Audiosport International (Pty) Ltd v Registrar of Patents and Others (87/1978) [2010] ZACCP 7; 2010 BIP 86 (CP) (17 June 2010)

IN THE COURT OF THE COMMISSIONER OF PATENTS FOR THE REPUBLIC OF SOUTH AFRICA

Date: 2010-06-17

Patent Case Number: 87/1978

In the matter between:

AUDIOSPORT INTERNATIONAL (PTY) LTD Applicant

and

THE REGISTRAR OF PATENTS First Respondent

SOUNDSURE CC Second Respondent

SOUTH AFRICAN RUGBY UNION Third Respondent

JUDGMENT

SOUTHWOOD J

[1] This is an opposed application in terms of s 51 of the Patents Act No 57 of 1978 (‘the Act’) for the amendment of patent no 87/1978 entitled ‘Broadcasting method and apparatus’ (‘the patent’). The first respondent does not oppose the application and takes no part in these proceedings. The second and third respondents (‘the respondents’) oppose the application for the reasons set out in their notice in terms of Rule 6(5)(d)(iii). They have not filed an answering affidavit.

[2] On 18 March 1987 the applicant applied for the grant of the patent and on 25 November 1987 it was granted with effect from 18 March 1987. The term of the patent was 20 years and it expired on 18 March 2007.

[3] The invention of the patent relates to a method of broadcasting and apparatus therefor. The invention is used to relay and broadcast sound effects including the voices of officials and players which occur on-field during sports events, particularly rugby matches.

[4] During November 2008 (i.e. after the term of the patent had expired) the plaintiff instituted an action for damages against the respondents based on their infringement of the patent. The respondents are defending the action and have counterclaimed for the revocation of the patent on the grounds that it is invalid for lack of novelty or lack of an inventive step. In this regard the respondents rely on two prior art documents, US patent no 4, 097, 809 entitled ‘Local Event Broadcast System’ (‘the Miller patent’) and US patent no 2, 710, 345 entitled ‘Rustic Link Sound Pickup’ (‘the Stephens patent’).

[5] The applicant states that at no stage prior to the filing of the respondents’ counterclaim was it aware of the two patents referred to or that the patent was vulnerable to an application for revocation. The applicant states further that it has considered the Miller and the Stephens patents and, although it does not consider that they anticipate the patent or render it obvious, the applicant seeks the amendment of the patent in an excess of caution and for reasons of commercial expediency. The applicant considers that the amendment sought will obviate the need for (lengthy) argument on the alleged invalidity of the patent thus shortening the court proceedings and avoiding unnecessary costs.

[6] According to the applicant it seeks to limit the scope of the claims of the patent and ensure that it is clearly distinguished from the two prior art patents. Furthermore, according to the applicant, the amendment will substantially narrow the scope of the claims of the patents and will not offend against the provisions of s 51(6) and (7) of the Act.

[7] The respondents’ notice in terms of Rule 6(5)(d)(iii) contains a number of grounds of opposition. In essence the respondents rely on three grounds:

(1) An expired patent cannot be amended;

(2) The applicant as patentee of a patent which has expired has no locus standi to apply for the amendment of the patent in terms of s 51 of the Act; and

(3) The amendment sought offends against the provisions of both s 51(6) and 51(7) of the Act.

The respondents also contend that the applicant knew or must have known that this application is devoid of merit and is an abuse of process and consequently seek an order that the applicant pay the costs of the application on the scale as between attorney and client alternatively that the applicant’s attorney pay the costs of the application de bonis propriis on the scale as between attorney and client.

[8] At the hearing the respondents’ counsel formally conceded that the amendments sought will not offend against the provisions of s 51(6) and 51(7) of the Act. The respondents’ remaining contentions will now be considered.

[9] These contentions are based on the patent having ‘expired’. The ordinary meaning of the word ‘expire’, according to the SOED is ‘die’ or ‘come to an end’. The Act does not provide expressly or by implication that a patent expires. All that it does provide, in s 46(1), is that, ordinarily, the duration of a patent is 20 years from the date of application. Accordingly it would be more correct to say that the term of the patent expires and to ask what the effect of the expiry of the term is. The respondents’ contentions imply that when the term of the patent expired the patent ceased to have any legal force or effect: hence the person recorded in the register as the patentee was no longer the patentee and the patent could not be amended.

[10] In their heads of argument both counsel referred to the following cases, none of which pertinently deals with the issue – see Wright Boag & Head Wrighton (Pty) Ltd v Buffalo Brake Beam Company 1965 BP 150 at 155; Leggatts v Hood’s Original Darts Accessories Ltd 68 RPC 3 at 22; EI Du Pont De Nemours and Company v SA Nylon Spinners (Pty) Ltd 1987 BP 282 (CP) at 289C-390C. However, at the hearing the respondents’ counsel referred to the following paragraph in Ensign-Bickford (South Africa) (Pty) Ltd and Others v AECI Explosives and Chemicals Ltd 1999 (1) SA 70 (SCA) at 84G –

‘In matters of this nature it is customary for the Court to afford the patentee an opportunity to apply for an amendment which may save the patent. See the Gentiruco case supra at 665, where reliance was placed in this situation on the provisions of s 54 of the 1952 Act. S 61(3) in the present Act is in similar terms. However counsel for the plaintiff made no application or request that this section be invoked. There, furthermore, seem to me to be factors present which render a suspension of an order for revocation so as to allow an application for amendment inappropriate. The first is that it seems an inevitable corollary of Dr. Viljoen’s evidence that the specification is, at least in its failure to provide instruction as to how the balance between integers (c) and (d) is to be achieved, insufficient. Since s 51 precludes a patentee amending his patent by introducing new matter it is difficult to see how the patent could be improved. More important, however, is the fact that the patent has now expired so that no amendment could in any event be applied for or be effective.’

The respondents’ counsel relies on the last sentence which, he submitted, provides cogent support for the respondents’ contentions and is decisive of this application. He apparently discovered the reference while preparing for this hearing.

[11] Ordinarily, a lower court will defer to a statement of the law by the Supreme Court of Appeal, but this statement is troubling. It is not supported by any reasoning and appears to be a bald conclusion of law. In the judgment there is no reference to a principle of the law of patents, a section in the Act, a judgment or a textbook in support of the conclusion. Counsel who appeared are experienced in the field of patents and, until the hearing, they were not able to refer to a principle of patent law, a section in the Act, a judgment or a textbook which pertinently says that once the term of a patent has expired the patent cannot be amended. I have also not found any authority for this statement. Such authority as there is does not support the statement. Burrell’s South African Law of Patents 3 ed says at para 8.16 p434 (referring to two of the cases referred to by counsel) –

‘Although there was at one time some doubt as to whether or not an amendment can be made after the expiration of a patent, it is now accepted that such an amendment is competent. Since a patent may be revoked after its expiration, it would indeed follow that it may be amended after the expiration of its term.’

Furthermore, the statement appears to be obiter, the court having already pointed out that there was no request for an amendment and given one reason why the amendment could not succeed. In these circumstances I am driven to agree with the applicant’s counsel that the statement should not enjoy the deference which a well-considered statement of the law by a higher court ordinarily would enjoy.

[12] It is common cause that after the term of the patent has expired a patentee may institute an action for damages for infringement of the patent. It is also common cause that after the expiry of the term of a patent the patent is capable of being revoked – ‘because revocation dates back to the grant of the patent, and therefore revocation can affect claims for infringement or for royalties’ - see Wright Boag & Head Wrighton (Pty) Ltd v Buffalo Brake Beam Co 1965 BP 222 (CP) at 223D-E and 1965 BP 150 (CP) at 154D; TJ Smith and Nephew Ltd v Surgipod (Pty) Ltd 1985 BP 120 (CP); Usher v Nordhoff & Co (Pty) Ltd 1972 RPC 636. Accordingly, it seems to me that the question of whether a patent can be amended after the term has expired must be decided on principle.

[13] The Act deals in s 44, 45 and 46 with the grant, duration and effect of patents. S 44 provides that as soon as practicable after the publication of the acceptance of the complete specification of a patent a patent in the form prescribed shall be granted to the applicant and that the patent shall have effect from the date of publication. S 45 provides that the effect of a patent shall be to grant to the patentee in the Republic, subject to the provisions of the Act, for the duration of the patent, the right to exclude other persons from making, using, exercising, disposing or offering to dispose of, or importing the invention, so that he or she shall have and enjoy the whole profit and advantage arising by reason of the invention. S 46 provides that the duration of a patent shall be 20 years from the date of application therefor subject to the payment of the prescribed renewal fees. Nowhere is it stated expressly or by implication that when the term of a patent comes to an end the patent ceases to have any legal force or effect.

[14] To ensure that the patentee shall have and enjoy the whole profit and advantage accruing by reason of the invention the Act provides for proceedings for infringement by the patentee (or the exclusive licensee) and in s 65 that in these proceedings a plaintiff shall be entitled to relief by way of –

(1) an interdict;

(2) delivery-up of any infringing product or any article or product of which the infringing product forms an inseparable part; and

(3) damages.

The section also provides that in any proceedings for infringement the defendant may counterclaim for revocation of the patent and, by way of defence, rely upon any ground on which a patent may be revoked. As already mentioned, after the term of a patent has expired, the patent may be relied on for a claim of damages for infringement and it is capable of being revoked.

[15] It is well-established that in patent infringement proceedings a comparison must be made between the allegedly infringing product or article (or method) and the claims of the patent and that if all the essential elements of the patent are found in the allegedly

infringing product or article it infringes the patent. See Letraset Limited v Helios Limited 1972 (3) SA 245 (A) at 274G-H; Aktiebolaget Hässle and Another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) para 7. South Africa has a non-examining patent regime and the registrar is not required to do more than examine the application to see that the formal requirements have been complied with. He is not required to determine whether the invention is novel and involves an inventive step. This leads to many applications for the amendment of a patent prior to or during infringement proceedings. In Bateman Equipment Ltd and Another v Wren Group (Pty) Ltd 2000 (1) SA 649 (SCA) in para 7 the court summed up the position as follows:

‘The nature and object of amendment proceedings must be seen in the context of our patent system as a whole. Ours is a non-examining

country and an alleged inventor is entitled to a patent for his supposed invention without having to satisfy anyone of its merit or validity. He does not have to give any reasons for his choice of wording. Should he sue for infringement, he has no duty to assist the alleged infringer in establishing whether his monopoly is valid or not. Why should he be saddled with the burden if he wishes to reduce the scope of his protection in an attempt to render the patent valid, while in obtaining or enforcing a monopoly he bears no similar burden? As much at it is in the public interest that persons with inventive minds should be encouraged to give the results of their efforts to the public in exchange for the grant of a patent (cf Miller v Boxes & Shooks 1945 AD 561 at 568 and 578), it is in the public interest that patents should be rectified or validated by way of amendment’

It is recognised that amendments are invariably sought in order to avoid an actual or apprehended attack on the validity of the patent – see Willows Francis Pharmaceutical Products Ltd v Aktiebolaget Astra Apotekarnes Kemiska Fabrieker 1960 (3) SA 726 (A) at 737C-D; Kimberly-Clark of SA (Pty) Ltd v Proctor & Gamble SA (Pty) Ltd 1998 (4) SA 1 at 12G.

[16] It is obvious that a patent may be infringed at any time during the 20 year term. If infringement occurs at the beginning of the term the patentee will clearly be entitled to apply for the amendment of his patent to deal with any counterclaim for revocation. This will be done during the term and would not give rise to the argument now raised by the respondents. However, the infringement may occur in the latter stages of the patent’s term or, may only be discovered after the term is ended. In such a case the patentee is not non-suited. Although he may not seek an interdict because the injury has already taken place he may seek damages. This is conceded by the respondents. It is obvious that in such cases the plaintiff will be able to institute an action for damages even after the 20 year term has come to an end. Clearly the patent still has legal force and effect for this purpose. The question is whether the usual remedies available to the parties in infringement proceedings instituted before the patent term elapsed are still available.

[17] As already mentioned, in terms of s 65(4) the alleged infringer (i.e. the defendant) may counterclaim for the revocation of the patent and, by way of defence, rely upon any ground on which the patent may be revoked. One of these grounds is that the invention concerned is not patentable under s 25 see - s 61(1)(c). In terms of that section an invention is not patentable if it is not new or does not involve an inventive step.

[18] During the term of a patent a patentee is entitled to apply for the amendment of the patent to protect the patent against a claim for revocation. The Legislature must be presumed to know that infringement may take place at the end of the patent’s term or be discovered after the term has come to an end and that proceedings for damages may be instituted just before or even after the term of the patent has expired. In this context s 51(1) provides that a patentee ‘may at any time’ apply for the amendment of the complete specification and in ss (9) that ‘where any proceedings relating to … a patent are pending in any court, an application for the amendment of the relevant specification shall be made to that court, which may deal with such amendment as it thinks fit’. The use of the word ‘any’ means that the amendment proceedings are not restricted to the term of the patent. As pointed out in Commissioner for Inland Revenue v Ocean Manufacturing Ltd [1990] ZASCA 66; 1990 (3) SA 610 (A) at 618H-I –

‘Any is “a word of wide and unqualified generality. It may be restricted by the subject-matter or the context, but prima facie it is unlimited.” (Per Innes CJ in R v Hugo 1926 AD 268 at 271.) “In its natural and ordinary sense, any – unless restricted by the context – is an indefinite term which includes all of the things to which it relates”. (Per Innes JA in Haine & Co v Kaffrarlan Steam Mill Co Ltd 1914 AD 363 at 371.)’

[19] I therefore conclude that after the term of a patent has expired the patent does not cease to have legal force and effect. For purposes of a claim for damages for infringement the patent still has legal force and the other provisions of the Act relating to revocation and amendment continue to apply.

[20] With regard to a claim for damages for infringement the Act provides in s 66(5) –

‘Where an amendment of a specification has been allowed under section 51, the commissioner may in his discretion refuse to award damages in respect of any acts of infringement committed before that amendment was so allowed and, in exercising his discretion, the commissioner may take into consideration the conduct of the patentee in framing this specification and permitting it to remain in its unamended form.’

At this stage it is impossible to say what view the commissioner will take.

[21] Accordingly, I do not agree with the respondents’ argument that the amendment will serve no useful purpose and it is found that it is permissible to seek an amendment of a patent after the term of the patent has expired.

[22] For the same reasons, the patentee of a patent whose term has expired has locus standi to apply for the amendment of the patent. If he has discovered the infringement after the term has ended he would be entitled to

institute proceedings and for the purposes of such proceedings he would be required to prove that he is the patentee. In terms of s 2(xvi) ‘patentee’ means the person whose name is for the time being entered in the register as the name of the grantee or proprietor of the patent.

[23] This is a case where the costs should follow the result and it is not contended otherwise by the respondents’ counsel.

Order

[24] 1. The complete specification of South African Patent No 87/1978 is amended as set out in annexure A to the notice of motion;

2. The respondents are ordered to pay the costs of opposition

B R SOUTHWOOD

JUDGE OF THE HIGH COURT

CASE NO: Patent Case Number 87/1978

HEARD ON: 11 May 2010

FOR THE APPLICANT: ADV. C.J. VAN DER WESTHUIZEN SC

INSTRUCTED BY: Paul du Plessis Attorneys

FOR THE 2ND AND 3RD RESPONDENTS: ADV. D.R. HARMS

INSTRUCTED BY: Hack Stupel & Ross

DATE OF JUDGMENT: 17 June 2010