Coflexip SA & Others v Stolt Offshore MS Limited & Others
[2003] EWHC 1892(Pat)Summary
In June 2003 we reported on the High Court decision in Rockwater Limited v Coflexip SA & Others, in which Coflexip’s patent was held to be invalid and an order for damages was made against Stolt. In light of the decision in Rockwater, Stolt applied to stay this damages enquiry pending the Court of Appeal hearing Coflexip’s appeal against invalidity. The application for a stay was refused by Jacob J.
The Issues
First, Stolt argued that the effect of revocation of Coflexip’s patent in the Rockwater case was to render the patent void as if it never existed. Accordingly Stolt argued that it would be unfair if it had to pay damages in respect of a non-existent right. Jacob J agreed that the effect of the patent being revoked was that it was "ab initio void". However, he relied upon the case of Poulton v Adjustable Covers & Boiler Block Co. (1908 25 RPC 529) in stating that this did not affect the order for damages. In Poulton it was held that the defendant was estopped from relying on a later finding of invalidity in order to avoid the payment of damages. Jacob J stated that the earlier finding of validity in the Stolt case and the order for payment of damages acted as an absolute bar to Stolt relying on the subsequent Rockwater decision.
Second, the defendants argued that following the House of Lords decision in Johnson v Gore Wood (2002 2 AC 1), the finding in Poulton had been overruled. In the Gore Wood decision it was held that the Court of Appeal had taken "too mechanical an approach" in determining that a party was estopped from bringing a complaint to the court which could have been heard earlier with a related complaint. This is often referred to as "Henderson v Henderson estoppel". However, Jacob J distinguished this from Stolt’s position on the basis that the Gore Wood case related only to Henderson v Henderson estoppel whereas the current case concerned cause of action estoppel.
Finally, Stolt argued that the Patents Act 1977 has the same legal effect as Article 35 of the Community Patent Convention. On this basis a revoked patent could only be treated as not "ab initio" void where the decision on infringement has been enforced prior to the revocation decision. Stolt argued that the decision on infringement had yet to be enforced and the patent was therefore "ab initio" void by virtue of the decision in Rockwater. Jacob J denied Article 35 had any effect on the way the 1977 Act should be interpreted. In any event the Stolt infringement decision had already been enforced by the order for an enquiry into damages. It was irrelevant that those damages had yet to be assessed or paid.
Issues and Effect
Jacob J argued that without the approach in Poulton, a defendant who knew that a successful application or revocation "might get him off the hook of damages" would have every reason to pursue further prior art and encourage another to attack the patent. Public policy demands that this should be prevented. However many will argue that it is not in the interests of public policy for parties to pay damages on illegitimate monopolies. Further, a subsequent successful action for revocation will still have the effect of discharging an earlier injunction against an infringer and thus providing an incentive to any defendant bent on helping another to re-litigate the issue.
The decision itself is to be appealed but Jacob J refused to grant a stay pending the outcome of that appeal.
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