Vringo Infrastructure Inc v ZTE (UK) Ltd

Before an order is drawn up and sealed, the court has jurisdiction to reopen a judgment and permit amended pleadings, fresh evidence and a further trial. The governing principle is the overriding objective, including justice, proportionality, expedition, fairness and proper allocation of court resources. The Ladd v Marshall factors remain highly relevant, although they are applied more flexibly at first instance. In patent litigation, a validity challenger must make a careful selection of prior art before trial. The public interest in testing patent validity does not ordinarily justify a retrial where the new material could have been found earlier and the merits are uncertain. A global portfolio licence being FRAND does not necessarily mean that it is the only FRAND licence capable of avoiding a territorial injunction concerning one patent.

The claimant had obtained judgment that its patent EP 1,212,919 (UK) was valid and essential to relevant telecommunications standards: [2014] EWHC 3924 (Pat). Before the order was sealed, the defendant sought to reopen the trial, amend its case and rely on newly located IS-95 standards documents as prior art. It also sought a stay of later patent trials because a proposed FRAND trial would address licensing issues.

The court had to decide whether the new prior art application satisfied the applicable principles and whether the existence of the FRAND trial made the scheduled patent trials unnecessary.

1. Reopening the judgment. The application to reopen the patent trial was refused. The court had jurisdiction, at least before the order was drawn up, to entertain an application for amended pleadings, fresh evidence and a further trial. The governing approach was the overriding objective under Civil Procedure Rules Part 1: cases must be dealt with justly, fairly, expeditiously and at proportionate cost, with an appropriate allocation of court resources.

2. The principles governing amendments remained relevant, and the factors in Ladd v Marshall were also significant. They should be applied more leniently at first instance than on appeal, but a failure to satisfy them would ordinarily require powerful countervailing factors. The word exceptional should not be treated as an independent threshold following the approach in In re L and another (Children) (Preliminary Finding: Power to reverse) [2013] UKSC 8.

3. The first Ladd v Marshall factor was not satisfied. The defendant could and should have searched for the IS-95 handover material before trial, particularly after the expert evidence had identified protocol transparency in the context of protocol relocation as an important issue. The proposed evidence was credible, but its likely influence on the result was no more than evenly balanced. Each side had an arguable novelty case and a proper trial would have been required. The public significance of a standards-essential patent and the fact that financial prejudice could be compensated in costs did not outweigh the importance of finality, efficient litigation and the interests of other court users.

4. FRAND trial and scheduled patent trials. The patent trials fixed for June were not stayed. The existence and uncertain scope of the later FRAND trial did not make the patent trials a waste of time or costs. A global portfolio licence may be a FRAND offer and may reflect industry practice, but it does not necessarily follow that a defendant facing one territorial patent must accept that global licence to avoid a national injunction. A FRAND offer for the individual patent could present a materially different case.

5. The earlier order was sealed. The reopening application was dismissed with costs assessed at £95,000. The patent trials were not stayed.