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[2013] ZASCA 180
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I O Tech Manufacturing (Pty) Ltd and Others v Gallagher Group Ltd and Another (872/12) [2013] ZASCA 180; [2014] 2 All SA 134 (SCA); 2013 BIP 138 (SCA) (29 November 2013)
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 872/12
Reportable
In
the matter between:
I O TECH MANUFACTURING
(PTY) LTD
………………………………………
FIRST APPELLANT
NEMTEK (PTY)
LTD
…………………………………………………………….
SECOND APPELLANT
NEMTEK CONTRACTING
(PTY) LTD
………………………….………………..
THIRD APPELLANT
And
GALLAGHER
GROUP LTD
………………………………………………..
FIRST
RESPONDENT
GALLAGHER
POWER FENCE (SA) (PTY) LTD
…………………….
SECOND
RESPONDENT
Neutral
citation
: I O Tech Manufacturing (Pty) Ltd v Gallagher Group Ltd
(872/12)
[2013] ZASCA 180
(29 November 2013)
Coram
:
Navsa ADP, Ponnan and Bosielo JJA and Van der Merwe and Swain AJJA
Heard
: 18 November
2013
Delivered
: 29
November 2013
Summary: Patent —
infringement not proven — documentary evidence inadmissible —
purported expert evidence of no
probative value — in any event
not all essential integers of the claims of the patent proved to have
been taken.
ORDER
On appeal from
:
The Court of the Commissioner of Patents (Legodi J):
1.
The appeal is upheld with costs, including the costs of two
counsel where so employed, but excluding twenty per cent of the costs
relating to the preparation of the record of appeal.
2.
The order of the court a quo is set aside and replaced with
the following:
‘
The plaintiffs’
claim is dismissed with costs.’
JUDGMENT
Van
der Merwe AJA (Navsa ADP, Ponnan and Bosielo JJA and Swain AJA):
[1]
The first respondent, Gallagher Group Ltd, is the proprietor
of South African Patent no 96/6799 entitled ‘Safety Operation
for a Security Device’ (the patent). The second respondent,
Gallagher Power Fence (SA) (Pty) Ltd, is the holder of an exclusive
licence granted by the first respondent under the patent for the
territory of Southern Africa. The first appellant, I O Tech
Manufacturing
(Pty) Ltd, primarily manufactures energisers for use in
the electrification of security fences. According to their plea, the
second
appellant, Nemtek (Pty) Ltd, and the third appellant, Nemtek
Contracting (Pty) Ltd, sell energisers for this purpose.
[2]
The respondents instituted a patent infringement action
against the appellants in the Court of the Commissioner of Patents,
relying
on direct and indirect infringement of the patent by the
appellants. The appellants counterclaimed for revocation of the
patent,
but at their instance the counterclaim was postponed sine
die. Consequently only the issue of infringement had to be determined
at the hearing of the action. The Commissioner (Legodi J) granted the
interdictory relief claimed by the respondents and ordered
delivery
up of infringing articles in rather unclear terms, deferment of an
inquiry into damages and payment of costs, including
the costs of two
counsel, by all three appellants. Leave to appeal was granted by this
court.
[3]
The issue is whether the respondents proved direct
infringement of the patent by the appellants. In this regard
s 45(1)
of the
Patents Act 57 of 1978
provides as follows:
‘
(1) The effect of
a patent shall be to grant to the patentee in the Republic, subject
to the provisions of this Act, for the duration
of the patent, the
right to exclude other persons from making, using, exercising,
disposing or offering to dispose of, or importing
the invention, so
that he or she shall have and enjoy the whole profit and advantage
accruing by reason of the invention.’
[4]
The test for infringement
under
s 45(1)
was authoritatively stated as follows in
Johnson
& Johnson (Proprietary) Limited v Kimberly-Clark Corporation and
Kimberly-Clark of South Africa (Proprietary) Limited
1985
BP 126 (A) at 130G-131B:
‘
The determination
of the question of infringement involves a two-stage inquiry:
firstly, the claims must be properly construed,
including the
ascertainment of the essential integers; then the infringing article
or process must be considered — to constitute
infringement the
article or process must take each and every one of the essential
integers of at least one of the claims. If it
does not, there is no
infringement.’
And this court has on
more than one occasion cited the following statement of Diplock LJ in
Rodi & Wienenberger A G v Henry
Showell Ltd
1966 RPC 441
(CA) at
467 with approval:
‘
If the language
which the patentee has used in the claims which follow the
description upon its true construction specifies a number
of elements
or integers acting in a particular relation to one another as
constituting the essential features of his claim, the
monopoly which
he obtains is for that specified combination of elements or integers
so acting in relation to one another —
and for nothing else.
There is no infringement of his monopoly unless each and every one of
such elements is present in the process
or article which is alleged
to infringe his patent and such elements also act in relation to one
another in the manner claimed.’
See
Raubenheimer & another v Kreepy Krauly (Pty) Ltd &
another
1987 (2) SA 650
(A) at
656I-657A and
Camworth Technologies Ltd v Videx Wire
Products (Pty) Ltd t/a
Videx Mining Products (702/12)
[2013] ZASCA 112
(17 September 2013).
[5]
The specification of the patent describes the background art
and the nature of the invention. It states that it is common in
security
systems to have a number of electric fence energisers
operating on different conductive lines which combine to form a
perimeter
fence. Safety regulations have over the years been enacted
which limit the frequency and magnitude of energy pulses that can be
delivered by electric fence energisers. This is to ensure that if a
person or animal touches or falls against the fence and for
whatever
reason remains there, the electrical energy received by that person
or animal is unlikely to permanently damage them.
When security
electric fence systems have two or more energisers, a problem can
occur where at a junction between the conductive
lines a person can
receive a pulse having a greater magnitude than generated singly by
an energiser. A junction in this context
means any region where a
person or animal can simultaneously touch conductive lines connected
to separate electric fence energisers.
The solution to this problem
offered by the invention of the patent is that if the operation of
the energisers are co-ordinated
with each other, the effective pulses
on the electric fence will at all times be regulated and thus fall
within the safety regulations
or whatever parameters are desired by
the operator or designer of the security system. It is stated in the
specification that the
electronics of timing the pulses of electric
fence energisers are not accurate enough to ensure that energisers
firing independently
in a co-ordinated pattern will continue doing so
over a period of time. The invention provides a means of
communication which ensures
that the firing of the energisers is
co-ordinated. With the invention co-ordinated firing between
energisers ensures that there
will be the same timed difference
between all pulses on a fence at the junctions, thus eliminating the
chance of a greater magnitude
shock.
[6]
The patent comprises four claims. In the court a quo the
respondents relied only on claims 1 and 2 thereof. It is common cause
that
the integers of claims 1 and 2 are as follows:
Claim 1
A
method of transmitting energy pulses on a conductive system where
such a system includes:
(I)
-
two or more conductive lines
(ii)
-
one or more pulse generators capable of transmitting an energy
pulse along each conductive line, and
(iii)
-
junction points where the conductive lines are in close physical
proximity to each other
(iv)
-
the method is characterised by the step of:
(a)
-
co-ordinating the operation of the energy pulse generators to
ensure that the effective pulses in the vicinity of a junction
point of a conductive line are within a predetermined
1
-
pulse rate and
2
-
magnitude range
(v)
-
whereby pulse production is co-ordinated with a timing means
included in each generator, wherein the timing means determines
at
what times pulses are produced by a pulse generator, and
(vi)
-
wherein there is provided a central control unit capable of
transmitting a synchronisation signal to each pulse generator,
said synchronisation signal acting to reset the timing means
associated with each pulse generator
Claim
2 (as above, plus)
(vii)
-
said pulse generators operating independently until said timing
means receive a further synchronisation signal to reset
them.
[7]
A pulse generator is also referred to as an energiser. The
parties are agreed that these integers are all essential integers. I
therefore agree with the appellants that the invention comprises a
combination of physical components and method steps, acting in
a
particular relation to one another, which constitute the essential
features of the claims.
[8]
It is common cause that the first appellant manufactures and
the second appellant sells the Merlin Stealth model M25S master and
slave energisers (the Merlin energisers). The Merlin energisers were
the central focus of the respondents’ case in the court
a quo.
The respondents’ case rested on documentation allegedly
pertaining to the Merlin energisers and tests performed on
them by Mr
J T Raubenheimer, the only witness for the respondents at the trial.
The appellants closed their case without adducing
any evidence.
[9]
Despite the fact that in evidence Mr Raubenheimer was asked to
simply read portions of documents alleged to pertain to the Merlin
energisers into the record, the respondents and the court a quo
relied on the truth of the contents of those documents. Before
us the
respondents relied solely on alleged Merlin energiser user manuals
and it is therefore only necessary to deal with them.
Mr Raubenheimer
testified that these manuals were obtained by him when he purchased a
set of Merlin master and slave energisers
but that he may have
downloaded some of the manuals from the internet. On either basis the
manuals were inadmissible as evidence
because their authenticity had
not been proved. The Merlin energiser master and slave set was
purchased by Mr Raubenheimer from
Unitrade 558 (Pty) Ltd t/a Nemtek
Security Warehouse (Unitrade). There is no evidence of any connection
between Unitrade and any
of the appellants. And to simply say that a
document was downloaded from the internet clearly does not prove that
the document
is what it purports to be. As the respondents provided
no proof that the manuals originated from any of the appellants, the
question
as to the probative value of the contents thereof, if any,
did not arise.
[10]
That leaves for consideration the evidence of Mr Raubenheimer.
He testified that on 10 March 2011 he performed certain tests on the
Merlin master and slave energisers that he purchased from Unitrade.
The tests were performed with the use of an oscilloscope. An
oscilloscope is capable of visualising the electric pulses produced
by energisers. According to Mr Raubenheimer, the tests demonstrated
that the Merlin master and slave energisers each has its own timer
which determines at what times pulses are generated by that
energiser
and that these pulses drift apart until the respective timers are
re-synchronised. His opinion was that the tests made
it clear that a
synchronisation signal was transmitted between the master
energiser,
acting as the central control unit, and the slave energiser and that
the signal acted to reset the timer associated with each pulse
generator.
[11]
For the reasons that follow, reliance on the evidence of Mr
Raubenheimer to prove infringement of the patent by the appellants is
in my judgement flawed in a number of respects, each fatal to the
case of the respondents. First, the evidence of Mr Raubenheimer
is of
virtually no probative value in the circumstances. Second, even if
regard is had to his evidence, it does not remotely prove
that all
the integers of claims 1 or 2 of the patent were taken and in fact
indicates that important integers were not taken.
[12]
It is trite that the basis for the admission of the opinion of
an expert is his or her special knowledge and skill in respect of
a
particular subject. Although Mr Raubenheimer qualified as an
electrical engineer, he only completed the second appellant’s
introductory course in respect of the installation of electric
security fences on 19 February 2011. The course lasted one day.
He
only ever installed single energiser electric fences. He performed
the tests in question on 10 March 2011. At the time he had
no prior
experience in the testing of energisers at all or in the testing of
energisers with an oscilloscope. In the circumstances
Mr Raubenheimer
can hardly be said to have acquired special knowledge and skill in
respect of the subject matter of claims 1 and
2 of the patent. It
follows that the opinion evidence adduced by him was not admissible.
Moreover, the oscilloscope used by Mr
Raubenheimer was provided to
him by a laboratory. He did not obtain a calibration certificate for
the oscilloscope. He was not
concerned about that and although that
was the first time that he, on his own version, used an oscilloscope
for this purpose, he
was satisfied that the oscilloscope was ‘.
. . more or less doing the right thing’, despite the fact that
an oscilloscope
is a precision instrument. A certificate of
calibration dated 1 February 2012 was produced at the trial, but
there is no evidence
that it relates to the oscilloscope used by Mr
Raubenheimer or that it was valid for the date of the tests. It
follows, in any
event, that no reliance could be placed on the
results of the tests performed with the use of the oscilloscope.
[13]
At the very best for the respondents, the Merlin master and
slave energisers could be used as components in the method of claims
1 or 2 of the patent, as could other energisers available on the
market. But even on this basis, it is clear that integers (i)
and
(iii) were not taken. In addition, integer (iv)(a)(2) provides that
the method is characterised by the step of coordinating
the
operation of the energy pulse generators to ensure that the effective
pulses in the vicinity of a junction point on a conductive
line are
within a predetermined magnitude range. Mr Raubenheimer testified
that he did not test the magnitude range of the energy
pulses. He
therefore did not provide evidence that in the operation of the
master and slave energisers, as observed by him, effective
pulses
were kept within a predetermined magnitude range because of the
co-ordination of the pulse generators. Integer (iv) was
thus also not
proved to have been taken.
[14]
It was the evidence of Mr Raubenheimer that in the tests
performed by him the synchronisation signal of the Merlin master
energiser,
acting as the central control unit, most probably reset
the timing means of both the slave energiser and the master
energiser,
‘. . . because there was a distinctive no pulsing’.
This is in accordance with the summary of his expert evidence
referred
to in para 10 above. This is contrary to integer (vi), which
requires that the synchronisation signal transmitted by the central
control unit acts to reset the timing means within each pulse
generator on the conductive lines, that is, without resetting a timer
of the central control unit.
[15]
Integer (vii) requires that each pulse generator operate
independently until it is reset by a further synchronisation signal.
Mr
Raubenheimer’s evidence was that in the absence of a
synchronisation signal, the voltage of the pulses of the slave
energiser
dropped. It therefore does not operate independently of the
master energiser in the absence of a synchronisation signal. Thus the
Merlin energisers do not have the feature set out in integer (vii).
[16]
It follows that the court a quo erred in finding that the
respondents proved direct infringement of the patent. Counsel for the
respondents fairly conceded that no case was made for indirect
infringement. The appeal must therefore succeed.
[17]
The record of appeal is burdened with unnecessary material,
such as expert summaries of witnesses not called and duplications of
the judgment of the court a quo and the patent specification. In
addition, many of the cross references in the record are confusing
or
wrong. As a mark of this court’s disapproval of the careless
preparation of the record, I propose to disallow twenty per
cent of
the appellants’ costs relating to the preparation of the record
of the appeal.
[18]
In the result the following order is issued:
1
The appeal is upheld with costs, including the costs of two
counsel where so employed, but excluding twenty per cent of the costs
relating to the preparation of the record of appeal.
2
The order of the court a quo is set aside and replaced with
the following:
‘
The plaintiffs’
claim is dismissed with costs.’
C H G VAN DER MERWE
ACTING JUDGE OF APPEAL
APPEARNCES:
For Appellant:
Instructed by:
Radmeyer Attorneys,
Randburg
Honey Attorneys,
Bloemfontein
For Respondent: R
Michau SC (with him D Hugo)
Instructed by:
Hahn
& Hahn Inc, Pretoria
McIntyre
& Van der Post, Bloemfontein