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[2007] ZASCA 123
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Vari-Deals 101 (Pty) Ltd and Others v Sunsmart Products (Pty) Ltd (503/06) [2007] ZASCA 123; 2008 (3) 447 (SCA); 2007 BIP 69 (SCA) (27 September 2007)
Links to summary
REPUBLIC
OF SOUTH AFRICA
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
Case
number:
503/06
In the matter between:
VARI-DEALS
101 (PTY) LTD
t/a VARI-DEALS
.......................
First Appellant
JILL
BELINDA DRAKE
.......................
Second Appellant
ZIMSTONE
(PTY) LTD t/a ZIMSTONE
.......................
Third Appellant
KEITH
ARNOLD MUNRO
.......................
Fourth Appellant
UWE
FRITZ
.......................
Fifth Appellant
and
SUNSMART
PRODUCTS (PTY) LTD
.......................
Respondent
CORAM
:
HARMS ADP, NUGENT, PONNAN,
COMBRINCK JJA and HURT
AJA
HEARD
:
3 SEPTEMBER 2007
DELIVERED
:
27 SEPTEMBER 2007
Summary:
Patent – Interpretation of
specification and claims – 'Purposive approach' – Patent
and Registered Design –
Anticipation – Infringement.
Neutral
citation:
This
judgment may be referred to as
Vari-Deals
101 (Pty) Ltd v Sunsmart Products (Pty) Ltd
[2007]
SCA 123 (RSA)
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
HURT
AJA:
Introduction
.
[1] The respondent,
Sunsmart Products (Pty) Ltd (‘Sunsmart’), is the
proprietor of a registered patent and a registered
design. Since
2004, various courts have dealt with applications for interdicts and
related relief, claimed by Sunsmart on the basis
that the patent and
design have been infringed. It is convenient, at the outset, to
recount the history of this litigation for the
purpose of clarifying
certain of the issues which require to be dealt with in this appeal.
[2] During November 1997,
applications for registration of the patent and the design were
lodged under numbers 97/10535 and 97/1155,
respectively, with the
Registrar of Patents and the Registrar of Designs. Both applications
related to what was described as a ‘flag
construction’.
During 2002, the original proprietors of the patent and the
registered design executed assignments of their
rights in both to
Sunsmart. In 2004 Sunsmart brought two applications for interdicts
restraining the infringement of the patent and
the registered design
against various alleged infringers. The respondent in the first of
these was a company called Flag and Flagpole
Industries (Pty) Ltd. In
that case simultaneous applications were lodged in the Court of the
Commissioner of Patents (under case
no 97/10535) and in the High
Court, Pretoria (under case no 7385/04). In a second (later)
application, the five appellants in this
appeal were amongst seven
cited respondents who were alleged to have infringed the patent and
the registered design. The second application
was likewise launched
in the Commissioner's Court (also under case no 97/10535) and in the
High Court (under case no 21061/04). In
each of these applications, a
judge sat in the dual capacity of the Commissioner and of a judge of
the High Court. In what has become
known (and will be referred to in
this judgment) as ‘the
Flag and Flagpole
case’,
the presiding judge was Southwood J and in the court from which this
appeal emanates, R D Claassen J presided.
[3] In the
Flag and
Flagpole
case, the respondent denied infringement and, in the
alternative, contended that both the patent and the design were
invalid for
want of novelty. Southwood J held that Sunsmart had
failed to prove infringement of the patent because one of the
essential elements
of the invention claimed in the patent was not
incorporated in the Flag and Flagpole product. He therefore found it
unnecessary to
deal with the issue of validity of the patent. In
regard to the design, Southwood J held that a ‘sail flag’
described
and illustrated in a 1992 United States Patent (‘the
Rehbein Patent’) constituted an anticipation of the registered
design
and he accordingly dismissed the application for an interdict
on that score. Southwood J granted leave to appeal against his
judgment.
[4] The applications
which were dealt with in the court
a quo
by Claassen J, came
before him after they had been referred for the hearing of oral
evidence in regard to a factual dispute relating
to the issue of
whether certain of the cited respondents had been guilty of
‘contributory infringement’. The matter proceeded
before
Claassen J while the appeals against the decisions by Southwood J
were still pending. I should mention that, on the papers
before
Claassen J, there was a counter-application for revocation of the
patent on the basis that it was invalid.
[5] After hearing
evidence, Claassen J held that Sunsmart had established infringement
of the patent and of the design. In the course
of reaching his
conclusions as to infringement, Claassen J found himself constrained
to disagree with the construction placed on
the claims in the patent
by Southwood J and with Southwood J's finding that the design was not
novel. He found that there had been
infringement (both ‘direct’
and ‘contributory’) of the design and the patent and
granted the customary relief.
In addition, he granted an unusual
order, directing the respondents to disclose to Sunsmart the names of
other possible infringers
to whom the respondents had sold their
products. Insofar as his finding was to the effect that there had
been contributory infringement
(the issue which had been referred for
the hearing of
viva voce
evidence), his conclusion was that
the first, third, fourth and fifth respondents had colluded to
procure the infringement. As there
had apparently been no mention, in
the course of argument before him, of the counter-application for
revocation, Claassen J made
an order dismissing it. His judgment was
delivered on 30 January 2006. He, too, granted leave to appeal to
this court.
[6] On 16 March 2007, the
appeal to this court in the
Flag and Flagpole
matter was
heard. Judgment on the appeal (per Streicher JA) was handed down on 3
April 2007.
1
The unanimous decision of this court was that Southwood J had erred
in finding that there was no infringement of the patent. On this
basis it became necessary for the court to consider the issue as to
the validity of the patent. In this regard, the contention was
that
US Patent 5 572 945, applied for in August 1994 (‘the Eastaugh
Patent’) described the invention in SA Patent 97/10535
and
rendered it invalid for want of novelty. This contention was
rejected. Insofar as the design was concerned, this court dismissed
various contentions to the effect that the design had been described
or depicted in various earlier documents and drawings (including
the
Rehbein patent). The court decided that the appeals in both the
patent and design cases should be upheld and granted relief by
way of
interdicts, orders for delivery of infringing articles and an enquiry
into damages.
[7] For some reason, the
second respondent in the court
a quo
, against whom Sunsmart
had withdrawn its claims, was cited as the second appellant in this
appeal. In fact, there are only four appellants
before us and, as was
done in the High Court, it will be convenient to refer to them by
name,
viz
, the first appellant, Vari-Deals 101 (Pty) Ltd, as
‘Vari-Deals’, the third appellant, Zimstone (Pty) Ltd, as
‘Zimstone’,
the fourth appellant, Mr Keith Arnold Munro
and the fifth appellant, Mr Uwe Fritz, by their surnames, ‘Munro’
and ‘Fritz’
respectively.
The Effect of the
Flag and Flagpole
Judgment.
[8] The appellants' heads
of argument were submitted to this court on 5 April 2007, only two
days after the judgment in the
Flag and and Flagpole
appeal
was handed down. The appellants, having based their original argument
on the judgments of Southwood J, submitted a set of
supplementary
heads in order to deal with the situation which had developed as a
result of the reversal by this court of those judgments.
In the
introduction to the supplementary heads, the appellants stated:
‘
These
supplementary heads have been prepared in an attempt to address the
judgment of this honourable court in the
Flag
and Flagpole
matter
insofar as it relates to both the patent and the design cases. The
submission will be, for the reasons which follow, that this
honourable court is not bound to follow its earlier decision, and
that this decision notwithstanding, the present appeal should succeed
on both the patent and design cases.’
There followed a number
of submissions by counsel for the appellants to the effect that this
court erred in coming to its conclusions
in the
Flag and Flagpole
matter –
(a) by failing to apply
the proper principles of construction of patent claims when
considering the meaning and scope which should
be attributed to them;
(b) by incorrectly
rejecting the contention that the invention in the patent was not
new, inasmuch as it had been ‘described’
(within the
meaning of that expression in
s 25(6)
of the
Patents Act 57 of
1978
) in the Eastaugh patent;
(c) by finding that all
of the essential integers in claim 1 of the patent are present in the
allegedly infringing flag;
(d) by finding that the
registered design had not been anticipated by one of the drawings in
the Rehbein patent.
(Section 35(5)
, read with
s 31(c)
and
s 14
of the
Designs Act 195 of 1993
.)
[9] In view of these
submissions, it is perhaps not inapposite to bear in mind (trite
though the proposition may be) that this court
is not sitting as some
sort of ‘Second Court of Appeal’ in judgment on the
Flag
and Flagpole
case. The judgment in that case, insofar as it
concerns the interpretation of the specification and/or claims of SA
Patent 97/10535
and insofar as it incorporates findings that the
patent and the registered design had not been anticipated by the
Eastaugh and Rehbein
patents respectively defines rights of a
statutory nature which apply as between Sunsmart and the public at
large, and not merely
between the parties to the litigation.
Especially in this situation, this court would accordingly only be
justified in declining
to follow the interpretations and the rulings
on anticipation (or rather the absence thereof) in the
Flag and
Flagpole
judgment in very restricted circumstances. These are
concisely stated in
Bloemfontein Town Council v Richter
1938
AD 195
at 232 viz :
'
The ordinary rule is that
this court is bound by its own decisions and unless a decision has
been arrived at on some manifest oversight
or misunderstanding that
is there has been something in the nature of a palpable mistake, a
subsequently constituted court has no
right to prefer its own
reasoning to that of its predecessor - such a preference, if allowed,
would produce endless uncertainty and
confusion. The maxim '
stare
decisis'
should, therefore, be more rigidly
applied in this, the highest court of the land, than in all the
others.'
This approach has been
regularly applied in our law.
2
Counsel for the appellants, though invited to do so, refrained from
contending that the judgment in the
Flag and Flagpole
case was
tainted by the type of oversight or error contemplated in the above
passage.
[10] Counsel did,
however, persist in a submission to the effect that the approach of
this court in the
Flag and Flagpole
case had not been
consistent with South African law and that, in considering the issue
of infringement in this case, we should have
regard to the caution
expressed by Plewman JA in
Nampak Products Ltd and Another v
Man-Dirk (Pty) Ltd
1993 (3) SA 708
(SCA) at 712-714. Counsel's
submission, as I understood it, was that the tendency to ‘purposive
construction’ of patent
specifications and claims in English
law
3
had been affected by the introduction of s 125 of the English Patents
Act of 1977 and Article 69 of the European Patent Convention.
These
statutory provisions had, and have, no force in this country, with
the result that the developments pursuant to them were not
applicable
to the interpretation of patents by our courts. The result would be
that the ‘time-honoured approach’ to interpretation
in
our law
4
needed to be, but was not, applied in the
Flag and Flagpole
case. Without going so far as to ask this court to disapprove of the
interpretation given to the claims in the
Flag and Flagpole
case, counsel suggested that, for the purpose of deciding the
infringement issue before us, we should revert to the more ‘literal’
approach and minimize the role which the apparent intention of the
patentee might play in deciding what the claims mean and which
particular aspects of them should be regarded as ‘essential
elements or integers’.
[11] There are two crisp
answers to this suggestion.
(a) The primary object of
Plewman JA's comments in regard to the changes in approach to
interpretation was to stress that the advent
of ‘purposive
construction’ should not be treated as giving litigants
carte
blanche
to tender the evidence of expert witnesses as an aid to
the construction of claims (p 714B). Nowhere, in the relevant
passage, did
the learned Judge disapprove of the
Catnic
approach
– he simply cautioned that it should be applied with care (p
714 D-E).
(b) In
Aktiebolaget
Hässle and Another v Triomed (Pty) Ltd
2003 (1) SA 155
(SCA), Nugent JA, after a brief review of the cases, said (at p160
para [9]):
‘
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 (Pty) Ltd
1972
(1) 589 (A) at 614 B-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 p 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.’
That the ‘purposive
approach’ has received the authoritative endorsement of the
courts in this country was made clear
by Nugent JA in his review of
the South African decisions (and and their adoption of the
Catnic
approach) at pages 159 to 160 of
Triomed
. It is, of course,
true that
Catnic
did not change the law relating to
construction
5
,
but it certainly restricted the scope for contesting litigants to
indulge in ‘meticulous verbal analysis’ of specifications
and claims - usually to an extent which would have been inconceivable
to the ordinary skilled addressee reading the patent to ascertain
the
invention and the ambit of protection claimed. It also relieved the
courts of the metaphorical ‘straitjacket’ of
having to
arrive at any interpretation of claims without having free recourse
(subject to the well-established limits) to the specification
in
order to decide what the skilled addressee would have understood
those claims to mean.
6
[12] In reaching his
conclusions as to the meaning of the claims in the patent, Streicher
JA expressly applied a purposive interpretation.
In doing so he
relied upon the
Triomed
judgment and there is no basis for the
criticism leveled at him in this respect by counsel for the
appellants.
The Patent-in-Suit.
[13] The first exercise
must be to consider the specification of the patent and to decide on
the meaning and scope of the monopoly
defined by the claims.
[14] Fundamentally, the
patentee seeks protection for a new type of flag which will remain
extended, whatever the weather conditions,
and which is of particular
use as an advertising medium. The specification records that the
flags of the prior art had two specific
drawbacks in this context.
The first was that they remained limp in windless conditions, making
it impossible to decipher any advertising
copy which might be printed
on them. The second was that in high wind conditions, or in blustery
weather, the continual flapping
of the flag would also result in
difficulty in reading the advertiser's message and would also often
result in damage to the flag
material. The patentee's claim is to a
method (and to its resultant product) of keeping the material of the
flag extended in any
type of weather conditions by using a flexible
pole to apply tension to the material. The consistory clause reads as
follows:
‘
According
to the invention, a flag construction comprises a pole which
includes, at least at the top end thereof, a flexible section
which
is adapted to be bent into a substantially U-shaped section and being
adapted to engage at least a portion of the upper periphery
of a
piece of material and to maintain it under tension at least in the
area defined by the pole, the U-shaped section and a line
between a
point towards the tip of the flexible section and a point along the
length of the pole.’
The specification then
proceeds to describe various preferred embodiments and/or
modifications which are all to be discerned in the
claims and it will
be convenient to deal with those that are relevant in this case when
the meaning and scope of the claims are considered.
[15] The claims read as
follow:
‘
1.
A flag construction comprising a pole which includes, at least at the
top end thereof, a flexible section which is adapted to be
bent into
a substantially U-shaped section and being adapted to engage at least
a portion of the periphery of a piece of material
and to maintain it
under tension at least in the area defined by the pole, the U-shaped
section and a line between a point towards
the tip of the flexible
section and a point along the length of the pole.
2. The flag construction according to
claim 1 in which the top end of the pole includes a flexible section
of fibreglass or the like
which tapers to a narrow diameter.
3. A flag construction according to claim
2 in which the tapered section is integral with the pole.
4. The flag construction
according to claim 3 in which the material includes a seam or sleeve
along one edge, into which the tapered
end of the pole is slided
(
sic)
.
5. A flag construction according to any
of the above claims including the combination of an inverted U-shaped
section with an inverted
teardrop-shaped piece of material.
6. A flag construction according to any
of the above claims in which the pole is adapted to rotate about its
own axis.
7. A flag construction substantially as
described with reference to the accompanying drawing.’
The issues relating to
the meaning and scope of the claims in this case are restricted and
it is not necessary for the purpose of
this judgment to embark on an
exhaustive analysis and interpretation. It will be convenient,
instead, to consider the proper interpretation
in relation to each of
the issues as they are dealt with.
Alleged Invalidity
of the Patent.
[16] Before us the
appellants persisted with the contention that the patent was
anticipated by the Eastaugh patent. Certain submissions
were made
concerning the analysis of the Eastaugh patent by this court in the
Flag and Flagpole
case. The submissions fall to be rejected on
the simple basis of
stare decisis
: the interpretation of the
Eastaugh patent is a question of law and the appellants have not been
able to pass the hurdle set in the
Bloemfontein Town Council
judgment.
7
[17] I have already
indicated that the counterclaim for revocation of the patent was
dismissed by Claassen J. Counsel for the appellants
contended that,
inasmuch as the revocation proceedings had not reached a stage where
they were ripe for adjudication at the time
when Claassen J delivered
his judgment, they should not have been dismissed but left in
abeyance. As stated by Claassen J, however,
no submissions were made
to him in relation to the prayer for revocation and in the
circumstances, given that he was called upon
to adjudicate upon the
application (including the counterclaim for revocation) it was proper
for him to make the order dismissing
the latter. Such an order, of
course, does not stand as
res judicata
on the issue of
revocation, but given the findings of the courts in relation to the
issue of validity of the patent when raised as
a defence to the claim
for infringement, it is highly doubtful whether the revocation
application, if proceeded with separately,
would have any prospect of
success.
Infringement of the
Patent.
[18] The issue of
infringement in this case has been complicated by Sunsmart's
contention that the appellants collaborated and induced
others to
assist them in producing infringing articles. Obviously, if the
articles thus produced do not infringe the patent, then
any question
of contributory infringement falls away. In the court a quo the
appellants, individually, denied ‘making, . .
. disposing of or
offering to dispose of . . . the invention’.
8
Their case was that the final product on which Sunsmart relied for
its case on infringement, was a combination of various items
independently
supplied by various dealers. What was common cause,
however, was that the flag which is depicted in the photograph,
Annexure 'A'
to this judgment , and which bears the caption ‘New
Heights 1408 CC’ is an example of what can be produced by this
combination.
For the purpose of discussing the issue of infringement,
I shall refer to this article as ‘the New Heights flag’.
[19] In the court
a
quo
Claassen J expressly recorded that it was common cause that
the integers of claim 1 of the patent were:
(a) a flag construction
comprising
(b) a pole
(i) which includes at
least at the top end thereof a flexible section;
(ii) which is adapted to
be bent into a substantially U-shaped section; and
(iii) being adapted to
engage at least a portion of the upper periphery of a piece of
material; and
(iv) to maintain it (i.e.
the material) under tension at least in the area defined by the pole,
the U-shaped section and a line between
a point towards the tip of
the flexible section and a point along the length of the pole.
[20] The debate in the
court
a quo
was confined to the question of whether the New
Heights flag incorporated integers (b)(iii) and (b)(iv). On appeal
before us, however,
counsel for the appellants submitted that a
drastically different approach to the analysis of the integers in
claim 1 should be adopted.
His contention was that claim 1 sought
protection for a pole with certain characteristics and not for a pole
in conjunction with
anything else (to quote counsel's heads of
argument) ‘more especially any material’.
9
There is no substance in this contention. The patent has already been
considered by seven judges, none of whom were asked to find
that
claim 1 related to a pole without the material. Nor, at this late
stage of the proceedings, is it necessary for me to say any
more than
that the experienced flag maker, reading the specification and
claims, could not possibly be under the impression that
the main
claim described a pole stripped of the material with which it must be
coupled to comprise a ‘flag construction’.
10
[21] Counsel for the
appellants repeated the contention that integer (b)(iii) was missing
in the New Heights flag. The basis for it
was the earlier finding by
Southwood J in the
Flag and Flagpole
case that integer
(b)(iii) defined a pole which was adapted (in the sense of ‘being
made suitable’ or ‘altered
so as to fit’) to engage
(in the sense of ‘to fasten or attach’) the material. He
decided that no part of the pole
in the allegedly infringing article
had been made suitable for fastening or attaching the material to it.
‘On the contrary,’
he stated, ‘it is the material
which has been adapted to engage the pole. The addition of the sleeve
makes this possible.’
[22] Claassen J declined
to follow the reasoning of Southwood J in regard to this issue. He
took the view that the word ‘engage’
had been used in the
sense of requiring the pole to be able to conform to the shape of the
upper periphery of the material. There
is much to be said for this
construction, more especially when one has regard to the circumstance
that the word ‘engage’
has a special technical meaning of
‘to interlock with or to fit into a corresponding part’.
11
This issue was, however, conclusively resolved by the judgment of
this court in para [13] of the
Flag and Flagpole
case where it
was held that, on a proper interpretation of claim 1, the essential
requirement is that the pole and the material must
be attached to
each other, the precise manner in which the attachment is achieved
not being material. Streicher JA went on to point
out (at para [14])
that claim 4, which is an embodiment of claim 1, defines a specific
method by which the material is adapted to
house the flexible pole.
To construe claim 1 as essentially requiring some mechanism of
attachment to be incorporated in the pole,
as opposed to the material
or to both, would be inconsistent with claim 4. This would be
contrary to the ‘normal rule’
of interpretation of claims
referred to in the judgment of Trollip JA in
Netlon Ltd and
Another v Pacnet (Pty) Ltd
1977 (3) SA 840
(A) at 857 G–H,
and applied by the learned judge at 857H-858B.
[23] Claassen J, in the
court
a quo
, confined his consideration of whether the New
Heights flag incorporated integer (b)(iv) to the simple statement
that:
‘
As
far as (b)(iv) is concerned, it is present in the infringing flag.
For all intents and purposes that is exactly what both flags
and
poles consist of.’
12
On appeal before us,
counsel for the appellants did not seriously challenge this finding.
Instead, counsel sought to place emphasis
on the reference in the
patent claims to the ‘U-shaped section’ of the flag for
which protection was claimed. In the
affidavits in the application,
the appellants had contended that the New Heights flag could not be
described as having a ‘U-shaped’
upper periphery. In this
regard the appellants contended that there was a material difference
between the (truncated) ‘spiral’
shape of the upper
section of the New Heights flag and the ‘semi-circular’
contour of the flag depicted in the patent
as an embodiment of the
invention. Perhaps conscious that this contention, standing on its
own, could not be justified, counsel expanded
it into an argument
which ran as follows:
(a) In rejecting the
contention (in the
Flag and Flagpole
case) that the Eastaugh
patent was an anticipation of the patent-in-suit, this court had
emphasised that the ‘question mark
shape’ referred to in
the Eastaugh patent could not be equated to the ‘inverted U’
claimed in the patent-in-suit.
13
(b) By a sort of 'reverse
application' of the time-honoured adage 'that which would infringe if
later anticipates if earlier’,
the corollary to the finding
referred to in (a) would be that the article described in the
Eastaugh patent would not infringe the
patent-in-suit because the
shape of its upper periphery would be different to that claimed in
the patent-in-suit.
(c) Since there is,
likewise, a material difference in the shape of the New Heights flag
compared to the article claimed in claim
1 (which, I need hardly
stress, is not confined to the embodiment depicted in the drawing),
there cannot be an infringement.
[24] The submission is
flawed on two fronts. In the first place, it ignores the fact that
claim 1 refers to the pole being bent into
a ‘
substantially
U-shaped section’. The skilled addressee would, in my view,
appreciate that the ultimate shape of the taut upper periphery
of the
flag, given that the pole and material are required to engage each
other, would ultimately be dictated by the arc taken up
by the flexed
pole and the shape of the periphery of the material.
14
He would surely not construe the claim as being confined to an
article in which the combination of the flexed pole and its
attachment
to the flag material produced an inverted U.
15
In the second place the rejection, in the
Flag and Flagpole
judgment, of the contention that the Eastaugh patent anticipated the
patent-in-suit should not be taken to have been confined only
to the
consideration that the ‘question mark shape’ described in
Eastaugh could not be equated to the ‘substantially
U-shaped
section’ of the patent-in-suit. It is apparent, both from a
reading of the description in the body of the Eastaugh
patent and
from a consideration of the drawings embodying what had been
described in words in that specification, that a wide range
of
resultant shapes was contemplated. It is trite that, in considering
whether an earlier document ‘describes’ a later
claim,
‘the wider or more general the language (of the earlier
document), the less likely it is to render the specific invented
process (claimed in the later patent) identifiable and perceptible
and therefore to "describe" it.’
16
The article contemplated as a part of the invention in the Eastaugh
patent is generally described as having a ‘curvilinear
edge’
which term plainly embraces a wide range of curved shapes.
Accordingly, the finding that the Eastaugh patent did not
anticipate
the patent-in-suit does not, as a matter of logic, have the necessary
result that a spiral-shaped upper section cannot
fall within the
ambit of the expression ‘substantially U-shaped’.
[25] The appellants'
final contention as to why the New Heights flag does not incorporate
all of the essential integers of the flag
described in the claims,
relates to the nature of the pole used in the New Heights flag. As
can be seen from the photograph, annexure
A, the pole effectively
comprises three sections. The lowest of these (which, according to
the evidence, is attached to the base
support) is a hollow tube which
has a diameter larger than the middle section. This middle section is
inserted into the lower section,
allowing the upper portion of the
flag to rotate independently of the lower section. At the top of the
middle section there is a
gooseneck joint. A solid, flexible baton is
inserted into the offset section of the gooseneck and this baton is
threaded into the
edge pocket sewn into the upper periphery of the
flag material. The appellants contended, first, that the pole
contemplated by the
claims in the patent was a single unit.
Accordingly, so the contention ran, the base support and the
three-component, rotatably-mounted
flag pole used in the New Heights
flag were materially different to the pole claimed in the invention.
Secondly, they contended that
the gooseneck and the baton were
materially different to the corresponding integers of the patent
claims.
[26] It is plain from a
consideration of claim 3, read with the claims preceding it, that
claim 1 is not confined to what counsel
referred to as a ‘unitary
pole’. Claim 2 can only be construed as referring to a pole
with at least two constituents
- a non-flexible base and a tapered,
flexible, fibreglass top. Moreover, claim 3 contemplates a pole in
which the tapered section
is ‘integral with the pole’.
The necessary implication is that claim 1 includes, within its scope,
a multi-component
pole. Nor (insofar as the appellants' second
contention is concerned) are there any stipulations in the patent as
to how the components
of the pole are to be joined to each other. The
situation in this regard is much the same as that relating to the
means of attachment
of the pole to the flag material. It is apparent
that the method of joining the sections of a multi-component pole to
one another
would not be regarded by the skilled addressee as an
essential element of making the flag according to the invention. Such
addressee
would understand that any form of joint could be used
provided that the resultant pole has the attributes required by the
claims.
In the result, the appellants' contentions that the New
Heights flag is not an infringement of the patent all fall to be
rejected.
I shall deal with the issues relating to contributory
infringement after considering the issues of the validity and
infringement
of the registered design.
Validity of the
Design.
[27] In the
Flag and
Flagpole
case, various prior art documents were relied upon in
support of the assertion that the design was not new. Southwood J had
held
that the design was anticipated by one of the drawings in the
Rehbein patent and had found it unnecessary to deal with the other
alleged anticipations. As already indicated, this court reversed the
finding that the Rehbein patent constituted an anticipation.
17
The appellants have restricted their attack on the validity of the
design to the drawing in the Rehbein patent. The issue has thus
already been disposed of by the judgment in the
Flag and Flagpole
case, and I have nothing to add.
Infringement of the
Design.
[28] The design was
registered as an aesthetic design in part A of the register. The
definitive statement reads:
‘
The
novelty of the design as applied to a flag, banner or the like lies
in the shape and/or configuration thereof, substantially as
shown in
the accompanying drawing.’
The drawing to which reference is made is
reproduced in annexure B to this judgment. The explanatory statement
reads:
‘
A
flag or banner is shaped substantially like an inverted teardrop (10)
and is adapted to be engaged by a flexible pole (12).’
The appellants contended
(unsuccessfully) in the court
a quo
, and have repeated their
contention in argument before us, that there are significant
differences between the shape of the New Heights
flag and the shape
depicted in annexure B. They emphasise (a) the difference in the
shape of the curved upper periphery of the design
compared with that
of the New Heights flag; and (b) the ‘multi-components with
their peculiar inter-action’ (I quote
from the appellants'
heads of argument) of the New Heights flag. The difference alleged in
(b) can be disposed of without more ado.
Functional features such as
the multi-component flagpole and the gooseneck joint in the New
Heights flag are not relevant in assessing
differences between the
New Heights flag and the aesthetic design for which protection is
claimed.
18
The significance of the difference between the two contours alleged
in (a), must be gauged through the eye of the ‘likely
customer’.
19
Although there is no specific evidence in this regard, I think that
it is fair to assume that a very large proportion of the customers
in
this instance will be attracted to the teardrop shape of the flag,
which is plainly a striking feature of the registered design.
Comparing the shape of the design with that of the New Heights flag,
through the eyes of a hypothetical customer, I do not consider
that
the subtle differences in curvature of the upper periphery of the two
flags would be regarded as significant. It follows that
the New
Heights flag is an infringement of the registered design.
Contributory
Infringement
[29] As indicated earlier
the issue of whether the appellants had collaborated to assist each
other in conduct which constituted infringement
of the patent was
referred, in the court
a quo
, for the hearing of oral
evidence. The evidence related to the proceedings in both the patent
and the design applications. The particular
issues were defined as
follow:
'1.1 Whether the first and third
respondents were either themselves engaged in the infringing
activities as alleged in the papers
in the application or were
inducing, procuring, aiding or abetting others to infringe;
1.2 Whether the second,
fourth and fifth respondents (were) inciting or procuring the first
and third respondents to infringe the
rights of the applicant as
alleged in the papers in the application . . . . '
20
[30] Sunsmart called
three witnesses, a person (‘Harrison’) who had dealt with
Munro in connection with the purchase of
the New Heights flag, a
person (‘Van der Walt’) who had negotiated with Munro for
the supply of teardrop-shaped flags,
and the managing director of
Sunsmart, Mr Bailey. Only Munro was called as a witness for
Vari-Deals and Zimstone. Fritz was not called
to give evidence.
Claassen J analysed the evidence comprehensively in his judgment. He
made explicit findings as to credibility,
accepting the evidence of
the three witnesses called by Sunsmart, but describing Munro as a
'very poor' witness.
21
The appellants' counsel did not suggest that these credibility
findings should be interfered with on appeal, and, accordingly, the
facts on which the question of contributory infringement falls to be
decided can be briefly stated as follow.
[31] At the material
times, the sole shareholder and director of Vari-Deals was the
erstwhile second appellant, Dr Drake. However,
she did not play an
active, executive role in the conduct of Vari-Deals' business. That
role was filled by Munro who was a 50 percent
shareholder, a director
and an employee of Zimstone. Zimstone had been appointed as the
manager of Vari-Deals' business, so that
Munro was
de facto
in
charge of the conduct of business by Vari-Deals. Munro's
co-shareholder and co-director in Zimstone was Fritz. In terms of a
trade
agreement between Vari-Deals and Zimstone, the latter supplied
Vari-Deals with various types of poles (including flexible fibreglass
poles), gooseneck connectors and pegs. Insofar as the actual
management and conduct of Vari-Deals' business was concerned, Munro
was actively assisted by Fritz. A copy of the sales brochure
emanating from Vari-Deals was annexed to the founding affidavits of
Bailey. In it, 'kits' for a teardrop-shaped flag were offered for
sale. The kit comprised a set of pole sections, a base and a
gooseneck
joint. The last two paragraphs of this brochure read as
follow:
'CLOTH
Different fabrics perform
different functions, and Vari-Deals has sourced a variety of fabrics
to ensure the client receives the correct
material for a particular
requirement. Vari-Deals will point customers in the direction of the
appropriate fabric supplier, so that
fabric is purchased at the
manufacturers' factory prices.
Vari-Deals has
pre-organised these arrangements
.
22
CLOTH TAUTNESS
Many competitive products suffer from
having cloth tensioned incorrectly, which creates the difference
between a spectacular and a
shoddy-looking unit. The Vari-Deals
Teardrop looks spectacular as it has just the right degree of tension
which is created by the
combination of a flexible baton and fabric
with the correct stretch characteristics.’
[32] The New Heights flag
came into existence as a result of an enquiry by Harrison. It was not
in dispute that this enquiry was a
‘trap’, Harrison being
an employee of Sunsmart. He telephoned Vari-Deals and was put through
to Munro. He told Munro
he was looking for a flag to advertise CC of
which he and his sister were members. Munro stated that Vari-Deals
could supply him
with a flag and sent at template to him by e-mail
with a request that he indicate what 'art-work' he required on the
flag. Harrison
duly complied with this request. He was told that he
should pay the company that did the printing on the flag separately,
but that
he should pay Vari-Deals the balance of the price which was
for the ‘hardware’ and the sewing services. Two complete
flag kits (including the printed fabric) were delivered to him under
waybills from Zimstone. He received an invoice from Vari-Deals
but he
made his cheque for the invoiced amount payable to Zimstone. It is
important to note that nothing Munro did in relation to
this
transaction substantiated his later contention that: (a) Vari-Deals
acted separately from Zimstone; and (b) Zimstone and Vari-Deals
sold
only 'pole kits', and not actual flags. There can be no doubt that
the transaction with Harrison constituted 'direct infringement'
of
Sunsmart's patent and registered design.
[33] The evidence of Van
der Walt was to the effect that he was in business, selling
advertising equipment including flags. He had
previously purchased
flags from Sunsmart. He had also purchased hardware and banners from
Zimstone. In March 2004, he had a conversation
with Munro, who
informed him that he was producing a new product. (Van der Walt was
under the impression that Zimstone would be the
actual marketer.)
When he heard that the new product was a teardrop-shaped flag (and
because the Sunsmart flag was generally known
in the trade as a
'teardrop'), Van der Walt informed Munro that the Sunsmart product
was the object of patent protection. According
to Van der Walt,
Munro's response was to the effect that he (or his companies) could
'get round'
23
the patent protection. It must be noted that, as cross-examination
proceeded, Van der Walt became somewhat equivocal as to the precise
words which Munro may have used in response to his warning. In the
end he conceded that Munro might have said that the
Zimstone/Vari-Deals
product 'did not infringe the patent' or 'was
different to the patented article'. Claassen J did not deal in his
judgment with this
equivocal aspect of Van der Walt's evidence. He
accepted that Munro told Van der Walt that 'they have ways
of getting by
it'. Whether this finding is in accordance with the
evidence or not is immaterial to the outcome of the appeal. Claassen
J correctly
treated, as more important than the statement allegedly
made by Munro to Van der Walt, the fact (which was not in
dispute)
that Munro declined to show Van der Walt a sample of his
product, saying that he could not do so because of unspecified
'complications'.
When pressed to explain what the complications were,
Munro gave an answer which Claassen J treated with the appropriate
amount of
scorn and skepticism. I can do no better than quote the
relevant passage from his judgment:
'When
asked
in court what the complications were, Munro said "the
complications were that he (sc Van der Walt) was not very forthcoming
during his conversation . . . . He was telling me how wonderful the
applicant's product was and I said we did not want to go in and
have
him as a customer if he saw how wonderful the other product was."
This was a very strange answer for a man who wants to
sell his
product in competition with another product.'
[34] On appeal before us,
counsel for the appellants suggested that the affidavit evidence read
with the oral evidence established
that the appellants had
bona
fide
believed that because they had registered their own patent
and design, they did not have the requisite unlawful intent to
constitute
contributory infringement on their part. In his judgment,
Claassen J specifically mentioned that awareness of unlawfulness was
one
of the essential elements of contributory infringement. This was
no doubt based on the
dictum
in
Viskasie Corp v Columbit
(Pty) Ltd and Another
1986 BP 432 (CP) at 452E. There has been
considerable development of the law relating to contributory
infringement in foreign jurisdictions
since 1986, generated
particularly by the computer age.
24
It may well be that the principles of liability for this type of
infringement may have to be reconsidered in the light of these
developments.
However, on the basis of the findings of fact by
Claassen J and the inferences which he drew from those findings, it
is not necessary
to decide the issue of contributory infringement in
this case. The contention that the appellants had acted
bona fide
plainly fell to be rejected, and Claassen J's decision to do so was
founded on sound reasons. First, there was the palpable lack
of
candour in Munro's evidence. Second, the most reasonable and probable
inference
25
from the evidence concerning his dealings with Van der Walt must be
that he knew (or suspected) that if the assembled product was
shown
to Van der Walt, it might generate an action by Sunsmart for
infringement. Thirdly, for some reason, when asked what was different
about the appellants' product, Munro kept harping on the 'gooseneck
patent' and avoided coming to grips with the question of why
he
suggested that the appellants' product was not an infringement of
Sunsmart's patent and design. The court a quo, having rejected
his
evidence, clearly drew the correct inference that his conduct was
tainted by
dolus.
Given all the circumstances, I am satisfied
that this inference was correctly drawn. Moreover, the failure by
Fritz to take the witness
stand when it was common cause that he was
intimately involved with the conduct of the businesses of Vari-Deals
and Zimstone, and
closely associated with the Munro in them, also
justified the inference that he could not have furthered the
appellants' contention
that they acted
bona fide
. He made no
effort to contend that he did not know what Munro was about in
relation to the 'new product' and it is inconceivable
that he
(especially with his professed expert knowledge in the field) could
not have known that the new product would be an infringement
of
Sunsmart's patent and design. The evidence and the inferences which
can fairly be drawn from it plainly establish that both Vari-Deals
and Zimstone, together with their managers/directors, embarked upon a
concerted course of action to infringe the patent and the design.
In
these circumstances the issue of whether there was 'contributory
infringement' by Vari-Deals, Zimstone, Fritz or Munro does not
arise
for decision. Sunsmart discharged the onus of establishing 'direct
infringement' by all of them.
[35] In the result, the
appeal must be dismissed. I have indicated, at various places in this
judgment, that there were errors in
the order granted by Claassen J
and the following order incorporates the necessary modifications to
the order in the court
a quo.
The amendments thus incorporated
do not have any effect on the question of the costs of the appeal.
This order is made in respect
of both cases in the court
a quo
,
ie High Court case no 21061/2004 and Patent case no 97/10535:
1. The appeal is
dismissed.
2. The order of the court
a quo
is amended to read as follows and an order in the
amended form is granted:
'(a) The First, Third, Fourth and Fifth
Respondents ('the Respondents') are interdicted and restrained from
infringing SA Patent no
97/10535 and SA Design Registration A97/1155;
(b). The Respondents are interdicted and
restrained from procuring, inducing, aiding, abetting, advising,
inciting, instigating and/or
assisting any act of infringement by end
users of infringing flags covered by the said patent and/or the said
design;
(c) The Respondents are ordered to
deliver up to the Applicant for destruction all infringing flags in
their possession or under their
control.
(d) The Respondents are ordered to pay
the costs of the application under case no 21061/2004 and Patent case
no 97/10535.
(e) The Applicant is ordered to pay the
costs of the Sixth and Seventh Respondents up to and including the
date of filing of their
opposing papers in each of the applications
referred to in para (d) hereof.'
3. The first, third,
fourth and fifth appellants are ordered to pay the respondent's costs
of appeal, such costs to include the costs
consequent upon the
employment of two counsel.
………………………
N V HURT AJA
CONCUR:
HARMS ADP
NUGENT JA
PONNAN JA
COMBRINCK JA
ANNEXURE A
ANNEXURE B
1
Sunsmart
v Flag and Flagpole Industries
[2007]
SCA 50 (RSA).
2
Catholic
Bishops Publishing Co v State President and Ano
1990 (1) SA
849(A)
at 866;
Brisley v Drotsky
2002 (4) SA 1
(SCA) at paras
55-60.
3
As
to which see
Catnic Components Ltd and Ano v Hill and Smith Ltd
[1982] RPC (HL)
; Improver Corporation and Others v Remington
Consumer Products Ltd and Others
[1970] FSR 181.
4
As
crystallized in
Gentiruco AG v Firestone (Pty) Ltd
1972 (1)
SA 589
(A) at 613-618, and modified in such cases as
Multotec
Manufacturing (Pty) Ltd v Screenex Wire Weaving Mnfrs (Pty) Ltd
1983
(1) SA 709
(A) and
Sappi Fine Papers (Pty) Ltd v ICI Canada Inc
[1992] ZASCA 58
;
1992 (3) SA 306
(A).
5
L
T C Harms,
The Enforcement of Intellectual Property Rights: A
Case Book,
p 188-198.
6
In
Kirin-Amgen Inc and Ors v Hoechst Marion Rousel and Ors
[2004] UKHL 46
;
[2005]
1 All ER 667
, Lord Hoffman sketched the history of the reception of
the concept of ‘purposive interpretation’ in English
Law. In
para [33] (at p 680) he said : 'Construction, whether of a
patent or any other document, is of course not directly concerned
with
what the author meant to say. There is no window into the mind
of the patentee or the author . . . Construction is objective in
the
sense that it is concerned with what a reasonable person to whom the
utterance was addressed would have understood the author
to be using
the words to mean. . . . . . The meaning of words is a matter of
convention, governed by rules, which can be found
in dictionaries
and grammars. What the author would have been understood to mean by
using those words is not simply a matter of
rules. It is highly
sensitive to the context of and background to the particular
utterance.’
7
In
addition, counsel was unable to identify the presence of integer
(b)(iv), referred to in para 19 below, in the Eastaugh patent.
8
Section
45 of the Patents Act.
9
This
contention was adumbrated in para 31 of the answering affidavit of
Fritz [pp 151-152], but apparently not persisted in before
Claassen
J.
10
The
definition of a ‘flag’ in the
Shorter Oxford English
Dictionary
, 3 ed, p 708 (assuming that the addressee of the
patent, bemused by the appellant's contention, might have been
driven to look
this word up) is given as ‘A piece of stuff . .
. . usually oblong or square, attached by one edge to a staff, used
. . .
for display.’
11
Oxford
English Dictionary (2 ed) Volume V, p 247.
12
Southwood
J had also held that integer (b)(iv) was incorporated in the
allegedly infringing article in the
Flag and Flagpole
case,
the construction of which, in this particular aspect, was, for all
practical purposes, identical to that of the New Heights
flag. His
finding on this aspect was expressly approved by Streicher JA in
para [19].
13
Flag
and Flagpole
judgment, paras [26] and [27].
14
This
much was expressly stated by Fritz in para 24 of his answering
affidavit. [p149]
15
Cf
the finding of the court in
Catnic,
where the word ‘vertical’
was was interpreted to mean ‘approximately vertical’.
16
Gentiruco
at 649G.
17
Streicher
JA's judgment, para 37.
18
Section
1(1)(i)
of the
Designs Act defines
an aesthetic design as ‘any
design applied to any article, whether for the pattern or the shape
or the configuration or the
ornamentation thereof, or for any two or
more of those purposes, and by whatever means it is applied, having
features which appeal
to and are judged solely by the eye,
irrespective of the aesthetic quality thereof’.
19
Homecraft
Steel Industries (Pty) Ltd v S M Hare and Son (Pty) Ltd
[1984] ZASCA 36
;
1984 (3)
SA 681
(A) at 692 B-D.
20
It
will be recalled that in the application proceedings in the court
a
quo
the first respondent was Vari-Deals, the third respondent
was Zimstone, the fourth respondent was Munro and the fifth
respondent
was Fritz. The proceedings against the second respondent
were later withdrawn.
21
The
learned judge elaborated on this finding by stating that '(Munro)
was evasive, off the point, constantly referring back to the
gooseneck patent when it had nothing to do with the real issue. He
contradicted himself several times, e.g. at one stage he admitted
he
acted as a facilitator for Harrison but later denied it and tried to
escape from the obvious inference thereof by saying he
only made
recommendations to Harrison. Although his brochure says that the
cloth for the banners is pre-arranged by him, he denied
in evidence
that that is done at all’.
22
My
emphasis.
23
‘omseil’.
24
See,
eg,
Sony Corp of America v Universal Studios, Inc
[1984] USSC 14
;
464 US 417
;
Metro-Goldwyn-Mayo Studios Inc v Grokster Ltd
(04-480)
380 F
3d 1154
, at pp12-19.
25
Govan
v Skidmore
1952 (1) SA 732
(N) at p 34 C–D.