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Malaysia: Good And Bad News For NEP Holdings

26th September, 2013

In the case of NEP Holdings (Malaysia) Berhad v C.K Filtration Technology Sdn Bhd, the High Court of Malaya in Kuala Lumpur upheld the validity of NEP Holdings (Malaysia) Berhad’s Malaysian patent while dismissing their claim for patent infringement against C.K Filtration Technology Sdn Bhd.

NEP Holdings (Malaysia) Berhad (hereinafter referred to as “the Plaintiff”) is a publicly listed company involved in business of manufacturing, assembling, marketing and trading in water filtration systems. The Plaintiff is the proprietor of Malaysian Patent No. MY 142566-A (hereinafter referred to as “the Plaintiff’s Patent”) entitled “Improvement in the Mechanism of Water Treatment System”.

C.K Filtration Technology Sdn Bhd (hereinafter referred to as “the Defendant”) is a distributor of various types of water filter including a product named CK King Filter (hereinafter referred to as “the Defendant’s Product”).

The Plaintiff initiated the present action against the Defendant alleging that the Defendant’s Product infringed the Plaintiff’s Patent.

The Defendant refuted the Plaintiff’s claim and filed a counterclaim that the Plaintiff’s Patent was invalid on the grounds of lack of novelty, lack of inventive steps and lack of enabling disclosure. The Defendant contested that the improved mechanism of water treatment system described in the Plaintiff’s Patent was intended for industrial purpose and not for household domestic use.

The High Court rejected this contention noting that the Plaintiff’s Patent stated that “most of the common water treatment systems were installed on the counter or hung on kitchen walls”. The High Court stated that in order to anticipate a patent, the prior art must disclose the claimed invention and together with the common general knowledge, enable the ordinary skilled person to perform it.

The Defendant submitted multiple prior arts asserting that the Plaintiff’s Patent was invalid on the grounds of lack of novelty. The Defendant stated that one of the prior art documents disclosed treatment of water on desalinator which was an apparatus for treating water in a water treatment system through reverse osmosis membrane. The High Court refuted the Defendant’s claim concluding that for any alleged prior art document to defeat the novelty of a patent claim, all of the features in the patent claim must be directly and unambiguously disclosed by the prior art document; which the Defendant failed to show.

The Defendant, next, contented that the Plaintiff’s Patent was not patentable as it lacks an inventive step. The High Court held that while dealing with obviousness, it was permissible to make a mosaic out of the relevant documents, but it must be a mosaic which could be put together by an unimaginative man with no inventive capacity. The High Court admitted that the Plaintiff’s Patent was trying to solve the problems of tedious, labor intensive and time consuming installation, and impossibility to clean and replace filter stones in common water treatment systems. The High Court further noted that the water treatments systems available prior to the one disclosed in the Plaintiff’s Patent were only capable of treating water but not magnetizing and activating water. Further, as per the submission by Plaintiff witness, who had been in the water treatment industry for over 30 years, the High Court adjudged that prior to the Plaintiff’s Patent, there were no water treatments systems available which aimed for domestic use having the effect of allowing a large quantity of treated or purified water to be activated. Therefore, the High Court ruled that the Plaintiff’s Patent was valid on the ground that it would not be obvious to a skill person to combine the prior arts.

The Defendant also challenged the validity of the Plaintiff’s Patent on the ground that the claims of the Plaintiff’s Patent were not sufficiently supported by the specification. The High Court rebuffed these claims as both the Plaintiff witness and the Defendant witness had pointed out that the claims of the Plaintiff’s Patent were sufficiently described and/or supported in its specification. Conclusively, the High Court rejected all the arguments of the Defendant and upheld the validity of the Plaintiff’s Patent.

On the issue of infringement, the Plaintiff contented that the Defendant’s Product contained all the essential features of the Plaintiff’s Patent except for an inner drum. The High Court noted that beside the inner drum, the Defendant’s Product does not have a magnetized assembly which was an also essential feature of the Plaintiff’s Patent. Therefore, the High Court rejected the Plaintiff’s assertion that the Defendant’s Product had infringed the Plaintiff’s Patent.

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