A Small Victory For Patent Common Sense: Earth Closet Orders Are No More
from the insert-joke-here dept
If you tell a commercial litigator who is not steeped in the law of patents that a patentee can sue for infringement and then discontinue his claim against the alleged infringer and consent to the revocation of his patent, yet require the alleged infringer to pay a substantial proportion of his costs, his reaction would be one of bafflement. If you went on to explain that this situation came about because the alleged infringer had amended his defence and counterclaim to plead a new piece of prior art he would be none the wiser. This is the practice of the Patents Court in making a See v Scott-Paine order (See v Scott-Paine (1933) 50 RPC 56) previously more robustly known as an Earth Closet order (Baird v Moule’s Patent Earth Closet Co Ltd 3 February 1876). Such an order enables the patentee to discontinue his claim and consent to the revocation of his patent on terms that he pays the costs of the action up to the date of service of the original defence; but that the alleged infringer pays the costs of the action from that date down to the date of discontinuance.
So even though the patent holder ultimately acknowledges that the patent is invalid, the person unjustly accused of infringement still has to pay for some of the not inconsiderable costs of a trial that should never have taken place. That hardly seems fair.
But now, in a sudden access of good sense, the English Court of Appeal has said that Earth Closet Orders are inappropriate, and should no longer be made. Among the reasons for the decision, the court noted the following:
Earth Closet orders are seen as a gift from heaven by patentees with a weak case which enables them to take the benefit of a costs order when the amendment was not really the cause of the discontinuance. In addition they will have had the commercial benefit of reliance on a monopoly which, with hindsight, can be seen to have been invalid;
And it only took 125 years for judges to realize this.