Neil Truman of Powell Gilbert discusses the strategy and Court’s reaction in the wake of Samsung filing an EPO central limitation against Apple in the UK.
This article was first published in the May/June edition of The Patent Lawyer.
Too many bites of the Apple?
Samsung has shaken up its UK proceedings with Apple by filing for an EPO central limitation. Neil Trueman of Powell Gilbert discusses the strategy and the Court’s reaction.
The Apple and Samsung patent war continues to create legal headlines all over the world and the UK is no exception. The UK Court of Appeal was recently pressed into resolving another potential quirk arising out of the concurrent jurisdictions of the European Patent Office (EPO) and the national courts. While the judgment was ultimately a case management decision,1 the Court nevertheless provided an important analysis of the relationship between proceedings in the EPO and national courts, and clarified the right of a patent owner to use the central limitation provisions of the European Patent Convention (EPC) to present new claims during the course of national litigation, whether before or after a first instance decision on infringement and validity.
Samsung brought proceedings in the UK against Apple in 2011 for alleged infringement by inter alia the iPhone 4 and 4S of the UK designations of three European patents. Of the two patents2 still at issue on appeal, both had been found invalid at first instance. The trial judge ordered the patents revoked, but stayed the revocation pending an appeal. Things got interesting in the period between Samsung filing its grounds of appeal and the substantive appeal hearing when Samsung invoked a seldom-used EPO central claim amendment mechanism.
Samsung’s strategy was to apply for central limitation under Article 105b of the EPC. Having invoked the central limitation procedure, which would have the effect of amending the claims across all EP designations, Samsung sought a stay of the UK appeal pending the outcome of the EPO examination. Samsung argued that the central limitation would proceed quickly such that the Court of Appeal could (just a few months later) still hear the substantive UK appeal based on the record of the first instance proceedings.
A legitimate play or gaming the system?
Apple had endured a full trial on the merits and had prevailed at first instance, and saw Samsung’s strategy as an abuse of process. Seen through the prism of UK trial procedure, the timing of the filing for central limitation was extraordinary because in UK actions there is an emphasis on bringing all the issues in dispute before the first instance trial court. A purely national limitation of the claims would not be allowed at this stage of the proceedings.
Aggravating matters further, Samsung had already attempted to hedge its validity position with two conditional applications to amend just the UK designation before trial, but the trial judge also held that these applications could not save either of the patents. Thus from Apple’s perspective, Samsung appeared to be seeking a second (or perhaps even a third) bite at the proverbial apple (or cherry, in the UK). Apple’s application requested that the Court of Appeal force Samsung to elect to either abandon its appeal (such that the patents would be revoked), or else Samsung should proceed with the appeal while taking no further steps with the central limitation.
Hands off the EPO
The Court of Appeal got straight to the point in its analysis of the provisions of the EPC 2000 and 1977 UK Patent Act and found it was powerless to interfere with Samsung’s right to apply for a central limitation. In particular, the Court noted that the UK Act specifically contemplated the possibility of concurrent proceedings. Accordingly, the Court explained that it “d[id] not believe the filing and pursuit by Samsung of its central amendment application can be characterized as an abuse of process or, indeed, an activity with which this court can properly interfere for any other reason”.
The support cited included the UK Supreme Court’s 2013 decision in Virgin v Zodiac 3 , the court holding there that, where judgment is given in an English Court that a patent (whether English or European) is valid and infringed, and the patent is subsequently retrospectively revoked or amended (whether in England or at the EPO), the defendant is entitled to rely on the revocation or amendment on the enquiry as to damages. Characteristic of both cases is the difficulty in resolving disputes efficiently and fairly when there are two tribunals and the court is dealing with the fact that an EPO claim amendment or revocation has effect ab initio.
The Court of Appeal noted that while there was no UK case on point for the central limitation procedure, there were of course other instances where parallel opposition proceedings run alongside national litigation, which further supported the intention to permit concurrent proceedings. The court also pointed to a Dutch Supreme Court decision, Boston Scientific v Medinol Ltd4 in which the Dutch court was faced with a similar case posture, in other words claims were found invalid in the Dutch lower courts after which the patentee filed for an amended claim set via a central limitation. In that case, the Dutch Court remitted the new claims for re-hearing by the Appeal Court, and while the case was not binding, the Court of Appeal indicated it was highly persuasive as a decision of a respected EPC court.
Apple’s counter arguments initially flagged the court’s power to strike out Samsung’s UK appeal thereby making final the revocation of the patents, such order having been stayed pending appeal. Here, Apple relied on cases of parallel UK and EPO opposition proceedings to illustrate the non-controversial point that the court has power to revoke the UK designation of the EP while an opposition is pending. Having laid this foundation, the main thrust of Apple’s submissions was to highlight Samsung’s failure to bring the amendments earlier, and the ensuing prejudice to Apple.
This submission regarding UK Patents Act amendment practice was not controversial, and the Court agreed with Apple’s hypothetical argument that an amendment of the UK designation of the EP under s.75 of the 1977 Patents Act made post-trial would almost certainly be rejected following, inter alia, Nikken v Pioneer,5 where a second validity trial was required. Apple argued that Samsung’s use of the central limitation route rather than the national route under s.75 was an attempt to circumvent the principles set forth in Nikken and should not be permitted. Apple was doubtless appalled at the prospect of being maneuvered into a new trial on new claims, or having to argue validity points on new claims on appeal for which there was no or limited evidence in the record.
Agreeing with Apple’s UK Patents Act hypothetical argument that a UK amendment would not be permitted was however as far as the court went, and Apple was faced with an uphill battle on the fiercely contested facts about what additional evidence (or trial), if any, would be required to address the amended claims.
The nuts and bolts of central limitation
While there was some discussion of what would or should happen at the EPO, the court was cautious about making a finding of whether a second trial would be needed, because the claims were yet to be confirmed in one form or another. The central limitation procedure has been available to EP proprietors for many years, following changes brought in by the EPC 2000. In contrast to oppositions, central limitation is ex parte (although third party observations are permitted), only requires a limited examination and consequently is relatively quick – a fact strongly emphasized by Samsung and a factor in the Court of Appeal’s judgment. According to the Implementing Regulations Rule 95, the Examination Division will only address whether the new claims:
a. are a limitation of the existing claims;
b. are clear and concise (Art 84); and
c. do not involve ‘added matter’ either extending the scope of protection or going beyond the subject matter of the application as filed (Art 123 paras 2 and 3). If the amendments pass muster and the appropriate fee is paid and translation formalities met, there is no discretion to reject the amendments, as the Rules further require that the Examining Division shall then limit the patent.
Accordingly, a patent owner engaged in litigation in various EP jurisdictions and with its back against the wall may see value in using the procedure if it proves to be reliably fast. The proprietor can present new claims which will account for or mitigate the danger from the prior art (and sufficiency) arguments cited against it, and can do so in the EPO in the knowledge that the EPO isn’t concerned about prior art, and the worst it will face is third party observations.
One further reason the process should not be long and drawn-out is that the examination division is required by the Implementing Regulations (Rule 95, para 2) to provide only one opportunity to cure any deficiencies. In Samsung’s case, the Court of Appeal reported that one patent (EP1714404) passed muster on the first review subject to some relatively minor objections, whereas the second (EP1005726) was rejected for added matter and is still in examination. While Samsung may have only one chance to remedy the rejections, it has hedged against the risk of loss by filing a response that includes no less than four auxiliary request claim sets.
In light of this limited examination procedure, estimates for completion of a central limitation are in the region of a year or less, sometimes just months, compared with the multi-party battles in opposition proceedings that notoriously take many years to resolve.
Using the Samsung playbook?
This particular Apple/Samsung skirmish will remain one to watch because although Samsung is able to move ahead in its desired course, the Court of Appeal left open the possibility for Apple – depending on Samsung’s next steps and the need for another trial on validity – of pressing its claim that there is an abuse of process in the UK on these particular facts. Such an abuse of process/directions hearing should give us some insight into the limits of the central limitation in the UK when it is deployed after losing at first instance.6
The Court of Appeal did not endorse Samsung’s play, and in a second judgment dealing with the costs of the adjournment/strikeout application7 , the court refused to award Samsung its costs. It observed that while Samsung had effectively won the stay, Apple were correct that Samsung had been “granted an indulgence” by the Court, noting that Samsung sought adjournment of the appeal at a late stage, and had failed to apply for the amendment either before or even promptly after the trial.
Whether a patent proprietor in the UK filing before a first instance trial is heard can obtain any additional benefit from employing the central limitation procedure over using the UK national route for amendment may depend on timing. For example, the patentee could give notice of its intention to file limitations at the EPO (as required by CPR 63 PD para 11.2) part way through the case in response to new prior art, and try to push off a trial arguing for a stay of the UK revocation action while the amendments are resolved at the EPO noting it will only delay for six months to a year. On the other hand, the opponent wanting to press ahead can argue that a UK court should proceed on the basis of the claims as granted and as proposed to be amended centrally (effectively forcing a UK amendment application), but this may not be particularly satisfactory as the court could be resolving issues on claims that will never have existed if the claim form changes further during examination. Samsung’s response to the EPO, which included four auxiliary sets of claims in addition to the main request, may illustrate the potential risk of going to trial in the UK against a moving target when the delay allowing the EPO to finish the limitation shouldn’t be more than a year.
1 Samsung Electronics Co Ltd v Apple Retail UK & Apple Sales International,  EWCA Civ 250.
2 EP1005726 and EP1714404.
3 Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd  UKSC 46,  RPC 29.
4 Case No. C07.085HR, March 6, 2009.
5 Nikken Kosakusho v Pioneer Trading Co.,  EWCA Civ 906.
6 In the meantime, Apple has been denied leave to appeal to the Supreme Court.
7 Samsung Electronics Co Ltd v Apple Retail UK & Apple Sales International,  EWCA Civ 376.