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	England and Wales High Court (Patents Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> HTC Europe Co Ltd v Apple Inc [2011] EWHC 2396 (Pat) (19 September 2011) URL: http://www.bailii.org/ew/cases/EWHC/Patents/2011/2396.html Cite as: [2011] EWHC 2396 (Pat)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		19/09/2011

MR. JUSTICE ARNOLD :

1. This is an application by HTC Europe Co. Limited and HTC Corporation (collectively "HTC") for expedition of three patent actions.
2. The background to the matter is that there is litigation in a number of European countries between HTC and Apple Inc. ("Apple") over European patents relating to "smart" mobile phones or "smartphones". The immediate spur to the present litigation was the commencement by Apple of infringement proceedings against HTC in two courts in Germany on 1 July 2011. Slightly curiously, for reasons which are unexplained but which ultimately do not matter, Apple brought proceedings in respect of the German equivalents of two of the patents in suit, referred to as '022 and '868, in the Landgericht in Munich, but on same day brought proceedings in respect of the equivalent to the third patent in suit, referred to as '859, in the Landgericht in Mannheim. The consequences of that I will come back to in due course.
3. In response to the commencement of those German infringement proceedings by Apple, HTC has commenced two actions for revocation of the UK equivalents of those patents. The first action was commenced on 29 July 2011 for revocation of '022 and '868. The second action was commenced on 12 August 2011 for revocation of '859. More recently, on 12 September 2011, Apple has brought an action for infringement against HTC, not only in respect of those three European patents (UK), but also in respect of a fourth patent, referred to as '948.
4. To complicate the position still further, there is in the background litigation between Apple and Samsung. As I understand it, there are claims both by Samsung against Apple for infringement of four Samsung patents and, more recently, by Apple against Samsung for infringement of the four patents in suit parallel to the claims made against HTC.
5. I should make clear at this stage that Samsung is not represented before me today, even though it was notified of today's application. I have already considered and rejected an application by Apple for today's hearing to be adjourned pending a CMC involving Samsung to be fixed in early October.
6. It is important in considering the present application to appreciate at the outset that what HTC is seeking is not merely expedition, but also a differential level of expedition according to which patent one is concerned with. HTC's position, for reasons I will explain shortly, is that the actions involving '859 -- and, when I say "the actions", I refer both to the validity action and the infringement action -- should be expedited so as to come on for trial in January 2012. By contrast, in relation to '022 and '868 and indeed now '948, HTC seeks a rather lesser degree of expedition, namely a trial commencing on the first convenient date on or after 26 March 2012. Moreover, in relation to those three patents, HTC is content for a trial window to be set ending at the end of April 2012, thus admitting of the possibility of a trial taking place at the beginning of the summer term, that is to say on or shortly after 17 April 2012.
7. Before I turn to consider the reasons put forward in support of the application, it is convenient next to consider the principles to be applied to this application. These were conveniently summarised by Lord Neuberger in W.L. Gore & Associates GmbH v Geox SpA [2008] EWCA Civ 622 at [25]:

"To my mind, when considering such an application there are four factors to take into account. The first is whether the applicants (in this case, Gore) have shown good reason for expedition; the second is whether expedition would interfere with the good administration of justice; the third is whether expedition would cause prejudice to the other party; and the fourth is whether there are any other special factors."

8. It is convenient to deal first with HTC's application for expedition of the actions involving the '022, '868 and '948 patents. As I have already indicated, in relation to these patents, HTC seeks expedition so as to have those actions tried either at the end of March 2012 or some time in April 2012. Apple's position in relation to that request is essentially that it does not consent to such expedition, but nor does it strongly resist it.
9. As I will relate in more detail when I come to the '859 patent, the basis upon which HTC makes its application is primarily that a decision of this court in relation to the validity of the patents in suit will be of assistance to it in the German proceedings. Nevertheless, HTC's evidence in support of the application also demonstrates, in my judgment, that there are grounds for some degree of expedition of these actions independently of that factor. In particular, Oliver Schulte, who is Vice-President, Commercial Operations, of HTC Europe Co. Ltd, explains in his witness statement the nature of the European smartphone market. It is clear from this evidence that at the present time the smartphone market is a large and expanding one in which there is rapid technological development. It is not necessary for the purposes of this judgment to go into further detail than that. Nor is it necessary to go into precise detail as to HTC's position in that marketplace. It is sufficient to say that the evidence shows that HTC has already achieved a significant share of the market and that it is attempting to expand that share. For reasons that Mr. Schulte explains, however, the position of players in that marketplace is somewhat precarious, even if they appear to be well established. It is therefore clear that HTC and its customers need to know as quickly as possible whether or not HTC is infringing any valid Apple patent.
10. In those circumstances, it seems to me that, even if one disregards the position concerning Germany, the present case is somewhat similar to the case which confronted me in Research in Motion UK Ltd v Visto Corp [2008] EWHC 3025 (Pat). In that case, I said this:

"13. That brings me, then, to the question of expedition of the trial date. So far as the claim and counterclaim in respect of the Visto patents is concerned, I am satisfied that a modest degree of expedition is justified. The primary reason for that is the considerable commercial importance of those claims, as I have already described. As Jacob LJ has repeatedly pointed out, business needs to know where it stands. That does not mean that every patent case is entitled to expedition, but it certainly means that commercially significant disputes should be tried promptly where and to the extent possible.

14. This is a case which is not only of commercial significance to the immediate parties, but it is also of commercial significance to third parties such as mobile phone operators and so on. Accordingly, it seems to me that it is an appropriate case to apply a modicum of expedition to."

11. It seems to me that everything that I said there is equally applicable to the present case. Indeed, if anything, it seems to me the evidence in this case is a little stronger in favouring some degree of expedition. For those reasons, and in the absence of any serious opposition from Apple, I am prepared to make an order for expedition of the actions relating to the '822, '868 and '948 patents so as to be tried at the first convenient date on or after 26 March 2012 and in a window ending on 30 April 2012.
12. I turn then to consider the position regarding '859. As I explained, HTC's application in relation to '859 is for a rather greater degree of expedition. In this case, Apple strenuously resists the application. In short, Apple contends that no good reason has been shown for such a measure of expedition. Furthermore, Apple says that to expedite the actions relating to '859 to that extent would be impractical and would prejudice Apple.
13. I turn therefore to consider whether a good reason has been shown by HTC for that degree of expedition, over and above the more modest degree of expedition that I have accepted is appropriate in relation to the other patents. As I indicated earlier in this judgment, the primary ground upon which the application for expedition is made relates to the position in which HTC finds itself in Germany. As I have said, in relation to the '859 patent, HTC has been sued by Apple for infringement in Mannheim. HTC's evidence is that the hearing before the court in Mannheim could take place as early as January or February 2012 with a judgment some four to six weeks later. By contrast, it is common ground that the hearing before the Munich court is likely to take place later in the year.
14. HTC's concern is that, by virtue of the bifurcated system that exists in Germany, if the decision of the Mannheim court on the question of infringement is adverse to HTC, then an injunction may be granted against HTC restraining infringement of the '859 patent before the validity of that patent has been tested. Although HTC has commenced proceedings before the Federal Patent Court in Germany for revocation of the '859 patent, it is clear that there is unlikely to be a decision of that court in relation to the '859 patent until much later in 2012, or possibly even not until some time in 2013. Accordingly, HTC is concerned that there will be a period of time during which it is restrained by injunction from infringing the '859 patent in Germany, even if it is subsequently successful in invalidating that patent before the Federal Patent Court.
15. It is for that reason that HTC seeks an expedited trial of the cases relating to the '859 patent in this country. It is common ground that the Mannheim court has power to stay its proceedings if satisfied that there is a sufficiently strong case to be made that the patent is invalid. In the absence of either a judgment or a preliminary opinion of the Federal Patent Court to that effect, it is also common ground that the court in Mannheim will have regard to any judgment of this court to the effect that the patent is invalid. That is not to say that the Mannheim court will in any sense regard itself as being bound by any finding of invalidity in this country, or even that the Mannheim court will necessarily grant a stay in the event of a finding of invalidity here. It is, however, a factor that appears likely to be taken into account by that court. Thus it is that HTC seeks the expedition of the '859 cases so as to be tried in January 2012 with a view to obtaining a judgment of this court which can be put before the Mannheim court before it issues its decision, which could be in March or early April 2012 on the timetable that I have indicated.
16. Counsel for Apple submits that the desire to obtain a judgment of this court for use in proceedings in Germany in that way is simply not a legitimate reason for expedition at all. So far as that submission is concerned, I have been referred to a series of cases in which a similar scenario has arisen. The first in time was the decision of Laddie J in Research in Motion UK Ltd v Inpro Licensing SARL [2005] EWHC 1292 (Pat). That was a case where Laddie J decided to order the trial of the case before him in accordance with the then recently-introduced streamlined procedure. The effect of that was to lead to a trial date in November 2005. Accordingly, the question of expedition became, strictly speaking, irrelevant. Nevertheless, he went on to deal with it as follows:

"38. That said, however, I will now consider the issue of whether this case would, in any event, be deserving of being made the subject of a speedy trial order. Most of the relevant material has been referred to already in this judgment. It is quite clear that the patent in suit could have a very serious impact on RIM's BlackBerry product. The existence of the German proceedings is a fact of life. It is no part of my function to interfere with German proceedings. I have to take account of the existence of the German proceedings as, no doubt, the German courts take account of the existence of English proceedings and their outcome. As I understand it from the evidence, Dr. Klaus Grabinski, a well known judge in Germany, who is in the court which is seized with the German infringement action, has indicated, unsurprisingly, that he would take account of what the English courts do and the timetable imposed by the English courts. Just as a matter of courtesy, I would do the same for German actions or French or Dutch actions. Furthermore, we can no longer consider litigation in England in isolation when at least one of the parties is engaged in pan-European business, as RIM is here.

39. The fact that there may be a determination of an issue of infringement in Germany in January is a fact of life and it is one which I cannot turn a blind eye to. It is not in any sense intended to be taken as a criticism or, indeed, a comment on German procedures, but I think that the fact that issues of infringement will be determined in Germany speedily is itself a reason why the issue of validity in this country for essentially the same patent should also be dealt with speedily. This is not a matter of trying to trump the German courts, but it seems to me that in all senses it would be fairer if RIM's ability to sell BlackBerrys and, in particular, the risk of it being held to have infringed a valid patent should be determined rapidly rather than slowly. The German courts happen to have in place a means by which infringement, at least in that country, will be determined rapidly. I see every reason for saying that the issue of validity should also be considered rapidly in this country. Even if on a normal timescale this trial would come into the lists next year, I think it is suitable for expedition to come on towards the end of November of this year and I will so direct."

17. It appears from that judgment that Laddie J considered that the fact that an English decision on validity might be of assistance to a party with regard to parallel German infringement proceedings was a factor which could be relied upon in support of an application for expedition. It is, therefore, an authority which contradicts the proposition that it cannot be relied upon as a legitimate ground for seeking expedition.
18. The subsequent cases to which I was referred are, to my mind, entirely consistent with the approach taken by Laddie J in that case. I do not propose to quote all of the relevant passages. I will simply list them. First, there is the judgment of mine in RIM v Visto, to which I referred earlier, at [15]. Secondly, there is the decision of Floyd J in Nokia Corp v IPCom GmbH & Co. KG [2009] EWHC 317 (Pat), particularly at [9]. Thirdly, there is the decision of Floyd J in Nokia Corp v IPCom [2010] EWHC 1750 (Pat) at [26]- [27]. That case provides the strongest support for the submission made by counsel for Apple, but even there Floyd J appears to have accepted that seeking assistance with regard to parallel foreign proceedings was a factor that could be relied upon if other factors were also present. Finally, there is the decision of Mann J in Telefonaktiebolaget LM Ericsson (PUBL) v ZTE (UK) Ltd [2011] EWHC 1907 (Pat) at [12]-[14].
19. Summarising, it seems to me that the position is as follows. To date, the English courts have accepted that a factor which may be relied upon by a party applying for expedition is that the finding of this court in relation to the validity of the European patent (UK), the German counterpart of which is being litigated in infringement proceedings in Germany, will be of assistance to that party with regard to the question of whether there should be a stay of those proceedings. It is not, however, a factor which has been treated in any of the cases as being a particularly strong or important factor. Thus, by way of example, in RIM v Visto, I said it was a factor to which I attached "less weight", but one which provided "some further support" to the request for expedition.
20. If one turns, then, to the situation in the present case, I am not persuaded that the position so far as the infringement proceedings in Mannheim is concerned is a sufficient reason for applying the degree of expedition that HTC seeks in relation to the '859 case. In the first place, as counsel for Apple points out, no timetable has yet been set in the Mannheim proceedings. While it is certainly possible that there will be a hearing some time in January or February 2012, that is by no means certain. At this stage, it appears to be a matter of some speculation as to when the hearing will actually take place. Even if the hearing does take place some time in January or February, the judgment is not expected until some four to six weeks later. Moreover, it is by no means clear to me that, even if there is a judgment of the Mannheim court in March or April, it will not be possible for HTC to make an application for the decision on the grant or refusal of an injunction to be delayed until later, or at least for any injunction to be suspended once this court's judgment is available.
21. Furthermore, as I have indicated, the timetable has not yet been set. It is entirely possible that, once the Mannheim court is aware that there is a trial set in these proceedings for late March or some time in April, it will adjust its timetable accordingly, so as to enable it to take this court's judgment on the validity of '859 into account before it decides whether to grant an injunction to restrain any infringement of '859.
22. A yet further factor is that the evidence establishes that it is the practice of the infringement courts in Germany, when granting injunctions, to require the patentee to provide security in the event that the injunction is subsequently held to have been wrongly granted. As I understand it, that would encompass the position where it is subsequently held that the patent is invalid. It is, therefore, by no means the case, even if an injunction is granted by the Mannheim court that is subsequently dissolved because the German equivalent of the '859 patent is held to be invalid, that HTC will have no remedy. Moreover, HTC will able to make submissions to the Mannheim court as to what amount of security Apple should be ordered to provide.
23. Counsel for HTC submitted that the provision of security by Apple would not be a sufficient remedy for HTC because, on the evidence before me, if an injunction were granted but subsequently discharged, HTC would suffer damage that was irreparable because it could not be fully compensated by a sum of money. If that is correct, that is a matter which can be put before the Mannheim court when determining whether it should either stay the proceedings as a whole or at least delay its decision as to whether to grant an injunction.
24. Turning then to the second factor identified by Lord Neuberger, I also consider that this is a case in which the degree of expedition that is sought by HTC would be contrary to the good administration of justice. So far as the good administration of justice is concerned, the greater the degree of expedition that is sought, the greater the impact on other litigants and upon the court. Accordingly, the greater the degree of expedition that is sought, the greater the degree of justification for it there must be. As I have indicated, I do not consider that there is good reason for the degree of expedition that HTC seeks in the present case so far as '859 is concerned, but the matter does not stop there.
25. If there is to be expedition of the '859 actions as sought by HTC, it involves separating the '859 case from the actions relating to the other three patents. Counsel for HTC makes the point that there are differences between '859 and the other three patents. First, it is in a slightly different technical field. Secondly, it has a rather earlier priority date. I accept both of those points. Nevertheless, it seems to me to be undesirable for an action involving one Apple patent to be litigated separately from an action involving three other Apple patents when the allegedly infringing phones are, if not the same, then certainly similar and where, as I understand it, it is likely that the representation on each sides will be the same. Clearly there is a close connection in commercial terms between the different actions, and it seems to me that there is likely to be a fair degree of overlap in terms of technical and legal subject matter, although I accept that there are some differences.
26. A further factor which it seems to me I have to make allowance for is the involvement of Samsung, which I mentioned at the beginning of this judgment. At this stage I can take no view as to whether it would be appropriate to expedite the Samsung action, still less can I take any view as to whether it would be appropriate to order the Samsung action to be tried at the same time as the HTC actions. That said, it seems to me that I must allow for the possibility that that will turn out to be the appropriate course. An order for expedition of the '859 case as sought by HTC would inevitably make that more difficult to achieve. I therefore consider that it would be undesirable for me to make an order for expedition of the '859 case at this stage in circumstances where it has not yet been determined whether the Samsung action should be expedited and whether it should be tried at the same time as the HTC actions.
27. So far as the position of Apple is concerned, as I have indicated, Apple strenuously resists such a degree of expedition as HTC seeks for the '859 actions. Apple contends that it is not practicable for the '859 case to be got ready for trial as quickly as January 2012, and that it would be prejudiced if it were required to do so.
28. In my view, there is substance in those contentions. A trial of the '859 case in January 2012 would be very rapid indeed. It is fair to say, as counsel for HTC points out, that the technical complexity of '859 case, and indeed of the other cases, is not great. There is no dispute that all of them have a technical complexity of two or three. Even so, in most patent cases, particularly patent cases involving mobile telephones, there is an unavoidable minimum of technical and legal complexity which the parties need to address. It seems to me that it would be putting undue pressure on Apple to require it to be ready for trial as soon as January 2012, particularly bearing in mind that one has to be realistic about the impact of the Christmas and New Year holidays. As HTC's proposed order for directions makes clear, a trial of the '859 case in January 2012 would effectively require the parties to have their expert evidence complete prior to Christmas. That I regard as a fairly tall order from what is going to be more or less a standing start.
29. Accordingly, on the question of whether expedition would cause prejudice to the other party, my conclusion is that it would.
30. Finally, as to whether there are any other special factors, I do not consider that there are any special factors in the present case, apart from the ones that I have already considered.
31. For all of those reasons, my conclusion is that I will expedite all the actions involving HTC relating to '022, '868, '948 and '859 to the extent I have indicated, but no greater extent.