Varian Medical Systems AG v Elekta Ltd & Anor [2016] EWHC 2679 (Pat)

[2016] EWHC 2679 (Pat)Case No HC-2015-000046
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue The Rolls Building, 7 Rolls Buildings, Fetter LaneDate Wednesday, 12 th October 2016
London EC4A 1NL
Before
MR. JUSTICE BIRSS
Between
VARIAN MEDICAL SYSTEMS AGClaimant(1) ELEKTA LIMITEDDefendants(2) ELEKTA HOLDINGS LIMITEDDefendant
Transcript of the Stenograph Notes of Marten Walsh Cherer Ltd.,1 st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HPTelephone: 020 7067 2900 Fax: 020 7831 6864 DX: 410 LDEEmail: info@martenwalshcherer.comWebsite: www.martenwalshcherer.com
MR. IAIN PURVIS QC and MR. BRIAN NICHOLSON (instructed by Bristows LLP) for ClaimantMR. JAMES ABRAHAMS QC (instructed by Powell Gilbert LLP) for Defendants
Judgment Approved
[1]I have before me an application for disclosure which is one part of a larger dispute about disclosure and the product description, much of which I have resolved this morning mainly by arranging for an inspection.[2]The outstanding matter relates to documents in two classes which are described in the application in subparagraphs (d) and (e) of the relevant document.[3]In her first witness statement on this application (which is her second witness statement) Ms. Ward, for the claimants, describes the points relating to these documents. The documents relate to public statements made by the defendants about the capabilities of the machines in issue in this case. Those machines are MR-Linac machines (that is to say magnetic resonance imaging linear accelerator machines). The claimants believe the statements indicate that the defendants are going to launch, and are offering, a product which has a feature called "real time control". This aspect relates to a feature of the claim in the patent which has been described as the crucial feature.[4]In essence the point of all this is that the invention is about a machine for use in radiotherapy in which a magnetic resonance imaging system is used to image the tumour which is receiving or is to receive the radiotherapy. The radiation beam comes from the linear accelerator. The invention provides for the control of the radiation beam in “real time” so that, for example, if the tumour moves a little bit, as compared to its location as specified in the treatment plan, the radiation beam can follow it.[5]There is a substantial dispute between the parties about the nature of the machine which the defendants are currently building and whether it will or will not infringe this claim. I am not concerned with that. What I am concerned with are the public statements which are being made by the defendants which are described in the categories (d) and (e). Although not entirely accurate, a sufficient summary of the issue arising from the public statements for this purpose is that although they describe a machine as a real time machine or real time control machine, that should not be of any concern to the claimants because the particular statements only relate to a different machine, which will be sold after the expiry of the patent. Mr. Abrahams also indicates that his clients are prepared to give an undertaking not to offer what his clients would regard as an infringing machine before the expiry of the patent.[6]The claimants pleaded case includes the following:
"After publication of the patent, prior to the issue of the claim form and thereafter, the defendants have infringed and threatened to intend to infringe [the claims] by doing the following acts in the United Kingdom without the claimant's consent: (a) ... offering to dispose of ... a system comprising an MRI (magnetic resonance imaging) guided radiotherapy machine as claimed in at least the aforesaid claims of the patent."
[7]Particulars are given which relate to something called the "Atlantic Project" and so on, but I find that within the generality of the pleaded case is an allegation that the defendants have made offers to dispose of a machine within the claims. That is something which is in issue.[8]Mr. Abrahams is right that the way that the particulars have been drafted do not deal with the recent public statements made by the defendants which have prompted this application for disclosure, but that is because those statements were made in the summer of 2016, well after the pleading was produced.[9]Where I disagree with the defendant's position on this application is on the question of whether offers to dispose of a machine which would fall within the claim, irrespective of whatever machine is being built at this moment, are or are not in issue. Contrary to the defendant’s submission, this matter plainly is in issue.[10]However, the first thing that I will require is for the claimants to provide further particulars, or a statement of case, setting out the public statements that they rely on that have been made since the claim was issued or since the Particulars of Infringement were served, to make good their allegation about offering for disposal. I will hear Mr. Purvis in a minute, when I have finished this judgment, as to how long his clients need for that.[11]The point that I have to resolve is about disclosure. The claimants contend that offering for disposal is in issue but no disclosure has been given in relation to it. That is true. The only disclosure that could be said to relate to it is that in the Product Description the defendants contend that they do not offer for disposal a machine with the relevant characteristic. What they also say is that once the patent has expired they may well, or I think they plan to, produce a machine which would fall within the claims of the patent, but they say they are not doing that now. However these assertions may or may not be right, that is where this issue arises.[12]The point raises a small point relating to patent practice and on what the Product and Process Description is for. CPR Part 63 r63.9 relates to disclosure in patent cases and practice direction 63PD6.1 is the provision which deals with product and process descriptions:
"6.1 Standard disclosure does not require the disclosure of documents that relate to – (1) the infringement of a patent by a product or process where – (a) not less than 21 days before the date for service of a list of documents the defendant notifies the claimant and any other party of the defendant’s intention to serve – (i) full particulars of the product or process alleged to infringe; and (ii) any necessary drawings or other illustrations; and (b) on or before the date for service the defendant serves on the claimant and any other party the documents referred to in paragraph 6.1(1)(a)." (a) not less than 21 days before the date for service of a list of documents the defendant notifies the claimant and any other party of the defendant’s intention to serve – (i) full particulars of the product or process alleged to infringe; and (ii) any necessary drawings or other illustrations; and (b) on or before the date for service the defendant serves on the claimant and any other party the documents referred to in paragraph 6.1(1)(a)."
[13]I have also had my attention drawn to a judgment mine in Vringo v ZTE [2015] EWHC 818 (Pat) at paragraphs 41-46 which was on a related point although I did not have this part of PD 63 in mind in Vringo.[14]The practice direction provides that when a party serves a Product Description they are relieved of the obligation of standard disclosure relating to "the infringement of a patent by a product or process". In my judgment, what that is concerned with is the nature and characteristics of the product or process in issue and the question of whether the product or process falls within the claims. What it is not concerned with is a factual issue of whether certain acts have or have not been carried out. Of course, in many cases as a practical matter, there is either no debate about the acts or the Produce and Process Description contains admissions such that no disclosure relating to acts is necessary. But sometimes – Vringo was one case and this is another – one sees a distinction.[15]The fact that a Product and Process Description has been served in accordance with the rules and practice direction does nothing to alleviate the defendants from whatever obligation they would otherwise have to give disclosure relating to acts of infringement. In this case that is the disclosure provided for in the original directions order dated February 2016, paragraph 5. I note also the terms of the order for a PPD in this case are in a slightly unusual form; I do not think that makes a significant difference.[16]So, pulling that together, the defendants have an obligation to give disclosure relating to what is in issue. The fact that a PPD has been served does not relieve them of that obligation and the only question is whether I should require the two classes of documents to be disclosed at this stage.[17]I am not satisfied that I should order class (d) for the simple reason that Mr. Whitfield in his witness statement on behalf of the defendants, which responds to this application, explains that all the documents that are in this class are necessarily in the public domain – and that seems to be right – and all such documents are available on a website produced by Elekta. Accordingly, there is no reason, it seems to me, to order category (d).[18]Category (e), however, is necessarily documents which are not publicly available because they relate to communications with customers or potential customers relating to development of property. At the moment I can see no good reason at all why I should not order the defendant to produce disclosure in that form.[19]What I will do, bearing in mind what Mr. Whitfield says (that this is a wide class which would be a hugely onerous exercise, to produce documents, see paragraphs 1 to 12) is that I will set a deadline for this disclosure after the date when Mr. Purvis's clients will produce their further particulars. But I will hear counsel as to how long the defendants require.[20]What I anticipate is that the date will not be all that far in the future so as to keep appropriate pressure on the defendants, but that it will give the defendants the opportunity to consider, bearing in mind that they have been ordered to produce disclosure of this kind, whether there is a better way of dealing with this point than that. That is my decision. (For continuation of proceedings: please see separate transcript)[21]I now need to decide what to do about the costs of this application. The primary rule is that the successful party's costs are paid by the unsuccessful party but the court may make another order in appropriate circumstances, taking into account various matters including the conduct of the parties. Commonly applications of this kind which relate to case management are subject to an order for costs in the case. Mr. Abrahams submits that what has happened here is an appropriate case for that.[22]The real issue has been all about disclosure and the product description. Mr. Purvis submits that although his clients did not obtained from the court orders for everything they asked for, they have achieved a substantial measure of success in that there is to be an inspection, there is to be disclosure in relation to one of the topics and we still don't know whether there will be any further disclosure after inspection but I have to say I rather hope not.[23]What to do? In my judgment the fair way of reflecting what has happened today is not to make an order for costs in the case, neither is it to make an order that the claimants should get all of their costs. A fair way of reflecting a measure of success achieved by the claimant, but also rewarding the defendants for cooperating in the course of this hearing and coming up with a pragmatic way forward, is to make an order that half the claimant's assessed costs of this application be paid by the defendant. (For continuation of proceedings: please see separate transcript)[24]Summarily assessing these costs, the total in the statement of costs for the successful party, whom I have ordered will get half their costs, comes to £69,000. That is expensive. This is an important case and I bear in mind the quantity of material and the detail which was required but at first sight I am bound to say that seemed to be a remarkable figure. However I then bear in mind that the defendants' costs on this application came to £71,000. Although not determinative of reasonableness, it is an indication of the inevitable costs of this sort of litigation and this sort of application.[25]Mr. Abrahams urges me to make what he calls the usual deduction which is made on a detailed assessment, by which he means the sort of general idea that on detailed assessments one comes to a figure of about 80% or 70% or something like that of costs. I am not enamoured with taking that approach. The approach I should be taking is to summarily assess these costs as they are.[26]In my judgment the hourly rates charged by both sides' solicitors are appropriate for this sort of high tech patent litigation. As far as the hours spent, I can understand how many hours have been spent by both sides since I read the documents. I am not surprised about the hours that were spent to deal with this. Dealing with counsel's fees, although the claimants have two counsel, and the defendants have one and counsel's fees are higher in relation to the claimants than they are in relation to the defendants, that is compensated for by more time and work done by the defendants' solicitors, so nothing really turns on that.[27]In my judgment, taking an overall approach, taking what is fair and reasonable in the circumstances and proportionate, the figure of £66,000 is my summary assessment for the costs of this application. Half of that will be paid.