Nokia GmbH v IPCOM GmbH & Co KG [2011] EWCA Civ 6

[2011] EWCA Civ 6Case No A3/2010/0454/0939/2678IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
[2009] EWHC 3482 (Pat)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
The Hon Mr Justice Floyd
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 20/01/2011
Before
THE RT HON LORD JUSTICE SEDLEYTHE RT HON LORD JUSTICE JACOBTHE HON MR JUSTICE NORRIS
Between
Nokia GMBHClaimants
Mr Daniel Alexander QC and Mr Brian Nicholson (instructed by Bristows) for AppellantsMr Richard Meade QC and Mr James Abrahams (instructed by Bird & Bird LLP) for RespondentsHearing Hearing dates: 14/15/16 December 2010
Judgment
[1]Although I am mainly responsible for this judgment I would like, at the outset, to acknowledge the valuable help provided by Norris J in writing the first draft of the technical background section.[2]The matters before us arise from three judgments of Floyd J: 20th November 2009, [2009] EWHC 3034 (Pat) (“the first amendment judgment”); 18th January 2010, [2009] EWHC 3482 (Pat) (“the main judgment”); and 31st March 2010, [2010] EWHC 789 (Pat) (“the second amendment judgment”).[3]I shall call the two sides Nokia and IPCom. The appeal is concerned with two of IPCom’s European Patents (UK), 0,540,808 (“the Synch Patent”) and 1,186,189 (the “Access Rights Patent”). By his main judgment Floyd J held both patents invalid but that if they had been valid Nokia would have infringed. He gave permission to appeal his Main Judgment but not either of the amendment judgments.

General Background

[4]IPCom and Nokia are engaged in an international patent battle. It arises this way. Robert Bosch GmbH was in the mobile telephone business in the 1990s and decided to get out. Bosch sold its mobile telephone business to Siemens but retained its mobile phone portfolio with a view to licensing it to mobile phone manufacturers. It negotiated with Nokia but negotiations broke down in 2003. Bosch then sold the portfolio to IPCom. This is a “non practising entity”, i.e. a patentee with no business of its own in products covered by the patents. IPCom’s business purpose is to persuade actual manufacturers to pay it licence fees under its patents. IPCom attempted to negotiate licences with Nokia and others. Nokia would not pay what IPCom asked. So IPCom started infringement proceedings on a number of its patents before a Landgericht in Germany: it was, adapting von Clausewitz, using litigation as a continuation of negotiation by other means.[5]Nokia retaliated. Not only did it start revocation proceedings in respect of a number of IPCom’s patents in Germany before the Bundespatentgericht (“BPG”), but it also started revocation proceedings in respect of no less than fifteen IPCom patents before the Patents Court of England and Wales: it escalated the war.[6]At a case management conference Kitchin J ordered that these cases (to some of which IPCom had responded by counterclaiming for infringement) be tried in succession. The proceedings under appeal were the first of the five cases to come to trial. The case was selected by IPCom to be heard first and both patents were from what it called its “Proud List”. The Judge inferred (second amendment judgment [9]) that that meant that IPCom considered them to be amongst its strongest patents.[7]Things have now moved on. IPCom has now consented to orders for revocation of all thirteen of the patents the subject of the four remaining batches of cases. That left the two patents the subject of Floyd J’s judgments now under appeal.[8]Another proceeding has, however, come into being. It concerns an application for revocation by Nokia of a “divisional” of the Access Patent together with a claim for its infringement by IPCom. The proceedings were only commenced after Floyd J’s second amendment judgment. It was not possible to start them earlier because the patent concerned had only recently been granted by the European Patent Office. It should not be thought that this late grant was due to an unjustified delay by the Office, for it was not. It was caused because IPCom (as it was entitled to do under the EPO rules of procedure then in force) only made the divisional application leading to the patent concerned years after the original, so-called “parent” application was made (in 1999). We were told that there are at least six other divisional patent applications pending from the same basic disclosure: there may be others, as yet unpublished.[9]IPCom were, of course, far from alone in making use of the “divisional” procedure in this way. I doubt that the public interest is well served by such an uncontrolled procedure. It is not surprising that the EPO has taken steps to curtail it. Similar steps have been taken (or are being taken) in the USA to curtail its equivalent – which goes by the name “continuation in part”. There ought to be a time, reasonably soon after a parent application, when the public are able to know the maximum extent of a patentee’s claimed monopoly.[10]The trial of the proceedings concerning the divisional patent is now set for April 2011.[11]IPCom’s skeleton argument contains a bit of a complaint (an Australian would call it a “whinge”) that Nokia had escalated the dispute by coming to the English Patents Court at all. There is even a suggestion that Nokia chose to litigate here to maximise costs:
“IPCom believes that Nokia has sought to involve IPCom in litigation at maximum cost in the UK instead of co-operating to resolve matters in a single jurisdiction.”
This merely reminds me of that good old French dog (Cet animal est très méchant: si on l'attaque il se défend). IPCom were, we were told, asking for €12b. It could hardly expect anything other than that Nokia would fight back really hard. I have no sympathy for the “maximum cost” complaint: we were not even told what resources are available to IPCom. Nor do we know what it paid for the Bosch portfolio, a portfolio from which it now seeks to derive very large sums from Nokia and other mobile phone makers. All that can be said is that IPCom’s investors could only reasonably have expected that mobile phone companies would not pay large sums without a fight.[12]It of course may sometimes make commercial sense to agree to resolve matters in a single jurisdiction. But for one party to choose its jurisdiction first and then expect the other to agree it is another matter. It is rather like one football team challenging another after it has picked a home advantage, if not quite challenging someone to a duel but only after having made one’s choice of weapons.[13]It is hardly surprising that IPCom chose Germany. For within the bifurcated system there, the infringement court is generally faster than the validity court. So, unless a patent is rather likely to be held invalid (the infringement court will stay proceedings if it is), a party can get a commercial advantage by an early infringement decision in its favour. And, judging by results so far (not only here but also in Austria and the US, though things are not over in either country), it would seem that IPCom’s position on infringement is stronger than that on validity. That may well have been its perception at the outset. If so, Germany would clearly be a commercially good place to sue – the hope would be of getting an early win on infringement followed by negotiation of a commercially advantageous deal.[14]I should also in passing mention that IPCom itself did not confine its actions to Germany before Nokia retaliated in the UK. It started proceedings in Bologna against Nokia for infringement of not only 41 EP Italian patents but also 44 EP UK patents (including the Access Rights Patent). Eventually the proceedings were dropped (not surprisingly since there can hardly have been jurisdiction over the UK patents) but their existence serves to show how one-sided the whinge was. The thought seemed to be: “IPCom’s chosen jurisdictions are ok, Nokia’s are not”.[15]These matters are relevant because they form part of IPCom’s argument concerning the Access Rights Patent. They have no relevance to the Synch Patent.[16]On appeal IPCom challenged the finding of invalidity of the Synch Patent. Nokia contingently challenged the finding of infringement, only seeking to raise points about it if we were to hold the patent valid. Accordingly we heard the argument from both sides on validity first. Having considered these we concluded that the Judge was right and so informed the parties. So it was unnecessary to hear Nokia’s contingent cross-appeal. This judgment contains my reasons for upholding the judgment on the invalidity of the Synch Patent and my reasons and decision concerning the Access Rights Patent.[17]As regards the Access Rights Patent, despite having permission to do so, IPCom decided not to challenge the finding that it is invalid as it stands. What it says is that by one or other or both of his amendment judgments the Judge wrongly refused it permission even to apply for amendment. The result was an order for revocation even though IPCom wanted to advance arguments which would or might have saved the Access Rights Patent, albeit with reduced scope.[18]Thus it sought permission to appeal the amendment judgments. We heard full argument from both sides on the points raised. Since they were in part novel and raised potentially important questions we have decided to grant permission in respect of both judgments. A The Synch Patent (1). Technical Background[19]Mobile telephones are so commonplace that it is easy for the ordinary user to overlook the stupendous technology that lies behind their convenient use. Professor Dr Alfons Eizenhöfer of the University of Applied Science in Nürnberg took 62 pages of his expert report to give an account of “a few basic concepts” which he said were “expressed at a superficial level”. What follows does not aspire even to that. But the determination of the issues concerning the Synch Patent involves some consideration of the technology as it stood at the priority date of the patent, 2nd November 1991.[20]The basic elements of a mobile phone system are, of course(i) a fixed base station transmitting a radio signal on an assigned frequency within its “cell”; and(ii) a mobile telephone. The radio signal carries the data. The radio signal transmitted by the base station is stable (because the signal is generated by a powerful and accurate oscillator which is fixed). The radio signal received and transmitted by a mobile phone is less stable, because the mobile phone contains a cheaper and less accurate oscillator, and because the phone is mobile.[21]A radio signal is graphically represented by a sine wave, with the horizontal axis representing time and the vertical access the oscillations. The highest positive value and the lowest negative value from the base line depict the amplitude of the signal. The number of cycles (0>+x>0>-x>0) per second depicts the frequency of the signal. So at one cycle per second, the wave would start at 0, reach its highest positive value at 90°, return to the base line at 180°, reach its lowest negative value at 270°, and return to the base line at 360° in one second. The same information can be represented graphically as a circle with key data marked by what are called I and Q values.[22]In a digital system, all data is converted into a series of “1”s and “0”s (“bits”). The difference between “1” and “0” is produced by modulating the carrier radio signal. With an AM signal the modulation would be achieved purely by altering the amplitude of the signal. On an FM signal the modulation would be achieved purely by altering the frequency of the signal. Mobile telephone signals use a very high frequency of around 900Mhz: one cycle takes 900 millionths of a second. At these frequencies the modulation is achieved by modulating the phase of the signal.[23]If one were to mark off two cycles (2 x 360°) on the horizontal axis of the graph and map one sine wave starting at 0 and another of the same frequency starting at 180°, the second wave would always lag the first by 180°. That constant 180° difference from the reference wave is the “phase”. (If the second wave was on a different frequency to the first reference wave then the wave patterns would not run parallel, the phase would not be constant, and there would be an increasing difference between the two patterns, called “a phase offset”). This is a very simple form of “binary phase shift keying” (BPSK) where the phase can take on one of two values relative to the unmodulated carrier (either 0 or 180°). These respective values can represent “0” and “1”. In fact mobile telephony applies these principles at a much higher level of complexity (8PSK) and using a special technique for constantly modulating the signal within each bit period (rather than making sharp changes at the beginning and end) called “Gaussian Minimum Shift Keying” (GMSK).[24]The data that needs to be transmitted falls into two categories. Firstly there is the “traffic” (the conversation or the text of the message – the “user data”): secondly there is the information that enables the system to set up the call and administer the operation of the network - “the control data”. Both of these are in digital form. The traffic (and some control data) is carried on one channel. Most (but not all) of the control data is carried on another linked channel. The receiver will need to sort out the one from the other: and it will then need to decode the stream of bits containing user data to convert it back into sounds or letters.[25]To ensure that there is compatibility between the receivers produced by various manufacturers and the services offered by various telecommunications suppliers certain standards have been agreed. The relevant standard for the Synch Patent are called the GSM standard and they prescribe the logical organisation of the data to be transmitted and the physical radio channels which support those logical channels.[26]At 900Mhz data can be transmitted at the rate of about 271,000 bits per second. To enable more than one mobile receiver to occupy any given frequency the GSM standards prescribes an elaborate timetable of timeslots for the transmission of this data. Particular types of information must be transmitted in particular timeslots in accordance with this timetable (which also groups the timeslots together into “frames”).[27]An individual timeslot is filled by a set of data called a “burst”. The GSM standards require that a “normal” burst consists of 156 bits. They are arranged in this way. The first three mark the “tail” (like opening a bracket). Then there are 58 bits conveying user data. Then there is a “training sequence” of 26 bits (which is a form of control data set out according to a specified sequence code). Then there are another 58 bits of user data. Then there are three more tail bits (to close the bracket). Finally there are some bits which “guard” the burst (like the space between sentences). The two 58 bit sequences contain the patterns of “0”s and “1”s that will first have to be deciphered and will then be decoded to convey the information (sound or text) that is being transmitted. The training sequence is there to facilitate that process.[28]There are two relevant other types of burst. A “frequency correction burst” again consists of 156 bits, but instead of user data and a training sequence, the heart of it consists of a pre-set pattern of fixed bits that enable the receiver to “tune” itself by reference to the unmodulated carrier wave. A “synchronisation burst” consists of 156 bits, the heart of which is another preset pattern which the receiver already knows and to which it can adjust itself so that it synchronises the receiver with the base station.[29]The training sequence is like the frequency correction burst and the synchronisation burst. It is a specified pattern of bits. The mobile knows what the pattern should look like; so if it can adjust itself to make the received signal conform to that expected pattern it can self-correct any errors; those self-correcting adjustments could then be employed to help refine the two 58-bit parcels either side of the training sequence, and the refined signal could then be decoded.[30]In order for the transmission to be successfully received and decoded it is necessary for the receiver to know the exact timing of the time slots in the transmitted signal to be able to extract the correct data. The receiver must be precisely synchronised with the signal originally generated at the base station: GSM standard 5.10 (section 6.2) so requires. So a receiver needs a synchronous processor to maintain frame synchronisation.[31]There are a number of things which can interfere with the transmission processes so as to cause “bit errors”: i) The reference oscillator in the mobile may not be accurate: in that case the frequency would differ from the true carrier frequency of the received signal and phase errors (an increasing phase offset) will occur. ii) Signal degradation caused by other radio emissions, perhaps from another mobile channel, (“interference”) may mean that the amplitude of the received signal does not remain constant. iii) The environment may produce random radio “noise” (e.g. from lighting). iv) Buildings or hills may create radio shadows. Other buildings or objects may cause the radio waves to be reflected, so that the mobile receives a burst directly and fractionally later than (and out of phase with) the same burst which had taken the longer path. The phase difference might be such that the two signals cancel each other out. v) The movement of the mobile towards or away from the base station may cause a Doppler shift, where the received frequency differs from the transmitted frequency.[32]What is needed to counteract these distorting effects is an “equaliser”. An equaliser may be thought of as a “function” rather than a “thing”. Its object is to remove errors in the received signal caused by the radio channel and to produce a distortion free signal of the correct frequency so that the transmitted data in the received signal can be decoded and read by the receiver.[33]The process of equalisation may involve something as simple as a fixed filter, to screen out a constant source of interference. But it could involve an adaptive equaliser; for example, continuous error correction operating on feedback (sometimes called “a Viterbi processor”). So if the receiver could measure the phase values of the received signal and subtract from those measured values the known phase values of the training sequence then it would be able to calculate the phase offset more or less as it occurs and use that value at some point in the process to adjust any frequency error in the transmission of the user data.[34]Thus far I have described the problems occurring within one cell. But the whole point of a mobile phone is that it can move from cell to cell, dropping the signal from one base station and picking up the signal (on a different frequency) from another without terminating the call and starting all over again. This is called “hard handover” (a “soft handover” would be one in which the phone stays connected with the leaving cell until it is connected with the new cell).[35]GSM standard 05.10 paragraph 6.8 required a mobile to be ready to transmit on the new channel within 120 ms of the last time slot of the frame containing the handover command. So the mobile has a very limited period within which to effect the handover. The experts were agreed on this. Thus Prof. Eizenhöfer said it was “very tight” and Mr Gould (IPCom’s expert) said; “you would not have time to hang around”.[36]For a mobile phone the signal from one base station will be dominant – it locks on to that dominant signal and whilst that signal remains dominant it stays within the cell of that base station. But adjoining base stations will be transmitting signals on their assigned frequencies which the mobile can also pick up. In its June 1988 version GSM Recommendation 05.08 prescribed (at paragraph 7.2) that it was essential for the mobile to identify adjacent base stations, to synchronise to them and to demodulate their carrier signals, and to do so as often as possible (and at least every ten seconds). GSM Recommendation 05.10 (in its March 1990 version) said that where adjacent base stations were being monitored, the mobile could store the timing values for all base stations whose synchronisation bursts had been detected relative to the base station it was currently using (and that it should do so to an accuracy of ±1 bit period). The Synch Patent claims to use this data to enable the mobile to “lock on” to the new base station within the timeframe allowed and so permit the datastream constantly to flow (and thus the conversation to continue uninterrupted). On the appeal we have to consider whether the claim to do so is (as the judge held) “obvious”.

The Judge made this general observation about this patent:

[37][20] The disclosure of 808 is extremely sparse. The original German text (ignoring the claims) is concentrated into only 30 paragraphs spread over only 5 columns. The drawings, many of which are inaccurate or trite, do not take the disclosure much further. The first claim, on the other hand, occupies almost all of a sixth column. With so little guidance from the specification, and with such a lengthy claim, it is hardly surprising that almost every expression in the claim was the subject of dispute. To describe the document as a recipe for protracted litigation would not, I am afraid, be unfair.[38]The mass of disputed issues before the Judge bore this out. The Judge had to deal with no less than nine issues of claim construction, an insufficiency attack and an obviousness attack which itself was broken up into sub-issues. Most of these were not pursued before us. In the end IPCom’s appeal turned on just three points.[39]As regards the disclosure of the Synch Patent the Judge set this out at [21-34]. IPCom did not criticise any aspect of this, so I gratefully borrow those parts relevant to the points on appeal. I can omit other parts because it is accepted that although the only claim now in dispute, claim 1, has many features; those features are not related one to another. It is not suggested that there is any synergistic relationship between them. [21] The specification starts (page 1 lines 4-9 of the translation) by saying that in the GSM system a relatively large amount of effort is required for synchronisation. After a cross reference to an article by Hodges, it states that the object of the invention is to specify a synchronisation method which satisfies all the relevant requirements with as little technical complexity as possible, an object which it claims is achieved by a method according to claim 1. This is said to be linked to the advantage that synchronisation can be achieved with high precision and relatively little effort. The description continues at page 1 lines 23 to 27 with a point (repeated later in relation to the specific embodiment at page 2 lines 24 to 27):
“The method is particularly advantageous if the synchronisation is based on evaluation of the continuous phase angles which are in each case calculated from the individual I and Q value pairs. This allows the synchronous state to be reached very quickly.” [22] IPCom’s case is that these passages simply refer to the fact that GMSK is based on continuous phase angles, and does not exclude the possibility of maintaining operation with I and Q, at least so far as claim 1 is concerned. IPCom is correct, and the general statements about the invention are simply the obviously desirable goals: minimum complexity and high precision with little effort. There is nothing specific about how these goals are to be achieved, or about what caused the prior GSM system, if it did, to fail to achieve them. [23] Apart from the global statement of advantage and the point about using phase angles calculated from I and Q, the introduction does not focus on any particular aspect of the synchronisation. This leaves the reader without much of an idea about what the patentee considered to be the inventive concept. The specification then moves (at page 1 line 29) straight into the description of a specific embodiment. At page 2 line 16 it is pointed out that, in the context of GSM: “A distinction is drawn between three types of synchronization for the required synchronization of the mobile radio telephones. (1) Initial synchronization, (2) Normal operation synchronization, (3) Lock on synchronization during normal operation.” [24] Before it turns to any aspect of any of these synchronisation stages, the specification launches into a description of some very general matters: (i) a summary of GMSK (page 2 lines 27 to 32); (ii) a TDMA frame, rather misleadingly described (page 2 lines 33 to 35) by reference to figure 1 by omitting various parts of the frequency correction and synchronisation bursts, (iii) “the basic design of the reception path of a mobile radio telephone” described from page 2 line 36 to page 3 line 32, by reference to figure 2. This is reproduced below. Of especial note is the dotted line 27 labelled “equalizer unit”
. This surrounds something called the “synchronous processor” 28 (which it is common ground is a misnomer – the skilled person would understand it is the processor in which some aspect of synchronisation takes place) and the “equalizer demodulator processor” 29. A connection is indicated between the “central control unit” and the “equalizer unit”, although it is not specific as to precisely where, within that, it goes. (iv) The specification again emphasises (now for the third time at page 3 line 24 to 26) that all processing subsequent to the analogue to digital converter is based on the processing of phase angles calculated from the I and Q components. [25] The specification then goes on to discuss the three types of synchronisation: initial, normal and lock-on. Disclosure about initial synchronisation [26] The disclosure about initial synchronisation extends from page 3 line 33 to page 6 line 11. This is said to comprise four steps:
“(1. 1) coarse frequency synchronization, (1. 2) coarse frame synchronization, (1. 3) fine frequency synchronization, (1.4) fine frame synchronization.” [27] Each of these steps is then described in some more detail. ….. I should simply note at this stage that the specification makes it clear that one does not always have to perform the coarse frequency step. …. [28] Whilst step 1.1. is therefore, at least to some degree optional, steps 1.2 to 1.4 are all accepted to be old or obvious in the light of the GSM Recommendations. …. Disclosure about normal synchronisation [29] Normal operation synchronisation is said to take place in two steps: “2.1 frame synchronization with fine synchronization 2.2 data signal pre-processing Error-free decoding is ensured by continuously monitoring and maintaining frame and frequency synchronism by evaluating the training sequence within the normal burst 14 (Figure 1). In this case, the frame offset is determined first of all. The determined value (clock offset) is a parameter required to mark the pattern sequence within the data set with bit accuracy. This is a precondition for the subsequent correct correlation calculation to determine the present frequency offset. Data preprocessing (2.2) A frequency correction value determined from the present frequency measurements by the central control unit 31 is supplied to the synchronous processor 28. This results in the data being preprocessed, as a result of which the decoder certainty is improved, since the equalizer is supplied with the present data with the frequency already corrected. Data signal preprocessing allows the limitation of error-free decoding for frequency offsets of more than 200 Hz, which could be caused by the Doppler effect and the oscillator, to be completely eliminated.” [30] It is common ground that the headline of step 2.1 should read “frame synchronization with fine frequency synchronization”
. It is also common ground that the skilled reader would realise that the term “correlation” is inappropriate terminology for the calculation of the frequency offset in step 2.1. The important point about the disclosure of step 2.1 is that the patentee is telling the reader to use the training sequence within the normal burst for this purpose. This is the subject of claim 9. [31] The text I have set out above (read in conjunction with the block diagram of the receiver of figure 2) is the totality of the description in the patent about data pre-processing, step 2.2. Nevertheless the reader learns that the pre-processing is concerned with errors that arise because of the Doppler effect and because of the oscillator. The skilled person would understand that these are both long and short term effects. Disclosure about lock-on synchronisation [32] Lock-on synchronisation is said to mean “synchronization of a mobile radio telephone to surrounding adjacent cells during normal operation” and occurs in two steps:
“3.1 coarse frame synchronization 3.2 fine frame synchronization with fine frequency synchronization” [32] As to the detail, one finds this at page 7 line 35: “..during normal operation, coarse frame synchronization (frequency burst start) and fine frame synchronization together with fine frequency synchronization are carried out as a background process for lock-on synchronization…” [34] The specification explains that the algorithms for this purpose correspond in principle to those in the earlier steps. At page 7 lines 26 to 32 the specification explains with less than model clarity: “… the synchronization parameters required for going beyond the cell boundary (frame and frequency offset) for the surrounding adjacent cells are determined as a background process during normal operation – lock-on synchronization (process with a relatively low priority). The control unit 31 thus ensures that a connection is maintained when going beyond a cell boundary.” “The method is particularly advantageous if the synchronisation is based on evaluation of the continuous phase angles which are in each case calculated from the individual I and Q value pairs. This allows the synchronous state to be reached very quickly.” “A distinction is drawn between three types of synchronization for the required synchronization of the mobile radio telephones. (1) Initial synchronization, (2) Normal operation synchronization, (3) Lock on synchronization during normal operation.” “the basic design of the reception path of a mobile radio telephone” described from page 2 line 36 to page 3 line 32, by reference to figure 2. This is reproduced below. Of especial note is the dotted line 27 labelled “equalizer unit”
. This surrounds something called the “synchronous processor” 28 (which it is common ground is a misnomer – the skilled person would understand it is the processor in which some aspect of synchronisation takes place) and the “equalizer demodulator processor” 29. A connection is indicated between the “central control unit” and the “equalizer unit”, although it is not specific as to precisely where, within that, it goes. Disclosure about initial synchronisation “(1. 1) coarse frequency synchronization, (1. 2) coarse frame synchronization, (1. 3) fine frequency synchronization, (1.4) fine frame synchronization.” [27] Each of these steps is then described in some more detail. ….. I should simply note at this stage that the specification makes it clear that one does not always have to perform the coarse frequency step. …. Disclosure about normal synchronisation “2.1 frame synchronization with fine synchronization 2.2 data signal pre-processing Error-free decoding is ensured by continuously monitoring and maintaining frame and frequency synchronism by evaluating the training sequence within the normal burst 14 (Figure 1). In this case, the frame offset is determined first of all. The determined value (clock offset) is a parameter required to mark the pattern sequence within the data set with bit accuracy. This is a precondition for the subsequent correct correlation calculation to determine the present frequency offset. Data preprocessing (2.2) A frequency correction value determined from the present frequency measurements by the central control unit 31 is supplied to the synchronous processor 28. This results in the data being preprocessed, as a result of which the decoder certainty is improved, since the equalizer is supplied with the present data with the frequency already corrected. Data signal preprocessing allows the limitation of error-free decoding for frequency offsets of more than 200 Hz, which could be caused by the Doppler effect and the oscillator, to be completely eliminated.” Disclosure about lock-on synchronisation “3.1 coarse frame synchronization 3.2 fine frame synchronization with fine frequency synchronization” “..during normal operation, coarse frame synchronization (frequency burst start) and fine frame synchronization together with fine frequency synchronization are carried out as a background process for lock-on synchronization…” “… the synchronization parameters required for going beyond the cell boundary (frame and frequency offset) for the surrounding adjacent cells are determined as a background process during normal operation – lock-on synchronization (process with a relatively low priority). The control unit 31 thus ensures that a connection is maintained when going beyond a cell boundary.”

Disclosure about lock-on synchronisation

[40]Claim 1 of the Synch Patent is extensive:
“Synchronization method for mobile radio telephones in a cellular, digital mobile radio telephone network, which comprises a plurality of fixed stations and mobile radio telephones and operates with the GSM method, characterized in that, in the mobile radio telephone, (1) initial synchronization which is used to set up a connection between a mobile radio telephone and a fixed station, (2) normal operation synchronization, and (3) lock-on synchronization, that is to say synchronization of a mobile radio telephone to an adjacent cell during normal operation, are carried out in a manner in which the initial synchronization is split into the following steps: (1.1) coarse frequency synchronization at least if the accuracy of the carrier frequencies is not adequate, in which case the coarse frequency synchronization operates independently of bursts and determines whether the frequency of the determined carrier is within a tolerance band, (1.2) coarse frame synchronization by approximate detection of the start of a frame with the aid of the identification of the start of a frequency correction burst (1.3) fine frequency synchronization by phase differencing with regard to a frequency correction burst (1.4) fine frame synchronization, that is to say bit-accuracy frame synchronization, the normal operation synchronization is split into the following steps: (2.1) frame synchronization with fine frequency synchronization, (2.2) frequency-correcting data signal preprocessing using a frequency correction value which is determined from up-to-date frequency measurements and the lock-on synchronization comprises (3.1) coarse frame synchronization and (3.2) fine frame synchronization with fine frequency synchronization.” are carried out in a manner (1.1) coarse frequency synchronization at least if the accuracy of the carrier frequencies is not adequate, in which case the coarse frequency synchronization operates independently of bursts and determines whether the frequency of the determined carrier is within a tolerance band, (1.2) coarse frame synchronization by approximate detection of the start of a frame with the aid of the identification of the start of a frequency correction burst (1.3) fine frequency synchronization by phase differencing with regard to a frequency correction burst (1.4) fine frame synchronization, that is to say bit-accuracy frame synchronization, (2.1) frame synchronization with fine frequency synchronization, (2.2) frequency-correcting data signal preprocessing using a frequency correction value which is determined from up-to-date frequency measurements (3.1) coarse frame synchronization and (3.2) fine frame synchronization with fine frequency synchronization.”

are carried out in a manner

[41]Nothing directly turns on the coarse frequency synchronization step (1). Note, however, that it twice refers to the “frequency correction burst.” Note also that both claim 8 and claim 11 (which I do not set out) respectively refer to the normal burst and the synchronisation burst. (2) The points in issue[42]IPCom contends that the Judge misconstrued both preprocessing and up-to-date in step 2.2 of the normal operation synchronisation. On the basis of his construction of the claim, IPCom accepts that the claim is obvious. But if the claim is narrower, in the manner for which IPCom contends, then it is not.[43]Nokia accepts that analysis. So whether the normal operation synchronisation aspect of the claim is obvious turns solely on two questions of construction, of those words which I have emboldened.[44]IPCom further contends that the Judge was wrong to find the lock on synchronisation step to be obvious.[45]IPCom had to succeed on either both issues of construction or the obviousness of the lock on feature. However, as I have said, we decided the Judge was right on all three points. I turn to consider each in turn. (3) Preprocessing[46]The Judge accepted Nokia’s contentions on construction. He said: [74] IPCom submits that the data pre-processing must cause the frequency correction to be applied before the equaliser. They point to the fact that this is where the correction is applied in figure 2 and is so described in the specification. Nokia submit that the requirement for pre-processing allows the correction to be applied anywhere before the decoder, by which they mean the place where binary values are finally ascribed to the data. [75] I prefer Nokia’s construction for the following reasons: i) IPCom’s construction is simply an attempt to use the specific embodiment to limit the claim. This is not legitimate. The only restrictions imposed by the claim are that the frequency correction is properly regarded as pre-processing and that it uses up to date information. (ii) The term “equaliser” does not itself have a clear meaning, as the experts agreed. So even if it were legitimate to read “before the equaliser” into claim 1, there would still be a question about what the term “equaliser” meant. (iii) The skilled person would have no reason to think that the patentee was at all concerned about precisely where the correction was applied. Indeed this seems to be left deliberately vague in figure 2.

[75] I prefer Nokia’s construction for the following reasons:

[47]The Bundespatentgericht, considering the German equivalent of the Synch Patent, took essentially the same view, 12th May 2010 (HTC and Nokia v IPCom). It said: To improve decoding security, temporary frequency fluctuations during data transmission are compensated using a frequency correction value that is determined from the current frequency measurements, so that the current date can already be further processed frequency corrected (see patent specification at issue, paragraph [0025]; feature 4.2 [This feature corresponds to element 2.2 of the claim].[48]So IPCom not only contends that Floyd J got it wrong. Necessarily it also contends that the BPG also got it wrong – and we were told that this will be one of IPCom’s points on its forthcoming appeal to the Bundesgerichtshof.[49]One of the reasons the issue (before equaliser or before de-coder) matters is the D’Avella citation. Figure 2 of this (reproduced as re-drawn by Prof. Eizenhöfer by the Judge at [171]) shows a phase shifting function φ immediately before a Viterbi processor. It is the latter which ultimately decodes the signal – decides whether each bit is a 0 or 1. Nokia contended, the Judge held, and IPCom does not challenge, that it would be obvious to incorporate this idea into a GSM receiver. IPCom says that does not matter. It points out that before φ is a matched filter. IPCom says that forms part of the equaliser. So, if its construction is right, the obviousness attack has missed its target.[50]The other reason the issue matters is the Judge’s general finding that pre-processing at any time before the de-coder would have been obvious to the skilled person simply using his/her ordinary skills – their common general knowledge. The basic point here is that the skilled person would realise that any corrections should be made to the signal before the decoder gets to work on it.[51]So how then does Mr Alexander contend that the pre-processing must be before the equaliser? He starts by pointing to the description of the specific embodiment in the patent which I set out again: A frequency correction value determined from the present frequency measurements by the central control unit 31 is supplied to the synchronous processor 28. This results in the data being preprocessed, as a result of which the decoder certainty is improved, since the equalizer is supplied with the present data with the frequency already corrected (translation 6 34-7 2) This on its own contemplates the data pre-processing being done before the equalizer. But fig. 2 of the patent shows not only a block labelled “equaliser demodulator processor” but also a dotted line block labelled “equalizer unit” which includes the “synchronous processor.” So the patent itself is none too clear as to what it regards as the equaliser. Seeing that dotted line block so labelled would not convey to the skilled reader that the patentee intended or required that the “pre-“ be pre- the equaliser.[52]And even if the specific embodiment of the patent clearly showed processing pre- the equaliser that would not be enough to show that the generality of the claim is limited in that way. For there is nothing in the teaching which indicates any purpose in pre-processing before the equaliser as opposed to before the decoder. The purpose is improvement in decoder certainty.[53]The next sentence is against IPCom’s construction: Data signal preprocessing allows the limitation of error-free decoding for frequency offsets of more than 200 Hz, which could be caused by the Doppler effect and the oscillator, to be completely eliminated It is against IPCom’s construction because it again emphases the point of signal pre-processing, namely error-free decoding which suggests that the “pre-” only needs to be pre- the decoding.[54]That really is all there is to this point. The skilled reader would not consider that the patentee, merely by the use of the suffix “pre-“ meant “pre-equaliser”: he would take it that the patentee intended the pre-processing to be done at any point prior to the time the signal was to be decoded.[55]I would however, add this: the experts were agreed that in general “equaliser” is used with various meanings depending on context. The Judge so held at [75(ii)] and this was not challenged. This makes it all the more unlikely that the patentee intended to convey that his claim was limited to “pre-” a functional unit, itself not a term of precision.[56]In the end IPCom’s argument involves ascribing to “pre-” not only a meaning (“pre-equaliser”) which it will not bear, but giving it a non-purposive meaning. (4) Up-to-date frequency measurements[57]The dispute is about the meaning of “up-to-date.” The claim calls for preprocessing using a frequency correction value determined from “up-to-date” frequency measurements. IPCom contends that this is confined to a correction value determined from a single burst. Nokia contends, and the Judge agreed, that it is not so limited: that a correction value determined by averaging frequency measurements sufficiently close to the transmission time to produce a useful correction falls within the claim.

The Judge put it this way:

[58][73] …. There is nothing to support IPCom’s rigid view in the specification. The skilled person would understand that averaging was a sensible thing to do. Using an average value of several measurements for the purposes of adjusting the oscillator was accepted to be essential. I consider that it would require a clear technical explanation in the patent to indicate that the frequency measurements (note the plural used in the specification and claims) taken for pre-processing should not be averaged. The terms “up-to-date” and “present” are simply not adequate for this purpose.[59]The specification indeed does not provide any explicit information as to why the correction value should be confined to one obtained from a single burst or why a useful correction obtained by averaging is outside the patentee’s contemplation.[60]And the point about the use of the plural is well taken. The language reads (634-37): A frequency correction value determined from the present frequency measurements by the central control unit 31 is supplied to the synchronous processor 28. Claim 1 (feature 2.2) likewise uses “value” (in the singular) and “measurements” (in the plural), confirming that the usage is no accident.[61]Mr Alexander ingeniously but unpersuasively suggested that this passage was neutral. It could be merely talking about a value obtained from measurements taken from a single burst. But he could offer no reason why the skilled reader would think that was all the patentee intended.[62]There is also this self-evident point: that if the patentee wanted to say his invention was limited to corrections obtained from a single burst, then he would have said so and not used “up-to-date”. After all a “burst” is a fundamental concept of this technology and would be the natural word to use if that was meant. Moreover the patentee does indeed use that word when he does mean it, see e.g. [41] above.[63]Moreover, and most significantly, the only purposive way to understand “up-to-date” is to read it as including averaging. For the patentee clearly contemplates correcting for both slow and fast effects (72-6): Data signal preprocessing allows the limitation of error-free decoding for frequency offsets of more than 200Hz, which could be caused by the Doppler effect and the oscillator, to be completely eliminated.[64]Slow effects would not be corrected by a value obtained from a single burst. Prof. Eizenhöfer explained it well: As I have previously pointed out, the accuracy of the frequency offset determination from the training sequence in a single Normal Burst is unlikely to be very high. It may also differ from burst to burst due to the Doppler effect. Quite apart from the GSM Recommendations, I think the skilled person would expect to average a number of frequency offset determinations in order to obtain a sufficient accuracy to reliably adjust the reference oscillator, which should already be accurate to about 0.1ppm (2nd report, para. 14) As Mr Meade QC (for Nokia) put: “generically speaking, doing things very quickly, making lots of very fast adjustments to something that is actually changing slowly, is not a good idea”.[65]The prior art Baier patent application (0,454 266 (Philips)) says the same thing: In order to obtain statistically rather reliable estimates of the frequency offset, it is advantageous to form a mean value of plurality of calculations of the frequency offset. This especially holds for radio channels affected by fading, for which single estimates may be highly unreliable (419-21).[66]Mr Alexander had another point. He pointed out (correctly, as indeed Prof. Eizenhöfer says at paragraph G126, which I do not set out here) that one cannot affect the data in a particular current burst by correcting the oscillator in the phone. The correction of step 2.2 is a correction to data in the current burst. So it followed all that is contemplated is that data in the current burst is used to correct that burst.[67]I cannot accept that. He is right in saying that one is correcting the data in a current burst. But it by no means follows that only data from that burst should be used to correct it. The patent does not say anything of the sort, as I indicated above.[68]So I reject IPCom’s contentions on this point. The Judge was right. (5) Obviousness of lock-on synchronisation[69]This feature of the claim is about the use of fine frame frequency synchronisation to facilitate handover. The Judge accepted, and Nokia do not now challenge, IPCom’s construction of this feature. The Judge summarised it in this way: [78] IPCom submits that all that is required for lock-on synchronisation is that the mobile determines and stores the frame and frequency offsets as a background process in preparation for a smooth handover.[70]The Judge found this to be obvious. He noted that coarse frame synchronisation is required by the GSM standards (see [35] above). So it was obvious. About that there was no dispute. It was also accepted that fine frame synchronisation as such was obvious. The question was whether it was obvious to effect this by determining and storing the frequency offset of neighbouring cells for use in a possible future handover.

The Judge said:

[71][147] Mr Gould accepted that the idea of storing the frequency offset in advance might occur to the skilled person if he thought that the window on handover was too tight. Professor Eizenhöfer thought that storing the offsets was an attractive and obvious thing to do, because he did think that the window would be very tight. He accepted that some people might not do it if they thought they could manage it in the handover window. [148] In my judgment the step of storing the frequency offset was a plainly obvious one. I think the skilled team would perceive the window available on handover as being tight, and would understand that it was prudent to prepare by storing the frequency offset at the same time as the timing offset is obtained.[72]“An appellate court should be very cautious in differing from the judge’s evaluation” [of obviousness] per Lord Hoffmann in Biogen v Medeva [1997] RPC 1 at p.45. Mr Alexander accepted that principle, but submitted we should indeed interfere because the Judge had made an error.[73]The alleged error was simply this: that although the evidence showed that the skilled man might have had the idea of storing the frequency offset, that was not mandated by the standards and it was not shown that he would have had the idea. Moreover, although the time for handover was short, it was long enough to determine and use the frequency offset – that indeed is why pre-storing the frequency offset was not mandated. Mr Alexander suggested that storing the offset would involve resources and the skilled person would not want to do that unnecessarily.[74]I am quite unable to accept this argument. The point about resources was never suggested in IPCom’s evidence and it is far from self-evident that there is any real resource problem. Besides, a skilled man could only make a conscious decision not to store frequency offset because of a resource problem if he first had the idea of such storage.[75]As to not having the idea, Prof. Eizenhöfer said it would have occurred to him. And IPCom’s expert Mr Gould accepted under cross-examination that the idea was obvious. It is worth setting this out (Trial Transcript pp386): Q Assuming that the skilled person thought the time for getting transmit synchronisation on handover was on the tight side. A Right, okay. The tight side I think we could potentially come up with different understandings of what the tight side means. If you are saying he would look at it and say, well, I cannot possibly do it within that window, is that the assumption? Q No, because we agree it is in fact possible. A It is possible, yes. Q But that it is demanding. It is tight. A Yes. Q So the skilled person has that understanding on board. I am asking you to assume that. A Assuming that they look at this and say this is going to be quite difficult to do, yes. Q Yes, and the skilled person knows that they are reading BSIC regularly in the neighbouring cell. A Yes. Q And they know that they will be storing timing offsets as a result. A Yes. Q Because the standard points explicitly to that. A Yes. Q In those circumstances, it would be obvious, would it not, to derive and store frequency offsets during, for example, the long window and then keep them for when you wanted them on a handover? A Yes, I think it would certainly be an avenue that the skilled person would explore. If they have really come to the conclusion that this is bordering on impossible, it might cause them to look in other directions. I suppose the other direction they could look in would be to try and sort of get a bit more prepared before entering that window, yes. Q You characterised this a couple of times as a trade off. I think you may have said 'design choice' as well. We agree with you to an extent that it is a trade off or design choice, but it is a design choice that the skilled person could identify and resolve without any invention. A I think, given this assumption that the ability to do it in those four bursts" -- that is the 120 milliseconds -- " might be wavering between possible and impossible, the idea of becoming more prepared and, as you say, you are already looking at the synchronisation burst, I think would dawn on them.[76]Given this evidence it is quite impossible to see how the judge made any error, still less one of principle. The claimed feature amounts to no more than the Boy Scout’s motto “Be Prepared.”[77]Moreover the idea of being prepared for handover was itself already published in the Baier patent application (521-26) "When an arrangement for correcting the frequency position is used, the oscillators need not be adjusted. This is especially advantageous when a receiver alternately receives signals with different receive frequencies [i.e. when the mobile phone is listening to all the surrounding base stations to get the frequency offset.] In such a case the frequency offset may be separately determined and stored for each receive frequency. With such a solution the otherwise inevitable transient times necessary for readjustment of the oscillators are dispensed with completely.”[78]The Judge did not find it necessary to hold that this feature was obvious over Baier, but it clearly is.[79]Accordingly the Synch Patent is invalid.

B The Access Rights Patent

[80]Potentially this patent is very important. It has been found to be essential for compliance with the 3G standard. Neither suggested that, if amended, it would cease to be so.[81]As I have said, Floyd J’s finding that this patent as it stands is invalid, is not challenged. IPCom wishes to amend it. It proposed two variants; one was proposed just before the trial before Floyd J and the other after he found it invalid as it stood.[82]It is not necessary for present purposes to distinguish between the variants. It is however necessary to say that each of them involves extensive additions to what was formerly claimed. They are not cases of amalgamating dependent claims or of simple excisions by way of disclaimer of parts found bad. Nokia say the proposed amendments are not allowable because they add matter and also because they are not clear. Nokia also contends that, even if allowable in principle, the claims are nonetheless invalid.[83]The judge was not asked to rule on these rival contentions. Nor are we. It is enough to say that these questions (and especially that of validity) would as a practical matter involve a whole new trial, possibly with further prior art as well as expert evidence. (1) The First Amendment Judgment[84]To understand the arguments it is necessary to set out some key dates: 4.9.2008 Nokia commenced revocation proceedings. The Grounds of Invalidity identified a number of items of prior art said to render the claims old or obvious. These consisted of versions of the GSM Recommendations and four particular prior art patents. Although the Grounds of Invalidity were amended on 6th July 2009, the amendments related only to the attack on the Synch Patent. 25.9.2009 Nokia served the first expert report of Prof. Eizenhöfer. 19.10.2009 Nokia served the second expert report of Prof. Eizenhöfer and Dr Cooper’s report. 10.11.2009 Nokia applied to amend its Particulars to cite additionally an earlier version of the GSM recommendations, v6.1.0. This was only 9 days before the date which had long been fixed for trial. 16.11.2009 IPCom launched its application to amend the Access Rights Patent. The stated reason for the application was in order to further distinguish the Patent from the disclosure in Version 6.1.0. Note that no other reason was offered. 19.11.2009 On the first day of the trial Nokia withdrew its application to cite the fresh prior art.[85]Although the stated cause of IPCom’s application to amend the patent was thus removed, IPCom persisted in the application. Nokia objected and Floyd J upheld that objection by his first amendment judgment.[86]The basis of Nokia’s objection and the Judge’s reason for refusing to allow the application to proceed was that it was too late. It would have been procedurally unfair to press ahead with the trial because Nokia did not have any proper opportunity to consider and formulate an attack on the proposed amended claim. After all it was a very extensive amendment and – even if allowable – one which would or could mean further examination of prior art, expert reports and so on.

The Judge said:

[87][5] Mr Meade, who appears for Nokia, says that these further claims present difficulties of allowability and alter the targets which it would be necessary to shoot at for the purpose of his validity attacks. He asserts, and Mr Alexander reluctantly accepts that if these amendments go ahead in the present trial, then Nokia would be prejudiced and would not be in a position to deal with them adequately. An adjournment therefore would be necessary of the issues relating to the validity at least of the [the Access Rights Patent] and probably the whole of the trial on [it]. [6] Nobody wants an adjournment of any nature. Both parties want certainty in relation to these patents which are put forward by IPCom as their lead patents in the disputes which are to follow. [7] It seems to me therefore that no question can possibly arise of these matters being dealt with at this trial. [9] Once the triggering event for the amendment to the patent goes, it seems to me that the amendment should go as well. It seems to me that it is impossible for the present case to accommodate the amendment. The trial will have to go ahead on the basis of the existing claims and existing prior art.[88]I cannot begin to see what is wrong with this reasoning. Absent an adjournment there could not be a fair trial, as Mr Alexander reluctantly accepted. IPCom did not ask for an adjournment. Procedural fairness compelled the Judge to rule as his did. Far from exercising his discretion on wrong principles, it seems to me that he could only have properly exercised his discretion in the way he did. Otherwise he would have ruled in favour of an unfair trial.[89]I would therefore dismiss the appeal concerning the first amendment judgment. (2) The Second Amendment Judgment[90]Floyd J ended his first amendment judgment by, quite properly, saying that it did not have the effect of completely preventing IPCom from seeking amendments of the kind concerned at all. It is not suggested that he thereby encouraged any future such application.[91]To be fair, Mr Alexander really concentrated his attack on the second amendment judgment. That judgment primarily applied the principles laid down by this court in Nikken v Pioneer Trading [2005] EWCA Civ 906, [2006] FSR 4. It was held that a post-trial application to amend a patent should ordinarily be refused if it would involve a second trial on validity. This was because procedural fairness required a party to put forward the whole of his case before trial thereby avoiding expense, delay uncertainty and double vexation of the successful party.[92]Mr Alexander submitted that Nikken should not be read so strictly. In summary he submitted(1) Nikken, if read strictly, would be inconsistent with the House of Lords case of Johnson v Gore Wood [2002] 2 AC 1 which laid down a broad “misuse or abuse of process” test.(2) The context of this case – part of an international patent licensing struggle – took it out of the normal and warranted the allowability of the amendments being considered even after the whole patent had been invalid as it stands.(3) Moreover at the time of the Judge’s decision the proceedings concerning the divisional patent (due to be heard in April) were not on foot, whereas now one can see a very convenient slot for the amendments to be considered.(4) Nokia did not develop its arguments on invalidity until shortly before trial (see the dates of Prof. Eizenhöfer’s and Dr Cooper’s reports above) and so the amendments, responsive to that, should not have really been considered late. Alternatively Dr Cooper gave evidence at the trial which took IPCom by surprise and, although adjournment was not asked for, the amendments should be regarded as responsive to that.(5) Art. 138 of the European Patent Convention 2000 liberalises the possibilities for patent amendment and was not taken into account in Nikken.(6) Likewise Nikken took no account of the Enforcement Directive (Directive 2204/48/EC on the enforcement of intellectual property rights). (3) Procedure for Amendment of a European Patent in Proceedings before the Patents Court[93]The European Patent Convention leaves procedural matters concerning infringement and revocation of individual national patents granted by the European Patent Office to national courts. The substantive limits as to permissible amendments are harmonised throughout all Convention countries, namely no added subject-matter and no extension of protection (EPC Art.123).[94]Since the coming into force of EPC 2000, there is also a method of applying to the European Patent Office for central amendment, see Arts 105a-c of EPC 2000. “Limitation” is the word used rather than “amendment” but it means the same thing. It has no relevance here, though I note that IPCom, whilst accepting Floyd J’s decision that the UK Access Rights Patent is invalid as it stands, has not initiated central amendment proceedings seeking limitation of all its parallel patents. Amendment to limit the claims always was possible during an opposition.[95]The procedure for amendment of a UK patent, whether granted by the EPO or the UK Patent Office in legal proceedings is governed by the procedural rules of the Court, CPR Part 63.10. I summarised it in Nikken: [9] …..The procedure is by way of an application notice, service on the Comptroller, subsequent advertisement and so on. The procedures can, in appropriate circumstances, be gone through quickly or gone through provisionally on the basis that probably no third party will ever come in to oppose. It may be noted that the rules specifically require by Part 63.10 that the patentee must state whether he will contend that the claims prior to amendment are valid. That means that in advance of trial everyone knows where they stand. The patentee is either saying that the original claims are all right or not, and he is plainly also saying that the proposed amendment claims are all right.[96]This is important. It means that once the patentee knows the attacks being made on his patent (and in particular the cited prior art) he is fully entitled to formulate what is called in the EPO a “fallback” position by way of seeking an amendment – indeed he can formulate several. And he can make it clear that he is only seeking amendment if his patent as it stands is found invalid, or is seeking the amendment anyway: conditional or unconditional. Rule 63.10 specifically requires that the patentee must state whether he “will contend that claims prior to the amendment are valid.” (4) The Decision in Nikken[97]In Nikken, the patentee once the court had found his patent to be invalid, applied to amend by a re-writing amendment of the same general sort as is sought here. The trial judge refused this in the exercise of his discretion and because he found the amendment unallowable. This court upheld his decision on discretion and did not need to consider the second point.[98]All three members of the Court gave judgments. I said at [8] after having pointed out that s.75(1) of the Patents Act 1977 says the Court “may allow the proprietor of the patent to amend”: There are different situations in which the exercise of the discretion to allow amendment of a patent may be sought:(a) before a trial;(b) after trial, at which certain claims have been held valid but other claims held invalid, the patentee simply wishing to delete the invalid claims (I would include here also the case where the patentee wishes to re-write the claims so as to exclude various dependencies as in Hallen v Brabantia [1990] FSR 134. There the patentee is in effect continuing to claim which he had claimed before but in a much smaller way); and(c) after a trial in which all claims have been held invalid but the patentee wishes to insert what he hopes are validating amendments.[99]I would only add that classes(a) and possibly(b) are really cases of a partially valid patent, a situation which the Act recognises in s.63. This provides that the court may grant relief in such a case. It will usually (probably invariably) only do so on terms that the patent is amended to cut out the invalid claims. Mr Alexander in his skeleton argument half suggested that the present case was one of a partially invalid patent. Not so. Floyd J held all the claims invalid. This is a class(c) type.[100]I described the position for such a type in Nikken: [11] Class (c) involves something different, a proposed claim which was not under attack and could not have been under attack prior to trial. If the court is to allow such a claim to be propounded after trial, there is almost bound to be a further battle which would arise in the proposed amendment proceedings. That battle will be over whether or not the proposed amended claim is valid. I say "almost bound" because I can just conceive a case where the point was covered by the main litigation in some way or other. I should have added that a further battle may also arise about the allowability of the amendments. In this case if IPCom were allowed to apply for the amendments, there would indeed be battles both about allowability (and clarity) and validity.[101]In Nikken I then went on to say that an exercise of discretion to allow two trials would be improper for three reasons which I can summarise here:(a) It would breach the general procedural rule laid down as long ago as 1843. in Henderson v Henderson (1843) 3 Hare 100, that a party should normally not be allowed to advance in a second proceeding matter he could have advanced in the first.(b) That rule had been applied in patent cases by this Court in Windsurfing v Tabur Marine [1985] RPC 59 and Aldous J in Lubrizol v Esso [1998] RPC 727. I said Aldous J had epitomised the position when he said, at p.790: I believe it is a fundamental principle of patent litigation that a party must bring before the court the issues that he seeks to have resolved, so as to enable the court to conclude the litigation between the parties.(c) The general court rules were “dead against” allowing amendment proceedings requiring a second trial after a first trial had determined the patent was invalid. I put it this way: [19] … The whole code is governed by the overriding objective contained in Part 1.1.1. 1.1.2 specifies some examples of cases of dealing with a case justly. 2(b) is "saving expense". Plainly a second trial would cause increased expense. 2(d) is ensuring that it is "dealt with expeditiously and fairly". Having two bites of the cherry is doing neither of those things. [20] The rules descend into more detail. Under the court's duty to manage cases, 1.4 requires the court actively to manage cases and 1.4.2 says that active case management includes "identifying the issues at an early stage and dealing with as many aspects of the case as it can on the same occasion”.[102]Moreover I considered that a case involving the validity of a patent concerned not merely the private rights of the parties but also the public interest and the court was “particularly entitled to have regard to that”.[103]I also said that: [25] In the real world patentees, faced with a real problem about the construction of their claims, ought to face up to them early and decide whether they need an amendment or might need an amendment. That is one of the purposes of the rule, to make people face up to their cases at an early stage, not at a late stage. That of course also applies to the validity of the claims.[104]Both Laws LJ and Waller LJ delivered short, but emphatic concurring judgments. Laws LJ said: [33] I agree. I wish only to underline my firm support for the view, which is a major and emphatic theme of my Lord, Jacob LJ's judgment, that the result of this appeal is driven by the principle of the general law given by Henderson and clothed with renewed vigour by the overriding objective of the CPR, that in any given litigation the parties are required to bring forward their whole case. It provides [the report says “provokes”] certainty and [the report says “of”] economy and minimises expense, and it applies as powerfully in this area of the law as any other. And Waller LJ: [34] In one sense the question is whether there should be some special rule in patent cases. In any other litigation it would be unfair to allow a party to amend his case post judgment so as to allow an opportunity to succeed after a further trial, however small. The question is whether there is something special about patent litigation. The authorities do not support the proposition that there is something special. Indeed, those authorities cited both by the judge and by my Lord go to the opposite effect. Those are reinforced, as I would see it, by the new CPR. I am relieved to find the position to be so.

Should Nikken be relaxed or watered down?

[105]I turn to Mr Alexander’s points. (1) Johnson v Gore-Wood[106]Mr Alexander principally relied upon what was said by Lords Bingham and Millett in Gore-Wood. Lord Bingham said at p.31: The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.[107]And Lord Millett said at pp.59-60: It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In Brisbane City Council for AG for Queensland [1979] AC 411, 425 Lord Wilberforce, giving the advice of the Judicial Committee of the Privy Council, explained that the true basis of the rule in Henderson v Henderson 3 Hare 100 is abuse of process and observed that it "ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation". There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company's action. This question must be determined as at the time when Mr Johnson brought the present proceedings and in the light of everything that had then happened. There is, of course, no doubt that Mr Johnson could have brought his action as part of or at the same time as the company's action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court. As May LJ observed in Manson v Vooght [1999] BPIR 376, 387, it may in a particular case be sensible to advance claims separately. In so far as the so-called rule in Henderson v Henderson suggests that there is a presumption against the bringing of successive actions, I consider that it is a distortion of the true position. The burden should always rest upon the defendant to establish that it is oppressive or an abuse of process for him to be subjected to the second action.[108]I do not think there is anything inconsistent between these speeches and Nikken. I accept entirely that the true test is one of abuse of process – procedural fairness - and that the burden lies on the party objecting to the second action to show this. However where a party fails to advance a case he could have advanced much earlier and does so without any real justification, he is abusing the process and the other party is therefore entitled to object. It is not normally procedurally fair to subject the other side to successive cases when you could readily have put them all in one go.[109]There are exceptions, depending on the facts (such as the facts of Gore-Wood). But there is nothing exceptional about the facts here. IPCom had every opportunity of proposing the amendments in time so that there could be a trial about them, it did not do so (whether deliberately or not we do not know), it only proposed amendments too late for them to be dealt with fairly at the trial, it elected to go to trial on the patent as it stood, and only when it lost did it seek to prolong matters thereby to vex Nokia again with the same patent. The Judge was fully entitled to regard that as procedurally unfair and to refuse to allow that to happen. (2) The context argument[110]The suggestion here was that because the parties are in negotiation or quasi-negotiation and the patent proceedings were really part of that, that the court’s discretion should be exercised differently. It was also submitted that it is possible (we had no detail) that the proposed amended claims are or may be the subject of a divisional and if so there would be no point in refusing to allow the amendment proceedings in this case.[111]I do not accept either of these arguments. The fact that there is a wider context (involving other patents here and parallel Access Rights and other patents in other countries) over which the parties are in dispute provides no basis for saying that what is an abuse of process concerning the proceedings about this patent in this country is somehow no longer so to be regarded. The question is whether there is an abuse of process in the litigation about this patent, not some wider woollier question.[112]In short as Mr Meade (revealing that his classical knowledge was a bit hazy) put it: We agree that we have to lop the tentacles of the Hydra one at a time or sometimes two at a time. That is what happens when you are facing somebody with a large patent portfolio. What we object to is every tentacle re-growing after we lop it off.[113]As to the possible divisional point, there was no factual basis advanced to show that the proposed amended claims were indeed the subject of a divisional. Even if they are, they may not be accepted by the EPO. Indeed they will not be if the EPO agrees with Nokia’s contention about added matter. In that event Nokia will never have to litigate about the validity of the proposed amendments. Moreover if they indeed are the subject of a divisional and are accepted by the Office, then IPCom will have suffered no prejudice by being precluded from advancing the amendments in the present action. The possibility of an identical or similar divisional does not convert an abuse of process in these proceedings into a process which is benign. (3) The convenient slot point[114]The suggestion was that the allowability of the amendments could readily be accommodated at the hearing of the trial about the divisional, fixed for April. So, it was said, the need for a fresh trial was much less onerous as compared with a case where a whole new trial would have to be set up. The fact that there is this convenient slot was not a matter the judge could have taken into account (the proceedings had not started) and the existence of the slot makes all the difference.[115]I disagree. What would be unfair about IPCom being allowed to advance the amendments is that Nokia will have to face a second trial on a patent they have succeeded in getting knocked out. It makes no difference when that second trial might be.[116]Moreover on the facts Mr Meade did not accept that the amendment proceedings could be tacked on as a small addition to the April trial. He accepted that it would be possible to consider just the question of allowability of the amendment at that time, but a trial of validity of the amended claims would involve more. (4) The application to amend was not late point[117]Then it is said there would be nothing really procedurally unfair about allowing the amendment proceedings to go ahead because IPCom could not really be criticised for not applying to amend earlier.[118]But what caused the amendments to be proposed was the new citation. When that was withdrawn, so was the real cause of the proposed amendments. They were not, as they could have been, formulated at a much earlier stage of the proceedings, a stage when they could fairly be considered at the trial.[119]Mr Alexander advanced an argument to the effect that in English patent proceedings a patentee does not really know the case against him until service of his opponent’s expert reports (here Prof. Eizenhöfer’s first report in September or Dr Cooper’s report of 19th October). So IPCom were not to be regarded as formulating the amendments late.[120]That will not do for several reasons. Firstly and most fundamentally Mr Alexander could not and did not say that there was anything in any pre-trial report which took IPCom by surprise or even was the reason for the proposed amendment. Nor did IPCom advance any evidence to that effect. As Mr Meade pointed out IPCom may even have had commercial reasons (e.g. not showing any sign of weakness in any German proceedings) for not advancing any amendment earlier. It may have weakened its negotiating position with Nokia or one of the other companies with which it is in dispute (these include at least HTC, Vodafone, T-mobile, DTAG, Deutsche Telecom, and Google).[121]Secondly it is not right to say that under English procedural law a patentee has no real idea of the case against his patent until his opponent’s expert report is served. It is true that an expert report will flesh out the detail but any competently advised (as IPCom were) party is normally able to discern the essence of the case against him from the prior art cited. And if he has any difficulty he can ask the other side for detail, failing the provision of which he can ask the court to order a statement of case. IPCom did neither of these things.[122]In this case it is true that Dr Cooper’s report advanced a construction of the patent which was not espoused by IPCom (we are not told whether it was a construction which took IPCom by surprise). But that can hardly have mattered as regards proposing amendment of the patent since the Judge accepted IPCom’s own construction of it.[123]IPCom also say that at trial Dr Cooper indicated a view of a piece of prior art (Ericsson) which had not been indicated before. It did not complain or seek an adjournment at the time. It is simply not shown how that piece of evidence was in any way relevant to the amendments now sought to be made.[124]I would only add that the points about Dr Cooper’s report and evidence somehow taking IPCom by surprise such that it cannot reasonably have been expected to seek to amend the patent earlier were not even made to the Judge when the second application to amend was made . That rather demonstrates how slight the points are. (5) Art 138 of EPC 2000[125]This provides:(1) Subject to Art. 139 a European patent may be revoked with effect for a Contracting Sate only on the grounds that [the grounds are specified](2) If the grounds for revocation affect the European patent only in part, the patent shall be limited by a corresponding amendment of the claims and revoked in part(3) In proceedings before the competent court or authority relating to the validity of the European patent, the proprietor of the patent shall have the right to limit the patent by amending the claims. The patent as thus limited shall form the basis of the proceedings.[126]Mr Alexander contended that this provision drew no distinction between amendments which were of the claim re-writing type (Nikken type (a)) or new wording type (type (c)). So the Article was liberalising. In effect it created a right to amend of any type, subject to cases where the patentee’s conduct was really culpable or amendment would cause unjust oppression.[127]I do not accept that. The main purpose of Art. 138 as compared with the unamended Art. 138 was to provide that national authorities should have an amendment procedure at all. For prior to the amendment of the Treaty the laws of some countries did not allow patent amendment post-grant at all. Now they must. Art.138 was not intended to govern national rules of procedure concerning patent amendment, still less to require national courts to conduct them in a manner which national law regarded as an abuse of process.[128]On its face, moreover, the Article does not apply to a case where the grounds of revocation affect the European patent as a whole, as the Judge held here. The provision is only about a case where the grounds of revocation affect the patent in part.[129]And finally it is impossible to suppose that this Article was intended to override national procedural rules as to procedural fairness.[130]There is nothing in the Art. 138 point. (6) The Enforcement Directive[131]This provides a general obligation on Member States by Art.3: 1. Member States shall provide for measures, procedures and remedies necessary for 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.[132]Mr Alexander submits that his proposed amendment and the procedure about it is covered by the Directive: I am seeking to enforce the relevant patent and amendment is part of and parcel of enforcement of that patent.[133]I do not accept that. Amendment of a patent is quite distinct from its enforcement: amendment is a procedure concerned with narrowing the scope of protection, not a procedure concerned with enforcement of what is protected. If allowed it applies in rem or as it is sometimes put in an alternative Latin tag, erga omnes. There is simply nothing in the Directive suggesting it applies to amendment of a patent.[134]Moreover it would be very odd if it were. For amendment (limitation) of a patent is very much the sort of thing dealt with by the European Patent Office (including especially the new central amendment procedure but also amendment during opposition). The Office is not an EU institution and it is wholly improbable that the Directive was intended to apply to it at all.[135]In any event I cannot see that allowing the procedure to be dragged out by having a second trial is even consistent with the Directive. It would make things “unnecessarily complicated” and “unnecessarily costly” and would “entail unwarranted delays,” all things proscribed by Art. 3.[136]Accordingly I reject the Directive point. I would add that I am glad to do so for two reasons. Firstly it is strongly in the public interest that patent disputes which matter commercially (many do not or turn out not to, particularly in the case of EPO oppositions) are resolved as soon as possible.[137]Secondly no other courts in Europe, or indeed the EPO, allow a patentee who has had his patent found invalid, only then in the same court to propose a limitation to it. There are countries whose appeal systems are in effect fresh first instance hearings (that is also broadly the current system for EPO oppositions). For these it is not procedurally too late to offer amendments (fall back positions) between first instance and appeal. But even in such cases no one allows unfair hearings to take place and no one lets a patentee who has lost his patent before a court then formulate before that court fall-back positions. A patentee cannot, for instance, after the hearing before an EPO Board of Appeal, and after he has been informed by the Board that he has lost his patent, then start formulating amendments to his claims.[138]Indeed the requirement on parties to formulate their cases in time, and in particular upon a patentee to formulate amendments to his patent in time, so that they can properly be dealt with at a pre-arranged hearing is strengthening across Europe. For instance the Rules of Procedure before the Boards of Appeal were amended in 2007 (by CAD 35/07) to say this: Art. 13 Amendment to a party’s case (1) Any amendment to a party’s case after it has filed its grounds of appeal or reply may be admitted and considered at the Board’s discretion. The discretion shall be exercised in view of inter alia the complexity of the new subject-matter submitted, the current state of the proceedings and the need for procedural economy. (3) Amendments sought to be made after oral proceedings have been arranged shall not be admitted if they raise issues which the Board or the other party or parties cannot reasonably be expected to deal with without adjournment of the oral proceedings. Similarly in Germany, s.83 of its Patent Act brought in last year entitles the court to reject inter alia a defence to a revocation claim by an amended version of the patent presented after expiration of a deadline set by the court before the date for the oral hearing. It can do so if “the consideration of the new pleading would make necessary a postponement of the already scheduled date for the oral hearing and the respective party does not give sufficient excuse for the delay and it has been made aware of the consequences of missing the deadline.”

Art. 13 Amendment to a party’s case

[139]In short procedural tightening by way of making parties put up their cases in time for them to be dealt with fairly with at a pre-arranged hearing without adjournment is the trend in Europe. The message is:
“put up in time, or shut up”
. That can only be good for European industry.[140]What IPCom seeks to do here is quite contrary to that trend as well as being an abuse of process. I would dismiss its appeal concerning the Access Rights Patent. Mr

Justice Norris:

[141]I agree.

Lord Justice Sedley:

[142]I also agree.

Cited in 16 later judgments

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