Thorn Security Ltd v Siemens Schweiz AG

This Court allowed the appeal on two issues: infringement and recovery for pre-registration infringements following assignment by merger. On claim construction the court applied section 125 of the Patents Act 1977 and the Protocol on the Interpretation of Article 69 EPC. The court held that the contested integer that the coating's wax "facilitates" through-plating and soldering requires a practical, appreciable benefit in use rather than merely a theoretical or purely measurable physical change. The court also held that the phrase "fused onto the printed circuit board by the action of heat" requires fusion caused by heat alone on a fair construction of the specification. Applying those constructions to the facts found at first instance, the court concluded that Thorn's coated printed circuit boards did not satisfy the fusion-by-heat integer and that the evidence did not establish the required practical facilitation of through-plating or soldering by the 5% wax in Thorn's coating. On the assignment point the court held that section 33(3) of the Patents Act 1977 is capable of covering vesting of title by operation of law on merger (universal succession) and that the judge was wrong to adopt an unduly narrow reading; accordingly Siemens could not be prevented from recovering damages or an account for pre-registration infringements solely because no formal bilateral assignment instrument in the narrow sense had been executed.

Background and parties. Siemens Schweiz AG (then holder of European Patent EP 0 577 094 B1) sued Thorn Security Ltd for infringement of a patent claiming a thermoplastic protective film for printed circuit boards with added wax that is fused by heat. The patent proprietor sought damages or an account of profits for use of Thorn's coated PCBs fitted in smoke alarms. The trial judge (Mann J) found the patent valid and infringed; Thorn appealed on infringement and on whether Siemens could recover for infringements predating registration of the change of ownership.

Procedural history. Appeal from High Court of Justice (Chancery Division), Mann J (HC 04 CO 2060). Permission to appeal was given in respect of both the infringement issue and the assignment/registration issue; appeal heard by the Court of Appeal (Mummery LJ, Arden LJ, Lewison J).

Nature of the claim and relief sought. Claim for patent infringement; relief sought was damages or, at the patentee's election, an account of profits in respect of infringing sales; subsidiary question whether damages/account could be recovered for infringements occurring before formal registration of change of proprietor following corporate mergers.

Issues framed. (i) Infringement Issue: whether Thorn's coated PCB fell within claim 1, in particular whether (a) the wax in Thorn's coating "facilitates through-plating and soldering operations through the protective coating" in the practical sense the claim requires and (b) the film "is fused onto the printed circuit board by the action of heat" (interpreted to mean heat alone). (ii) Assignment Issue: whether vesting of title by merger (under Swiss law, universal succession) fell within the meaning of assignments or other events in section 33(3) and thus whether section 68 prevented recovery of damages for pre-registration infringements.

Court's reasoning on claim construction. The court applied the statutory construction regime in section 125(1) and the Protocol on Article 69 EPC: claims are read in the light of the specification and drawings and assessed as a practical document addressed to a skilled addressee. "Facilitating" was held to require a practical, appreciable benefit for the identified operations (through-plating and soldering); mere theoretical or analytically measurable changes did not suffice. The phrase "fused ... by the action of heat" was construed in light of the specification's process description to mean fusion caused by heat alone.

Court's factual assessment and application. The court gave full weight to the judge's factual findings but intervened where the judge's inferences were unsupportable on the evidence. The judge's finding that Thorn's coating (containing 5% wax) conferred certain practical facilitation was analysed and reversed in part: the evidence did not support a practical advantage when a normal soldering iron (circa 300-380°C) was used; experiments and expert evidence demonstrated only modest reductions in softening temperature and theoretical flow improvements insufficient to prove practicable facilitation or a "healing" effect in repair; and the judge had relied on inferences about behavior under hot-air removal that were not established by expert evidence. The court also held that the PPD showed that adhesion in Thorn's process was achieved by application of pressure (and vacuum), not by heat alone, so the fusion-by-heat integer was not satisfied.

Court's reasoning on assignment and registration. The court reviewed section 33(3) and section 68 of the Patents Act 1977 and the Banks Committee background. It rejected the judge's narrow reading that limited "assignment" to an express bilateral document complying with section 30(6). Considering the statutory context and purpose, the court held that section 33(3) can cover vesting by operation of law such as universal succession on merger and therefore that the prior rulings (including Tamglass) adopting a narrow approach were wrong. The Court allowed the appeal on that point.

Disposition. The Court allowed Thorn's appeal on both the infringement issue and the assignment issue, set aside the judge's findings of infringement and his decision on section 33(3), and dismissed the respondent's notice.

This Court allowed the appellant's appeal on both the Infringement Issue and the Assignment Issue. On construction the court held that (a) the claim integer that wax "facilitates" through-plating and soldering requires a practical, appreciable benefit to a user and (b) the film being "fused ... by the action of heat" means fusion caused by heat alone. Applying those constructions, the court concluded that the judge's factual findings did not support the presence of those integers in Thorn's product (the evidence did not show practical facilitation by 5% wax and the Thorn process achieved adhesion by pressure/vacuum, not heat alone). The court also held that s 33(3) may cover vesting of title by operation of law on merger and that the judge's narrow approach was erroneous; accordingly pre-registration recovery was not barred in the circumstances. Appeal allowed for those reasons.

Appeal from High Court of Justice (Chancery Division), Mann J (HC 04 CO 2060). Permission to appeal on the infringement issue was granted by Jacob and Wilson LJJ; permission on the assignment issue was given by the trial judge. This Court (EWCA Civ) heard the appeal and allowed it ([2008] EWCA Civ 1161).