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Intermediate Bulk Containers FAC |
An intermediate bulk container, unsurprisingly known as an IBC, is a large container, normally around 1000 litres in volume, used for the transport of liquids. FAC |
Such containers face tough transport conditions. FAC |
They must be capable of bearing heavy weights (as much as six tonnes, as they are often stacked four-high), of withstanding prolonged or violent vibration, and of resisting the forces caused by the liquid splashing around inside, without buckling, cracking or springing leaks. FAC |
IBCs of a two-part construction, resting on a flat pallet (of wood, steel, or plastic) have been well known in the trade for many years. FAC |
They consist of a metal cage into which a large plastic container (or bottle) is fitted. FAC |
The bottle has to fit the cage snugly, as otherwise the cage will not provide full protection, and the walls of the bottle will not be properly supported. FAC |
The general idea is shown by the prior art IBC which is illustrated in the description of the patent involved in this case: FAC |
IBCs are used to transport a wide range of types of liquid. FAC |
Often, the bottle cannot be reused, because it contains residues of a toxic liquid or because it has been physically damaged. FAC |
While the cage also has a limited life-span, which depends on a number of factors (such as the means and conditions of transport and climatic conditions), it has a significantly longer life expectancy than a bottle; the evidence suggested that, on average, it is about five or six times as long. FAC |
Reconditioning FAC |
Reconditioners engage in re-bottling or cross-bottling used IBCs. FAC |
In either case the old bottle is removed, any damage to the cage repaired, and a new bottle is fitted within the cage. FAC |
Re-bottling involves replacing the bottle with a fresh bottle from the original manufacturer; cross-bottling involves replacing the bottle with a bottle from a different source. FAC |
Opinion in the industry is divided about cross-bottling. FAC |
Because the bottle is not specifically designed for the cage, the fit is not always as good as with a bottle from the original manufacturer. FAC |
For instance, stabilising loops in the top of the bottle may not precisely match up with bars on the cage, or the bottle may not fit so as to drain properly without tipping. FAC |
However, there appears to be a healthy market for cross-bottled IBCs. FAC |
The IBC market FAC |
IBCs are normally sold by a manufacturer to a filler, who then uses the IBC to send its product to an end-user. FAC |
Fillers typically include large chemical companies, and end-users include fizzy drink wholesalers, cosmetic suppliers and pharmaceutical companies. FAC |
Manufacturers of new IBCs often also recondition their own original IBCs, but there are many suppliers of IBCs who are solely reconditioners. FAC |
Reconditioners (whether or not they are the original manufacturers) normally collect used IBCs from end-users, who have no further use for the used IBCs. FAC |
The end-users are sometimes, but by no means always, paid for these used IBCs by the reconditioners. FAC |
After re-bottling or cross-bottling an IBC, the reconditioner offers the reconditioned product to fillers on the market in competition with the products of original manufacturers, and of other reconditioners. FAC |
Reconditioned IBCs are, predictably, generally cheaper than new IBCs. FAC |
The invention and the Patent in this case FAC |
European Patent (UK) 0 734 967 (the Patent) has a priority date of 30 March 1995. FAC |
Claim 1 of the Patent (the Claim) is the only relevant claim for present purposes. FAC |
It is in the following terms (with added sub-paragraphs): [A] Pallet container for the transporting and storing of liquids, having a flat pallet, an exchangeable inner container made of plastic material with an upper, closable filler opening and a lower emptying device and also, surrounding the inner container, one out... |
Read on its own, the Claim is not immediately accessible, and it would normally be inappropriate to consider its meaning or effect without explaining its factual and technical context, including the description (i.e. the narrative preceding the claims) of the Patent, reasonably fully. FAC |
However, given the issues which require consideration on this appeal, only the following points need be identified: i. Item [A] extends to a complete IBC, i.e. a pallet, a bottle (the inner container) and a cage (the outer sleeve); ii. FAC |
The claimed inventiveness lies in items [D], [E], and [F], as is indicated by the introductory words characterised in that; iii. FAC |
The inventiveness of the Patent lies in the idea of flexible weld joints in the cage, to increase its strength and durability; iv. FAC |
More specifically, the inventiveness lies in the idea of introducing a dimple on either side of the weld and a central raised portion; v. The description of the Patent acknowledges that the bottle is exchangeable i.e. replaceable. FAC |
The parties FAC |
The proprietor of the Patent is Protechna S.A. (Protechna). FAC |
The respondent, Schtz (U.K.) Limited (Schtz) is its exclusive licensee in this country, and is the leading manufacturer of rigid composite IBCs in the United Kingdom. FAC |
Most of its sales are of new IBCs, but about 25% are rebottled IBCs, whose cages have, after any necessary repairs, been re-bottled with new Schtz bottles. FAC |
The appellant, Werit UK Limited (Werit), sells bottles (Werit bottles) for IBCs to a reconditioner, Delta Containers Limited (Delta). FAC |
Delta acquires discarded IBCs originally put on the market by Schtz (Schtz IBCs), and replaces the original bottles (Schtz bottles) with Werit bottles, and then offers these cross-bottled IBCs on the market. FAC |
These cross-bottled IBCs are therefore in competition with the original Schtz IBCs, marketed by, or with the express authority of, Schtz. FAC |
Schtz objects to its cages being used by cross-bottlers. ARG |
Apart from the competitive consequences, Schtz claims to be concerned that publicity about any accident with a cross-bottled product made with one of its cages might harm its reputation. ARG |
Accordingly, it objects to Deltas re-bottling activities and contends that they infringe the Patent. ARG |
It is common ground that, if Delta thereby infringes the Patent, Werit does so. ARG |
The legislation STA |
Section 60(1) of the 1977 Act (section 60(1)) is concerned with direct infringement, and provides in para (a) that a person infringes a patent if, where the invention is a product, he makes, disposes of, offers to dispose of, uses or imports the product or keeps it whether for disposal or otherwise, without the consent... |
Section 60(2) of the 1977 Act is concerned with indirect infringement, which includes the knowing supply to a primary infringer of any of the means which enables him to carry out the infringing act. STA |
(Hence the common ground referred to at the end of the preceding paragraph). STA |
Section 125(1) of the 1977 Act (section 125(1)) provides that unless the context otherwise requires, an invention for a patent for which a patent has been granted should be taken to be that specified in a claim of the specification of the patent , as interpreted by the description and any drawings contained in that spe... |
Section 130(7) of the 1977 Act states that certain specified sections of that Act, including sections 60 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the [European Patent Convention and the Community Patent Convention] have in the... |
The scope of protection afforded by a European patent is defined by Article 69(1) of the European Patent Convention (the EPC), as amended in 2000, which provides that [t]he extent of the protection conferred by a European patent shall be determined by the terms of the claims. STA |
It also provides in Article 64(1) that the protection to be afforded to an EPC patentee should be the same as that afforded to a patentee under a national patent. STA |
Article 25(a) of the Community Patent Convention (the CPC) prohibits the making, offering, putting on the market, or using a product which is the subject-matter of the patent. STA |
The present litigation FAC |
On 7 August 2008, Schtz issued these proceedings against Werit seeking relief on the ground that Werit infringed the Patent (as well as two earlier patents, also vested in Protechna and of which Schtz was the exclusive licensee). FAC |
The proceedings were met with a denial of infringement on more than one ground, and a counterclaim for revocation of the three patents. FAC |
By the time the case came on for hearing before Floyd J in March 2010, the issues concerned only two of the three patents, but there were other issues which he had to resolve. FAC |
Following a seven-day hearing, he gave a full and prompt judgment - [2010] EWHC 660 (Pat), [2010] Bus LR 1244, [2010] FSR 22. FAC |
The only question relevant to the present appeal which he had to consider was whether Delta infringed the Patent by mak[ing] the article claimed by the Claim, contrary to section 60(1)(a). FAC |
On that question, Floyd J held, distinguishing the House of Lords decision in United Wire Ltd v Screen Repair Services (Scotland) Ltd, [2000] 4 All ER 353, [2001] RPC 24, that Deltas activity of replacing the inner container of a Schtz IBC with a Werit bottle does not amount to making the patented product. FAC |
He justified this conclusion on the ground that the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim, and the inventive concept of [this claim] is wholly embodied in the Schtz cage paras 181, 197, and 206. FAC |
Schtz appealed on a number of points. RLC |
In a judgment given by Jacob LJ (with which Ward and Patten LJJ agreed), the Court of Appeal upheld the Judge on all other points, but reached a different conclusion on this issue. RLC |
Relying on the reasoning of the Court of Appeal and House of Lords in United Wire, Jacob LJ said that it was inappropriate to determine the issue by reference to the inventive concept, and that [the] product (i.e. the IBC) ceased to exist when the bottle is removed, so [w]hat remained at that stage was merely an import... |
Accordingly, Werit was found to be liable to Schtz to pay damages or account for its profits, arising out of its infringement of the Patent. RLC |
The Court of Appeal also had to deal with an issue relating to costs and damages, arising out of section 68 of the 1977 Act (section 68), and the fact that Schtz had failed to register its exclusive licence. FAC |
This led to two decisions, which were favourable to Schtz. FAC |
Accordingly, Werit had to pay the great majority of Schtzs costs of the proceedings at first instance and almost all of Schtzs costs in the Court of Appeal. FAC |
Werit was granted permission to appeal both against the substantive order that it had infringed the Patent and against the costs order. FAC |
I shall first consider the main issue, namely whether the Court of Appeal were right to hold that Delta did indeed make the patented article contrary to section 60(1)(a), and I shall then address certain issues arising under section 68. Ratio |
Infringement: the proper approach to the meaning of makes Ratio |
Introductory Ratio |
It seems clear that the effect of section 60(1)(a) is that a person infringes a patent for a product if that person makes the product, as claimed in the patent concerned. Ratio |
As to the making, that is the verb used in section 60(1)(a). Ratio |
As to the product being defined by the claim, that seems clear from section 125(1). Ratio |
In any event, if it is not the product as claimed in the patent, it is hard to see what else the subject matter of the making could rationally be. Ratio |
The word makes must, of course, be interpreted contextually. Ratio |
In this case, the word should, in my view, be approached bearing in mind a number of considerations (which sometimes may be apparently irreconcilable in this field, as Robert Walker LJ pointed out in Cartonneries De Thulin SA v CTP White Knight Ltd [2001] RPC 6, para 21 quoting Attorney-General v Prince Ernest Augustus... |
First, the word makes must be given a meaning which, as a matter of ordinary language, it can reasonably bear. Ratio |
Secondly, it is not a term of art: like many English words, it does not have a precise meaning. Ratio |
Thirdly, it will inevitably be a matter of fact and degree in many cases whether an activity involves making an article, or whether it falls short of that. Ratio |
Fourthly, the word makes must be interpreted in a practical way, by reference to the facts of the particular case. Ratio |
Fifthly, however, there is a need for clarity and certainty for patentees and others, and for those advising them. Ratio |
Sixthly, it should be borne in mind that the word applies to patents for all sorts of products, from machinery to chemical compounds. Ratio |
Seventhly, one should bear in mind, at least as part of the background, the need to protect the patentees monopoly while not stifling reasonable competition. Ratio |
Eighthly, the word makes must be interpreted bearing in mind that the precise scope of a claim may be a matter almost of happenstance in the context of the question whether the alleged infringer makes the claimed product. Ratio |
Lord Diplock described the specification of a patent as a unilateral statement by the patentee, in words of his own choosing by which he states what he claims to be the essential features of the new product Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, 242. Ratio |
As Lord Hoffmann explained in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] 1 All ER 667, [2005] RPC 169, para 21, a claim is, or at least should be drafted not only in the interest of others who need to know the area within which they will be trespassers but also in the interests of the patentee,... |
As Lord Hoffmann went on to explain in para 35, all sorts of factors, only some of which may appear to be rational, can influence the person drafting a claim. Ratio |
Ninthly, where, as here, there is a decision (United Wire) of the House of Lords or this court on the meaning of the word, it cannot be departed from save for very good reasons indeed. Ratio |
Finally, particularly given that section 60 (like section 125) is one of the sections mentioned in section 130(7) of the 1977 Act, the word should be interpreted bearing in mind that it is included in a provision which is intended to be part of a scheme which applies in many other jurisdictions. Ratio |
United Wire PRE |
The decision of the House of Lords in United Wire assumed central importance in the Court of Appeal, as is clear from para 91 of Jacob LJs judgment, where he described Schtzs appeal as determined by United Wire, a proposition unsurprisingly supported by Mr Meade QC on behalf of Schtz before this court. Ratio |
However, while we must be careful not to cause confusion in this area, the reasoning in that case, like the reasoning of any court, was inevitably based on the facts agreed between the parties or decided by the judge, and on the arguments raised by the parties or suggested by the court. Ratio |
United Wire involved two patents, and the facts were summarised by Lord Hoffmann at paras 62-64 (taking the paragraph numbering from the RPC report, which includes the decision of the Court of Appeal) in these terms: 62. PRE |
[B]oth patents are for a screen consisting of a frame to which two meshes of different mesh sizes are adhesively secured at the periphery so as to be at different tensions. PRE |
The differences are the striking screens of the first patent and the flexible apertured [frame] of the second. . 63. PRE |
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