Malaysia - Chow Chuan Fat V Yeo Chai Seng & Ors

Legal News & Analysis - Asia Pacific - Malaysia - Intellectual Property

31 August, 2018

 

The Kuala Lumpur High Court in the recent case of Chow Chuan Fat v Yeo Chai Seng & Ors [2018] MLJU 914 had the opportunity to address the application of section 38(1)(a) of the Patents Act 1983 (“PA”). Section 38(1)(a)  provides for rights derived from manufacture or use in good faith by a third party prior to or at the priority date of the patent application as an exception to patent infringement. 

 

Brief facts 

 

The plaintiff Mr Chow Chuan Fatt (“Mr Chow”) has been in the palm oil industry since 1989. 

 

On 26 January 2005, the first defendant (“Mr Yeo”) and second defendant (“Mr Choong”) jointly filed a patent application in Malaysia for an invention entitled “Method and Apparatus for Sterilizing Oil Palm Fruit” (the Invention) relating to sterilisation of oil palm fresh fruit bunches by using water (instead of air).  

 

On 31 January 2008, the patent application was granted a patent with serial number MY-134916-A (“Patent 916”). 

 

Mr Chow had claimed that he had before 26 January 2005 agreed with Mr Yeo and Mr Choong that the three of them would be partners in the research & development (“R&D”) of the Invention and that Mr Chow had funded the R&D. 

 

Mr Chow further claimed that Mr Yeo and Mr Choong had applied for Patent 916 without his knowledge and consent. 

 

Mr Chow further alleged that he had fabricated and marketed the Invention before the application for Patent 916 was jointly filed by Mr Yeo and Mr Choong on 26 January 2005.

 

Mr Chow thus claimed, among others, that:

 

  • He is co-inventor of the Invention together with  Mr Yeo and Mr Choong, and thus entitled to be a co-owner of Patent 916 (and that two Assignments earlier executed by the Mr Yeo and Mr Choong are not valid); and
  • He is a prior user of the Invention within the meaning of section 38(1)(a) PA and is thereby entitled to exploit commercially Patent 916 without being liable for patent infringement. 

 

The High Court made a finding of fact that Mr Chow was not a co-inventor or co-owner of the Invention. 

 

The High Court held that Mr Chow also could not rely on section 38(1)(a) for the following reasons:

 

The Court made a finding of fact that Mr Chow had failed to prove his use of the Invention on or before the priority date of 26 January 2005. 

 

 

In any event, the Court held that Mr Chow was estopped from relying on section 38(1)(a) by his stand that the Invention is not novel in his defence and counterclaim in another suit in which one of the causes of action was infringement of Patent 916. 

 

The High Court however proceeded  to discuss Mr Chow’s reliance on section 38(1)(a) in the event that the Court had erred in applying the doctrine of estoppel.  This was discussed together with the application of sections 11, 14(1), 14(2)(a) and 58 PA.  

 

The High Court’s Discussion of “Prior Use” Under Section 14(2)(a) and “Use” under Section 38(1)(a) 

 

The High Court was of the following view : 

 

If a person can prove the use of an invention by any person before the priority date of the patent application claiming the invention (“Prior Use”), the person may apply to court to invalidate the patent under section 11, section 14(1),section 14(2)(a) and section 56(2)(a) PA on the ground that the invention is not new. If a patent is invalid, there cannot be any cause of action for patent infringement under section 58 PA . 

 

Section 38(1)(a) Use applies if a person can prove . In such a case:

 

  • The person relying on section 38(1)(a) Use has a right to exploit commercially the patented invention and cannot be liable for patent infringement under section 58 PA; and 
  • The patent is still valid (unlike the case of Prior Use). 

 

Conclusion 

 

In the above case, the High Court took the view that : 

 

  • If a person claims that a patented invention lacks novelty, he is estopped from asserting that he was a prior user of the invention within the meaning of section 38(1)(a) PA. 
  • If a person can prove that his or her own use of a patented invention falls within the meaning of section 38(1)(a), said person may rely on the section to commercially exploit the invention without being liable for patent infringement, and the patent remains valid. 

 

The above view taken by the court leaves open the question of whether the court is of the view that  if a person were to assert that he was a prior user of the patented invention within the meaning of section 38(1)(a),  he could not then challenge the validity of the patent based on his own public use of the patented invention prior to the priority date.  

 

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For further information, please contact:

 

Ameet Kaur Purba, Partner, Shearn Delamore & Co​

zara@shearndelamore.com