16 December 2003

Lorna Brazell

In November 2002 the Patent Office and the Department of Trade and Industry began a public consultation on a range of proposals for inclusion in a Patents Act (Amendment) Bill. On 14 November 2003 the Patent Office produced a summary of these responses and the Government’s conclusions. The main proposals which emerged are described below. Most significantly, two new mechanisms are proposed for obtaining non-legally binding opinions on validity and infringement, which may affect the options available to parties in dispute.

1. Amendment after grant

To date, a patentee wishing to amend a patent after grant in the UK has had to demonstrate that they had not deliberately maintained or asserted an invalid patent. The court or Comptroller of Patents had a discretion to refuse amendment if not satisfied as to the patentee’s conduct. This discretion will be removed so that the conduct of the proprietor will no longer be a factor the court or Comptroller of Patents considers in allowing an amendment, although the substantive effect of the amendment of the patent will continue to be considered (no matter how straightforward it appears to be). To protect against covetous proprietors, conduct will continue to affect recovery of damages.

2. Proposal for post grant re-examination procedure

General provisions will be introduced enabling the Patent Office to perform post-grant re-examination. The procedure is intended to encourage the resolution of validity issues prior to full-scale litigation, thus serving as a tool to encourage settlement. Procedures already exist before the Comptroller and in the courts to obtain a legally binding decision on issues of validity, e.g. through revocation proceedings under section 72 of the Patents Act. For this reason, the post-grant re-examination process is described as a “non-binding assessment of validity” or as a form of “early neutral evaluation of validity”. The result will be a Patent Office opinion.

The procedure is intended to be:

  • a rapid and affordable means to obtain an early assessment of validity and therefore used at the earliest stages of a potential dispute or to better inform the patentee’s decision-making without having subsequent legal consequences;
  • available at the request of any party, including the patentee and even those who do not have a declared interest;
  • based on a reasoned statement, containing the argument to be considered by the Patent Office, along with the patentee’s or third parties’ submissions in response;
  • rejected at the discretion of the Patent Office if, for example, the request is considered vexatious, or if the only issues raised have already been settled in proceedings before the court or Comptroller, or have already been the subject of a validity assessment; and
  • public, through an indication being entered on the Patents Register that such a request has been made, and through the outcome of the assessment being made public.

Given that it is intended to not be legally binding the validity assessment process should not prevent or delay proceedings for revocation or infringement of a patent, although the courts or the Comptroller would be free to stay proceedings pending the outcome, if a stay were considered to be in the interests of resolving the dispute. There will be no bar on raising, in subsequent proceedings, those issues which have been the subject of an opinion.

A request for an opinion should be based on a new case or argument being made. The obvious example is when a new piece of prior art emerges, which results in a new argument on novelty and/or obviousness not considered during the pre-grant phase. However, new arguments based on prior art considered previously, are not excluded. The important question for the Comptroller in deciding whether or not to proceed with the request for an opinion, will be whether a new case had been made.

3. Infringement assessment

A similar mechanism is proposed to enable the Patent Office to perform an infringement assessment and give a non-binding opinion on whether or not a particular act or process infringes a particular patent. A request for an infringement assessment could be made by any party, who need not declare an interest, including the patentee, and based on a written statement containing details of the patent in question and the potentially-infringing object, act or process. The Office would have discretion to reject the request. An opinion on both validity and infringement may be offered on request.

As with the validity assessment procedure, one of the key principles underlying the proposed non-binding procedure is that the Patent Office will be able to consider both sides of the argument before issuing its opinion. The opinion will be based on a consideration of the comments from all interested parties, who must be identified in the requestor’s statement of grounds. The Office may then invite them to comment. The outcome of any infringement assessment should be available to the public.

4. Extension of employee’s entitlement to compensation

An existing provision (section 40 of the Patents Act) provides for an employee who makes an invention over which a patent is granted which is of outstanding benefit to the employer's organisation to be entitled to compensation. This provision has rarely been invoked successfully, and will be amended. Under the amended Act the benefit which can be taken into account includes the benefit flowing from the patented invention rather than merely from the patent itself. The employee will still have to show that the invention (as defined by the patent) is of outstanding benefit, but it will not be necessary to show that such benefit arises solely from the existence of the patent itself. Of course, if the outstanding benefit includes (or consists solely in) a benefit flowing directly from the patent, that will – as now – continue to be taken into account.

5. Enforceability of Patent office damages awards

Under the present system the Patent Office may, with the consent of the defendant, hear infringement proceedings and award damages. This route is never used. To encourage its use, an amendment is proposed to provide a mechanism by which an award of damages, made by the Comptroller of Patents in infringement proceedings, can be enforced in a county court. The Patent Office was also keen to remove the requirement for both parties to consent for infringement proceedings to come before the Comptroller. However, consultation revealed insufficient support for this move.

6. Ammendment to the ‘threats’ provisions

Currently, under section 70 of the Patents Act, a patentee who writes threatening to bring patent infringement proceedings in respect of any act other than a primary infringement (that is, a manufacture or import of a patented product, or use of a patented process) may be sued for any damage caused by the making of the threats. This applies even if the person threatened in respect of secondary acts of infringement (selling, keeping patented products etc) is also carrying out primary acts.

It is proposed to modify this so that, if the recipient of the threat is carrying out primary as well as secondary acts of infringement, it will no longer be possible for them to bring a threats action on the basis of the threat. It is also proposed to permit a patentee to write to a supplier of patented goods asking for details of the source of their supply without such a letter being considered to be an actionable threat, and to permit a patentee to write to the highest identifiable point in the supply chain without risking an action for threats even if that person is only carrying out secondary acts of infringement.

7. Ownership and revocation

Changes are proposed to the provisions on ownership and revocation of patents. For example, the Act will be amended in order to clarify that a patentee can apply to revoke his own patent and that co-owners will be able to seek revocation on any ground, but only if they act jointly. The Act will also be changed to clarify that co-owners can only apply to amend a patent (under s.27 or s.75) if they are acting jointly. However, co-owners will be able to contract out of their rights to act jointly to apply to amend or seek revocation; co-owners will be free to make their own arrangements to suit themselves. This reflects the freedom that co-owners already have to contract out of other provisions on co-ownership, provided for in section 36.

8. Amendments to entitlement procedure

Under the Act as it stands, a patent applicant cannot file a second application for a patent over an invention claiming the filing date of an earlier application, unless the earlier application has been published. It is proposed to remove this restriction. However, where a new application is made with a retrospective filing date, it is proposed that parties who have been working the invention in the interim will be entitled to be granted a licence for a reasonable period and on reasonable terms so that they can continue to work the invention insofar as it is subject to the new application. This will mean that those who have acted in good faith are not put at a disadvantage by this new proposal.

9. Changes to payment dates for renewal fees

It is proposed to amend the Act and Rules in respect of payment dates for renewal fees, which are currently the actual anniversaries of filing, so that the payment deadline will be the last day of the relevant month. The same effective extension will be granted in respect of the six month period for late payment and 19 month period for restoration of a patent which has lapsed through no fault of the proprietor. Other key dates (e.g. the ceasing date or date by which the patent can be marked "licence of right") will remain tied to the anniversary of the filing date.

10. Conclusion/summary

The proposals and responses produced by consultation display a clear desire from all interested parties for simpler, less expensive means of settling disputes and enforcing patent rights. How effective the Patent Acts (Amendment) Bill will be in satisfying this desire will become clearer, once the Bill and any secondary legislation has been drafted. It will be interesting to see how far the proposed amendments affect the role the Patent Office currently plays in disputes between parties. There is a clear attempt to widen access to the Comptroller with a view to enabling low-cost dispute resolution. How much effect such new procedures will actually have on costs remains to be seen. As was pointed out in consultation, the lion’s share of the costs of litigating is made up of costs in the control of the parties themselves, i.e. their legal representatives.

Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.