UK: Court Of Appeal Allows Appeal On Crown Use Defence In Mobile Telecoms Patent Case

Facts

The claimant, IPCom GmbH & Co KG, is the proprietor of a portfolio of telecommunications patents. IPCom issued proceedings against Vodafone Group plc for infringement of one of its European Patents (UK) entitled, "Allocation of access rights for a telecommunications channel to subscriber stations of the telecommunications network" (the Patent). IPCom contended that the Patent was essential to operating access control in accordance with an optional part of the LTE (4G) standard, and that Vodafone had infringed the Patent prior to a re-design implemented by Vodafone shortly before trial. Vodafone contended that the Patent was invalid and disputed infringement.

As a result of pending opposition proceedings before the European Patent Office also in relation to the Patent, IPCom made two applications to amend the claims of the Patent, the first unconditionally and the second conditionally. At trial the first set of amended claims was referred to as the "unconditionally amended claims" and the second set as the "conditionally amended claims".

At first instance, the judge held that the unconditional amendments were impermissible on the ground of added matter, but that the conditionally amended claims were valid. He held that some of Vodafone's allegedly infringing acts infringed, but that others did not, in some cases due to his construction of the claims and in other cases because Vodafone had a defence of Crown use.

Both parties appealed various of the judge's findings. In particular, IPCom challenged the judge's construction of one of the conditionally amended claims which underpinned his conclusion of non-infringement in some cases and his conclusion that Vodafone had a defence of Crown use in others.

Decision

Lord Justice Arnold dismissed IPCom's appeal on the judge's construction of one of the conditionally amended claims. However, he allowed the appeal in relation to the Crown use defence.

Under s 55 of the Patents Act 1977, any Government department and any person "authorised in writing by a government department" can, "for the services of the Crown" use a patented invention without the consent of the proprietor of the patent.

At trial, the judge had found that one of Vodafone's uses of the invention, which was providing access to its network for use by emergency responders under the Mobile Telecommunications Privileged Access Scheme (MTPAS), was subject to the Crown use defence under s 55.

On appeal, IPCom said that the judge had erred when construing s 55(1). The issue was what was meant by "authorised in writing by a government department", or more specifically what form of authorisation was required for this purpose. There was no challenge to the judge's conclusion that Vodafone's acts were "for the services of the Crown".

It was common ground that:

1. i) Vodafone was authorised by the Cabinet Office in writing to operate MTPAS;
2. ii) it was technically possible to comply with MTPAS requests without infringing the Patent; and

• iii) during the period of time that was relevant for infringement purposes, Vodafone never received an actual MTPAS request, but it tested its system regularly to ensure that it was in a position to comply with any such request.

At first instance, the judge had found in favour of Vodafone, holding that, as Vodafone had argued, "authorised in writing by a government department" extended to an authorisation to do a particular act even if that did not necessarily involve infringing the patent.

The judge had rejected IPCcom's argument that "authorised in writing by a government department required either an express authorisation to work the patent or an authorisation to do a particular act in circumstances where that act necessarily infringed the patent.

In Arnold LJ's view, the judge had erred and the correct interpretation of "authorised in writing by a government department" was as argued by IPCom for various reasons, including:

1. i) the language of s 55(1) made it clear that the authorisation must be an authorisation to do acts in relation to a patented invention, not merely an authorisation to do acts;
2. ii) although s 55(1) extended beyond agents of the Crown, the concept of authorisation was familiar from the law of agency, in which context actual authority can be either express or implied; the usual basis for implication was necessity (as it is in the case of implied terms in contracts) and it was difficult to see why s 55(1) should exclude an authorisation to do an act which necessarily infringed a patent; it was equally difficult to see why it should extend to an authorisation to do an act that did not necessarily infringe a patent;

• iii) the authorities supported IPCom's interpretation, as did successive editors of Terrell on the Law of Patents;

1. iv) s 55(7) (which obliges the government to notify the patent proprietor of any authorisation granted) demonstrated that authorisation must either be an express authorisation to work a specific patent or an authorisation to do a particular act that necessarily involves working a specific patent; any other interpretation of "authorised in writing" would make it impossible to comply with s 55(7);
2. v) the judge had considered that Vodafone's interpretation was "much easier to operate" than that of IPCom since the only question that needed to be answered was whether the act in question was duly authorised; whilst it was true that Vodafone's interpretation avoided having to consider the question of necessity, this did not mean that s 55(1) was easier to operate; on the contrary, Vodafone's interpretation placed a much greater burden on the Crown than IPCom's interpretation;
3. vi) the judge was wrong to consider that the burden more fairly rested upon the person authorising the acts than on the person doing them; in a normal commercial sale of goods scenario, the burden is on the supplier to ensure that the goods are non-infringing or licensed, not on the purchaser; this makes sense: the supplier is in a position to know what technology it is using, to conduct patent searches and take legal advice, to negotiate for a licence if required and to re-design if necessary; there was no reason why the position should be different here if the Crown does not authorise use of the patent either expressly or by necessary implication;

• vii) policy considerations support a narrow rather than a broad interpretation of s 55(1): the policy which underpins s 55(1) is one of respect for private IP rights unless State exploitation is in the public interest and in that case the owner of the right is to be notified and compensated; and
• viii) if possible, the 1977 Act should be interpreted consistently with TRIPs and IPCom's interpretation of s 55(1) was more consistent with Article 31 of TRIPs than Vodafone's.

Therefore, Arnold LJ held, the judge was wrong to conclude that Vodafone had a defence of Crown use.

Accordingly, Arnold LJ dismissed IPCom's appeal as to construction of the claim, but allowed its appeal on the defence of Crown use. (IPCom GmbH & Co KG v Vodafone Group Plc [2021] EWCA Civ 205 (19 February 2021) - to read the judgment in full, click here).