Thursday, 3 April 2008

Sanitam episode 2 - another injunction

In Sanitam Services Limited v Bins (Nairobi) Services Limited, civil suit 597 of 2007 (unreported,) Sanitam has obtained an interlocutory injunction against Bins restraining the defendant from a host of activities against Sanitam’s patent number AP 773. This High Court judgment, Kimaru J, is dated 20th February 2008.

The order states that, pending the hearing and determination of the suit, the defendant and its servants are restrained from,

  • Providing services using the patented bin
  • Offering for sale or selling the patented bin
  • passing off the foot operated bin as theirs
  • trading in Kenya in any manner likely to cause their business to be confused with that of Sanitam
  • trading in any manner as to infringe patent no, AP 773
  • passing off their business of foot operated sanitary bins as that of the plaintiff

This is the second injunction to issue for Sanitam. The first was against Rentokil in Sanitam Services (E.A.) Ltd v Rentokil Kenya Ltd & another [2006] eKLR, in which the Court of Appeal restrained Rentokil from infringing the same patent, AP 773. The said patent relates to a foot operated sanitary bin. Sanitam applied for the patent on 4th September 1998 in ARIPO and the patent was subsequently granted on 25th October 1999.

Sanitam has fought many battles before the Courts to prevent infringement of the patent. In April 1999, before the grant of the patent, it unsuccessfully sought temporary injunction against Rentokil. After the grant of the patent, it again unsuccessfully sought the same orders in 2000. Thereafter the matter went for full hearing in which the High Court ruled in 2002, Sanitam Services (ea) Limited V Rentokil (k) limited [2002] eKLR, that Sanitam had not proved infringement.

Sanitam appealed against the decision of the High Court and it partially succeeded in the Court of Appeal (in 2006) in obtaining an injunction for the lifetime of the patent with effect from 16th December 1999, the date when Sanitam submitted an amended plaint to take account of the granted patent. However, the Court of Appeal did not award damages, ruling that, “[h]aving so found on the issue of infringement, it was unnecessary to examine the hypothetical issue relating to damages.” It may not be surprising that this is the first case on patent infringement in Kenya to go through the ranks all the way to the Court of Appeal.

After the Judgment against Rentokil in 2006, ARIPO published an entry in its Journal to the effect that the patent had lapsed for failure to pay annual fees. Sanitam then sought the intervention of the Board of Appeal, which ultimately overturned ARIPO’s decision and reinstated the patent on the register.

The present case, against Bins, is quite interesting and demonstrates the complexity of resolving intellectual property disputes and it kind of echoes the sentiments expressed by the Court of Appeal in the Rentokil case that it is “…a branch of law which has scanty litigation and therefore minimal jurisprudential corpus in this country...”

For example, the orders sought by the plaintiff included passing off and damage of goodwill, which ordinarily are trade mark issues. It is telling that the counsel for the plaintiff made submission to the effect that “a case relating to patent was similar to that of protection of trade marks.” However, it is not clear how or to what extent that relationship holds but it may be because the practitioners are more conversant with trade marks disputes which are legion, and this probably explains the tendency to extrapolate from experience of familiar territory.

The defendant argued that:

  • The existence and efficacy of the patent was doubtful (perhaps alluding to the removal and restoration of the patent from the register).
  • The plaintiff had not demonstrated that it had invented the bin.
  • The patent was meant to muzzle the legitimate activities and honest business activities of the defendant.
  • The plaintiff had not demonstrated that the patent was its invention.
  • The plaintiff had registered the patent to achieve a technical result-to lock out other users of the sanitary bin from the market.
  • Similar bins were in use in many parts of the world and the defendant had imported the bin it was issuing to its customers.
  • It was in the process of challenging the registration of the patent.

As one would expect, this thread of argument by the defendant did not offer a lifeline, and the court was convinced that the law did not back the contention by the defendant that it was not bound to respect the patent.

The court concluded that the issue to be determined was not whether the patent was wrongly registered but whether the plaintiff had established a case to entitle the court grant the orders sought. As such, the court distilled three principles needed to support an injunction; namely, that applicant was required to demonstrate,
(1) probability of success at trial; and
(2) that damages would not adequately compensate for the loss suffered and
(3) consideration by the court balance of convenience in case of doubt on either (1) or (2).

In the circumstances, the court made a finding that the plaintiff had proved it had a valid patent, which was infringed by the defendant by the acts of offering for sale or hire foot operated sanitary bins without authorization of the plaintiff. Apparently, the Rentokil case considerably influenced the decision to grant the injunction, with the court holding that the two cases were similar.

The court further observed that if the defendant considered that the patent was wrongly registered it could apply for invalidation or revocation of the patent under section 103 of the Industrial Property Act, 2001(Act) and that it could also seek exclusion of application of the patent in Kenya under section 59 of the Act.

While the observation on revocation under section 103 is correct, it does appear that the court was wrong in stating that the defendant could seek exclusion, under section 59 of the Act, of the application of a patent in Kenya where the patent is registered by ARIPO.

Section 59 provides that:
A patent, in respect of which Kenya is a designated state, granted by ARIPO by virtue of the ARIPO Protocol shall have the same effect in Kenya as a patent granted under this Act except where the Managing Director communicates to ARIPO, in respect of the application thereof, a decision in accordance with the provisions of the Protocol that if a patent is granted by ARIPO, that patent shall have no effect in Kenya.

First, the word “application” in section 59, does not mean “application of a patent in Kenya” as stated by the court, rather it is in reference to a “patent application”. This is so because once ARIPO makes a decision that an invention is patentable, before granting the patent, it has to communicate the decision to member states (meaning heads of the respective patent offices), who determine whether the patent will have effect in their country.

Secondly, under the section it is only the Managing Director who is mandated to communicate a decision to ARIPO that the patent if granted will not have effect in Kenya. There is no provision in the Act for an aggrieved person to seek exclusion of an ARIPO patent based on section 59.

Thirdly, section 59 is only applicable before grant of a patent not after grant, as is the present case.

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