Coflexip SA v Stolt Offshore MS Ltd & Ors [2003] EWHC 1892 (Pat)

Case No CH 1006 C No 4344[2003] EWHC 1892 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 31 July 2003
Before
THE HONOURABLE MR JUSTICE JACOB
Between
(1) Coflexip SAClaimants(2) Technip Offshore UK LtdClaimant(1) Stolt Offshore MS LtdDefendants(2) Stolt Offshore LtdDefendant(3) Stolt Offshore A/SDefendant
Mr Richard Miller QC and Mr Justin Turner (instructed by Messrs Clifford Chance) for ClaimantsMr Roger Henderson QC and Mr Thomas Hinchliffe (instructed by Messrs Bird & Bird) for DefendantsHearing Hearing dates :22 July 2003

Approved

[1]In 1996 Coflexip sued Stolt for infringement of Patent. On 31st July 2000 the Court of Appeal upheld a judgment and order of Laddie J whereby he held the Patent valid and infringed. The Court of Appeal went further than Laddie J on infringement, holding that Stolt had infringed both the main process claim and product claim of the Patent. Laddie J ordered:
"(3) There be an enquiry as to damages suffered by the Plaintiffs by reason of the acts of infringement of the Patent and of the rights conferred by publication of the application for the Patent by the Defendant and each of them or at the Plaintiffs’ option an account of profits made by the Defendants by reason of such acts. The costs of the enquiry or account are reserved. (4) The Defendants pay to the Plaintiffs all sums found to be due to the Plaintiffs on the said account/or enquiry together with interest thereon pursuant to section 35A of the Supreme Court Act 1981 and/or pursuant to the Court’s equitable jurisdiction". 2. "
That the enquiry as to damages ordered in paragraph (3) of the order of the Honourable Mr Justice Laddie of the 29th January 1999 proceed having regard to the contents of the judgment of this Court."[2]Stolt’s Petition for leave to appeal from the decision of the Court of Appeal was dismissed. So the Court of Appeal’s decision is well and truly final as between Coflexip and Stolt.[3]The enquiry ordered has been proceeding since. It covers (in addition to the specific contract referred to in the Particulars of Infringements), some 14 other pipe-laying contracts whose performance is said by Coflexip to fall within the scope of the Patent as construed by the Court of Appeal. The enquiry has been fixed for a hearing lasting 4-6 weeks in April 2004. Coflexip are claiming between £50 and £70 million plus interest.[4]Following Coflexip’s success against Stolt, Rockwater sought revocation of the patent, basing their case on prior art which had not been relied upon by Stolt. Coflexip counterclaimed for infringement. Unlike Stolt, Rockwater were successful. On 15th April this year Laddie J ordered that the Patent be revoked, subject to a stay until after an appeal by Coflexip is finally disposed of.[5]Basing themselves on this order, Stolt seek a stay of the inquiry as to damages. At the heart of their submissions, advanced by Mr Roger Henderson QC, is the proposition that it would be monstrous if they have to pay an enormous sum in respect of a violation of a wholly non-existent right. This proposition has a lot to be said for it, but it does not follow that it is right. After all, Stolt lost their case and are seeking to take advantage of the success of others as though it applied to them too.[6]It is common ground that I have jurisdiction to order a stay. That jurisdiction derives from CPR Part 3.1:
"3.1.(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have. (2) Except where these Rules provide otherwise, the court may – … (f) stay the whole or part of any proceedings either generally or until a specified date or event."
Moreover the Court has an inherent jurisdiction, as recognised by s.49(3) of the Supreme Court Act 1981 The power is to be exercised so as permit justice to be done or prevent injustice from being done. The "Premature" point[7]Mr Miller QC for Coflexip submits first that this application is premature. Suppose, he says, Coflexip succeed in their appeal in the Rockwater case and the Patent is again held valid. Then the whole basis of this application will have gone. At present, he submits the application is based on a supposition and is potentially purely academic. The court does not deal with academic or hypothetical questions.[8]I do not regard the point as purely academic. It is real but contingent on the Court of Appeal upholding Laddie J. As matters stand there is an order for revocation of the patent, albeit suspended. As a practical matter there is a real live point of practical importance to both sides. As Mr Henderson pointed out if Stolt are right (or indeed wrong) on this point it could substantially affect settlement discussions.[9]Moreover there are good practical reasons for not leaving the question of estoppel over until after the decision of the Court of Appeal. So to do would inevitably put things back further. The point that has been fully argued before me would have to be reargued. There would be an inevitable appeal by the losing side. And there could well be a further appeal to the House of Lords.

Cause of Action estoppel

[10]Next submits Mr Miller, there is no point in ordering a stay because it avails Stolt nothing that the Patent has subsequently been revoked. He accepts that the revocation relates back to the date of grant but says that cannot help Stolt: they are bound by the rule of cause of action estoppel. They, unlike anyone else, cannot be heard to say "There never was a patent." The estoppel might sound odious to some, but estoppel it is.

Poulton

[11]Mr Miller begins by rolling into Mr Henderson’s way the formidable obstacle of Poulton v Adjustable Cover & Boiler Block Co. (1908) 25 RPC 529 and 661. The facts are not materially different from those of the present case. I take them from the headnote to the decision of the Court of Appeal (Vaughan Williams, Fletcher-Moulton and Buckley LJJ) who affirmed the decision of Parker J:
"The Plaintiff in an action for infringement of a Patent succeeded at the trial, and an injunction was granted, and an inquiry ordered what damage had been sustained by the Plaintiff by reason of the infringement by the Defendant of the Patent. Subsequently to this judgment, the Defendant obtained evidence of prior user of the invention, and presented a Petition for revocation of the Patent, and at the hearing of the Petition the Patent was revoked, and this decision was affirmed on appeal. On the inquiry in the action the Master found and certified that, by reason of the revocation of the Patent, the Plaintiff had not sustained any damage; but if it should be held that, notwithstanding the revocation of the Patent, the Plaintiff was entitled to damages, he found that they amounted to £110"
[12]It was held that notwithstanding the subsequent order for revocation, the defendants were bound by the earlier decision and had to pay damages. Parker J said this (p.532):
"Therefore the real question turns upon this, was there any estoppel operating to prevent the Defendants on that inquiry as to damages setting up the fact of the revocation as conclusive on the question of damage or no damage, or were they bound to allow matters to proceed without setting up the Order for revocation, so that, first the Master, and then the Court, should give a sum by way of damages on that state of affairs, assuming the validity of the Patent which did not exist. It is really a pure matter of estoppel. I think that on principle it is absolutely clear that a judgment for an injunction and an inquiry as to damages in an action for infringement does estop a defendant from setting up upon the enquiry the invalidity of the Patent. So far as he is concerned he is estopped from denying the validity of the Patent at the date of the trial, which is the date with reference to which the inquiry for damages is directed, and, of course, estopped from denying its validity at the date of the infringement in respect of which the inquiry as to damages is directed."
[13]The argument for the defendant was that the revocation was in rem and related back, that the patentee could not be heard to say otherwise. In technical language the defendant was setting up an estoppel upon an estoppel. Parker J said of this:
"The question, therefore, for me to decide is whether or not I can apply that principle of an estoppel upon an estoppel in the present circumstances, so as to avoid having to give the Plaintiff in the action a sum by way of damages when as a matter of fact, the Patent having been ab initio void, he suffered no damage at all? Having regard to the practice that has been laid down in the Court of Appeal, and having regard to the fact that I am of opinion that a decree for revocation of a Patent is a judgment in rem, I think I am not justified in deciding that I ought to apply a principle for which I can find no authority, and, therefore, in my opinion, I am forced to the decision that the original estoppel is a good estoppel and that the Certificate must be varied by stating the finding as to the £110 damages."
[14]The Court of Appeal was equally clear. Vaughan Williams LJ said this (p.663):
"In my opinion this judgment of Mr Justice Parker is perfectly right. The Plaintiff obtained judgment in an action for the infringement of a Patent, and consequently upon that judgment there was an inquiry ordered as to the amount of damages sustained. The judgment so obtained by the Plaintiff is a judgment which made the matter of the infringement and the validity of the Patent res judicata as between these parties and created a perfect estoppel."
And: 16. "Then it is said that there has been an Order revoking the Letters Patent. It is an Order made after this res judicata had arisen. In that state of things, whatever might be the truth either in the past or in the future in support of the validity of these Letters Patent and in respect of their continued existence or in negation of their ever having come into existence at all – assuming that the effect of the Order revoking the Patent might be that the Letters Patent are not only to be treated as null and void at that moment and from the date of that Order, but that they are to be treated as null and void from the very first, so that the Letters Patent never had any valid existence whatsoever – it does not affect in the slightest degree, in my opinion, the existence of the estoppel which prevents the Defendant, against whom that judgment has been obtained, ever denying what was proved for the purpose of infringement. The question here is whether this estoppel, as between the Plaintiff and the Defendant, remains a living and effective estoppel, notwithstanding the subsequent revocation of the Patent, so as to prevent the Defendant from reopening this question, which, as between him and the Plaintiff, has been decided once and for all. In my opinion that estoppel remains a good estoppel, and there is no estoppel on an estoppel as suggested by Mr Walter, and the appeal must be dismissed."[15]Fletcher-Moulton LJ said this (p.663) "I am of the same opinion. This judgment obtained by the Plaintiff against the Defendant settled for ever, as res judicata between those two parties, that this Patent was valid and that it was, infringed during the period that it was valid. So far as those issues are concerned the cause was terminated, but an inquiry was necessary to ascertain the damages. In fact such an inquiry takes time, but for all legal consequences it may be supposed to be instantaneous and to take place at the moment when the judgment is pronounced."

And:

[16]It may be noted that he went on to express the view that an order for revocation only takes effect from the time of its pronouncement, a view not espoused by anyone else and not material to his decision. Mr Miller does not advance such a case. I have to say that, notwithstanding the learned Lord Justice’s eminence (particularly in intellectual property law) it has no other support of which I know. His example to support his view is not convincing – upsetting a sale of a patent if the patent is subsequently revoked would not seem to be justified on the ground of failure of consideration. The consideration is a real chance that the patent might be good and an ability to litigate it. One can think of examples the other way too – suppose a patentee has his patent revoked with effect only from the date of revocation. He could hardly claim damages from others for acts prior to that date.[17]Buckley LJ said this (p.664):
"I am not so clear upon this question, I confess, as my learned brothers are, but I can see a reason for answering the question in the same direction, and my reasons for concurring in the judgment are these. The judgment in the infringement action was of course a complete judgment inter partes. It contained a certain subsidiary Order, - an Order for inquiry as to damages. That Order was a complete judgment inter partes, and it was an Order made upon a certain basis – namely, upon the basis as established at that date, that the Patent was valid. You may express it thus, that there was a complete judgment inter partes to ascertain what damage the Plaintiff had sustained upon the footing that his Patent was valid. That being inter partes, res judicata cannot be affected by the fact that subsequently, upon a Petition for revocation, the Patent was held to be invalid. That is to say, in the proceeding directed for ascertaining damages upon a particular footing the Patentee is not estopped by the Order from saying that that is the relevant footing for ascertaining those damages; and on those grounds I concur in thinking that the appeal should be dismissed."
[18]Before parting with Poulton it is just worth noting that no one suggested the injunction continued in force. Only Parker J (the other IP giant of the early 20th century) dealt with the point. He said:
"I think it is obvious on the face of it, that a judgment for the revocation of the Patent would in effect put an end to the injunction, because the question whether a Patent has been infringed or not is a question to be tried at the date of the alleged infringement, and, if there is no Patent at that date because it was revoked, that would not be an infringement; so that in effect an Order for revocation of a Patent would in every case put an end to the injunction."
Mr Miller accepted that would be the position here. It is perhaps not entirely clear as to why. In particular suppose the acts found to infringe were repeated after the revocation and a charge of contempt for breach of the injunction were brought. Why is it that the defendant can say "but there is no patent" to that charge but not in the claim for damages? It may be the difference is just that – that there is a difference between saying "there is no patent" and "there was no patent," the estoppel only operating against the latter. I do not go into the point further save to note that the Americans too have had to deal with the question of what happens to the injunction in similar circumstances – see below.[19]Mr Miller pointed out that Poulton has not only stood for nearly 100 years, but that it has so stood referred to without criticism in the books. The 1927 edition of Terrell (Mr Miller had no access to the earlier 1921 edition) refers to it without comment, as do all subsequent decisions. Likewise the current (3rd, 1996) edition of Spencer Bower (by that eminent jurist Justice Ken Handley of the Supreme Court of New South Wales) on "The Doctrine of Res Judicata" simply says:
"An order for the revocation of a patent is conclusive in rem, as it extinguishes the patent, but it does not avoid prior estoppels from a prior decision in personam that the patent was valid and infringed."
It gives Poulton as the authority for that.[20]Mr Miller further observes that Poulton is fully consistent with more recent authority. He in particular referred me to the decision of the House of Lords in Arnold v National Westminster Bank [1991] 2 AC 93. Walton J had construed a lease containing a rent review clause which was to be by reference to a hypothetical lease. He took the view that the hypothetical lease would not have a rent review clause. His decision was final. His view on construction was, however, wrong as appeared from other decisions concerning the same point. The tenants sought a declaration that, for future rent reviews, they could re-open the point decided by Walton J. It was held that the doctrine of issue estoppel did not prevent them from so doing. But Lord Keith, giving the leading speech, said this (p.104):
"It is appropriate to commence by noticing the distinction between cause of action estoppel and issue estoppel. Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties of their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the latter to be re-opened."
[21]Mr Miller said that is exactly what he is relying on here – cause of action estoppel, not any other variety of estoppel. In the case of cause of action estoppel, it is not merely that the point has been decided. It is that the whole cause of action has been decided with the result that the cause of action merges with the judgment. Here the court has not just held the patent valid. It has held that Stolt must pay damages on the footing that the patent is valid. That is what the orders mean. "The bar is absolute."[22]This is a formidable position indeed. Mr Henderson sought to evade Poulton and cause of action estoppel in two ways – first by reference to the House of Lords decision in Johnson v Gore Wood [2002] 2 AC 1 and secondly by reference to s.130(7) of the Patents Act 1977.

The Gore Wood escape route

[23]Mr Henderson submitted that the decision in Gore Wood has fundamentally changed the common law of estoppel. The kind of point at issue was admittedly different from cause of action estoppel or even issue estoppel, but the House had nonetheless effectively re-written the rules for all kinds of estoppel. Accordingly the reason for the decision in Poulton must be taken as impliedly overruled.[24]What was in issue in Gore Wood was that kind of estoppel designed to ensure that a man brings all related complaints at one go, rather than stringing them out one after another. To prevent a defendant from being successively vexed for related claims, the common law has developed a rule whose essence lies solely in abuse of process. The classic statement of the rule is that of Wigram VC in Henderson v Henderson 3 Hare 100 at pp114-115:
"In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."
[25]Lord Bingham said this at p.31:
"But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. 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." 28. "
In my opinion, based on the facts of this case, the bringing of this action was not an abuse of process. The Court of Appeal adopted too mechanical an approach, giving little or no weight to the considerations which led Mr Johnson to act as he did and failing to weigh the overall balance of justice. I would allow Mr Johnson’s appeal."[26]Mr Henderson seeks to extract from these, and from the House’s rejection of a "too mechanical" approach a general rule that estoppels of all kinds (cause of action, issue and Henderson-type) are now just subject to general considerations of public policy.[27]And as to public policy, Mr Henderson submitted that the two key reasons (there must be an end to litigation and a man should not be revexed) for all these kinds of estoppel did not apply to this case. Stolt were not trying to relitigate anything. Nor were they seeking to vex Coflexip again. All Stolt wanted to do was to take advantage of the fact that someone else had knocked the patent out. There is no vice in that. On the contrary it is the only way justice could be achieved. Otherwise Stolt might have to pay for the use of an invalid patent – which would be a monstrous injustice and involve the court in aiding an unjust enrichment.[28]Mr Henderson sought to reinforce his policy argument by reference to the position in the United States. [Neither side was able to find any case dealing with what would happen in parallel circumstances in any Continental jurisdiction]. Procedurally the US deals with invalidity of a patent in a quite different way from us. It does not have revocation. Instead any defendant subsequently sued on a patent which has been held invalid has a defence called collateral estoppel. The position in a case very similar to this, was examined by the CAFC in Mendenhall v Barber-Greene 26 F 3d 1573. The headnote states the facts:
"Patent infringement suits were brought against two corporations, one of which later became subsidiary of the other. Judgment in favor of patentee respecting validity issues was affirmed on interlocutory appeal, 887 F.2d 1094, in suit against the parent. Following judgment of invalidity in a separate suit against third party, 5 F.3d 1557, while parent’s case was still pending for determination of damages and other issues, parent moved to vacate liability judgment on ground of collateral estoppel."

Judge Nies explains the collateral estoppel rule at p.1577:

"In Blonder-Tongue, supra, the Supreme Court ruled that once the claims of a patent are held invalid in a suit involving one alleged infringer, an unrelated party who is sued for infringement of those claims may reap the benefit of the invalidity decision under principles of collateral estoppel. Mutuality of estoppel is no longer required. Thus, the benefits of collateral estoppel (now generally termed issue preclusion) arising from a final judgment of patent invalidity were extended to an alleged infringer other than the defendant who earlier successfully litigated the matter and those in privity therewith."
[30]She then went on say (p.1578):
"Mendenhall asserts, in essence, that these cases are far too long along for appellants to invoke collateral estoppel. Except for timeliness and variations of that argument, Mendenhall suggests no grounds for averting the application of collateral estoppel to its claims against these appellants. For reasons that follow, we reject Mendenhall’s arguments on timeliness and collateral issues and hold that collateral estoppel applies. It would be contrary to the policies expressed in Blonder-Tongue were this court now to enter the judgments Mendenhall seeks in these appeals. For this court to affirm the findings of infringement and the willfulness of conduct against one appellant, increase damages against the other, and uphold injunctions against both, appears anomalous in the extreme in connection with patents this court has just held invalid."
Mr Henderson emphasises the last sentence. Judge Nies went on: 34. "Because its patents are invalid and were determined to be invalid after full and fair litigation, Mendenhall is collaterally estopped from recovering for infringement of those patents in these pending cases."[31]Later (p.1583) she said this, much relied upon by Mr Henderson:
"Thus, the policy behind the law of the case that a court will not "revisit" a decided issue is not present here."
Likewise, said Mr Henderson, in this case.[32]Mr Henderson further emphasised a passage a little later:
"Further, when the rest of the industry is not impeded by the patents, it seems manifestly unjust to rely merely on ‘judicial economy’ as justification for holding appellants liable and impairing their ability to compete."
Just so here, said Mr Henderson. I am not quite sure about that, for, as far as I can see the plaintiffs in that case were seeking to maintain not only a financial claim for past infringements but also the injunction itself.[33]As I read the case it turned on the view that the proceedings between the parties were not final "until the conclusion of the accounting." In other words under US law the decision as to validity was not regarded as final. I do not think that is so as regards English procedure. The decision as to validity in this case is final. So in the end, whilst understanding all the policy points made by Judge Nies, I do not see the case as helping me with the problem of what happens when there is a true cause of action estoppel.

Mr Henderson emphasises the last sentence. Judge Nies went on:

[34]Turning back to English law, whilst there may be room in the future for the House of Lords to vary the rule of cause of action estoppel so as to take into account the kind of policy matters referred to by Judge Nies, I do not accept that it has done so in Gore Wood. The House was not considering that variety of estoppel. Only 10 years earlier the position as to cause of action estoppel was clearly articulated by Lord Keith in Arnold. Arnold was cited in Gore Wood. The House could have formulated an all-embracing policy rule for all kinds of estoppel. But it simply did not do so. I do not accept the contention that Poulton has been impliedly overruled.[35]Moreover there is this consideration concerning policy. If a defendant, having finally lost a patent action, knew that an application for successful revocation by another might get him off the hook of damages, he would have every motive for digging up better prior art and encouraging another to attack the patent. So although he himself could not re-litigate validity, one of the heads of public policy (re-litigation) behind the rule could be subverted indirectly.[36]I conclude that the Gore Wood route is ineffective – The general law of cause of action estoppel and its particular embodiment in Poulton do indeed stand in Mr Henderson’s way. The Section 130(7)/CPC Escape Route[37]Mr Henderson bases his argument firstly on the preamble to the Patents Act 1977. This reads:
"An Act to establish a new law of patents applicable to future patents and applications for patents; to amend the law of patents applicable to existing patents and applications for patents; to give effect to certain international conventions on patents; and for connected purposes."
[38]Next, Mr Henderson goes to Section 130(7) of the Act which provides:
"Whereas by a resolution made, on the signature of the Community Patent Convention the governments of the member states of the European Economic Community resolved to adjust their laws relating to patents so as (among other things) to bring those laws into conformity with the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty, it is hereby declared that the following provisions of this Act, that is to say, sections 1(1) to 4(2), 2 to 6, 14(3), (5) and (6), 37(5), 54, 60, 69, 72(1) and (2), 74(4), 82, 83, [88(6) and (7),] 100 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty have in the territories to which those Conventions apply."
[39]Finally, Mr Henderson goes to Article 35 of the Community Patent Convention. This provides: "1. A European patent application in which the Contracting States are designated and the resulting Community patent shall be deemed not to have had, as from the outset, the effects specified in this Chapter, to the extent that the patent has been revoked. 2. Subject to the national provisions relating either to claims for compensation for damage caused by negligence or lack of good faith on the part of the proprietor of the patent, or to unjust enrichment, the retroactive effect of the revocation of the patent as a result of opposition or revocation proceedings shall not affect:(a) any decision on infringement which has acquired the authority of a final decision and been enforced prior to the revocation decision;(b) any contract concluded prior to the revocation decision, in so far as it has been that decision; however, repayment, to an extent justified by the circumstances, of sums paid under the relevant contract, may be claimed on grounds of equity." [Actually in 1975 this provision was Article 33 of the CPC as it then stood. A revision of the Convention in the 1980s renumbered it as 35 without any other change. By virtue of s.130(6) of the 1977 Act it is the revised Convention which is referred to in s.130(7).][40]Mr Henderson submits that the combined effect of these provisions is to make Art.35 part of United Kingdom law. He accepts that there is no provision in the United Kingdom Act corresponding to that Article but he says it is brought in by necessary implication.[41]His argument runs thus. Section 130(7) says that Section 72(1) and (2) are to have as nearly as practicable the same effects as the CPC equivalents. In other words when Section 72(1) and (2) speak of "revocation" they must be using the word in exactly the same sense as is used in the CPC. To find out the legal meaning of "revocation" one is therefore driven to the CPC and in particular to Article 33.[42]Ingenious though the argument is I think it fails. It is reading much too much into the simple word "revocation". Section 72(1) (as qualified by s.72(2)) merely sets forth the grounds of revocation. This is how s.72(1) begins: The Power to revoke patents on application (1) Subject to the following provisions of this Act, the court or the comptroller may on the application of any person by order revoke a patent for an invention on (but only on) any of the following grounds, that is to say …..". Those grounds are also set forth in the Conventions (both of them, CPC and EPC). All the section is saying is that the UK is to have the same grounds. There is no intention to spell out the legal effects of revocation. It is too Humpty-Dumpty like to make the word "revocation" in the 1977 Act carry all the legal consequences spelt out in Art. 33 for the proposed unitary Community patent. If that is what the draftsman had wanted to do he could simply have added a provision in our Act equivalent to Article 33. He chose not to do so.[43]Moreover, as Mr Miller points out, there are provisions in the CPC not expressly referred to in s.130(7) which deal with similar topics to those dealt with in our Act but in a different way. For instance section 72(4) deals with partial validity and amendment under our procedure. The CPC has different provisions for partial invalidity (Arts. 52 and 57(2) of the 1975 version). Similarly the CPC has its own provisions for compulsory licences, renewal, compulsory licences and so on. All of these subjects are dealt with in the UK Act in a quite different way from the CPC. The only reasonable inference from this sort of example is that it is only the specified provisions in s.130(7) which are intended to have the same effect so far as practicable as the corresponding EPC and CPC provisions. Otherwise one is completely at sea as to what provisions of the two Conventions form part of our domestic law and in any event Parliament would have deliberately defied the Conventions on a host of topics.[44]Mr Miller makes another point: that the CPC never was ratified and never came into force. Therefore, he says, it never had any effect in any territory and s.130(7) does not have any effect so far as the CPC provisions are concerned. I do not agree. Section 130(7) is an interpretation section. It is not dependent on whether or not the CPC comes into force. One would not say for instance that the specific provisions identified in Section 130(7) are not to be interpreted in the light of the corresponding provisions of the CPC because the CPC never came into effect.[45]Accordingly, however, I think that Mr Henderson’s ingenious argument fails. If I were wrong on that Mr Miller submits that Article 33 would not avail Mr Henderson in any event. He submits that the reference to "any decision which has acquired the authority of a final decision and been enforced" should be read as covering the case where there is a final decision and order to pay a sum to be assessed. The fact that the sum has not been worked out does not mean that there is no final decision. It is just happenstance that the sum has not been assessed. As observed by Fletcher-Moulton LJ in Poulton "In fact such an inquiry takes time, but for all legal consequences it may be supposed to be instantaneous and to take place at the moment when the judgment is pronounced."[46]These are deep waters if, contrary to my view, Art. 33 is part of our domestic law. Does the Convention renvoi procedural matters, including the notional date of the decision, to domestic law? And does our law regard the date of decision to be the date when the enquiry was ordered, as Fletcher-Moulton LJ suggested? I prefer to express no opinion on the point, save to say that it reinforces my view that Art. 33 is merely a rule for the putative Community Patent and not a rule of domestic patent law.

General Discretion

[47]Accordingly I hold that Mr Miller is right – there is no point in ordering a stay because there is nothing in the point. Should I order a stay nonetheless, in case I am held wrong on appeal? I think not for the following reasons: (a). What will be wasted if there is no stay are the costs (and court time) of the inquiry. Mr Miller makes it plain that his clients will be at risk as to costs so the real loss would be of court resources. (b). On the other hand if a stay is ordered and Coflexip are entitled to anything like the sum claimed, keeping them out of it (for probably two years at the very least) would be unfair. They would be funding a competitor and permanently deprived of interest (the difference between the judgment rate of 8% and current commercial court rates of interest would, on the sums claimed, amount to over £1m per annum on the sums claimed). (c). There is a general desirability to finality to this litigation, which has been going on since 1996. (d). There is a very very slight concern over the defendant’s solvency. I hasten to add that there is none right now (and none is suggested) but the future is always uncertain. I am not prepared to go so far as to say that there is any specially raised level of uncertainty (as Mr Miller suggested). All I have is analysts’ reports and Dun and Bradstreet ratings. But on the other hand this is an uncertain world and, given the amount of the sums claimed, the sooner Coflexip have the certainty of cash, the less there is any risk. Delaying matters by a couple of years is inevitably to expose them to some more uncertainty.[48]Accordingly I decline to order a stay.

Cited in 1 later judgment