organic-pigment-picture
31 July 2013Patents

Patent threats upheld in organic pigment case

The UK Court of Appeal has upheld a finding that threats of patent infringement against a producer of organic pigments by a rival company were unjustified.

Organic pigments are used to colour plastics, synthetic fibres and surface coatings such as inks and paints.

Swiss company Clariant patented a process for manufacturing a pigment type, before threatening Indian company Sudarshan, which produced a similar product, with a claim of patent infringement. The 2009 letter also threatened the “most serious penalties” for Sudarshan’s customers should the company continue to infringe the patent.

A year later at the English High Court, Sudarshan sought to invalidate the patent and claim for damages based on unjustified threats of infringement – against both Sudarshan and its customers. Clariant counterclaimed for infringement.

In 2012, Clariant’s patent was invalidated while the threats against Sudarshan and its customers were held to be unjustified, meaning Clariant’s infringement claims failed.

On Tuesday, Lord Justices Moore-Bick, Kitchin and Floyd at the UK Court of Appeal dismissed Clariant’s appeal and upheld the ruling that even though Clariant had not directly threatened Sudarshan's customers – it had only directly threatened Sudarshan – Clariant was still liable to pay damages for such unjustified threats.

Clariant argued that the threat to Sudarshan’s customers was not actionable because a threat must be sent to the person in question. Sudarshan said it did constitute a threat because the company had believed that Clariant intended to sue its customers.

The court interpreted the relevant case law, which dates back to 1893, to support Sudarshan’s claims. It said the wording of the legislation has been “the subject of consistent judicial interpretation since their consideration” in 1893 and that “parliament has had many opportunities to intervene but has chosen not to do so”.

The decision means Sudarshan will be able to claim a “significant amount” of damages, said Patrick Gearon, partner at Charles Russell LLP who acted for Sudarshan, with the sum being based on “profits otherwise made” since it stopped importing the disputed products in 2009.

Gearon said: “The careful and clear clarification of the liability for threats by the Court of Appeal is welcomed.”

He added: “This is a very good judgment. Sudarshan is extremely happy and hopefully this is the end of what has been a very long battle.”

Gearon said that on the same day as the ruling, Clariant applied for permission to appeal against the findings covering the threats, but the Court of Appeal refused its petition.

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