25 February, 2019
This decision focuses on whether the High Court has original jurisdiction to hear applications for patent revocations brought by way of defence and counterclaim in infringement proceedings.
The respondent commenced High Court proceedings claiming that the appellants jointly or severally infringed 8 out of 12 claims in a Singapore patent in respect of a power grid system and a method of determining power consumption at building connections in the system. The appellants denied the allegations and sought in its defence and counterclaim a declaration of the patent’s invalidity and that the patent be revoked. The respondent asserted that the appellant could not put in issue the validity of any of the claims of the patent by way of counterclaim in infringement proceedings.
The Court of Appeal disagreed with the High Court Judge’s decision that the High Court lacks original jurisdiction in all cases to hear applications for the revocation of a patent. It held that where there are independent claims of which the validity has not been disputed and which can be maintained without invalid claims, the High Court should not revoke the patent, but instead may allow the proprietor to amend the specification in a manner and subject to such terms as the court thinks fit. However, for applications brought independently of infringement proceedings, the High Court does not have jurisdiction to determine the validity of the patent and original jurisdictional vests exclusively in the Registrar.
The Court of Appeal's decision provides useful guidance to future patent litigants on the proper forum in which patent revocations may be sought and on how pleadings should be framed when challenging the validity of a patent by way of defence and counterclaim in patent infringement proceedings.
Facts
The Respondent, Sun Electric Pte Ltd ("Sun Electric"), retails solar energy to consumers in Singapore. It is the registered proprietor of a Singapore patent in respect of a power grid system and a method of determining power consumption at building connections in the system ("Patent"). The first appellant, Sunseap Group Pte Ltd, is the parent and holding company of the second and third appellants. The second appellant, Sunseap Energy Pte Ltd, is a licensed electricity retailer while the third appellant, Sunseap Leasing Pte Ltd, develops and manages rooftop solar photovoltaic systems (collectively, "Sunseap").
Sun Electric commenced High Court proceedings in November 2016 claiming that Sunseap jointly or severally infringed 8 out of 12 claims in the Patent ("Asserted Claims"; the remaining claims are referred to as the "Unasserted Claims"). Sunseap denied all allegations. Sunseap sought in its defence and counterclaim ("D&CC"), among other relief, a declaration of the Patent's invalidity and an order that the Patent be revoked. Sun Electric subsequently applied to strike out certain portions of Sunseap's D&CC. In effect, Sun Electric asserted that Sunseap could not put in issue the validity of any of the claims of the Patent by way of counterclaim in infringement proceedings.
This issue was heard before the Assistant Registrar ("AR"), who held that the validity of the Unasserted Claims could not be put in issue by way of defence in infringement proceedings. Furthermore, revocation proceedings could be commenced in the High Court at first instance, particularly where infringement proceedings are already before the High Court and revocation proceedings are brought by way of counterclaim. Sunseap was thus entitled to put in issue the validity of both the Asserted Claims (by way of defence) and the Unasserted Claims (by way of counterclaim) in infringement proceedings before the High Court. Sun Electric appealed to the High Court Judge against this aspect of the AR's decision.
The High Court Judge ("Judge") held that in the absence of express statutory provisions conferring original jurisdiction on the High Court to hear revocation proceedings by way of application, or to grant a prayer for revocation whether or not by way of counterclaim in infringement proceedings, the High Court has no jurisdiction because such an order is in rem in nature. Without such jurisdiction, no powers of the Registrar of Patents in respect of revocation applications under section 80 of the Patents Act ("PA"), including the power to revoke a patent, could vest in the High Court. Accordingly, the Judge allowed Sun Electric's appeal and proceeded to strike out Sunseap's prayer for revocation. Sunseap then appeal to the Court of Appeal.
Decision
The Court of Appeal disagreed that the High Court lacks original jurisdiction in all cases to hear applications for the revocation of a patent. In this regard, the PA envisages two categories of cases that are to be dealt with differently.
(i) First category – defence and counterclaim in infringement proceedings
The first category concerns applications for revocation brought by way of defence and counterclaim in infringement proceedings. In this instance, the Court of Appeal found, contrary to the Judge's position, that the PA confers original jurisdiction on the High Court to determine the validity of a patent.
The Court of Appeal observed that pursuant to section 82(1)(a) of the PA, a defendant in infringement proceedings under section 67 is entitled to challenge the validity of the patent by way of defence. Whilst section 82(1)(a) did not, by itself, confer original jurisdiction on the High Court, section 67(1) expressly refers to infringement proceedings brought in "the court".
Given that a defendant may only put validity in issue by way of defence in infringement proceedings, it follows that only the validity of asserted claims may be put in issue. The High Court's power to revoke a patent could be exercised where all the claims or all the independent claims in the patent are found to be invalid.
In cases where there are independent claims of which the validity has not been disputed and which can be maintained without the invalid claims, the High Court should not revoke the patent, but instead may allow the proprietor to amend the specification in a manner and subject to such terms as the court thinks fit.
(i) Second category – applications independent of infringement proceedings
The second category concerns applications for revocation brought independently of infringement proceedings, where the applicant challenges the validity of the patent and seeks revocation of the patent. The Court of Appeal found that in this instance, the High Court does not have jurisdiction to determine the validity of the patent, which is expressly excluded by section 82(2) read with section 82(1) of the PA. The Court of Appeal clarified that original jurisdiction to determine the validity of the patent in this category of cases vests exclusively in the Registrar.
(iii) In rem jurisdiction
The Court of Appeal disagreed that the High Court requires in rem jurisdiction before it can make an order with in rem effect, and held that an in rem judgement can arise equally in an in personam action. On the facts, the Court of Appeal found that the High Court has jurisdiction to determine the validity of the Patent and if invalidity was established, the court could exercise the power to revoke the Patent.
Comment
The Court of Appeal's decision provides useful guidance to future patent litigants on the proper forum in which patent revocations may be sought and on how pleadings should be framed when challenging the validity of a patent by way of defence and counterclaim in patent infringement proceedings.
For further information, please contact:
Andy Leck, Principal, Baker & McKenzie.Wong & Leow
andy.leck@bakermckenzie.com
