High Court Deliberates on Patent Infringement and Interim Injunctions in Cloud Cycle v Verifi Case

Citation: [2024] EWHC 233 (IPEC)
Judgment on

Introduction

The High Court of Justice, Chancery Division, presided over by His Honour Judge Hacon, deliberated upon Cloud Cycle Limited v Verifi LLC & Anor [2024] EWHC 233 (IPEC), a case encapsulating the complexities of intellectual property law in relation to patent infringement and interim injunctions. The judgment assessed the applicability of summary judgment alongside the propriety of issuing an interim injunction in a scenario where patented technology was in dispute.

Key Facts

Cloud Cycle Limited (CCL) filed for summary judgment seeking a declaration of non-infringement of European Patent (UK) No. 1 720 689, which was held by the first defendant, Verifi LLC, and was subject to an exclusive license agreement with the second defendant GCP Applied Technologies (UK) Limited. Verifi LLC filed a counterclaim alleging CCL’s infringement of the patent and sought an interim injunction.

The patent in question related to a system for calculating and reporting ‘slump’ in concrete delivery trucks. Claim 1 of the patent was central to the dispute, with CCL asserting that their system did not infringe this claim because it did not erase stored measurements when speed and pressure were not stable, an alleged key feature of claim 1.

Summary Judgment

The court reviewed the principles for summary judgment as established in previous cases, notably American Cyanamid Co v Ethicon Ltd [1975] AC 396 and subsequent cases such as Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). The judge noted that summary judgment is typically not fitting in patent cases due to the requirement of expert evidence and cross-examination for thorough comprehension of claim construction and infringement through the perspective of the skilled person.

The defendants contended that their system, which may not delete previous measurements in line with the patent claim, could still be found to be an equivalent at trial. This proposition hinges on the inventive concept and could possibly justify infringement under the doctrine of equivalents as set out in Actavis UK Limited v Eli Lilly and Company [2017] UKSC 48.

Interim Injunctions

The principles for granting interim injunctions were revisited, emphasizing that the key consideration is which course of action is likely to result in the least irremediable prejudice to either party, as established in National Commercial Bank Jamaica Ltd v Olint Corpn Ltd (Jamaica) [2009] UKPC 16. The defendants proposed that maintaining the status quo could minimize harm, but the judge noted that the status quo only takes central importance if there is a perfect balance between potential irreparable damages to both parties.

Outcomes

The application for summary judgment was dismissed based on the belief that expert evidence was crucial for determining claim 1 construction and the equivalent infringement issue.

The application for an interim injunction was also dismissed. The judge assessed the balance of irreparable harm and concluded that denying the injunction would likely impose limited harm on GCP, which could potentially be compensated through damages. Conversely, granting the injunction posed a substantial and possibly existential risk to CCL’s business operations.

Conclusion

In Cloud Cycle Limited v Verifi LLC & Anor, the court underscored the crucial role of expert evidence in patent cases and held that decisions on summary judgment and interim injunctions should not be taken lightly, especially when infringement by an equivalent is plausible. The judgments rendered in American Cyanamid and subsequent cases played a significant role in shaping the judge’s decision-making process. By affording care to each party’s potential for irremediable harm, the court refused both the application for summary judgment and interim injunction, paving the way for a potential full trial to resolve the disputes.

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