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coffee wars

3 June 2013

This is a case about coffee machines. Nestec and two other Nestle companies sued Dualit in the English High Court for infringement of a European patent. Claim 1 was to an extraction system comprising a device and a capsule, and some Nespresso machines fall within the claim. Nestec claimed that by supplying coffee capsules which fitted Nespresso machines, Dualit infringed the patent.

The judge, Mr. Justice Arnold, said in his judgment that the case was "a paradigm example of the regrettable tendency of current patent litigation in this country towards proliferation of issues rather than concentration upon the essentials."

This may prove unfortunate for the parties when costs come to be assessed, but it also makes for an interesting 49 page judgment which deals with some rarely discussed points of law. In summary, the judge concluded:

  • The patent was not entitled to priority from a priority document, but that the patent lacked novelty over the priority document;
  • Novelty was also destroyed by the patentees own use of machines falling within the claims;
  • An unintended use did not destroy novelty;
  • None of the other validity attacks succeeded; and
  • Dualits sale of capsules would not have infringed anyway.

Priority

Claim 1 covered subject matter that was not disclosed by the priority document. It was not possible to say that the matters covered in claim 1 were clearly defined alternative subject matters to the matter disclosed in the priority document, so it was not possible to give different priority dates to different parts of the claim.

However, all of the features of some of the patents claims, including claim 1, were disclosed by the priority document. So these claims were held to lack novelty over the disclosure of the Priority Document even though they were not entitled to priority from it.

Patent attorneys will want to be very careful about any amendments post-priority to avoid running into similar problems to those encountered by Nestec.

Novelty destroyed by patentees use

Without the benefit of its priority date, the patent was also invalid over the patentees prior use.

Some machines falling within the claims were supplied for trials, with no terms of confidence were imposed. The court cited Milliken v Walk Off Mats and said that:

"A skilled person in the position of the consumers could readily disassemble one of the machines. In the absence of any obligation of confidentiality, he would have been free in law and equity to disassemble the machine and to use the information gained thereby. Thus the information was made available to the public."

Other machines were demonstrated at a trade fair, and the capsule insertion and extraction method was disclosed through the operation of the machine.

This is not controversial, but is perhaps a reminder; make sure your product is protected before making it publically available, and when appropriate have non-disclosure agreements signed.

Can faulty and unintended use destroy novelty?

Dualit contented that claim 1 was also invalid over 1,2,3 Spresso machines. When functioning properly, 1,2,3 Spresso machines would not fall within claim 1, but the judge held that when worn, it was probable that the machines would develop a fault which would cause them to meet every integer of claim 1. Dualit said that this meant that a system having all features of claim 1 would have existed before the priority date and that this therefore deprived the claims of novelty. Nestec said it did not destroy novelty "since the skilled person would not have been taught to produce a machine falling within claim 1 as he would have appreciated that the machine was operating in a faulty and unintended manner."

The judge said that he had not found it easy to decide who is right about this, but on balance he favoured Nestec.

This is an interesting point of law and it may be that in a different case, if more attention is given to this argument, a different decision would be reached.

Section 2 of the Patents Act says that an invention is new if it does not form part of the state of the art. The state of the art is "all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way."

There is no requirement in section 2 that for something to be part of the state of the art, the skilled person has to be taught to produce machines operating in accordance with it, and there is no carve-out that something operating in an unintended manner is not novelty destroying.

So, the judges decision here seems difficult to reconcile with the statute.

If the patent was valid, would Dualits supply of capsules have infringed?

Sections 60(2) and 60(3) of the Patents Act read:

"(2) Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.

(3) Subsection (2) above shall not apply to the supply or offer of a staple commercial product unless the supply or the offer is made for the purpose of inducing the person supplied or, as the case may be, the person to whom the offer is made to do an act which constitutes an infringement of the patent by virtue of subsection (1) above."

The judge held that the capsules were means relating to an essential element of the invention. Arnold rejected the Dutch courts contention that means essential had to distinguish the patent from the state of the art, and approved German authorities which say that something is means essential if it:

  • contributes something to the implementation of the teachings of the patent;
  • is suitable to interact in a functional way with one or several features of the patent claim when implementing the protected thought behind the invention; and
  • is not of such completely subordinate importance that it could be regarded as a non-essential element.

The capsules were not staple commercial products. The court considered the English courts consideration of this term in Pavel v Sony, but in its conclusion only referred to the Australian case of Northern Territory of Australia v Collins. This said that a staple commercial product must ordinarily be one which is "supplied commercially for a variety of uses". Dualits coffee capsules "have no other use than with a limited range of coffee machines", so are not staple commercial products.

However, Arnold held that owners of Nespresso machines were impliedly licensed to acquire and use compatible capsules with their machines:

"In order to use the machine for its intended purpose, the purchaser must insert capsules into the machine. It follows that the purchaser must be impliedly licensed to obtain and use capsules with the machine. Otherwise, it would be useless. In the absence of any restriction upon the purchaser preventing him from obtaining capsules from third parties, the purchaser is entitled to do so."

Considering the matter using the alternative analysis of exhaustion, Arnold elucidated:

"By consenting to the manufacture and sale of Nespresso machines, Nestec have exhausted their rights under the Patent to restrict purchasers freedom to use such machines in accordance with their normal function."

This approach could be controversial in different circumstances. Purchasers of Nespresso machines could use the machines for their intended purpose without needing to purchase capsules manufactured by a third party. Selling a product should not mean that all of ones rights in consumables compatible with such products are exhausted.

The judge also held that Dualits pods were not means suitable for putting the invention into effect because Dualits customers did not make anything just by purchasing a coffee pod.

The judge applied the principles from Schutz v Werit and found that capsules are subsidiary to the Nespresso machines (and much cheaper than the machines), they have an independent commercial existence, they dont embody the inventive concept of the patent, purchasers would assume they were entitled to purchase consumables from any source they chose, and "the owner of the machine is not even doing anything which would ordinarily be described as repairing a product, let alone making one". Arnold was quite scathing:

"Only in the world of patents could it even be suggested that a person "makes" a "product" merely by purchasing a consumable for use with a machine (i.e. before they have even used the consumable in the machine, here by making a cup of coffee)."

The court did not consider whether or not providing means for using the product (which, like making, is an infringement under 60(1) of the Patents Act) amounted to providing means suitable for putting the invention into effect.


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