Malaysia

Back to News

MALAYSIA: KINGTIME IS VICTORIOUS

23rd January, 2019

In November of 2018, the High Court of Malaya in Kuala Lumpur delivered a judgement in Kingtime International Limited (hereinafter referred to as “Plaintiff 1”) and Gryphon Energy (Asia-Pacific) Sdn. Bhd (hereinafter referred to as “Plaintiff 2”) v Petrofac E&C Sdn. Bhd (hereinafter referred to as “Defendant”), which dealt with the principles of interpretation of claims in a patent infringement matter.

Plaintiff 1 has registered two patents under the Patents Act 1983: MY-144898-A and MY-145004-A. Plaintiff 1 has also granted a license to Plaintiff 2 with regards to the two patents. The Plaintiffs claimed infringement of these two patents that are related to a “Mobile Offshore Production Unit” (hereinafter referred to as “MOPU”). The Plaintiffs claimed that the Defendant has infringed Claim 1 of Patent No. MY-145004-A by making, offering for sale, selling, and using MOPU in an oil field in Sepat (hereinafter referred to as “Sepat MOPU”) located off the coast of Terengganu. The Plaintiffs further claimed that the Defendant has infringed Claim 13 of Patent No. MY-145004-A and Claim 1 of Patent No. MY-144898-A by using a method to install the Sepat MOPU. In lieu of the Plaintiffs claims, the Defendant proceeded to apply to invalidate the three claims (counterclaim).

One of the Plaintiff’s expert witness testified that in 2010, Petronas Carigali Sdn. Bhd (hereinafter referred to as “Petronas”) wished to develop an early production system or EPS in Sepat. Hence, Petronas prepared tender specification for Sepat EPS. As Petronas was only interested to work with selective few companies including Petrofac Malaysia Ltd, the 2nd Plaintiff negotiated with Petrofac to submit a joint bid for the tender. During the negotiations, Petrofac had been informed that the requirements of the tender fell within the scope of the 2 Patent which have yet to be granted. The 2nd Plaintiff and the Defendant then entered into a Confidentiality and Non-Disclosure Agreement”. However, the negotiations failed and the 2nd Plaintiff did not participate further into the tender. The Defendant on the other hand was awarded the Sepat EPS contract by Petronas. The Defendant argued that they had submitted an alternative proposal to Petronas based on the trial and tested Cendor MOPU (Cendor Field Development Project ­– an earlier project successfully completed by the Defendant in 2006) and that the alternative proposal was not based on the 2 patents on trial and was subsequently accepted by Petronas.

The essential feature of the 3 claims provides that the “wellhead deck” or WHD is “removably attached” to the hull and/or deck frame and the sub-sea conductor frame (SSCF) is “removably attached” to the mat or at least one connecting leg. Emphases were given by both parties to the term “removably attached”. The Defendant advances with the counterclaim regarding the lack of novelty in the 3 claims discussed. According to the defendant, the words “removably attached” must refer to the manner of the attachment and relied on 5 US Patents which have the words “removably attached”. According to the Defendant’s expert witness, the “wellhead deck” or WHD and sub-sea conductor frame (SSCF) are attached to the Sepat MOPU by welding, a commonly used technique in the construction industry, and hence, there is novelty regarding the 3 claims. Furthermore, the Defendant’s argued that if the words “removably attached” in the 3 claims means that the WHD can be removed from the Sepat MOPU by cutting the welds, then the 3 claims have been anticipated by the Cendor MOPU and the Cendor MOPU predated the priority date of the 2 patents. Accordingly, the Defendant is of the view that the inventions in the 3 claims are not new because they have been anticipated by Cendor MOPU. The Plaintiff on the other hand explained that the term refers to the structures designed to have the ability of being removed on some occasion during their design life. The Court was unable to accept the opinion of the Defendant’s expert witness on the meaning of the term “removably attached”. According to the Plaintiff’s expert witness, the WHD and SSCF are building blocks which are initially added to the offshore unit and installed as one unit but the WHD can later be detached from the offshore unit and be used independently by tying the WHD to other production units. Based on the 3 claims discussed, the Court decided that opinion of the Plaintiff’s expert witness supports the meaning of the words “removably attached”.

The Court dependent on the three tests, i.e. the Essential Integers test, the Improver’s test, and the Actavis’ test, to decide if the patent has indeed been infringed. By applying the Essential integers test, the Court decided that the Sepat MOPU has all the essential integers (essential features) of all 3 claims discussed. Based on the improver’s test, the Court has taken view that the Sepat MOPU does not have a material effect on the way the inventions in the 3 claims work and satisfied that the Defendant’s design, fabrication, installation, and use of Sepat MOPU has infringed all 3 claims. By applying the Actavis’ test, the Sepat MOPU achieves substantially the same result in the same way as the inventions in the 3 claims. Therefore, by applying the 3 tests and based on the Plaintiff’s expert opinion, the Court has decided that the Defendant’s use of the method of construction, installation, and operation of Sepat MOPU has infringed Claim 1 of patent no. MY-144898-A and Claim 13 of patent no. MY-145004-A within the meaning of Section 36(1)(a) of the Patents Act 1986 (exploitation of the patented process) and the Defendant’s making, offering for sale, and use of the Sepat MOPU has infringed Claim 1 of patent No. MY-145004-A.

In summary, the Court decided that the 2nd Plaintiff has no right to under Sections 43(1) and 59(1) of the Patents Act 1986 to file a patent infringement action. As the 1st Plaintiff has filed the original action, the 2nd Plaintiff cannot claim for an infringement of the 3 claims discussed. The Court further accepts the opinions of the expert witnesses of the Plaintiff on the meaning of “removably attached’ in the 3 claims. Furthermore, the application of the 3 tests based on the Plaintiff’s expert witnesses shows that the Defendant’s design, construction, installation and use of the Sepat MOPU have infringed all the 3 claims.