Patents: misrepresentation and revocation

September 2014 | EXPERT BRIEFING | INTELLECTUAL PROPERTY

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Can you validly amend out of a false misrepresentation? This issue was recently debated before the South African Court of the Commissioner of Patents in the 2013 case of Gallagher Group Ltd v IO Tech Manufacturing (as yet unreported – Kollapen J sitting as Commissioner of Patents).

Section 61(1)(g) of the South African Patents Act 57 of 1978 provides that a patent can be revoked if the patentee’s prescribed declaration: “...contains a false statement or representation which is material and which the patentee knew or ought reasonably to have known was false at the time when the statement or representation was made”.

The prescribed declaration (or Form P3) includes the following statement: “To the best of my/our knowledge and belief, if a patent is granted on the application, there will be no lawful ground for the revocation of the patent”.

In the present case, the infringer reacted to the patentee’s action for infringement by way of counterclaim for the revocation of the patent on various grounds. Strangely, final injunctive relief was granted in contemporaneous proceedings against the infringer, which is presently under appeal. In casu, the infringer as applicant for revocation amended its statement of objection in support of revocation, to which the patentee excepted. The amendment, inter alia, introduced section 61(1)(g) as a further ground for the revocation of the patent in issue. According to the applicant for revocation, the false statement made was that the cited inventor was not the inventor of the invention described in the patent. Prior art disclosures were relied upon in asserting this ground, some of which were oral disclosures during gatherings that the cited inventor had attended.

The patentee countered the exception by relying on, inter alia, a substantive amendment made to the patent subsequent its filing and contended that the grant of this amendment cured the patent of possible invalidity with retrospective effect, bearing in mind that no pronouncement of invalidity had as yet been made. Thus, the complaint by the applicant for revocation – so the argument went – lacked averments necessary to sustain a cause of action.

Kollapen J did not agree with the patentee’s contentions. His reasoning included a comparison of the old Patents Act of 1952, which sanctioned a material misrepresentation made in the entire patent application which has broader scope of application as opposed to the relevant section under the current Act that merely scrutinises the patentee’s declaration. In practice, signature of the patentee’s Form P3 declaration with knowledge of falsity by the patentee (whether innocent or culpable) is what the current section of the Act calls for.

The intention of the legislature under the old Act was to sanction both innocent and culpable misrepresentations. The current Act excludes innocent misrepresentations, and rightly so. The requirements for successful reliance on a section 61(1)(g) attack, namely that the patentee knew or ought reasonably to have known of the falsity, and that the patentee had such knowledge at the time when the misrepresentation was made, has two effects: on the one hand it narrows the scope on which patent revocation proceedings could be launched by excluding innocent representations; and on the other hand it creates a higher bar in order to successfully invoke a claim for patent revocation under section 61(1)(g).

The generosity provided under these sections to a patentee was balanced by the judge following a dictum in a 1963 Appellate Division decision (Bendz v SA Lead Works) where the learned judges of appeal in that decision held that a misrepresentation made in an application for a patent in its pre-amended form can still be used to invalidate the patent post-amendment. Thus, an ex post facto amendment to the claims of the patent could not rescue the patent (once amended) from a 61(1)(g) attack. The deliberate change of stance by the legislature (between the old Act and the current one) makes it difficult for a court to be persuaded to the contrary by a patentee, in weighing up the cogency of a mere amendment that effectively deprives an applicant for revocation of a pre-amendment defence to a claim for infringement.

In obiter, the judge also felt that public policy stands against any remedy that would cure an invalidity hinged upon falsehood, and thereby lend itself to abuse. The patentee’s right to amend its patent application was not disturbed or curtailed. All that was confirmed is that culpable falsities could never be validated, even by way of amendment.

No guidance is given in the decision about what constitutes a ‘material misrepresentation’ that could be relied upon in the future by an applicant for revocation. It could well be argued that a patentee’s failure to deal with material prior art cited under Chapter I PCT proceedings (and hence fall within the patentee’s knowledge) could form the basis for a section 61(1)(g) attack. This may not stick unless the patentee allows an overly broad set of claims to proceed to grant. Amendments made under PCT Chapter II demands for preliminary examination hold the prospect of distancing patentees from allegations of callous or indifferent conduct. Either way, prudent patentees will carefully read the Form P3 and take steps to mitigate future allegations of impropriety by timeously entering amendments in their South African national phase applications where continuing examination processes yield an equivalent claim set that is clear of foreign examiner objections. Of course, discussions with your local patent attorney on these concerns are the best way to mitigate risk.

Muhammed Vally is a patent director at DM Kisch Inc. He can be contacted on +27 11 324 3080 or by email: muhammedv@dmkisch.com.

Muhammed Vally

DM Kisch Inc.