Case No. IP-2016-000202

The law on the scope of a claim 84. The law on the scope of a patent claim was explained by the Supreme Court in Actavis UK Ltd v Eli Lilly & Co [2017] UKSC 48; [2017] RPC 21 and the Court of Appeal in Icescape Limited v Ice-World International BV [2018] EWCA Civ 2219; [2019] FSR 5. I discussed those judgments in Regen Lab SA v Estar Medical Ltd [2019] EWHC 63 (Pat) at [199]-[224]. A Formstein defence 85.An additional point arose in the present case. Teleste argued that if its product fell within the scope of claim 1, it was entitled to a defence to infringement if the product lacked novelty or inventive step over the prior art. This defence was fully pleaded on both sides and argued at the trial. 86.To explain how such a defence, if it exists, might operate I need to go back to the law as it applied before the judgment of the Supreme Court in Actavis. 87.It has long been a basic principle of patent law in the United Kingdom that a patentee should not be able to prevent a person from doing what he or she had lawfully been entitled to do before the patent was granted. Lord Hoffmann put it in this way in Merrell Dow Pharmaceutical Inc v H. N. Norton & Co Ltd [1996] RPC 76, at p.83: “Ever since the power of the Crown to grant monopolies was curbed by parliament and the courts at the beginning of the seventeenth century, it has been a fundamental principle of United Kingdom patent law that the Crown could not grant a patent which would enable the patentee to stop another trader from doing what had been done before.”188.For convenience I will call this ‘the Merrell Dow principle’. By way of an earlier example from the House of Lords, in Gillette Safety Razor Co v Anglo-American Trading Co (1913) 30 RPC 465, Lord Moulton said (at p.480): “It is impossible for an ordinary member of the public to keep watch on all the numerous patents which are taken out and to ascertain the validity and scope of their claims. But he is entitled to feel secure if he knows that that which he is doing differs from that which has been done of old only in non-patentable variations …” 89.Before Actavis the Merrell Dow principle was reconciled with the law on the construction and infringement of patent claims by the availability of the ‘Gillette defence’, the name being taken from the judgment just referred to. In modern practice this is not strictly a standalone defence to infringement. Lord Moulton’s idea was that a defendant should be entitled to prove that the alleged infringement would have lacked novelty or inventive step at the priority date and that this of itself established a defence without the court having to go to the trouble of having to resolve whether the patent was valid or not infringed, see pp.480-1. However, Floyd LJ pointed out in Fujifilm Kyowa Kirin Biologics Co., Ltd v Abbvie Biotechnology Ltd [2017] EWCA Civ 1; [2017] RPC 9 that this idea has never been taken up and that the court must primarily consider whether the patent is valid: “[56] It is, we would accept, still not the practice to adopt Lord Moulton's approach to deciding conventional patent actions where both validity and infringement are in issue. The court will resolve those issues individually by reference to the claims of the patent, rather than take the short cut of deciding whether the defendant's product is old or obvious. That is because, as we think Lord Moulton was recognising, the validity of a granted patent involves more than just the private interests of the parties. If the patent is indeed to be impaled on the validity horn of Lord Moulton's dilemma, then it is in the public interest that it be decided and the patent revoked. That same policy is visible in Traction Corporation v Bennett (cited above). That consideration does not, however, detract from the potential usefulness of the principle that Lord Moulton was espousing. In a conventional patent action a determination that there is nothing new or inventive about the defendant's product may operate as a cross-check on the outcome of the action as a whole.” 90.I believe that it would be surprising if the Supreme Court in Actavis intended to abandon the Merrell Dow principle without expressly saying so. 91.Arnold J considered an aspect of this in Generics (UK) Ltd v Yeda Research and Development Co Ltd [2017] EWHC 2629; [2018] RPC 2 (at [161]-[167]). He said: “[163] Counsel for the defendants submitted that it was no longer the law that a claim lacked novelty if the prior publication disclosed subject-matter which, if performed, would necessarily infringe the claim. Rather, the claim would only lack novelty if the prior publication disclosed subject-matter which fell within the claim on its proper interpretation. It was not sufficient that the subjectmatter would infringe the claim applying the doctrine of equivalents. … [167] The conclusion I have reached is that counsel for the defendants is correct.” 92.Arnold J was apparently not asked to consider a similar question in relation to inventive step. Specifically: if an equivalent within the scope of a claim is obvious over the prior art but nothing within the claim on its normal construction is obvious, does the claim lack inventive step? Nor was he asked to consider a defence to infringement newly arising as a consequence of the change in the law on the scope of claims. 93.The issue raised by Teleste is the relationship between the scope of a claim and prior art which will invalidate the claim, taking into account both novelty and inventive step.94.One way of reconciling the Merrell Dow principle with the doctrine of equivalents would be to say that if an accused product or process is an equivalent and for that reason is nominally within the scope of the claim, but the equivalent would have lacked novelty or inventive step over the prior art at the priority date, then it is deemed to fall outside the scope of the claim, thus providing a defence to infringement. 95.German law provides for such a defence, first stated in the judgment of the Federal Supreme Court in Case X ZR 28/25 Formstein GRUR 1986, 803. The defence is explained in Patent Litigation Proceedings in Germany, Thomas Kühnen, trans. Frank Peterreins, Carl Heymanns Verlag 2015, 7th ed. (the translator renders Formstein as ‘Formed brick’ in English): “e) Objection according to the »Formed brick« decision If it is found that a contested embodiment contains the features of the asserted property right in at least partly equivalent form, the defendant may use what is referred to as the objection according to the »Formed brick« decision as a defence. aa) Conditions According to this defence, a contested embodiment does not fall within the scope of protection of a patent or utility model if, with its (partly literally realized and partly equivalently realized) features, it is anticipated in the state of the art or is obvious from the state of the art. Background for the objection according to the »Formed brick« decision is the consideration that the patent in suit must not be extended by means of equivalency on a subject matter which is within the known state of the art, and for which the proprietor of the patent in suit could thus not have obtained patent protection in examination proceedings.” (original italics)96.To give this type of defence a label I will call it the Formstein defence. There is a defence along the same lines under Dutch law, see Core Distribution Inc v Lidl Nederland GmbH¸ District Court of The Hague, 14 March 2012 (Kalden, Hensen and van Peursem), at para. 4.7, which shows that the Formstein defence works in a nonbifurcated system. 97.In the United States there exists the similar principle of ‘ensnarement’: the range of equivalents cannot be so extended as to ensnare the prior art, see Chisum on Patents, §18.04[2][d]. The authors refer to several authorities including (at p.18-708) We Care, Inc. v Ultra-Mark International Corp. 930 F.2d 1567, 18 USPQ2d 1562 (Fed. Cir. 1991), at 1564-65 (the ellipses and square brackets are those of the Chisum authors): “… [A] determination of infringement based on [the doctrine of equivalents] cannot be made in a vacuum; the prior art must be examined to assure that the range of equivalents asserted by the patent holder does not encroach upon subject-matter in the prior art… This, of course, involves consideration of what the prior art would have anticipated…and what the prior art would have made obvious…when the patentee filed the original application. In this way, the doctrine of equivalents is limited; it may not be used to extend a patent holder’s right to exclude beyond what could lawfully have been obtained in an original application.” 98.More recently, in a judgment dated 29 September 2017 the Court of Appeals of the Federal Circuit said this in Jang v Boston Scientific Corp, Opinion no. 16-1275 (Fed. Cir. 2017) at 14-15: “A doctrine of equivalents theory cannot be asserted if it will encompass or ‘ensnare’ the prior art. [References given]. A ‘[h]ypothetical claim analysis is a practical method to determine whether an equivalent would impermissibly ensnare the prior art.’ We have explained: Hypothetical claim analysis is a two-step process. The first step is ‘to construct a hypothetical claim that literally covers the accused device.’ Next, prior art introduced by the accused infringer is assessed to ‘determine whether the patentee has carried its burden of persuading the court that the hypothetical claim is patentable over the prior art.’ In short [the court] ask[s] if a hypothetical claim can be crafted, which contains both the literal claim scope and the accused device, without ensnaring the prior art.” 99.One route the Supreme Court or the Court of Appeal may take in due course, regarding the interplay between the scope of a claim on the one hand and novelty and inventive step on the other, is the introduction into English law of a Formstein defence. 100.I cannot rule out such a possibility. I will therefore consider the facts also on the hypothesis that such a defence exists. Whether Teleste’s tap unit falls within claim 1 on a normal construction 101. Teleste’s tap unit was generally referred to as ‘the Tap Bank’. Teleste said that the Tap Bank lacked three integers of claim 1.