IP-2024-000024 - [2024] EWHC 951 (IPEC)

As noted above, the Claimant criticised various aspects of the Defendant's evidence as the foundation for a submission that the rest of the evidence should be treated with particular care, especially the evidence about the impact that granting or refusing an injunction may have on future sales and prices. Three specific aspects of the evidence were said to be contradictory, grossly misleading and/or manifestly untrue.

First, Mr George Reynolds gave evidence about the orders of the Seplou Sheath as at the date of his statement, 19 March 2024. It was conveniently summarised in tabular form as follows:

Mr Reynolds stated that the first units of the Seplou Sheath were despatched to customers on 8 March 2024, and that a total of 57 units had been despatched to satisfy the existing orders (although this is obviously a typographical error and should read 67 units instead). He also estimated that the Defendant may sell up to a further 150 units before the hearing date in April.

Counsel for the Claimant submitted that this evidence was contrary to the position that had previously been conveyed by the Defendant in its communications to the court in February 2024 when the parties had been debating an appropriate hearing date for this application. The Claimant wanted the hearing to be listed in the week of 10 April, but the Defendant wanted it to be listed in mid-May. In support of its position that a May hearing was appropriate, the Defendant had sent a bullet-point list of submissions to the court via email dated 23 February 2024, which list included the following:

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The Defendant has not sold the Seplou Sheath and is not currently in a position to begin selling the product. The Framework Agreement to register the Defendant as a supplier to the NHS is only likely to be finalised some time in March. The earliest the Defendant will be able to begin supplying the Product in the UK will be April. The projected sales volume of the Product by the Defendant once active selling begins is small – ie 50 units per month. Accordingly, if the hearing is in mid-May, it is unlikely that there will be any substantial sales at all. Thus, there is unlikely to be any real prejudice at all if the hearing is not until mid-May.

The email was sent to the court by the Defendant’s counsel’s clerk but was signed by a representative at the Defendant’s patent attorneys.

I was initially very concerned that the Defendant had misled the court in respect of the February email. At first blush, the email certainly gives the impression that the Defendant had not commenced dealings in the Seplou Sheath and would not do so before a substantive hearing. However, on a more careful read, one can see that the Defendant only states that it has not sold the product. It does not go so far as to say that it has not already started marketing it, offering it for sale or supply, and taking orders in readiness for when it can do so.

Moreover, as counsel for the Defendant pointed out, in the event the hearing was listed for 10 April 2024 which was the date that the Claimant wanted. So the Defendant’s email was not operative in any meaningful way.

I do not accept that any apparent conflict between the Defendant’s email and its evidence provides a foundation for treating that evidence with particular caution. I have considered all the evidence carefully and with an appropriate level of scrutiny (in accordance with the Neurim guidance), but I do not consider that the Defendant’s evidence should be treated differently from the Claimant’s or given any less weight.

Second, Mr George Reynolds gave evidence that the core of the Seplou Sheath comprises a reinforced coil structure to provide optimal flexibility, maximum resistance to kinking and compression, and visibility (for example by fluoroscopy or other x-ray techniques). He explained that it is important for the surgeon to be able to see the location of the sheath during use so that it is correctly positioned into the ureter of the patient and to avoid injury (such as perforation of the ureter or other organs). By contrast, he said that the Claimant’s Clear Petra Sheath is not visible by x-ray. I refer to paragraph 61 of his Witness Statement where he said:

61.

I understand from my discussions with urologists and surgeons in the urology field that the Claimant’s Clear Petra sheaths are not visible under x-ray illumination, as they are translucent to x-rays. As a result, the sheath is not visible on a kidney, ureter and bladder (KUB) x-ray image. This in turn means that the location of the sheath of the Clear Petra products, once inserted into the ureter of the patient, cannot be readily determined using standard procedures, such as fluoroscopy. In particular, a number of surgeons have reported that it is difficult, if not impossible using fluoroscopy to see the tip of the Clear Petra sheath, within the patient, leaving the surgeon unsure about the location of the distal end of the sheath. This leads to significantly higher risks to the patient when using the Claimant’s products, compared with the Seplou Sheath. In particular, I have been advised that this has led to patients experiencing severe complications following use, including post-operative haematuria. These complications are avoided when using the Seplou Sheath supplied by C J Medical.

He went on to suggest that the Seplou Sheath provides a safer alternative to the ClearPetra Sheath, with the result that if the Defendant was injuncted, patients could be put at increased risk.

This evidence is consistent with the Defendant’s pleaded case in its Defence and Counterclaim, which states as follows:

Seplou Sheath is substantially safer than Clear Petra/Flexi Clear Petra.

16.

In particular, it is averred that no injunction should be granted even if the Seplou Sheath is found to infringe the Patent (and the same is found valid) as the Seplou Sheath has substantial advantages to patients over the ClearPetra or Flexi ClearPetra. The Seplou Sheath has an inner metal coil inside it that allows surgeons to see (using xray or other diagnostic imaging methods) the position of the sheath, in particular the distal tip of the sheath, within the patient. Visualisation of the Seplou Sheath allows the surgeon to identify the precise location of the sheath and its distal tip thereby avoiding perforation of the ureter and damage to the kidney as the sheath is advanced into the renal pelvis and avoids post-operative haematuria. Seplou has a licence for the sheath design with the metal coil which is protected by EP1819389B1 and which is owned by Cook Medical Technologies LLC. The ClearPetra and Flexi ClearPetra sheath does not have these advantages. If the Seplou Sheath is found to infringe and the Patent is valid, the Defendant would be prepared to enter into a licence whereby a reasonable royalty is paid.

The Defence and Counterclaim was signed with a statement of truth by Mr Charles Reynolds, Managing Director of the Defendant. It is dated 2 April 2024.

That is the same date as the Claimant’s reply evidence in the application. In that evidence, Mr Cox explained that Mr Reynolds’ evidence is wrong, and that the ClearPetra Sheath also has an internal metal coil, as most UASs on the market do. Accordingly, he said, it has the same characteristics as the Seplou Sheath of compression resistance and visibility. He rejected any suggestion that the Seplou Sheath has any advantage over the ClearPetra Sheath, which he said work and are used in identical ways. Mr Cox supported his evidence with exhibits of x-ray images, purportedly showing a ClearPetra Sheath with a metal coil.

This prompted a further statement from Mr Akers dated 5 April 2024. He called into question whether the x-ray images where a metal coil was visible were of a ClearPetra Sheath.

Thankfully I do not have to resolve that dispute, as the Defendant has subsequently been able to inspect a Flexi ClearPetra Sheath and satisfy itself that there is a metal coil inside the sheath. According to the correspondence between the parties, that happened on Saturday 6 April 2024. I was referred to an email from the Defendant’s patent attorneys dated 7 April 2024 which stated:

“As you will be aware, there has been an acute conflict of primary fact in this case as to whether the ClearPetra and/or the Flexi ClearPetra Sheath has a metal coil in it.  

Following service of your client’s evidence in reply, efforts were made to inspect a ClearPetra sheath. On Saturday, a representative of the Defendant managed to inspect a sample of a Flexi ClearPetra product at an exhibition. A metal coil was seen inside the sheath. It is thus accepted that the Flexi ClearPetra Sheath does indeed include a metal coil. 

The Defendant will therefore not be pursuing a defence or put forward any argument founded on the basis that the ClearPetra or Flexi ClearPetra sheath does not have a metal coil and/or that the Seplou Sheath offers substantial medical advantages over the ClearPetra and/or Flexi ClearPetra sheaths by reason of the former having a metal coil and the latter sheaths not having one.”

As a result, the Defendant’s counsel clearly indicated in his written and oral submissions that the Defendant no longer pursues any suggestion that the ClearPetra Sheaths do not have a metal coil or that the Seplou Sheath is better for patients as a result.

Nevertheless, counsel for the Claimant submitted that the statements which had been made by the Defendant in its pleadings and evidence about the ClearPetra Sheath products were derogatory, misleading and/or untrue (knowingly or otherwise). He suggested that the 7 April email had been carefully worded to avoid revealing whether this was the first time the Defendant had inspected the Claimant’s products, but that since the ClearPetra Sheath had been on the market for years, it was inherently unlikely that it was.

I do not accept the submission that there was anything untoward about the 7 April email. This is because Mr Akers makes clear in his Second Witness Statement at paragraph 5 that the Defendant had not been able to obtain a ClearPetra or Flexi Clear Petra (at least as at the date of the statement). I also do not accept the submission that the Defendant’s pleadings and evidence on this issue were knowingly untrue. There is no evidence to support that submission. To the contrary, the evidence of Mr George Reynolds which I set out at paragraph 47 above suggests that the Defendant had a legitimate basis for believing the statements that were made, albeit that they have turned out to be wrong. The fact that the Defendant told the Claimant of its mistake on 7 April, immediately after the mistake was identified on 6 April, reinforces the impression that it was a genuine error. The allegation that the statements were derogatory is relevant to the Claimant’s case on unquantifiable damage and I return to it in that context below.

Third, Mr George Reynolds gave evidence that the net price of the Seplou Sheath to NHS hospitals was “fixed” at £125 for at least 15 months from the date of his evidence (19 March 2024) – that is, until the Framework Agreement expires in June 2025. However, Mr Cox in reply gave evidence that he had been informed by Mr McQuilkin of BioSpectrum (the Claimant’s distributor) that prices are not fixed with NHS hospitals. The Defendant now accepts that it is possible to change the price (contrary to what Mr Reynolds seems to have said in evidence) but I was told by counsel for the Defendant on instructions that it can take weeks to implement such a change and that the Defendant would not do this now that it has given a price of £125 to the NHS for the next year.

Counsel for the Claimant submitted that this was another example of evidence which was “simply not true”. He even went so far as to say that Mr George Reynolds knew that it was not true when he signed his Witness Statement. I am not able to accept that submission. There is no evidence to support it. Moreover, it seems more likely that when Mr Reynolds said that the NHS price was “fixed” at £125, he was not saying that it could never be changed, but rather that the Defendant had no intention of changing it.

Overall, I do not accept the submission that these three specific aspects of the Defendant’s evidence taint the rest of it.