Malaysia - Selected Issues On Patent Litigation From Kingtime International Ltd v Petrofac E&C Sdn Bhd.

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

24 May, 2019

 

Introduction

 

The Malaysian Patents Act 1983 (“PA”) came into force in 1986, yet there is a dearth of authorities on patent disputes in Malaysia. In this context, the recent High Court decision in the case of Kingtime International Ltd v Petrofac E&C Sdn Bhd1 is a welcomed addition. This article will focus on selected issues from this case.

 

Background facts

 

Kingtime International Ltd (“Kingtime”) is the registered owner of two Malaysian patents, referred to here as Patent 898 and Patent 5004. Both patents relate to the Mobile Offshore Production Unit which is installed for offshore oil production purposes.

Kingtime licensed Patent 898 and Patent 5004 to Gryphon Energy (Asia-Pacific) Sdn Bhd (“Gryphon”). In the High Court, Kingtime and Gryphon commenced a suit against Petrofac E&C Sdn Bhd (“Petrofac”) for patent infringement of Claim 1 and 13 of Patent 5004, as well as Claim 1 of Patent 898. Petrofac counterclaimed to invalidate the three patent claims.  In this case, the High Court explored various issues on patent infringement and patent invalidation in Malaysia.

 

The right of a patent licensee to sue for patent infringement

 

One of the questions before the High Court was whether Gryphon can sue Petrofac for patent infringement in its capacity as the licensee for Patent 898 and Patent 5004. The Judge held that under PA, a patent licensee had no right to sue for patent infringement save in the following limited circumstances:

 

  1. The patent owner refused/failed to file a patent infringement after three months from receiving the request of the licensee to do so.

  2. Notwithstanding that the three-month period has not been satisfied, the licensee may apply to the court for a restraining order to prevent patent infringement or prohibit its continuation by proving that immediate action is necessary to avoid substantial damage to the licensee.

 

As the limited circumstances were not applicable in this case, the High Court dismissed Gryphon’s action against Petrofac.

 

Construing a patent claim

 

The Judge held that a patent claim may be interpreted with reference to other parts of the patent specification but if the claim is clear, the scope of the claim cannot be extended, reduced or amended by the other parts of the patent specification.

 

In Kingtime, the issue of patent construction revolved around the words “removably attached” in the three patent Claims. On this issue, the Court held that reference to dictionaries and foreign patents employing the words was not permissible. The learned judge stated that judicial decisions (local or foreign) cannot be a substitute for an expert view of the meaning of a claim of a person skilled in the art.

 

Written opinion of the International Searching Authority

 

On patent invalidation, Petrofac claimed that the patent Claims were not novel and not inventive. The question arose whether the courts should consider the written opinion by the International Searching Authority (“ISA”) in deciding the novelty and the inventiveness of the patent claims.

 

Consequently, the High Court held that the courts may consider the written opinion by ISA but are not bound by such opinions which are not conclusive.

 

Patent infringement under section 35(1A) of the PA

 

One of Petrofac’s contentions was that Petrofac was not liable for patent infringement because the alleged infringement occurred before the grant of Patent 898 and Patent 5004. Petrofac’s counsel relied on section 35(1A) of the PA which provides that a patent “shall be deemed to be granted and shall take effect on the date the certificate of grant of the patent is issued”.

 

The Judge disagreed with Petrofac’s counsel and held that section 35(1), which provides that the duration of a patent is 20 years from the filing date of the application, only applied to subsection (1B) and (1C). Both subsections (1B) and (1C) did not apply to the present case, and therefore the 20 years’ duration of the two Patents shall take effect from the filing date of the applications of the two patents.

 

Although Petrofac’s alleged infringement occurred before the grant of the Patents, it happened after the filing date of Patent 898 and Patent 5004 and during the duration of the Patents. Thus Petrofac’s contention of non-liability for patent infringement was not accepted by the Court.

 

Applicability of the patent infringement test in Actavis UK Ltd v Eli Lilly 

 

The Judge stated that there were three tests for patent infringement, namely

 

  1. the Essential Integers Test2;

  2. the Improver test3; and

  3. the test in the recent case of Actavis UK Ltd v Eli Lilly4.

 

The Judge was persuaded to apply the test in Actavis in addition to the Essential Integer test and the Improver test, despite noting that no local cases have discussed the test in ActavisThe learned Judge opined that the test in Actavis was a clearer test than the Improver’s Test.

 

In addition, the Judge took note that the test in Actavis considered the approach by the German courts, and that it would be a uniform test for patent infringement in different jurisdictions in view of the extra-territorial nature of patent rights.

 

The Judge proceeded to apply all three tests and found that Petrofac has infringed Claim 1 and 13 of Patent 5004, as well as Claim 1 of Patent 898.

 

Conclusion

 

In light of this case, it is pertinent to name the right plaintiff for a patent infringement action to prevent dismissal of the suit. Further, there seems to be judicial acceptance of the extra-territoriality of intellectual property rights, though this has not been tested in the higher courts. At the time of writing, this case was pending appeal to the Court of Appeal. Nevertheless, this decision by the High Court is a new milestone for patent litigation cases in Malaysia.

 

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For further information, please contact:

 

Elisia Engku Kangon, Shearn Delamore & Co​

elisia.engku@shearndelamore.com

 

  1. [2018] MLJU 1840
  2. Rodi & Wienenberger AG v Henry Showell Ltd [1969] RPC 367
  3. Improver Corp & Ors v Remington Consumer Products Ltd & Ors [1990] FSR 181
  4. [2018] 1 All ER 171