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UK – Optis Cellular Technology and others v. Apple

26 Jul 2021

Optis Cellular Technology LLC and others v Apple Retail UK Limited and others, High Court of England & Wales, 25 June 2021, London, [2021] EWHC 1739 (Pat)

On 25 June 2021 Meade J handed down his decision in the second of a series of trials listed as part of the ongoing Optis v Apple UK multi-patent action. This decision concerned the validity and infringement of EP (UK) 2 229 744. This patent had previously been held valid and infringed/essential by Birss J in the context of the Unwired Planet v Huawei dispute in 2015 (and subsequently upheld by the Court of Appeal). In this case, Apple conceded infringement/essentiality but argued the patent was invalid over two pieces of prior art not considered previously (including an argument of anticipation by equivalence). Apple also raised a defence of proprietary estoppel.

Validity issues
Despite the fact that this patent had been litigated previously, the judge made clear that given the new issues in play (including new prior art and evidence), he was required to approach the matter entirely afresh.

Priority citation under s. 2(3) of the Patents Act
One of the pieces of prior art was a patent (“Pani”) the application to which was filed before the priority date of the patent in suit (EP’744), but only published after. It followed that this prior art could be considered for the purposes of novelty only. In order to form part of the state of the art in such circumstances, section 2(3) of the Patents Act requires that “the priority date of [the] matter [in the prior art] is earlier than that of the invention”. It was accepted that Pani itself would have anticipated EP’744, however, the judge explained that section 2(3) required him to consider whether Pani’s priority document contains information that anticipates the claims. Pani’s priority document was accepted to be a less well-written document than Pani itself.

There were a number of disclosures in Pani’s priority document which Apple relied on to argue anticipation. The judge rejected each of these. He noted that unlike under the law of insufficiency which requires the skilled person to make practical progress despite a lack of clarity, “if the novelty-only prior art is genuinely unclear or ambiguous then anticipation is not made out”. EP’744 required using “byte counting” and “PDU counting” together in the same method for the purpose of triggering a status report. Whilst each of these techniques was disclosed (either explicitly or implicitly) in the prior art citation, the judge did not consider the disclosure necessarily implied both techniques used at the same time. Further, whilst the skilled person might consider it sensible to use them together, the judge considered that went beyond an assessment of anticipation, straying into the realms of obviousness, which was not permitted for this novelty-only citation.

Anticipation by equivalence
In relation to the other piece of prior art, “InterDigital”, Apple sought to rely on anticipation by equivalence in the event that this piece of prior art was found not anticipate the claims under ordinary construction. The argument was effectively that the disclosure of the prior art was an immaterial variation of the invention in EP’744.

Meade J considered that the question, as a matter of law, of whether equivalence is available to broaden an anticipation attack is one that needs consideration by the Court of Appeal and probably the UK Supreme Court. He explained that detailed legal argument would be required, for example to consider “whether and how people can be prevented from practising the prior art, or if not, how and why not”. In this case, the argument was only introduced by amendment shortly before trial which did not leave time for such detailed argument to be prepared. In the circumstances, the judge proceeded on the assumption that anticipation by equivalence was not available, but nevertheless made the necessary factual findings and answered the three Actavis v Lilly questions on equivalence to determine whether the prior art could otherwise be said to fall within the scope of the claim.

• In relation to Actavis question 1, the judge considered that the prior art did not achieve “substantially the same result” as the invention because it did not achieve the simplicity of the solution in the patent which avoided the problem of “superfluous polling”.

• The judge explained that question 2 from Actavis had no role to play given there was no issue as to whether the skilled person would fully understand how the prior art worked.

• In the event that he was wrong on question 1, the judge also considered Actavis question 3 (whether the reader would have nonetheless concluded strict compliance was essential).

In respect of one of the features in dispute (“resetting”), he agreed with Apple that if the prior art had been considered to achieve the same result in the same way there was nothing in EP’744’s specification to confine the claims to the narrower interpretation.

However, in respect of the other disputed claim feature (“counting”), the judge considered that the patent disclosed two approaches (“windows-based” and “counter-based” approaches), only one of which was claimed (his normal purposive construction was that the claim was limited to the counter-based approach) and that this suggested strict compliance was intended, at least so as to exclude the equivalent from the scope of the claim (the equivalent was essentially a windows-based approach). The judge noted that this logic for answering Actavis question 3 was clearly implicit in Birss J’s decision in Illumina v Latvia. Although only obiter in this case, this rationale also appears to be consistent with the German court’s approach to infringement under the doctrine of equivalence following the BGH decision in Okklusionsvorrichtung.

The judge concluded that the anticipation by equivalence argument would fail even if available as a matter of law.
Meade J also dismissed Apple’s arguments regarding obviousness over the InterDigital prior art. It followed that EP’744 was held valid.

Proprietary estoppel defence

EP’744, which was accepted to be essential to the LTE standard, was originally owed by Ericsson.

As part of the ETSI standardisation process, technical proposals (Tdocs) are put forward to the relevant standards groups regarding the functionality that different companies/organisations consider should be incorporated in the standards. Ericsson filed a US provisional patent application (from which EP’744 stemmed) and on the same day it submitted a Tdoc to the relevant technical group which substantially mirrored the patent application. The proposal set out in Ericsson’s Tdoc was subsequently agreed for inclusion in the relevant standard and Ericsson later declared its patent rights to ETSI.

Apple’s estoppel argument was that Ericsson had declared its IPR late by not having declared it before the relevant technical groups agreed the content of the relevant standards. Apple argued that as a result Optis was not entitled to enforce the patent against Apple or, alternatively, would not be able to obtain an injunction based on it. Specifically, Apple argued that:

• By not declaring its IPR before the standard was “frozen”, there was an assurance by Ericsson that it did not hold IPR in the technical solution it proposed; and

• the relevant technical groups relied on this assurance, suffering a detriment by not incorporating an alternative, unpatented technical solution in the standard.

There were a number of aspects to Apple’s arguments, including an argument that Ericsson had breached clause 4.1 of the ETSI IPR policy by its “late” declaration. Apple contended that the breach of clause 4.1 was not determinative of the estoppel issue but that it demonstrated there was a relevant assurance. In the alternative, Apple argued that breach of clause 4.1 of the ETSI IPR policy was a standalone basis for Optis to lose its entitlement to relief. Clause 4.1 of the ETSI IPR policy states that:

… each MEMBER shall use its reasonable endeavours, in particular during the development of a STANDARD or TECHNICAL SPECIFICATION where it participates, to inform ETSI of ESSENTIAL IPRs in a timely fashion. In particular, a MEMBER submitting a technical proposal for a STANDARD or TECHNICAL SPECIFICATION shall, on a bona fide basis, draw the attention of ETSI to any of that MEMBER’s IPR which might be ESSENTIAL if that proposal is adopted.

Meade J dismissed Apple’s arguments both in respect of breach of clause 4.1 and proprietary estoppel more generally.

In relation to breach of clause 4.1 of the ETSI IPR Policy, Meade J applied the French law principles of construction (the ETSI IPR Policy is governed by French law). He considered the clause was not “clear and precise” and so he was required to “investigate the common intent of the parties rather than focus on the literal meaning of the terms”, which he considered was “materially different” to the construction exercise under English law. Taking into account the evidence as to the historical context of the ETSI IPR Policy, including the changes to the policy over time and the behaviour of declarants, the judge concluded that clause 4.1 did not require a definitive time limit for declarations of IPR to be made in respect of technical proposals put forward for standardisation. He also considered that Ericsson’s approach was well within the range of what ETSI declarants generally did, and that it was objectively reasonable for Ericsson to think that it was complying with the clause. His conclusion was that Ericsson had not breached clause 4.1 by its “late” declaration.

In respect of the estoppel argument more generally, Meade J found as a matter of fact that existence of IPR was not a consideration for those agreeing the content of the standards, but rather the goal was to arrive at the best technical solution. Further, the relevant standards group was “patent-heavy” and Ericsson was a well-known innovator, patent filer and participant in the group. The judge’s conclusion was that no member of the relevant working group could reasonably have thought that Ericsson’s proposal was IPR free and, even if they did, there was no reason Ericsson should have been aware of this perception. As such there was no relevant assurance. In any case, the judge considered that the Ericsson proposal was the best technical solution and would have been chosen in any event, and so even if his conclusions on assurance were wrong, there was no reliance and detriment.

A copy of the judgment can be found here.

Headnote by Nadine Bleach, Bristows LLP