Patent

SDL Hair Ltd v Next Row Ltd and others; Master Distributor Ltd v SDL Hair Ltd and others: Patents County Court: 14 June 2013

The proceedings concerned two claims involving heated hair rollers produced by a company, SDL. In the first claim (the infringement action), Master Distributor Limited (MDL) sued SDL and five other defendants, for infringement of the United Kingdom Patent GB 2 472 483. That issue revolved around the features of SDL's products, and, in particular, the heating used in them, neither of which involved a signal derived from monitoring the roller itself. In the second claim (the threats action) SDL sued for wrongful threats of patent infringement regarding the patent.

Four issues arose, among other things. First, in relation to the infringement action, whether MDL had status to sue at all. It purported to sue as an exclusive licensee pursuant to section 67(1) of the Patents Act 1977 (the 1977 act). The question arose as to whether it was relevant that the patentee was continuing to deal in patented goods, and whether there was a basis for concluding that such dealings were inconsistent with MDL having the legal right to exclusivity. Secondly, the issue of infringement arose. It was common ground that the heating in the SDL products depended on the current draw of the heating unit with a particular size of roller in it, and on the fixed heating time of the products.

Thirdly, in relation to the threats action, whether three letters sent by the defendants in the threats action could be considered to be groundless threats of infringement proceedings, under section 70 of the 1977 act, one of which was from the defendants' solicitors and specifically mentioned patent infringement. Fourthly, the issue arose as to whether the second defendant company in the threats action, AH, was the importer of the SDL products that it had bought. If that was the case, then communications with AH would not be actionable by virtue of section 70(4) of the 1977 act. In relation to the issue of whether AH was an importer, the court considered two facts: first, that shipping was arranged and paid for by IDHC and not by AH. That was demonstrated by the documents in the case, in particular the shipping invoices billing IDHC for the shipping; and, secondly, that the risk in the goods remained with IDHC until the goods were delivered to AH, as verified by the statements of case in the threats action.

The court ruled: (1) With regard to infringement, a patentee might carry on dealing in patented goods consistently with the grant of an exclusive licence. There was a licence which was not said to be a sham, and which on its face complied with sections 67 and 120(7) of the 1977 act. Whether the patentee was continuing to deal in patented goods was irrelevant, and in any case, there was no basis for concluding that any such dealings were in any way inconsistent with MDL having the legal right to exclusivity (see [18] of the judgment). MDL was an exclusive licensee and entitled to sue (see [19] of the judgment).

(2) Since it was common ground that the heating in the SDL products depended on the current draw of the heating unit with a particular size of roller in it, and on the fixed heating time, neither of which involved a signal derived from monitoring the roller, there would be no infringement by either of the SDL products (see [81] of the judgment). The infringement claim would fail (see [131] of the judgment).

(3) Individually, some of the features of the letter lacked cogency, and by themselves would not constitute a threat. However, taken as a whole, the letter did clearly convey a threat. It was an urgent letter from solicitors that specifically spoke of patent infringement. The ordinary reader would have understood that the thrust of the letter was that some consequence was intended to follow, and that consequence could really only be proceedings for patent infringement (see [99], [101], [102] of the judgment). Each of the communications complained about amounted to an actionable threat under section 70 of the act (see [131] of the judgment).

(4) On the evidence, the combination of IDHC paying for and arranging transport and the risk remaining with it until the goods reached the customer was enough to say that it and not the customer - in the instant case, AH - was the importer (see [123] of the judgment). AH had not been an importer of the SDL products. The threats action would succeed (see [131] of the judgment).

Geoffrey Pritchard (instructed by Waterfront Solicitors LLP) for the SDL parties; Anna Edwards-Stuart (instructed by Lupton Fawcett LLP) for the NRL parties.