CANON KABUSHI KI KAISHA v. GREEN CARTRIDGE CO (HONG KONG) LTD AND ANOTHER

1993, No.A7844

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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1. I have before me a summons dated 14th October 1997 issued by the Plaintiff herein for an Order that the principal and interest standing in The Hongkong and Shanghai Banking Corporation Hong Kong dollar Savings Account Nos.002-6-346536 and 002-8-367175 be paid forthwith to the Plaintiff's solicitors for the account of the Plaintiff in partial satisfaction of the Plaintiff's costs in Privy Council Appeal No.75 of 1996.

2. This is very much a procedural sideshow resulting from this long running litigation, which was a patent and copyright infringement action, the subject matter of which involved disposable process cartridges used in laser printers and photocopiers.

3. The history of the action can be broadly, and shortly, stated. The Plaintiff issued a writ in July 1993, and on 15th September 1993, the Plaintiff issued a summons for an interlocutory injunction seeking to restrain the 1st Defendant from committing acts of patent infringement. This application was dealt with by Consent Order made by Rogers, J. on 7th February 1994. As Mr Shieh, for the Plaintiff, put it, the result of this was that the 1st Defendant could continue with the manufacturing and sale of its "copy" process cartridges until trial, provided that the 1st Defendant paid US$1 per cartridge sold into a joint bank account held by the parties' solicitors, such money to be held "to the order of the Court".

4. Pursuant to that Order, money was paid into The Hongkong Bank account from March 1994 until, I understand, the conclusion of the proceedings in the Court of Appeal, and the sum presently stands at a figure of in or around HK$1.3 million. The present application, therefore, involves the payment out of these very monies.

5. But to return to the history of the action. Trial before Rogers, J. took place in late 1994, and judgment was handed down in the action on 31st March 1995. Paragraph 9 of that judgment reads :-

"The amount or amounts certified to be due to the Plaintiff upon making the said accounts and enquiries at paragraphs 6, 7 and 8 hereof be paid to the Plaintiff from the account held by the parties' solicitors pursuant to paragraph 2 of the order of Mr Justice Rogers dated 7 February 1994 and the balance (if any) be paid by the Defendants to the Plaintiff within such time as is ordered upon such accounts or enquiry."

6. The Defendants appealed against the findings of the trial judge, and the Plaintiff cross appealed. The Court of Appeal allowed both the appeal and the cross appeal, holding, inter alia, that the Plaintiff's copyright was not infringed. However, the Court of Appeal held that two of the Plaintiff's patents held invalid below were valid and infringed, and paragraph 7 of the Court of Appeal Order read as follows :-

"The amount or amounts certified to be due to the Plaintiff upon making the said accounts or enquiry at paragraphs 5 and 6 hereof be paid to the Plaintiff from the monies held in the accounts held by the parties' solicitors pursuant to paragraph 2 of the Order of Mr. Justice Rogers dated 7th February 1994 and to paragraph 1 of the Undertakings given to the Honourable Mr. Justice Liu and embodied in the Order dated 30th August 1995 and any deficiency be paid by the 1st Defendant to the Plaintiff within such time as is ordered upon such accounts or enquiry and any surplus after such payment be released to the 1st Defendant within such time as is ordered upon such accounts or enquiry."

7. Thereafter the matter went to the Privy Council on the issue of copyright infringement only, the Privy Council allowing that appeal with costs to the Plaintiff by Order dated 20th May 1997. That Order was formally made an Order of the High Court by the Order of Master Jennings dated 20th June 1997, paragraph 3 of which reads :-

"(3) that the Defendant to pay to the Plaintiff its costs of the appeal to Her Majesty in Council incurred in the said Court of Appeal and the sum of (177,485.38 for its costs thereof incurred in England."

8. Hence the present application.

9. In a nutshell, Mr Shieh submits that a liability to pay costs is as much a liability in the action as a liability to pay damages. The court, he says, undoubtedly has jurisdiction to order payment out of the monies in the joint account, and that as a matter of discretion, all the practical considerations point to one conclusion only, namely that the money should be paid out to the Plaintiff, given that the order of costs made against the 1st Defendant in the Privy Council appeal is a precise and liquidated sum, that there is also an undoubted and indisputable liability, and that it makes no sense for the money to remain in the joint account. He amplifies this argument in his elegant skeleton but that, at least, was a thrust of his submission.

10. To the contrary, Mr Chow, for the 1st Defendant, opposes as "a matter of principle". Essentially, Mr Chow's submission is that the monies in the joint bank account have always been notionally earmarked for the payment of damages, which was precisely the factual matrix at the date of the Order before Rogers, J., as to the consensual nature of which Order he also lays considerable stress. Moreover, the judgment of Rogers, J. dated 25th June 1995 (at paragraph 9) and the judgment of the Court of Appeal (at paragraph 7 thereof, which paragraph was, I note, not altered by the Privy Council decision) make the point that the amounts consequent upon the accounts and inquiries are to be paid from the joint account. He further submits that this Court has no jurisdiction to vary the Court of Appeal Order and that, if such variation is to be done, it should be done by the Court of Appeal. Lastly, he submits that there is no current certainty, as opposed to unproved speculation, that the monies in the joint account would be insufficient for the damages accruing to the Plaintiff.

11. I think that in the circumstances this latter point is stretching credulity. Admittedly there has as yet been no inquiry as to damages, but on the affidavit evidence before the Court, Mr Shieh is confident that the damages liability is in excess of at least HK$20 million. In fact, from a financial viewpoint, the 1st Defendant's position looks distinctly bleak. Not only must the 1st Defendant pay the Privy Council costs, now crystallised at some £177,000, but it must also pay the costs (yet to be taxed) of the First Instance and Court of Appeal proceedings, plus all the damages in due cause to be proved. So, in terms of the Plaintiff and the 1st Defendant, the monetary equation is overwhelmingly one way. The Plaintiff can be under no liability vis-a-vis the 1st Defendant, and the 1st Defendant can have no legitimate residual claim to any of the monies in the joint account. Indeed, the latter sum of HK$1.3 million appears to be but a drop in the financial ocean, so to speak, and all that the Plaintiff wishes now to achieve is to obtain the payment of these monies to defray the now-quantified Privy Council costs.

12. In my judgment, the merits of this application are overwhelmingly with Mr Shieh's clients, and the only point which has given me pause for reflection in the present debate is Mr Chow's submission that to accede to the present application would, in effect, be to vary an Order of the Court of Appeal.

13. Mr Shieh's response to this is to say that there is nothing to prevent a First Instance judge from construing an Order of a Superior Court - he says that the mere exercise of the power to construe such an Order does not logically lead to the conclusion that such can only be conducted by a Court of Appeal judge - although he does, I think, accept that if the Order in question is construed as mandatory in effect, it can only be varied by the Court pronouncing it, that is, by the Court of Appeal. The option in this situation would, therefore, be to revert to Rogers, JA (as he now is) for such an application to take place; however, in Mr Shieh's submission, such an exercise in the circumstances would be a manifest waste of time and money.

14. After some hesitation, I agree with Mr Shieh. I think that paragraph 7 of the Order of the Court of Appeal dated 9th May 1996 is permissive only, and not mandatory in its effect. In my view, the monies in the joint account are not to be regarded as an exclusive mandatory source for the payment of damages, at least until any formal variation of the Court of Appeal's Order. Rather, at the time of making the Orders in question, the Court, at the Court of Appeal level and at First Instance, was merely reflecting the existence of the funds in the joint account as the first source of the payment of such damages as may be subsequently ascertained; accordingly, in my judgment, the Court was not saying that such funds can or could never be used for any other purpose. Ergo, paragraph 7 permits but does not preclude. And if this be correct, this Court is, in my judgment, in the position to direct the orderly and fair disposal of the monies in the joint account according to the situation as it has now developed some two years later. To suggest that such monies in the joint account should remain effectively inviolate pending the ascertainment of the damages, whilst interest continues to accrue upon the unpaid crystallised costs, is a suggestion that holds no intrinsic attraction.

15. So that once I have arrived at this conclusion, I have little difficulty in permitting what is in effect execution of the crystallised Order for the Privy Council costs against the sum presently standing in the joint account. In the circumstances, I cannot see anything to be gained by referring the matter to Rogers, JA, or indeed to one of his colleagues in the higher Court, and accordingly, rightly or wrongly, I think that this Court should grasp this particular nettle and decide the point here and now; indeed I note, for reasons which are not altogether clear, that this particular application has been outstanding since October 1997, and I think it is high time that a decision was reached thereon. It follows, therefore, that notwithstanding the valiant efforts of Mr Chow in arguing a difficult brief, I grant the Plaintiff's application, and I am prepared to do so in terms of the summons before me unless Mr Chow has any argument on costs that he wishes to place before me.

[Submissions from Counsel]

16. I now have received submissions on costs. Mr Chow, for and on behalf of the 1st Defendant, quite properly draws my attention to the fact that this is actually the third effort in getting this application off the ground in terms of argument. Mr Shieh helpfully tells me that the first hearing of the summons was returnable was on 31st October 1997 for 15 minutes. It was then adjourned for a date to be fixed, not unsurprisingly. The matter was then refixed for hearing before Yam, J. on 8th January 1997 for a morning, but I understand that at that time approaches were made between the parties to the effect that the matter be further discussed with a view to a consensual resolution of the whole issue, and that accordingly such argument did not take place on that day. Today, of course, the matter has been argued to its conclusion, and I have now rendered my judgment. Against this background, therefore, Mr Chow suggests that the costs of and occasioned by the hearing on 31st October 1997 and 8th January 1998, which were reserved, should be on the basis of no Order as to the costs of those days. To the contrary, Mr Shieh suggests that he should have the costs of both of those days since the ultimate hearing has now taken place, and he has won.

17. In my judgment, the appropriate Order is as follows : the Plaintiff is to have the costs of and incidental to this application, to be taxed if not agreed, save and except for the costs of and occasioned by the hearing on 8th January 1998; as to those costs, I consider that no order as to costs is the appropriate order. I further add, for the direction of the taxing master in light of the Order I have made, that Mr Shieh's brief fee is to be permitted for the hearing today; in other words, the effect of this is that on taxation his clients will be denied a refresher.

18. That takes care of the costs. However, Mr Shieh has drawn my attention to minor matters on the face of the summons. First, instead of the word "forthwith", my order is that the principal and interest in the joint account be paid to the Plaintiff's solicitors within 14 days of the date hereof. It may be, also, that Mr Chow is in the position to offer me an undertaking in that regard, in which case there is no need to refer in the formal Order to the Defendant's solicitors doing all that is necessary to effect such payment.

19. A further matter arose after dealing with these other issues. Mr Chow, on behalf of the 1st Defendant, asked for a short adjournment. I granted it, and on my return, he indicated that he had instructions to appeal, and that he wanted a stay of execution pending that appeal. Mr Shieh, for his part, has drawn my attention to the relevant text regarding a stay of execution as is digested in the White Book, and suggests that he should not be deprived of the fruits of this particular success in this Court.

20. I have considered the matter fully, and rightly or wrongly, I have come now to the particular conclusion as reflected in this judgment. However, this is a somewhat unusual situation; it is not quite the normal type of litigation wherein a litigant has obtained an order for payment of a sum of money, and immediately (and naturally) wants the fruits of that judgment. I bear in mind that this is a long-standing piece of litigation, and that the money in question has been in the joint account for some three to four years. Accordingly, after looking at the situation in the round, I think that in the circumstances prevailing the correct order is as follows :

21. There be a stay of execution to the 1st Defendant for a period of 21 days to permit the 1st Defendant to make application to a single Judge of the Court of Appeal for a stay of execution of this Order. It follows therefore from what I have said that if a single Judge of the Court of Appeal has not granted any such stay of execution within 21 days from today, then the present interim stay of execution expires, and the result of this application will stand in the normal course.

22. I thank both Counsel for their assistance.

Representation:

Mr Paul Shieh, inst'd by M/s Deacons Graham & James, for Plaintiff

Mr Raymond Chow, inst'd by M/s Robin Bridge & John Liu, for 1st Defendant

1993 No. A7844

 IN THE SUPREME COURT OF HONG KONG

HIGH COURT

1993, No. A7844

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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JUDGMENT

    This is a Patent and Copyright Action. The Plaintiff is a Japanese corporation. It is a manufacturer of many different products but as regards this Action it is relevant that it manufactures laser printers and copiers which operate with cartridges. The 1st Defendant is a Hong Kong company, the 2nd Defendant is its managing director.

    There are than 5 patents in issue. In nearly every instance, infringement and validity falls to be decided. There are well over 100 drawings which are the subject of the copyright claim. The issues in respect thereof, at this stage of the proceedings are limited. What is at issue in this Court is whether the Defendants’ acts constitute infringement having regard to the defences which are available to manufacturers of spare parts following the decision in British Leyland v Armstrong[1]. The Defendants have reserved their right to take other points as to infringement of copyright but those would not be open to them in this Court.

THE BACKGROUND

    This Action relates to the Plaintiffs EP-S process cartridge which is used in its SX model laser printer. The SX engine, as it is called, can be used for both photocopying machines and laser printers notably those which work with computers. The Plaintiff claims to have pioneered the use of a cartridge system in electrophotographic copying machines and laser printers. Since these machines print in exactly the same way, at any rate as far as is relevant to this action, no distinction will be drawn as far as this case is concerned.

    Photocopying machines of one type or another have been in existence for many years. The history of development of electrophotography, or xerography (meaning “dry writing”) as it is sometimes called, dates back to just before World War II. In 1939, Chester Carlson applied for the first patent relating to the electrophotographic process. The list of well known companies which were offered but turned down the invention makes interesting reading. After World War II the first commercial machine which used the process was made. That was called the Model D and was made by the Haloid Corporation (the predecessor of the well known Xerox Corporation). In the course of the evidence I was shown a video demonstrating that machine. It was clearly not an office copier as is known to-day but it was a machine, or more accurately a combination of machines, which operated essentially the same electrophotographic process as is known today. A description of the process is contained in the book Electrophotography and Development Physics by L.B. Schein, which was referred to from time to time throughout the trial. For convenience I set out the 6 basic stages in the xerographic process:-

1.  Charge  ;What is called a corona discharge caused by air breakdown uniformly charges the surface of what is termed the photoreceptor. In the absence of light that surface is an insulator. The surface is now invariably made in the form of a drum and was often referred to during this case as the photosensitive drum.

2.  Exposure  Light either reflected from an image in a photocopier or produced by a laser in a printer discharges the charge on the surface of the photoreceptor selectively to produce a latent image in the form of a charge pattern on the photosensitive surface that mirrors the information to be transformed into the real image.

3.  Development  Electrostatically charged toner particles, the equivalent of what may be regarded as ink, are brought into sufficient proximity to the drum that toner is transferred to the latent image, transforming it into a real image.

4.  Transfer  The toner image on the drum is transferred to the paper.

5.  Fusion   The toner is embedded onto the paper by heating.

6.  Cleaning   The photosensitive drum is discharged and cleaned of any excess toner.

Reproduced below is a diagram which illustrates the separate steps.

    It was apparently at the end of the 1950’s that the first automatic electrophotographic machine was produced. All the steps 1 to 6 above were incorporated into one machine. During the 1960’s and 1970’s the photocopier became a more and more common machine. A diagram showing the same basic steps in a single machine is reproduced below. It will be noted that the part labelled “Develop” which takes the toner particles and brings them into proximity of the photoreceptor is in the form of a roller. The roller features significantly in this case. When I refer to roller hereafter I shall be referring to this part unless the context otherwise makes it clear.

    The major development which affects this case came in the 1980’s when the Plaintiff pioneered the use of a cartridge system. The cartridge contained not only the supply of toner but the photoreceptor in the form of a photosensitive drum and the mechanism for transferring the toner to the drum. Hence, effectively, the mechanism for accomplishing all the steps enumerated above apart from step 5 (fusion) were contained in a small cartridge or cassette designed to be handled by the unskilled user. It had the advantages, which I shall come to later, that not only was the toner cleanly and easily handled safely inside a container but since the photosensitive drum and other parts were replaced each time the toner was replenished the need for servicing was reduced significantly because, effectively, there was a new machine every time the cartridge was replaced.

PATENTS

    Before going to the patents in issue in this case it is necessary to examine the law relating to patents. The law as to patents in Hong Kong is governed by the Registration of Patents Ordinance. It is fair to say that many of the difficulties with regard to the interpretation of the Ordinance were raised by the Court and became the subject of detailed argument. As a general observation I should say that the archaic wording of the Ordinance causes undoubted obscurity. Whereas the overall intent that patents should be registrable and enforceable in Hong Kong could be said to be clear, the wording of the Ordinance gives rise to difficulties when it comes to a more detailed examination of how that is done. The matter is clearly ripe for detailed legislation.

THE ORDINANCE

Background

    The Ordinance was first enacted in 1932. In those days a patent was a document in the form prescribed in the Rules made under Patents a Designs Acts 1907 and 1919. That form was sealed by the seal of the Patent Office which by Section 14 of the Acts had the same effect as if it were sealed with the great seal of the United Kingdom. It is unnecessary to set out the full wording of the patent, that can be seen in the Third Schedule of the Patents Rules 1920. It suffices to say that the form of the patent gave the patentee the monopoly in the invention by on the one hand giving him the right and sole privilege of making, using, exercising and vending the invention and on the other hand the King’s subjects were commanded not to use or put the invention into practice. Both aspects were specifically geographically restricted in their application to the United Kingdom. The specification of the patent was that which defined the invention.

    That scheme of things was continued under the Patents Act 1949, with a minor modification in the wording and remained until the 1977 Act came into force.

    Prior to the 1977 Act there were no statutory provisions defining or prohibiting infringement except for that which was contained in Section 29(1) of the earlier Acts and Section 21(2) of the 1949 Act. Those provisions enacted that the Patent had the same effect against the Crown as it did against a subject. The effect of those provisions was modified by the Crown user provisions.

    It can be seen, therefore, that patents were not a creature of statute but were regulated by statute. The rights in respect of a patent were prerogative rights modified in some respects by statute.

Section 6 of the Registration of Patents Ordinance

    Against that background Section 6 of the Registration of United Kingdom Patents Ordinance (as it was then entitled) provided that the holder of a certificate of registration should enjoy “privileges and rights, subject to all conditions established by the law of Hong Kong, as though the patent had been granted in the United Kingdom with an extension to Hong Kong.”  Although the wording is quaint it did have relevance to the prerogative nature of patents and the common law as to the nature of the rights of the patentee.

Smith, Kline & French Laboratories v The Attorney-General

    The most notable case in which Section 6 of the Registration of United Kingdom Patents Ordinance came to be considered was Smith, Kline & French Laboratories v The Attorney-General[2]. In that case the Full Court had to consider an argument by the Government of Hong Kong that it was entitled to use an invention by reason of the Crown user provisions contained in the 1949 Act. The Full Court was clear in its conclusion: Section 6 of the Ordinance did not apply the Patents Act to Hong Kong but the effect of some of the provisions of the Act might be felt in Hong Kong.

    What the Ordinance did was, in Rigby J.’s judgment, to do no more than extend to Hong Kong the rights and privileges given to the holder of a patent issued in the United Kingdom as if the words “Hong Kong” had been included in the original letters patent.

    Huggins J. used similar words to express the same sentiment. He went on to explain that the purpose and effect of Section 6 of the Ordinance was to give to the applicant for registration the same protection in Hong Kong as he enjoys in England and no more. That protection consisted partly of privileges and rights conferred in the exercise of the Royal prerogative and partly of rights conferred by statute. The particular statutory provision which he was referring to was protection against the Crown which was provided by Section 21 of the Act.

    The Court held that the Crown user provisions under Sections 46 to 49 inclusive of the Act did not apply in Hong Kong but they were relevant since they affected the rights of the patentee by reason of the fact that they so affected his rights as if the patent had been issued with an extension to Hong Kong. In other words there was no question of rewriting the sections (notionally or otherwise) so that the Crown user provisions applied to the Hong Kong Government because the Act used words which meant Departments of the Government of the United Kingdom. It is in that context that the statement of Huggins J. at page 517 of the report is relevant:-

“So far as the prerogative privileges and rights are concerned the protection under the existing legislation is the same because they have not been cut down by statute. So far as the statutory rights are concerned I am of the opinion that they too are the same, namely a right to protection against use by the Crown other than such use as may be made or authorised by a department of State of the United Kingdom …”

    That decision was never the subject of appeal and indeed statutory recognition can be said to have been given by the enactment of specific Crown user provisions which are to be found in Sections 7A to 7D inclusive.

The Patents Act 1977

    The Patents Act 1977 introduced a substantial change in the way patents were granted. There was no longer use of the prerogative in the granting of Patents. Infringement was governed by Section 60 onwards. That Section defined what constituted infringement and Section 61 gave a right of action in “the court” for infringement. I would mention, at this point, that under the 1977 Act infringement takes place in the United Kingdom.

Later amendments to the Ordinance

    Following the coming into force of the Patents Act 1977, the Ordinance was again amended. This time the definition of the term “patent” was amended to include a European patent (UK) that has effect in the United Kingdom. Another amendment was made which is of some interest. The words “manufacture, use or sale of the invention” in the proviso in Section 7 of the Ordinance were changed to read “act done”. This proviso prevents any action for infringement of a patent for acts done prior to the issue of the certificate of registration.

    What might, perhaps, be said to have been lost sight of in amending the Ordinance was that not only were the provisions as to infringement now included in the Act and the prerogative powers no longer used in granting patents but that many of the provisions of the Act, for example specifically Section 60 (defining what constituted infringement) applied to the “United Kingdom”. Hence, if one gave the same meaning to Section 6 of the Ordinance as had been given by the Full Court in the Smith Kline case, then there would be a difficulty. It was no longer a question of extending the terms of a prerogative patent but of giving rights in Hong Kong that existed as statutory rights limited specifically to the United Kingdom.

Decisions subsequent to the 1979 amendments

The Improver Case

    The most notable Hong Kong decision on the meaning and effect of the Registration of Patents Ordinance following the amendments made in 1979 has been the case of Improver Corp & Another v Raymond Industrial Ltd & Another[3]. There however the argument was a narrow one. It was a decision in an application for an interlocutory injunction. It appears that the extent to which the Patents Act applied or its effect felt was only argued to a limited extent. The argument was whether effect should be given to those provisions of the Patents Act which related to interpretation of the patent specification. Clearly if the argument that those provisions should not be applied in interpreting the specification were acceded to there would be a possibility that the same specification might have been subject to a different interpretation in the United Kingdom and in Hong Kong. That result would seem to be one that would have to be avoided at the most costs. The effect and application of the other sections of the Act was not considered. When the trial took place it seems that there was no relevant argument and the Court of Appeal simply recorded that there was not dispute that patents were given protection in Hong Kong.

National Research Development Corporation v The Wellcome Foundation Ltd

    The question of the effect of the Ordinance was however considered in the Patents Court by Aldous J. in National Research Development Corporation v The Wellcome Foundation Ltd[4]. In that case what was under consideration was whether the effect of paragraph 4(2)(b) of Schedule 1 of the 1977 Act applied to a patent licence which covered Hong Kong. The learned Judge held that it did and in doing so he said:[5]

“After the 1977 Act came into force, it became necessary to look to the 1977 Act to ascertain the extent and nature of the United Kingdom patent rights and privileges. A Hong Kong patentee has the same rights and privileges and the 1977 Act must be consulted to ascertain their nature and extent.”

    With that statement of principle I respectfully concur. But as I have already pointed out in relation to Section 6, I consider that it is not possible to give an interpretation of the Ordinance based solely on a logical analysis of the wording.

Interpretation of the Registration of Patents Ordinance

    In interpreting the Ordinance I have been persuaded that it is proper, given the decision in Pepper (Inspector of Taxes) v Hart[6], to have regard to what was said in the Legislative Council. To that end I have been shown a copy of the Hong Kong Hansard report of the resumption debate on the second reading of the Registration of United Kingdom Patents (Amendment) Bill 1979. There the late Mr. Peter C. Wong, who appears to have been stating what was apparently the accepted position, said in respect of the Amendment to Section 7 that the old wording was too narrow because it would not cover what would be considered infringement under the 1977 Act. From this I take it that it was the intention of the Legislature that infringement would be governed by the same criteria apart from geographical limitations as governed the law of infringement in the United Kingdom under Section 60 of the Act.

    Even here a certain flexibility of thought has to be used. Section 60 itself, as I have already indicated, merely defines infringement and it is Section 61 which gives the right of action. However that latter Section refers to bringing proceedings in the court and “court” is defined in Section 130 in terms which only relate to the United Kingdom. At first glance a liberal interpretation of the effect of the Ordinance as implying a power to the High Court in Hong Kong similar to that contained in Section 61 might not seem extreme, given the fact that it is clearly the purpose of the Ordinance, even without considering what was said in the Legislative Council, that patents should be enforceable in Hong Kong. However it seems to me to be difficult to find a rational interpretation of the Ordinance as it stands at present that would include the effect of Section 61 but exclude other sections.

    To take an extreme example, Section 75 of the Act gives the court power to amend a patent. It would seem an extraordinary proposition to me that a Hong Kong Court could amend a patent. Indeed neither of the parties contended for such an interpretation. Yet if one interpreted the word “court” in Section 61 to include the High Court in Hong Kong it is difficult to see on a matter of pure grammatical construction why a court in Hong Kong should not have the power to amend a patent.

    The Defendants’ Counsel sought to draw the distinction between the rights of a patentee and the power of the court. The former he said were the same in Hong Kong as in the United Kingdom, the latter different. In this way he argued that the effect of Section 61 could apply and the powers of the court under section 75 could not. Although at first blush that is an attractive argument that still does not solve all the queries. I bear in mind here that whether a matter is expressed as a question of a right of the patentee (or limitation thereof) or a power of the court to make a particular order in favour of or against a patentee is often the distinction between a choice of phraseology. I would draw attention here to the distinction between Section 61(1) which states that civil proceedings may be brought in the court by the patentee and Section 61(2) which restricts the powers of the court to prevent an award of damages and an account of profits.

    It is pertinent to note that Mr. Peter C. Wong also made reference to Section 64[7] when he was addressing the Legislative Council. He acknowledged the fact that since prior secret user was no longer to be a ground of invalidity the effect of that Section was important. He gave 2 reasons for not incorporating “the essence” of that Section into the Ordinance. The first reason implied that it was considered that Section 6 included the effect of Section 64 at least by implication. The second reason was that “Adopting Section 64 would not be desirable at this stage as it would require very careful thought and drafting. The matter will be referred to the Working Party on Patents”. This, perhaps, lends some credence to the overall impression that the 1979 legislation was only a stop gap measure and that the implications and effect of the legislation were not fully thought through. As an aside I can say that the working party evolved into a steering committee. The report of the committee was published some 2 years ago. The draft legislation contained in that Report has not yet been put before the Legislative Council.

    The question still remains as to which are the sections of the Act the effects of which are felt in Hong Kong.

    Broadly applying the criteria stated by Aldous J. they must be those which govern the rights and privileges of the patentee. First there must a right of action in Hong Kong Courts for infringements committed in Hong Kong. Those are to be judged by the same criteria as limit the patentees’ rights in the United Kingdom. Such limitations should, it seems to me, include such matters as restriction of a right to damages in the case of innocent infringers: Section 62. It will be noted however that there would not be any rewriting of the Section and the exemption would be to those who did not know of the patent. Knowledge, or rather absence of it, of the certificate of registration would be immaterial. Even in so holding I have to say the matter is not beyond all doubt. Reference could be made to the United Kingdom Designs (Protection) Ordinance. Section 2 of that Ordinance is in similar terms in respect of registered designs as Section 6 of the Patents Ordinance in respect of patents. Nevertheless, that Ordinance only has 4 Sections, one of them provides for innocent infringers.

    I see no reason why relief for a partially valid patent should not be granted by interpreting the patentees’ rights as including such a right. I consider it is an artificial distinction based simply on linguistics to say, as was argued by the Defendants, that Section 63 applies to the court’s powers and not to be patentee’s rights. In any event, even if I were wrong about that, since I am clearly of the view that a Hong Kong Court cannot amend a patent I see no reason why if a court in Hong Kong should come to the view that a patent is partially valid it should not stay the proceedings to give the patentee time to apply for an amendment and at the same time grant an interlocutory injunction pending the resolution of any amendment proceedings in the Patent Office.

    The only other section to which I need refer here is Section 71. That relates to the Court’s power to grant a declaration of non-infringement. I consider that it is too strained an interpretation to say that this section relates to the rights and privileges of a patentee. It relates to the power of the Court and the rights of a potential infringer in certain circumstances to seek a declaration.

    The absence of statutory powers of a Court to make a declaration as to non-infringement does not mean that the Court is powerless to make such declarations. There is the ordinary action for a declaration. In this case I was urged not to consider that since it was said that the necessary circumstances did not exist to warrant exercise of the Court’s power.

    In my view the Court’s power to grant a declaration of non­infringement is an important and useful power. It is in the public interest that issues as to infringement in industrial property matters are clarified as early as possible. No doubt if a patentee has made no claim and an outsider simply files a writ seeking a declaration without more ado then the Court would be reluctant to embroil a patentee into litigation. But where there is already substantial litigation in progress and one of the parties wishes to clarify an issue as to infringement that is far from fanciful, the court would be concerned that the time, effort and expense that has already been expended on the litigation should not have to be repeated simply because no formal claim had been made by a patentee.

    I bear in mind in so holding the principle referred to for example in Yat Tung Investment v Dao Heng Bank Ltd[8] that it is incumbent on parties in litigation to raise all relevant matters in the litigation that is on foot. Applying that to the present proceedings the parties have, of course, marshalled a patent action into court. It seems that it has to be a point of real merit which should prevent a court considering an issue.

    Put in another way, the absence of a statutory right to apply to the patentee for an assurance as to non-infringement should not put a third party at a disadvantage in Hong Kong. The Court should where possible give a liberal interpretation to its powers.

The acts complained of

    It is unnecessary to set out in detail the Defendants’ acts that have led to this Action. The questions of infringement and validity of the patents can be decided without so doing. It suffices to say that the Defendants are manufacturing and selling cartridges and parts which are a close and detailed imitation of the Plaintiff’s cartridges. The Defendants’ product is not merely an imitation of the corresponding parts of the Plaintiff’s cartridge, it is intentionally so close an imitation that the parts which the Defendants manufacture can be interchanged with parts of the Plaintiff’s product.

    I can mention at this stage that 1st Defendant commenced its business operations by refilling old cartridges made by the Plaintiff. That form of operation entailed the replacement of parts which had become worn. The lack of availability of spent cartridges prompted the 1st Defendant to turn to the manufacture of complete cartridges. That is a matter which the 1st Defendant says it is justified in doing. It is that matter which has led to this Action.

    The fact that the Defendants’ product is an imitation of the Plaintiff’s does not dictate that there must be an infringement of all or any of the claims of the Plaintiff’s patents. The Plaintiff may or may not be using the technology and the inventions of its patents in any one of its particular products. I therefore approach the question of patent infringement without any preconceived notion of probable infringement.

UK PATENT 2,006,054

History of Toners

    Because of its relevance in relation to the attack of obviousness, it will be convenient to commence by referring briefly to some of the features of the history of toners in relation to photocopiers. Reference to this is made in the opening columns of the specification. The details of the development systems are dealt with in much greater detail by L.B. Schein in his book Electro-photography and Development Physics.

    For the present purposes, I ignore the liquid development systems. Essentially, the photocopiers which are on the market today use toners which fall into two broad categories. The first is the dual component toner and the second, the later development, is the mono-component toner.

Dual Component Systems

    The first system which was used and which is still, I understand, used today in most, if not all, high speed copiers was a dual component system. A dual component system uses two powders. There is a toner powder which is electrostatically charged by mixing it with another powder called the carrier. The toner has an average diameter of perhaps around 10 microns and constitutes the colour, usually black, which forms the “marks” on the paper. The carrier is of much larger size.

    There was some dispute at the hearing as to the size of the carrier particles in a dual component system in 1977. Apart from odd exceptions, it might be supposed that the carrier size would have been approximately 200 microns. Dr. Schein[9] gives his indication that the carrier diameter is usually chosen between 100 and 300 microns. His book seems to have been published in 1988 with revisions in 1992. The sizes of toner particles in use have not, as I understand it, changed over the years. If anything the size has become smaller. In the book it is said that it is only Minolta which uses smaller diameter earner particles but that there was no published information available in respect of it. It seems from the evidence in this case that sizes between 70 to 200 microns were known. In rare exceptions they may have been even smaller than that.

    In usual circumstances, the roller has stationary magnets within it. The arrangement of the magnets generates magnetic fields. The magnetic properties of the carrier beads causes them to be transported by friction forces around the roller. The magnetic fields in turn cause the carrier beads to form upstanding chains or brushes. In a dual component system, these brushes come into contact with the photoreceptor (i.e. the photosensitive drum). The charged toner is attracted by the electric field on the photoreceptor. Thus the toner is brought into contact with the photoreceptor and taken from the carrier particles and passed onto the appropriate parts of the photoreceptor i.e. the part which corresponds to the black part of the final print. A diagram taken from Dr. Schein’s book showing the magnetic brush development in a dual component system is reproduced below.

    In those parts which are intended not to contain an image, i.e. the white parts, no toner is intended to be passed. If toner becomes dislodged from its carrier particle and unintentionally passes to the parts of the photoreceptor to which it is not intended it should pass, in theory at any rate, the carrier particles will have sufficient charge to remove the unwanted toner from the parts of the photoreceptor which do not have the necessary charges. In other words, the magnetic brush in a dual component system not only touches the surface of the photoreceptor to transfer toner in the intended parts but also touches the photoreceptor to remove toner which has been unintentionally deposited on the unintended part.

    In his book Dr. Schein makes three points in respect of the development step[10]. First that it is important and that it usually determines the best image quality the copier will produce. Secondly that significant aspects of the physics of development are not well understood. Thirdly that, as a result, significant empirical material and hardware parameter searches are standard procedure in optimising a development system for a new copier. He says that because there is no predictive ability or off-line tests, a manufacturer can only proceed by building actual hardware, making copies and running tests. This is naturally an expensive and highly manpower intensive process. He goes on to say that after a failed test, it is usually unclear whether hardware changes or material changes need to be made.[11]

    It is clear that there were significant developments in the dual component systems but none were specifically referred to during the trial and for present purposes it does not appear necessary to go into them.

Mono-component Development Systems

    Mono-component development systems are conceptually simpler than dual component systems since the carrier particles are eliminated. In the mono-component systems hardware complications which are inherent in the dual component systems can be avoided. The mono-component toner, at least so far as concerns the facts of this case, has a particle size which is very much smaller than the size of the carrier particles of the dual component toners. The specification[12] talks of the toner suitable for use in the embodiments having an average particle size of 5 to 10 microns. This is by no means out of the way and I understand from the evidence would be typical of the size of a mono-component toner particle.

    The first mono-component toner photocopier was apparently marketed in early 1970’s. According to Dr. Schein’s book[13], it had inherent flaws. There is a diagrammatic description of this in a figure which is reproduced both at figure 3.7 and 8.3 of Dr. Schein’s book. I include it here.

    The mono-component systems worked with a roller spacing between the roller and the photoreceptor which was of an order which was considerably smaller than that of the dual component systems. Apparently published data referred to a spacing of 25 to 50 microns with a spacing of less than 25 microns being said to provide unsatisfactory images because the toner loading was generally not sufficiently uniform. Above 75 microns spacing, image density dropped and the ability to reproduce fine lines and dots was reduced. Dr. Schein said in his book that it clearly created a challenging tolerance problem.[14]

THE INVENTION OF PATENT 2,006,054

    It was in the context of the background of the 2 types of toner that the invention of the patent in suit was made. It will be noted that the first application was in September 1977. As I have indicated the opening columns of the specification refer to both the two component and the mono-component systems.

    The patent specification confines itself to mono-component magnetic developers. In using that the patentee seeks to avoid the drawbacks which are inherent in the systems where toner is allowed to come into direct contact with the non-image areas. In other words, the inventor is using a system whereby the toner is not allowed to touch those areas of the photoreceptor which correspond to what will be the white areas of the copy.

    The system which is the subject of this patent works in the way described at lines 89 to 124 on page 4 of the specification. The design of the system is said to be such that the toner remains separated from the non-image area of the photoreceptor but transfers to the surface of the image area of the photoreceptor. The attractive force due to the electric field of the latent image on the photoreceptor causes the toner layer to increase in thickness and the toner particles form into erect extending brush-like chains under the influence of the magnetic field of the magnets inside the roller. The end portions of the chains are said to be torn and fly towards the image carrying surface.

    The mechanism of the patent is described in the specification as being different from the jump technology[15] Professor Castle described it in his evidence as being more of a bouncing technology.[16]

    Comparatively broad ranges of sizes are given in the specification to the extent that on page 3 of the specification, the thickness of the toner layer is given as preferably between 30 and the 100 microns. It is true to say that larger dimensions are also talked about later in the specification. These measurements are given in respect of an arrangement whereby when the toner layer is at the developing station, the separation between the surface of the toner layer and the image carrying surface is in the range of between 20 microns and 400 microns.

The claimed invention

    It is against this background of the use of a magnetic insulating mono-component toner that the invention claimed in the patent is said to reside. What the patentee was seeking to obtain on the roller was, first of all, clearly a very thin layer. Thicknesses of 30 microns, even given the dimensions of a mono-component toner particle, are undoubtedly very thin. With the dimensions referred to the specification to which I have just referred, it can be seen that the toner layer must have a high degree of uniformity if the arrangement is going to achieve the purpose of avoiding contact between the toner layer, whilst on the roller, and the photoreceptor. Furthermore, experience both with dual component systems and indeed the prior mono-component systems had shown that lack of uniformity in a toner layer even where contact is wanted can cause substantial difficulties.

    What is claimed in claim 1 of the patent is a method of forming the layer of a mono-component magnetic developer which is said to comprise 2 matters. The first: ‘A) supplying the developer to a carrier for carrying the developer through a regulating zone to a developing station.’

    Dealing briefly with this requirement, this simply states that the developer should be supplied to the carrier (roller) on which it passes first through a regulating zone. That could be constituted by, for example, a doctor blade which smoothes out the flow of the material. The developer is then carried to the developing station, namely opposite the photoreceptor.

    The requirement B) of claim 1 is that there should be formed at the ‘regulating zone a magnetic field in the region of a gap between the carrier and a magnetic member positioned in spaced relation to the carrier, said field having lines of force which converge towards said magnetic member and being such as to limit the thickness of the developer layer by causing the passage of said developer through the gap to be blocked except for a portion moved adjacent the carrier.’

    The patent is therefore concerned with the development stage, step 3, which I have indicated above.

    This claim appears to me to be clear in its scope. What it requires is that the magnetic member, which has been referred to in this case as the magnetic doctor blade, should have lines of force converging towards it and that as a result, when the apparatus is in operation, toner particles should collect in the form of a clump such that a blockage is formed and only a portion of the toner which is closest to the roller can be carried forward. The operation of this blockage and the way it works is shown diagrammatically in a figure which appears to have first been produced in a paper written by the inventors but has been reproduced in Dr. Schein’s book at figure 8.11.

    For convenience I include that figure here. It is not necessary to go into mathematical calculations, but the diagram is also used in demonstrating the theory which lies behind where the toner chains split.

    Professor Castle who gave evidence for the Plaintiff described the clump that was formed as being semi-rigid. He amplified this in the course of his evidence with a diagram which was marked X-12 which illustrates this semi-rigid clump. Professor Castle had undertaken considerable research into the way the Canon roller and magnetic doctor blade worked. This research had been done at least during the 1980’s for I.B.M.[17]

    I should mention at this stage that I found Professor Castle to be a knowledgeable and precise witness. He appeared to me to be particularly well versed in the functioning of the magnetic system of the Canon cartridge. I consider he was a very straightforward witness. I would also draw attention to the fact that it was primarily his criticism of the Plaintiff’s first experiment, aided little by cross-examination, that caused the Plaintiff to have to disavow reliance upon that experiment. The forthright manner in which Professor Castle gave his evidence about it was both commendable and very helpful.

    I would mention that Professor Castle’s evidence as to the manner in which the Canon cartridge works was not on the face of it challenged by Professor Marsh who gave evidence on behalf of the Defendants. As was pointed out in argument, it could be suggested that it might have been a little difficult for Professor Marsh to have challenged the manner of operation of the Plaintiff’s cartridge, in view of the fact that attacks of anticipation and obviousness, based upon the operation of other magnetic members, were being mounted against this claim. This argument would not, of course, be a complete answer.

INFRINGEMENT

    Although the Defendants’ cartridge is as near as possible a replica and exact duplication of the Plaintiff’s cartridge that in itself does not prove that the Defendants’ cartridge infringes the claims of this patent. In the first place, as I have said, the Plaintiff might not be using this particular technology. In the second place, the patent which has been obtained may not describe the technology properly nor may it claim the invention accurately. It is therefore necessary to examine the evidence in relation to the operation of the Defendants’ cartridge in order to consider the question of infringement.

    It is clear from the admissions which were made that the only issues outstanding are whether there are lines of magnetic force which converge towards the magnetic doctor blade and whether they limit the thickness of the developer layer by causing the passage of the developer through the gap to be blocked.

    In this respect, I would mention that by the end of the case, there was no dispute as to the meaning of the word thin. Professor Castle’s analysis was accepted by all sides. It was in effect that which would be no greater than that beyond which one would start to experience problems such as an increase in unwanted ‘background’ development causing ‘fogging’. With any word such as thin, one cannot have an empirical measurement. But given the nature of mono-component toner particles which have a diameter of approximately 10 microns, a thickness of the developer layer of 3 developer particles is in accordance with the preferred lower limit of the thickness as set out in the specification.

    No formal admissions were made as to the attainment of the thin layer. Mr. Thorley, Q.C. in his submission criticised the presentation of the Plaintiff’s case. He pointed to the fact that the article by Takahashi and others in the September/October 1982 edition of Photographic Science and Engineering, appeared to be able to give precise measurements of thicknesses. He drew attention to the fact that the Plaintiff had not done so in the course of evidence. I bear in mind here that the Plaintiff’s experiment no. 1 was criticised by Professor Castle and thereafter not relied upon. I do not consider that the argument based upon the ability of Mr. Takahashi and others to specify measurements in their article is determinative. I have no idea as to how their measurements were taken. Much has no doubt happened since 1982 and the Plaintiff and Mr. Takahashi may have thought better of their measurement methods.

    At the end of the day, I do not consider that the criticisms of the Defendants were any more than a prelude to the main attack relating to the existence or otherwise of the lines of magnetic force converging towards the magnetic member and whether they were such as to limit the thickness of the developer layer by causing the passage of the developer through the gap to be blocked.

    As I have indicated, the meaning to be attributed to the word thin in claim 1 of the '054 patent is in relation to the way the apparatus works rather than upon any empirical figures derived from specific measurements. Whilst the measurements might be of assistance, they would not, at the end of the day, be decisive of infringement.

Experiment no. 5 and the Reply Experiment

    The Plaintiff sought to establish the manner in which the toner layer is formed on the roller by means of experiment no. 5 and the reply experiment. Experiment no. 5 entailed the use of one of the Defendants’ cartridges, taking out the developing unit so that it can be easily seen, setting it on a sleeve rotation jig and setting the jig together with developing unit on an optical table. The developing roller was then run and the toner was fed into the system. As this was being done the gap between the doctor blade and the roller was observed.

    The viewing was done through a magnifying lens. That operated somewhere in the region somewhere between 25 and 100 times magnification. In practice the upper end of the magnification scale was apparently used. The experiment was recorded on video tape.

    The procedure in the reply experiment required that the optical axis of the microscope should be substantially in a plane perpendicular to the doctor blade, which plane passes through the gap, but the optical axis of the microscope should be at an oblique angle to the plane of the doctor blade for better observation.

    I did not see the conduct of the experiments. I doubt whether it would have taken the matter very much further if I had. I have seen the video tapes both of the original experiment and of the repeat experiment which was done at the commencement of the trial.

    When looking at the video recordings, the first thing which is obvious is that the effect of the magnification is such that really one would have been hard pressed to have seen anything without looking through the optical system. Two items bring a sense of proportion, the first is a ball point pen and the second is a feeler gauge.

    In interpreting what can be derived from the experiments, I consider that it is of crucial importance to have regard to the evidence of the expert witnesses. As with any other technical photograph, although the layman can watch the video and in general terms see what is going on, the important interpretation can only be done with technical assistance from those who are experienced in looking at these videos, and presumably photographs, and have worked with them.

    The dispute as to what this experiment showed, centred upon criticisms made by one of the Defendants’ witnesses namely Mr. Mercer and his challenge upon the accuracy of the setting up of the experiment.

    Mr. Mercer is now a director of the 1st Defendant. He has at all times been intimately involved with the 1st Defendant and its business. Indeed he has been primarily responsible for the manufacture of the 1st Defendant’s products. As such Mr. Mercer is clearly an interested witness. At the beginning of his evidence, he struck me as being a straightforward witness but later, and particularly when dealing with the experiments, his personal involvement in the case was regrettably all too apparent in the excitable manner in which he gave his evidence.

    Mr. Mercer’s criticism really stemmed from this that the procedure in the protocol, importantly in particular that set out in the Plaintiff’s notice of experiments in reply, was not followed. This would be odd when it is remembered that the reply experiment was designed to meet criticism of the format of experiment no. 5 made in Mr. Mercer’s written evidence.

    Mr. Mercer drew a sketch, which is X-13, depicting what he says was how the camera was looking at the apparatus. His evidence in this respect was disputed both by Professor Castle[18]and by Mr. Hall[19]. Mr. Hall was a patent agent of the Plaintiff who was called at the end of the evidence by consent to give evidence primarily about the reply experiment which had been repeated on the 21st November. Professor Castle’s sketch of the layout of the apparatus was marked X-14.

    I have no hesitation in accepting what Professor Castle and Mr. Hall say about the set up of the experiment. Insofar as I can judge from the video tape of the reply experiment, it seems to me to show exactly what I would expect if the experiment had been set up in the way these witnesses had said. I can add as an aside here that it would have perhaps been surprising for the Plaintiff to have set it up incorrectly given that was the point of the reply experiment.

    I note also here that Professor Marsh was not asked to observe the reply experiment on behalf of the Defendants and that the criticisms which were leveled at the setting up of the experiment were not raised during the carrying out of the experiment but were raised in Court. Had they been raised at the experiment then agreed measurements, if not photographs of the apparatus, could have been taken. What was apparently raised was the relevance or probative value of the experiments. Since Mr. Mercer was seemingly the only person witnessing the reply experiment on behalf of the Defendants, Mr. Hall very properly cautioned him to be careful lest he disclosed of the Defendants’ arguments prematurely.

    I am bound to say that I regard Mr. Mercer’s theories as to what was being seen in the video were based on concepts which I find I cannot accept. His primary contention was that because of the angle of the lens in relation to the doctor blade, which he says was as shown in X-13, the toner that can been seen takes the form of a wing extending out from the side of doctor blade. I find this concept difficult to understand particularly as to why there should be such a wing and not a clump at the bottom of the doctor blade.

    It is clear that Mr. Mercer’s criticism of the camera angle is tied into the allegation of the formation of the “Wing” of toner attached to the doctor blade. The more acute the angle that the axis of the lens of the camera is to the doctor blade, the more a length of a clump of toner will indicate a sideways extension of the clump. If however the axis of the lens is perpendicular to the doctor blade, then the length of the clump will be indicative of the extension of the clump from the doctor blade towards the roller. This is shown graphically in drawing X-41.

    I consider that Mr. Laddie’s criticism of Mr. Mercer’s theory was sound.

    It is difficult to see how the lines magnetic force which would exist between the magnetic doctor blade arid the magnet of the roller could support a wing of the type envisaged by Mr. Mercer. Mr. Mercer was not an expert in magnetics. Professor Castle was asked about the lines of magnetic force.[20] He was never asked whether wings of the type envisaged by Mr. Mercer could be formed where the lines of force were weaker and the clump would not be formed where the lines of force were stronger. If the Defendants had wished to make good this point then it would have been necessary in my view to have put it to Professor Castle.

    At the end of the day, I consider that Professor Castle’s evidence where he said in his second supplementary witness statement[21] that he believed that the measurements that were made previously would show that in the Defendants’ product the gap size is approximately 250 microns (a quarter of a millimetre) and that he would estimate that the layer of the toner which passes through the gap is approximately 50 microns was unshaken in cross-examination. His evidence in the witness box was to the like effect and I accept it.

    In consequence, I have no hesitation in finding that the Plaintiff has made out its case of infringement. I find that the Defendants’ cartridges work in precisely the same way as the Plaintiffs cartridge. I find that there is this semi-rigid clump of toner which is formed at the base of the doctor blade. Of course, with a magnetic toner and a magnetic doctor blade, toner will accumulate around the clump and on various parts of the blade. Nevertheless, that blockage which is caused by the converging lines of magnetic force, converging on the end of the doctor blade causes the toner on the roller to be blocked except for a portion moved adjacent to the carrier. I find in accordance with the evidence that the thickness of that toner is thin.

OBVIOUSNESS

    I turn to the attack of obviousness in relation to the '054 patent. This attack is now based entirely upon the United States Patent No. 3,915,121 in the name of Wilcox. Mr. Wilcox was apparently an employee of the Xerox Corporation. The application was filed in 1973 and the specification published in 1975. This specification was discovered by the Defendants either very shortly before or at the beginning of the trial. As a result, the early stages of the trial were thrown into some confusion because the importance of this specification was at once apparent. After its introduction into the case the Defendants abandoned all other attacks of anticipation and obviousness against the '054 patent and relied solely upon the attack of obviousness based on the '121 specification.

    I do not propose to go into any lengthy discussion as to the law of obviousness. Under the 1977 Act it arises in this way. Section 1(1)(b) provides that a patent may only be granted for an invention which involves an inventive step. Section 3 of the Act provides that an invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art.

    During the course of the trial the Court of Appeal decision in PLG Research Ltd. v. Ardon International Ltd.[22] became available. The court’s approach, set out at pages 32 to 36 of the judgment encapsulates the conventional approach to the question of obviousness.

    One starts first of all with what obviousness means. Lord Herschell in Siddell v. Vickers, Sons & Co[23]. said that the relevant question was whether what is claimed is ‘so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end...’

    As has been seen, Section 3 of the 1977 Act refers to the person skilled in the art. It thus gives statutory recognition to the hypothetical person who has always been the notional addressee of the specification. This person has other important attributes. He is unimaginative and uninventive. He is therefore not ignorant but his important lack of inventive capacity highlights the fact that the court must be astute not to disregard factors which are indicative of invention when assessing questions of obviousness.

    One important matter of approach which to my mind ties in with the hypothetical skilled man being unimaginative is that the court must be wary of what has been termed the ex post facto analysis giving a false impression of obviousness. Many good inventions have been deceptively simple. In colloquial terms it could be said of many inventions, some of which might have made fortunes for their inventors, that anybody could have thought of them. Nevertheless even the most deceptively simple invention may still not be obvious.

    A further factor must always be borne in mind. The onus is clearly upon the person attacking the validity of a patent to establish obviousness. Again, straightforward though that proposition might be, it is sometimes lost sight of. Even in this case at one stage the question was asked ‘Does that deserve a patent?’  To my mind the question on obviousness is not whether it would be fair that a patentee obtains a valid patent but whether it is unfair that the patentee has obtained a patent. It is for the person attacking the validity of the patent to show the unfairness.

The approach

    Following on the analysis made by Oliver L.J. in Windsurfing International v. Tabur Marine[24], the conventional approach to the question of obviousness is as follows:-

    First the court must identify the inventive concept alleged to be embodied in the patent in suit; secondly the court must assume the mantle of a normally skilled but unimaginative addressee at the priority date and impute to him what was at that date common general knowledge in the art in question and that he had carefully read or observed matters cited as being known or used; thirdly, the court must identify what if any differences exist between the cited prior art and the alleged invention; fourthly, the question must be asked whether, to the hypothetical skilled man without any knowledge of the alleged invention, those differences constituted steps which would have been obvious to him or whether they required any degree of invention.

    Whilst I propose to adopt the four-stage of approach as I have set out above, I have to say that I do so with some caution. The necessity for caution seems to me to stem from the fact that the approach, if not made with considerable care, is liable to lead to an oversimplification of the matter. In the words of Lord Diplock in Technograph Printed Circuits Ltd v. Mills and Rockley (Electronics) Ltd[25]:

‘But it is only because the invention has been made and has proved successful that it is possible to postulate from what starting point and by what particular combination of steps the inventor could have arrived at his invention.’

    Great care must also be taken with paper proposals. These are documents which are often said to be found acquiring dust on the shelves of the Patent Office Library. They describe machines and processes which experience subsequently shows have never been put into practice: either what is described is impracticable or, sometimes, impossible. These documents have to be viewed in their own context. That is they are paper proposals which the skilled man is likely to recognise as unworkable or impracticable and thus disregard.

The '121 Specification

    The specification of U.S. patent 3,915,121 describes a particular type, of baffle arrangement for use in the development part of the apparatus of electrostatic printing machines.

    The specific examples in the specification describe a printing machine which works with a dual-component toner. This is not altogether surprising given its date. From the brief history which I have set out above even up until 1977 there was apparently only one manufacturer who was selling mono-component toner machines.

    The problem which the '121 specification addressed was that of a build up of toner at the ends of the roller. This build up was analysed to be caused by the fact that the length of the internal magnet was slightly shorter than the roller and the magnetic fields which are inherently present in a magnet are such as to cause a build up of the toner at the ends. This build up is shown in figure 1 of the specification. The roller is shown with a comparatively uniform toner layer along the length of the roller, apart from at the ends where there is a build up. These magnetic fields which cause the build up are referred to as the fringe field effect.

    The solution provided in the '121 specification is that there should be stationary magnetic brush flow baffle means which can regulate the flow of developer on the roller as it rotates towards the development zone. The specification makes reference to a known device where magnetic means have been placed between a bearing and a flow of magnetic particles in order to protect the bearing. The specification makes reference to the fact[26] that the patents in which that is disclosed do not disclose the use of the magnetic seal brushes as flow baffles to regulate the flow of developer to the development zone of the development apparatus. The '121 specification thus highlights the difference between its own disclosure and what has gone before.

    The Wilcox specification says[27] that it is preferred that the stationary magnetic brushes which are formed as a consequence of the magnetic members, should extend over less than the entire gap between the housing and the roller. The specification goes on to say that the amount of developer in that area should be less than or equal to the amount of developer in the central part of the roller. The amount of the developer in the central part is assumed to be satisfactory because it is said that this can result in the magnetic brush being uniform over the length of the roller. In column 7, the specification goes on to say that the field strength of the stationary brush forming magnet can be increased to overcome the field of the magnet which is inside the roller and in this way the stationary brush which is formed would extend over the entire gap. This is not regarded as being a preferred form of the invention and it is said that the axial extent of the magnet would have to be reduced[28].

    Although, as I have indicated, the specific examples in the specification relate to dual-component systems, it is indicated in the specification that the invention can be applied and adapted for use in other types of processing systems and it is not confined even to automatic xerographic reproducing machines.

The Inventive Concept of '054

    The inventive concept of the '054 patent as claimed in that patent comprises, as I have indicated, the creation of a thin layer of mono-component toner by the use of a magnetic baffle which operates in conjunction with the magnet inside the roller. In this manner there are lines of magnetic force which converge towards the magnetic member and a blockage is caused by the creation of a semi-rigid clump of toner at the magnetic member. This semi-rigid clump of toner causes only a thin layer of developer to be carried round by the roller.

    Thin, in this context, means a layer of mono-component toner which is so thin that it will not reach the photosensitive layer and create background fog problems even when extended into its brushlike form.

    The inventive concept might be narrowed to being the creation of a thin uniform layer of mono-component toner by the use of a magnetic member to form a semi-rigid clump. Given the context of a thin layer of mono-component toner, if the layer was not uniform the apparatus would not achieve its purpose.

The Differences between the '121 Patent and the alleged Invention

    The first and major difference between the '121 patent and the alleged invention is that the '121 patent is concerned with removing excess toner from the ends of the roller which has accumulated due to the fringe field effect. It is described in a context where the reader would assume that, even with this effect, contact between the magnetic brushes formed on the roller after the magnetic blockage and the surface of the photosensitive drum would still take place. The point of the '121 specification is to bring the thickness of the toner at the edges of the roller down to the same level as the thickness of the toner on the body of the roller. The '054 patent, however, is concerned with what might be termed micro adjustments of very thin layers over the length of the roller. Another description of it might be fine tuning.

    In this context, it is pertinent to note that the dimensions and sizes which are relevant with mono-component toners are of an order of magnitude different from those which are relevant in a dual-component system. One is talking in terms of a mono-component toner with a 10 micron particle size. In a dual-component system, one is talking in terms of a carrier of between 70 to 200 micron size with a toner particle or particles in addition thereto. The thickness of the layer on the roller in a mono-component system may be only 3 or so particles thick. Translated into dual-component systems the measured thickness of the layer clearly is considerably larger.

    It must not be lost sight of that the problem addressed in the '121 specification is that of the fringe field effect. Hence the magnetic members which are disclosed extend only over a short section of the roller. There is no disclosure of extending the magnetic members over the full length of the roller. Nor is there any disclosure of regulating the thickness of the layer over the full length by means of the magnetic baffle.

Whether the differences which exist between the disclosure in the '121 specification and the '054 patent would constitute steps which would have been obvious to the skilled man or whether they required any degree of invention

    Professor Castle in his evidence raises a number of matters. One of these is whether the 2 magnets disclosed in the '121 specification would produce converging lines of force as required in the '054 patent. He was cross-examined about this[29]. Although in the end it seemed the cross-examination was inconclusive, it seems to me that the answer as regard this case is that this is not really a major point of difference. I am not convinced that the description and drawings in the '121 specification are that precise that a skilled man will consider that the lines of force taught by that specification are parallel. In any event as Professor Castle agreed that the lines of force could never be exactly parallel although, no doubt, they would exhibit parallel tendencies as opposed to converging tendencies.

    The '121 specification deals at various parts and in particular in the passage which runs from line 28 in column 6 right through to the end of column 8 with various different alternatives with regard to the shape of the magnet and indeed the effect which the stationary magnet has. In the passage I have already noted[30], the specification describes an embodiment, which is said not to be the preferred alternative, and it talks of blocking off the flow of developer on the roller. At column 8 lines 34 through to line 46 the specification talks about being able to alter the magnets if the developer flow at the end of the roller is not acceptable. Nevertheless, as Professor Marsh, agreed[31] there is nothing in the '121 specification which would lead the reader to believe that the mechanism of what in effect is a magnetic doctor blade could be used to adjust the thickness of the toner along the length of the roller down to 25 microns.

    The problem facing the inventor of the '054 patent was not simply one of avoiding background fog. I think that Professor Castle encapsulates the position accurately at Day 8 page 47 lines 13 to 22. What was needed was a thin layer of toner of uniform thickness. The need for this was attributable to being able to meet the requirement both of the background fogging and optical clarity, by that I mean fidelity and optical density.

    Dr. Schein in his book makes clear that these three problems are all interrelated and when designing a system, and in this I include both hardware and the selection of material, these factors had to be taken into account. He says:-[32]

“An example of the procedure followed in optimising a new development system illustrates the point that our lack of knowledge is costly. It is known, i.e., in electrophotographic folklore, that a tradeoff exists between line copy and background development. A lower average toner charge-to-mass ratio Q/M increases line copy development but also increases background development. The standard hardware approach (after trying to get the background specification raised!) is to set Q/M to achieve the background specification and then to change other variables, such as number of rollers in the magnetic brush development system to achieve the line copy specification.”

    This was said in a chapter relating to development step and admittedly the passage goes on to talk about difficulties with dual-component systems, but it is clear that Dr. Schein did not consider that mono-component toner systems were free from this sort of difficulty. Indeed in the chapter devoted to mono-component development in a section dealing with the early work on mono-component systems, there is an interesting paragraph which deals with a report made to a specialist conference in 1974. It will be noted that it is not very long before the date of the present invention. The information which was given to the conference related to the jump development otherwise known as ‘space touch down’ system. This was a technique which seems to have been the predecessor of the technique used in the present invention. I have already referred to this passage and to the reference to the challenging tolerance problem caused by the necessity to maintain tight control over the spacing of the roller and the photoreceptor.

    In my view, in directing so many questions to the question of background fog the defence Counsel in this case lost sight of the ultimate object and problem facing the inventor and confined his focus on too narrow a field. The problems related to quality in terms of definition, tone and contrast as well as background fog.

    The determination of the issue of obviousness is a question for the judge and not the witnesses. Under the new law as to expert witnesses, they may be permitted to give their opinions on issues in question. No court should be so naive as to think that a party would call a witness who holds a different view from that which coincides with the case of that party. In so far as a witness were to express or convey his own view as to the ultimate question which the court has to decide what might be important are perhaps the reasons for his holding such a view. But it is primarily the witnesses’ task to give the court the background information and the detailed technical evidence. It is not their task to tell the court what is obvious and what is not. In so far as that information is conveyed to the court, the court must make up its own mind.

    I make no pretence to disguise the fact that I regard that the attack of obviousness in respect to this patent as a very difficult question. I have thought long and hard about whether the disclosure in '121 should not render the invention of '054 obvious. The approach that both specifications are concerned with a magnetic doctor blade is attractive. On a simple and facile approach, one would be tempted to say that on the one hand the '121 specification disclosed the magnetic doctor blade and on the other hand all that the '054 patent did was to claim the use of a magnetic doctor blade with a mono-component arrangement. Mono-component toners might not have been specifically referred to in the '121 specification but the claims and the broader statements could be read as covering mono-component systems.

    I bear in mind that it is no answer to an attack on obviousness based, as this is, on a paper proposal that nobody actually put the matter described into action. What is important is whether on looking at the disclosure it would at once occur to the hypothetical skilled but unimaginative addressee that it would be the solution to the particular problem.

    In the end I have come to the firm conclusion that what I have outlined above would not be the correct approach to this case. One is in danger of perhaps getting into the realms of saying that the hypothetical addressee of the '121 specification “might” or “could” or, perhaps, “would” think of using a full magnetic doctor blade in a mono-component system. But that is not, it seems to me, the correct test. The correct test as was said in Hallen v Brabantia[33] is not whether the skilled man could or might or perhaps would do such and such. The question which I consider the court must ask itself is in this case whether it would be obvious to the hypothetical skilled but unimaginative addressee faced with the problem of arriving at a thin (i.e. something which is in the range of a uniform three particles thick) uniform layer of mono-component magnetic toner on a roller would see the solution to his problem if presented in 1977 with the Wilcox specification. I consider that the Defendants have failed to establish that would be so.

    I consider that the hypothetical skilled but uninventive man on looking at the '121 disclosure would first of all say that this disclosure was of a baffle for the ends of the rollers where problems arose due to the fringe field effect. He would then say that the disclosure of the '121 specification lay in the field of the comparatively broad brush approach suitable for dual-component systems where minute differences in thickness were of no consequence and that the disclosure was of no interest in relation to the fine adjustments required for mono-component systems and in particular those where the control of thickness was particularly important.

    If he were to take the notion of a magnetic member from the '121 disclosure and use a continuous blade to limit the thickness of the layer all the way along the roller, the skilled man might (after perhaps much experimentation I know not) come up with the invention but that seems to me to be precisely an ex post facto analysis of the type which is illegitimate. When Professor Castle said[34] that perhaps if the Wilcox specification were brought to his attention he might have come up with the answer of the '054 patent, he was saying that in the same breath as saying that to his mind techniques which were used with dual-component systems were not necessarily applicable to mono-component systems. In my view, to pose the question on the basis that the skilled man would set about using a magnetic doctor blade technique on the basis of what is described and shown in the Wilcox specification and adapt it and use it in relation to his work on a mono-component system would on the one hand be to ascribe to the notional uninventive man that scintilla of invention of which he is incapable and on the other hand be to prejudge the whole issue of obviousness.

    In summary, I do not consider that the hypothetical addressee would in 1977 have seen the Wilcox specification as an obvious answer to the problem with which he was faced.

    The cross-examination of Professor Castle[35] by the Defendants’ Counsel which resulted in the following interchange in my view does not show obviousness:

“Q. Professor Marsh’s view, when he saw that comment was that in 1977 when he was in this field was that he would have expected any of his competent engineers, faced with this problem; that of difficulty with mechanical doctoring, to look with interest at any proposal for solving that problem.

A. I respect his view, but I have given you my view.

Q. The reason he says that is because mechanical doctoring with magnetic material was a known problem, and that the solution posed by '121 of using magnetic means would have been something well worth looking at. Are you able to agree or disagree?

A. Perhaps, if it was brought to my attention, but in my looking at the problem, all I am saying here is I would not have been driven to dual component technology to look for a solution, given the differences in the scale of the components of the material, the difference in the charging characteristics and so on.”

    The matter in my view ends up being speculative. The question is not whether Professor Castle, who is a distinguished professor and who is very often sent problems to solve and paid to find solutions, would think that the '121 specification would give the answer, but whether the notional addressee would do so. Far more important to the Court than Professor Castle’s ultimate conclusion, is his reasons and route by which he arrives at any such conclusion. What Professor Castle was being asked about in that passage was his statement that:[36]

“Had I been seeking an improved doctoring arrangement in 1977 for a mono component magnetic developer, I do not believe I would have looked to dual component technology for a solution.”

His conclusion was that:[37]

“Obviously, in hindsight, the characteristic of this situation, in my position in the university, I am periodically asked by companies to consult on specific problems, and that consultation varies from subject to subject and area to area. The context of this particular statement was if I had been asked at that time to consult with Xerox, let us say, to look for an improved doctoring arrangement for a mono component toner, I do not believe I would have been drawn to dual component technology for the reasons I have outlined here.”

    Likewise in a passage which commences with a recapitulation of his cross-examination Professor Marsh when giving his evidence said:[38]

“  If you had been looking for the very fine adjustments of uniformity in a toner layer, a mono-component toner layer, can I suggest that you cannot now be confident that you would have looked at the Wilcox Patent and said, “I think that gives me my answer”? You cannot now be confident, can you?

A.  Let me understand the question precisely. You are saying, having looked at the Wilcox Patent ----

Q.  Yes, assume that Wilcox was in front of you. Your job was to try and get down to the tolerances, the very fine uniformity necessary for mono-component layers. I ask you to be as fair as possible. You cannot now be confident that you would have said, “Wilcox gives me an answer”?

A.  I think that that is a fair assessment. Nor could I have felt confident at that time. I would have been expected to carry out normal engineering development activities to optimize to the end result that we were trying to achieve. That requires development activities) testing and valuation.

Q.  Can I go one stage further? You cannot now be confident that you would have thought of Wilcox as suggesting the correct route to take?

A.  Again, “correct route” implies ----

Q.  The '054 route. You cannot now be confident that that is what you would have thought at the time in 1977?

A.  I cannot state now that that would have been the path taken to achieve the solution.”

    With respect whether it would or would not have been the path which Professor Marsh would have taken is immaterial. The question is whether it would have been obvious to the hypothetical addressee. In the re-examination Professor Marsh added to his previous answers[39]:

“If I think I could be confident I would certainly consider the Wilcox solution as a starting point, but in the course of the development activities and the normal assessment of materials and engineering set-ups, I cannot state that I would have ended up with the solution. I do not know where I would have ended up.

Q. Why would you have started with it?

A. Because, in reading that, the concepts, to me, lend an obvious starting point to the problem of trying to achieve a uniform thin layer.

Q. And what would have been, in broad terms, the nature of the engineering development activities which you would have undertaken?

A. I would have varied magnets, the magnetic flux, the surface on the developer roll. If permitted, I would have looked at materials properties, the flowability of the toner, and working with all of these factors, attempted to optimize to get uniform thin layers.”

    What Professor Marsh has jumped to is the conclusion that Wilcox is an obvious starting point for trying to achieve a uniform thin layer. Nowhere in the specification does it teach the attainment of a uniform thin layer (using that expression with the meaning I have referred to above). Professor Marsh knows now that the magnetic doctor blade can be used to achieve such a layer. No doubt once that fact is common knowledge then it is difficult to look at something like the Wilcox specification and not say, just as Professor Marsh has done, that is an obvious starting point. The question is why is it a relevant starting point. That question is not answered simply by saying it is “obvious” as Professor Marsh did in the passage I have just quoted.

Claims 25 and 26

    Since this matter may go further and a different Court may reach a different conclusion from that which I have reached, for completeness, although it is not relevant as far as my judgment is concerned, I should deal with the factual matters which arise on claims 25 and 26.

    One matter which is agreed on all sides is that the evidence is almost non-existent about these claims. The evidence is limited to paragraph 22 of Professor Marsh’s 2nd statement. He says that the solution of a second magnet would readily occur in the circumstances where the sleeve and the magnet are rotated in the same direction. I cannot at the moment understand why it would readily occur. Professor Castle was asked about this[40] and said it would occur but he did not agree with Professor Marsh that there was nothing clever in these 2 claims.

    I have to say that I am unconvinced about the attack on these 2 claims. As I have said, I derive little or no assistance from a statement by a witness that a particular step is obvious. If at all, as I have already said, it is for the witnesses to say why they think a particular step would be made.

    Again it is not for the Court to determine whether a step is clever. The Court must decided whether the claimed invention is obvious.

    I regret that in this instance I have to conclude that the evidence is wanting and I have no alternative to saying that the Defendants have not made out their case of obviousness on these claims.

ADDED MATTER

    It is the Defendants' contention that the Plaintiff’s patent is liable to revocation by reason of Section 72 (l)(d) of the Patents Act 1977.

    The relevant provision reads:-

“72. -(1) Subject to the following provisions of this Act, the court or the comptroller may on the application of any person by order revoke a patent for an invention on (but only on) any of the following grounds, that is to say-

(d) the matter disclosed in the specification of the patent extends beyond that disclosed in the application for the patent, as filed...”

    This provision is based on the European Patent Convention. Amongst other purposes, it is designed to prevent the inclusion into the disclosure in the specification of the patent of matter not contained in the priority document. The reason is perhaps obvious. The wording of the Section has a figurative element to it which is not uncharacteristic of European based provisions. The authors of the Encyclopedia of United Kingdom and European Patent Law have subjected it to no mean criticism.[41] Nevertheless the Section is there and has to be construed and given effect to. My understanding of what the Section means is the same as the formulation made by Aldous J. in Bonzel v lntervention[42] where he indicated the steps as follows:

“The task of the court is threefold:

(1) To ascertain through the eyes of the skilled addressee what is disclosed, both explicitly and implicitly in the application.

(2) To do the same in respect of the patent as granted.

(3) To compare the two disclosures and decide whether any subject matter relevant to the invention has been added whether by deletion or addition. The comparison is strict in the sense that subject matter will be added unless such matter is clearly and unambiguously disclosed in the application either explicitly or implicitly.”

The A Specification

    The first step then is to see what was disclosed in the application, namely the A specification. This specification was traversed both during evidence and submissions on a number of occasions. Essentially it starts by describing the prior art. It divides that into the 2 component systems and the mono-component systems. The specification makes it quite clear that the invention is not concerned with the dual component systems.

    The specification then goes on to examine the various methods employed in the developing apparatus of mono, or single, component systems. It identifies 4 methods for mono-component systems: the powder cloud, the contact development, the jumping development and the magnetic dry development methods. The powder cloud and magnetic dry development systems are said to be undesirable because they entail the contacting of toner with what is regarded as the “non-image” areas, that is the areas of the photosensitive drum which correspond to the parts of the ultimate image which are intended to be white. This is said to be conducive to background fog which the inventor wishes to avoid.

    The specification then goes on to talk about the jumping development method. Even there the specification says that there are drawbacks. These are listed as difficulty in obtaining a uniform coating of toner on the toner carrier (in the cases with which this case is concerned it has always been a roller in the form of a cylindrical sleeve containing a core but the carrier need not necessarily be in that form); then there was the difficulty of uniform toner removal from the toner carrying member. Lastly there was a problem of low image resolution said to be the result of toner having to fly across the gap between the carrying means and the photosensitive drum.

    There then follows a series of what are termed objects of the invention. The first object is threefold. It may be summarised as:

    (a)  to form a uniform toner layer;

    (b)  to maintain an extremely thin toner layer of a uniform thickness in developing station; and

    (c)  to form a toner layer allowing uniform release of toner particles towards the photosensitive drum whereby the toner layer is maintained separate from the non-image area to eliminate fog completely.

    It is interesting to observe that as a matter of syntax from the way these elements are expressed in the specification, and I have not set out the full wording here, it seems to me that they are in fact distinct objects. If this were not so there would be a certain amount of repetition. I do not place very great reliance on that point because clearly it is not a chancery document.

    Page 2 of the A specification goes on to list some 8 other objects. Some of those specifically refer to the non-contact of developer with the non-image area of the photosensitive but others do not. Mr Thorley, Q.C. described these latter in the course of argument as being neutral.

    There then follows a detailed description by reference to the drawings. It must be observed that figures 3 and 4 are described as being explanatory views showing the working principles of the developing apparatus of the invention. Neither of those 2 figures show the photosensitive drum. They are both confined to the toner carrying sleeve in the vicinity of the doctor blade. Hence they do not show and are not directly concerned with the toner extension process.

    The description of the invention as contained in pages 3 to 9 only refers to what might be shortly termed a process whereby there is no contact of toner in the non-image areas. Lines 52 to 110 on page 8 of the specification relate specifically to a description of how the process is said to work.

    I consider Professor Castle was correct when he said that he thought that there were a number of inventions contained in this specification. He said[43]:

“I am saying, as I said in my first statement, that there are a number of aspects of the development process which are disclosed in this document, and one of them is the formation of the thin layer, which is an extremely crucial part of any developing process, and in my view a separate part of this whole disclosure related to the actual development process itself, which is this toner extension method.”

    And a little later, after the break, he went back to the same point when he said[44]:

“…in my interpretation, as I have already said, I felt that the 054A invention was really a multiplicity of inventions----

Q. Do not let me interrupt you, carry on.

A. I stated three in the statement, and I ignored some of the other minor ones, but the essence that I saw was the formation of the thin layer using this magnetic doctoring, formation of a thin layer using magnetic fields interacting with the mechanical Doctor Blade and this toner extension method of development.”

    He analysed it as 3 inventions. I would myself analyse it as 2. On the one hand is the arrangement of the magnetic doctor blade and the use of the magnetic fields to form the thin layer. Secondly there is the toner extension. The distinction between there being 2 or 3 inventions is unimportant. Furthermore, whether or not all of those inventions are patentable does not matter. The important point is to appreciate that the specification is teaching more than one thing.

    Professor Marsh in my view also appreciated the multiplicity of concepts included in the A specification. He readily accepted that it would at once occur to the reader of the A specification that the teaching could be applied to any xerographic system where a thin layer was wanted.[45]  In doing so he was adverting to the use of the magnetic forces in conjunction with the doctor blade and was of course not referring to the toner extension. What Professor Marsh was saying also ties in with Professor Castle’s confirmation that in 1977 both the jump development and the contact development method were suffering from a disadvantage in obtaining uniform toner coatings.[46]

    Having said the above in relation to the A specification, I should also observe that it is clear that the A specification teaches the avoidance of contact of the toner with the non-image area on the photosensitive drum. Claim 1 of the application includes the limitation that the thickness of the toner is such that it does not cause contact of the toner with the non-image area on the photosensitive drum. One must bear in mind however that when considering the claims of the A specification one is considering the claims qua disclosure. Although by Section 15(1)( c) of the Act it is not necessary that an application should contain claims, the claims filed in the application are nevertheless part of the matter disclosed in the application, see Section 130(3) of the Act.

The B Specification

    Turning to the B specification it is important here to distinguish between what is disclosed and what is claimed. As I have already said a claim is part of the disclosure but it does not follow that what falls within the scope of the claims is necessarily disclosed. To take a very simple example, if a claim says “a vehicle with wheels” then a vehicle with any number of wheels is liable to fall within the scope of such a claim. That is a very different thing from saying that the specification discloses a vehicle with ten wheels. Still less does it disclose a vehicle wherein all the wheels were steering wheels. Yet such a vehicle would still be liable to fall within the terms of the broad claim.

    My note of caution is directed to this. When one comes to consider the B specification the description of the invention is very similar to that of the A specification. Nevertheless the real point of contention is that Claim 1 of the B specification is not limited to the feature of the toner not contacting the photosensitive surface in the non-image area. That however, as I have already said, does not of itself extend the disclosure. There is no description of the invention which includes a use of the invention in a system where there is deliberate contact of toner on the photosensitive surface in the non-image area. It is true that because claim 1 of the specification does not include that feature and some of the subsidiary claims do, then it can be said that the use of the invention in circumstances where there is contact of toner on the non-image area is included within the scope of the monopoly claimed, but it does not mean that such an arrangement is disclosed.

The pleaded case

    The Defendants found it necessary to amend their pleadings during the course of the Plaintiff’s opening in order to put the case in the way they thought it could best be run. The new pleading now reads as follows:-

“ In the application as filed, all particulars to which this invention relates and all the relevant independent claims included electrostatic image carrying means and further included the feature of a limiting means adapted to limit the thickness of developer supported on a developer supporting means to a thickness not causing contact of said developer with a non-image area on said image carrying means (or member). The matter disclosed in the application as filed was thus limited to forming a thin layer of toner for this purpose. Accordingly, the word ‘thin’ is to be construed in the context of the application as being limited to a thickness of layer which does not cause such contact.

    In the granted patent, the description of the invention and some of the claims are not limited in this way, these limitations forming the subject matter of sub-claims. The matter disclosed in the granted patent is accordingly not limited to forming a thin layer of toner for the said purpose. The word ‘thin’ is thus not to be construed in the context of the granted patent as being limited to a thickness of layer which does not cause such contact.

    Thus the patent as granted now discloses variations of the invention not disclosed in the application as filed and thus matter has been implicitly added, extending the matter disclosed in the specification beyond that disclosed in the application as filed.”

    It can thus be seen that the Defendants are not merely relying upon the fact that there is an alleged implicit extension of the disclosure by reason of the relegation to the subsidiary claims of the limitation that the feature that the thickness of developer on the roller should be such that there is no contact of the developer with the non-image area of the photosensitive drum. What they go on to say is that, because of that, the meaning of the word ‘thin’ as used in the patent has been changed.

    I do not see that this is so at all. Of course the word ‘thin’ is a relative expression. In the context of the matter disclosed in these specifications I consider it is relative to the whole apparatus, dependant in particular upon the toner being used. I do not see that given the context of mono-component toners there is any change in meaning of the word ‘thin’ and thus change in the disclosure.

    Professor Marsh indeed said that the thinness of the layer on the sleeve, which is taught in the A specification is exactly the same thinness of layer put on the sleeve in the final specification and that nothing had been done to change the dimensions of the thickness of the layer.[47]

    In essence however the argument as it was put still boiled down to the question of whether when one comes to the A specification, it teaches that it is extremely preferable, although not essential, to avoid contact with the non-image areas, or whether it is essential to avoid contact with the non-image areas.

    Again as I have said when the A specification is properly read and understood, it is appreciated that it is describing more than one thing. What the patentee has done is to single out one of those items and make it the feature of the claimed invention. That is something which patentees always have been entitled to do and I do not see that the 1977 Act has sought to change that.

The “inventive concept” arugment

    The argument was put that the inventive concept of the patent had been changed. That is a very dangerous test to try and apply from the point of view that it is not the criteria laid down in the Act. If what is sought to be done is to test a disclosure by considering what is taught in the specification and to consider the inventive concepts as can be gleaned from the application and the specification as a cross-check, then such a test may be of limited assistance when applied with caution.

    In this respect the purpose of the A specification and B specification must be remembered. Specifications were first required in the reign of Queen Anne. The law officers made it a condition of the grant of a patent that the patentee would within a period of months by an “instrument under his hand describe and ascertain the nature of the said invention and in what manner the same is to be performed”. In the intervening period of months the patent was protected and for that purpose, in those days, the title was all important. It was a ground of objection however that the specification as later produced was inconsistent with or wider than the title. Provisional specifications were introduced by Parliament in 1852. It would not be of assistance to go into the precise provisions relating to the provisional and complete specifications because in each case one has to look at the wording of the statutory provision that is being considered. However, the fundamental purpose of the period allowed before the filing of the specification which defines the scope of the monopoly sought to be protected has remained the same. It is to enable the inventor to improve and perfect his invention and to ascertain clearly what it was and what was new and what was old. He has the time to do that in the interval between the time when he files his application and the time when he has to define the scope of his claimed monopoly.

    I do not see any difference in the purpose of the period now given to the patentee between the filing of his application and the filing of his specification. No doubt an application is filed as soon as it is appreciated that some important development has been made. For over a century now there have been many instances where inventors have been working on parallel lines and the difference of days has separated the filing of similar patents by inventors working on similar courses, sometimes wittingly sometimes not so. Hence the important thing for a patentee is to have his application filed as early as possible. It is for that reason that the application is not required to contain claims. The applicant may realise that he has a useful product or invention but it may take time to analyse what the important features are. By filing his application at the earliest time he secures the priority date.

    Whilst it can be said that modem day European patent legislation is only very indirectly derived from early 18th century English patent practice, I consider the foregoing considerations are perhaps helpful in seeing that there may be importance in the wording of the statute when it refers to matter which is disclosed being extended. It is not talking in terms of inventive concepts but in terms of disclosures. The definition of the inventive concept is something which is required in the specification but not in the application. Hence if it is said that the inventive concept has changed between the application and the specification it is important to then go on and see whether that is symptomatic of an underlying extension of disclosure or of the patentee having defined his invention.

Conclusion

    I appreciate in saying this, that it may be possible for it to be said that by omitting one feature of a combination the matter has been extended. Practically it may be a very different thing if the reader is told that only 2 integers are necessary, whereas he had previously been told that 3 are required. In this respect I would refer to the case of Thomson CSF (Decision T 151/84)[48] referred to by the Court of Appeal in A.C. Edwards Ltd v Acme Signs & Displays Ltd[49] where it is stated as follows:

“3. In order to determine whether or not the modification made to a claim extends the subject matter of the patent application beyond the contents of the application as filed, it is necessary to find out whether the resulting overall modification to the contents of the application (whether by addition, modification or withdrawal) is such that the information presented to the skilled man is not derived directly and unambiguously from that which the application contained previously. Even taking account of the elements which are implicit to the skilled man. In other words, it is necessary to find out whether the new claim as presented is supported by the original description.

3.1 In the case in point the important thing is therefore not that a logical analysis of the text be carried out in order to determine whether or not the initial intention of the applicants was to limit the protection claimed to the particular combination of characteristics described and represented, but rather that it be discovered whether the skilled man reading the patent application as filed would consider that the characteristic under discussion namely the presence of permanent magnets, is or is not a characteristic which is indispensable to the operation of the device described in the application.”

    Again with all due respect I consider that care needs to be taken in applying the test referred to in the first paragraph of whether the information is derived from the application. Something may be “derived from” but that does not mean that it is “disclosed in” which is the test laid down in the statute. The second paragraph that I have quoted I find most useful in determining the issues in this part of the argument.

    In my view the reader of the A specification would not think it was indispensable to have the feature of toner extension. As I have indicated, and the witnesses have said, the reader would see from the A specification that there were a number of different inventions involved and would appreciate that the provision of a thin uniform toner layer was something that could be applied in the xerographic field outside the toner extension arrangement.

    In my view, there has been no added matter in the specification and this objection fails.

PATENT NO. 2, 101, 933

    During the course of the hearing, this patent was referred to as the ‘cover patent’. In essence, it is very simple. It relates to the removable cartridge which is central to this case. In its most simple analysis, the patent relates to the removable cartridge with a movable cover which shields the photosensitive drum.

    The question of infringement of this patent is not in issue. What is in issue is validity. Two main attacks are made in respect of this patent. The first is one of anticipation and the second is of obviousness.

    Although the specification is quite lengthy, the concept and what is disclosed in the specification is comparatively simple. The specification commences by dealing with the problems associated with servicing a photocopier. It mentions, on page 2, the risk caused to the photosensitive drum by extraneous light.

    The specification quickly goes on to refer to U.S. patent no. 3,985,436. During the course of the hearing this was referred to as the Minolta patent. That is a specification to which I will be coming later when dealing with the question of obviousness. Suffice it to say, however, that this United States specification was published in October 1976 whereas the earliest claimed priority date of the present patent is June 1981. The '933 specification refers to the Minolta patent as disclosing a unit in which process means such as a photosensitive drum, a developing device, a cleaner and a charger are incorporated into one unitary structure which can be interchanged and replaced.

    It suffices for present purposes, in my view, to proceed straight to claim 2 of the '933 specification. That reads as follow: -

“A process unit for an image forming apparatus, the unit being removably mountable to a main part of the apparatus and having a member for carrying an image to be formed thereon during operation of the apparatus, process mean for acting upon said member during such operation and a cover movable between a first position for exposing said member and a second position for shielding such member.”

    For the purposes of analysis during the hearing the claim was broken down into various integers but, again for the present purposes, it is sufficient to point out the following. In the first place, the claim is clearly very broad. The image forming apparatus clearly covers a photocopier and it could also cover a camera. The term process unit is defined by the claim as not only being removably mountable to the rest of the apparatus but as having 3 attributes. First, it must contain the member for carrying an image which will be formed thereon. Secondly, it must contain process means. Thirdly, it must have a movable cover.

    Turning to the process unit therefore, the “member” in the present context could be the photosensitive drum of a photocopier or it could also be the photosensitive film or plate used in a camera.

    The “process means” as used in the claim is something about which there was a considerable degree of discussion. The Defendants say that the words ‘process means’ in the specification and in the claim mean anything which enables the apparatus to perform the function of providing an image.

    For my part, I do not see that. In ordinary parlance “process means” would be understood as being some item which in some way performs a process. If one reads the specification that is how the expression seems to be used. For example at the top of page 5 of the specification, there is a paragraph which starts off ‘The process means of the unit may comprise any one or more of . . .’. That paragraph seems to me to be a rather rambling or incoherent passage. I find it difficult to determine any common factor amongst the matters therein mentioned other than this: the process means must be something which processes, or something which operates in some way which could be regarded as processing, to achieve the final goal of the apparatus, namely to create an image on the member which I have just referred to. In my view, the process means must be something more than just an opening.

    The final attribute of the process unit, namely the cover which is movable seems to me to pose no further difficulty. The requirement of the claim that it is movable between a first position which exposes the member and a second position which shields the member is probably of less importance when one considers that if it is a cover, it is there to shield and if it is movable, it must be movable between positions as claimed.

Anticipation

    The validity of the patent is attacked on the basis of two Japanese Utility Models numbers 31-18354 and 32-9449. Both these Utility Models relate to cameras with backs which are removable. In the circumstances, if these constituted anticipations, they would be fortuitous paper anticipations. Nonetheless, of course, if they do disclose something which falls within any of the claims of the specification, they would render them invalid.

    I do not see however that there is such a disclosure in either of these two specifications. Even if one were to regard the removable backs as process units, they do not, it seems to me, contain what would be process means. There is nothing in what would be termed the process unit which would be regarded as a process means for acting in the manner as referred to in the specification and which could come within what is comprehended by the word process means as used in the specification.

Obviousness

    The attack of obviousness is based upon the Minolta specification. That specification describes a photocopying machine which bears a remarkable similarity to the Minolta EP520 machine which has been exhibited as exhibit P. 6 in this case. It does not in fact describe that machine because there is at least one major difference. The Minolta patent describes a copying machine where the photosensitive drum, a developing device and the cleaning device are all integrally incorporated in a casing as one unit. That unit can be taken out of the copying machine. The point of it is said to be that it aids the efficient replacement and maintenance of the components.

    Exhibit P. 6 does not have a unit as described in the Minolta patent. It has a unit which is similar but slides out on support rails.

    It would be a mistake to regard what is described in the Minolta specification as a cartridge. I do not consider that it is a cartridge. It is a replaceable unit. The distinction to my mind is between a cartridge which is something which is convenient and easy to handle and a replaceable unit which is something heavier and more cumbersome.

    Dr. Tabak labelled the unit which is disclosed in the Minolta specification as being inelegant, of very poor design, impractical to implement and a kludge[50]. Dr. Tabak is a man of considerable experience in the photocopying field and has been engaged in extensive research for many years. I found him a particularly enlightening witness as his notable experience shone through in what he said.

    I have no doubt that Dr. Tabak is correct in his assessment of the disclosure in the Minolta patent. Indeed the mechanism and the arrangement shown in the Minolta patent is clearly the first cousin, at least, of the P.6 copier in Court. If the photosensitive drum and the developing roller together with its ancillary part including the cleaning blade were enclosed in a casing, I have no doubt that this would be a cumbersome and difficult to handle object. Indeed, if anything the unit which is shown in figures 2 and 3 of the Minolta patent specification is even more cumbersome and awkward looking than the P. 6 arrangement.

    It appears from the evidence that unlike the Wilcox patent, the Minolta patent came to the attention or would have come to the attention of a large number of relevant people in the photocopying field. Like the disclosure in the Wilcox patent, however, the ideas disclosed in the Minolta patent were never taken up. From the evidence which has been given, I draw the conclusion that the reason why the teaching of the patent was never implemented was that what was shown, was clumsy and inelegant. Dr. Tabak did indicate that he saw an impracticality in the design although I do not think that it has been seriously suggested that something along the lines of what is shown in the Minolta patent could not be made to work. Of course, that is not to say that such an apparatus would be commercially marketable.

    There is, it seems to me, a world of difference in practical terms between the unit which is shown in the Minolta patent and the Canon cartridge. The importance of the difference is this that the Canon cartridge is a handy size unit which can be easily taken out and replaced by anybody with a minimal knowledge of things mechanical. That shown in the Minolta patent is clearly something best left to the mechanic to handle. It seems to me that here lies an important facet of this case.

    There was much evidence given some in writing from Mr. Bogdanoff, who was not cross-examined, and some orally from Mr. Malcolm and this is brought out in his cross-examination. Mr. Bogdanoff gave evidence as to the enormous number of patent abstracts and indeed full patents which he read week by week and the research and the development that went into the photocopier field at Xerox at the relevant time. Mr. Malcolm gave evidence that he was working for Gestetner in Australia on the development of new photocopying machines. Neither of these two companies came up with the idea of a cartridge such as the Plaintiff’s. Nor did they think of making a replaceable unit of the type described in the Minolta patent. Indeed Mr. Malcolm specifically said that he was aware at the time of the Minolta patent.

    From that evidence, I take it that despite knowledge of the Minolta patent and even without it, the idea of producing a small cartridge such as Canon produces did not occur to those in the industry. Indeed Dr. Tabak gave evidence as to the consternation which senior management at Xerox expressed when the Canon cartridge system first came on the market. This fact, however, does not necessarily show that line '933 patent is valid and not obvious. It may show that to have a handy cartridge like Canon’s was not obvious but that may be a different matter.

    It seems to me that there are two aspects to the question of obviousness. If one were to say was it obvious in 1981 that a light, compact and easily usable cartridge system could be used for photocopiers and one used as the starting basis the Minolta patent, I would say that the evidence as to what happened at the time in the industry clearly indicated that it was not obvious.

    The other aspect of the matter is, however, that the court must look at a published document and ask the question what would be obvious to the hypothetical skilled but unimaginative man based on that. I pause here to mention that for these purposes when I refer to the hypothetical man, I am in fact referring to a hypothetical team. There are so many different technologies which are incorporated into a photocopying machine that it must go without saying that one man alone would not be designing a photocopying machine, there would be a whole team. Indeed Professor Marsh said as much in re-examination[51].

    I consider that one of the facets of obviousness is that the hypothetical man is simply presented with a document which existed at the time and asked what does that teach him and what does he derive from it.

    There are some things which must simply go without saying. Even the most uninitiated layman would appreciate the necessity of a connection to an electric supply of apparatus that needs it. So too, one might expect any photocopying machine to have a movable top cover to go on top of the transparent member on which the matter to be copied is supported. Unless I am mistaken neither of these two things are shown in the Minolta patent specification. That is not to say however that these matters would not be obvious.

    One then comes to how a skilled man would construct the removable unit. It is pertinent to note here that the description in the body of the specification describes a preferred embodiment of the invention as being built in a casing as one unit[52]. The specification further goes on to describe it as being of a box like shape[53]. It can be seen with reference to the embodiment as shown in the figures and described that the only openings in that box like shape appear to be above and below the photosensitive drum. Since the unit is described as being intended for use for a predetermined period of time and thereafter can be collected by the manufacturer of such units for reclamation of the same, it seems to me to follow almost inevitably that some kind of protection must be provided for the photosensitive drum during the time of transport and storage when it is not inserted into the machine.

    The Defendants in this case rely upon the well-known VHS video recording cassettes which had a movable flap at the front. It seems to me also that it is beyond doubt that movable covers for photosensitive surfaces were known for many years. A wide variety of covers were used for photosensitive plates and film holders. It seems to me that if one were to ask the question how a hypothetical skilled addressee would go about constructing a machine with a unit as described in the Minolta patent, the answer must be that he would wish to put some kind of shield device to protect the photosensitive drum. This may well not have been one which was automatically movable on insertion of the unit into the photocopying machine but may well have been one or rather two which were manually slidable or movable. Whether such a unit with a movable cover of the type used on the VHS cassette or with a slidable cover of the type which had hitherto been used in photographic equipment were constructed, it would clearly, it seems to me, fall within claim 2 of the '933 patent. In the circumstances, it seems to me in the light of the Minolta patent claim 2 of the '933 patent is clearly obvious.

    No ground was put forward for supporting the validity of any other of the claims the '933 patent, should claim 1 be struck down and I see nothing in them which would withstand a similar attack as that against claim 1.

EUROPEAN PATENT 0096261

    This patent was referred to as the double cover patent and the matters which are in issue are comparatively short.

    The patent relates to a cartridge which in this specification is termed a process kit. I do not propose to set out the whole of claim 1 since for present purposes, it is unnecessary. It suffices to say that amongst other things claim 1 specifies that the process kit shall comprise a housing containing a photosensitive drum, discharge means for discharging the photosensitive drum which is upstream of an exposure opening, development means for developing the image formed on the photosensitive drum and an optical opening which is itself upstream of the discharge means. The exposure opening is to allow the light beam which carries the information which will act upon the photosensitive drum to charge it selectively so that eventually it will bear the latent image. Finally there has to be a movable cover which covers the peripheral part of the photosensitive drum.

    Claim 2 of the specification requires that the exposure opening should have a separate cover which is adapted to be opened when the cartridge is mounted in the photocopier.

    Claim 3 specifies that there shall be a recessed portion in which the exposure opening is located.

    Claim 4 which is dependent on either claim 2 or claim 3 specifies that the cover for the exposure opening shall be in the form of a plate-like member which is rotated about one edge of the opening.

    The first important claim is claim 5 which reads as follows : -

    “A process kit as defined in claim 4, characterised in that said plate-like member includes a projection adapted to engage with a component in said image forming apparatus when said exposure opening is closed by said second cover, so that the process kit cannot be inserted into said image forming apparatus”.

    It was argued that as a matter of construction claim 5 required a fail safe mechanism which was additional to anything which fell within claim 2 which could be used to open the cover on the light sensitive opening. Purely as a matter of construction, I do not consider that is so. Nothing in the body of the specification or claims leads me to believe that must be so. The requirement of claim 5 may be satisfied either by a separate member or by something which both acts as a fail safe member and as something which operates the cover on the opening. Claims 2 and 5 are not coterminous. Something might fall within claim 2 but would not necessarily fall within claim 5. In the circumstances, I consider that the Defendants’ argument as to construction is wrong and that in the circumstances, claim 5 of the patent would be infringed by the Defendants’ cartridge.

    As regards claim 8, this adds a quite separate feature. The claim is based on claims 1, 2 or 3. It requires that the discharge means should include a corona discharging wire and a member which is positioned between the photosensitive drum and the corona wire. The member is urged towards the surface of the photosensitive drum under tension from the corona discharging wire and is used to position the corona wire at the required level.

    There was no dispute, it seems, that the Defendants’ cartridge would fall within claim 8.

OBVIOUSNESS

    It was agreed between the parties that if I were to hold that claim 1 of '933 were invalid for obviousness then claim 1 of this patent would likewise be invalid. I pass then to the attacks on claims 5 and 8.

Claim 5

    The evidence as to obviousness about this claim is as short as I think I have ever seen. It is contained that these words “I can see nothing unusual in the features of these claims”.[54]  The claims in question were claims 3 - 5 and 7 of the '261 patent. The point was made that Mr. Malcolm who gave the evidence was not cross-examined on his statement. In the present context, I see no reason why he should have been cross-examined. The statement which he has made is not evidence. It is a conclusion of personal opinion. I regret to say that it does not help me in coming to a conclusion. I do not know what facts Mr. Malcolm took into account when he made that statement.

    Dr. Tabak says[55] that there is nothing in the cited prior art which suggests making a cover with a projection adapted to engage a component in the machine such that the process kit cannot be inserted in the image forming apparatus when the exposure opening is closed.

    As regards this claim, I find myself in this difficulty that there is no evidence, it seems to me, upon which I could act to hold the claim obvious. I am not convinced that Dr. Tabak is not correct in the remainder of paragraph 545 where he says that this feature is an important feature. There may be very little in this claim, but, even so, I do not think that the Defendants have proved that it is obvious.

Claim 8

    Claim 8, as I have indicated, relates to the member for holding the corona wire and using the tension in the corona itself to adjust the height. I do not see that the evidence of Mr. Malcolm at paragraph 60 of his statement helps in any way in establishing the obviousness of this claim. It does not seem that either Mr. Malcolm’s evidence or indeed the cross-examination of Dr. Tabak began to test the obviousness or otherwise of this feature. The only matter to be derived from the evidence was that the corona wire had to be at a set height. It was submitted that there was no suggestion from the witnesses that the particular way of achieving that which is claimed in claim 8 was inventive. That, however is not the test. That would be putting the onus on the patentee to prove his patent is not obvious. This, claim seems to me to be quite separate from the other claims and to be directed to quite a different inventive concept from claims 1 to 6. Hence the invalidity or otherwise of claim 1 does not affect this issue.

    I find that the Defendants have failed to make out a case of obviousness in respect of claims 5 and 8.

CONCEPT CARTRIDGE

    By letters dated the 18th April 1994 and the 2nd May 1994, the first Defendant applied to the Plaintiff for written acknowledgement that manufacture of cartridges of the types which were enclosed with those letters would not infringe the rights of the Plaintiff. That acknowledgement was not forthcoming. Indeed the Plaintiff’s reply drew attention to the helical gear patent and as a result eventually that was brought into the case.

    As I have indicated, I consider that in appropriate circumstances, it would be right for a court in Hong Kong to give a declaration of non-infringement notwithstanding the fact that there is no specific power to do so in the legislation as applied in Hong Kong. Particularly in a case such as this where a great deal of preparation has been undertaken, it would be highly undesirable that further litigation should have to take place.

    I have to say, however, that although I have been given what I have been told is a sample of the First Defendant’s proposed cartridge (referred to in this case as the concept cartridge) I have not been told what if any differences existed between that which was supplied in April and that which was supplied in May 1994.

    Very little evidence or argument was directed to the concept cartridge. Indeed, it is fair to say that the Plaintiff’s counsel considered that it was a long way off being in a state where it could be regarded as a practical proposition. As regards the 2 cover patents I can make the following observations.

    In respect of '933 patent, I consider that there is clearly no movable cover. There is a rather flimsy removable plastic cover of a very insubstantial nature and I did not see how it would fall within the claims of the '933 patent.

    In respect of the '261 patent again there does not seem to be a cover which is movable between 2 positons. Claim 5 appears to be the same as the Defendants’ ordinary cartridge and would appear to me to take the extra features of that claim. In respect of claim 8, I have not seen the corona wire nor the member which holds it. Mr. Malcolm’s statement contains the following statement[56] :

“I note that in the altered example the subject of the Declaration of Non-Infringement, the wheeled spacer system for positioning the wire has been removed.”

    This may or may not result in there being no infringement of claim 8 of this patent. I know not, however, since Mr. Malcolm’s statement does not go so far as to say how the corona wire is kept in position, whether there is a positioning member and whether or not that positioning member is urged towards the surface of the photosensitive drum under tension from the corona discharging wire. In my view, in view of the unsatisfactory nature of this state of the affairs, I have to decline to make any further finding as to non-infringement of claim 8 by the concept cartridge.

EP 0226454

    This patent which has been labelled the “second magnetic member patent” is really ancillary to the '054 patent. The '054 specification disclosed an arrangement for a cartridge whereby the device which conveys the toner to the photosensitive drum is a roller. That roller comprises a magnetic core around which rotates a non-magnetic sleeve. At a suitable position, there is the magnetic doctor blade which is the subject of the '054 patent. In practice, a resin magnet was used inside the roller. A resin magnetic is quite simply a magnet which is formed of resin material and magnetic powder which is mixed in to it. It was suitable for use as the magnetic core for the roller due to its size, weight and magnetic properties.

    According to the specification, difficulties were discovered in practice in using a resin magnet. Those difficulties were amongst other things insufficient development and cleaning. Apparently the image density of the developed image varied along the length of the magnet. Again, according to the specification, investigations were made as to the cause of this. It was found that what was happening was that the resin magnet was being bent. The cause of this bending or flexing was the magnetic doctor blade. The resin magnet was attracted towards the doctor blade and that caused the deformation. The solution offered by the patent is that a second magnetic member should be included in the arrangement. The second magnetic member should be outside the sleeve and spaced from it; it should extend longitudinally in relation to the sleeve and it should be spaced so as to apply a magnetic force to the resin magnet to reduce deformation thereof. The material words of claim 1, after the definition of the basic arrangement are as follows: -

“. . . characterised in that a second magnetic member (8) is disposed outside of and spaced from said sleeve extending longitudinally thereof, and is spaced from the said first member (3) so as to apply a magnetic force to the said magnet for reducing deformation thereof.”

    The point which arises upon construction of this claim is that the claim does not specify the amount of deformation about which it is talking. It is said that when the claim says “to reduce deformation”, it cannot mean to reduce any deformation or by any amount however small. It is said that a line has to be drawn between what might be called de minimis reduction in deformation and material reduction in deformation. The Defendants say that the claim should be so construed that the reduction in deformation should be of the nature that it was obtained for the purposes of improving image quality. They aver that should be the over-riding test.

    In my view, that is not to construe the claim but to redraft it.

    The approach to interpretation of patents is now set out in the Patents Act 1977. One start with section 125. That provides: -

“(1) For the purposes of this Act an invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, as the case may be, as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly.”

    The interpretation section of the Act, section 130, provides in section 130(7) that it is declared that, inter alia, section 125 was “so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention . . . have in the territories to which those conventions apply.”

    That is somewhat reinforced by section 125(3):-

“The Protocol on the Interpretation of Article 69 of the European Patent Convention (which Article contains a provision corresponding to sub-section (1) above) shall, as for the time being in force, apply for the purposes of sub-section (1) above as it applies for the purposes of that Article.”

    For completeness, I will set out Article 69 and the Protocol. Article 69 reads:-

“(1) The extent of the protection conferred by a European Patent or a European Patent application shall be determined by the terms of the claims. Nevertheless, the description and drawings shall be used to interpret the claims.”

    The Protocol on the interpretation of Article 69 of the convention is a curious provision. I set it out below:-

“Article 69 should not be interpreted in the sense that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Neither should it be interpreted in the sense that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patentee has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patentee with a reasonable degree of certainty for third parties.”

    With all due respect to the various draftsmen of these provisions, they appear to me to be saying no more than that a sensible and proper interpretation of the claims as defining the scope of the invention claimed as part of a document which describes and claims the invention should be given. In my view, the 1977 Act, Article 69 and the Protocol when taken together are really saying the same thing as Lord Russell said in EMI v. Lissen Limited 56 RPC 23 at page 39 onwards. Although it has often been said that there was no majority of the House of Lords in favour of Lord Russell’s view, it seems to me that his approach is, in reality, the sensible approach to the question of construing a specification. The provisions to which I have referred amount to the same thing.

    The recent case to which I have referred of PLG Research Limited v. Ardon International Limited, in recognising the importance of the Patents Act and the Protocol has released the courts from any over meticulous examination of what Lord Diplock said in Catnic Components Limited v. Hill and Smith Limited[57]. Lord Diplock’s speech is said to have expounded upon the common law as to construction. It seems to me that application in subsequent cases of what was said in Lord Diplock’s speech had lead to a situation where the interpretation of a patent was in danger of becoming an over formalised and too rigid an application of rules supposed to be expounded in Lord Diplock’s speech and was detracting from the concept which Lord Diplock was seeking to express. Be that is may, as the Court of Appeal has said, it is now a matter for the legal historian.

    Turning to this case, it seems to me that what the court must do is first of all to construe the specification itself. It must not leave that to witnesses to do. Witnesses, no doubt with their statements drafted for them by lawyers, are apt to attempt to construe a specification. Professor Marsh in paragraph 52 of his statement attempted to do just that. I make it clear that I treat such attempts as no more than an addition to the argument which is made in court. It is for the court to construe a specification in the light of the expert evidence as to the technical matters. The court must understand what the meaning is of the words used in the specification. Like any other document, it must be read as of its date. Particularly in technical matters, expert witnesses have an important function to play to make sure that the court understands the technical matters which are dealt with in the specification. Once the court has achieved that it is for the court then to construe the specification including the claims.

    I have no doubt that the meaning of the claim in issue here is clear. What falls within the claim is a use of a second magnetic member to reduce deformation of the resin magnet.

    The importance of the second magnetic member is not that it always pulls the resin magnet back into tolerance but that it reduces the deformation of the resin magnet. It may well be that in some instances, the resin magnet, when in place without the second magnet, will not be deformed to an extent that the roller is no longer within specification. In some instances, this might happen. In some instances, therefore, the magnetic field generated between the resin magnet and the doctor blade may cause the roller to become out of specification and in some instances, it may not. Nevertheless, what this second magnetic member does is to reduce the chance of the resin magnet and thus the roller being taken out of specification.

    In this respect, I would draw attention to a fairly lengthy passage in the cross-examination of Professor Marsh on Day 11 which culminates at the end of his cross-examination[58] with the question: -

“So, the result is that putting in the magnetic counter balance has the effect of insuring that, no matter how close your rollers are to tolerance, those which are likely to go out of spec due to the occurrence of magnetic fields are kept in spec; is that not right?”

A  :  They would be held, yes.

Q  :  The net effect on the ones which are not deleteriously affected by the distortion caused by the magnetic field is zero. It does not make any difference, does it?

A  :  With regard to the ability to keep those in spec, as a piece apart yes. However, the effects on image quality would have to be addressed, because I can see that you have an opportunity to degrade image quality. You have another opportunity to improve it.

    There was that little dispute that the second magnetic member in the Defendants’ cartridge did reduce deformation.

    Originally Mr. Mercer stated that[59] “The reason why the 1st Defendant put in the ‘second magnetic member’ is not because it has any material effect on the satisfactory operation of the cartridge in image formation, but to reinforce the rigidity of the product.”

    It emerged during cross-examination[60] that really Mr. Mercer had very little idea as to why the second magnetic member was there. He guessed it was there for rigidity but it seems quite clear to me that it was put there because the Defendants were copying the Plaintiff's cartridge. Indeed Mr. Mercer never explained why it need be a magnetic member that was put there.

    Be all that as it may, the Defendants’ intention in the placement of a second magnetic member is irrelevant. Experiment 9 shows a significant reduction in the deformation with the second magnetic member present. As the cross-examination of Professor Crowley shows,[61] the percentage of deformation which is reduced with the presence of the second magnetic member is roughly the same according to the experiments on the Defendants’ cartridge as it was in the patent example. Admittedly the reduction in deformation in terms of measurement is less in the experiments on the Defendants’ cartridge, it appears to be in the order of about 40 microns. Nevertheless, it is still clearly enough to reduce deformation to a significant extent, particularly if one considers this in terms of a mono-component toner and particularly if one considers that the 40 microns might be sufficient to bring the resin magnet, and hence its associated roller, back into specification.

    The only other claim which I need refer to as regards the question of infringement is claim 15 which is dependent on any of the preceding claims and hence, inter alia, claim 1. Claim 15 requires that the first magnetic member and the second magnetic member are substantially radially opposed with respect to the axis of the sleeve. There was, as I understood it, virtually no challenge by the Defendants as to this.

VALIDITY

Anticipation

    There are 2 pleaded attacks on anticipation. The first is based on the A specification of the '054 patent. This was not pursued in argument. It clearly fails and I therefore pass to the other.

    The attack of anticipation and also obviousness in respect of this patent is based upon the patent application 2,139,526A.

    The attack of anticipation is, in my view, unarguably wrong.

    The '526A specification discloses a particular type of developing apparatus. It is interesting that it contains a non-magnetic developer which also uses magnetic particles. The specification refers to the use of a magnetic doctor blade and a roller with a magnet internally thereof. Anticipation can be disposed of for the very simple reason that the specification does not talk, anywhere as far as I can see, of the use of a resin magnet. In relation to the examples, the specification refers in 4 places,[62] to the use of a ferrite sintering magnet. There is no reference to a resin magnet. Since the claims of the '454 patent are limited to a resin magnet, there cannot, in my view, be any question of anticipation. The limitation in the claims of the '454 patent to a resin magnet is no accident. The invention as I have already explained concerns rectification of a problem which occurs with the use of resin magnets.

    The matter does not end there, however. The '526A specification teaches the use of an additional magnet which can co-operate with a magnetic member to form a magnetic brush to prevent magnetic particles as well as the developer from leaking at the inlet of the container even when the developing apparatus is inoperative. There is no teaching whatever of using the magnetic member, which is labelled 10 in the drawings, to reduce deformation of the magnet inside the roller.

    Professor Crowley explained why if the angle between the doctor blade and this magnetic member 10 were less than 120°, the result would be to increase, not decrease, the deformation. I refer to his statement at paragraph 114 in relation to the '526A specification and the cross-reference back to paragraphs 84 to 89 where he set out the calculations which go to support his analysis. Those calculations were done in respect of the '054A specification which was not pursued, but in this respect are relevant. This was amplified in paragraphs 13 to 16 of his second statement which goes on to say that even with an angle larger than 120°, there can be no guarantee of reduction in deformation. The outcome depended on many factors including the size, shape and location of the doctor blade and magnetic members, the details of the magnetic roller and so forth. None of this, as far as I can see, was cross-examined to.

    It is quite clear to me that there are no clear and unmistakable directions in the '526A specification to produce anything which would fall within the claims of the '454 patent.

Obviousness

    The argument as to obviousness is again based on the '526A specification. It is in my view hopeless. To classify it as being based upon an ex post facto analysis would be to exalt it. It is in my view based on wishful thinking supplemented by what might charitably be called inaccurate diagrams.

    The wishful thinking arises from the fact that as I have indicated the '526A specification refers to a sintered ferrite magnet.

    There is no suggestion that sintered ferrite magnets did or might suffer from deformation problems. The '526A specification is entirely related to the provision of a second magnetic member being incorporated into the hopper so that a further magnetic brush is formed to prevent leakage out of the rear of the hopper. Hence the question of the eradication of any deformation of the magnet inside the roller is nowhere even suggested in the '526A specification. On the face of the specification therefore it seems that obviousness is a non-starter.

    It is only if one says that for some reason the skilled man would look at the disclosure in the '526A specification and say that he would naturally think of using a resin magnet that one approaches the beginning of any argument. As to that the position is in my view doubtful. Professor Marsh said that in 1985, which is the priority date of the '454 patent, he was working in the engineering department of Xerox. In that capacity he had been working with resin magnets[63]. I understood him to be saying that the general configuration of the devices with which he was working was similar to that shown in the drawings of the '526A specification. I did not understand him to be saying that the context in which the resin magnets were being tried or used was in relation to cartridges. Nor did I understand why resin magnets were being used.

    Earlier in his evidence[64] he had said that resin magnets had the advantage of size and weight and if one were making a small desk top apparatus one might think of resin magnets as a way of reducing at least the size. The '526A specification is not specifically directed to desk top apparatus nor to cartridges although it can be said that in the opening paragraphs reference is made to the equivalent of the '054 specification.

    The conclusion that I come to is that the skilled man on being shown the '526A specification would neither think of deformation problems and certainly would not say at once that he would think of using resin magnets. It might be that on working on the proposals he might try and apply it to a system where he wanted to try using a resin magnet. If the invention lay in the use of a resin magnet one might say that such a magnet was one of a number of options that was open, but the invention does not depend on that.

    One turns to consider what the skilled man would do even were he to chose to use a resin magnet.

    It is in this aspect that I consider that the case of obviousness shows its real colours. In the first place as I have already pointed out the specification says nothing about any deformation. Hence there is no reason on the face of the document for anybody to think of solving problems related to deformation. It is interesting to point out that the '454 specification says[65] that considerable investigation had to be made to find the cause of the problem which the invention seeks to solve. Nobody as I understood it challenged that. I find it difficult to see that a solution would be obvious if the cause of the problem was not known.

    What is said, however, is that either by following the drawings in the patent or by altering the shown arrangement of the second magnet one would end up with an arrangement whereby the second magnet would reduce deformation of the magnet inside the roller.

    Dealing first with the drawings, Professor Marsh tried to demonstrate by the use of diagrams that the result was inevitable. To his first statement there was an Annex 2. That was supposed to be an analysis of the vector forces that would exist in an apparatus as shown in figure 4. There has to be some doubt on the face of the document since it has a reference to item 10b. 10b only appears in figure 8 of the '526A specification. For these purposes it might be said that the difference in the configurations shown in these two figures is small, nevertheless it does perhaps indicate some imprecision in the preparation of the evidence.[66]

    The important point, however, is that made by Professor Crowley paragraphs 11 to 16 of his supplementary witness statement. Professor Crowley asserts, apparently correctly, that the angles shown between the doctor blade and the second magnetic member in figure 4 and Annex 2 are different and that that difference in angle is likely to make the difference between the second magnetic member being able to improve the distortion and not being able to reduce it.

    Professor Crowley[67]was critical of Annex 3 to Professor Marsh’s second statement. This was said to be a vector diagram relating to the magnetic forces shown in figure 2 of '526A.[68]  For the reasons he gave he pointed out that the magnetic forces would not be in the manner shown in the Annex 3. Professor Marsh even in some supplementary questions to his evidence in chief,[69] foreshadowed during cross-examination of the Plaintiff’s witnesses, felt compelled to be hesitant and say that there was not enough data which could be obtained from the '526A patent from which these vectors could be analysed. In cross-examination Professor Marsh admitted[70] that one could not look at figure 2 of the '526A specification and draw any conclusion as to whether or not the presence of the piece 10 increased or decreased deformation. It is fair to say that Professor Marsh[71] readily admitted that he was not an expert in magnetics. Although clearly he had an understanding of the subject if there were a difference between him and Professor Crowley I would prefer the latter.

    However, it is not in my view a matter of preferring one person’s evidence or another’s. The conclusion of the cross-examination is probably on its own enough to demonstrate a lack of obviousness. One then adds to that the fact that legitimate criticisms can be levelled as to the configuration drawn in Annex 2. Although components of the forces may be said to exist as shown in Annex 3 they could only do so if the actual forces were resolved and that would leave a component at right angles to the forces shown and these components have not been shown in the Annex. To put the point in very simple terms, I do not accept that the parts shown in figure 2 of the '526A specification would result in the forces shown in Annex 3 and no others. If one looks at figure 2 of the specification and imagines a hypothetical tangent to both the circles of the photosensitive drum and the roller and then notionally drew a diameter through the roller which was parallel to the tangent, both lines of forces from the magnetic doctor blade and the second magnetic would be creating a force which would be tending to pull the roller away from the photosensitive drum roughly in a direction which could be described as 1.30 as regards the centre of the roller. Thus the tendency would be to pull the roller out of position and not into position. This is shown in diagrammatic form in exhibit P. 9 which is reproduced below.

    I would add that some mileage was sought to be made from the fact that the second magnetic member used by the Plaintiff to reduce deformation of the resin magnet, started life as a member used as a part such as is used in the '526A specification. The Plaintiff’s original papers show that it was a powerful magnet used to prevent leakage of the toner. The fact that the Plaintiff started using the part for that purpose and later realised its utility for other purposes does not affect the validity of the invention. As I have indicated it is not a necessary consequence of the use of such a part that deformation of the resin magnet will be reduced.

    Furthermore the fact one of the Plaintiff’s documents, X-24 shows that the Plaintiff was aware of the use of such a part in preventing deformation some 7 weeks before the priority date of the patent in suit again adds nothing to the argument. The recognition of the significant qualities of this part is an important facet of the invention.

EUROPEAN PATENT 0251693B1

    This patent relates to a process cartridge of the type which is detachably mounted into a photocopy machine or laser printer. It is effectively the same process cartridge as has been referred to in respect of the other patents.

    The problem which faced the inventor is that which is described in column 1 lines 13 to 31. The difficulty arises in connection with the photosensitive drum. In order to allow it to rotate freely it needs to have a certain amount of clearance between the casing of the cartridge and the drum itself. This clearance means that there will be a certain degree of slack or slop. This can been seen by the fact that the photosensitive drum can be moved in an axial direction inside the cartridge.

    Mr. Becker demonstrated this whilst he was in the witness box[72]. This lateral movement would not be apparent on casual observation but can easily be seen when the photosensitive drum is pushed in an axial direction. As is explained in the patent, if the drum moves whilst it is in the course of printing this movement could cause deterioration of the image quality. It does not take a great deal of imagination to envisage that when one is talking of what is now referred to as ‘laser quality’ printing, a movement, for example, the width of a thin line or a full stop would be enough to cause the image to lose sharpness. The solution which is provided in the specification is that the photosensitive drum should be driven by a helical gear which is attached at the end of the shaft which in turn is driven by a helical gear which is mounted in the apparatus.

    One of the features of a helical gear is that in addition to the force in the circumferential direction which rotates the drum, there is also a force in the axial direction. This arises because the gears are angled. Helical gears have one attribute that the larger contact surface area of the gears tends to make the operation smoother than in respect of other gears. The axial force, however, is often regarded as a drawback to the use of those gears. It is either the reason helical gears are not used in a given application or if they are used then steps are taken to eliminate the effect of the force.

    In the specification in suit the axial force generated by the use of a helical gear is used to lock the photosensitive drum into its desired position. This is described, for example, at column 3 lines 33 to 45. The advantage of the use of this invention is said to be that the manufacturing tolerances can be lower.

    Naturally, if the photosensitive drum is pulled in an axial direction it will correspondingly pull the cartridge in which it is contained in the same direction. That, it seems to me, is all that is being said at, for example, column 4 lines 37 to 47 and column 5 lines 20 to 37.

    Claim 1 of the patent, having defined the process cartridge and specified that the photosensitive member has to be operatively coupled to a helical gear, provides that the photosensitive member is urged, when driven, in the direction of its rotational axis into a pre-determined position in relation to the main assembly of the apparatus.

    As with all other documents which have to be construed, the specification has to be read and understood as a whole. That includes the claims which are part of the specification. I have no doubt whatever that the claim when thus properly construed, and even, I may say, when read on its own, seems to me to be unambiguous. The claim is talking about locking the photosensitive drum into position and it is the ultimate position of the photosensitive drum when the apparatus is in operation that is important. Naturally the cartridge will have to be in its position as well if the photosensitive drum which it contains is located in its position. What is important however is the exact location of the photosensitive drum in relation to the apparatus.

INFRINGEMENT

    In my view the matter of infringement by the Defendants’ cartridge is clear. In the passage in Mr. Becker’s evidence to which I have already referred he demonstrated the axial movement of the photosensitive drum in the cartridge. Once the cartridge is located inside the apparatus and is in operation the photosensitive drum will inevitably be moved in an axial direction and thereby be locked into position.

    I would only note in this respect that this patent was only registered in Hong Kong in 1994 and there can, of course, be no question of infringement prior to the date of registration.

VALIDITY

Obviousness

    By the conclusion of the trial, the only remaining attack as to validity of this patent was one of obviousness based upon the Minolta EP520 machine and the manual that went with it. This machine and its associated manual is relied upon because of the -use therein of a helical gear to drive the photosensitive drum. In my view this machine does not really assist any more than the general evidence to which I shall come.

    As I have already stated the EP520 was exhibited as P.6. It is what might be termed a full size table top office copier. The photosensitive drum is mounted on a sliding tray. The photosensitive drum was driven by a gear at its end. That gear was a helical gear. There are some further features which are relevant for the present purposes. In the first place there were heavy clamps to keep the photosensitive drum in position and prevent axial movement. In the second place the gear train on the drum interfaced with the driving mechanism in the apparatus via a dogclutch. Hence any axial force exerted on the drum was an axial force in relation to the slidable tray upon which the drum was mounted and not an axial force in relation to the main body of the apparatus. The designer of the EP520 had thus mounted the photosensitive drum in such a way that the axial thrust of the helical gear was designed to be eradicated. The clamps were such that the drum was designed not to move in the axial direction.

    The way I see the matter however is this. There are only a limited number of types of gears. Amongst that number is the well-known category of helical gears. In some applications they would be regarded as advantageous since generally speaking they rendered a smoother operation than other types of gears. However, in my view the importance of the invention lies in the use of the axial thrust developed by the use of a helical gear to maintain the position of the drum. No previous analogous use of a helical gear had been suggested. Indeed it appears both from the evidence of Mr. Becker[73] and the evidence of Mr. Malcolm[74], that where helical gears were used it was the practice to use clamping or locking devices to prevent axial movement. That it seems to me is demonstrated in the EP520 machine.

    Mr. Becker in his evidence at para. 100 described the invention as being very clever and elegant. He was criticised by counsel for the Defendants as being perhaps skilled and experienced as a witness. I have to say that I found him to be knowledgeable witness and his evidence gave a great deal of assistance. I have no hesitation in accepting his technical evidence and appreciating that his opinion evidence as to the merits of the invention were genuinely held.

    Making my own assessment as to the merits of the invention I have no doubt that the invention of this patent was not obvious. I have no doubt that even if somebody in 1986 had thought of using a helical gear in cartridges of the type used in the '054 patent he would have done so for the purpose of achieving a smooth movement. But most importantly he would, as apparently was always done in relation to helical gears, have clamped the photosensitive drum in the cartridge to prevent axial movement.

INNOCENCE

    The defence of innocence is relied upon in this case in respect of patents only.

    As I have already indicated, as a matter of law the defence of innocence can be relied upon in Hong Kong but it is of course innocence of the knowledge of the United Kingdom patent and not the Hong Kong registration which is important.

    The defence of innocence of knowledge of a patent was considered by Graham J. in Lancer Boss Ltd. v. Henley Forklift Co. Ltd.[75]. He was, of course, considering the provisions under the Patents Act 1949. The wording of Section 62 of the Patents Act 1977 follows Section 59 of the Patents Act 1949 and therefore what Graham J. has said is directly pertinent.

    One of the matters that is apparent is that the onus lies on the person seeking to rely on the exception that he is innocent as at the date of the infringement. He must prove not only that he was not aware that the relevant patent existed but also that he had no reasonable grounds for supposing that the patent existed. Graham J. held that the test was an objective test and that if the infringer had no actual knowledge of the existence of a patent, the reasonable grounds must be judged in the light of all the circumstances at the time of the infringement.

    One interesting observation made by Graham J.[76] is that as a matter of common sense if a defendant copies an article he has only himself to blame if does not ascertain by making all reasonable and proper enquiries whether he is free to do so.

    The facts relating to this case which I consider relevant as regards the defence of innocence are as follows. The Defendants and the 2nd Defendant in particular, were aware at an early stage of the likelihood of the existence of patents relevant to the Plaintiff’s cartridge. Mr. Buice said in his evidence[77] that he warned the 2nd Defendant of the common belief and hence likelihood of the Plaintiff having patents. He was not cross examined as to this. It is fair to say that the 2nd Defendant’s recollection of his meeting with Mr. Buice entailed more of a discussion as to the repair of existing cartridges rather than manufacture of new cartridges. The defence relies upon the fact that advice had been sought from Messrs. Lloyd Wise & Co. Hong Kong, a well known firm of patent agents practising in Hong Kong.

    Before I turn specifically to that allegation, it is apparent that the fact that Lloyd Wise’s advice was sought reinforces the conclusion that the Defendants were aware of the likelihood of the existence of patents in the Plaintiff’s name. In the Autumn of 1991 when the decision to manufacture cartridges as opposed to refilling or repairing them was taken, in addition to the 2nd Defendant being a director of the 1st Defendant there were some 4 other directors including in particular Mr. Gurka. Mr. Gurka has considerable experience in the investigation of activities of those who are alleged to infringe industrial property rights. As a result therefore he is well-known amongst, industrial property practitioners. Hence, it is not surprising that Mr. Gurka contacted Mr. Rackham who was the senior partner of Lloyd Wise in Hong Kong.

The Lloyd Wise Letters

    The basis upon which Lloyd Wise was consulted is not clear to me. It is evident that the letters (faxes) from Lloyd Wise of the 11th September and of the 7th and 15th October 1991 were addressed not to the 1st Defendant but to Mr. Gurka.

    It is apparent both from the letter of the 11th September itself and from the evidence of Mr. Greene Kelly that Mr. Rackham conducted some searches. I understand that those searches were done by Mr. Rackham himself using a computer linked to an overseas database. Whilst times might have changed since the advent of the computer and computerised databases, previously senior partners would not themselves have conducted searches but would have left them to be done either by technical assistants in their firms or by searching companies. Mr. Rackham was not called as a witness hence it is not possible to know why he himself conducted the searches. It may well be that what he was doing was more in the nature of a personal favour to Mr. Gurka rather than giving advice to a fee paying client. Hence that might be the reason for his doing the searches himself. My suspicion that it is probably still unusual for senior partners of firms of patent agents to conduct their own searches is somewhat confirmed by Mr. Greene Kelly’s evidence which shows that apparently Mr. Rackham made some fundamental errors in the operation of the search which led to a nil return.

    Be that as it may it is also apparent from the 11th September letter that the primary searches conducted by Mr. Rackham were under the name Cannon and not Canon. Again I found this factor indicative of a slightly casual and ‘friendly advice’ approach to the matter rather than a thorough and professional approach to the search. It is clear from the letter of the 11th September that Mr. Rackham was aware at the time of the possible spelling of the word Canon of the Plaintiff’s name being correct. It would have taken little more than a perusal of the “Yellow Pages” in the telephone directory to be able to ascertain the correct spelling.

    Another matter which would be at once apparent to those familiar with patent searching is that the letter of the 11th September talks of a search of patent assignees. Whilst it is apparently the practice that United States patents are first applied for in the inventor’s names and there is then an assignment of the rights to the eventual patentee and hence there would be an assignment in nearly all cases where a patent ends up in corporate hands, in the United Kingdom this has not been the common practice. In the United Kingdom if an invention is made by a corporate employee the patent is often, if not usually, applied for in the company name.

    Hence, although assignment searches are relevant in the United Kingdom and patent searchers who conduct thorough patent searches will also search the assignment register, no patent search for United Kingdom patents would be complete without a name search under the name of the person believed to be the owners of the patent. Again I say no more than that because Mr. Rackham was not called as a witness and it is therefore impossible to say whether he was using the term “assignee” in its strict and accurate sense or whether he was using it in a sense to include patentees and applicants. Nevertheless, the letter of 11th September indicates that the only search done under the name Canon (as opposed to Cannon) was an assignee search.

    The effect of the letters of the 11th September and 7th and 15th October 1991 seems to me to be that a prudent person would have been left in doubt. Clearly the Defendants were concerned lest the Plaintiff had patents. The letters should not have relieved any concern about the existence of patents held by a prudent enquirer. Instead, the patent agent seems to have been told that the 1st Defendant was going to refurbish existing cartridges and make spare parts. For that reason it is clear from the letter of the 7th October that patents no longer featured as a significant concern to the patent agent. However, the 1st Defendant should have appreciated 2 matters on reading the letters. In the first place the operation was going to be very different from a purely refurbishing operation. Page 2 of the letter of 7th October makes quite clear that a repair defence will not be viable if what is being done is to make what is effectively a new item. In the second place, the 1st Defendant should have appreciated that the primary searches had been done using the wrong spelling the Plaintiff’s name.

The 2nd Defendant’s Evidence

    The 2nd Defendant in giving evidence in Court said that he relied primarily on what Mr. Gurka told him rather than on the letter of the 7th October[78]. He said that the letter was merely confirmation of what Mr. Gurka, who he understood to have a broad experience in intellectual property matters, had told him. Mr. Gurka on the other hand when he gave evidence did not support this and indeed said[79] that it was Mr. Rackham who was giving the advice not himself. To his recollection he never gave Mr. O’Brien any categorical assurance that there were no intellectual property problems. I am not sure whether Mr Gurka’s memory is wholly reliable about the precise details of the events that surrounded taking the advice from Lloyd Wise. There seems to be some discrepancy about when Mr Rackham was given a sample of the cartridge. Nevertheless I consider that Mr Gurka is correct when he says he was not giving advice. He was merely a channel to consult Lloyd Wise.

Conclusion

    Apart from the '693 patent, helical gear, the only patent left in respect of which this defence is relevant is the '054 patent. The other patents were either not registered in Hong Kong until August 1993 or later or in the case of '933 has dropped out of the picture.

    I arrive at my conclusions making the best of the Defendants’ evidence that I can. I consider that the Defendants were not specifically aware of any patent owned by the Plaintiff in respect of the cartridges until this was drawn to their attention by the Plaintiff’s solicitors. On the other hand I consider that on the evidence it is clear that the Defendants suspected that there may have been patents and had made some inquiries. Those inquiries I do not consider were complete inquiries. On the other hand I do not consider that the Defendants were in a position where they simply turned a blind eye to the possible existence of the Plaintiff’s patents. I consider that the primary cause of the Defendants’ ignorance of these specific patents owned by the Plaintiff was the faulty search made by the patent agent. If the search had been conducted properly a large number of patents would have been revealed and, difficult though it might have been there have been, it is no excuse to say that it would have been too time consuming and expensive to have examined 500 patents. The Defendants should, however, have told the Patent Agent of the correct spelling of the Plaintiff’s name. A cautious and honest manufacturer might even write to the Plaintiff and make enquiries as to the existence of any relevant patents.

    On the other hand I do not consider that a Defendant is obliged to do a full infringement search in order to be able to rely on the defence of innocence. By full infringement search I mean a subject matter search based on a search of all patents looking for those which may cover in scope subject matter relevant to a product which it is intended to manufacture and sell. Such searches are notoriously difficult because, despite the detailed classification of patents, the location of a patent which is of relevant scope is often very difficult. As this case shows, a single product such as a cartridge may incorporate a number of quite different inventions.

    I would also mention that the Second Defendant said whilst giving his evidence that he had also discussed the matter with 2 or 3 barristers on one occasion. That again seems to have been an informal affair and one of the barristers was the husband of one of the directors. No date was given for the meeting but it seems to have been about the time the company was formed or slightly before. Again nothing relevant to this aspect can I think be attached to this meeting.

    In my view therefore following the criteria laid down by Graham J. in the Lancer Boss case I consider that the Defendants were in September/October 1991 in a position where they were going ahead to copy a product knowing that there were probably patents which covered the product. I consider they took the risk to go ahead not because they thought that no patents existed but because they thought they could rely on the repair defence. In this respect they did not take proper advice. They seem to me to have taken informal advice. They did not take care to tell those from whom they were taking that advice exactly what they were proposing to do. In my view the Defendants went ahead and copied hoping if things took a bad turn and they were challenged to rely on the repair defence. I do not consider that they were in a position where they can say that they had no reasonable grounds for supposing that a patent such as the '054 patent existed.

    In respect of the '693 patent relating to the helical gear, this was only drawn to the Defendants’ attention by letter of the 20th June 1994. By that stage these proceedings were well under way. I consider different considerations apply here. Whereas one might say that a Defendant who takes a risk of the existence of a patent only has himself to blame if the existence of a relevant patent subsequently emerges, if a Defendant has already been sued and a patent has neither been included in the Action nor drawn to his attention, I consider that he is justified in saying that he has no reasonable grounds for supposing its existence. In respect of the '693 patent I consider that Defendants are entitled to rely on the defence of innocence up until the 21st June 1994.

COPYRIGHT

    There are a substantial number of drawings in respect of which copyright is alleged to have been infringed by the manufacture and dealing in the 1st Defendants’ cartridges and its parts.

    Subsistence of copyright has not been the subject of any dispute and it has not been necessary to go through the evidence filed to support the Plaintiff’s case in this regard.

    The question of reproduction and infringement has resolved itself into one basic issue. Before coming to that it is necessary to mention that the Defendants have reserved for the Privy Council, should the case reach that far, the question as to whether reverse engineering of a mechanical part constitutes reproduction of the drawing from which the original part was made. The Defendants have also specifically reserved the right to argue what might be referred to as the “Catnic” point. Put shortly the question is whether a patentee has effectively lost or abandoned his copyright in drawings relating to parts depicted in the drawings of his patent once a patent is applied for or granted.

    The matter at issue at the present stage of the proceedings is that which is referred to as the British Leyland point. It is a defence that was first formulated in the case of British Leyland v Armstrong[80]. Although the effect of the decision is indisputably at least partially felt in this case, the Plaintiff challenges the ability of the Defendants to rely on the doctrine enunciated in the circumstances of this case. It is therefore necessary to examine what the Defendants are doing and then what the British Leyland case decided and the limits of the doctrine.

The Defendants’ Acts

    Before going to the British Leyland case it is necessary to reiterate that the Defendants claim the right not only to manufacture parts for the EP-S cartridges for the purpose of replacing worn and broken parts but to manufacture complete new cartridges and kits ready to be made into cartridges.

    The way the matter is put the Defence is twofold. In the first place as regards the cartridges it is said that the 1st Defendant’s cartridges are being dealt with as spare and replacement parts for the repair and/or continued functioning of the Plaintiff’s printers. As regards the parts, it is said that the parts, assemblies and sub-assemblies are being sold as spare parts for the repair and/or continued functioning of the Plaintiff’s cartridges and printers.

    As regards the parts of the cartridge there is little difficulty. There is no dispute that if a man has a cartridge with some parts which are worn or defective he is entitled to repair his cartridge by replacing the particular part or parts. The Defendants are therefore able to make and sell spare parts to enable that to be done. The problem comes with regard to the complete cartridges and the kits for cartridges. Does this right of repair extend to making complete cartridges or making kits for cartridges?

    It is evident that the Defendants’ business is based on the supply of cartridges which will be a replacement for original cartridges which are supplied with photocopying or laser printer machines. It is evident from the 1st Defendant’s business plan which was referred to at the trial that the primary reason for replacement of the cartridge is the depletion of the toner therein.

    In relation to this point, it can be noted that it has always been the 1st Defendant’s objective that its cartridge would contain more toner than the original cartridges. For example, section 6B of the business plan (Private Placement Memorandum), which is the section dealing with Product Positioning, states that there will be 25% more toner included in the 1st Defendant’s cartridge than the original SX cartridge. This will give an estimated 4,000 A4 copies rather than 3,200 copies which the original cartridge is said to give. When one looks at the cost per page analysis, it is evident that the Defendants were basing their sales strategy on the footing that the cartridges were prima facie to be replaced when the toner was depleted and not because the cartridge had in some way become defective.

    The calculation was for example also repeated in effect in para. 16 of the affidavit of the 2nd Defendant sworn on the 14th January 1994 for the purposes of defending the application for an interlocutory injunction. In para. 17 of the same affidavit, Mr. O’Brien talks of the buyer being forced to buy a US$125 cartridge every time he consumed US$5 worth of toner. Indeed, in Mr. O’Brien’s witness statement[81] he stated “It is a waste of resources to throw away a functioning xerographic apparatus simply because the toner powder has been used up”.

    I draw attention to this matter because it has been part of the Defendants’ case that cartridges are replaced when for one reason or another, there has been a malfunctioning which has led to either the cartridge and hence the machine not working or else to bad quality. It is clear from the evidence that if a service engineer is called out to service a machine which is for one reason or another malfunctioning, often the first thing which is done is to replace the cartridge. That is hardly surprising given the importance of the parts which are contained in the cartridge. As such, the cartridge does perform the function of being a simple and effective means of servicing the printer.

    However, in his first affidavit which was filed in response to the application for an interlocutory injunction, the 2nd Defendant stated that of the 108 parts in a cartridge approximately 95 of those parts were in perfect condition when the toner powder had been used up. In cross-examination during the trial[82], the 1st Defendant confirmed that the same was an accurate estimate based on his knowledge as of January 1994. Dr. Tabak said during re-examination[83] said that the normal event which stops the machine producing copies is the depletion of toner.

Summary of evidence relating to replacement of cartridges

    The evidence of all the witnesses really amounts to this:-

1. The normal event which causes a laser printer or copier to stop producing copies is the depletion of toner.

2. The normal event which requires a replacement of the cartridge in a laser printer or copier is the depletion of toner.

3. The cartridge in a laser printer or copier is sometimes replaced because the cartridge has failed otherwise than because the toner has run out.

4. When the toner has run out, or the cartridge has ceased to work for some other reason, the majority of the parts of the cartridge are usually in proper working condition.

5. Even though a depleted cartridge may function if refilled it may be legitimate to replace some of its parts on a “preventive maintenance” basis, i.e. to make sure that the cartridge lasts for another full toner load. The parts which would or may require replacing are generally speaking:-

(a)  the photo-sensitive drum;

(b)  the corona wire;

(c)  the seals;

(d)  the wiper blade;

(e)  other parts.

    In addition, in the course of handling a used cartridge, some of the plastic parts may become damaged or broken. Whilst I do not rule this out it does seem to me that the construction of the cartridge is reasonably strong and it can withstand firm handling.

    Prima facie, therefore, when the Defendants are supplying and assisting others to supply complete cartridges, they are providing the user with a new supply of toner. The existing cartridge has not become broken or defective other than by reason of the fact that there is no more toner. The cartridge is in a condition where it can be re-used, although it may be advisable at that stage to replace a few of the parts, not because they have become defective, but because they may become defective.

    There is a subsidiary use for replacement cartridges and that is as an element of repair, but that I hold to be a minor element or in other words, a subsidiary use of the Defendants’ cartridges. Even then the cartridge which is causing problems will no doubt have the majority of its parts in working order and will thus be repairable.

The British Leyland decision

    The British Leyland case involved the claim for infringement of copyright of the drawings of an exhaust pipe for a car. The majority of the House of Lords came to the conclusion that there was no ground for saying that copyright did not subsist in the relevant drawing and they were unable to come to the conclusion that there had not been reproduction by reverse engineering. There was one dissenting speech, that of Lord Griffiths.

    The majority then went to consider whether there was any bar to the Plaintiff succeeding in its claim. They came to the conclusion that there was. Again, Lord Griffiths dissented. The starting point on this aspect of the case was the decision in Solar Thomson v Barton[84].

The Solar Thomson decision

    The claim by Solar Thomson was for infringement of patent and copyright. The rights were said to be infringed by the manufacture of replacement parts for patented machinery which was in need of repair. The Court of Appeal rejected both claims.

    The patent claim was refused on the basis that the purchaser of a patented article had a right to repair the article. There are a number of old cases and the principle is clear. Anybody acquiring a patented article has an implied licence to keep it in repair but he must stop short of renewal. As Lord Halsbury said in a much quoted passage[85]:

“You may prolong the life of a licensed article but you must not make a new one under the cover of repair.”

    The copyright claim was rejected as a necessary concomitant of the licence to repair under the patent. In the words of Buckley L.J. in the Court of Appeal[86]:

“If I am right in the view I have expressed about the existence here of an implied licence under the patent to repair pulleys by replacing worn rubber rings, it must, I think, follow that purchasers of polyrim pulleys are also impliedly licensed to infringe the plaintiffs’ copyright in their drawings to the extent necessary to enable such repairs to be carried out. To hold otherwise would be to allow the copyright to stultify the implied licence under the patent. It seems to me that considerations of business efficacy strongly support the view this should not be the case. If it were, any purchaser of a patented article might find himself deprived of his ostensible right to repair the article by the existence of a copyright of which he would probably be ignorant when he had made the purchase.”

The Court of Appeal decision in British Leyland

    The Court of Appeal in the British Leyland case was faced with the position that it was a third party manufacturer and not the purchaser of the article who was making the copy or directly authorising the making of it. The Defendant in that case was a spare parts manufacturer. What the Defendant wanted to do was manufacture spare parts which would then be available on the market to owners of the Plaintiff’s cars.

    The difficulty which the Court of Appeal experienced was in finding that any licence extended beyond the purchaser and enabled others, who were unconnected with the owners of BL cars, to manufacture spare parts. In rejecting the defence Oliver L.J. said this[87]

“I can see that there are strong arguments for saying that where a manufacturer sells to a purchaser an expensive piece of machinery containing parts which are inherently likely to wear out during the working life-time of the machine, he impliedly licenses the purchaser to procure, by copying if it is more advantageous to him, those subsidiary parts, even in a case where the manufacturer is itself willing to supply the parts at whatever it regards as an appropriate price.

    If such a licence can be implied, there can be no reason for inhibiting the purchaser, when he orders one replacement, from having two or more made against future breakdown during the anticipated life of the machine. But even allowing that such manufacture might be within the implied licence, I find myself quite unable to see how that could constitute some sort of blanket licence from the vehicle manufacturer to any member of the public to copy and manufacture, for sale in the market generally and without specific order, equipment to be made available for purchasers or users of the vehicle manufacture’s product.”

    As Lord Bridge pointed out[88] it seemed that in the Court of Appeal, Oliver L.J. was prepared to accept that the purchaser of a BL car might himself copy, or commission another to copy, the original exhaust pipe in order to provide replacements, but he found it impossible to derive from this a conclusion on which a third party manufacturer could found a defence. Lord Bridge concurred in that rejection of the Defendant’s argument based on implied licence. It was this problem which faced the House of Lords.

THE HOUSE OF LORDS DECISION IN BRITISH LEYLAND

    The majority of the House held that the right of the owner of a car to repair it enabled a manufacturer of spare parts to make parts in infringement of the Plaintiff’s copyright.

    The reasoning of Lord Templeman takes a slightly different route from that of Lord Bridge. Since Lord Scarman and Lord Edmund-Davies both adopted the reasoning of Lord Templeman it is that to which I shall turn first. Lord Edmund-Davies also agreed with Lord Bridge. A factor which did not go unmentioned during argument was that Lord Edmund-Davies appears to have had some doubts about the doctrine. Nevertheless, powerful though he felt that Lord Griffiths’ views were, he did not feel compelled to disagree with the majority.

Lord Templeman

    At the commencement of his speech Lord Templeman said that the “purchaser of a BL car sells his soul to the company store”[89]. No doubt his approach was symptomatic of his apparent dislike of what he might have regarded as excessive enforcement of industrial property rights. The references to the Ford motor company, the background to the motor industry, the need for spare and replacement parts for cars, the approach of car manufacturers to spare parts and the likely consequences of a successful outcome for British Leyland reinforce the impression of an apparent judicial aversion to the use, or perhaps what the Judge regarded as a misuse, of industrial property rights.[90]

    It is clear from the opening words of Lord Templeman’s speech on this topic[91] that he approached the question at issue on the basis of the right of the purchaser of a product to repair it.

Non-derogation from grant

    After the preliminary observations Lord Templeman turned to the rule as to non-derogation from grant as applied in land law. He cited a number of cases[92]. I am informed by Mr Laddie Q.C. who appeared in the British Leyland case that none of those cases were cited during the hearing. The first surprising thing I found when considering them is how seldom the doctrine of non-derogation from grant seems to have been the subject of reported decisions. The doctrine was encapsulated by Lord Templeman in the quotation from the judgment of Bowen L.J. in Birmingham, Dudley and District Banking Co. v Ross[93] that a “grantor having given a thing with one hand is not to take away the means of enjoying it with the other.”

    A number of points emerge from the cases which were cited by Lord Templeman. In the first place the doctrine of non-derogation from grant is based on the principle of common honesty. In the second place it is a narrow doctrine. In the third place its application must be such as was in the reasonable contemplation of the parties at the time the transaction was entered into. As Younger L.J. said in Harmer v Jumbil (Nigeria) Tin Areas Ltd[94]: “..a principle that a grantor shall not derogate from his grant, a principle which merely embodies in a legal maxim a rule of common honesty.” He then cited the same statement from the judgment of Bowen L.J. and the went on:

““If A. lets a plot to B.,” as Lord Loreburn phrases it in Lyttelton Times Co v Warners, “he may not act so as to frustrate the purpose for which in the contemplation of both parties the land was hired.”  The rule is dear but the difficulty, as always, is in its application. For the obligation laid upon the grantor is not unqualified. If it were, that which was imposed in the interest of fair dealing might, in unscrupulous hands, become justification for oppression, or an instrument of extortion. The obligation therefore must in every case be construed fairly, even strictly, if not narrowly. It must be such as, in view of the surrounding circumstances, was within the reasonable contemplation of the parties at the time when the transaction was entered into, and was at that time within the grantor’s power to fulfil.”

    Lord Templeman did not quote this passage. Instead he quoted part of a sentence from the judgment of Branson J in O’Cedar Ltd v Slough Trading Co. Ltd[95]. Lord Templeman said:[96]

“In relation to land, the principle has been said to apply “beyond cases in which the purpose of the grant is frustrated to cases in which that purpose can still be achieved albeit at a greater expense or with less convenience.” per Branson Jin O’Cedar Ltd v Slough Trading Co. Ltd.”

    What Lord Templeman cited was not a principle derived from the O’Cedar case. It was the losing argument in that case. It was precisely what Branson J. held was not the law. Following the question which he posed which was partially quoted by Lord Templeman, Branson J. said that there had to be a substantial interference with the use of the premises for the purpose for which the premises were demised for the doctrine of non-derogation from grant to apply although the doctrine was not confined to cases of complete frustration for that purpose. He then went to paraphrase the passage in the judgment of Younger L.J. in Harmer v Jumbil which I have already cited. But he came to the conclusion that the principle of non-derogation from grant was not applicable in circumstances where the grantor was doing something on his land which had the effect of increasing the insurance premium on the land of the grantee next door. Thus simply making it more expensive for a grantee to carry on a business on the land did not constitute derogation from grant. He said this[97]:

“In my judgment, even so, the principle (non-derogation from grant) invoked by the Plaintiffs does not assist them in this case. The contention is that the defendants, by doing something on the adjoining land which is not in itself unreasonable or unbusinesslike, which has not affected the demised premises physically in any way, which has not rendered it less easy or less legal to carry on upon them the business for which they were demised, but which has the effect of adding substantially to the expense of carrying on that business there, have derogated from their grant. I should be extending the application of the principle into a region quite different from that in which it has hitherto been applied if I were to hold that it applied to anything done by a lessor upon adjoining land which, while not otherwise affecting the demised premises or their user in any way, merely made it more expensive than it was before for the lessee to carry on his business on the demised premises.”

    I draw attention to this point about expense because it becomes important when considering the full implication of the British Leyland judgment.

    Lord Templeman did not say whether he agreed with what Branson J. had said was the law relating to non-derogation from grant in land law. Nor did he say whether and to what extent he regarded extra expense imposed was a matter which would cause the circumstances to fall within the principle which he enunciated in respect of industrial property rights. However, Lord Bridge, as I will come to, did refer to the expense aspect as part of his judgment. He did so in the context of it being the factor which entitled the Defendants to copy a part rather than design one of their own.

    Although Lord Templeman did not revert directly to the notion of expense that might, perhaps, be implied from the fact that it was never in dispute in that case that BL were in a position to and did supply spare parts for its cars.

The right to repair

    Lord Templeman based his decision on the right to repair which had long been recognised in patent law and had been recognised as part of the law of copyright once the issue of repair to products protected by copyright had come before the Courts in Solar Thomson Engineering Co Ltd v Barton[98]. His conclusion was[99]:

“For my part, I base the right to repair on the principle of non-derogation from grant rather than implied licence and I see no difficulty in concluding that suppliers such as Armstrong may make exhaust pipes to be supplied to those cars of BL which require to be repaired by the replacement of exhaust pipes. Every owner of a car has the right to repair it. That right would be useless if suppliers of spare parts were not entitled to anticipate the need for repair. The right cannot, in my view, be withheld by the manufacturer of the car by contract with the first purchaser and cannot be withheld from any subsequent owner.”

    Whilst dealing with the non-applicability of the doctrine which he had expounded to the law of patents Lord Templeman had this to say[100]

“In the third place, BL market and sell a car as a form of transport which requires an exhaust pipe in order to function. BL are not selling exhaust pipes. The car sold by BL can only be kept in repair by the replacement of the exhaust pipe which is not the subject of a patent. In these circumstances, in my opinion, BL are not entitled to assert the copyright in their drawings of an exhaust pipe in order to defeat the right of the purchaser to repair the car.”

    Before going on to consider the speech of Lord Bridge it is pertinent to note that the right to repair was just that. Repair has never been understood to mean renewal. The manufacture of a new part under the cover of repair is not permitted notwithstanding that parts may have been derived from a patented article sold by the patentee.

Lord Bridge

    Lord Bridge too based his decision on the right of repair. Unlike Lord Templeman he did not start his reasoning that there was a right of repair from the basis of the doctrine of non-derogation from grant. He made reference to the right of repair being inherent in the ownership of the car itself[101] and he supported his own conclusion by reference to Lord Templeman’s reliance on the law of non-derogation from grant.[102]

    Having referred to the right of repair he said[103]

“It seems to me that when one is considering machinery which is not the subject of any patent protection, it is unnecessary and may be misleading to introduce the concept of an implied licence. The owner of a car must be entitled to do whatever is necessary to keep it in running order and to effect whatever repairs may be necessary in the most economical possible.”

    The juridical basis was no longer licence, it was the right of an owner of an article to keep it in running order and to repair it. Nevertheless, it is the same right to repair as had been held to exist in respect of patents for many years.

    The introduction of the words “most economical way possible” is not something which Lord Bridge found necessary to predicate on a basis of previous authority. It was something which Lord Bridge himself stated, apparently for the first time. The word “economical” in relation to repair subsequently appeared at least another 3 times in his speech. As I have already noted, any attempt to base such a proposition on a parallel with the law of non-derogation from grant would not be in accordance with the authorities, at least those cited by their Lordships.

    Lord Bridge then used the used the concept of economical repair as the basis for the next proposition namely[104]:

“What the owner needs, if his right to repair is to be of value to him, is the freedom to acquire a previously manufactured replacement exhaust system in an unrestricted market.”

    His Lordship appreciated however that such a right conflicted with the right of a copyright owner to control the supply of spare parts. He came to the conclusion that the Courts could not police the way in which a copyright owner enforced his copyright in spare parts. There was neither the statutory mechanism to do so nor were the Courts equipped to come to a decision as to whether a copyright owner was acting reasonably. It came down to a straight forward decision as to whether the rights of the copyright owner or the rights of the acquirer of the item in need of repair would prevail. The resolution of that conflict was[105]:

“By selling cars fitted with exhausts based on their copyright drawings, BL have already enjoyed the primary benefit which their copyright protects. By selling those same cars BL have also created a large community of car owners who, quite independently of any contractual rights derived from BL, enjoy the inherent right as owners to repair their cars by replacing the exhaust whenever necessary in the most economical way possible.”

    Lord Bridge put it that the copyright owner’s right to enjoyment of copyright had to give way to “the right of car owners to a free market in spare parts necessary for economical repair” and that “the court should decline to enforce copyright claims as against the manufacturer of spare parts intended exclusively, as are Armstrongs’ exhaust systems, to be available as replacement parts for cars in need of repair”[106]

    Thereafter Lord Bridge made reference, as I have indicated to Lord Templeman’s application of the principles relating to non-derogation from grant.

Limits of the Doctrine

    Obviously when a new legal principle is evolved finer points and difficulties may arise. The limits of the British Leyland doctrine, if I may so term it, seem to me to be obscure in parts. If the doctrine, as Lord Templeman and the majority thought, was an analogy with non-derogation from grant the question at once arises as to whether the rule applies to bind others than the original manufacturer of the equipment which is said to be under repair. Lord Templeman said at one point:[107]

“It was suggested on behalf of BL that any such right would only be effective against the manufacturer of a car and not against a subcontractor who manufactured parts for the car and was allowed by BL to retain copyright in the engineering drawings. In my view, the same principle applies to a subcontractor because he knows that he is manufacturing a part of a car to be sold to a purchaser who will need to keep the car in repair.”

    However, that, it seems to me, does not deal with the situation where an independent manufacturer is involved. If the products of A happen to be purchased by the manufacturer of a larger machine, why should A not be able to restrain anybody making copies of his products? A may or may not have dealt directly with the manufacturer of the larger machine. He may not know his products are used for that purpose. If he has not so dealt and has no knowledge there seems certainly no basis for saying that he should be denied the enforcement of his statutory rights of copyright. Yet if the right is based upon the right of the purchaser the question must always be asked against whom is that right enforceable.

    The problem is no less on Lord Bridge’s analysis of the right of repair of the owner of an article. Is the right of copyright effectively lost because the product in question has come into the hands an owner who has acquired it as part of a larger machine?

    There was even a suggestion made in the course of argument that a spare parts manufacturer who designed his own spare parts, might himself be subject to a British Leyland defence by someone wanting to make those same spare parts for a third party manufacturer’s product.

Whether the British Leyland Decision covers things other than repair

    As I have pointed out the decision in British Leyland specifically relates to repair of machinery which the owner has acquired directly or indirectly from the person required not to derogate from the grant.

    For the meaning of the word repair, the Defendants relied upon what was said by Foster J. in Gardner & Sons Ltd. v. Paul Sykes Organization Ltd.[108]: -

“Repair is an ordinary English word meaning, “to restore to good condition by renewal or replacement of decayed or damaged parts” - see Lord Simonds in L.N.E.R. v. Berriman [1946] A.C. 278 at 314. In the present case the piston is not usually repaired but nearly always replaced by a new one. It would be extraordinary if my car breaks down and required, for instance, a new radiator, I had to seek it only from the manufacturer of the car. In my judgment in the absence of any express conditions, the defendant company is entitled to use in effecting the reconditioning of the diesel engines, new pistons not made by the plaintiff company.”

    The question then arises as to whether the principle laid down in British Leyland extends beyond restoring to good condition by renewal or replacement as indeed presaged by the Defence in the words “continued functioning” which the draftsman clearly thought was something different from “repair”.

    There are references in the speeches of both Lord Bridge and Lord Templeman which might indicate that a further extension of the principle which they enunciated could be made. For example Lord Bridge said:[109]

“The owner of a car must be entitled to do whatever is necessary to keep it in running order and to effect whatever repairs may be necessary in the most economical way possible.”

    Lord Templeman in the passage where he dealt with the cases of non-derogation from grant in land law said[110]:

“I see no reason why the principle that a grantor will not be allowed to derogate from his grant by using property retained by him in such a way as to render the property granted by him unfit or materially unfit for the purpose for which the grant was made should not apply to the sale of a car.”

    And later towards the end of his speech when dealing with the question of the applicability of the doctrine to patents, Lord Templeman said[111]:

“I see no reason to confer on a manufacturer the right in effect to dictate the terms on which an article sold by him is to be kept in repair and working order.”

    Despite the references in the speeches which might indicate that the doctrine might be wider, I consider that it would be an extension of the principle laid down in the British Leyland case, to debar an action for infringement of copyright, in circumstances other than where there was a repair. That case concerned the provision of articles which were designed to replace decayed or damaged parts, it did not concern a case where the parts to be replaced were sound.

Decisions subsequent to British Leyland

    My attention has been drawn to 2 decisions which have been made subsequent to the British Leyland decision. In the first place, I refer to the case of Dennison Manufacturing Co. v. Alfred Hope & Co. Ltd.[112] , this was a case decided by Smellie J. in the High Court in New Zealand. I derive little assistance, unfortunately, from this case. The judge held that the wording of the Copyright Act in New Zealand specifically excluded a spare parts defence and that the British Leyland decision should not be followed in New Zealand.

    I was also referred, however, to a judgment of Mr. Justice Jacob in Flogates Ltd. v. Refco Ltd.[113]. The judgment was in an application for an interlocutory injunction. The case concerned sliding gate valves for molten steel ladles. The ladles, which hold molten steel in very large quantities and, of course, at high temperatures, are lined with refractory material. In order to be able to pour the molten liquid from the ladle, there is an aperture. The aperture is closed by a sliding gate valve which uses refractory materials. The general principle is that there are two refractory components each with an aperture. The upper component is fixed whilst the lower one is slid. These refractory materials are subject to a great deal of wear and tear and have to be replaced approximately every three or four times that the ladle is used. This can be perhaps as much as once a day. The case concerned the supply of refractory material for replacement in the Plaintiff’s valves.

    The argument was raised on behalf of the Plaintiff that the British Leyland doctrine had no application at all. It was said that the refractories were not spare parts but merely “consumables”. It was pointed out that the grant from which the manufacturer could not derogate was of the right to repair only. Regular replacement of the refractories did not constitute a repair. It could be likened for example to a filter in a coffee machine or perhaps a bag which is used in a vacuum cleaner.

    For the Defendants it was argued that for a consumable to be outside the scope of the British Leyland doctrine, it would have to be something which the machine, when in working order worked upon. It would have to be something in the nature of a staple for a staple gun.

    In the end Mr. Justice Jacob did not reach a conclusion, but he clearly inclined to the Plaintiff’s arguments. He considered that the Plaintiff was correct in its submission that the customer knows when he buys the Plaintiff’s system that he would need a constant supply of refractories and that they will be the major cost item which he has to bear. The refractories in that case could be considered the major technical components not just one of a host of such components, such as an exhaust pipe of a motor car.

    After Mr. Justice Jacob had alluded to the fact that the British Leyland decision could be extended to situations beyond mere repair, he came to the conclusion:-

“So the decision is not easy, and Leyland does not give much guidance. I incline to Mr. Young’s (The Plaintiff’s Counsel) argument because it accords more closely with commercial sense. But in the end I decline to decide upon in this merely interlocutory, decision.”

The Present Case

    In my view, the Defendants in this case are not protected by the British Leyland decision when it comes to manufacture and sale of cartridges and kits for cartridges.

    As I have already stated, the primary purpose of producing cartridges was to replace cartridges where the toner had been depleted. This in my view is not repair. It does not accord with the common understanding of the word repair. Nor does it fit in with the description of the meaning of that word in the case of Gardner & Sykes. What is taking place is the provision of a further supply of consumable material namely toner. To take, perhaps, an extreme example a publican could not be said to be repairing his beer machine by installing a full barrel of beer to replace an empty beer barrel. Nor does the office boy repair the water cooler when he replaces the empty water bottle with a new one.

    The reality of the situation may be considered thus. What there is notionally is first of all a laser printer which has a spent cartridge. The cartridge has been removed. The cartridge is then discarded though the vast majority of the parts are still usable. Once the cartridge has been discarded obviously the machine is unusable until another cartridge has been obtained. But that does not give the owner of the printer a right to go and obtain replacement parts for those which have been deliberately discarded. The British Leyland decision does not say that the owner of a machine is entitled to discard perfectly good parts if it is unnecessary. In so far as it says that the owner is entitled to effect repair in the most economical way, it is not saying that a third party may not only make an exhaust pipe which needs replacing but a lot of other parts as well, even though those are in no danger of wearing out. It is economy to the owner of the printer that must be considered, and that is economy given the fact that he has, in this instance, an existing machine and cartridge.

    In my view the practical realities of the situation are perhaps stronger. The Defendants wish to have on offer complete cartridges so that the owners of printers can be encouraged to throw away cartridges which either are in perfectly good condition or which need only a few parts replaced. Convenient it may be to be able to be in the market supplying new cartridges, but one only has to consider the Defendants’ own justification in section 6B of their business plan to appreciate that they are supplying a large number of parts which are unnecessary. Convenient it may be, but economical it is not.

    During the course of argument analogies were drawn with other items such as cars and whether it would be legitimate to provide replacement engines under the guise of repair. Such analogies may not always be fully apt, but I consider that by supplying a large bulk of machinery which is not needed the Defendants are not bringing themselves within the British Leyland decision.

    Even if one were to look upon the matter as one where the Defendants were supplying replacement parts for those parts of a cartridge which had worn out or which were likely to wear out, in my view their position is not saved. In supplying complete cartridges the Defendants are replacing parts which there is no need to replace. It is not correct to say that the replacement of the whole, i.e. including all the perfectly good parts, will be done because that is the most economical way of going about the replacement of those parts which can be anticipated to be near the end of their useful life. In the first place there is no evidence that it is cheaper to do things that way, rather than take a spent cartridge and replace those parts which need replacing. In the second place when Lord Bridge was referring to repairing in the most economical way possible he was referring to copying those parts which had worn out, not those parts which had not worn out.

    What in reality is happening is that the Defendants are not repairing anything. If a user, or even perhaps the Defendants, were to have a cartridge all the parts of which were totally and utterly unusable then there might be justification to replace the whole cartridge. The reality of the situation is that the Defendants do not have spent cartridges. They do not have them because they are not available in sufficient quantities for the Defendants to be able to run a viable refilling and repair business.

Flogates and Consumables

    The situation in the present case is if anything stronger than that in the Flogates case. In Flogates the material which was being replaced was the refractory material. This formed part of the machinery and was consumable to the extent that it wore out at predictable intervals. Nevertheless, the refractory material did not form part of the end product which the machine was designed to produce, namely the molten metal flowing out of the bottom of the ladle.

    In the present case, the toner which becomes depleted is a true consumable product to the extent that the only purpose for it is in the words of the witness to “put marks on paper”. The toner is therefore a commodity which is worked upon by the machine and remains, in so far as it is used, in a highly visible form upon the paper which comes out of the photo copier or laser printer.

    In my view, the British Leyland decision does not include within its scope an absolution from the law relating to infringement of copyright because the person infringing the copyright finds it convenient so to do whilst he is supplying material which is consumed by the machine. In this respect what must be considered is what is necessary in the context. Even if the doctrine of British Leyland were to be given its extended meaning to cover a situation where a machine was not being repaired but being kept in “working order” or not being rendered “unfit for the purpose for which it was intended”, I still do not consider that the present situation would be covered. The British Leyland decision covers what is necessary. What is necessary in this context is that there should be a new supply of toner. There may need to be replacement of certain parts. The bulk of the parts in a spent cartridge would not need replacing. Therefore to replace the whole cartridge by a new one would be going beyond what is necessary. The Defendants have not in this case satisfied me that it is either necessary or the most economical way of replacing toner for the original cartridge to be discarded and a new cartridge to be manufactured and inserted in its place.

Should the doctrine of British Leyland be extended?

    Neither do I consider it is right in these circumstances to extend the doctrine propounded in the British Leyland case to a situation as exists in the present case.

    As I have indicated, Lord Templeman, and the majority at least, considered that the doctrine was in part derived from the concept of non-derogation from grant. That is a concept based upon the precept of common honesty. I see nothing dishonest in the circumstances of this case in the Plaintiff reserving for itself the right to sell cartridges when a purchase is made of a laser printer or copier. The purchaser is fully aware that he will have to have a new supply of toner when the toner is depleted. He knows the cost and the availability of the cartridges when he purchases his machine. He knows that the supply of toner in the cartridge is finite. When the toner runs out, he is not faced with a machine which is broken, but he is faced with a machine the purpose of which is to put marks upon paper and he needs new material with which to make those marks. The purchaser is therefore in possession of a machine which has foreseeably become depleted of essential ingredients with which to work. This is an incident of use and no more.

Necessity and Common Honesty

    In so saying, I bear in mind that it is not necessary either to maintain the existing cartridge, albeit depleted of toner, or the printer, that a new cartridge be purchased. The existing cartridge can be refilled. There is a whole industry built up of refillers. True it is that when cartridges are refilled, they may need to have certain parts replaced. Those parts include, for example, the photo-sensitive drum. That can be done legitimately by replacing that part, or indeed any other part of the cartridge. But that does not in any way mean that it is a matter of common honesty that the Plaintiff who has designed a cartridge which is the key element of the laser printer should be deprived of his market in the sale and supply of new cartridges. If the purchaser of a machine wishes to discard his old but still usable cartridge and replace it with a new and identical one, then I see nothing in common honesty which would dictate otherwise than that the person who should have the benefit from the manufacture of the specially designed replacement cartridge should be the person who owns the copyright therein.

    I consider that what was reasonably in the contemplation of the parties when the original laser printer was supplied was that the new supplies of new toner cartridges would be obtained from the Plaintiff.

    I would also point out that in so far as the laser printer or copier is used, as no doubt it primarily is, as an office tool, it falls within the purview of being a capital cost item. As such, under most systems of taxation and in particular that in Hong Kong, it is tax deductible on a writing down basis. The purchase of cartridges, however, would constitute a legitimate business expense which could be deducted from income in assessing taxable income. As such the full cost of the cartridge is immediately allowable for taxation purposes, but only a percentage of the cost of the printer or photocopier would be tax deductible.

    Where capital equipment is involved, it is often the case that manufacturers aim to reduce as far as possible the initial capital cost of the equipment intending thereafter to recoup any losses and to make legitimate profits on the basis of the continuing business which will be brought in by the supply of replacement parts and consumables. That is a matter about which the customer is often very content. In the first place it reduces his initial capital commitment which often has to be financed through borrowing or other sources and allows the continuing expenditure to be met out of recurring income. In the second place, it is tax beneficial to the customer. I see therefore nothing inherently unfair in the situation where a manufacturer, even if it be the case, deliberately sets out to make his profit on the basis of supply of consumables rather than the original machine.

    In coming to my conclusion I also bear this in mind. The doctrine of non-derogation from grant is one which as was pointed out by Younger L.J. that should be strictly construed. The law as to copyright has been in existence for many years. The effects of the 1968 Act were appreciated by the early 1970s. The legislature in the United Kingdom has now changed some, but not all, of the effects of that legislation but in Hong Kong no steps have been taken and indeed the 1956 Act together with the 1968 Act was brought into force in Hong Kong only in the early 1970s.

    Whereas I would be the first to concur that there are many aspects of the law of copyright, particularly in relation to industrial articles, that are inequitable, I would be very slow to extend the law to introduce yet further inequities in other directions to try and balance out the original perceived inequities. I bear in mind that the law which allows the Plaintiff to recover damages on a conversion basis would appear to be something of an anomaly. Although, perhaps the law of copyright could be developed to allow a Defendant some relief from the full rigours of the law of conversion damages, I do not consider that my dislike of conversion damages gives the Court carte blanche to take away from a copyright owner virtually all the rights the law has given him. So too with respect to the period for which copyright is enjoyed. Whereas there is sometimes perhaps some flexibility in a decision as to whether that period is limited to 15 years or extends very much longer, again the feeling of constraint to allow a longer period does not justify a striking down of the period altogether.

Foreign Aspect

    Quite apart from the foregoing considerations, I have been troubled in the present case by the fact that many if not the majority of the Defendant’s cartridges are clearly destined for export overseas. Although nothing came of it, there were clearly negotiations and dealings with Pelikan A.G. of Switzerland. Indeed, sample cartridges which included in one instance a cartridge which was composed totally of the Defendants’ own parts was supplied to Pelikan.

    As I have indicated, the British Leyland doctrine as held by the majority of the House of Lords is founded, on one analysis at least, upon the principle of non-derogation from grant. That is a doctrine which is of some ancient origin relating English land law.

    In so far as Lord Bridge’s formulation is concerned, it is based upon the common law rights of the owner of an article.

    In each respect, however, the doctrine of the British Leyland case is founded upon the rights of the owner of the article. I find it difficult to conceive the basis upon which a Court should hold that it should protect the rights of a foreign owner who is overseas, who has purchased overseas a product which has never been in Hong Kong and which was designed, manufactured and sold overseas. The laser printer may, and in most cases will, have no connection with Hong Kong whatever.

    Looking at the facts of this case, as regards the international aspect at its narrowest, if a Japanese customer in Japan purchased a Canon laser printer which had been designed and made in Japan entirely by the Plaintiff, I see no reason why the law of Hong Kong should intervene to find some right of the Japanese customer founded upon concepts of English land law and English sale of goods. It may or may not be that the manufacture and sale of cartridges by independent third party manufacturers would be permitted in Japan.

    Likewise, in the case of the No. 20 cartridge sent to Pelikan A.G. in Switzerland, this may have been for use in a laser printer which was sold in Switzerland under the name of a United States company, the printer having been manufactured perhaps in the United States or some other country under the direction of a multi-national company of U.S. parentage either with parts supplied by the Plaintiff in Japan or made under licence from the Plaintiff. Again I see no justification for the intervention by a Hong Kong Court under the guise of being in the interests of the customer and not, I reiterate, of the manufacturer replacement cartridge.

    Overseas countries often have sophisticated anti-trust laws and anti-monopoly provision in the laws relating to the implementation of industrial property rights. It might be said, in parenthesis, that for the most part these are something alien to Hong Kong’s existing legal system and economic framework. It seems to me that it would be impertinent in the extreme for a Hong Kong Court to deny a foreign manufacturer his recourse to the law of copyright on the basis of supposed rights of overseas purchasers of the manufacturer’s products in circumstances which I have outlined where the manufacturer of the product and purchaser have nothing and have never had anything to do with Hong Kong, the United Kingdom or any other country to which the Copyright Act 1956 has been applied.

    It has been said on the part of the Defendants that to deny Hong Kong manufacturer relief when an allegation of infringement is made in respect of a product which is destined for sale overseas, in circumstances which I have outlined above, would be to put the Hong Kong manufacturer at a disadvantage. This would in effect be against public policy. In my view, this argument is not correct. The British Leyland doctrine is there for the protection of the customer or consumer. It is not the duty of the Hong Kong Court to protect customers or consumers where there is no connection with Hong Kong or any other relevant jurisdiction whatever. Still less is the British Leyland doctrine a copyist’s charter. The doctrine is not one designed because the manufacturer enjoys an equity or any right to carry on business as a copyist. The doctrine of caveat emptor may be said to be almost as extinct as this century, but the days of caveat imitator are still with us.

Infringement of Copyright by Reverse Engineering

    Lord Griffiths in his powerful dissenting speech in British Leyland reached the conclusion that “reproducing” in S.3(5) of the Copyright Act 1956 should not be given an extended meaning of “indirect copying” in cases in which the mechanical drawing or blue print is of a “purely functional object.”  That conclusion was not reached by the remainder of their Lordships. Nevertheless, it can be seen from the judgments that there was a great deal of sympathy for that view. There are strong arguments for suggesting that a wrong turn was taken in the early stages of the development of the law in the interlocutory injunction cases of the early 1970’s. Be that as it may, this does not, it seems to me dictate an extension of the British Leyland principle to situations such as the present.

    True it is that in many parts of the world reverse engineering of industrial articles does not constitute an infringement of copyright, but it must be remembered that for many years in a number of countries utility models and petty patents have been obtainable and that trend is if anything expanding. The form of protection is not obtainable in the United Kingdom or in Hong Kong. Whether the Plaintiffs’ cartridge would be so protectable in any particular country is not a matter for consideration here. Nevertheless, I do not consider that an extension of the British Leyland principle is justifiable solely because I may have sympathies for the view expressed by Lord Griffiths or consider that copyright law has taken a wrong tum many years ago. Copyright law is a matter of statute and it is for the legislature to correct the legislation.

BRITISH LEYLAND IN RESPECT OF PATENTS

    The Defendants rely on the British Leyland case as a defence to the infringement of patent. It is said that the same principles can be relied upon in respect of patents as applies in respect of copyright.

    It is pointed out on behalf of the Defendants that the question of patents was dealt with briefly in the British Leyland decision. One of the reasons that Lord Bridge gave for saying that the same doctrine did not apply to patents is that the Patents Act contained provisions for compulsory licensing.[114] It was said that since the Registration of Patents Ordinance did not contain any equivalent provisions the same situation did not prevail in Hong Kong and therefore the doctrine can be applied in respect of patents.

    In my view that argument can be dealt with shortly. Section 6 of the Registration of Patents Ordinance provides that the certificate of registration shall confer the like rights and privileges as if the patent had been granted in the United Kingdom with an extension to Hong Kong. If the British Leyland doctrine applied in Hong Kong in respect of patents the holder of the rights would not enjoy the same rights in Hong Kong as he does in the United Kingdom. He would be able to obtain relief in the United Kingdom for something in respect of which he would not be able to in Hong Kong.

    There is the further point that it seems to me that both Lord Bridge and Lord Templeman were content to think that the right of repair which has always existed in patent law is sufficient protection for the owner of the patented article. If more than repair is required and complete replacement of the patented article is wanted then the defence of repair would not be available. On this basis I consider the matter is clear and it is not necessary to consider whether the conceptual distinction between patents and copyright which Lord Templeman considers was important[115] is a sufficient distinction.

PERSONAL LIABILITY OF THE SECOND DEFENDANT

    On the basis of Evans v. Spritebrand[116] it was submitted by both parties that the decision as to whether a director should be liable for the acts which are done in the company name has to be judged according to the facts of this case. Whilst in no way suggesting that the liability of a director may be dissected I consider that it is helpful in considering responsibility of the 2nd Defendant to analyse the position in relation to the major relief sought.

Injunction

    I start first with the relief of an injunction. Here I have absolutely no doubt that the 2nd Defendant should be subject to the same injunctions as the 1st Defendant and that should be in his personal capacity and not just as a director of the 1st Defendant.

    The 2nd Defendant was at the very least a joint prime mover of the 1st Defendant in relation to the matters which are the subject of this Action. He was the person who was a main, if not the main, protagonist in establishing the 1st Defendant. At best it can be said it was a “3 way nod” to go ahead to manufacture the cartridges. I incline however to the conclusion that the move to manufacture the complete cartridge was something that the 2nd Defendant had in mind as an ultimate or potential venture right from the start. Mr. Mercer was clearly someone who in my view was working for the 1st Defendant on the technical side. Obviously if he said something could not be done from a technical point of view then whatever it was that was under discussion would have had to be reviewed. Nevertheless from a commercial aspect I have no doubt that the 2nd Defendant must be credited as a prime mover in the conception of the idea of making complete cartridges and the decision to go ahead to make them.

    Mr. O’Brien was intimately involved in the creation of the initial business plan. The history of the development of the 1st Defendant’s business is not as clear as it might be due to a lack of written records. Nevertheless I am satisfied that the 2nd Defendant was at all times intimately involved in, if not the person who took every decision as to the nature of the business that the 1st Defendant would undertake. In particular I am quite satisfied that he authorised the spending of the money necessary to manufacture the moulds and tools. From what I can see that was a mighty proportion of the 1st Defendant’s available captial. Without his instigation and approval the company would not have turned to the manufacture of cartridges. At least since the departure of Mr. Sanders in October 1992 all commercial decisions of the 1st Defendant have been taken by him albeit possibly with the approval of the other directors and shareholders and Mr. Mercer. Nevertheless the continued activities of the lst Defendant were under his ultimate control.

    I have to say that I noted both in Mr. Mercer’s and Mr. Gurka’s evidence what I would term a closing of ranks to try and protect the 2nd Defendant. Despite this, I consider that I am driven to come to the conclusions I have as to the 2nd Defendant’s responsibility. I would add that many of the contemporaneous documents which I would have expected to have been circulated to a prime mover in relation to the expansion of the 1st Defendant’s business seem to have been circulated to the 2nd Defendant but not to Mr. Sanders. It was the latter person on whom the Defendants’ witnesses appeared to be trying to pin responsibility for the 1st Defendant going into the business of manufacturing cartridges rather than refurbishing them. I would add that those who remained with the 1st Defendant after Mr. Sanders’ departure appeared to retain little affection for him.

    It seems to me it would be quite wrong in the circumstances to allow the 2nd Defendant to be free from any fetter to repeat those steps under another trading umbrella or in another company.

Damages

    Turning to the question of damages, I have to say that my initial sympathies are perhaps the other way. Given the legal concept of a company and its separate identity from the directors and shareholders I have a reluctance to burden a director with the consequences of acts in respect of which the company stood to gain. The benefits to Mr O’Brien of any tortious acts were indirect.

    Nevertheless I can see that if a person is in the position of a prime mover, to the extent of being an instigator as well as being the person who has the ultimate say as to whether the company should undertake a course of action then it may be right that he should be made liable for the consequences of those acts which he has instigated. Provided the company is able to pay the damages no consequences would presumably follow from such a holding. If the company is not able to pay the damages then in the circumstances of a director I see no reason why he should not be responsible for the damage caused by the acts which he has instigated to be performed by a company that he has been controlling. He has taken a business risk in putting the company into the venture. As between himself and the company no doubt the company takes the consequences of that risk. As between the wrongdoers and the injured third parties I see no reason why the third party should not recover from either wrongdoer.

    Much, therefore, though I sympathise with the plight of anybody faced with a claim for conversion damages, I consider that it is right in these circumstances for the 2nd Defendant to be responsible. As I have indicated I am not convinced that all channels have been exhausted to alleviate the inequitable rigours of the consequences of a claim for conversion damages.

CONCLUSION

    When the parties have had an opportunity of considering this judgment the matter can be restored and I will hear them as to the Order that should be made and as to costs.

    It only remains for me to thank those responsible for the preparation and presentation of the case including in particular Counsel and Solicitors for the considerable assistance which their manifest hard work has given me.

Mr. Hugh Laddie, Q.C. & Mr. Paul Shieh inst’d by Messrs. Deacons for Plaintiff

Mr. Simon Thorley, Q.C. & Mr. Steward K.M. Wong inst’d by Messrs. Robin Bridge & Jobin LIU for 1st & 2nd Defendants

1993 No. A7844

HEADNOTE

Discovery Intellectual Property cases - In normal limited to documents relating to specimen infringement - Discovery as to quantities and prices relevant only on enquiry as to damages - British Leyland Defence - need to allow further discovery limited so as not to cause unnecessary hardship

1993, No. A7844

HEADNOTE

This was an action for infringement of patent and copyright. The action concerned the manufacture of replacement cartridges for laser printers. There were 5 patents in issue and questions of infringement and invalidity had to be decided in respect of all. In respect of copyright there were a large number of drawings but the only issue which fell to be decided at this stage was the question of whether the Defendants were entitled to rely on the "spare parts" defence otherwise known as the British Leyland defence. An index is included in the judgment which sets out the main topics dealt with.

Held:

1. It was necessary to give a liberal construction to the Registration of Patents Ordinance since its wording could not be construed strictly.

2. That 3 of the patents were valid and infringed.

3. That one of the patents was invalid for obviousness.

4. That the fifth patent was partially valid and that the claims that were valid would be infringed if the patent was amended.

5. That the British Leyland doctrine did not apply to the facts of this case since the Defendants were going beyond the boundaries of what was permitted. The doctrine should not be extended to encompass the manufacture of complete cartridges.

6. The Defendants were not entitled to rely on the defence of innocence.

1993 No. A7844

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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D E C I S I O N

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1. This is an application which relates in part to discovery and in part to question of interrogatories, but most importantly it really revolves around the question of discovery and quantities. Before going to the facts of this case, I should say at this stage that I am concerned in any application to limit discovery as much as possible. Discovery can be or can become extremely oppressive and difficult. It can add enormously to the cost of litigation and produce very little or no assistance in determining the issues.

2. Normally in an action concerning infringement of patents, trademarks, copyright and the like, discovery relating to quantities of items which have been sold by the alleged infringer is very limited at the stage prior to the Court holding liability. The usual course is that the only discovery given is of manufacture and sale in relation to the specific item(s) identified in the particulars of infringement which is (are) alleged to be an infringement. The question of quantities of manufacture of identical items and the prices of those sales are usually not dealt with on discovery prior to trial, but only on the enquiry for damages. What the Court decides is whether the specifically identified item(s) is or is not an infringement. If it decides that the identified item(s) is an infringement then it is for the person conducting the enquiry as to damages to assess how many other such items have been manufactured or sold or whatever.

3. This case is a case of alleged infringement of patents and copyright. The items involved relate to cartridges for printers. There are four and very likely five patents which are going to be involved in questions of both infringement and validity and there are something, I am told, in the region of 110 parts in the cartridges which are alleged to be infringements of the Plaintiff's drawings.

4. The Defendant has raised what for want of a better catch phrase can be described as a British Leyland defence. It is summarized in para. 15 of the Defence which says:

"Further, or in the alternative, and without prejudice to the matters pleaded in paras. 11 to 14 inclusive hereof

(a) the 1st Defendant was manufacturing, assembling, offering and exposing for sale, selling and/or distributing its process cartridges in Hong Kong as spare and replacement parts for the repair and/or continued functioning of the printers made sold and/or supplied by the Plaintiff,

(b) the 1st Defendant was manufacturing, assembling, offering and exposing for sale, selling and/or distributing assemblies, sub-assemblies and/or other component parts for process cartridges in Hong Kong as spare and replacement parts for the repair and/or continued functioning of the process cartridges and/or printers made, sold and/or supplied by the Plaintiff.

In the premises the Plaintiff is not in law entitled to enforce any alleged copyright against the Defendants or either of them."

5. In so far as para. 15(a) is concerned, there is little difficulty as regards this application. The question which the Court will be faced with is whether the manufacture and so forth of the cartridges constitutes a repair of the printer and that is a matter which can be gone into without considering quantities.

6. In para. 15(b), the matter causes this difficulty. First of all because, as has become clear as a result of the affidavits which were filed in the interlocutory injunction proceedings, the 1st Defendant carries on its business by stripping down old cartridges, servicing the parts and then later reassembling cartridges. That may be done with or without a greater or lesser number of other parts or new parts. So first of all there is a question of how many new parts to how many old parts are likely to be in any one cartridge. But secondly, the Plaintiff considers that it is relevant to go into the question of whether particular parts of the cartridges can be regarded as the equivalent of an exhaust pipe as in the British Leyland case. There the item was regarded as a replaceable part which was likely to wear out during the course of the life time of the car.

7. This type of defence is a relatively new type of defence. It has not been examined in a great number of cases. It seems to me that the Plaintiff is entitled to counter these defences in the best way it seems to the Plaintiff to be viable and the information which the Plaintiff requests is really two fold. First of all it wishes to know which spare parts have actually been sold to outside entities, so that it can determine which are really genuine spare parts in the sense of an exhaust pipe type of situation, and secondly, it may well wish at the trial to go into the question of the relative quantities of parts which are in any cartridge.

8. The discovery which has been asked for consists of documents including but without limitation sales invoices and accounting records and documents passing between Green Cartridge Company Limited and either the 1st Defendant regarding the quantity of manufacture and sale of the Defendants' cartridge. The definition section of the request makes clear that the Defendants' cartridge relates to parts as well as the completed cartridge. If that discovery was gone into fully, it seems to me that it may well cause undue hardship to the Defendants and I wish if at all possible to avoid that. What the parties need to do is to have a decision on the merits of the case and not to spend large amounts of time digging out documents which at the end of the day, the Court is hardly likely to look at and are likely to become otiose to the whole case. The Defendants however said that they would prefer, if the choice were given, to provide discovery which would merely mean that they have to produce the documents rather than answer interrogatories of the numbers of 65 to 68, because that would entail them having to do a great deal more work over and above the discovery. The interrogatories are as follows:-

"65. How many of each of the parts of the Defendants' cartridges have been made by or on behalf of the Defendants since October 1991?

66. How many such parts have been sold by the Defendants as parts as distinct from components of complete cartridges or cartridges in SKD form?

67. How many of each of the parts of the Defendants' cartridges have been used by the Defendants to repair or replace worn-out parts in EP-S cartridges or the Defendants' cartridges?

68. What use has been made of the said parts not sold pursuant too the answer in Question 66 or used for repair or replacement pursuant to the answer in Question 67?"

9. It seems to me that what the Plaintiff requires is details of the quantities of the Defendants' cartridges and parts which have been (a) used and (b) sold by the 1st Defendant. It seems to me that if they have that information they should have what they need to mount the argument. I realize that it will cause the 1st Defendant or the Defendants inconvenience to produce this information I feel that I should give the option of producing that information as information and verifying it on affidavit or alternatively producing the relevant documentation as a matter of discovery. What I propose to do is to make an order which will cover that, and allow the 1st Defendant time to do it. If there are difficulties then the matter can be brought back to me again in six weeks or so, after a suitable time has been given, and alternative arrangements can be considered. Once the Plaintiff has seen that information if it requires any further information then that can be considered at that stage. At the moment, it seems to me that if that information is provided that should be sufficient.

Representation:

Mr. Paul M. T. Shieh instructed by Messrs. Deacons for the Plaintiff.

Mr. Stewart K.M. Wong instructed by Messrs. Robin Bridge & John Liu for both Defendants