HTC Corp v Nokia Corp

Applications to amend pleadings shortly before trial require the court to strike a fair balance between the relevant factors. These include the history and explanation for the delay, prejudice to the applicant if refused, prejudice to the opponent if allowed, and the clarity and particularity of the proposed amendment. The factors are non-exhaustive and interrelated. A party seeking a very late amendment bears a heavy burden, particularly where the delay is its own responsibility and the amendment would impose substantial additional work before trial. A technically arguable amendment may nevertheless be refused where it is unclear, insufficiently particularised, or unfairly burdens the opposing party. The risk that an invalid patent may remain valid does not outweigh the need for a fair and orderly trial between sophisticated commercial litigants.

HTC applied to amend its grounds of invalidity in two patent actions concerning Nokia patents relating to modulator structures and radio-interface transceivers. The applications were made on 2 August 2013, after validity evidence had been exchanged and shortly before the trial fixed for 1 October 2013.

The proposed amendments alleged insufficiency. One amendment concerned the meaning and disclosure of a low-pass filter in a Gilbert cell modulator. The other concerned controllable low-pass filters and gain transmitter amplifiers capable of operating with different radio interfaces. Nokia opposed the applications on grounds of delay, lack of clarity and the practical prejudice caused by the compressed timetable.

1. The court refused both applications to amend. The relevant question was whether, in the circumstances, fairness required permission to add the proposed insufficiency pleas before trial.

2. The court adopted the four factors identified in Brown v Innovatorone [2011] EWHC 3221 (Comm): the history and explanation for the delay; prejudice to the applicant if permission were refused; prejudice to the resisting party if permission were granted; and the clarity and particularity of the amendment. The list was not exhaustive, and the factors commonly interrelated.

3. The principles in Swain-Mason v Mills & Reeve [2011] 1 WLR 2735, including the need to balance the relevant factors and the heavier burden on a party seeking a very late amendment, were material. The requirement that a late amendment itself set out the case with proper clarity was also important. The observations in Worldwide Corporation v GPT Limited [1998] EWCA Civ 1894 illustrated the prejudice caused when a party must revisit evidence and expert reports at the time of trial.

4. As to the 024 patent, the proposed pleading was unclear. The central issue appeared to be one of construction rather than insufficiency. Although a future evidential development might justify an insufficiency plea, the pleaded case had not yet emerged in a legitimate form. The amendment was therefore refused.

5. As to the 831 patent, the pleading was materially clearer and raised a potentially arguable insufficiency case. Nevertheless, it would require substantial and burdensome work, which Nokia could not reasonably complete before trial. HTC had known of the underlying issues earlier and could have pleaded them when the first validity reports were served. The theoretical risk that an invalid patent might remain on the register did not outweigh the prejudice caused by HTC’s delay, particularly in litigation between sophisticated, well-funded commercial parties.