That patent litigation (reported here,
here, and here) was meant to be continued, and Nigeria’s civil justice system must not
encourage “patent trolls”, reports Afro-IP’s friend, Chukwuyere Izuogu,
solicitor at Streamsowers & Köhn. Thanks, Chukwuyere, for sharing this thought-provoking piece.
---Start---
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| Nigerian patent troll Source: here |
On Tuesday, 28 January 2014,
the court, in the case of Bedding Holding Limited v. INEC & others, found the
Independent National Electoral Commission (INEC)
liable for infringing the patents belonging to Bedding Holding Limited (BHL). [Afro
Leo couldn't find a website for this patent holder] The patents, granted under the Patent
and Designs Act of 1971 (the Act), relate to the process and application of
Direct Data Capture (DDC) machines for the compilation and collection of
various biometric information.
Background and facts
BHL sued INEC and five others at the Federal High Court (the Court) alleging
infringement of Patent No. RP16642 (relating to Electronic Collapsible Transparent
Ballot Boxes) and Patent No. RP NG/P/2010/202 (in respect of Proof of Address
System/Scheme) (PASS). Both patents will be collectively referred to as the “patents”.
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| Harry Potter patent troll Source: here |
The
court held that the defendants infringed the
patents and consequently made a declaration inter
alia that BHL is entitled to 50% of the total
contract sums, amounting to N17, 258, 820, 000. 00 (Seventeen Billion, Two
Hundred and Fifty Eight Million, Eight Hundred and Twenty Thousand Naira Only)
as the minimum reasonable royalty accruable for the infringement committed by
INEC and the other defendants. [Folks, that’s around $106 million, if
Afro Leo’s calculator is right. Says Afro Leo: Good luck with enforcement! And, what sort of healthcare or education can that buy?]
In this article, I will
set out why I do not agree with this decision. I conclude that it will encourage
patent trolls, which will negatively impact on Nigeria’s nascent tech-ecosystem.
[To read about some developments in the ecosystem, see here, here,
and here]
1. BHL did not identify the particular
claims contained in the patents that were allegedly infringed
Whether
or not a patent is infringed depends on the identification of the claims
contained in the patent, in accordance with Section 6 (2) of the Act. Section
6 (2) of the Act provides that: The scope of the protection conferred by a patent shall be determined by
the terms of the claims; and the description (and the plans and drawings, if any) included in the patent shall be
used to interpret the claims, accordingly
the question of patent infringement will ultimately depend on the
identification of these claims.
According to
Lord Russell in Electric & Musical Industries Ltd v Lissen Ltd (1939) 56 RPC 23, “the function of the claims is to
define clearly and with precision the monopoly claimed so that others may know the exact
boundaries of the area in which, if they venture therein, they will be trespassers”. In Codex
Corporation v Racal-Milgo Ltd [1983] RPC 369 at page 381, the Court of
Appeal held that one should not look only to the essence or principle of a
patent in suit to find an infringement merely because the essence or principle
has been made use of by the alleged infringer.
My review of the decision indicates
that BHL did not identify the particular claim(s) contained in the patents that
were allegedly infringed. It is my view that the failure to
identify the particular claims allegedly infringed makes it impossible to determine
the exact scope of the protection granted by the patents, not to mention of
reaching a definite legal conclusion that the said patents were actually
infringed.
2. BHL did not make a clear showing that
the allegedly infringing DDC machines applies the same process protected by his
patents
BHL
averred in paragraph 19 of its statement of claim that it is “not claiming to have a patent over the
voter’s register per se or the DDC Machines, but the process of the application
of the said DDC machines...and application of the said products to produce the
Voter’s Register”.
Further,
at paragraph 20 of its statement of claim, that: ...inasmuch as the end result is to provide the names, age, sex,
photographs, address, unit, ward, town, local government, state etc of voters,
the process and the combined application of the means of achieving this,
serious infringes on the said process and application of the Plaintiff’s
patents for the compilation and production of the Voter’s Register.
These
averments by BHL brings the patent infringement allegations against the defendants
within the scope of the first part of Section 6 (1) (b) of the Act which states
that: A patent
confers upon the patentee the right to preclude any other person from doing any
of the following acts where the patent has been granted in respect of a
process, the act of applying the process. In other words, in this case, the process patents
owned by BHL can only be infringed by the
act of applying the process.
Beyond the “formulaic
recital” of the basic elements of infringing a process patent under the Act, BHL
did not show by material facts supported by “clear and convincing” evidence on how
the
defendants’ applied the patented process in the deployment of the DCC machines
for the election process, or how the defendants’ conduct in deploying the DCC
machines for the election process is identical to the patented process. Thus,
BHL failed to plead the infringement of his patented process with sufficient
detail.
The Court of Appeal in the case of Arewa Textiles Plc & Others v. Finetex
Limited (2003) 7 NWLR 322 at 351 – 352, had this to say concerning the
infringement of a process patent: The
claim herein being one of process or method and not one of product, it is incumbent
on the [plaintiff] to adduce evidence showing that the first [defendant]
adopted a process similar to its own...
In
the absence of such material facts backed by evidence in this regard, I do not
see how the court could have rightly held that: The plaintiff has established by overwhelming evidence that his patents
rights have been infringed on.
3. The Court misconstrued the
meaning of “new” or “novelty” in the Act
The 1st, 2nd and
4th defendants, in their respective statements of defence, set out
facts challenging the novelty of the patents. They also adduced evidence of
prior art and canvassed legal arguments to sustain this challenge. Accordingly,
the novelty of the patents was thrown up for determination before the court.
Section 1 (2) (a) of the Act states
that an invention is new if it does not form part of the state of the art. Section
1 (3) defines the “art” to mean the art or field of knowledge to which an
invention relates and “the state of the art” means everything
concerning that art or field of knowledge which has been made available to the
public anywhere and at any time whatever (by means of a written or oral
description, by use or in any other way) before the date of the filing of the
patent application relating to the invention... Therefore,
novelty is really a question of whether the invention is “new” or has been
“anticipated” for example, by a previous patent, or by publication or use.
In resolving this issue, the court, in
my humble opinion, wrongly proceeded to affirm the novelty (validity) of the patents
because BHL was able to establish that it owns the patents, whereas the defendants
failed to prove otherwise. In this regard, the court misconstrues novelty to mean proof of existence (or ownership) of a
patent rather than whether the invention (or process) protected by the patent is
new, or is anticipated by prior art.
Conclusion
The precedent set
by this decision, if not challenged, will give rise to a new breed of patent
trolls (Wikipedia defines a patent troll as “…a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees….) who will apply to patent just about
anything patentable under the sun in other to claim ownership to the invention,
rather than proving novelty. This is particularly possible because the Act does
not require patent examiners to conduct substantive examination as to whether
the invention (contained in the patent application) is in fact patentable. [Yes, also South Africa, not so in Kenya for petty patents] This
gives patent trolls the ability to “game” the patent system in Nigeria. Such scenario occurring in Nigeria is likely to retard innovation.
On this basis and for the reasons stated above, it is
necessary that the decision of the court is reviewed by a higher court and that
the Act is urgently reformed to support innovation and protect the nascent
tech-ecosystem in Nigeria.
--Ends--
Leos' questions and commentary
First, is the continent, generally, ready for substantive patent examination? And, is it a good idea in its current stage of development?
What is the difference, if any,
between a “patent troll” and a non-practicing entity (NPE)? Do you consider
them to be a Friend or
a Foe? Do they really
matter? [This is funny: Afro Leo thinks they do matter because there is a law
module at Stanford Law School on ‘patent troll litigation’. On a more
serious note, he points at a
recent study which suggests they’re “killing start-ups” and/or slowing
innovation]
However, this Leo doesn't quite feel that “patent trolls” will be springing
up or flooding into Nigeria anytime soon. To his mind, South Africa, where he understands
that third party litigation funding is pretty decent, seems to be the place for
hunt. So, good luck to any “patent troll” thinking of making easy money or
gaining other strategic advantage from litigating patents under the current civil
justice system in Nigeria. [Afro Leo
understands that a reform is overdue – not least, at the Federal High Court level, where IP disputes
are litigated]
More importantly, it’s time for Nigeria to emulate South Africa, with a specialist profession. This would create a pool of specialist lawyers to pick from when appointing the
IP judges of the future. If that happens, then the next step could see the
creation of a specialist court for resolving IP disputes. Again, Nigeria might
wish to copy Thailand (also here) or even the
UK. Anyway, that’s food for thought for a future civil justice reform in
Nigeria.
Lastly, this Leo just found out, by himself, that
Chukwuyere will be speaking at this year’s NigeriaCom
conference scheduled for 17 – 18 September. You can also pursue Chukwuyere
on Twitter @NairaSolicitor.
Readers, over to you.
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Afro-IP references:
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European
Commission’s study on NPEs coming soon
EU folks’ view on “patent trolls” here;
but are they
really in Europe?
A “patent troll” is hit with legal costs here
Tools to stop “patent trolls” are here
What others can learn from America’s “patent
troll” experience here
How Nigeria can beat “patent trolls” using the EU
formula found here
Wondering why "patent trolls" go to Texas? Answer is here
