approach to this issue, it is clear that they are starting to fully engage with it.”

“The number of cases in which infringement by the doctrine of equivalents is pleaded has increased significantly over the four years since the decision in the Actavis case, and we therefore expect the approach to validity by equivalence to be considered by a higher court in the not too distant future,” she said.

Apple also argued before the court that, even if the patent was valid and infringed, Optis was prevented from enforcing it – or at least restricted in the relief that it could obtain from the court – by proprietary estoppel. This refers to the claiming by a party of a right to property belonging to another party in circumstances where the claimant has been led to believe, by a promise by words or conduct by the other party, that they have or can expect to be given an interest in the property.

The Optis patent was originally held by Ericsson, which had gone through the process of registering it as a SEP with the European Telecommunications Standards Institute (ETSI). Apple argued that Ericsson had made its declaration of essentiality out of time, and that as a result the patent could not be enforced against Apple. It also argued that Ericsson’s failure to reveal a provisional US patent application to ETSI, prior to the standard being frozen, breached ETSI’s intellectual property rights (IPR) policy.

Mr Justice Meade ultimately rejected Apple’s arguments, finding that the timing of Ericsson’s declaration was in keeping with the ETSI IPR policy and the expectations of ETSI members as a whole.

Mark Marfé of Pinsent Masons said that the estoppel points “were an interesting argument”.

“Many of the patents in suit in FRAND cases have changed hands so clarity on the FRAND obligations that attach to these patents is welcome where the litigant is not the original rights holder,” Marfé said.

“The decision also reminds litigants to make time early on to consider what their strongest points are” he said.

Various arguments were conceded by the parties very close to trial. The judge observed that this often occurs in complex cases where the interplay of issues is only fully appreciated in the run-up to trial with the reply evidence in hand, and in international litigation the effect of concessions in other jurisdictions has to be weighed up, and client instruction obtained. Nonetheless, the judge said that parties should try and clarify and narrow the issues in a timely manner.

Two further technical patent trials involving Optis and Apple are scheduled to take place later in 2021, with a further two trials in respect of the FRAND licence issues to follow in 2021 and 2022.