What do you do when your distributor terminates your Supply and Distribution Contract stating that it is more economical for them to acquire the products from another company (Company A)? However, you have a registered patent for the products that Company A is manufacturing. As the patentee, you may institute proceedings for infringement of your patent but the question is against whom, the distributor or Company A?
Company A is conducting an act of infringement by manufacturing your products and are, therefore, liable for direct infringement. By acquiring the products from Company A, your distributor is securing a benefit from your patented invention and therefore their conduct amounts to contributory or indirect infringement. This is because while the distributor infringes, it is only as a result of being induced by Company A, who is selling your patented product to your distributor.
To establish that there has been contributory infringement, the patentee must show that the defendant intended to commit the infringement and the defendant had knowledge of the unlawfulness of his act. Therefore, it is pertinent to notify your distributor in writing of the existence of your patent by providing him with the patent specification and alerting him to the conduct of infringement being conducted by Company A. Should your distributor proceed in acquiring their products from Company A, intention and knowledge would have been established.
Another form of contributory infringement involves acquiring Component A from Seller A and acquiring Component B from Seller B, and combining the two components to assemble the patented invention, thereby forming an infringing article. In this scenario, Seller A and Seller B are intentionally aiding and abetting infringement of the patented invention. Here, you would rather go after the distributors (Seller A and Seller B) for contributory infringement since suing every single user would be an impossible exercise.
Contributory infringement is actionable in South African law and an interdict is obtainable under the law of delict due to an incitement to commit infringement rather than in terms of the Patents Act. The plaintiff will have to show both intention and knowledge of unlawfulness in order to succeed.
The lesson to be learned is that infringement is twofold; direct infringement and contributory infringement and both are actionable in South Africa. The goal is not to contribute to an act of infringement, but rather to have your non-infringing act contribute to your profits. If you are uncertain, ask your patent attorney for their advice before you act.
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.