Does Mr Justice Birss' decision in Positec finally signal the end of disclosure in obviousness cases in the UK Patents Court?

The AmerKat explaining the relevance of
last week's decision on patent procedure
to whomever will listen...

The AmeriKat was so busy meowing about last week's case management decision of Mr Justice Birss in Positec v Husqvarna [2016] EWHC 1061 that she forgot to write about it.  Why the interest?  Well, it has to do with a long-standing and "notorious" point in English patent law - disclosure.

Background

Positec wish to sell robotic lawnmowers in the UK.  They are seeking to clear the path of Husqvarna's EP 1 512 053 ('053 Patent) relating to a method for operating an automatic device, such as a robotic lawnmower, under the guidance of an electronic "directing" system.  Postiec therefore commenced a revocation action and declaration of non infringement.  They claim that the '053 Patent is invalid in light of an earlier patent application (WO 99/59042, known as "Peless"). Their Grounds of Invalidity also refer to the common general knowledge (CGK), but they have yet to confirm whether their case is that the '053 Patent is obvious over the CGK alone or just over Peless in light of the CGK.   That will be confirmed in due course by a Statement of Case.

Husqvarna's Disclosure Report was prepared on the basis that disclosure on validity would be in accordance with paragraph 6.1 of the Practice Direction to Civil Procedure Rules 63 which requires disclosure of documents that came into existence within the four year window (i.e. two years either side of the priority date).  However, when later trying to agree the Order for Directions (i.e. the order which governs the deadlines in English litigation, including disclosure and evidence), Husqvarna argued that no validity disclosure should be ordered.

The question

What is the correct approach to disclosure in light of  CPR 31.5?  How does that approach apply to the question of whether to order disclosure of documents arising from the making of the invention in an obviousness case?

The law

Mr Justice Birss commenced with a history of disclosure in obviousness cases.  Whether or not an invention is obvious is judged by the notional skilled person.  The skilled person, a legal construct, may have characteristics based in reality, but is not a real person.  These nerds know all CGK, read obscure public documents and foresee only what is obvious (not what is inventive).  They are not the real skilled person.  They are not the inventor. Evidence of what the inventor actually did "can often be of little value" and is at risk of hindsight.  The value of this secondary evidence (as opposed to primary expert evidence ) was discussed at length by Lord Justice Jacob in Nichia v Argos [2007] EWCA Civ 741.  Although sometimes this secondary evidence can win a case, i.e. by telling the invention story of how the inventor toiled away in the dark (figuratively) before arriving at the invention (see Schlumberger v EMGS [2010] EWCA 819), it is often a "costly distraction".

There had previously been an attempt to limit disclosure on obviousness.  First, an attempt by Mr Gratwick QC failed in the Court of Appeal in SKM v Wagner Spraytech [1982] RPC 497.  The issue was tackled again by the Patents Court in the 1990s, but again it was felt that a crucial aspect of common law disclosure is the ability to obtain documents that may be adverse to a party's case.  A balance therefore needed to be struck.  Cue the introduction of the RSC in 1995 (which would become para 6.1 of the Practice Direction to CPR 63).  This limited disclosure by initially replacing disclosure on infringement by way of a product or process description (PPD)  and providing a four year window for validity disclosure.  This practice was well established by the mid-2000s.

Will this warning from Lord Justice Rix hold true following Positec?

But validity disclosure still haunted parties and the courts. In 2007, Mr Justice Pumfrey tried to do away with disclosure on obviousness in Nichia v Argos.  In the Court of Appeal, Lord Justice Jacob agreed stating that the principle of proportionality - which runs through the Civil Procedure Rules - normally requires that "such disclosure should not be ordered".  However Rix and Pill LJJ reluctantly refused to follow him on the basis that easily revealed documents known to exist which prejudice a case would not be disclosed allowing "dishonest or cavalier litigants" the possibility to "reap an unmerited advantage, contrary to the interests of justice".  However, any concerns about such sharp practice did not bear fruit, continued Mr Justice Birss, as exemplified by the experience in the Intellectual Property and Enterprise Court (IPEC) where there is no automatic right of disclosure and disclosure is addressed at the CMC on an issue-based approach. No complaints so far received .

The 2013 amendments to CPR 31 (Disclosure and Inspection), following the Jackson review, have made a material difference to the application of Nichia.  In particular CPR 31.5(7) which provides a menu of potential disclosure options governed by the preface that the court needs to have regard for the overriding objective and the need to "limit disclosure to that which is necessary to deal with case justly" before determining which of the orders to make.   Standard disclosure is no longer the default option.  However, given the nature of patent cases, the judge commented, issue-based disclosure on obviousness, is the same as standard disclosure.

What is the test?  

At paragraph 25, Mr Justice Birss outlined the questions that need to be answered by the court when deciding whether and what disclosure to order:

1. What is the probative value of the material that could be produced?
2. What is the cost of providing this probative material, in the context of the proceedings as a whole?
3. In light of all the above, would disclosure be fair, proportionate and in the interest of justice (i.e. in accordance with the overriding objective)?

The decision

On the first question - probative value - Husqvarna confirmed that it would not be relying on commercial success, calling the inventor, relying on the reactions of others to the invention or rely on its own internal documents to support its case on inventive step.  If they had, Birss J concluded, these would be reasons to order disclosure.

Disclosure will not be probative for purposes of  cross-examination.  Putting documents to witnesses in cross-examination that show what the inventor did assumes that the inventor is equivalent to the notional person skilled in the art (which he may or may not be).  This does little to answer the question as to what the notional person skilled in the art would have done based on the prior art and/or CGK.  Further, an expert's opinion on the steps that the inventor actually took, again. is not probative.  This is because it assumes that the expert has not thought of an obvious path from the prior art to the invention in the first place.  Such an approach is potentially tainted with hindsight and adds little to the cross-examination point.

Positec argued that a particular way of thinking on the basis of the prior art would be what the notional skilled person would do.  If this particular thinking and path was reflected by the inventor's documents, then this would support Positec's case that the invention was obvious.  However, again, the relevance of this disclosure depends on how close the notional skilled person is to the inventor(s) and their working context.  Importantly, held the judge, in this case it was unclear if this point was even in issue.  If and when it arises, provision could be made for disclosure on this point if it was considered to be required after the exchange of fact evidence and experts' reports (a point reiterated again by Mr Justice Birss at paragraph 42).

The judge also rejected the contention that Husqvarna arguing that disclosure should not be ordered, despite serving a Disclosure Report signed by a statement of truth, was indicative of a party who found a "smoking gun".  Mr Justice Birss stated that "in the vast majority of the minority of cases in which obviousness disclosure from a patentee plays any material role in litigation at all, it helps the patentee."

But if you are missing reading through
reams of inventors' notebooks, you can
purchase this handsome version here
on Amazon.  

On the second question - cost - Husqvarna, by way of its solicitor's witness statement, tried to argue that the value and importance of the dispute was low. However, the judge held that the picture this painted was wrong.  The case is not at the very low or very high end of cases in the Patents Court, but it concerned rival manufacturers of consumer products in a substantial market with a likely turnover in the millions, if not tens of millions.  The costs budgets filed in the case ranged from £0.8-1.1 million of which a minimum amount of £90,000 was estimated by the judge to be attributable to disclosure on obviousness.  This amount was "not a very substantial aspect of the costs of this litigation but neither is it in any sense a trivial sum of money".

On the final question - the overriding objective - the judged refused disclosure.  He acknowledged that this runs counter to the Court of Appeal in Nichia, but that the change to CPR 31.5(7) means it is not a binding authority.  He concluded:

"Experience in IPEC shows that the obligation to disclose documents which may be adverse to a party's case can be preserved as a critical aspect of a fair trial at common law within an issue by issue based disclosure regime in which disclosure on some issues, such as obviousness, is not ordered because the likely probative value of what is produced is not worth the cost. Applying what I perceive to be the right approach under the Civil Procedure Rules as they now are, I am not satisfied that an order for standard disclosure, or an order for issue based disclosure including the issue of obviousness, would be in accordance with the overriding objective in this case. This is an ordinary obviousness case with no special features which might make such disclosure worth the cost."

What does it all mean?

The AmeriKat understands that, so far, Positec have not appealed the decision so this case may stand as the new (or at least reported) approach to obviousness disclosure in the UK Patents Court.  So, has Mr Justice Birss finally achieved what those before him tried and failed to do?  Will much really change in the Patents Court, given that some judges (shout out to Mr Justice Arnold) have been refusing or extremely restricting disclosure in patent cases? Will parties be scrambling to argue that their obviousness cases have "special features" ripe for disclosure?  Are English patent litigators actually a bit more like their Continental cousins than they care to admit when it comes to disclosure?  Is this all getting us into shape for the UPC?

Despite all the questions (some of which are tongue in cheek), it is clear that following this decision parties need to be alive the test and considerations outlined by Mr Justice Birss when seeking or resisting obviousness disclosure.  In light of CPR 31.5(7), even if parties agree that disclosure should be provided, if they have a very active judge at their CMC, they may need to be prepared to answer the questions posed above.  Merpel wonders whether, if they take some of the cues from this decision, parties may agree to address the question of disclosure after exchange of expert reports, at which point the issues should be narrowed and targeted issue-based disclosure more easily ordered.  Now that would be something....