Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd

Factual and Procedural Background

Plaintiff owned a European patent covering a flat-bed aircraft seat. Defendant manufactured and sold a seat called “Solar Eclipse.” Two months after the patent was granted, Plaintiff sued in the High Court for infringement. Defendant denied infringement and alleged invalidity based on prior art and added matter.

The High Court (Judge [Last Name]) held that Defendant’s seat did not infringe; if it had, certain claims would have been invalid for added matter. Plaintiff appealed on infringement; Defendant cross-appealed on validity. While the appeal was pending, Defendant and several airlines started opposition proceedings in the European Patent Office (EPO).

The Court of Appeal reversed the High Court, declared the unamended patent valid and infringed, granted an injunction, and ordered an enquiry as to damages exceeding £49 million. Shortly afterwards, the EPO’s Technical Board of Appeal retrospectively amended the patent, deleting every claim found to have been infringed. The injunction was discharged, but the Court of Appeal refused to vary its declaration or cancel the damages enquiry, holding that its earlier judgment remained binding per rem judicatam.

Defendant appealed to the Supreme Court, contending that it could rely on the EPO’s retrospective amendment in the forthcoming damages enquiry.

Legal Issues Presented

1. Does the doctrine of res judicata prevent Defendant, at the damages enquiry, from relying on the EPO’s retrospective amendment that removed the infringed claims?
2. Should earlier Court of Appeal authorities holding that such reliance is barred—specifically Company A v Company B (No 2), Company C v Company D, and Plaintiff v Company K—be reaffirmed or overruled?
3. What is the correct interaction between national court proceedings and parallel EPO opposition procedures when their outcomes conflict?

Arguments of the Parties

Plaintiff's Arguments

• The Court of Appeal’s declaration that the unamended patent was valid and infringed creates a cause-of-action estoppel that bars any reliance on the later EPO amendment.
• Long-standing authorities have treated post-judgment revocation or amendment as irrelevant to damages between the same parties; legal certainty requires adherence to that rule.
• Allowing Defendant to rely on the amendment would undermine the finality of litigation and encourage duplicative challenges to patents.

Defendant's Arguments

• The EPO decision operates in rem, deeming the original claims never to have existed; damages cannot be awarded for infringement of claims that are retrospectively removed.
• The earlier authorities misapply modern principles of res judicata, particularly the flexibility recognised in Plaintiff v Bank [1991] 2 AC 93 and in abuse-of-process jurisprudence.
• Denying reliance on the amendment would unjustly grant Plaintiff compensation for a monopoly it never validly possessed.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge [Last Name] (delivering the lead opinion) began by reviewing the statutory framework: the Patents Act 1977, the European Patent Convention, and Article 68, which makes revocation or limitation retrospective. The Court then:

1. Clarified modern res judicata doctrine. Cause-of-action estoppel is absolute only for points actually decided; it does not bar reliance on facts that could not have been raised earlier, such as a later patent amendment.
2. Emphasised the distinction between in personam infringement findings and the in rem effect of EPO revocation, which extinguishes the patent ab initio.
3. Held that Defendant seeks not to relitigate validity but to rely on the legal consequence of the amendment: the original claims are deemed never to have existed.
4. Found the earlier Court of Appeal authorities to be inconsistent with this modern approach, misreading the flexibility recognised in leading House of Lords cases.
5. Concluded that preventing Defendant from invoking the amendment would grant damages for infringement of non-existent rights and create outcomes dependent on which tribunal finished first—an “irrational” result contrary to justice and legislative purpose.

Holding and Implications

APPEAL ALLOWED.

Defendant may rely on the EPO’s retrospective amendment to show that no damages are payable because the infringed claims are deemed never to have existed. The Supreme Court overruled Plaintiff v Company K, Company A v Company B (No 2), and Company C v Company D.

Implications: National courts must give effect to retrospective EPO revocations or amendments when assessing past damages. The decision realigns English law with fundamental estoppel principles and removes outcomes that hinged on the speed of parallel proceedings. The Court suggested that existing guidance on staying national proceedings pending EPO opposition (the Company E v Company F guidelines) should be reconsidered, though it left that task to the lower courts.