AP Racing v Alcon Components

Abuse of process in a subsequent patent infringement claim requires a broad, merits-based assessment of whether the defendant has been unfairly oppressed or harassed. A patentee is not generally required to investigate every possible infringement before bringing proceedings. In patent litigation, further examples of infringement may ordinarily be considered at an inquiry as to damages or an account of profits once infringement has been established. That practice applies in the Intellectual Property Enterprise Court as well as the High Court. Case-management rules do not convert the issue into res judicata or require exceptional circumstances before further infringements can be considered. The court must assess the particular circumstances, including the defendant’s knowledge, any prejudice, and the history of attempts to deal with the further allegations.

AP Racing had succeeded in earlier patent validity and infringement proceedings against Alcon in respect of certain calipers. After discovering seven further calipers, AP Racing sought to include them in an inquiry as to damages. Alcon objected and AP Racing included them in subsequent proceedings, alongside three calipers manufactured later. Alcon alleged that the claim concerning the seven calipers was an abuse of process.

The IPEC declined to strike out that part of the claim. On appeal, the central issues were whether the usual patent practice permitting further infringements to be considered at the damages inquiry applied in the IPEC, whether CPR 63.23(2) altered that practice, and whether the subsequent proceedings unfairly oppressed or harassed Alcon.

1. The appeal was dismissed and the Respondent’s Notice was allowed. The IPEC judge had applied the correct abuse-of-process test and was right to refuse strike-out.

2. Abuse of process is determined by a broad, merits-based judgment addressing all the circumstances and asking whether the later claim misuses the court’s process. It is distinct from res judicata. A first-time claim engages the right of access to the court, including the protection afforded by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.

3. Authorities concerning parties who knowingly reserve related claims, including Aldi Stores Ltd v WSP Group plc and Stuart v Goldberg Linde, do not establish a general duty on a patentee to investigate every possible infringement before proceedings. A claimant’s failure to exercise reasonable diligence in discovering a potential claim is not generally relevant unless, on the merits, it provides a complete and inevitable defence.

4. The established patent practice identified in General Tire & Rubber Company v Firestone Tyre & Rubber Company Limited and Unilin Beheer BV v Berry Floor NV applies in the IPEC. Once infringement has been established, further alleged infringements may be considered at the damages inquiry or account, subject to case management. This approach promotes proportionate, economical and expeditious patent trials.

5. CPR 63.23(2) applies separately to the liability and quantum case-management conferences. It does not prevent further infringements being introduced at the quantum stage, nor does it replace the merits-based abuse inquiry with a requirement for exceptional circumstances.

6. On the facts, Alcon knew of the relevance of other products, had declined AP Racing’s proposal to litigate the seven calipers in the damages inquiry, and suffered no oppression or harassment justifying strike-out. The possible additional costs were insufficient, particularly as Alcon could seek a costs cap.

• High Court (Chancery Division): Appeal from the IPEC dismissed and Respondent’s Notice allowed.
• Intellectual Property Enterprise Court: His Honour Judge Hacon’s order dated 17 June 2015, giving effect to judgment dated 15 May 2015, refused to strike out the claim concerning the seven calipers.