The Supreme Court says that damages are not recoverable for infringement of a patent later found to be invalid.
Insight
The previous position was that an infringer of a patent (i.e someone using patented inventions without the owner’s consent) was still liable to pay damages even though an owner’s patent was later found to be invalid. However, the Supreme Court has now overruled the controversial case law. The fact that damages for infringement of a patent have already been decided upon cannot be protected, now, on grounds of res judicata. An invalid patent acts as if it never existed at all and thus cannot be infringed and damages are therefore not payable, (see our IP page).
The Case
Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd (formerly known as Contour Aerospace Ltd) [2013] UKSC 46
Virgin had a patent for flat bed airline seats. Virgin brought a claim against Zodiac for infringement of their patent. Zodiac Seats UK Ltd was found liable for infringement and were ordered to pay damages.
However, a claim was made at the EPO (European Patent Office) at the Technical Board of Appeal by a third party that Virgins’ patent was only valid for a narrower range of claims than first made out.
Virgins’ patent was decided to only be valid for a narrower range of claims. Zodiac returned to the English courts. The High Court decided that the patent was valid but not infringed and Zodiac on the back of this and the Technical Board of Appeal’s decision sought leave to appeal as to whether it [Zodiac] still had to pay damages for the original finding of infringement.
The Supreme Court found in favour of Zodiac and said that Virgin could not claim damages on the bases of resjudicata because an invalid patent was void from the start.
A res judicata claim on behalf of the claimants was denied, and the controversial line of case law, including the Court of Appeal’s decision in Unilin Beheer v Berry Floor, was wrongly decided.
The Take Away
Res judicata (i.e if a court decides on issue A it cannot decide on issue A again) is not as rigid as first thought when it comes to infringement damages and later patent revocation. A void patent is a patent that never existed and therefore was never infringed.
The case overrules a previous line of case law and is a landmark ruling.
The Courts are arguably establishing the correct line of reasoning that an infringer should only be liable for that which is infringed – but not liable for infringing something that is decided later to have never existed at all. The Supreme Court’s decision seems a good one.
Under the previous ruling of Unilin, Zodiac would have still had to pay damages. This is of course no longer the stance.
It does not matter if the infringer is a party or not to the claim that a patent is invalid. The fact that it will be void (at least in this case for the claim under which Zodiac were said to have infringed) will mean no infringement took place.
The Example
John’s Mobiles Direct patents its mobile technology for claims x, y and z. Fred’s Phones infringe the patent on ground x. Fred is ordered to pay £5,000. Later Cathy’s Technology claim that John’s Mobiles Direct should not have been patented on ground x or y. Cathy’s Technology Group is successful in their claim and because of the narrowing of John’s patent, Fred no longer has to pay damages for the infringement of John’s patent. Why? Because as claim x was found to be invalid it is void as against the world – it accordingly is thought to have never existed and therefore was not infringed and damages are not owed.