Clash of the Conventions

The relationship between human rights and patents has been clarified in a recent decision by the First Division of the Inner House. In ITP SA v Coflexip Stena Offshore Ltd, 19 November 2004, the court implemented a decision of the Board of Appeal of the European Patent Office (EPO) revoking a European patent. In so doing it overturned an earlier finding of infringement and validity at first instance. This is not surprising in itself, but the court did so in the face of a claim by the patent holder that its human rights had been infringed and in the light of an application by it to the European Court of Human Rights in Strasbourg. In applying section 77(4A) of the 1977 Patents Act without alteration the court has indicated that the European Convention on Human Rights cannot trump the effect of a Board of Appeal decision.

A right left standing?

ITP sued Technip (formerly Coflexip Stena Offshore Ltd) in the Court of Session, successfully at first instance, for infringement of their pipeline-related patent. The Lord Ordinary also rejected a challenge to the validity of the European patent. Technip appealed both the infringement and validity findings. Before the appeal was heard, the Board of Appeal of the EPO revoked the European patent. This left the highly unusual situation where the patent was invalid as against all parties but there was a finding of validity and infringement recorded against Technip, unless the appeal court overturned the Outer House decision. This should have been a straightforward hearing to ask the court to recognise the Board of Appeal decision and wipe the first decision away. However, ITP then made an application to the European Court of Human Rights in Strasbourg claiming the Board of Appeal procedure had infringed its human right to a fair trial.

ITP’s main complaints to the ECtHR were that the Board of Appeal had infringed its rights (1) in considering documents that were not taken into account by the Examining Division of the EPO, and (2) in failing to remit the matter back to the Examining Division. ITP asked the Scottish court to delay deciding the appeal at least until the ECtHR had considered whether the application was admissible, because if they did otherwise the Scottish court too would be infringing its human rights. In doing so the court was effectively asked to maintain ITP’s patent rights as against Technip alone. The patent would have been removed from the European patent registers in all the member states, including the UK, where it had previously been recorded (and would be regarded as void ab initio there), but would have continued to have force and effect as against one single party in respect of its acts. ITP expected to have a finding on admissibility in approximately one year, at which point, it suggested to the court, matters could be reconsidered.

Technip argued that the patent should not be resurrected like a phoenix from the flames when it had been held to be invalid. Further, Technip questioned the advantage of delaying a hearing for the estimated year – if the application to the Strasbourg court was held to be inadmissible then Technip would have had a finding of infringement and the possibility of an accounting for profits hanging over them for a year. This had serious commercial implications. The status quo should be maintained, i.e. that the patent did not exist and indeed should be treated as though it had never been.

The alternative outcome of the initial decision by the ECtHR would be that the application by ITP to it was admissible. If this was the case, the parties would find themselves in the same position as they were now, making the same arguments but one year on. A final decision on the human rights issue raised by ITP was not expected for at least five years.

No room for inquiry

The First Division held that the European Patent Convention trumps the European Convention on Human Rights. The Patents Act, section 77(4A) required the UK courts to implement a decision of the Board of Appeal revoking a patent, into UK law. They “did not have any right or discretion to ignore or reduce the effect that they would otherwise have to attribute to the finding of the... Board of Appeal”. In addition, the court held there was “no logical or legal basis for the submission... that the court could on the one hand, accept the effect of revocation within the UK and other designated states, but on the other hand preserve as between the pursuers and the defenders the liability which the Lord Ordinary had found to be established”. As the patent was a property right created by the European Patent Convention, and as it had been revoked under it, the right had never existed from the outset. Indeed the national courts cannot even inquire into whether the proceedings before the Board of Appeal were Convention-compliant. This was out of bounds. The court distinguished circumstances involving a decision of an international tribunal as “fundamentally different” from cases where a domestic court declined to give effect to a decision of a foreign national court.

The court also indicated as part of its reasoning that even if the application to the ECtHR was well founded, this would not have any effect on the revocation of the patent. The ECtHR did not have power to reinstate the patent; it could refer the matter back to the EPO and require it to re-examine the case, but this only had the effect of setting the procedural clock back to zero. In the event that the ECtHR did find that ITP’s human rights had been infringed, the most likely outcome was that an order for compensation would be made in ITP’s favour.

A decision with implications

This straightforward decision affirms the certainty and finality, which had been thought to exist, for parties relying on revocation of a patent by the EPO Board of Appeal. Many businesses in many fields of technology use the patent registers to fix the parameters of their own research and development and commercial activity. They can continue to do so without concern that a European patent, although on the face of it revoked, may still have some effect if a challenge based on human rights has been launched. It is a sensible decision and will act as a deterrent for patentees who may wish to try to invoke their alleged human rights to hold on to weak patents.

The decision is likely to be of wider application in an environment which is seeing widespread review of existing legislation in the light of human rights issues. What appears clear from the emerging case law is that while the courts are willing to hear arguments based on alleged breaches of human rights, where a party seeks to use human rights arguments to cut across the fundamental thrust of the legislation being called into question they are unlikely to find a sympathetic ear on the bench.

The full judgment can be found at www.scotcourts. gov.uk/opinions/A3606.html

Gill Grassie, Partner, and Claire Urquhart, Associate, IP and Technology Department, Maclay Murray & Spens

e: Gill.grassie@mms.co.uk; Claire.urquhart@mms.co.uk

The writers acted for the defenders in the litigation.