Tuesday, December 17, 2019

Actavis Extended Protection Applied by EWHC

Excel-Eucan Ltd v Source Vagabond Systems Ltd [2019] EWHC 3175 (Pat) Clarke J
            GB2 489 116 / Linked ammunition carrying bag

In Actavis [2017] UKSC 48, Lord Neuberger, writing for a unanimous UKSC, held that the scope of protection afforded by a claim will sometimes “extend beyond” the meaning of the words of the claim. The decision of Clarke J in Excel v Source, finding that the defendant Source had not infringed the claims of Excel’s 116 patent as a matter of normal interpretation [75], but had infringed as an matter of extended protection [103], is an excellent example of a trial level application of Actavis. It has always been recognized that the advantage of extended protection is that it can give fairer outcomes by preventing an infringer from taking the inventive concept while avoiding infringement by a technical variant that avoids the claim language. That is on full display in this case, in which the defendant, Source, copied Excel’s patented design [58]. Excel v Source also illustrates that purposive interpretation of the language of claims alone is not always sufficient to avoid an injust result. And it also shows that the Actavis doctrine can be quite easy to apply.

The invention relates to a carrier for linked round machine-gun ammunition. Modern machine guns have a very high rate of fire, and a great deal of ammunition is required to supply the gun. In the prior art, the ammunition had typically been carried in a sand bag in the soldier’s rucksack, and had to be removed from first from the rucksack, then from the bag, and then laid on the ground to feed the machine gun. This was awkward to use and exposed the rounds to contamination by dirt etc, which was the main cause of weapon stoppages [23]-[34].

In 2011, the UK Ministry of Defence opened a competition called URBEX 2012, intended to identify equipment that would efficiently support combat operations, including a category of “rapidly accessible linked ammunition stowage suitable for 200 rounds of 7.62mm” [21]-[22]. In reponse, the inventor, Excel’s founder, discovered that properly layered ammunition could flow freely across itself, and he developed the invention, a long-narrow bag in which the linked rounds are folded or “flaked” like an accordion. The bag could be conveniently carried, and the linked rounds could be fed directly from the bag into the machine gun, protecting them from dirt and simplifying delivery. This is referred to as a “plug and play” product [23]-[28]. Excel’s product, embodying the patented technology, is referred to as the “Link-Tail”. It received very positive reviews after in-theatre testing in Afghanistan.

The Ministry of Defence then launched Project Virtus, a large scale procurement exercise intended to completely replace all of a soldier’s personal worn equipment with an integrated soldier system (“ISS”) [31]. Because of its success in field tests, the key elements of the Link-Tail system were included in the Virtus requirement document [31], [35]. However, Virtus was to be procured by a single prime contractor [33]. Excel contacted all the candidates and entered into an agreement with the defendant, Source, to take a licence to the ‘116 patent to use the invention as part of Source’s ISS [44]. Source was selected as the prime contractor for Virtus [45], and the licence was entered into accordingly [46].

At this point matters started to go sideways. Excel did not make the Link-Tail for supply as part of the Virtus contract, but only licenced it. The Source Ammunition Bag that was actually supplied by Source to the MoD, did not do well in the field. This was because in order to feed smoothly, the linked-rounds had to be loaded into the bag correctly, with the link side up [29]. The Source Ammunition Bag omitted a simple marker patch showing the correct orientation that had been recommended by Excel, and to make matters worse, the training material supplied by Source explicitly instructed users to load the rounds incorrectly [53]! Excel, concerned about the success of its product, sent an email to the Ministry of Defence, complaining about these quality issues. When Source got wind of this, it purported to terminate the licence agreement [6]. To fulfil the Virtus contract, Source developed a new bag, the “2017 Bag” [7]. The question then, was whether the 2017 Bag infringed the 116 patent.

The key difference between the Link-Tail Bag and the 2017 Bag is that the Link-Tail had a zipper running the length of the bag. Excel had contemplated that the Link-Tail would be loaded horizontally, by opening the zipper and layering a 200-bullet linked round with 4 leaves of 50 bullets each [88]. In the absence of a zipper, the 2017 Bag used vertical layering, where the rounds were fed from the top of the bag resulting in 50 leaves of 4 bullets each.

2017 Bag is on the left, Link-Tail on the right.

The claim at issue claimed a linked round carrying bag “having an openable closure extending substantially from the first end to the second end” [66]. There was no dispute that the 2017 Bag had all the other elements of the claim.

In Actavis Lord Neuberger held that infringement requires addressing two issues [54]:

(i) does the variant infringe any of the claims as a matter of normal interpretation; and, if not, (ii) does the variant nonetheless infringe because it varies from the invention in a way or ways which is or are immaterial?

Clarke J had no difficulty holding that the 2017 Bag did not infringe as a matter of a normal interpretation of the claim, as it did not have any kind of opening at all along the length of the bag, much less one that might be described as an openable closure [75]. If the claim had specified a zipper, and the 2017 Bag had used Velcro, there might have been room for debate, but as it was, the matter was not disputed [75].

Clarke J therefore proceeded to the second stage, which considers whether the variant – in this case, a bag without a closure – is immaterial, so that the scope of protection should properly extend beyond the normal meaning of the words of the claim: Actavis [56]. In Actavis Lord Neuberger set out three questions to address this issue.

The first question is “Does the variant achieve substantially the same result in substantially the same way as the invention?” In Actavis [60] Lord Neuberger stated that this “should correctly involve the court focussing on. . .‘the problem underlying the invention’, ‘the inventive core’, or ‘the inventive concept.’” Put slightly differently, the first question asks whether the alleged infringer took the inventive concept: “the question is whether the variant achieves the same result in substantially the same way as the invention” [Actavis 60]. These questions are slightly different, because it isn’t always necessary to decide what the inventive concept is, in order to decide whether the defendant took it. In this case, the Source 2017 Bag differed from the claimed invention in one element, and all that was really necessary was to decide whether that element was part of the inventive concept.

Addressing the first question was the most substantial part of Clarke J’s decision on extended protection. She concluded that the inventive concept was the “plug and play” capability, enabling linked rounds to be directly fed into the gun [95]. It must be said that the “plug and play” capability is perhaps not entirely apt as a way of identifying the inventive concept; it is more a statement of the problem, rather than its solution. Recall that “rapidly accessible linked ammunition stowage” was the problem posed in the notice of competition that stimulated development of the invention: [22]. The inventive concept is, rather, perhaps “the shape and configuration of the bag which is designed to carry, and deliver to the gun, linked ammunition folded in a way which allows for spooling out without snagging” [85]. But in any event, it wasn’t really necessary to identify the inventive concept with precision, because the key point is not to identify what the inventive concept is, but what it isn’t. Is zippered loading with horizontal layering the key advance over the prior art? That was the focus on Clarke J’s inquiry.

Here a few words on the development of the 2017 Bag are in order. Source argued that the reason that soldiers in the field were loading the Source Ammunition Bag incorrectly was because of the zipper design [51]. As noted, Clarke J found that the real cause was the absence of a marker patch and the fact that soldiers were trained to load it incorrectly [53]. At the same time as these problems emerged, soldiers using the equipment had discovered that the Source Ammunition Bag (which, like the Link-Tail Bag, did have a zipper) could easily be loaded vertically by dropping the linked round through the opening at the top, without using the zipper [54]. It was that discovery by the users that led Source to design the 2017 Bag, in which the ammunition was loaded from the top, eliminating the vertical zipper [55]. It seems, therefore, that the omission of the closure on 2017 Bag was not intended merely to circumvent the claims; it was a real improvement on the Link-Tail design. The evidence was clear that the Link-Tail Bag could also be loaded vertically, without unzipping it [54]. Had the inventors contemplated that method of loading it, they would no doubt have omitted the problematic phase.

This takes it out of the classic scenario in which the variant is inferior and is implemented solely to avoid the patent, as in McPhar (1960) 35 CPR 105. The basic difficulty addressed by extended protection in this case is that the patent drafters did not have the gift of foresight. It is normal that any breakthrough invention, such as this was, in its narrow field, will be subject to improvement. The problem for the patent drafter is to draft the claims in terms that define an operable embodiment, but are nonetheless sufficiently broad to capture improvements that the drafter could not possibly have specifically contemplated. While the 2017 Bag was an improvement on the patented invention, because it simplified the design, it nonetheless took the basic inventive concept, and, the law has long recognized that “[t]he superadding of ingenuity to a robbery does not make the operation justifiable” (Wenham Gas (1891) 9 RPC 49 (CA) at 56). Accordingly, Clarke J concluded that the first Actavis question was to be answered in the affirmative, which is to say that Source had taken the inventive concept of the 116 patent [97].

Clarke J then turned to the second question: “Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?” [98]. The first question is “Did the defendant take the inventive concept?” The second question asks, in effect, “Should the defendant have known they were taking the inventive concept?” Clarke J had no difficulty answering in the affirmative, as it would be obvious that a different way of loading the linked rounds into the bag did not affect the plug and play capability [100].

The third question is “Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?” [100]. Clarke J answered this very briefly: “For the reasons I have given, I am satisfied that the skilled person would not have concluded that the patentee intended that the openable closure was an essential requirement of the invention.” There are two points here. First, the third question is a backstop that will be invoked only in unusual circumstances. (Actavis [71] made it perfectly clear that the language of the claim itself was not sufficient reason to answer this question in the affirmative.) The more important point relates to Canadian law. While we do not have anything formally called a “doctrine of equivalents,” we do have a doctrine of essential elements. Clarke J’s brief conclusion makes it clear that the whole of the Actavis questions are ultimately a way of asking “Is the omitted element essential to the invention?” For this reason, as I have argued in a two part article in the IPJ, the Actavis approach can and should be adopted in Canadian law: see, “Protection Extending Beyond the Language of the Claim: What does Actavis v Lilly Mean for Canadian Law? (Part I)” (2019) 31 IPJ 217; (Part II) 31 IPJ 267 (forthcoming).

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