So You've Got A Patent!

Jane Lambert

Congratulations! It probably took a little longer to get than you expected. It almost certainly cost you more money than you had bargained for.  But so long as you pay the renewal fees you have an asset that is bound to make your fortune. Right?

Well, not exactly. You have a right to stop other people from making, marketing, importing or selling something that you have invented but a patent is not a meal ticket. It exists to give you an opportunity to recoup the time and money you spent in devising the invention and perhaps a little extra on the side either by working the patent yourself or by licensing it to others. Whether you can do that or not will depend on whether anybody wants to buy your invention.

If there is a market for the invention, there is always a possibility that somebody will want to muscle in. Such a person may want to do it fairly by seeking a licence from you or by using a technology that does not infringe your patent, but there are also those who would try to sweep your patent out of the way in revocation or declaration of non-infringement proceedings or simply ignore your patent if they don't think you can afford to enforce it.  Unlike some other intellectual property rights such as copyright, trade marks, rights in performances or, nowadays, registered designs, it is not an offence to infringe a patent in this country even if it is done quite blatantly, cynically and on an industrial scale.

If anyone infringes your patent you have to sue and patent litigation is not cheap. You can't use the small claims track of the Intellectual Property Enterprise Court ("IPEC") because the rules specifically exclude patents, registered and registered Community designs, semiconductor topography and plant variety claims from that tribunal.  You can use the IPEC multitrack but you have to be prepared to pay up to £50,000 if you lose the case and probably a great deal more than that to your own legal team. That is a lot better than the Patents Court where the costs that can be awarded against you are unlimited and can run into millions.

So unless you are a millionaire, your company is really coining it or you have some other source of funding you should consider before-the-event insurance cover against IP disputes before a dispute arises (see my article It is never enough to get a patent, trade mark or registered design 19 Aug 2019 and my links to other articles). It is unrealistic to expect a lawyer specializing in IP to represent you on a no-win no-fee basis because the risks, costs and wait for payment are too great however strong your case. IP insurance is not cheap but it is a lot better than bankruptcy or watching a competitor ride roughshod over your rights.

So, what should you do if you think that someone is infringing your patent? Well, one thing you should not do is take matters in your own hands and write a stroppy letter to the other side. S.70 of the Patents Act 1977 and subsequent sections prohibit threats of patent infringement proceedings that cannot be made out. If you make such a threat (however politely) you risk an action for an injunction, declaration and costs that could cost you plenty. Any lawyer or patent attorney with any experience of patent litigation will be aware of this section but many non-specialist lawyers aren't. If they make a groundless threat on your behalf it is you who will have to carry the can.

Where do you find a specialist lawyer? Any firm that belongs to the Intellectual Property Lawyers Association should be able to help you. There are good solicitors in other firms but you have to be careful because not every solicitor who claims experience of IP has actually done a patent case.  Another possible option is a patent attorney litigator.  Not every patent attorney has expertise in civil litigation but there is a growing number who have. The CIPA and IPReg websites should help you find one. Yet another option is to consult a member of the IP Bar. We are advocates and not litigators but we are probably in a better position than most to recommend a good litigator.

Civil proceedings begin with the service or delivery of a claim form on the alleged wrongdoer.  The claim form is usually accompanied by another document known as particulars of claim. Those particulars must state the facts on which you base your claim and the remedy that you want precisely. In a patent infringement claim, your particulars of claim must state which of the claims of your patent is alleged to have been infringed and give at least one example of at least one alleged infringement.  The "claims" are the numbered paragraphs at the end of your patent specification setting out the features of your invention.  The reason they are set out in numbered paragraphs is that if one of them is too broad you may still be able to rely on one of the others. If your invention is a product the patent is infringed by making, marketing, importing or using a product that has all the features of at least one of the claims.

It is possible that the alleged infringer will accept the strength of your case and seek a settlement or simply throw in the towel but you cannot bank on that. He or she may challenge your interpretation of the claim and argue that his or her product falls outside its wording,  It is likely that he or she will dispute the validity of the patent on one of several grounds.  If your opponent can show that someone else invented exactly the same thing before you applied for your patent can be revoked (taken away) on the grounds that your invention was not new. Another possible ground for revocation is that your invention would have been obvious to anyone with the appropriate skills and knowledge having regard to everything that was known at the time of your application.  You might think that all this would have been considered by the examiner when you applied for your patent but the sad fact is that the time and resources that are available to an examiner are nothing like the time and resources that your opponent will expend in order to knock out your patent.  A surprisingly large number of patents are revoked in whole or in part when patentees bring infringement claims.

If you win your action you will be awarded an injunction and a contribution to your legal fees which will be limited to £50,000 if you brought your claim in IPEC.  You would probably get more if you sue in the Patents Court but even the awards in that court are unlikely to cover everything you spent. An injunction is an order by a judge to do or not to do something. If it is disobeyed the court may punish the defendant with a fine or even imprisonment.  What you will not get at this stage is damages or accountable profits.  That will require another hearing known as an account or inquiry which may take place several months or even a year or so in the future. That will also cost a lot of money,

There is obviously a lot more to patent enforcement than I can mention in a short note.  The important thing is to think about enforcement and arrange to fund it whether by insurance or otherwise well before a dispute arises. If you want to discuss this article or anything relating to it, call me on 020 7404 5252 or send me a message through my contact form.

A Sad but not Unusual Tale of an Inventor

Mr Perry invented a fence bracket.  In his abstract he described it as

"A fence bracket comprises a main plate 10 adapted to overlie the top edge of a fence panel 18, and depending sides, which may be triangular and apertured as shown, which form a channel to receive the panel, and apertured tabs 14, 16, for the receipt of fasteners 22 to attach the bracket to post 20. An alternative form has a back plate 41 (Fig 4A, not shown) which lies against post 20."

He appears to have applied for a patent by himself for he is named as the agent on the specification. His application was duly granted under British patent number GB3920104.

Mr Perry believed that a wholesaler called FH Brundle sold products that infringed his patent and he wrote to the company's CEO in the following terms on 5 Oct 2012:

"FAO: Chief Executive/Chairman

Notice Before Proceedings

Infringement of Patent GB2390104, 4 August 2003 - October 2011 Through Sales Of Betafence's Nylofor 3D Bracket And 3M Panel

Claim for Damages Under the Patents Act 1977.

Sirs,

I have written to your Company in the past to see if you would have any interest in stocking any of my fencing products and your reply was that you didn't sell any of these products or that type of fencing and your Company had no interest.
It has now been brought to my attention that your Company has been selling a product of Betafence known as Nylofor 3D bracket that is used to install Nylofor fencing, for over at least 5 years, according to your Southampton office and you in fact still sell these products.
This Nylofor product infringes my Patent and I demand that you provide an Account of Profits of direct profit on sales of:
1. The quantity of the Nylofor 3D bracket you have sold between August 2003 – October 2011.
2. The number of Nylofor 3M fence panels that have been sold during the same period that are installed using the Nylofor bracket.
3. The number of fence posts sold corresponding with the number of fence panels sold during the same period.
4. The quantity of add on products sold such as the allen key tool specifically designed to use with the Nylofor 3D bracket.
I am legally entitled to a share of these profits whilst the Patent was in force and which is currently being restored to the register, as it had lapsed temporarily due to Patent Office error in late 2011.
I intend to take proceedings against your Company in the High Court if no amicable solution can be reached regards paying me my share of the profits for your use of my inventions without any licence to do so. Please respond within 14 days or I will commence proceedings against your Company.
Sincerely,"

Mr Perry's letter constituted a threat of proceedings for the infringement of a patent within the meaning of s.70 of the Patents Act 1977. I discussed that section and similar provisions in other intellectual property statutes and regulations in If you think someone has infringed your patent talk to a lawyer first 11 July 2014.

Solicitors acting for the wholesaler replied on the 15 Oct 2013. They denied that their client had infringed the patent, complained that the letter constituted an actionable threat and invited Mr Perry to withdraw it. On 21 Nov 2012 Mr Perry rejected their complaint and demanded particulars of their client's sales:

"Para. 6 Just to clarify, according to you, your client will be ignoring the Cease and Desist Notice and will continue to sell the infringing products. As you and your client both take the Patent Infringement very seriously, you will be providing the information I have asked you for and in the meantime I will put a hold on taking any legal proceedings against your client."

The solicitors repeated their request to Mr Perry to withdraw his threats which were met with yet another letter dated 18 Dec 2012:

"In your initial letter you are claiming 'unjustified threats of legal action for alleged patent infringement' and I pointed out that your client may still have a liability to me between 2004 – 2011 whilst the Patent GB2390104 was in force, …"

The wholesaler brought proceedings against  Mr Perry for groundless threats in what is now the Intellectual Property Enterprise Court ("IPEC"). Mt Perry counterclaimed for infringement of the patent joining the manufacturers of the allegedly infringing products into the proceedings as Part 20 defendants. The action and counterclaim came on before His Honour Judge Hacon in FH Brundle (A Private Unlimited Company) v Perry [2014] EWHC 475 (IPEC).  The judge construed Mr Perry's patent claims and concluded that they had not been infirnged. The failure of the counterclaim meant that there was no defence to the threats action. The judge gave FH Brundle judgment on the claim and dismissed the counterclaim.

Mr Perry represented himself in those proceedings whereas the wholesaler and one of the manufacturers were represented by solicitors and counsel.  At a hearing to assess costs counsel for the claimant and first Part 20 defendant reminded the judge that he had discretion under CPR 44.2 (4) (a) to take account of the conduct of the parties. They urged the judge to disregard the cap on recoverable costs on the grounds that Mr Perry had behaved unreasonably. His Honour described that behaviour as follows:

"Brundle pointed to Mr Perry's persistent use of intemperate language and expletives in his pleadings and in his skeleton argument for the trial. This is consistent with the way Mr Perry has expressed himself in emails sent to my clerk. I was told that Mr Perry was warned about his language by Mr Recorder Meade QC at an application before him on 16 May 2013. Before me Mr Perry, who appeared in person, accepted that he had been warned by Mr Meade and that he had chosen not to heed the warning."

Shortly after judgment had been delivered Mr Perry circulated the following letter claiming that it had come from the judge:

"Royal Courts of Justice
Patents County Court
Rolls Building, Fetter Lane
London

sales@hmcts.fasteners.co.uk

Mr Richard Perry

19 Yerbury Street
Trowbridge, Wiltshire
BA14 8DP

26th March 2014

Claim CC13P00980

Dear Mr Perry,

I have re-considered the case CC13P00980 and upon reflection; your opponents (FH Brundle, Betafence and Britannia Fasteners) having used your name on purchase orders for the infringing goods protected under your patent (which seems to be a fundamental point in the case), have colluded to defraud you of substantial sums of profits you were rightfully entitled to and therefore I have reversed my decision in your favour and award £5,000,000.00 in damages that would settle the claim in full.
I apologise that I did not even question your opponents on this issue or the matters concerning the manipulation of design sheets and copyright dates as at the time I didn't think it was all that relevant.
I order the claimants and counter defendants to pay the claim in full within 14 days and the claim for unjustified threats is dismissed.

Mr Justice Hacon."

Although a deliberate attempt to influence others by means of a forged letter from a judge would normally be an extremely serious matter Judge Hacon thought that the letter was better characterized as a further example of Mr Perry's intemperate and eccentric behaviour. He took it into account by awarding an additional £2,000 costs against Mr Perry but he did not regard Mr Perry's conduct as sufficiently exceptional to take it outside the £50,000 costs cap. Giving his reasons in FH Brundle (A Private Unlimited Company) v Perry (No. 2)  [2014] EWHC 979 (IPEC), [2014] 4 Costs LO 576 the judge awarded costs of £49,645 against Mr. Perry.

Mr Perry was unable to pay those costs and was adjudged bankrupt on 30 April 2015. He appealed unsuccessfully against his bankruptcy order and applied unsuccessfully for permission to remain a company director notwithstanding his bankruptcy. He also issued fresh proceedings against F H Brundle and the manufacturers of the fence brackets which came before Judge Hacon in Perry v F H Brundle and Others [2015] EWHC 2737 (IPEC) 2 Oct 2015). His Honour struck out the claim and made an extended civil restraint order against Mr Perry under para 3.1 of Practice Direction 3C - Civil Restraint Orders which prevents Mr Perry from issuing any proceedings or taking any steps in existing proceedings without the permission of the court for the next 2 years. I discussed those proceedings in Civil Restraint Orders in IPEC: Perry v Brundle 12 Oct 2015 NIPC Law.

Although Mr Perry may have behaved intemperately and unwisely it is hard not to feel sorry for him. As the judge acknowledged at para [34] of his judgment in the strike out proceedings Mr Perry feels a strong sense of injustice which seems to have got the better of him at times. It might have been a different story had be been properly represented. A patent attorney might have drawn up more robust claims and a specialist solicitor would have steered him clear of any liability for groundless threats. But professional advisors come at a cost. For many years business disputes involving sole traders were covered by legal aid but legal advice and representation in business matters were excluded from the Community Legal Service by para 1 (h) of Sched 2 to the Access to Justice Act 1999.

In view of that exclusion this is what inventors should do:

1. Get a reader's card for the British Library and take advantage of the many free courses and inexpensive services available through the Business and IP Centre. It is a good idea to subscribe to the Centre's Facebook and Linkedin groups.
2. If you live outside London check whether there is a Business and IP Centre at a central library near you. Leeds Central Library is particularly good. Call Ged Doonan on 0113 247 8266 for details of his centre's services.
3. Take advantage of the network of free IP clinics up and down the country. Many are run by or in conjunction with the Chartered Institute of Patent Attorneys and I run a monthly one in Barnsley. Most clinics will allow you up to 30 minutes free advice with a patent or trade mark attorney or some other IP professional. They will give you some good advice on such topics as whether your invention is patentable, what to do if you think your intellectual property right has been infringed and how to respond to a complaint of IP infringement.
4. Consider taking out IP insurance whenever you register a patent or other intellectual property right to fund legal advice or representation.
5. Always consult a lawyer or patent or trade mark attorney before threatening legal proceedings. I am aware that lawyers do not come cheap but most of us are ready to do deals or suggest sources of funding.

If anyone wants to discuss this article or patents in general, call me on 020 7404 5252 during office hours or send me a message through my contact form.