PATENTS

Rights of action. A variety of claims can be brought relating to patents, the principal ones being: a claim for infringement, a claim for a declaration of non-infringement, a claim for revocation and a claim to restrain unjustified threats.

Patents for inventions take their force from the provisions of the Patents Act 1977, as amended by the Patents Act 2004. Patents for the United Kingdom can be granted in one of two ways: via the procedure through the UK Patent Office set out in the Act (ss.7-23, 89) or alternatively via the European Patent Office in Munich. The latter Office was set up pursuant to the European Patent Convention and has its own system of application and grant (contained in the Convention and the Rules thereunder). A successful application there will result in the grant of a series of national patents for every state designated by the applicant in his application. Where the United Kingdom is designated, the European application takes effect as though the application has been granted by the UK Patent Office (s.77) and the patent, so far as the UK is concerned,, is called a “European Patent (UK)” (s.130(1)). So far as rights of action are concerned there is therefore no difference between the alternative procedures for grant.

Patents are ancient rights originally granted through the exercise of Royal Prerogative. Early grants were made to trade guilds and corporation and, as now, were intended to encourage new industries. Unfortunately, they were also “conferred by the Sovereign as a convenient means of raising revenue” (the Swan Committee – Board of Trade: Patents and designs Acts, Second Interim Report of the Department Committee, Cmn 6789 (April 1946), at para 7). The abused of power prompted calls for reform which resulted in the enactment of The Statutes of Monopolies for England and Wales in 1623 (the Statute of Monopolies 1623 declared all monopoly rights void save for those grants for “new manufacturers”. A grant was made to the “true and first inventor” for a period of up to 14 years. There was no equivalent Act in Scotland, although in 1641 a statute “discharging monopolies” was passed by a Parliament openly hostile to the use of the Royal Prerogative. This Act, was, however, rescinded in 1661 after the Restoration of Charles II. “Scotch” patents continued to be granted until the Patent Law Amendment Act 1852). The modern form of UK patent is now granted under the Patents Act 1977 by the Intellectual Property Office (the IPO) (the 1977 Act ratified the European Patent Convention and Patent Co-operation Treaty, it is intended to harmonise the law in relation to patents. Some provisions of the 1977 Act are based on the Community Patent Convention, which although never brought into force, is nonetheless very influential I the interpretation of the law; see Fujitsu Ltd’s Application [1977] RPC 608 at 611 by Aldous LJ, approving the comments of Nicholls LJ in Gale’s Application [1991] RPC 305 at 322. See also Patents Act 1977, s 130(7)). European patents are granted by the European Patent Office (EPO).

The specifications and the claims

A patent is a monopoly right to commercially exploit an invention in return for its disclosure. The protection is limited to the invention as it had been clearly and concisely set out in the specification which will describe it and may contain drawings. It will contain claims which define the scope of what protection is being applied for (Patents Act 1977, s 125(1)). The disclosure of the invention must be such that it is “clear enough and complete enough for the invention to be performed by a person skilled in the art” (Patents Act 1977, s 14(3), and see Asahi Kasei Kogyo Application [1991] RPC 485).

It is important that these requirements are met as many disputes turn on the clams and what comes within the patent. Failure to comply may mean the invention has not been disclosed clearly enough and that the patent may be revoked or declared invalid for “insufficiency” (Patents Act 1977, s 72(1)(c). Another ground for revocation is the non-use of the patent; a patentee is given monopoly right in the expectation that it will be employed). If a product or the use of a process is alleged to have infringed the patent it must fall within one or more of the claims made for the invention as properly construed (Belot Technologies Inc V Valmet Paper Machinery Inc (No 2) [1995] RPC 705).

Priority date

The maximum term for a patent is 20 years from the date the application is filed (Patents Act 1977, s 5(1). This will also be the priority date although the application may in certain circumstances claim as the priority date the date of an earlier application; see Patents Act 1977, s 5(5). Certain patents for medicinal products can be extended through supplementary protection certificates because of the time it takes to get approval to bring these to market). The general rule is that the filing date is the priority date for the patent. If fixes the point in time at which validity of the patent will be assessed if it is challenged.

Patentability

Only a patentable invention may be validly registered. The invention must:

  • Be new (novel) in that it must not “form part of the state of the art” at is priority date (Section 2(1) of the 1977 Act which provides that the state of the art of the invention shall be taken to comprise all information which at any time before the priority date had been made available to the public (in the UK or elsewhere) by written or oral description, but use or any other way; see also Patents Act 1977, s 2(2)). This turns on whether there has been an enabling disclosure, which is one that would enable the ordinary skilled person to perform the invention. For example, by describing the invention in a book that is then placed in bookseller’s window for sale (Lang v Gisbourne (1862) 31 Beav 133 at 136).
  • Involve an inventive step (not obvious). An invention will be taken to involve an inventive step “if it is not obvious to a person skilled in the art, having regard to any matter that forms part of the state of the art…” (Patents Act 1977, s 3, see also European Patent Convention, art 56).
  • Be capable of industrial application. An invention is capable of industrial application if it can be “made or used in any kind of industry, including agriculture” (Patents Act 1977, s 4 see also European Patent Convention, art 57).
  • Not one excluded by the Act.

Excluded inventions

Some inventions are excluded and cannot be patented (above, s 1(2)). These include discoveries, scientific theories literary, dramatic, musical or artistic works and computer programs (these may be protected by copyright or design right. Section 3(1)(b) of the copyright, Designs and Patents Act 1988 provides that computers are to be treated as literary works so they are protected by copyright).

Infringement

In all cases the right of action for infringement is now set out in s.60 of the 1977 Act. Accordingly the many pre-1977 Act cases on this subject (concerned with infraction of the Royal Command which used to be contained in the grant of Letters Patent) are of marginal relevance at most. Section 60 provides for what is frequently called direct infringement (e.g. making disposing of, using or importing a patented product, or using a patented product) and for so-called indirect infringement (e.g. supplying a means relating to an essential element of the invention). It also contains a number of exceptions (e.g. private and non-commercial use). Reference should be made to the section for its full provisions.

The right of action is conferred upon the registered proprietor (s.61) and an exclusive licensee (s.67) though in the case of the later the patentee must be joined as a party (s.67(3)).

Where title is assigned or an exclusive license is granted this should be registered at the Patent Office under s.33. Failure to do so within six months may result in the denial of an award of “costs or expenses” (s.68, as amended).

A claim for infringement (whether for a UK Patent or a European Patent (UK)) can only be brought following grant (s.69(2)), though relief may be claimed in respect of acts done following publication of the application (s.69(1) but with the qualification of s.69(3) which provides of a reduction in damages to such amount as the court or controller thinks just). For a general discussion of the law of patent infringement, see Kirin-Amgen Inc v Hoechst Marion Rousell Ltd [2005] R.P.C. 9.

Who is liable for the infringement?

A patent is infringed when someone, without consent, does something that is an exclusive right of the rights holder (an infringement of a European patent is dealt with by national law; European Patent Convention, art 64(3)). An infringing act can be committed by a principal, or through an agent or employee; each will be liable in their own right (Skyes v Howarth (1879) 12 Ch D 826. See also The Koursk [1924] P 140). A person who places an order for products to be made using a patented process “causes or procures” them to be made and “may well be said to have made them himself” (Gibson and Cambell v Brand (1841) 1 WPC 631 by Tindal CJ). They will have infringed as well as the actual manufacturer.

Infringing acts

Until section 60 of the 1977 Act there was no statutory definition of infringement (the definition of infringement is taken from, but not identical to, the wording of Arts 25 and 26 of the Community Patent Convention (CPC). It has been observed that the differences in wording is unhelpful; Beloit Technologies Inc v Valmet Paper Machinery Inc (No 2) [1995] RPC 705 at 737 by Jacob J, who suggested in Bristol Myers Squibb v Baker Norton that it would be easier to treat the CPC, EPC and PCT as if they had direct effect, [1999] RPC 253 at 258). Infringement can be direct or indirect. Direct infringement is:

  • where the invention is a product, the alleged infringer makes, disposes of, offers to dispose of, uses or imports or keeps it whether for disposal or not (Patents Act 1977, s 60(1)(a));
  • where the invention is a process, the alleged infringer uses the process or he offers it for use in the United Kingdom knowing such use is without consent, or where it would be obvious to a reasonable person in the circumstances that is the case; (Patents Act 1977, s 60(1)(b));
  • where the invention is a process, the alleged infringer disposes of, others to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product whether for disposal or not (Patents Act 1977, s 60(10)(c)).

The meaning of most of the infringing acts is straightforward. The question of whether an alleged infringer was “making” a patented product was recently considered by the Supreme Court in Schütz (UK) Limited v Werit (UK) Limited (Schütz (UK) Ltd v Werit (UK) Ltd; Schütz (UK) Ltd No 2 v Werit (UK) Ltd [2013] UKSC 16). The decision involved an exercise in judgment and is a matter of fact and degree. Some cases may be clear or there may be a “single clinching factor”. In others, however, it may be necessary for the court to identify the “various factors which apply on the particular facts” and then weigh them up in order to conclude, as a matter of judgment, whether the alleged infringer has “made” the product (above at [78]). Infringing “use”, as Terrell notes, indicates “making practical use of the invention itself” (Terrell on the Law of Patents, (17th ed 2011) at para 14.37). For example, in Neilson v Betts the use of a patented protective capsule to transport beer from Glasgow (which the patent did not cover), via Liverpool (which it did), for onward sale India infringed the patent even though the beer was not sold in Liverpool. The capsule was protecting the beer and so it was being used ((1871) LR 5 HL 1).

What is meant by “disposes of” has been interpreted in the light of the Community Patents Convention which uses the words “putting on the market”, so it is taken to mean disposal in the course of trade (see Terrell on the Law of Patents, (17th ed 2011) paras 14.32 and following). The meaning of “offers to dispose” is not limited to offers to sell. In Gerber v Lectra it was held to extend to pre-contractual negotiations and advertising for sale ([1995] RPC 383 at 411 by Jacob J).

The meaning of “keeps” is not as broad as might at first appear. In Smith, Kline & French Laboratories Ltd v RD Harbottle (Mercantile) Ltd, warehousemen or carriers, in this case British Airways, who had merely kept possession of a product during transit, were not found to be infringing ([1980] RPC 363). In McDonald v Graham, “keeps” was held to mean “keeping in stock” for trade purposes ([1994] RPC 407 at 431 by Ralph Gibson LJ).

Where the invention is a process, infringement can take two forms: first, the use of the process itself and second, dealing in any product directly obtained by using the process.

Indirect infringement

It is an indirect infringement of a patent to supply or offer to supply without consent in the UK to a person not entitled to work the invention “any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom” (Patents Act 1977, s 60(2)).

Terrell suggest that the meaning of “supply” should be understood as “putting on the market” as it clearly indicates the transfer of a thing to another (Terrell on the Law of Patents, (17th ed 2011) at 14.55). Whether the element of an invention is essential or not is a question of fact. Knowledge of the intended use may be actual or objective and two things must be known. First, that the means supplied can put the invention into effect in the UK and second, that it is intended to do so (Grimme Maschinenfabrik GmbH & Co v Scott [2010] EWCA Civ 1110, [2011] FSR 7. The offer for sale or the sale must be in the UK and the invention must be put into effect in the UK: Menashe Business Mercantile v William Hill Ltd [2002] EWCA Civ 1702, [2003] 1 WLR 1462, [2003] RPC 31).

Exceptions to infringement

Acts that would otherwise be an infringement may not be in certain circumstances (Patents Act 1977, s 60(5); which is based on art 27 of the Community Patent Convention). For example, where the act is done for non-commercial or experimental purposes (Patents Act 1977, ss 60(5)(a) and (b)). The experimental purposes exception plays an important role in striking a fair balance between enforcement and innovation. An inventor is granted a patent ultimately in the public interest to further scientific and technological innovation, therefore “the unlimited protection of the patent is not justified in a case where the further development of technology is hindered” (Klinische Versuche (Clinical Trials) II (Case X ZR 68/94) [1998] RPC 423, a decision of the Bundesgerichtoshof (German Federal Court of Justice)).

Other defences

It is a defence to show that a patent is invalid or that it should be revoked (for example because the invention is not patentable or the patent was granted to someone not entitled to it; see Patents Act 1977, s.72). There is no infringement if it can be shown that the patentee has expressly or impliedly consented to the acts complained of. Where “infringement” is innocent in that, at the time of the infringement, the infringer was not aware, and had no reasonable grounds for supposing that a patent existed, the financial remedies for infringement are restricted. No damages will be awarded or, if one was sought, no order for an account of profits will be made (Patents Act 1977, s.62).

Liability of Directors and Controlling Shareholders. Caution should be exercised suing any person who has not himself committed an infringement act. Corporations are, of course, vicariously liable for infringements carried out by their servants in the course of their employment. In some cases claimants wish to sue not only an infringement company (which may have no assets) but also the directors. That directors may be liable is settled, although the precise judicial nature of their liability is perhaps not clear (Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 K.B. 1; Rainham Chemical Works Ltd v Belvedere Fish Guano Co. [1921] 2 A.C. 465; British Thomson-Houston Co Ltd v Sterling Accessories Ltd [1924] 2 Ch. 33; Prichard & Constance (Wholesale) Ltd v Amata Ltd (1925) 42 R.P.C. 63; Evans v Spritebrand [1985] F.S.R. 267, CA). It has been held that a director will not be liable unless his involvement would be such as to render him liable as a joint tortfeasor if the company had not existed (see PLG Research Ltd v Ardon [1993] F.S.R. 197). Merely facilitating infringement is not sufficient (see PLG and CBS Songs v Amstrad [1988] A.C. 1013). See also MCA Records Inc v Charly Records Ltd [2002] F.S.R. 401, CA. It is necessary to show that such directors were personally involved in the infringing transactions in the sense that they personally directed or procured the company’s infringement acts, or that the director and the company had in concert secured the intriguing acts. Similar reasoning also limits the liability of a controlling shareholder who does no more than exercise his power of control through the constitutional organs of the company: Boegli-Gravures SA v Darsail-ASP Ltd [2009] EWHC 2960 (Pat). In such cases, where evidence of systematic infringement is available, a prayer for an injunction to restrain the directors from forming any company for the purpose of infringement may be included.

Liability of foreign suppliers or manufacturers as joint tortfeasors. The same principles apply, as above. The court is careful to ensure that foreign defendants are not brought unnecessarily into English proceedings. Mere assistance, even knowing assistance is not enough. Merely being the parent company of the infringer is not enough. Liability as a joint tortfeasor will only be imposed where the party has conspired with the primary infringer or procured or induced his infringements or joined in a common design pursuant to which the infringements were committed. (See Unilever v Gillette [1989] R.P.C. 583; Credit Lyonnais v Export Credit Guarantee Dept [1998] 1 Lloyd’s Rep. 19, Nap Pharmaceutical Group Ltd v Asta Medical Ltd [1999] F.S.R. 370 and Sabaf SpA v MFI Furniture Centres Ltd [2004] UKHL 45; [2005] R.P.C. 10).

Declaration of Non-Infringement. By s.71 an application may be made for a declaration that certain acts do not infringe a patent, notwithstanding that no assertion to the contrary has been made. The party seeking such a declaration must first apply in writing for a written acknowledgment that the proposed acts do not infringe (and he must be specific as to the nature of such acts: Mallory Metallurgical Products v Black Sivalls & Bryson Inc [1977] R.P.C. 321) and the patentee must have refused or failed to give such an acknowledgement.

Unjustified Threats of Infringement. By s.70 there is a statutory right for a person aggrieved by unjustified threats of patent infringement proceedings to sue for a declaration that the threats were unjustified, an injunction and damages. This section has been very substantially amended by the Patents Act 2004 s.12. The action does not lie where the threats are justified (in that the acts referred to would have infringed the patent), and the patent is either valid insofar as it covers the said act, or the patentee did not know or have reason to suspect that the patent was invalid in those regards. Furthermore no action may be brought in relation to threats made against a manufacturer or importer of a product (or user of a process), nor where the threat: (i) provides factual information about the patent; (ii) makes inquiries for the sole purpose of discovering the identity of the manufacturer /importer of the product or user of the process; and (iii) makes an assertion about the patent for these purposes. Finally, there is a provision under s.70(6) which allows the making of threats against a non manufacturer/importer of a product or user of a process where the patentee has made best endeavours without success to identify the manufacturer/importer/user.

When pleading a claim to restrain threats, the tendency is to claim an inquiry as to damages, I common with claims for infringement of intellectual property rights. However, the facts may well justify a different approach. Some isolated threats may not cause actual damage (as in Prince Plc v Prince Sports Group Inc. [1998] F.S.R. 21, where the judge required evidence that more than nominal damage had been suffered before he would order an inquiry as to damages). In other cases, if the threats caused identifiable loss, it would seem appropriate to plead and claim special damage.

Relief claimed. Section 61(1) of the 1977 Act sets out the relief obtainable, namely an injunction to restrain infringement, an order, for delivery-up or destruction of an infringing product or of any article in which such product is inextricably comprised, damages, an account of profits and a declaration that the patent is valid and has been infringed. The form of the injunction granted may be tailored to match the infringements committed or threatened (Coflexip SA v Stolt Comex Seaway MS Ltd [1999] F.S.R. 473 and Microsoft Corp v Plato Technology Ltd, reported at [1999] Masons C.L.R. 370; (1999) 22 (11) LP.D. 22108). Under usual practice the claimant claims an inquiry as to damages or an account of profits. If he is successful at the trial of liability he must then elect between an inquiry as to damages or an account of profits (s.61(2)). In common with other intellectual property cases, the defendant may be ordered to make limited disclosure in order to allow the claimant to make an informed choice between these alternative remedies (cf. Island Records Ltd v Tring International Plc [1995] F.S.R. 560).

Application of the CPR. The CPR apply to Patents Court business, subject to the provisions of CPR Pt 63. In the normal way, particulars of claim and of infringements must be verified by a statement of truth (CPR, r.22.1) and relevant documents (e.g. a copy of the patent in suit) should be attached to the particulars of claim.

Grounds of defence. The two main grounds of defence to a claim for infringement are a denial of infringement and a denial of validity.

Non-infringement. Once a defence of non-infringement has been pleaded, identifying the main reasons for no infringement, it is often convenient for the defendant to prepare a Product or Process Description, containing full particulars of the product or process alleged to infringe and including any necessary drawings or other illustrations. The service of such particulars will remove the need for disclosure of documents relating to infringement (CPR Pt 63.8, PD para. 6.1(1)). In this context, “full particulars” means particulars sufficient to enable all issues of infringement to be resolved and the description must be complete in all relevant areas (Consafe Engineering v Emtunga [1999] R.P.C. 154). If it is possible to do so, these particulars may be served with the defence.

Validity. Where validity is disputed it is the practice to counterclaim for revocation of the patent. The burden of proof of invalidity lies on the defendant and accordingly he must set forth the grounds upon which he relies.

The grounds of attack available against a patent are contained in s.72(1) of the Patents Act 1977 (“the Act”). Section 72(1) of the Act provides an exhaustive list of grounds (Wellcome v Genentech [1989] R.P.C. 147, CA). They are:

  • the invention is not a patentable invention;
  • the patent was granted to a person who was not entitled to be granted that patent;
  • the specification of the patent does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art;
  • the matter disclosed in the specification of the patent extends beyond that disclosed in the application for the patent, as tiled, or ,if the patent was granted on a new application filled under ss.8(3), 12 or 27(4) above or as mentioned in s.15(4) above, in the earlier application as file;
  • the protection conferred by the patent has been extended by an amendment which should not have been allowed.

“Not a patentable invention” covers the grounds of lack of novelty, obviousness, and “incapable of industrial application” (see ss.1, 2 and 3). It also covers the case of “not an invention” (see s.1(2)). Quite how far this ground may go is uncertain (see per Mustill L.J. in Wellcome, above and cf. Biogen v Medeva [1997] R.P.C. 1, per Lord Hoffmann at 41 and Lord Mustill at 31 and Generics (UK) Ltd v H Lundbeck A/S [2009] UKHL 12; [2009] 2 All E.R. 955).

There are a variety of detailed exceptions to invalidity (e.g. certain prior disclosures at certain types of exhibition) and reference to the Act should be made for these.

Proceedings in the Patents County Court. From October 1, 2010 the Patents County Court has operated with modified procedures intended to reduce the cost of litigation in lower value claims. Part V of PD63 modifies the rules and procedure in relation to the Patents County Court.