• UK Courts have broader discretion in awarding damages for patent infringement prior to amendment

    When a patent is amended after grant, the amendment is deemed to have taken effect from the date of grant. Where does an infringer stand with regards to back damages during the period when the claims were not valid? Until recently, it was an all-or-nothing decision on the part of the Court based on limited criteria. Two events have brought a need for change. One is the EU Enforcement Directive (with which the UK may not have been in full compliance) and the other is the EPC 2000 (with its provisions for central post-grant amendment regardless of good faith).

    Changes to the criteria for limiting damages for acts committed prior to amendment of a patent have been brought into effect in the Intellectual Property (Enforcement, etc.) Regulations 2006.

    Sections 62(3) and 63(2) of the Patents Act 1977, used to state that no damages would be awarded in cases where a patent as published was not “framed in good faith and with reasonable skill and knowledge”. This was partly intended to prevent patentees maintaining claims which they knew to be invalid, and subsequently restricting the claims just before or during a suit. Asserting overly-broad claims, or claims known to be invalid is sometimes referred to as “covetous” behaviour.

    Amended Sections 62(3) and 63(2) now provide that assessment of damages for infringement of amended patents and partially valid patents will take into account three factors. In addition to the “good faith and reasonable skill and knowledge” criterion, the court must consider whether:

    • the defendant knew he was infringing, and
    • the proceedings are brought in good faith.

    The concern that the previous “no damages” provision might eviscerate a patentee’s rights was raised in Unilin Beheer v. Berry Floor [2006] FSR 26, in which a defendant attempted to avoid paying damages by arguing that the specification was inconsistent, and hence not framed with reasonable skill (the court did not agree).

     

    Comment

    Now that central post-grant amendment of a European patent will be possible under EPC 2000, with no discretion on the part of the EPO (e.g. no discretion to refuse amendment on grounds of bad faith), a patentee can potentially act covetously by delaying restriction of claims before the EPO as long as he wishes, and then suing nationally. It appears that the last factor of the new Regulations may be intended to address this eventuality. However, there remains the question of whether the proceedings themselves are brought in bad faith, if only the amendment itself can be demonstrated to lack good faith.

    The second factor above (knowledge of infringement) is presumably a positive, rather than negative factor. It does not introduce into UK law the concept of wilful infringement familiar in the US. The subsection in question is still concerned only with the extent to which damages are mitigated on account of the patent having been infringed while it was unduly broad (and therefore invalid), but it goes well beyond the existing mitigation of damages under Section 62(1). Under that section, damages are mitigated if the infringer had no reason for supposing that the patent existed. Now, if one becomes aware of the existence of a patent, it is all the more important to seek an opinion from a patent attorney. If the opinion is that there is no infringement, this could be a mitigating factor later if the patent is amended.

    Incidentally, it is frequently said that one cannot infringe an invalid patent, so one might ask “how can one knowingly infringe if one also knows the patent is invalid”? If the question arises, it may be of assistance to bear in mind that when it comes to interpretation of statutes in the UK, “infringing” is understood to mean “falling within the scope of a claim”. It is therefore unwise to rely on the invalidity of the patent. Better to challenge the patent.


     

     

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