Oxford Nanopore Technologies Ltd & Anor v Pacific Biosciences of California, Inc & Anor, Court of Appeal - Patents Court, December 14, 2017, [2017] EWHC 3190 (Pat)

Resolution Date:December 14, 2017
Issuing Organization:Patents Court
Actores:Oxford Nanopore Technologies Ltd & Anor v Pacific Biosciences of California, Inc & Anor

Case No: HP-2017-000025

Neutral Citation Number: [2017] EWHC 3190 (Pat)






7 Rolls Buildings

Fetter Lane

London, EC4A 1NL

Date: 14 December 2017



(sitting as a Deputy High Court Judge)

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Mr Michael Tappin QC (instructed by Norton Rose Fulbright LLP) for the Claimants

Mr Richard Meade QC and Stuart Baran (instructed by Carpmaels & Ransford LLP) for the Respondents

Hearing date: 13 November 2017

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JudgmentDavid Stone (sitting as Deputy High Court Judge) :

  1. Is a licence an ``exclusive licence'' within the meaning of section 130(1) of the Patents Act 1977 (the Patents Act) if a third party has an option to take a licence under the patent, but has not yet done so?

  2. That was the only question that remained to be decided at the Case Management Conference in these proceedings between, on the one hand, Oxford Nanopore Technologies Limited (ONT) and the President and Fellows of Harvard College (Harvard) (collectively, the Claimants) and, on the other hand, Pacific Biosciences of California, Inc and Pacific Biosciences UK, Limited (PacBio).

  3. The question arises in the following way: ONT and Harvard have sued PacBio for infringement of EP (UK) No 1,192,453 titled ``Molecular and Atomic Scale Evaluation of Biopolymers'' (the Patent). PacBio have counterclaimed for revocation of the Patent. Nothing turns on the technology for the purposes of this point of law.

  4. Harvard is the registered proprietor of the Patent. ONT takes its standing to sue from section 67(1) of the Patents Act, which provides that an exclusive licensee may bring patent infringement proceedings in its own name as follows:

    ``Subject to the provisions of this section, the holder of an exclusive licence under a patent shall have the same right as the proprietor of the patent to bring proceedings in respect of any infringement of the patent committed after the date of the licence; and references to the proprietor of the patent in the provisions of this Act relating to infringement shall be construed accordingly.''

  5. Section 130(1) of the Patents Act provides a definition of ``exclusive licence'' as follows:

    ```exclusive licence' means a licence from the proprietor of or applicant for a patent conferring on the licensee, or on him and persons authorised by him, to the exclusion of all other persons (including the proprietor or applicant), any right in respect of the invention to which the patent or application relates, and `exclusive licensee' and `non-exclusive licence' shall be construed accordingly.''

  6. Section 67(3) of the Patents Act provides that where an exclusive licensee commences proceedings under section 67(1), the proprietor of the patent is to be made a party to the proceedings.

  7. In short, PacBio say that the licence on which ONT relies (the ONT Licence) is not an exclusive licence because it is not ``to the exclusion of all other persons''. The Claimants say that the ONT Licence is an exclusive licence at the moment, because the ``option'' a third party has to take a licence has not yet been exercised.

    How the question arises

  8. PacBio have, by application notice dated 11 September 2017, sought an order striking out ONT's claim under CPR Part 3.4 on the basis that it discloses no reasonable grounds against PacBio or, in the alternative, that summary judgment be entered against ONT under CPR Part 24.2 on the basis that ONT has no real prospect of succeeding in its claim. PacBio also seek their costs of and occasioned by this application, and their costs of the action to date insofar as they relate to the issue of ONT's standing to bring the action as an exclusive licensee. The Claimants resist the applications but they did concede that the question is appropriate for summary judgment, and, indeed, asked me to determine the question now, one way or the other. The parties are in agreement that if I find that the ONT Licence is non-exclusive, I should enter summary judgment and remove ONT from the proceedings. If I find that the ONT Licence is exclusive, then it is agreed that I should enter summary judgment for the Claimants on this issue.

  9. Thus the parties agreed that I should decide the point now as a point of law: nothing will emerge in the evidence, it is said, that might assist the trial judge in the determination of the issue, and substantial costs may be saved if ONT's involvement or otherwise in the proceedings is resolved now: see, for example, the comments of Arden J (as she then was) in Price Meats Limited v Barclays Bank plc [2000] 2 All ER (Comm) 346 and of Moore-Bick LJ (with whom Ward and Buxton LJJ agreed) in ICI Chemicals & Polymers Limited v TTE Training Limited [2007] EWCA Civ 725 at paragraphs 10 to 12.

  10. During the course of the hearing, I was asked not to give an ex tempore judgment that day, but to reserve my judgment so as to have the benefit of a then forthcoming judgment of Henry Carr J in Illumina Inc and Ors v Premaitha Health PLC and Anor [2017] EWHC 2930 (Pat). Henry Carr J handed down his judgment in that case on 17 November 2017, and I have now had the benefit of reading his judgment, as well as written submissions on it from the parties. The parties agreed that no further hearing subsequent to Henry Carr J's judgment was required.

  11. Various claims to confidentiality were made in relation to various documents in the proceedings. By the time of the hearing, they had evaporated, other than in relation to the identity of a third party, referred to in the proceedings only as X. For ease, I, too, have adopted that nomenclature.

    The Facts

  12. The facts are agreed, and can be simply stated. Mr Alan Gordon, Director of Business Development at Harvard, has provided a witness statement, on which he was not cross-examined. I accept his evidence.

  13. Mr Gordon's witness statement sets out briefly the history of the ONT Licence. Harvard first entered into a licence with ONT in January 2008. That licence, according to Mr Gordon, has been ``amended and/or restated several times over the years, culminating with the ONT Licence''.

  14. The ONT Licence was entered into on 18 December 2015. A heavily redacted version of the ONT Licence was in evidence. It is unnecessary to set out more than a few clauses of it.

  15. Three of the unnumbered recitals of the ONT Licence provide as follows:

    ``WHEREAS, Harvard and [ONT] entered into the Original Agreement, pursuant to which Harvard granted [ONT] an exclusive license under the Patent Rights, all in accordance with the terms and conditions of the Original Agreement; and

    WHEREAS, after the execution of the Original Agreement, it came to Harvard's attention that the Original Agreement did not account for certain rights under the Patent Rights granted [X] under a pre-existing collaboration agreement; and

    WHEREAS, the parties accounted for these pre-existing rights by reforming, restating and replacing the Original Agreement with the Amended and Restated License Agreement;''

  16. The Original Agreement was not in evidence.

  17. Clause 2 of the ONT Licence is titled ``License Grant''. Clause 2.1.1 of the ONT Licence sets out the grant of the licence from Harvard to ONT as follows:

    ``Exclusively Licensed Patent Rights. Subject to the terms and conditions set forth in this Agreement, Harvard hereby grants to [ONT] an exclusive, worldwide license under the Exclusively Licensed Patent Rights, solely (a) to develop, make, have made, market, offer for sale, sell, have sold, import and export Licensed Products (which, for clarity, shall include the right to license end users to use the Licensed Products sold under this Agreement) and (b) to perform Licensed Services; provided, however, that the exclusivity of the license granted under this Section 2.1.1 shall be subject to the following limitations:''

  18. Amongst those limitations sits clause, which provides as follows:

    Pursuant to a collaboration agreement between Harvard and [X] (``X Collaboration Agreement''), Harvard agreed to grant X upon request by X nonexclusive, transferable, royalty-bearing license(s) under the Encumbered Exclusively Licensed Patent Rights, to make, have made, use, offer for sale, sell, and import products that comprise or that incorporate any inventions covered by the Encumbered Exclusively Licensed Patent Rights, and to practice any methods that comprise or that incorporate any inventions covered by any Encumbered Exclusively Licensed Patent Rights (each, ``[X] License''). ... The licenses granted to [ONT] under this Agreement are subject to any [X] Licenses that may be granted to [X] (or its permitted assignee) upon [X's] (or its permitted assignee's] request in accordance with the terms of the [X] Collaboration Agreement....''

  19. Further, clause provides for Harvard to notify ONT should X (or its permitted assignee) request and be granted a licence.

  20. It...

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