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State of the art still uncertain after UK LG-Sony settlement


In August, LG Electronics and Sony Corporation announced a settlement in their long-running patent dispute over the technology used in smartphones, Blu-Ray players and digital televisions. The settlement requires both parties to cross license each other’s patents and drop all pending court cases alleging infringement of one another’s intellectual property rights.

This is clearly good news for consumers and for the parties themselves. Fans of the PlayStation3 platform in particular can breath a sigh of relief, as the settlement means that future sales of the console should be unimpeded (as recently as March 2011, LG Electronics succeeded in temporarily stopping distribution of the PlayStation3 platform in Holland following a decision of the court in the Hague).

The settlement between LG Electronics and Sony does, however, leave an important question of UK patent law unanswered: namely, where technical documents are available via patent pools and standard bodies, are those documents considered part of the state of the art for assessing the novelty of a patent claim? The answer to that question would have important ramifications for technology companies squaring off against competitors who are members of a patent pool or standards body.

Clause For Thought

In this case, the question arose in LG Electronics’ UK Patent litigation against Sony Corporation, and was initially considered by Justice Arnold of the UK Patents Court in a request by LG Electronics for Summary Judgement. LG Electronics had sued Sony for infringement under a number of its patents relating to the Blu-Ray optical disc format. The earliest priority date of the relevant patents fell in 2003. In reply, Sony had raised a defence that the patents were invalid in view of a technical document, which was available in 1997, detailing DVD specifications for read-only discs.

A point of contention between the parties was whether the technical document had ever been truly available to the public, as access to the document was controlled by the DVD Format/Logo Licensing Corporation and restricted to those who paid a required access fee and who signed a non-disclosure agreement. Further limitations had also been applied by the DVD Format / Logo Licensing Corporation on the use of the information contained in the document, namely that it be expressly used for the development of DVDs and related products.

Under Section 2 of the UK Patents Act, only disclosures that have ‘at any time before the priority date of [the] invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way’ are considered as forming the state of the art for considerations of novelty.

LG Electronics had therefore argued that the disclosure had never been available to the public due to the express confidentiality clause included in both the document and embodied in the non-disclosure agreement, and the fact that use of the information in the document was restricted. They also produced evidence of correspondence between the DVD Format / Logo Licensing Corporation and the European Patent Office (EPO) supporting the view that the 1997 DVD technical specification had never qualified as prior art.

Sony’s position in reply was that, despite the apparent conditions imposed on access, the specification had been made available to all skilled persons with an interest in developing DVD technology, and that, as a result, the disclosure had been widely disseminated and could not therefore be held as confidential. In making their argument, Sony drew the judge’s attention to the EPO Technical Board of Appeal decision T0050/02 (Daikin Industries Ltd), in which it was concluded that:

‘A document is made available to the public […] if all interested parties have an opportunity of gaining knowledge of the content of the document for their own purposes, even if they do not have a right to disseminate it to third parties, provided these third parties would be able to obtain knowledge of the content of the document by purchasing it for themselves.’

Silver Bullet

For the UK litigation, this EPO decision was certainly on-point. Furthermore, in expressly going against an earlier decision of the EPO Technical Board of Appeal T300/86 (RCA/TV Receiver), it struck against the heart of LG Electronics’ counter argument. In T300/86, a report that had been marked as confidential, but that had nevertheless been widely distributed to almost all of the relevant industry, including the major industrial players, had been held by the EPO as undisclosed to the ‘public’ and therefore inadmissible for the purposes of a novelty attack. T0050/02 expressly did away with T300/86’s requirement for any disclosure to the public to be ‘unrestricted by contractual or other legal restrictions on use or dissemination of the information’. As the UK Courts are compelled, where possible, to harmonise decisions with those of the EPO Technical Board of Appeal, T0050/02 provided Sony with a silver bullet.

Existing UK case law is as nuanced and as apparently divided as the two Technical Board of Appeal decisions mentioned above. Whether or not a document is considered confidential is always dependent on the particular facts and circumstances of the case. Simply writing ‘confidential’ on the cover, for example, offers no guarantee of confidentiality if subsequent actions demonstrate that the parties have not treated the document appropriately. While LG Electronics’ request for Summary Judgement, on the one hand, appears to have been optimistic, it was perhaps more likely to have been a strategic play in the ongoing dispute and associated negotiations between the parties.

On 27th June 2011, Mr Justice Arnold of the England and Wales Patents Court refused to issue a Summary Judgement, concluding that Sony’s defence could not be said to be without prospect of success; but also, significantly, observing that the issue was complex enough to require consideration at full trial. In view of the subsequent settlement between the parties, it would appear that patent law will now have to wait for another opportunity to arise before visiting this question again.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.

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