UK Supreme Court bins a century of patent law

The UK Supreme Court overturned more than 100 years of legal doctrine on Wednesday, ruling that damages cannot be claimed for infringing a patent that is later revoked.

Airline Virgin Atlantic had demanded damages worth £49 million ($75 million) after alleging Zodiac Seats UK infringed its European patent for a “seating system and passenger accommodation unit for a vehicle”, granted in 2007.

The seat, which reclines to provide a flat bed, is commonly used in long haul aircraft and similar to the “solar eclipse” seats, manufactured by Zodiac and sold to various international airlines.

In 2007, Virgin sued Zodiac (then called Contour Aerospace) for patent infringement in the English High Court, prompting Zodiac to oppose the patent’s validity a year later at the European Patent Office (EPO).

Zodiac was cleared of patent infringement in 2009, while the EPO upheld the patent’s validity in a parallel decision. Later in 2009, the UK Court of Appeal reversed the High Court and found the patent valid and infringed, before ordering a damages inquiry. Virgin asked for £49 million, while Zodiac asked for this hearing to be stayed pending an EPO appeal ruling, a request which the court rejected.

In 2010, an EPO appeal board held all the infringed claims invalid due to prior art – and amended Virgin’s patent by removing all the relevant claims.

Zodiac therefore asked the Supreme Court to rule that it should not pay damages for infringing a patent that no longer exists. It was seeking to overturn a doctrine established in 1908 – most recently affirmed in the 2007 case Unilin Beheer v Berry Floor – which said IP owners can still recover damages if their right is infringed but subsequently revoked or amended.

Ruling unanimously in Zodiac’s favour, the Supreme Court, led by Lord Sumption, found that previous cases such as Unilin had been wrongly decided.

They disregarded the “fact that the consequences of the patent’s subsequent revocation had not been, and could not have been, determined ... in the earlier decision, because it had not happened by the time of that decision”, said the court.

It added: “They were also wrong to suppose that, by taking into account the subsequent revocation, a court would be rehearing the question of validity decided by the judgment on liability.”

“The Supreme Court has overturned one of English law’s longest standing IP principles,” said Jonathan Radcliffe, partner at Mayer Brown LLP.

“With one stroke this has restored sanity and logic to an area of law which many IP litigants have long seen as unjust and plain wrong,” he added.

Gordon Harris, partner at Wragge & Co LLP who acted for Zodiac, said the victory was enormous:

“Not only have we saved our client an enormous sum in potential damages, but we have materially changed the law. A chain of authority going back to 1908 has been overruled and a new, more modern and sensible approach has replaced it.”

In its ruling, the Supreme Court also said the current rules guiding English courts to refuse to stay proceedings if they are likely to resolve validity disputes significantly earlier than the EPO, should be re-examined.

Radcliffe continued: “Perhaps more importantly for the future of pan-European patent litigation, because of the subtle interplays between the equal and parallel authority of national courts and the EPO as amply demonstrated in this case, the Supreme Court has mandated the English Patents Court to review its approach afresh to this area. This could well have profound long term implications for the future of European disputes.”

There is still a dispute in the case over Zodiac’s alleged infringement of the amended Virgin patent, following its narrowing by the Court of Appeal in 2009. The High Court has found that Zodiac did not infringe the patent, while the Court of Appeal is set to rule on the case in November this year.

WIPR was unable to speak to lawyers from DLA Piper LLP, which represented Virgin.