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MMI Research Ltd v
CellXion Ltd and Others [2012] EWCA Civ
139
This case highlights the need to determine
which of your arguments are reasonable, and then to select only the
best of these. In MMI
Research, no order was made as to costs to penalise the
successful claimant for running too many points.
Facts
The claimant was an exclusive licensee under a
European patent relating to IMSI catchers. These are devices used
by police forces to obtain unique identification numbers (IMSIs) of
mobile phones operated by suspects. The device works by tricking
the mobile phone into transmitting its IMSI. A fake base station
transmits a signal of the type received by phones when they are
physically moved from one geographical zone to another. Such
virtual base stations were already known at the priority date of
the patent, but the novelty claimed in the patent related to the
manner in which the virtual base station transmitted a signal of
such strength that the suspect's mobile phone would release its
IMSI.
Decision
At first instance, the judge upheld the
validity of the patent and found for the claimant. The defendants
appealed to the Court of Appeal (CA) on the basis of new evidence;
they produced written manuals and a floppy disc that they claimed
were supplied to the Italian Carabinieri and German police force
before the priority date. They argued that these constituted an
enabling disclosure of the invention or in the alternative that
they rendered the invention obvious. The judge disagreed and held
that the manuals and disc did not constitute an enabling
disclosure, did not render the invention obvious and were disclosed
under a duty of confidence in any case.
A second appeal was allowed and the CA held
that the claimant's expert had conceded at the first instance that
an article on phone location technology rendered the invention
obvious. The Judge at first instance, Mr Justice Floyd,
had overlooked this critical concession. The CA suggested that this
was probably caused by the fact that so many other points had been
raised. Had the defendants concentrated on their best points, the
judge may not have erred. This was, no doubt, embarrassing for the
judge at first instance, but better that the appellate Court
reverses the decision than creates a new point of principle to fit
the facts.
In the costs judgment, Sir Robin Jacob held
that the defendants were profligate in the number of defences they
ran. A defendant in a patent trial cannot take as many "reasonable"
points as it likes and not have to pay for any of them if they are
unsuccessful. It should make a judgment as to which are the better
points by applying the following test:
(a)
"Is this point a reasonable runner?"; and then
(b)
"which of my reasonable runners are the best few?"
Sir Robin went on to say that "a
reasonably strict costs regime should make a defendant concentrate
on his best [points] – which may indeed also give him a better
chance of winning." In the end, no order was made as to costs,
which deprived the defendants of their costs on the issue on which
they won. This was held to be an appropriate price to be paid for
the aforementioned profligacy. Given the defendants were the
overall winners at trial however, they were not ordered to pay the
other side's costs.
Comments
It is often not obvious which points
will be the best runners at the beginning of a case. By the time
evidence is exchanged, the parties should have a much clearer
understanding of the relative strength and weaknesses of the case,
but by then a large proportion of the costs dealing with each point
will have been incurred by the other side. If any "bad points" are
dropped at this stage, it is likely to result in negative costs
repercussions in any event. However, the decision not to award
costs in MMI Research went beyond merely not awarding
costs for the "bad points"; the claimants were denied their costs
on the successful points too.
Clients with deep pockets may be happy to take
the risk of an adverse costs order for the peace of mind that no
stone is being left unturned. However, it is not just a question of
adverse costs orders; the legal team will need to dedicate time and
effort to each claim and there is value in assessing at an early
stage where the strengths in the case lie so as to focus resources
appropriately.
Beatriz San Martin, Senior
Associate and Adam Gamsa,
Trainee, IP Protection and IP
Enforcement and Litigation at Field Fisher
Waterhouse.
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