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Dyson Technology Ltd And Another v German Pool Group Co Ltd And Others

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date12 December 2016
Year2016
Judgement NumberHCA838/2011
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA838B/2011 DYSON TECHNOLOGY LTD AND ANOTHER v. GERMAN POOL GROUP CO LTD AND OTHERS

HCA 838/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 838 of 2011

__________________

BETWEEN
DYSON TECHNOLOGY LIMITED 1st Plaintiff
DYSON EXCHANGE LIMITED 2nd Plaintiff
and
GERMAN POOL GROUP COMPANY LIMITED 1st Defendant
GERMAN POOL (HONG KONG) LIMITED 2nd Defendant
GERMAN POOL KITCHEN EQUIPMENT LIMITED 3rd Defendant

__________________

Before: Mr Recorder Anthony Houghton SC in Chambers
Dates of Hearing: 13 October 2016
Date of Decision: 12 December 2016

____________________

D E C I S I O N

____________________

Introduction

1. The plaintiffs in this litigation are companies within the Dyson Group of companies, which are well known manufacturers of household electrical products based, I understand, in the United Kingdom. The defendants are also members of a group of companies; in this case the German Pool Group, which carries on a business in Hong Kong which also includes the manufacture and sale of domestic electrical appliances. The litigation dates back to May 2011, proceedings having been commenced by the plaintiffs seeking to restrain the defendant’s from infringing a patent, and copyright held by the 1st plaintiff in a model of bladeless fan.

2. Following an inter‑parties hearing on the 3 June 2011 an injunction order was issued by the court restraining the 2nd and 3rd defendants from the further manufacture, import or sale of certain models of bladeless fans. The order did not extend to the 1st defendant which gave a parallel undertaking to like effect.

3. At the hearing on 13 October 2016 there were three summonses before the court. Chronologically, the first of these was a summons filed by the plaintiffs on 13 June 2016 seeking a stay of these proceedings pending the determination of certain proceedings which are ongoing before the European Patents Office (“EPO”). For their part the defendants issued a summons dated 30 August 2016 by which they sought the discharge of part of the Injunction Order which had been made on 3 June 2011.

4. The defendants issued a further summons on 12 October 2016 by which they sought to amend their earlier summons so as to include reference to the undertaking in lieu of an injunction which had been given by the 1st defendant. The amendment canvassed by this summons was not opposed by the plaintiffs, and an order in terms of that summons was therefore made.

Background

5. As noted above, the matters in dispute between these parties arise out of allegations of copyright and patent infringement by the defendants. The plaintiffs’ complaint, put broadly, is that the defendants have marketed and/or sold bladeless fans incorporating component parts which are reproductions of the 1st plaintiff's artistic works in respect of which the 1st plaintiff owned copyright, and was the subject of a Hong Kong Patent (referred to as “the 413 Patent”). The 2nd plaintiff is the exclusive licensee for the manufacture and sale of products subject to the 413 Patent.

6. Breach of copyright allegations are no longer in issue between the parties. At an early stage of the proceedings the defendants admitted liability in regard to copyright infringement and, by a consent order dated 21 November 2012, judgement on liability was obtained by the plaintiffs against the defendants in respect of that part of the plaintiff's claims. Disputes remain between the parties in regard to the patent issues however, and the plaintiffs’ damages claims arising out of the alleged breaches of the defendants remain to be determined, as do matters arising out of the defendant's counterclaims.

7. Set out below is a chronology of some of the key events which have taken place in regard to these matters.

Patent application filed in Europe 26/8/2008
Patent granted in Europe 1/12/2010
Patent granted in HK 6/5/2011
Writ issued 17/5/2011
Injunction application 18/5/2011
Statement of Claim in HCA 31/5/2011
Defence and Counterclaim in HCA 12/7/2011
Opposition to European Patent 5/7/2011
P seeks judgment on admissions in HCA 16/11/2012
Judgment by consent in HCA 21/12/2012
Oral hearing in Opposition Division 29/2/2016
D. issues Notice of intention to proceed 15/3/2016
“Revocation” of European Patent by Opposition Division 16/3/2016
P. offered to suspend injunction on terms 5/4/2016
Case Management Summons (D) 3/6/2016
Stay summons 13/6/2016
P. appeal to Technical Board of Appeal 29/7/2016
Discharge Summons 30/8/2016

8. The relevance of some of the above events calls for some elaboration. The grant of the 413 Patent in Hong Kong was based upon the grant of a patent in Europe in December 2010, and it is the validity of that European patent which, in many senses, lies at the heart of the remaining issues in Hong Kong. As appears in the chronology the European patent was applied for in 2008; was granted in December 2010; and the Hong Kong grant followed approximately five months later. Almost immediately thereafter the plaintiffs moved against the defendants issuing a writ and seeking an injunction to prevent the sale or marketing of bladeless fans by the defendants.

9. The plaintiffs were successful, obtaining the injunction against the 2nd and 3rd defendants with the 1st defendant making an undertaking in lieu to like effect. The Injunction Order restrained the defendants, until judgment or further order, from manufacturing or dealing with any bladeless fan that infringed the 413 Patent.

10. The 413 Patent, as noted above, was granted based upon the existence of the European Patent, and shortly after the Injunction Order was issued a German affiliate company to the defendants commenced Opposition Proceedings before the EPO by which the validity of that European Patent was challenged. A Brazilian company also challenged that patent in Opposition Proceedings.

11. As, it appears, is commonly the case, the Opposition Proceedings were prolonged, and the written decision of the Opposition Division was published only on 16 March 2016. The procedure before the Opposition Division is such however that a preliminary indication of the conclusions of the Opposition Division had been provided to the relevant parties in advance of the oral hearing which was held by the Opposition Division on 29 February 2016.

12. The decision of the Opposition Division was adverse to the plaintiffs, and was succinctly expressed, as being that “European Patent No EP‑B‑2 191 142 is revoked.”. The procedures of the EPO provide for an appeal mechanism from decisions of the Opposition Division to, in this case, the Technical Board of Appeal. The plaintiffs have instigated such an appeal. It is significant to record that bringing such an appeal has a suspensive effect in regard to the order revoking the European patent. In other words, until determination of the appeal process, the patent is treated as remaining valid.

13. Returning to the chronology, the defendants admitted copyright infringement and judgment on liability was entered, by consent, in November 2012, but other than this and the service of a statement of claim, and a defence and counterclaim, there was no substantive progress, or even attempted progress, in the Hong Kong proceedings after the injunction was issued until quite recently. There were discussions between the parties regarding the possibility of formalising a stay of proceedings to abide the outcome of the proceedings before the Opposition Division, but no such agreement eventuated, despite repeated attempts to reach agreement with the defendants according to the plaintiffs.

14. The Hong Kong proceedings were “revived” by the defendants on 15 March 2016 when a Notice of Intention to Proceed was issued. This came hard on the heels of the decision by the Opposition Division to revoke the European patent. A Case Management Summons was issued by the defendants on 3 June 2016 by which directions for the exchange of lists of documents and witness evidence were proposed, with a further Case Management Conference to be convened at a future date.

15. The plaintiffs were not content for the Hong Kong proceedings to be resumed and took out the summons of 13 June 2016 (“the Stay summons”) seeking a stay of all further proceedings in this action until the “final determination of the patent opposition filed at the European Patent Office (EPO) by German Pool (Deutschland) GmbH against the first plaintiff's European Patent ... by way of final non‑appealable decision or withdrawal, or the expiry of the applicable period for appeal...”. What that means in practical terms is discussed below.

16. Very shortly before the date fixed for the Case Management Conference pursuant to the defendant’s Case Management Summons, the defendants filed their summons seeking the discharge of parts of the Injunction Orders (“the Discharge summons”). In consequence of this the court directed that both the Stay summons and the Discharge summons be fixed to be heard together before a judge. Provision was made for the exchange of affirmation evidence. The Case Management Summons was adjourned sine die.

17. It is apposite to record that some efforts were made by the parties to reach accommodation over part of the matters canvassed by the summonses. In particular, the plaintiffs offered to agree to the discharge sought by the defendants, and to undertake to apply to the EPO Technical Board of Appeal to have the appeal heard with expedition, if a stay of the Hong Kong proceedings were to be ordered.

The Stay Summons

18. The proceedings in Hong Kong have...

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