UK: Proposed UK Patent Law Reform

Last Updated: 18 December 2003

Article by Mr Gordon Harris and Ms Bonita Trimmer

Following a comprehensive public consultation process, the UK government published a report earlier this month (13 November 2003) indicating which of the numerous amendments to the UK Patents Act 1977 put forward jointly by the Patent Office and Department of Trade & Industry last year, it now intended to include in a proposed Patent Act (Amendment) Bill.

The main purpose of the proposed bill is to give effect to the changes to the wording of the European Patent Convention adopted by the EPO Administrative Council on 28 June 2001. However the government also took the opportunity to consider further changes including proposals that are entirely unrelated to the EPC 2000 but will address certain enforcement and post grant issues that have caused some concern in the UK.

The intention is for all these amendments to take effect around the same time as the provisions of the EPC 2000, which will not come into force until up to two years after another 11 Contracting States ratifies or accedes to it (bringing the total to the required 15). Therefore it is unlikely that we will feel the force of the government’s current thinking for some years (we do not even have any draft wording to consider yet). However, it is worth highlighting now a few of the more radical and in some cases innovative changes proposed not least because the judiciary will be aware of the solutions proposed to some of UK’s most perplexing patent law issues.

No More Discretion To Refuse Amendment

The government hopes that provision will be made in the 1977 Act to make it clear that neither the Comptroller nor the Court has any discretion to refuse an application to amend an EP (UK) or GB patent where the substantive grounds for refusal do not apply. Therefore the applicant’s conduct will no longer be relevant when such an application is being considered. This will apply to all requested amendments and not just limiting ones. Such a provision will accordingly do more than simply reverse the Court of Appeal’s judgment in the Kimberly-Clark Worldwide Inc v Procter & Gamble Ltd [2000] RPC 422.

This proposed reform was welcomed by many as likely to decrease the cost and delay of amendment proceedings that now require extensive disclosure frequently of privileged materials. However the government also acknowledged the concern that this change may mean there will be little incentive in the future for patentees to acknowledge the need for amendment other than at the very last minute. The Government intends therefore to address these concerns by extending the scope of sections 62(3) and 63(2) (which deal with claims that were framed in bad faith or without reason able skill and care) as follows.

Covetous Patent Proprietors & The New Restriction on Relief From Infringement Where A Patent Is Enforced In Bad Faith

An amendment is intended to be made to the 1977 Act so that relief will not be granted in the situation where a patent was framed in good faith but the proprietor regardless of having since realised it needed amendment to be valid, has attempted to enforce it against another.

The Government concludes that this compromise solution will mean that the proprietor will not lose his patent rights entirely but would find them "effectively unenforceable for the period during which he had knowingly tried to enforce bad claims". It is currently unclear whether all relief will be denied or rather that no damages will be awarded for this period.

Groundless Threats Obstacle To Pre-Action Negotiations To Be Minimized

Section 70 (1) of the UK Patents Act 1977 currently states "Where a person…by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats…may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming…relief…"

Subsection (4) states "Proceedings may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process".

The Court of Appeal in Cavity Trays v RMC Panel Products [1996] RPC 361 determined, in essence, that an action under this section can successfully be founded on a threat of proceedings where secondary infringement is alleged even if this threat is made against a manufacturer or importer.

As result few UK patentees or their legal representatives are willing to write letters "before action" or letters offering pre-action settlement even to allegedly infringing manufacturers. It is both difficult and unrealistic to draft such letters so as to avoid the slightest reference to any secondary infringements that are known to have taken place. The consultation paper acknowledged that this situation was at odds with the greater public interest and the objectives of Lord Woolf’s civil procedure reforms. Furthermore it was accepted that despite the useful judgments in Unilever v Procter & Gamble [2000] FSR 344 (Court of Appeal) and the cases that applied it, this problem was not yet satisfactorily resolved by the "Without Prejudice" privilege doctrine. This is because " Without Prejudice status arises at least partly by agreement of the parties concerned…[so] there remains a question of whether a first piece of correspondence attempting to open a genuine discussion would be protected by …[this] privilege".

Accordingly section 70(4) may be amended to ensure that a groundless threats action could not be brought where the threat of infringement proceedings was made against a manufacturer or importer but included an allegation of secondary infringement.

In addition a new innovative and potentially controversial provision is intended to be added to the Act which will prevent a section 70 action from being founded on a threat made to the first in the supply chain where extensive but unsuccessful efforts heave already been made to identify and locate the primary infringer (i.e. manufacturer / importer).

New Validity / Infringement Opinions Role For The Patent Office

The draft Patents Act (Amendment) Bill will include general provisions enabling the Patent Office to issue publicly published but non-binding opinions on issues of validity and/or infringement at the request of "any party" (including the patentee). Such opinions on validity would only be available where the post grant re-examination would cover prior art additional to that which was examined at the application stage or at least where there was a new argument based on such previously examined prior art. The aim of these intended new provisions is to facilitate the settlement of patent disputes without full-scale litigation by enabling the parties to obtain an early, quick and inexpensive assessment of key issues.

It remains to be seen how much use will be made of either of these procedures. However it is likely that the threat of requesting such an opinion on validity may well persuade a patentee to enter promptly into a licensing arrangement with a less well-funded opponent when it would not otherwise have done so. An opinion on validity that is unfavourable to the patentee will of course act as an open invitation to those with sufficient funds and interest to aggressively seek the challenged patent’s revocation.

Over To You

We would be very interested in hearing your views (whatever jurisdiction you are based in) on the above proposals or indeed on any of the other proposals in the report that can be found on the UK Patent Office’s Web Site at www.patent.gov.uk/about/ippd/notices/patact.html.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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