Insights: Supreme decision in the case of Virgin Atlantic Airways Limited v Zodiac Seats UK Limited

On 3 July 2013, the Supreme Court issued a decision in the case of Virgin Atlantic Airways Limited v Zodiac Seats UK Limited that puts an end to the English legal principle preventing re-assessment of Patent infringement following the outcome of parallel Opposition proceedings at the European Patent Office (EPO). It also potentially makes way for English courts to grant a stay of proceedings in such cases more readily.

Details of the case may be found here. In summary, Virgin’s UK Patent relating to a seating system was originally found by the Court of Appeal to be valid and infringed by Zodiac. Before the damages payable by Zodiac to Virgin could be set, the Technical Board of Appeal at the EPO issued a Decision amending the European Patent upon which the UK litigation was based. This resulted in the removal of all claims from the European Patent that had been found by the Court of Appeal to have been infringed by Zodiac. The amendments to the Patent have a retroactive effect, such that the removed claims are treated as if they had never existed in the granted Patent.

Zodiac asked the Court of Appeal to reverse its decision to award damages on the basis that Zodiac did not infringe the amended Patent. However, the Court of Appeal were unwilling to do so in view of established English case law that prevents a previous award for Patent infringement damages being reconsidered if the situation subsequently changes. The Supreme Court were asked to review this decision on appeal and have now concluded that the amended Patent should be considered when setting the level of damages, resulting in Virgin’s unassessed claim for damages falling away and the previous legal principles being put to an end.

The immediate consequence of this is that a decision from the EPO to amend or revoke a European Patent may now directly affect parallel on-going or concluded litigation in the UK. The longer term consequence is that guidance issued to English courts may be amended to allow for stays of proceedings to be granted more readily pending the outcome of Opposition and Appeal proceedings at the EPO. It should be noted that Opposition and subsequent Appeal proceedings at the EPO typically take about five years to conclude, which may have a significant impact on UK litigation.