User:Billyprogym/sandbox
In this 2009 case, the Royal Courts of Justice held that Premium Aircraft had infringed upon Virgin Atlantic's European patent on aircraft seats.
Parties of the Case[edit]
Virgin Atlantic: plaintiff
Premium Aircraft: defendant
Contour Aerospace: Manufacturers of defendant's aircraft seats
Seton House Group Limited: Parent corporation of Contour.
Delta Airlines: Contracted with Contour to have airline seat installed.
Procedural History[edit]
On October 22, 2009 the lower court handed down a judgment holding that Virgin Atlantic’s European Patent (UK) 1,495,908 was valid and infringed. The parties could not, however, agree on the substance of that ruling.
Consequently, four matters arose as disputed in the appeal:
1. Permission to appeal to the Supreme Court of the United Kingdom,
2. costs,
3. stay of the inquiry as to damages, and
4. the terms of a permanent injunction.
Analysis[edit]
1. The court held that permission to appeal to the Supreme Court was not granted, because the issue in the case did not raise a significant enough question of law. The court stated that this approach was consistent with the that taken in the House of Lords decision in Kirin-Amgen v Hoechst Marion Roussel [2005] RPC 9.
Note: The Supreme Court could still grant permission to appeal despite this court's recommendation against it.
2. The Court merely referred to its previous opinion in regards to cost.
Note: As opposed to the American model where litigants ordinarily par for their own costs. In the U.K., the losing party is traditionally required to pay litigation costs to both parties.[1]
3. In regards to the stay of inquiry for damages and the terms of the permanent injunction, the court referred to the general rule that successful claimants are able collect damages even if there is a possibility of appeal. The successful party does so on the risk that the decision could be overturned. The court applied that rule, despite Contour Aerospace's and others' contentions that the damages should be delayed until the disposition of their opposition to the granting of the patent through the European Patent Office. Even though none of the infringing seats would be used in the important trans-Atlantic flights, Virgin Atlantic could legally recover damages. Counsel for Virgin proposed applying a "balance of convenience" for anytime after the Technical Board of Appeal ruling. It may be enough to justify staying an injunction if the defendant would be damaged in such a way that he would have no remedy even if he were successful in his appeal. A stay might also be justified when plaintiffs have difficulty determining amounts of damages. The court also noted that an injunction is always a discretionary action, citing Article 3 of the Enforcement Directive 2004/48/EC.[2]
3A. Accepted Background Facts:
1. Contour had already manufactured 2,800 seats for which it would have to pay damages if it were to lose.
2. Contour wished to manufacture an additional 400 seats for Delta.
3. Contour was a financially unstable subsidiary of the financially stable Seton House Group, Ltd.
4. Virgin is a solvent company
5. Virgin licensed the flipover seat with Air New Zealand for an undisclosed sum.
6. Proposed supply to Delta was also for non-competing, trans-Pacific flights.
7. No mechanism was present to prevent Delta from switching to trans-Atlantic flights.
8. Contour was contracted with Delta to finish installation by September.
9. Failure to perform by Contour would result in a £1 million penalty charge.
3B. Virgin's Proposal
1. Contour should pay to Virgin the sum of £10,000 per seat.
2. Contour’s parent company Seton should guarantee payment to Virgin.
3. Delta should submit to contract preventing use of planes equipped with "flipover" seats in trans-Atlantic flights.
3C. Defendants' Responses
1. £10,000 per seat is disproportionately high. Instead they offered £500 per seat, half the profit.
2. Seton House Group could not guarantee payment at that time.
3. A Delta contract was not necessary because the likelihood of switching to a JFK-London flight was remote.
4. The granting of an injunction would likely lead to job losses.
Holding[edit]
1. Virgin Atlantic would certainly be able to repay if the decision were later overturned on appeal. Defendants were required to pay £10,000 per seat.
2. The court agreed that the parent, the Seton House Group, should guarantee the judgment. It described the excuse that the board would not meet until April as a "pathetic" excuse.
3. The court also found that it was reasonable to require a contractual obligation from Delta. It reasoned that if there was no risk of the flights using the "flipover" beds use serve the JFK-London route, then a contract should be no difficulty. If there was a risk, then a contract was needed.
4. The job cuts argument received very little weight because Seton House Group would ultimately make the decision of to what extent it would support Contour.
Defendants must pay damages before waiting for either permission to be heard before the Supreme Court or a decision before the European Patent Office.
References[edit]
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