Cloud Cycle Limited v Verifi LLC & Anor

Summary judgment in a patent case may be appropriate where the relevant claim language has an ordinary meaning and the issue does not require expert evidence. It should be refused where the evidence is opaque, expert evidence may materially affect construction or infringement, or a fuller investigation could alter the outcome.

For an interim injunction, the court applies the American Cyanamid principles. The status quo is relevant only if the balance of potential irremediable prejudice is even. The court should choose the course likely to cause the least irremediable prejudice, assessing the evidence realistically and giving proper weight to speculative or calculable losses.

Cloud Cycle Limited sought summary judgment on its claim for a declaration of non-infringement of a patent concerning slump monitoring in concrete delivery vehicles, together with summary dismissal of the infringement counterclaim brought by Verifi LLC. Verifi applied for an interim injunction restraining Cloud Cycle from dealing in its allegedly infringing system.

GCP Applied Technologies (UK) Limited, Verifi’s exclusive licensee, was joined as a defendant, counterclaimant and joint applicant for interim relief. The central issues were whether the defendants had a real prospect of establishing infringement, including infringement by equivalence, and where the balance of irremediable prejudice lay pending trial.

1. Summary judgment. The threshold for summary judgment under CPR Part 24.3(a) is materially the same as the serious-question or real-prospect threshold in American Cyanamid. In patent cases, summary judgment is often inappropriate because claim construction and infringement commonly require evidence from the skilled person, including expert evidence and cross-examination.
2. That is not an absolute bar. Where the relevant claim words have an ordinary meaning, expert guidance is unnecessary, and the technology is simple, summary judgment may be suitable. A party asserting that expert evidence is required must explain the nature of the evidence and why it could affect the issue.
3. Cloud Cycle’s product and process description was opaque and did not self-evidently establish that no stored measurements were deleted. Expert evidence might clarify the position. The defendants also had a real, rather than fanciful, prospect of establishing infringement by equivalence under the approach in Actavis UK Limited v Eli Lilly and Company. Summary judgment was therefore dismissed.
4. Interim injunction. The court applied the familiar questions identified in American Cyanamid, including whether damages would be adequate and, if not, where the balance of convenience lay. The governing consideration was the course likely to cause the least irremediable prejudice, as stated in National Commercial Bank Jamaica Ltd v Olint Corpn Ltd (Jamaica). The status quo was relevant only if the other factors produced an even balance.
5. GCP’s potential losses from price depression, delayed contracts and market effects were uncertain but broadly calculable. The alleged reputational harm was too speculative. Although Cloud Cycle’s financial position was precarious, an injunction risked an existential effect on its trading and investor confidence. The balance favoured refusing relief. The defendants’ interim-injunction application was dismissed.