Machinery Developments Ltd & Anor v St Merryn Meat Ltd & Anor

A domestic patent appeal should not ordinarily be stayed pending opposition proceedings before the European Patent Office where those proceedings are unlikely to be resolved within a reasonably imminent period. Avoiding inconsistent judgments and parallel costs is relevant, but prolonged uncertainty may materially prejudice patentees and alleged infringers. The court should assess the practical commercial consequences of delay, including effects on technical development, marketability, customer relationships and an existing domestic decision on validity and infringement.

The patentees and their exclusive licensee succeeded in the Patents County Court on validity and infringement of a patent relating to a large machine. The defendants appealed that decision. The patentees separately appealed a later declaration that a modified machine would not infringe.

After the European Patent Office opposition division held the patent invalid for added subject matter under Article 100(c) of the EPC, the parties sought to stay both domestic appeals until the EPO proceedings and any appeal had finally ended. The proposed stay was expected to last four or five years and was accompanied by undertakings intended to protect the defendants. The issue was whether that delay justified staying the appeals.

1. Application dismissed. The court refused to stay the appeals pending final determination of the EPO opposition proceedings. The proposed delay of four to five years was not reasonably imminent and was commercially significant.
2. The avoidance of inconsistent judgments and parallel litigation could support a stay, but it had to be balanced against the prejudice caused by prolonged uncertainty. Uncertainty generally favoured the patentee because competitors did not know what they could safely market, develop or use as the basis for further invention. The same uncertainty could prejudice defendants whose technical developments remained affected by the patent.
3. The patentees’ asserted prejudice was principally the cost of hearing the appeals, but the evidence did not establish that those costs would significantly affect them. By contrast, delaying the appeals risked leaving the parties’ costs below unresolved for five or six years and would increase the eventual cost of the proceedings by requiring the appeal to be heard after accumulated knowledge had been lost.
4. The existing domestic judgment holding the patent valid and infringed was a significant consideration. Reasoned decisions of one European judge might be respected by judges elsewhere in Europe, and the decision could therefore have commercial effects beyond the United Kingdom. The undertakings offered did not remove all uncertainty for customers or eliminate the commercial consequences of delay.
5. The court ordered that the application be dismissed with costs to be assessed.

• Court of Appeal (Civil Division): refused the application to stay two pending appeals until final determination of the European Patent Office opposition proceedings. Application dismissed with costs to be assessed.
• Patents County Court: held the patent valid and infringed by the M602 machine on 12 May 2004, granted an injunction and other relief on 18 June 2004, and later declared that a modified machine would not infringe on 26 October 2004. The merits appeals remained pending.