Originally published December 2003
Background
The claimant, General Electric, acquired a patent in May 2002 involving variable speed wind generators used in electricity generation. The patent had been granted back in 1998. Following the acquisition of the patent by GE, opposition proceedings were commenced in the European Patent Office ("EPO") by several opponents (one of whom was Enercon, one of the defendants in this action). The opponents were attacking the validity of the patent based on prior art citations.
General Electric then commenced infringement proceedings in the UK against Enercon and others, in respect of the same patent. The defendants applied for a stay of the UK proceedings pending the outcome of the EPO opposition proceedings. Their argument was that the patent might be subject to late amendments, which would cause difficulty for the UK court in considering issues of infringement and validity.
Laddie J heard the defendants’ application for a stay on 17 February 2003 ([2003] All ER D 293) and refused to grant a stay. He had held that, although the risk of amendments to the patent was an important consideration, and further that the court should do whatever it can to avoid preventable proceedings, this had to be weighed against the value of the claimant’s rights. Were a stay granted, the delay would result in the claimant having to put back enforcement of its patent rights for up to 7 years, at which point only 2 years worth of protection would remain under the patent. For this reason, Laddie J refused to grant a stay.
The EPO’s Opposition Division has since held the patent to be invalid. General Electric lodged an appeal and itself proceeded to apply for a stay of the UK proceedings pending the EPO appeal proceedings. The EPO appeal is not likely to be heard until late 2005 or even early 2006, therefore the requested stay would be for a significant period of time.
The argument put forward by General Electric as to why a stay was now appropriate was that there had been a "material change in circumstances". It also put forward a series of undertakings, one of which was that it would refrain from seeking damages or an account of profits in respect of any act of infringement by the defendants during the period of the stay.
Outcome
Laddie J agreed that the circumstances had materially changed since the previous application. The reasons that he had previously applied for refusing a stay were no longer relevant - there were no longer any "powerful considerations militating against the grant of a stay". Given that the claimant was prepared to give undertakings to the effect that it would not seek to enforce its patent rights against these defendants whilst the stay was in place, Laddie J was prepared to grant a stay of the UK proceedings.
Comment
Although the text of the full decision is not available as yet, Laddie J seems to have made it clear that this case turned on its own facts. Parties who have previously been refused a stay will not therefore be able to cite this decision in order to overturn or re-hear their own and it is notable that it was the claimant which applied for the stay the second time around, whereas the defendants had sought the stay previously. Laddie J pointed out that in this case there had been a material change in the circumstances of the parties. In such a case, the court might entertain a further application for a stay. Laddie J seems to have been particularly swayed by the undertakings offered by General Electric. Its willingness to surrender approximately three years of their monopoly in the patented technology was an important factor that shifted the balance - it was no longer essential to ensure that the defendants were otherwise being adequately protected.
To conclude, whilst a stay of UK proceedings pending EPO oppositions is still not granted as a matter of course, the UK judges are increasingly willing to consider them. Parties who have previously been refused a stay may have a second chance if there is a material change in the circumstances and applications may be looked upon more favourably if the applicant is prepared to offer undertakings that provide a degree of protection to a defendant.
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