Structural Claim Limits Trump Equivalence Where the Specification Discloses No General Principle; Pre‑Transfer IPEC Costs Remain Capped Absent Good Reason to Depart

1. Introduction

This appeal concerned infringement and validity of UK Patent No. 2569212 (“the Patent”) relating to ostomy bags. The claimant, Salts Healthcare Ltd (“Salts”), alleged that Pelican Healthcare Ltd (“Pelican”) infringed (among others) claims 5 and 8 by marketing its “ModaVi” range. Pelican denied infringement and counterclaimed for revocation. At first instance, the Patents Court found no infringement; it also held claim 8 as granted lacked novelty over European Patent Application No. 2 229 924 (“Grum-Schwensen”), but allowed Salts to amend claim 8 to restrict it to closed appliances.

On appeal, Salts challenged (i) the construction applied to key claim language, (ii) non-infringement (including by equivalents), and (iii) the novelty attack on claim 8 as granted. A further issue concerned whether Pelican’s costs incurred while the case was in the Intellectual Property Enterprise Court (“IPEC”) remained subject to IPEC scale caps after transfer to the Patents Court.

2. Summary of the Judgment

• Infringement (literal/purposive): Appeal dismissed. The Court of Appeal agreed that the claims require weld portions that truly extend away from the actual periphery (not merely a change of direction in the peripheral weld) and that the weld portion as a whole must extend downwardly, not merely its upper surface.
• Infringement by equivalents: Appeal dismissed. Even if Pelican’s “lobes” achieved substantially the same result in substantially the same way, the patentee intended strict compliance with the “downwardly” structural requirement (Actavis question 3 answered “yes”).
• Novelty over Grum-Schwensen: Appeal allowed. The prior art did not clearly and unambiguously disclose the relevant “bottom of the bag” position when folded, nor was infringement an inevitable result of carrying it out. Claim 8 as granted was therefore not shown to lack novelty.
• Pre-transfer IPEC costs: Appeal allowed. Where the transfer order indicated pre-transfer costs “should” be assessed on IPEC scale caps (while reserving costs), departure required good reason; none was given. The Court of Appeal re-exercised discretion to apply IPEC caps to pre-transfer costs.

3. Analysis

3.1 Precedents Cited

Claim construction (purposive interpretation under Art 69 EPC)

• Virgin Atlantic Airways v Premium Aircraft Interiors [2009] EWCA Civ 1062, [2010] RPC 8: adopted as the core framework for contextual, purposive construction (claims read with description/drawings; purpose informs meaning but does not override language; deliberate limitations matter). The Court used this to reject Salts’ attempts to “re-write” explicit structural language (“extends away…”; “extends … downwardly…”).
• Adaptive Spectrum and Signal Alignment Inc v British Telecommunications Plc [2014] EWCA Civ 1462: cautions against importing limitations from embodiments, while recognising that limited meaning can be implicit if that is what the claim conveys to the skilled person. Here, however, Salts’ reading was rejected not because it broadened beyond an embodiment, but because it departed from what the claim language conveyed.
• Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] RPC 9: reinforced that the ultimate question is what the skilled person would understand the patentee’s language to mean. This underpinned the Court’s insistence that “extends away from a periphery” refers to the real periphery, not a hypothetical one.

Doctrine of equivalents (Actavis framework)

• Actavis UK Ltd v Eli Lilly & Co [2017] UKSC 48, [2017] RPC 21: supplied the three questions; the Court emphasised that question 3 needs a “good reason” to insist on strict compliance even where Q1 and Q2 are satisfied. In this case, the “good reason” was found in the structural specificity of the claim set and the specification’s limited teaching.
• Icescape v Ice-World International [2018] EWCA Civ 2219, [2019] FSR 5: clarified that “literal meaning” in Actavis means the “normal”/purposive meaning. This mattered because Salts’ failure on “normal” construction was the gateway to, not the end of, the equivalents inquiry.
• Formycon AG v Regeneron Pharmaceuticals Inc [2025] EWHC 2527 (Pat): relied upon for two related propositions: (i) the inventive concept for Actavis Q1 should be assessed at the level of generality of the claims; and (ii) it is generally preferable to identify the inventive concept and answer Q1 on its own terms, leaving drafting/textual constraints to Q3 where appropriate. The Court adopted this sequencing and resisted Pelican’s submission to “front-load” Q3 considerations into the inventive concept.
• Pozzoli SpA v BDMO SA [2007] EWCA Civ 588, [2007] FSR 37: used as a comparator—its inventive concept methodology for obviousness may be a starting point, but is not necessarily determinative for Actavis.
• Akebia Therapeutics Inc v Fibrogen, Inc [2020] EWHC 866 (Pat), [2020] RPC 15: cited for the “disclosed-but-not-claimed” principle as relevant to Actavis question 3. The Court treated the presence/absence of “downwardly” across numerous independent claims as a strong indicator that downward extension was deliberately essential in claim 8.

Novelty: strict “prior disclosure” and appellate approach

• SmithKline Beecham Plc's (Paroxetine Methanesulfonate) Patent [2005] UKHL 59, [2006] RPC 10: applied for the strict novelty test: prior art must disclose subject-matter which, if performed, would necessarily infringe—“the flag has been planted”. The Court used this to emphasise that ambiguity in Grum-Schwensen’s schematics is fatal to a novelty attack.
• General Tire v Firestone Tyre and Rubber Co [1971] FSR 417: relied upon for the “clear and unambiguous disclosure” / “inevitable result” dichotomy and the strictness of the standard.

Standards of review (fact vs law)

• Volpi v Volpi [2022] EWCA Civ 464, [2022] 4 WLR 48: used to reject Pelican’s attempt (via respondent’s notice) to disturb the trial judge’s fact-finding on Actavis question 1; appellate interference requires irrationality.

Costs: appellate restraint and IPEC scale-cost purpose

• Roache v News Group Newspapers Ltd. [1998] EMLR 161 and AEI Rediffusion Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507: set the appellate standard for costs appeals (error of principle, irrelevant factors, or decision “wholly wrong”).
• Westwood v Knight [2011] EWPCC 11, [2011] FSR 37: cited for the policy of IPEC scale caps—certainty and predictability for SMEs; departures undermine the regime’s purpose. The Court endorsed the policy rationale but held it applies less fully once a case transfers out of IPEC.
• Henderson v All Around the World Recordings Ltd [2013] EWPCC 19, [2013] FSR 42: cited as reinforcing that the point of PCC/IPEC costs rules is certainty over full compensation.
• Comic Enterprises Ltd v Twentieth Century Fox Film Corp [2012] EWPCC 13, [2012] FSR 30: key authority interpreting PD30 para 9.2(1): the transfer court may impose a term that pre-transfer costs remain on the IPEC/PCC scale “in any event”. This informed the Court of Appeal’s conclusion that absent such a term, the Patents Court has discretion—yet must treat any transfer judge indication as the baseline requiring good reason to depart from.

3.2 Legal Reasoning

(A) Construction: “extends away from a periphery” and “extends … downwardly”

The Court anchored construction in function (weld portions “force waste up rather than out”, distributing waste along the length and reducing bulging/sagging) but treated the claim language as controlling. Salts’ attempt to characterise a mere change of direction in the peripheral weld as a weld portion “extending away” was rejected because it depended on a “hypothetical” periphery.

Similarly, Salts’ submission that only the top edge needed to slope downward to satisfy “extends … downwardly” failed because the claim requires the weld portion as a whole to extend downwardly. The Court viewed both submissions as impermissible re-drafting rather than purposive interpretation.

(B) Equivalents: why strict compliance was “nonetheless” essential (Actavis Q3)

The Court reformulated the inventive concept for claim 8 at a level reflecting both function and geometry: weld portions additional to the peripheral connection, positioned and shaped (i) to force waste up rather than out (reducing bulging/sagging) and (ii) to avoid trapping waste above them.

On the facts, the “lobes” could satisfy Actavis Q1 and Q2 (the Court declined to interfere with the judge’s fact-finding, and itself regarded anti-trapping as “plain”). The case turned on Q3: whether the skilled reader would understand “downwardly” as an essential strict limitation.

The Court gave four cumulative reasons for answering Q3 “yes”:

• Structural (not functional) claiming: claim 8 uses specific structural constraints rather than claiming a result (e.g., “narrower bag” or performance outcome).
• No general principle disclosed: functional benefits were presented as tied to the specific weld portions shown (20, 22, 28, 30), with no broader teaching or criteria/quantification of improvement.
• Many independent claims: the unusually large number suggested deliberate calibration of scope beyond the embodiment, supporting an inference of intentional limitation.
• Disclosed-but-not-claimed inference: some independent claims do not require “downwardly”, whereas claim 8 does; that contrast strongly implied “downwardly” was intentionally essential for claim 8’s monopoly.

The result is a notable refinement of how UK courts operationalise “legal certainty for third parties” (Protocol to Art 69 EPC) in Q3: where drafting shows deliberate structural delineation against a thin disclosure, equivalence will not be used to erase that boundary.

(C) Novelty: schematic ambiguity defeats “clear and unmistakable” disclosure

Reversing the first instance decision, the Court held that Grum-Schwensen did not clearly and unambiguously disclose the contested feature (weld portions extending away from the periphery and downwardly towards the bottom, as mapped onto the folded state of the drainable outlet). The schematic drawings and inconsistent depiction of welding portions meant that the position of the “bottom of the bag” when folded could not be pinned down to a location that would necessarily infringe claim 8 as granted.

The Court also rejected “inevitable result” reasoning: the trial judge had not applied the requisite strict standard, had not reconciled expert evidence with the document, and Pelican did not pursue a respondent’s notice contending that inevitability should have been found.

(D) IPEC pre-transfer costs: discretion exists, but departure needs good reason where the transfer judge indicated caps

The Court analysed CPR 46.20–46.22 and PD30 para 9.2(1). It held:

• The transfer court may impose a term that pre-transfer costs remain capped (“in any event”).
• If it does not, the receiving court (here the Patents Court) has discretion whether to assess pre-transfer costs on the IPEC scale.
• However, where the transfer judge has indicated that pre-transfer costs “should” be assessed on the IPEC caps (even if costs are reserved), the receiving court should treat that as the default and depart only for good reason.

The Patents Court judge treated the matter as entirely at large and gave no good reason to depart from HHJ Hacon’s indication. The Court of Appeal therefore re-exercised discretion and restored IPEC scale caps for the pre-transfer period.

3.3 Impact

Patent infringement and equivalents

• Drafting consequences: where claims are deliberately structural and specific, especially amid many independent claims, courts may treat those choices as powerful Q3 indicators that strict compliance was intended.
• Thin disclosure risk: where the specification asserts advantages but discloses no generalised principle or performance criterion, claim scope by equivalents is less likely to expand beyond the structural language.
• Claim differentiation as Q3 evidence: variation across independent claims (some requiring “downwardly”, some not) can be compelling evidence that a requirement is essential for a particular claim’s monopoly.

Validity (novelty)

• Reaffirmation of strictness: schematic ambiguity in prior art can be fatal to novelty attacks unless the disclosure is unmistakable or the infringing result is truly inevitable (not merely likely or obvious).
• Appellate framing: the Court underlined that “explicit disclosure” has a right answer (legal standard applied to properly instructed interpretation), not a broad evaluative discretion.

IPEC transfers and costs

• Practical lesson: parties seeking certainty on pre-transfer cost caps should press for an express PD30 para 9.2(1) term in the transfer order.
• But protection remains real: where the transfer judge indicates IPEC caps should apply, the receiving court should not lightly displace that indication.

4. Complex Concepts Simplified

• Purposive construction (Art 69 EPC): claims are read as a skilled person would, in context of the description/drawings; purpose helps interpret words, but courts will not rewrite clear structural language.
• Doctrine of equivalents: even if a product falls outside the claim’s normal meaning, it can infringe if it works substantially the same way to achieve substantially the same result, and if the patentee did not intend strict compliance with the literal requirement (Actavis Q3).
• “Inventive concept” (for Actavis Q1): not necessarily the same as the inventive concept used for obviousness; here it meant the functional role of weld portions plus their positioning/shaping to avoid waste trapping—at the claim’s level of generality.
• Novelty (“clear and unmistakable” / “inevitable result”): prior art must teach the claimed subject-matter so clearly that doing what it teaches would necessarily infringe; it is not enough that the claimed version would be an obvious modification.
• IPEC scale costs: IPEC usually caps recoverable costs by stage/overall to provide predictable exposure; after transfer out, future costs are uncapped, but pre-transfer caps can remain, especially if made a transfer term or indicated by the transfer judge.

5. Conclusion

Salts Healthcare Ltd v Pelican Healthcare Ltd is a significant decision on the boundary between purposive construction and equivalents: where a patent claims a specific structural solution, supported by a specification that does not articulate a broader general principle, the courts are willing to treat that structure as an essential limitation under Actavis question 3—even if a variant appears to deliver similar functional benefits.

The Court also reinforced strict novelty principles by overturning a novelty finding based on uncertain schematic prior art, and clarified the post-transfer handling of IPEC pre-transfer costs: discretion exists absent an express transfer term, but any indication given by the transfer judge in favour of scale caps should be displaced only for good reason.