The early bird catches the patent worm

Due to the global economic crisis, the heat is on for companies in the technology sphere to get the edge on their competitors. They are doing this by investing vast amounts of money and resources in research and development in the hopes of coming up with the next big thing. In those instances where commercially viable technological advancements do result from such investment, companies are making sure that the fruits of their labour do not fall into the clutches of unscrupulous competitors. One way of keeping competitors at bay is by means of patent registrations. Where once patenting may have been the exception to the rule, the current trend appears to be the opposite. Globally, industry players invest substantial sums of money in protecting their intellectual property – and this includes defending that intellectual property against would-be infringers.

The exact scope of protection to which a patentee is entitled is determined by the patent specification itself. Specifically, the function of a patent specification is to define the scope of the invention clearly and precisely in order to make others aware of the boundaries of the area within which they may not trespass. Where a patentee alleges infringement of its patent rights by a third party, it must be established that the allegedly infringing article or process falls within the scope of the claims of the patent specification. Where this cannot be established, there can be no finding of patent infringement. All things being equal, patent litigation is a costly exercise for both parties, irrespective of the outcome. For the loser, the cost of being caught on the wrong side of the boundary is potentially crippling in the form of damages liability and loss of investment into a product or process that can no longer be commercialised. In order to mitigate the risks associated with third-party patent rights infringement, industry is becoming proactive.  Increasingly companies are conducting freedom-to-operate searches in order to establish the lie of the land before expending huge amounts of money on R&D and potentially facing lawsuits.

This level of proactivity may have reached new heights in the recent South African Supreme Court of Appeal judgment in Camworth Technologies Ltd v Videx Wire Products (Pty) Ltd (17th September 2013). The judgment was handed down in an appeal from the South African Court of the Commissioner of Patents, where the respondent (Videx) had applied to the commissioner for a declaration of non-infringement in terms of Section 69(1) of the Patents Act (57/1978). Section 69(1) provides:

"(1)A declaration that the use by any person of any process, or the making or use or offer to dispose or disposal or importation of any article by any person, does not or would not constitute an infringement of a patent, may be made by the commissioner in proceedings between that person and the patentee, notwithstanding that no assertion to the contrary has been made by the patentee, if it is proved –

 (a)that such person has applied in writing to the patentee for a written acknowledgement  to the effect of the declaration claimed, and has furnished the patentee with full particulars of the process or article in question; and

(b)that the patentee has failed to give such an acknowledgement."

In the matter before the commissioner, Videx had sought a declaration that a pre-stressing device, the Videx pot, did not infringe the claims of a patent held by the appellant (Camworth). The fact that the procedural requirements of Section 69(1) had been complied with were not at issue. The question before the court was whether the Videx pot fell within the scope of Camworth’s patent. The commissioner held that the Videx pot did not infringe the patent because it did not include two of the patent's essential integers. Accordingly, the commissioner issued a declaration of non-infringement and the patentee appealed. Following a comparison between the Videx pot and the wording of the patent claims, based on the expert evidence presented, the Supreme Court of Appeal agreed with the lower court’s decision and dismissed the appeal with costs. The declaration of non-infringement was endorsed and Videx can now manufacture and sell the Videx pot in South Africa.           

Many companies are content to operate based on the findings of various patent investigations carried out at their behest, and it is not usual practice to go the extra mile of a Section 69(1) declaration. However, that extra mile bought Videx some comfort.         

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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