Virgin v Delta - Aircraft Seats: When Is Supply Of Parts For Assembly Into A Product An Infringement Of A Patent?

First published in the CIPA Journal of January 2011.

Introduction

The recent decision of Justice Arnold granting Summary Judgment in the High Court in Virgin Atlantic Airways Limited - v - Delta Airways, Inc [2010] EWHC 3094 (Pat) Case No: HC08C1577, 30 November 2010 raises a number of interesting questions in relation to whether a party can be liable for direct infringement of a patent by dealing in/supplying a kit of parts for assembly into a complete product. Whilst a Summary Judgment in a patent case is very unusual in itself, perhaps the more controversial core issue was the interpretation of the scope of direct infringement under section 60(1) of the Patents Act 1977 and its interrelationship with section 60(2).

Does the decision firmly clarify and establish a clear kit of parts doctrine or does it create further uncertainty opening up commercially artificial loopholes for would be infringers? The decision is subject to appeal. However it deserves close analysis as it dealt with a relatively untested point of patent law and has potentially wide significance in relation to the drafting of patent claims in the future as well as liability for infringement. The latter is particularly the case where two or more parties are involved in the supply of various parts/means required to put a patent into effect and/or the ultimate assembly of the finished product.

This article will firstly set out the background to the dispute and the issues which the Court had to address. Secondly, it will analyse the interpretation of sections 60(1) and 60(2) of the 1977 Act and in particular whether the distinction between providing a kit of parts (complete or otherwise) for assembly within the UK as opposed to outside the UK is a valid and realistic one in today's global manufacturing and supply economy. Lastly, the practical implications and potential impact of the decision will be considered. This involves looking at whether the decision clarifies the legal position or emphasises a potential lacunae in the current UK and European patent legislation which may, unless overturned on appeal, provide a defence for many would be infringers.

Background

Delta applied for Summary Judgment for dismissal of Virgin's claim that Delta was jointly liable for infringement of one of its European (UK) patents. Before setting out the issues Justice Arnold had to consider, it is necessary to discuss the preceding parallel dispute which gave rise to the claim against Delta.

The Contour litigation

In 2007 Virgin commenced proceedings against Contour (trading as Premium Aircraft Interiors UK Limited) alleging both patent and unregistered design right infringement. These related to the same patent being litigated in the Delta case. Virgin's patent related to a passenger seating system for use in first and business class cabins. Virgin alleged that Contour's manufacture of a seat design called the Solar Eclipse, for a number of airlines including Delta, infringed its' patent and unregistered design right. At first instance [2009] EWHC 26 (Pat), both infringement claims were rejected, but the patent was held to be valid. On appeal [2009] EWCA Civ 1062, the Court of Appeal held that Contour did infringe the patent and upheld the validity ruling.

It is important to note that although Contour manufactured the various elements making up the Solar Eclipse chair in the UK, all assembly of the seating units took place outside of the UK. The assembly was carried out by the aircraft manufacturer or the airline's appointed maintenance provider inside the actual aeroplane (in Delta's case in the United States of America). The Court of Appeal conclusion that Contour did infringe Virgin's patent was based on the wording of the relevant patent claims at the time of the decision.

However subsequent to that ruling, in September 2010, the Technical Board of Appeal of the European Patent Office upheld the relevant European (UK) patent but in an amended form which amended the main independent claim in suit as well as the features of various dependent claims. The amended claims had not been considered by either the High Court or Court of Appeal. In broad terms the significance and import of the amendments, as interpreted by Justice Arnold, were that the claims were limited to a seating system assembled and arranged in a particular manner in an aircraft and did not include a number of seating units capable of being assembled in an aircraft.

Prior to the trial in the Contour case, Virgin commenced proceedings against Delta alleging that it was jointly liable with Contour for its acts of patent and design right infringement. The claim against Delta was one of joint liability for acts of patent infringement committed by Contour. Furthermore, the claim against Delta was limited to direct infringement under section 60(1)(a) of the 1977 Act as no claim for indirect infringement could be made against Contour in terms of section 60(2) as the assembly and hence putting the invention into effect was done outside the UK. Thus whilst the essential elements of the invention had been provided by Contour from within the UK the patented seated system was not being put into effect within the UK.

Application for Summary Judgement

Delta sought Summary Judgment on the basis that the claim as amended was limited to a passenger seating system assembled and arranged on an aircraft, noting that as Contour had never assembled and arranged a number of seats into a seating system on an aircraft in the UK, there could be no infringement and hence no joint liability on...