Salts Healthcare Ltd v Pelican Healthcare Ltd

Factual and Procedural Background

The Plaintiff appealed an order of Judge Karet dated 1 April 2025 dismissing the Plaintiff's claim against the Defendant for infringement of UK Patent No. 2569212 ("the Patent") entitled "An ostomy appliance" and declaring that claim 8 of the Patent was invalid as granted. Permission to appeal was granted on some grounds by the first-instance judge and on other grounds by the appellate panel. The Patent (priority date 22 September 2017) concerns ostomy bags. The Plaintiff alleged infringement of claims 5, 8 and 20 by the Defendant's ostomy products; the Defendant denied infringement and counterclaimed for revocation. The first-instance judge found no infringement, found claim 8 as granted lacked novelty over a prior published application ("Prior Publication A" (European Patent Application No. 2 229 924)), but refused other validity attacks and allowed the Plaintiff permission to make a validating amendment to claim 8. The claim began in the Intellectual Property Enterprise Court (IPEC) and was transferred to the Patents Court. There is a disputed issue about costs incurred prior to transfer.

Legal Issues Presented

1. How should the disputed claim features ("extends away from a periphery" and "extends downwardly towards a bottom of the appliance") in claims 5 and 8 be construed?
2. Whether, on that construction, the Defendant's accused ostomy products infringe claims 5 or 8 (including infringement by the doctrine of equivalents under the Actavis framework).
3. Whether claim 8 as granted lacked novelty over Prior Publication A.
4. Whether pre-transfer costs incurred in IPEC should be assessed subject to IPEC scale cost caps or may be assessed on a different basis after transfer.

Arguments of the Parties

Plaintiff's Arguments

• The judge misinterpreted claims 5 and 8 and, on a correct (broader) construction, both claims (or at least claim 8) are infringed by the Defendant's products.
• The judge was wrong to hold that claim 8 as granted lacked novelty over Prior Publication A.
• The products infringe at least some asserted claims by the doctrine of equivalents (Actavis), and the inventive concept is broader than the judge found.
• Pre-transfer costs should be assessed in accordance with the IPEC scale cost limits.

Defendant's Arguments (including respondent's notice)

• The judge correctly construed the claims: the weld portions must be actual extensions away from the actual periphery and must extend downwardly as a whole.
• The judge correctly found no literal infringement; infringement by equivalence also fails because the inventive concept and claim language require strict compliance with the structural features.
• Prior Publication A anticipates claim 8 (as the first-instance judge held), but the Defendant did not cross-appeal on validity in this proceeding.
• Pre-transfer costs need not be confined to IPEC scale caps where transfer has occurred and no transfer-term requiring IPEC-scale assessment was made; the Patents Court may allow recovery on a non-IPEC-scale basis for work integral to the dispute determined in the Patents Court.

Table of Precedents Cited

Court's Reasoning and Analysis

The appellate court analysed claim construction, equivalents (Actavis), novelty and costs as follows.

Claim construction: The court accepted the first-instance judge's construction that the phrase "extends away from a periphery of the appliance" requires an actual weld portion that is additional to (or may be connected to) the peripheral connection and not merely a hypothetical change in the peripheral line; and that "extends ... downwardly towards a bottom of the appliance" requires the weld portion as a whole to extend downwardly towards the bottom, not merely that its top edge slopes downward.

Inventive concept and Actavis: The court identified the inventive concept of claim 8 as weld portions additional to the peripheral connection positioned and shaped (i) to force waste up rather than out so as to distribute waste more evenly and reduce bulging and sagging, and (ii) to avoid trapping waste above them. Applying the Actavis questions to the accused lobes, the court accepted the judge's factual finding (based on assessment of experimental and expert evidence) that the lobes achieved substantially the same result in substantially the same way (Actavis Q1) and that it would be obvious to the skilled person that they did so (Actavis Q2). However, on Actavis Q3 the court agreed with the judge that the skilled reader would conclude that strict compliance with the structural claim language (including the downward extension) was intended: the claims are in structural terms, the specification ties the functional improvements to specific weld portions, there are many independent claims showing careful delimitation, and claim 8 specifically includes the downward limitation while other independent claims do not; cumulatively these factors justified concluding that strict compliance was an essential requirement.

Novelty over Prior Publication A: The court reviewed the first-instance judge's novelty analysis. The appellate court concluded that Prior Publication A did not clearly and unambiguously disclose the claimed location of the bottom of the bag when folded (so as to show weld portions that "extend away from a periphery ... and downwardly towards a bottom"). Because the disclosure was schematic and ambiguous, the strict test for anticipation was not met. The court therefore allowed the Plaintiff's appeal on the novelty ground.

Pre-transfer costs: The court analysed CPR rules and Practice Directions. Paragraph 9.2(1) of Practice Direction 30 enables IPEC, when ordering transfer, to set terms requiring pre-transfer costs to be assessed on the IPEC scale. Where no such transfer term was made, the Patents Court has a discretion whether to assess pre-transfer costs on the IPEC scale. HHJ Hacon's transfer order in this case included a recital indicating pre-transfer costs should be assessed on the IPEC scale, although costs were reserved. The appellate court held that the judge should have treated that indication as a reason to apply IPEC-scale limits unless there was a good reason to depart. The court re-exercised the discretion and limited pre-transfer costs to the IPEC scale in light of the earlier judge's indication and the circumstances described to that judge.

Holding and Implications

Holding: The appellate court reached the following dispositive outcomes:

• Infringement: The court dismissed the Plaintiff's appeal on the infringement issues and upheld the first-instance conclusion that the Defendant's accused products do not infringe claim 8 (and related infringement findings).
• Novelty: The court allowed the Plaintiff's appeal on novelty and concluded that the first-instance finding that claim 8 as granted lacked novelty over Prior Publication A was not established; claim 8 as granted was therefore not shown to be anticipated by that prior publication.
• Pre-transfer costs: The court allowed the Plaintiff's appeal on pre-transfer costs to the extent of limiting the costs incurred prior to transfer to assessment in accordance with the IPEC scale (re-exercising the costs discretion consistent with the transfer judge's recital).

Implications: The direct effects are that (a) the Plaintiff's infringement challenge was unsuccessful; (b) the finding of lack of novelty of claim 8 over Prior Publication A was overturned; and (c) the Defendant's recoverable pre-transfer costs are to be limited in accordance with IPEC scale caps. The court emphasised that no broader novel principle of patent law was established beyond applying existing authorities on claim construction, Actavis equivalence, novelty disclosure standards and the exercise of discretion on pre-transfer costs.