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[2014] ZASCA 208
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Marine 3 Technologies Holdings (Pty) Ltd v Afrigroup Investments (Pty) Ltd and Another (0018/14) [2014] ZASCA 208; 2015 (2) SA 387 (SCA); 2014 BIP 104 (SCA) (1 December 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no: 0018/14
Reportable
In
the matter between:
MARINE
3 TECHNOLOGIES HOLDINGS (PTY)
LTD
.............................................
APPELLANT
and
AFRIGROUP
INVESTMENTS (PTY)
LTD
...................................................
FIRST
RESPONDENT
DU
TOIT, HENDRINK
MACHIEL
............................................................
SECOND
RESPONDENT
Neutral
citation:
Marine 3 Technologies
Holdings v Afri-Group Investments
(0018/14)
[2014] ZASCA 208
(1 December 2014)
Bench:
Ponnan and Swain JJA and Mathopo,
Mocumie and Gorven AJJA
Heard:
25 November 2014
Delivered:
1 December 2014
Summary
:
Patents Act 57 of 1978
-
s 61(1)
(d)
–
application for revocation on the ground of alleged inutility of the
Patent.
ORDER
On
appeal from
: North Gauteng Division,
Pretoria (Tuchten J, sitting as the Court of the Commissioner of
Patents)
(1)
The appeal is upheld.
(2)
The order of the court below in the revocation application is set
aside and substituted with the following order:
‘
The
application for the revocation of South African Patent No. 2008/10778
is dismissed.’
JUDGMENT
Ponnan
JA (Swain JA and Mathopo, Mocumie and Gorven AJJA concurring):
[1]
The appellant, Marine 3 Technologies Holdings (Pty) Ltd (Marine 3),
is the patentee of South African Patent Number 2008/10778
(the
patent), issued on 30 June 2010 for a ‘surface active
ingredient composition’. Marine 3 applied for patents for
the
invention in various jurisdictions internationally including
examining jurisdictions such as the USA, the European Community
(EC),
Australia and New Zealand.
[1]
At
the date of the hearing in the court below, patents for the invention
had issued in Australia and New Zealand, but the applications
in the
USA and EC were still pending. The claims in the Australian and
New Zealand issued patents are the same as those in
the patent in
suit.
[2]
The second respondent, Hendrik du Toit (Du Toit), was previously
associated with Marine 3, having approached it to finance the
exploitation of the invention. On 14 November 2008 Du Toit, his alter
ego Afri-Group Investments (Pty) Ltd (Afrigroup) (the first
respondent) and Marine 3 entered into a written distribution
agreement in terms of which Afrigroup became the sole distributor
of
Marine 3`s product range. However, towards the end of 2009 or early
2010 the relationship between the parties soured, apparently
because
Du Toit wanted to market products of Marine 3’s competitors as
well.
[3]
The relationship between the parties deteriorated to such an extent
that litigation, which included an Anton Piller application
and an
application for interim relief to interdict an alleged infringement
of the patent, was launched by Marine 3 against the
respondents.
Those applications were opposed by Afrigroup who, in turn, applied
for the revocation of the patent.
[4]
All three applications served before the Court of the Commissioner of
Patents (per Tuchten J), who found for the respondents
with costs in
all three applications but granted leave to Marine 3 to appeal to
this court.
[5]
Subsequent to the grant of leave to appeal, the parties concluded an
agreement that inter alia recorded:
‘
3.3
This is a judgement in the public interest that cannot be abandoned
by Afri-Group.
3.4
In the light of Marine 3`s appeal to the Supreme Court of Appeal in
respect of the revocation of the relevant patent:
3.4.1
Afri-Group herewith agrees that there is no reason why the Supreme
Court of Appeal, after due consideration, should not find
in favour
of the Appellant; and
3.4.2
Afri-Group will take no further steps nor file any documents in
opposition to Marine 3`s appeal to the Supreme Court of Appeal
and
Marine 3 will not hold Afri-group or any other party liable for any
costs in this regard, whether before the Commissioner of
Patents or
in the Supreme Court of Appeal;
3.4.3
Afri-Group will not oppose any potential amendment of patent no
2008/10778 by Marine 3; and
3.4.4
Afri-Group will not oppose any declaration of validity of patent no
2008/10778.’
[6]
Inasmuch as the judgment of Tuchten J is one
in rem
in that it
affects a public register, Marine 3, notwithstanding the settlement
of the matter, is constrained to proceed with the
appeal because, as
Steyn CJ put it in
Rembrandt Fabrikante en Handelaars (Edms) Bpk v
Gulf Oil Corporation
1963 (3) SA 341
(A) at 348H:
‘
.
. . generally speaking, the existence of an exclusive right to a
trade mark flows from and is dependent upon registration, and
the
nature and extent of such a right is determined by the entries in the
register. The right to a registered trade mark is effectively
assigned, transferred, modified, partly divested of its
exclusiveness, or terminated, by such entries.’ (See
The
Gap Inc v Salt of the Earth Creations (Pty) Ltd
2012
(5) SA 259
(SCA) para 2.)
[7]
In support of the revocation application, Afrigroup contended that
the invention claimed is subject to revocation in terms of
s 61(1) of
the Patents Act 57 of 1978 (the Act), inter alia, because:
(i)
the invention cannot be performed or does not lead to the results and
advantages set out in the complete specification (subsec
d
);
(ii)
the invention is neither novel nor inventive (subsec
c
);
(iii)
the complete specification concerned does not fully describe,
ascertain and, where necessary, illustrate or exemplify the
invention
and the manner in which it is to be performed (subsec
e
); and
(iv)
the claims of the complete specifications concerned are not clear
(subsec
f
(i))
However,
at the hearing of the revocation application, Afrigroup abandoned the
alleged lack of novelty and inventiveness and, save
for the alleged
inutility, Tuchten J found against it in respect of the remaining
grounds.
[8]
In so far as the alleged inutility is concerned, the court below
stated:
‘
But
it is quite another matter whether the invention is useful. The
uncontradicted evidence adduced by the experts on behalf of
the
respondents is that sodium chloride and SLES cannot by any process be
dissolved in the base liquid in the claimed proportions.’
It
accordingly held:
‘
The
evidential material before me establishes that it is not possible to
create a composition in which the base liquid, sodium chloride
and
SLES are present in solution in the given ratios. The attack on the
utility of the patent must therefore succeed.’
The
court granted leave to Marine 3 to apply for the amendment of the
patent to overcome the inutility. The revocation order that
issued
was thus subject to Marine 3`s right in terms of s 61(3) of the Act
to amend the patent to overcome the inutility.
[9]
The patent having been granted, the onus would naturally be on the
person wishing to challenge its validity (
Miller
v Boxes and Shooks (Pty) Ltd
1945 AD
561
at 576). That onus has to be discharged on a balance of
probabilities. The onus of establishing invalidity on the grounds of
inutility
thus rested on Afrigroup. An invention that cannot be
performed is obviously not capable of being used or applied in trade,
industry
or agriculture and will therefore not be patentable and, if
patented, the registration for that invention would be liable to be
revoked.
[10]
Generally the first task of a court in the determination of an issue
such as the present is to construe the claims in the patent
(
Gentiruco AG v Firestone SA (Pty) Ltd
1972 (1) SA 589
(A)).
According to Harms JA (
Monsanto CO v MDB Animal Health (Pty) Ltd
(formerly MD Biologics CC)
2001 (2) SA 887
(SCA) para 8):
'The
rules relating to the interpretation of patents have often been
stated and do not need any reformulation. The problem lies
in their
sensible application in any given case. For present purposes the
following rules as they appear in
Gentiruco
AG v Firestone SA (Pty) Ltd
1972 (1) SA
589
(A) at 614A-616D may be emphasised:
(a)
a specification should be construed
like any other document, subject to the interpreter being mindful of
the objects of a specification
and its several parts;
(b)
the rule of interpretation is to ascertain, not what the inventor or
patentee may have had in mind, but what the language used
in the
specification means, ie what the intention was as conveyed by the
specification, properly construed;
(c)
to ascertain that meaning the words used must be read grammatically
and in their ordinary sense;
(d)
technical words of the art or science involved in the invention must
also be given their ordinary meaning, ie as they are ordinarily
understood in the particular art or science;
(e)
if it appears that a word or expression is used, not in its ordinary
sense, but with some special connotation, it must be given
that
meaning since the specification may occasionally define a particular
word or expression with the intention that it should
bear that
meaning in its body or claims, thereby providing its own dictionary
for its interpretation;
(f)
if a word or expression is susceptible of some flexibility in its
ordinary connotation, it should be interpreted so as to conform
with
and not to be inconsistent with or repugnant to the rest of the
specification; and
(g)
if it appears from reading the specification as a whole that certain
words or expressions in the claims are affected or defined
by what is
said in the body of the specification, the language of the claims
must then be construed accordingly.'
[11]
The patent basically relates to the composition, manufacture and
application of a surface active solution. The invention of
the
patent, a so-called surfactant, is a chemical composition which, when
mixed with water, changes, enhances and improves the
wetting,
emulsification and de-agglomeration properties of water. Surfactants
are compounds that lower the surface tension between
two liquids or
between a liquid and a solid and act as detergents, dust suppression
agents, emulsifiers, foaming agents and dispersants.
The invention
finds application in various and diverse industries, including: (a)
the mining industry, where it is used for dust
control; (b) the fire
fighting industry, where it acts as a suppressant by enhancing
wetting; and (c) the agricultural industry,
where it enhances wetting
and fertilizer penetration.
[12]
Inutility is a question of fact which must
be decided in the circumstances of each case (
Coflexip
SA v Schlumberger Logelco Inc
2001 BIP
1 (CP) at 30H-I). An invention is not useful if it does not
effectively produce the result aimed at or promised by the
specification (
Filta-Matix (Pty) Ltd v
Freudenberg & others
[1997] ZASCA 110
;
1998 (1) SA
606
(SCA) at 612I). In particular, where a claim involves the use as
ingredients of a class of chemical compounds, it is invalid if
any of
these will not work (
Transvaal and
Orange Free State Chamber of Mines v General Electric Co
1967 (2) SA 32
(T) at 63G). To determine the
inutility issue, it is necessary to begin with a consideration of the
meaning of the claims of the
patent. It is apparent from the evidence
and the judgment of the court below that for revocation purposes the
focus was solely
on claim 1. The only issue before this court
therefore is the validity of claim 1 of the patent. Claim 1, which
claims an object,
namely a chemical composition, consists (as the
court below accepted) of the following integers:
‘
(a)
A surface active ingredient composition,
which includes
(b)
a base liquid including water, which has
dispersed therein in percentages by volume:
(i)
Sodium Chloride – 1 to 3%
(ii)
Magnesium ions – 1 to 2%
(iii)
Calcium ions – 1 to 2%
(iv)
Potassium ions -1 to 2%
(v)
Sulphate – 1 to 2%
(vi)
Carbon – 0.5 to 1%
(vii)
Nitrate – 1 to 2% and
(viii)
Phosphate – 1 to 2%;
(c)
wherein the sodium chloride if required,
and sodium alkyl ether sulphate is dissolved in the base liquid,
(d)
with the proportion of the base liquid to
sodium chloride to sodium alkyl ether sulphate being between 1: 1:
1,5 and 1: 1:5.’
[13]
In arriving at its conclusion of inutility the court below laid
particular emphasis on the words ‘dispersed’ and
‘dissolved’. Whilst recourse to authoritative
dictionaries is a permissible and often helpful method available to
courts to ascertain the ordinary meaning of words, judicial
interpretation cannot be undertaken by 'excessive peering at the
language
to be interpreted without sufficient attention to the
contextual scene' (
Fundstrust (Pty) Ltd
(In Liquidation) v Van Deventer
1997
(1) SA 710
(A)
at 726H- 727B).
In
Aktiebolaget Hässle & another v
Triomed (Pty) Ltd
2003 (1) SA 155
(SCA)
para 9,
Nugent JA
stated:
‘
In
Multotec Manufacturing (supra
at 721C - E) Corbett JA observed that a Court should always guard
against “too ''textual'' an approach” in the
interpretation of claims in a patent specification because by
“peering too closely at the language of a claim the Court may
overlook an infringement that takes the substance of the invention”.
While the claim must be construed to ascertain the intention
of the
inventor as conveyed by the language he has used (
Gentiruco
AG v Firestone SA (Pty) Ltd
1972 (1) SA
589
(A) at 614B - C) what is sought by a purposive construction is to
establish what were intended to be the essential elements, or
the
essence, of the invention, which is not to be found by viewing each
word in isolation but rather by viewing them in the context
of the
invention as a whole. To the extent that it might have been
suggested in an
obiter dictum
in
Nampak Products Ltd and Another v
Man-Dirk (Pty) Ltd
1999 (3) SA 708
(SCA) at 714A that it might be called in aid only to construe an
ambiguous claim I do not think that is supported by the decisions
of
this Court and, in my view, it is not correct. It is merely an
approach to construction that is aimed at establishing what was
meant
in a particular context. As pointed out by Hefer JA in
Fundstrust
(Pty) Ltd (in Liquidation) v Van
Deventer
1997
(1) SA 710
(A) at 726H - 727B (in a passage that was adopted in
relation to the construction of patent specifications in
Monsanto
Co v MDB Animal Health (Pty) Ltd (formerly MD Biologics CC)
2001
(2) SA 887
(SCA) at 892B - C):
“
The
task of the interpreter is, after all, to ascertain the meaning of a
word or expression in the particular context of the statute
in
which it appears (
Loryan (Pty) Ltd v
Solarsh Tea and Coffee (Pty) Ltd
1984
(3) SA 834
(W) at 846G
ad fin
).
As a rule every word or expression must be given its ordinary meaning
and in this regard lexical research is useful and at times
indispensible. Occasionally, however, it is not.”’
[14]
In
all cases of
inutility the prime necessity is to construe the claim, and in
construing it one must have regard to the way in which
it would
appeal to the addressee who had to work with such things (
Frank
& Hirsch (Pty) Ltd v Rodi & Wienenberger Aktiengesellschaft
1960 (3) SA 747
(A) at 756E-F). Claim 1 claims a chemical
composition. In order to construe that claim it is necessary to
appreciate that the words
‘dispersed’ and ‘dissolved’
point to the achievement of the claimed features of that product by
means of
a process of manufacture. That process of manufacture is
explained in the body of the specification and in claims 5 and 6. As
Nugent JA pointed out in
Aktiebolaget
Hässle v Triomed (Pty) Ltd
it is
of course permissible to have regard to subsequent claims for the
purposes of interpreting a preceding claim. It is in this
context
that the words dispersed and dissolved must be construed. It must be
remembered as well that those words are employed in
the claims and
the body of the specification in the context of the making of
chemical compounds and in that context technical words
must be given
the meaning as ordinarily understood by an expert skilled in the
particular art or science of the patent
.
And,
because
a patent is addressed to the so called ‘person skilled in the
art’ the court must determine what such a person
would
understand that claim to mean.
Here the
patent in suit addresses itself to an individual with qualifications
and experience in chemistry and analytical chemistry.
[15]
In its judgment the court below held, without elaboration, that the
‘uncontradicted evidence adduced by the experts’
and the
‘evidential material’ before it established that ‘it
is not possible to create . . . [the] composition’
of claim 1.
Accordingly, so the court held, claim 1, and therefore the patent,
was invalid and liable to be revoked. It is not
possible to determine
from the judgment exactly what evidence the court had in mind. The
witnesses gave evidence on affidavit.
Afrigroup relied on the
evidence of Professors Krause and Labuschagne, who are experts in
chemistry. Their evidence focused primarily
on lack of novelty and
lack of clarity. They deal only peripherally with utility, then as
well in the context of the method claimed
in claims 5 and 6 of the
patent. In that regard both contended that the composition cannot be
manufactured by means of the method
of claims 5 and 6 because the
solution of water, sodium chloride and sodium alkyl ether sulphite
(SLES) in the ratios of claim
1 cannot be achieved. Professor Krause
opined that it is not clear that ‘it would be possible to
dissolve the needed sodium
chloride to satisfy the given ratio . . .
in the base liquid’. He added: ‘[s]imilarly the SLES
would not dissolve at
these high amounts. There are different kinds
with more or less ethoxy ether groups but I am quite sure none of
these will dissolve
to this extent . . . . The court below appears to
have agreed with Professors Krause and Labuschagne.
[16]
In restricting the meaning of ‘dissolve’ and ‘disperse’
in the manner that it did, the court below
not only disregarded the
body of the specification but also disregarded the evidence of Marine
3`s experts. It, moreover, ignored
the cautionary words of Corbett CJ
in[zRPz]
Roman Roller CC & another v
Speedmark Holdings (Pty) Ltd
[1995] ZASCA 78
;
1996 (1)
SA 405
(A) at 419D-E that the skilled addressee, had neither to
struggle with the language of the patent nor to adopt an attitude of
‘studied
obtuseness’. Corbett CJ emphasised (at 419F)
that where the words permitted, an interpretation should be adopted
which is
consistent with the description of the problem to be
overcome and the method of doing so described in the body of the
specification’.
The body of the specification clearly
anticipates that the process of the manufacture of the composition of
claim 1 read with claim
5 provides for a concentrated composition
which, if suitably diluted, forms in the order of 0.5 per cent of the
diluted composition.
[17]
Unsurprisingly, Marine 3`s experts, Professors Domb and Du Toit,
disputed the conclusions of Krause and Labuschagne. It is
evident
from Professor Domb`s evidence that ‘the SLES’ referred
to in claim 1 comprises various of the compounds listed
in integer
(b), in particular carbon, sulphate and sodium. And whilst compounds
such as sulphate and sodium chloride would dissociate
completely in
water into hydrated ions
,
solids
such as carbon cannot. Thus whereas some of the compounds listed in
integer (b) and all of the compounds listed in integer
(c) (the
solubles) would dissociate into ions in water, some of those
compounds listed in (b) (the solids) cannot dissociate in
water.
Accordingly, where integer (b) uses the word ‘disperse’
in the base liquid, it is used in the wide sense to
mean that the
solid compounds of that integer are ‘spread, distributed or
divided up’ so as to form a ‘solution’,
namely a
blend, mixture or suspension in the base liquid, and where integer
(c) uses the word ‘dissolved’ it is used
in the wide
sense to mean that the solubles are dissociated into ions in the base
liquid. Professor Domb accordingly stated that
it is possible to form
a uniform dispersion of SLES with water and sodium chloride when
selecting a SLES derivative which is water
miscible at the given
ratios. Turning to Professor du Toit: ‘disperse’, she
explained, notes ‘a phase dispersed
in another phase’.
Accordingly, where claim 1 speaks of a dispersal of the claimed
chemical elements in the base liquid,
it was clearly intended to
broadly define the mixing together of those elements in the base
liquid, uniformly dispersed throughout
the mix.
[18]
The explanation by Professor du Toit of the words ‘disperse’
and ‘dissolve’ as employed in claim 1
and the employment
of the word ‘miscible’ by Professor Domb in the
interpretation of claim 1, are therefore consonant
with the approach
in
Roman Roller.
As
one would expect each of those words do not admit of a single
meaning.
According to the Concise OED (12
ed) the ordinary meaning of the words are:
disperse
- distribute in different directions or over a wide area, thin out
and disappear, denoting a phase dispersed in another
phase
(chemistry);
dissolved
– (with reference to a solid) become or cause to become
incorporated into a liquid so as to form a solution; and
miscible
– forming a homogenous mixture when added together; capable of
being mixed (with something); a substance that will
mix with another.
Whilst
Webster`s Third New International Dictionary defines those words,
inter alia, thus:
disperse
– to cause to become spread widely; to distribute more or less
evenly throughout a liquid, gaseous or solid medium
with the
formation of a two phase system;
dissolve
– to cause to disperse or disappear, to pass into solution; to
break up; and
miscible
– capable of being mixed, capable of mixing in any ratio
without separation of two phases.
[19]
The conclusion by Professors Krause and
Labuschagne
that the surfactant of claim 1 cannot be
manufactured, is strangely not based on any actual attempt by either
of them to manufacture
the compound. It was thus purely theoretical.
The factual evidence that the surfactant of claim 1 had indeed been
in commercial
manufacture and sold under the trademarks M3T, M3T3001
and M3T3005 debunks that theoretical hypothesis. The evidence was
further
to the effect that the respondents were alleged to have
infringed the patent by the manufacture of their own surfactant. The
best
evidence of utility according to
Turner
v Bowman
(1925) 42 RPC 29
at 39, ‘is
the fact that the Defendants, who had something to do with the prior
user . . ., have thought fit to use the machine
which is alleged in
the Particulars of Breaches as an infringement’. Perverse
attempts to show failure, or the choice of
unusual combinations which
will not succeed, is not generally sufficient to support the plea of
non-utility (
Halsbury
(3 ed vol 29 p 124 cited with approval in
Transvaal
and Orange Free State Chamber of Mines v General Electric Co
).
Indeed, as it was put in
Astrazeneca
Canada Inc., Astrazeneca Aktiebolag and Astrazeneca UK Limited v
Apotex Inc. and Apotex Pharmachem Inc.
2014
FC 638
para 83: ‘[i]n essence, an alleged patent satisfies the
requirement of utility if, from the perspective of the skilled person
. . ., its utility is
demonstrated
,
or in the alternative, if its utility is
soundly
predicted
’. It follows that the
appeal must succeed.
[20]
In the result:
(1)
The appeal is upheld.
(2)
The order of the court below in the revocation application is set
aside and substituted with the following order:
‘
The
application for the revocation of South African Patent No. 2008/10778
is dismissed.’
___________
V
PONNAN
For
the Appellant: A J Bester SC
Instructed
by:
Hahn
and Hahn Inc
Pretoria
Mcintyre
& Van der Post
Bloemfontein
[1]
An
examining jurisdiction is one where a patented application is
examined by suitably qualified examiners for formal and substantive
registrability. South Africa is a non-examining country.