WHAT MADE THIS MALAYSIAN PATENT REVOKED?

February 13th, 2012

 

The Malaysian High Court in Shah Alam, Selangor has recently revoked Malaysian Patent No. MY-103619-A and the reasons for the revocations made an interesting reading.

In the case of Nehemiah Reinforced Sdn. Bhd. vs. Patrick Cyril Augustine & Imbiraj K. S. Abraham, the Court held that Malaysian Patent No. MY-103619-A (hereinafter referred to as "the Patent") which was granted on 28 August 1993 was not valid because the invention as claimed in the Patent was not new or inventive at the time of filing of the Patent and that the Patent specification did not describe the invention sufficiently.

Nehemiah Reinforced (hereinafter referred to as "the Plaintiff"), a company that specializes in the building of retaining walls using a system called "Anchored Earth System" filed a patent revocation suit against the Patentees i.e. Mr. Augustine and Mr. Abraham (hereinafter referred to as "the Defendants") by claiming that the Patent was invalid and not enforceable.

By way of history, the Defendants had entered into an agreement with the Plaintiff on 6 May 1994 in which it was agreed that Defendants will allow the Plaintiff to continue manufacture their own multi-anchor wall system (which otherwise will be an infringement of their rights under the monopoly granted by the Patent) in consideration for a fee of RM9.50/m2 (approximately USD3.20/m2) of wall area built by the Plaintiff. In the agreement, the Plaintiff had indicated that the validity of the Patent was never acknowledged by the Plaintiff and the only reason why it had agreed to enter into the agreement was because it had started working on a project and it did not want the project to be delayed because of this issue.

Based on the facts of the case, the Plaintiff had apparently paid a total amount of RM42,818.51 (approximately USD14,300.00) as a royalty to the Defendant after the agreement was executed by both the Plaintiff and the Defendants. Soon after that, the Plaintiff has instructed their solicitors to conduct a detailed study on the Patent to verify whether the Patent was valid or otherwise.

The solicitors had advised the Plaintiff that the Patent maybe invalid and based on that advice, the Plaintiff had initiated an action at the Shah Alam High Court for a declaration that the Patent was invalid and not enforceable. The Defendants, in return, had filed a counterclaim by saying that the Patent was always valid and enforceable and demanded the Plaintiff to pay the balance amount of RM877,294.49 (approximately USD292,432.00) from the total amount of RM920,113.00 (approximately USD306,704.00) that should be payable to them as part of royalty fees that were agreed in the agreement dated 6 May 1994.

During the trial, the Court had the opportunity to listen to three expert witnesses from the Plaintiff and another three from the Defendants' side. The Plaintiff had presented a Patent Expert and two Technical Experts as their expert witnesses whereas the Defendants had presented a Technical Expert, an Ordinary Witness and the Inventor himself as their expert witnesses.

The case put forward by the Plaintiff is that the Patent was invalid because it lacks novelty and inventive based on the prior art which had been disclosed to the Court as well as the Patent lacks complete information of the invention.

The Plaintiff had pointed out that the Defendants had expressly agreed that the only novel and inventive feature in the Patent is the fact that the invention requires the length of the tie members which must be between 0.8H to 1.2H, wherein H is the height of the panel. This is because Claim 1 of the Patent was drafted in a two-part format wherein the length of the tie members was the only feature described in the characterizing portion. It is well accepted that this European format of claim drafting confirms that the features which have been described in the preamble (the first part) are features which are already in the public domain and features which have been described in the characterizing portion (the second part) are the novel and inventive features. This fact was never disputed by the Defendants.

The Plaintiff was successful in showing to the Court relevant prior art that showed that the length of the tie members must between 0.8H to infinity. That means, the range of 0.8H to 1.2H was a subset of the range disclosed in the prior art.

The Defendants were unable to show any prove on why the range of 0.8H to 1.2H was selected and this was also not described in the Patent.

Another issue for the Defendants was that the selection of their "expert witnesses". During the trial, it appeared that the Defendants' first expert witness is a professional engineer who has been working in the construction industry since 1998. However, during the trial, he has agreed that he has been more involved in the marketing. He was also inconsistent with his answers to the questions raised by the Counsel representing the Plaintiff and had admitted that he is not an expert in patents and therefore was not able to comment on the contents of the specification of the Patent. The other two witnesses of the Defendants were an ordinary witness and the inventor, and their arguments did not carry a lot of weight.

On the other hand, the Plaintiff's expert witnesses comprising a Patent Expert and two Technical Experts and all of them were very consistent and were able to highlight the weaknesses of the specification of the Patent.

Having listened to the expert witnesses from both Plaintiff and Defendants and the prior art presented by the Plaintiff, the Court held that the Patent was invalid because it was not novel, not inventive and the specification of the Patent contains insufficient disclosure of the invention. The Court ordered the Defendants to return the amount of RM42,818.51 collected as royalty from the Plaintiff previously and dismissed the Defendants' counterclaim with cost.

The case clearly explained the business decision taken by the Plaintiff (to agree to pay the royalty and to include a clause in the agreement that the validity of the Patent was not acknowledged – this is obviously to allow them to complete the project on time) and to challenge the validity of the Patent after the project was completed and the litigation strategies that were employed by them in identifying the relevant prior art and expert witnesses.

Judges in Malaysia are not technically qualified and therefore, they rely on the expert witnesses to guide them on the technical issues, and it is well known that patent litigation cases are usually won by parties who submit convincing expert witnesses (patent and technical experts).

ADIPVEN can assist in strategizing litigation actions to ensure higher chances of success in Courts. ADIPVEN can also assist in conducting prior art search and giving opinion on validity of patents and to help to identify Patent and Technical Experts in the event that you or your clients are considering patent revocation actions in Malaysia, India, Singapore, Thailand, Vietnam, Indonesia, Philippines and Brunei. Please do not hesitate to write to us at info@adipven.com if you need any further clarifications on this matter.