YKL Engineering Sdn Bhd (hereinafter referred to as “the Appellant”) V Sungai Kahang Palm Oil Sdn Bhd (hereinafter referred to as “the 1st Respondent”) & Profina Teknik Sdn. Bhd. (hereinafter referred to as “the 2nd Respondent”) is a case which revolves around patent and copyright infringement issues.
The Appellant is involved in the business of designing and manufacturing equipment for palm oil processing. The 1st Defendant is a palm oil factory operator and the 2nd Defendant is involved in the business of manufacturing and maintenance of machinery in palm oil mills.
The Appellant is the owner of Malaysian Patent No. MY-139512-A (hereinafter referred to as “the Appellant’s Patent”) which relates to a machine used in the oil palm industry known as the Fruit Bunch Splitter (hereinafter referred to as “the FBS”) and the design drawings relating to the FBS and its component parts (hereinafter referred to as “the Design Drawings”).
The Appellant had earlier initiated a patent infringement action against the 1st and 2nd Respondents in the High Court (hereinafter referred to as “the HC”) alleging that the 1st Respondent was using two units of FBS in its factory which was a reproduction of the FBS and 1st Respondent had caused the 2nd Respondent to reproduce the FBS. The Appellant also claimed ownership over the copyright subsisting in the Design Drawings and sued the Respondent’s for infringement of its copyright.
In response, the Respondents counterclaimed for invalidation of the Appellant’s Patent on the grounds of lack of novelty and lack of an inventive step. Further the Respondents asserted that copyright does not subsist in the Design Drawings and hence there would be no copyright infringement.
The HC found in favour of the Appellant and the aggrieved Respondents then appealed to the Court of Appeal (hereinafter referred to as “the CoA”) which reversed the finding of the HC and found in favour of the Respondents. The Appellant then appealed to the Federal Court (hereinafter referred to as “the FC”) which revisited the decisions of the HC and the CoA and found in favour of the Appellant for claims relating to the patent and copyright infringement issues.
The FC in its decision gave clarity to principle of questions of law in patent and copyright infringement actions.
Pleadings on Prior Art
In this case, the 1st and 2nd Respondents relied on a prior art that was pleaded by the 1st and 2nd Respondents and another prior art which was not pleaded by the 1st and 2nd Respondents in applying to revoke the Appellant’s Patent. The FC was asked to clarify on whether a prior art that was pleaded by the 1st and 2nd Respondents and the other prior art which was not pleaded by the 1st and 2nd Respondents can be legally used to revoke the Appellant’s Patent.
Among the question the FC had to decide was whether in action to invalidate a patent, a prior art relied upon to establish lack of novelty of a patent must be specifically pleaded, and if not specifically pleaded, whether evidence in relation to the prior art may be admissible.
The FC held that a prior art relied on to establish lack of novelty of a patent must specifically pleaded and evidence in relations to it is inadmissible if it is not specifically pleaded.
In reaching it decision the FC cognized unlike in other jurisdictions such as the United Kingdom, Australia and Singapore there are no specific provisions in the Patent Act 1983 (hereinafter referred to as “the PA 1983”) and Patents Regulations 1986 ( hereinafter referred to as “the PR 1986”) which deal with pleadings of prior art.
In absence of specific provisions in the relevant piece of legislations which govern patent, the FC referred to Order 18 rule 7(1) of the Rules of Court 2012 (hereinafter referred to as “ROC 2012”), which governs the general principles of pleadings which states that “every pleading shall contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement shall be as brief as the nature of the case admits
The FC then went on to decide if prior art was a material fact that must be specifically pleaded.
Referring to a plethora of cases the FC held that in a patent invalidation action based on lack of inventiveness and novelty, expert witnesses are required to assist the Court by providing their opinion on the relevant prior art. The FC emphasized the validity of a patent must be assessed by the Court with the aid of an expert witness.
In light of this the prior art should be particularized in the pleading to enable the Appellant and the 1st and 2nd Respondents and their experts to study the prior art and to meet the case which is intended to be proved against them and that there may be no taking by surprise. The FC held that non-pleading of the prior art would lead to unfairness and be prejudicial to the other party.
Accordingly, the FC held that prior art was a material fact which needed to be specifically pleaded and in absence of pleading of the prior art the evidence in relation to it is inadmissible.
Can the FC rely on a prior art rejected by a previous decision of another panel of the CoA in the same case?
On the facts of the case, during the trial of the case the Appellant objected to the admissibility of the prior art at the HC to which the Respondents applied leave to amend the Defence and counterclaim to specifically plead the prior art. The Appellant objected and the application was dismissed by the HC. The Respondents then appealed to CoA which upheld the HC’s decision.
Despite the CoA’s prior decision in not allowing the Respondents’ application to reamend their pleadings, the CoA in the current matter had admitted and relied on the non-pleaded prior art against the Appellant’s Patent.
The Appellant contended that the CoA in the instant case had contravened the principle of res judicate prejudicing the Appellant when it disregarded its previous decision in the same case by allowing the prior art to be admitted.
The FC agreeing with the contention of the Appellant held that the decision of the CoA concerning the prior art is final and could not be re-opened by the CoA at a later stage during appeal proper as this would amount to contravention of the principle of res judicate.
A decision made by a Court at one stage on a given matter is binding on it at a later stage in the same or subsequent suit. It is irrelevant if the earlier decision was made at an interlocutory stage. The decision is binding both on the Court and the parties.
Scope of the ‘public disclosure’ requirement under section 14(2)(a) of the PA 1983 to invalidate a registered patent
The FC had to also decide if Section 14(2)(a) of the PA 1983 on public disclosure applies where there is unauthorized public disclosure of the invention and whether a patent could be invalidated on ground of anticipation pursuant to Section 14(2)(a) of the PA 1983 if there is unauthorized public disclosure.
The FC referred to Section 14(1) of the PA 1983 which stipulates that an invention is new if it is not anticipated by prior art and Section 14(2) PA 1983 which defines “prior art” as consisting of “everything disclosed to the public, anywhere in the world, by written publication, by oral disclosure, by use or any other way, prior to the priority date of the patent application claiming the invention”.
The FC held for an invention to be patentable, it must be new or novel and has never been disclosed to the public in within the meaning of Section 14(2)(a) of the PA 1983.
The FC then when on to decide what amounts to public disclosure public in the sense set out in section 14(2)(a) of the PA 1983.
Drawing guidance from earlier decided cases, the FC held that in order to amount to public disclosure the information (whether in documentary form or the invention itself) has been communicated or made available to at least one member of the public who is free in law and equity to use it. That information would amount to a prior art. The exception to this is where such information is communicated under obligation confidence, where the recipient will not be in law or equity to use it.
The FC further held that the public disclosure must be such that to enable the claimed invention to be anticipated. A prior art is considered to have anticipated a claimed invention if there is sufficient information divulged to the public which would enable the recipient of the information to be able to reproduce the invention.
Do courts need to construe and decide on the validity of the dependent claims separately even if the independent claim is adjudged to be invalid?
The FC was also poised with the question of whether courts have a legal duty to examine each dependent claim separately when the independent claim is declared to be invalid.
The FC referring to its decision in Merck Sharp & Dohme Coro & Anor v Hovid Bhd [2019] 12 MLJ 66 , affirmatively held that even if the independent claim is found to be invalid, the Courts must still construe and decide on the validity of the dependent claims separately.
Decision
The FC held that the Appellant’s Patent was invalid as the invention claimed in the Appellant’s Patent was not novel and inventive over the pleaded prior art. Although the FC did not touch on the infringement of the Appellant’s Patent, the mere fact that the Appellant’s Patent had been revoked, the 1st and 2nd Respondent cannot be held to be infringing the Appellant’s Patent.
Copyright
The FC also had to decide if copyright subsisted in the Design Drawings.
The Appellant contended that the Design Drawings were created by its employees, who put in sufficient effort to render its original in character as required by the Copyright Act 1987 (hereinafter referred to as “the CA 1987”).
The Respondents however opined no copyright subsisted in the Design Drawings as they were not original. The Respondent alleged that there had been existing prior literatures which the Appellant had copied from before they came up with the Design Drawings.
The FC looked at both the Appellant’s and Respondents’ contentions and held it is well settled in law that the test applicable to decide on the subsistence of the copyright is not “newness” or “novelty”.
The FC held essentially to decide if copyright exist, reference must be made to Section 7 of the CA 1987 which in summary provides that for copyright to exist the work must be
- original;
- complies with the requirement as to form;
- belongs to one of the categories of protected works; and
- complies with the qualifications for copyright.
A work is entitled for copyright protection regardless of its quality or purpose of creation once the requirements set out in Section 7 of the CA 1987 is met.
The FC went on to dissect the concept of originality and referring to earlier decided cases held that that it was not a requirement for the expression to be in an original or novel form before a copyright can be said to subsist.
The paramount consideration to consider if a work is original in accordance with CA 1987 is that if sufficient efforts have been expended to render the work original. This can be deciphered from the effort expended in terms of time, labour, and skills to render the same original.
Accordingly, the FC held on the facts of the case there were substantive efforts made by the Appellant to entitle itself to the subsistence of copyright in the Design Drawings.
Having found that Appellant’s work was copyrighted the FC went on to decide on if there was infringement of copyright despite the question of law posed in the Appeal does not relate to copyright infringement.
The FC opined the finding of copyright existed would be meaningless if it the consequence of the finding is not explored. The FC referring to earlier decided cases held that it is not bound to limit itself to the framed issue and may deal with any matter which it considers relevant for the purpose of doing justice in accordance with the substantial merits of a particular case.
The FC held that copyright infringement is governed by Section 36 of the CA 1987 read together with section 13(1) of the CA 1987. Section 36 of the CA 1987 provides that copyright is infringed by “any person who does, or causes any other persons to do, without the license of the owner of the copyright an act, the doing of which is controlled by copyright under the Act.”
The acts controlled by copyright law under the CA 1987 are provided in section 13(1) which gives the exclusive right against:
(a) the reproduction in any material form;
(b) the distribution of copies to the public by sale or other transfer of ownership; of the whole work or a substantial part thereof, either in its original or derivative form.
The FC also held is it well established from decided case laws that three elements are required for establishing copyright infringement namely:-
- a) there is sufficient objective similarity between the original work or a substantial part thereof, and the infringing copy;
- b) there is a causal connection between the original work and the infringing copy, that is, the infringing copy must have been copied from the original work, whether directly or indirectly; and
- c) what has been infringed must constitute a substantial part of the original work.
All the three elements need to be established to establish copyright infringement.
Decision
Applying the three elements to the facts of the case the FC opined that the Appellant failed to establish that there was copyright infringement.
Important to note
In reaching its decision the FC also held that it was the duty of the court to examine and evaluate, on evidence, the distinct materials and features of both works in question. Essential features and other related elements must be decided based on evidence and not by referring to pleadings alone.
The FC went into great details dissecting the finding of the HC and the CoA to give clarity and fill the gaps in patent and copyright infringement cases. The FC certainly has provided answer especially in issues relating to pleading of prior art in patent infringement cases, res judicata, assessment of dependent and independent claims as well as the concept of “originality” in copyright cases. The decision of the FC is certainly a welcoming decision which would serve as a guide and reference for future cases.