Cross-border invention risk management: infringement

It may be possible to bring proceedings for indirect infringement. In the UK Patents Act, this requires an allegedly infringing party to supply or offer to supply, in the UK, any of the means relating to an essential element of the invention for putting the invention into effect in the UK.

The infringing party must also know, or it must be obvious to a reasonable person in the circumstances, that those means are suitable for and are intended to put the invention into effect in the UK. However, relying on indirect infringement is less than ideal since the knowledge requirement (that the skilled person must know that the means are suitable for and intended to put the invention into effect in the UK) is a high barrier to meet.

It should be noted that having patents in numerous jurisdictions does not necessarily resolve this issue since most jurisdictions will require all claim features to be carried out within their jurisdiction for infringement to occur.

The case law

Menashe B M Ltd v William Hill Organisation Ltd

In Menashe B M Ltd v William Hill Organisation Ltd [2002] EWCA, Menashe had claimed a system having a terminal and a server. William Hill supplied customers with a CD which enabled those customers to turn their computers into terminals which operated within a system such as claimed by Menashe. William Hill argued that this was not even indirect infringement because the server, which William Hill provided, was not located within the UK. Consequently, the system was not put into effect in the UK – only the terminal was.

However, LJ Aldous interpreted the phrase "put the invention into effect in the UK" as requiring use of the invention in the UK. Furthermore, the court decided that since the location of a server is immaterial to the user, it can be used in the UK without the server being physically located in the UK. Hence, in this case, the CD was an essential means supplied in the UK for putting the invention into effect (by use) in the UK.

Research In Motion v Motorola

In the case of Research In Motion v Motorola [2010] EWHC, Arnold J found that the patent was invalid. However, he commented that had it been valid, there would have been no infringement. Referring to Menashe, Arnold J emphasised that it is important to consider who uses the claimed invention, and then where they operate it. Despite Arnold J maintaining that use of a server in the UK does not require the server to be located in the UK, it was found that the claimed invention (a method of operating a system), was used by Research In Motion itself (as distinct from Menashe where the server was used by the customer). Research In Motion was based in Canada, and so the use of the server was found to be occurring in Canada, despite a user also being free to communicate with the system from the UK.

Virgin Atlantic Airways Ltd v Delta Air Lines Inc

Taking a step back from overseas based servers, a third case to consider is that of Virgin Atlantic Airways Ltd v Delta Air Lines Inc [2011] EWCA. A company called Contour made ship-sets (ie, seats along with plinths and all required fittings for specific aircraft of their customer's airline) for business class seats. Contour provided instructions for the seats' assembly on aircraft, and sent out ship-sets abroad (in the US) for installation, where their engineers aided Boeing in fitting the seats to aircraft which were eventually supplied to Delta. The High Court granted a declaration of non-infringement in respect of Delta Air Lines, citing Menashe, since the invention was not used (ie, put into effect through use) in the UK; but in the US where the seats were fitted.

The declaration was overturned by the Court of Appeal. However, this was only due to a different construction of the claims; the terms "for" and "arranged to" were interpreted more broadly by the Court of Appeal such that the ship-set itself was actually potentially covered by the claim. Given Virgin now had a "realistic prospect for establishing infringement" the declaration of non-infringement was lifted. The decision taken in Menashe was therefore not truly tested in this case.

Legal test

Based on an analysis of the case law, a simplified legal test for determining infringement under Section 60(2) UKPA involves performing the following steps:

1. Determine what the invention is.

2. Identify an essential element of the invention.

3. Determine who puts that essential element into effect through "use".

4. Determine if the double territorial requirement is met, by asking:

a. Is the essential element supplied/offered for supply in the UK?

b. Is the essential element suitable for enabling use by the person determined in step (3) of the invention in the UK?

Practical lessons

A claim is generally as valuable as the scope of protection which it confers. If direct infringement is made avoidable by simply performing a part of a claimed invention in another jurisdiction, then the protection conferred by the claim is only that which is provided by virtue of indirect infringement. However, due to the knowledge requirement set out in Section 60(2) UKPA, as well as the ambiguities in the interpretation of the relevant statute, it is often much harder to prove that indirect infringement has occurred than direct infringement.

It is therefore important that an attempt is made to draft claims so as to make it as hard as possible for potential infringers to avoid direct infringement. In particular, this can be achieved by ensuring that a potential infringer would infringe the whole claim, rather than just an essential element of it.

This can be achieved by drafting the claim in terms of the functionality to be performed by a single apparatus, rather than by a plurality of apparatuses.

In addition, by avoiding the requirement of a feature to be performed on a remote server and by avoiding method steps in an apparatus claim (which could be geographically separated) it is possible to reduce the likelihood that direct infringement can be avoided. A professional patent drafter should be able to take these issues into consideration and we would recommend you seek professional advice if your invention is geographically distributed and has the potential to only infringe across jurisdictional borders.

Nonetheless, there will undoubtedly be situations in which it may not be possible to capture the inventive concept without one or more of these elements. Therefore, even the best-drafted claims could still risk the problem of cross-border infringement. In these situations, it is necessary to rely on the provisions set out in the aforementioned cases and in Section 60(2) UKPA, which relates to indirect infringement.

It is reassuring to know that there is precedence in Menashe for successful infringement proceedings under Section 60(2) UKPA in the specific situation of cross-border infringement. The generalised legal test discussed above has been devised in view of our interpretation of both the statute and the relevant case law. However, we consider the interpretation of Section 60(2) UKPA in Menashe to be fairly broad, and hence, this legal test may be liable to change if a future case reached the Supreme Court. Due to the specific facts in the Menashe case, it is hard to discern the extent to which the reasoning can be generalised. Hence, in a case with differing facts, the court may well reach a conclusion which provides less scope for cross-border infringement proceedings under Section 60(2) UKPA.

The unitary patent and Unified Patent Court

The unitary patent is a new EU-wide patent which is expected to come into force in the coming months, along with the Unified Patent Court (UPC). The unitary patent will have unitary effect such that post-grant rulings of infringement are effective across every participating state. Since the unitary patent is not yet in force, there is considerable uncertainty surrounding the way in which cases of cross-border infringement will be handled, and of course this would only be relevant in cases where the cross-border infringement is confined to Europe.

We therefore recommend seeking professional advice to be able to discuss potential issues relating to cross-border infringement, with specific regard to the details of your situation.

Related decisions

• Menashe Business Mercantile Ltd. & Anor v William Hill Organization Ltd. [2002] EWCA Civ 1702 (28 November 2002): http://dycip.com/ewca1702
• Research In Motion UK Ltd v Motorola Inc [2010] EWHC 118 (Pat) (03 February 2010): http://dycip.com/ewch118
• Virgin Atlantic Airways Ltd v Delta Air Lines Inc [2011] EWCA Civ 162 (23 February 2011): http://dycip.com/ewca162t may be possible to bring proceedings for indirect infringement. In the UK Patents Act, this requires an allegedly infringing party to supply or offer to supply, in the UK, any of the means relating to an essential element of the invention for putting the invention into effect in the UK.
  The infringing party must also know, or it must be obvious to a reasonable person in the circumstances, that those means are suitable for and are intended to put the invention into effect in the UK. However, relying on indirect infringement is less than ideal since the knowledge requirement (that the skilled person must know that the means are suitable for and intended to put the invention into effect in the UK) is a high barrier to meet. It should be noted that having patents in numerous jurisdictions does not necessarily resolve this issue since most jurisdictions will require all claim features to be carried out within their jurisdiction for infringement to occur. The case law Menashe B M Ltd v William Hill Organisation Ltd In Menashe B M Ltd v William Hill Organisation Ltd [2002] EWCA, Menashe had claimed a system having a terminal and a server. William Hill supplied customers with a CD which enabled those customers to turn their computers into terminals which operated within a system such as claimed by Menashe. William Hill argued that this was not even indirect infringement because the server, which William Hill provided, was not located within the UK. Consequently, the system was not put into effect in the UK – only the terminal was. However, LJ Aldous interpreted the phrase "put the invention into effect in the UK" as requiring use of the invention in the UK. Furthermore, the court decided that since the location of a server is immaterial to the user, it can be used in the UK without the server being physically located in the UK. Hence, in this case, the CD was an essential means supplied in the UK for putting the invention into effect (by use) in the UK. Research In Motion v Motorola In the case of Research In Motion v Motorola [2010] EWHC, Arnold J found that the patent was invalid. However, he commented that had it been valid, there would have been no infringement. Referring to Menashe, Arnold J emphasised that it is important to consider who uses the claimed invention, and then where they operate it. Despite Arnold J maintaining that use of a server in the UK does not require the server to be located in the UK, it was found that the claimed invention (a method of operating a system), was used by Research In Motion itself (as distinct from Menashe where the server was used by the customer). Research In Motion was based in Canada, and so the use of the server was found to be occurring in Canada, despite a user also being free to communicate with the system from the UK. Virgin Atlantic Airways Ltd v Delta Air Lines Inc Taking a step back from overseas based servers, a third case to consider is that of Virgin Atlantic Airways Ltd v Delta Air Lines Inc [2011] EWCA. A company called Contour made ship-sets (ie, seats along with plinths and all required fittings for specific aircraft of their customer's airline) for business class seats. Contour provided instructions for the seats' assembly on aircraft, and sent out ship-sets abroad (in the US) for installation, where their engineers aided Boeing in fitting the seats to aircraft which were eventually supplied to Delta. The High Court granted a declaration of non-infringement in respect of Delta Air Lines, citing Menashe, since the invention was not used (ie, put into effect through use) in the UK; but in the US where the seats were fitted. The declaration was overturned by the Court of Appeal. However, this was only due to a different construction of the claims; the terms "for" and "arranged to" were interpreted more broadly by the Court of Appeal such that the ship-set itself was actually potentially covered by the claim. Given Virgin now had a "realistic prospect for establishing infringement" the declaration of non-infringement was lifted. The decision taken in Menashe was therefore not truly tested in this case. Legal test Based on an analysis of the case law, a simplified legal test for determining infringement under Section 60(2) UKPA involves performing the following steps: 1. Determine what the invention is. 2. Identify an essential element of the invention. 3. Determine who puts that essential element into effect through "use". 4. Determine if the double territorial requirement is met, by asking: a. Is the essential element supplied/offered for supply in the UK? b. Is the essential element suitable for enabling use by the person determined in step (3) of the invention in the UK? Practical lessons A claim is generally as valuable as the scope of protection which it confers. If direct infringement is made avoidable by simply performing a part of a claimed invention in another jurisdiction, then the protection conferred by the claim is only that which is provided by virtue of indirect infringement. However, due to the knowledge requirement set out in Section 60(2) UKPA, as well as the ambiguities in the interpretation of the relevant statute, it is often much harder to prove that indirect infringement has occurred than direct infringement. It is therefore important that an attempt is made to draft claims so as to make it as hard as possible for potential infringers to avoid direct infringement. In particular, this can be achieved by ensuring that a potential infringer would infringe the whole claim, rather than just an essential element of it. This can be achieved by drafting the claim in terms of the functionality to be performed by a single apparatus, rather than by a plurality of apparatuses. In addition, by avoiding the requirement of a feature to be performed on a remote server and by avoiding method steps in an apparatus claim (which could be geographically separated) it is possible to reduce the likelihood that direct infringement can be avoided. A professional patent drafter should be able to take these issues into consideration and we would recommend you seek professional advice if your invention is geographically distributed and has the potential to only infringe across jurisdictional borders. Nonetheless, there will undoubtedly be situations in which it may not be possible to capture the inventive concept without one or more of these elements. Therefore, even the best-drafted claims could still risk the problem of cross-border infringement. In these situations, it is necessary to rely on the provisions set out in the aforementioned cases and in Section 60(2) UKPA, which relates to indirect infringement. It is reassuring to know that there is precedence in Menashe for successful infringement proceedings under Section 60(2) UKPA in the specific situation of cross-border infringement. The generalised legal test discussed above has been devised in view of our interpretation of both the statute and the relevant case law. However, we consider the interpretation of Section 60(2) UKPA in Menashe to be fairly broad, and hence, this legal test may be liable to change if a future case reached the Supreme Court. Due to the specific facts in the Menashe case, it is hard to discern the extent to which the reasoning can be generalised. Hence, in a case with differing facts, the court may well reach a conclusion which provides less scope for cross-border infringement proceedings under Section 60(2) UKPA. The unitary patent and Unified Patent Court The unitary patent is a new EU-wide patent which is expected to come into force in the coming months, along with the Unified Patent Court (UPC). The unitary patent will have unitary effect such that post-grant rulings of infringement are effective across every participating state. Since the unitary patent is not yet in force, there is considerable uncertainty surrounding the way in which cases of cross-border infringement will be handled, and of course this would only be relevant in cases where the cross-border infringement is confined to Europe. We therefore recommend seeking professional advice to be able to discuss potential issues relating to cross-border infringement, with specific regard to the details of your situation. Related decisions
  • Menashe Business Mercantile Ltd. & Anor v William Hill Organization Ltd. [2002] EWCA Civ 1702 (28 November 2002): http://dycip.com/ewca1702
  • Research In Motion UK Ltd v Motorola Inc [2010] EWHC 118 (Pat) (03 February 2010): http://dycip.com/ewch118
  • Virgin Atlantic Airways Ltd v Delta Air Lines Inc [2011] EWCA Civ 162 (23 February 2011): http://dycip.com/ewca162