With all corners of the globe feeling the squeeze as a result of the international economic crisis, it would be an understatement to say that the heat is definitely 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 it may have been the exception to the rule to follow the patenting route, the current trend appears to convey 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 that a patentee is entitled to is determined by the patent specification itself. Specifically, the function of a patent specification is to clearly and precisely define the scope of the invention in order that others are made aware of the boundaries of the area within which they may not trespass. Where a patentee alleges infringement of his patent rights by a third party, it must be established 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 even, patent litigation is a very costly exercise for both parties, irrespective of the outcome. And 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 getting proactive. Globally, ever more frequently companies are going the route of conducting freedom to operate searches in order to establish the lie of the land prior to expending huge amounts of money on R&D and potentially facing lawsuits.
In fact, this level of proactivity may have reached new heights, if the recent South African judgement handed down by the Supreme Court of Appeal in Camworth Technologies Ltd v Videx Wire Products (Pty) Ltd (17 September 2013) is anything to go by. The judgement 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) of the Act provides:
- 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 for use in ("the Videx pot") did not infringe the claims of a patent held by the appellant (Camworth). What was not in issue between the parties was that the procedural requirements of section 69(1) were complied with. The question before the court was whether the Videx pot fell with 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 essential integers thereof. Accordingly, the Commission issued a declaration of non-infringement and it was against this finding that the patentee appealed. On a comparison between the Videx pot and the wording of the patent claims off the back of the expert evidence presented, the SCA agreed with the lower court's decision and dismissed the appeal with costs. The declaration of non-infringement was endorsed and Videx is can manufacture and dispose of the Videx pot in the Republic of South Africa.
Many companies are content to operate based on the findings of various patent investigations carried out at their behest, and it certainly isn't usual practice to go the extra mile of a 69(1) declaration. What cannot be denied is that the extra mile bought Videx some comfort.
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