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[2013] ZAGPPHC 143
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Trinamics Incorporated v Registrar of Patents and Others (23902/2010) [2013] ZAGPPHC 143; 2013 BIP 29 (CP) (29 April 2013)
NOT REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA /ES (REPUBLIC OF SOUTH
AFRICA)
CASE NO: 23902/2010
DATE: 29/04/2013
IN THE MATTER BETWEEN
TRINAMICS
INCORPORATED
.............................................................................
APPLICANT
AND
THE RGISTRAR OF
PATENTS
..................................................................
1st
RESPONDENT
JOHN TERRY
PIDGEON
...........................................................................
2nd
RESPONDENT
WAFFLERAFT MARKETING SA (PTY) LTD
t/a WAFFLE RAFT
FOUNDATIONS
..........................................................
3rd
RESPONDENT
JUDGMENT
PRINSLOO, J
[1]
This is an application for the review and setting aside in terms of
section 6 of the Promotion of Administrative Justice Act
3 of 2000
("PAJA"), read with rule 53 of the Uniform Rules of Court,
of certain administrative actions performed by the
Registrar of
Patents or his or her duly delegated official or officials ("the
Registrar") in relation to South African
patent 88/0864 ("the
patent”).
[2]
More specifically, the application is directed at the acceptance by
the Registrar of certain renewal payments and the allowance
of a
restoration application in respect of the patent.
[3]
Before me, Mr Michau SC appeared for the applicant and Mr Van Tonder,
assisted by Mr Heystek, appeared for the second and third
respondents. The first respondent did not take an active part in the
proceedings.
Brief
introduction and background notes
[4]
The Patent Register indicates that an application for the patent was
filed on 8 February 1988 and the application proceeded
to grant on 22
February 1989.
[In
terms of the provisions of section 46(1) of the Patents Act 57 of
1978 ("the Act") the duration of a patent shall,
unless
otherwise provided in the Act, be 20 years from the date of
application therefor, subject to payment of the prescribed renewal
fees by the patentee concerned or an agent. Subject to the condition
mentioned, the patent would therefore have endured from 8
February
1988 to 8 February 2008.
[5]
The second respondent is the patentee of the patent and also a
director of the third respondent company, reflected as a licensee
of
the patent in the Patent Register.
[6]
The title of the invention is "Method of Constructing a
Foundation for Buildings".
According
to the evidence offered by the second and third respondents, the
method of construction (which is claimed in the method
claims of the
patent specification) and foundation for a building (which is claimed
in the products claims of the patent specification)
became known in
the trade as a "Waffle Raft”. The Waffle Raft became the
industry norm when buildings had to be constructed
on expansive soil.
It became highly successful due to the fact that it provided a
construction method which is universal and constant
and in general
leads to a more cost effective but at the same time a more effective
type of stiffened raft foundation than was
known before the priority
date of the patent. According to the respondents, it is estimated
that not less than 25 million square
metres of foundations for
buildings have been constructed in South Africa utilizing the Waffle
Raft invention.
[7] The respondents allege that the
applicant would, in its capacity as the appointed structural engineer
for numerous projects,
have been responsible for designing the
foundation structure for buildings. Where expansive soil conditions
were found, the applicant
would have benefited (and indeed has
benefited) from the solution disclosed by the invention. It is for
this reason that the applicant
and the third respondent, already in
April 1996, entered into a sub-licence agreement under the patent. In
terms of this agreement
authority was granted to the applicant to
design Waffle Raft foundations and, in exchange, certain licence fees
and royalties would
become payable to the third respondent.
[8] In April 2008, the second and
third respondents, as plaintiffs, instituted a damages action against
the applicant, and a number
of the applicant's directors, as
defendants flowing from the alleged breach of the sub-licence
agreement, which the respondents
claimed to have cancelled in August
2006, and alleged infringements of the patent after the alleged
cancellation of the licence
agreement.
[9] The trial was enrolled for hearing
on 3 - 14 May 2010.
[10] Days before the scheduled start
of the trial, on 26 April 2010, the applicant launched these review
proceedings which, if successful,
will result in a conclusion that
the patent lapsed already in February 1992 (more than twenty one
years ago) for failure by the
respondents to timeously pay the
prescribed annual renewal fees as intended by the provisions of
section 46 of the Act. In order
to achieve this result, the alleged
unlawful or irregular administrative actions of the Registrar,
purporting to restore the patent
to the Register, have to be set
aside by means of this review application. A successful review, will,
as mentioned, result in the
patent being regarded as having lapsed in
February 1992, before the licence agreement was entered into between
the parties so that
the agreement will, for practical purposes, be
unenforceable and the action cannot succeed. I add that the "defence"
that the patent had lapsed, is not raised in the plea offered by the
applicant and its directors as defendants to the particulars
of claim
in the action. The defendants in the action also raised a
counter-claim seeking an order revoking the patent on the ground
that
it did not involve an inventive step as contemplated in section
25(10) of the Act. The defence, as pleaded, appears to go
to the
merits of the c laims and there is also an attack on the locus standi
of the third respondent (as second plaintiff).
Details of the main relief sought in
the notice of motion and described in the founding
affidavit
[11] Prayer 2 of the notice of motion
reads as follows:
"2. Reviewing and setting aside:
2.1 the acceptance of the 1992 renewal
payment in respect of South African patent 88/0864;
2.2 the acceptance of the 1993 renewal
payment in respect of South African patent 88/0864; and
2.3 the restoration of South African
patent 88/0864 pursuant to the filing of a restoration application on
30 October 2003."
[12] It will be observed that these
alleged unlawful or irregular administrative actions were performed,
broadly speaking, 21, 20
and 10 years ago.
[13] For illustrative purposes, it is
convenient to quote the nature and details of the three
administrative actions under attack
in the review application, as it
is described in the founding affidavit:
"66.1 The irregular acceptance by
the Registrar in 1992 of the Second Respondent's Form P10 with
revenue stamps to the value
of R30.00. In terms of Government Notice
no R3163 of 27 December 1991, the prescribed renewal fee payable for
the expiration of
the fourth year, ie the 1992 renewal fee in respect
of the patent, was R36.00.
66.2 The irregular acceptance by the
Registrar in 1993 of the second respondent's Form P10 without revenue
stamps, payment having
been made by way of a cheque drawn in favour
of the Registrar. In terms of Regulation 3 of the Patent Regulations
which were in
force at that time, the fees payable in terms of the
Patents Act shall
be the fees specified in Schedule 1 to the
regulations and shall be payable:
(a) by affixing revenue stamps to any
relevant document, which stamps may be cancelled by a Receiver of
Revenue or the Registrar,
or
(b) by impressing a stamp on any
relevant document by means of a die approved by the Secretary for
Inland Revenue; or
(c) in such other manner as the
Registrar may direct.
66.2 The irregular acceptance by the
Registrar of an application for the restoration of the patent, which
restoration application
was filed on 30 October 2003. In terms of
Schedule 1 of the regulations referred to above, the fee payable for
the restoration
application was R286,00 payable as stated in
paragraph 66.2 above. It is not apparent from the Patent Office
records that this
fee was paid and that it was paid in the prescribed
manner. The restoration application was in any event not competent as
it was
aimed at restoring the lapsing of the patent in 2001 for
failure to pay the full prescribed renewal fees for the period 1993
to
2002. As pointed out in paragraph 66.1 above, the patent had
already lapsed in 1992 for the reasons given there. Notwithstanding
these defects the Registrar irregularly allowed the restoration of
the patent."
[14] The applicant then proceeds to
ask for the review and setting aside of these three administrative
actions by employing the
full spectrum of review grounds codified in
section 6
of PAJA.
Abandonment of part of the relief
sought and a consideration of the issues regarding the remainder of
the relief still prayed for
[15] Shortly before the commencement
of the proceedings before me, the applicant abandoned the second and
the third attacks referred
to above, namely those in respect of the
alleged irregular acceptance of the 1993 renewal payment by way of a
cheque and the 2003
entertainment of the restoration application for
the period 1993 to 2002.
It is common cause that the
restoration application was granted in terms of the provisions of
section 47 of the Act. In terms of
section 47(2), the second
respondent's intention to apply for the restoration was duly
advertised in the Patent Journal of February
2004. The applicant did
not oppose the restoration application or enquire about the
circumstances which gave rise for the need
for such a restoration. I
find no explanation in the voluminous record for the applicant's
failure to do so.
[16] What is left for consideration
and adjudication is the application to review and set aside the
alleged irregular acceptance
by the Registrar in 1992 of the second
respondent's Form P10 renewal application with revenue stamps to the
value of R30.00 instead
of R36.00 after the tariff had been increased
a few days earlier (on 27 December 1991) in terms of Government
Notice no R3163 of
27 December 1991.
[17] I consider it useful, and of some
relevance, to make a few remarks about the "renewal history"
of the patent, from
its inception on 8 February 1988 until its expiry
on 8 February 2008.
[18] The second respondent's patent
manager was, at all relevant times, his spouse, Ms Aideen Pidgeon
("Ms Pidgeon").
It was her duty to see to the regular and
timeous renewal of the patent in consultation with her husband. It is
common cause that
the patent was duly renewed for the first three
years namely in February 1989, 1990 and 1991. It is also common cause
that the
second respondent, at all relevant times, had the firm
intention to diligently and timeously renew the patent.
Ms Pidgeon offered detailed and
undisputed evidence on oath relating to the various steps she took
over the years to ensure the
proper renewal of the patent. Towards
the end of 1991, the second respondent instructed her to obtain a
copy of the relevant Government
Gazette regulating the prescribed
fees for patent renewals and to attend to the renewal of the patent
by not later than the due
date, 8 February 1992. She made use of the
"builders holiday" which normally commences at about 15
December of each year,
during 1991 to visit the Government Printer
before Christmas. She requested and obtained the relevant schedule of
fees published
in terms of the Act. At the time of preparing her
affidavits in this matter, she no longer had a copy of the relevant
Government
Notice, but she was advised that it would have been
Government Notice no R3038 of 28 December 1990. In terms of that
Government
Notice, the prescribed renewal fee was R30,00. It was
payable before the expiration of the fourth year from the date of the
application
of the patent, in this case before 8 February 1992.
It is common cause that after Ms
Pidgeon had visited the Government Printer, and on 27 December 1991,
with effect from 1 January
1992, the amended tariffs were published,
as I have pointed out, by Government Notice R3163. Ms Pidgeon was
unaware of this latest
amendment when she proceeded to complete the
relevant Form P10 on 8 January 1992 and when she affixed the revenue
stamps to the
value of R30,00. She posted the form on 9 January 1992
as is evident from the relevant "certificate of posting of a
registered
article" attached to one of her affidavits. She
received the form back some time later, duly endorsed with the
official stamp
of the Registrar, indicating that the patent had been
renewed for another period of one year with effect from 8 February
1992,
If she had been aware of the regulation published on 27
December 1991, or if the Registrar had drawn her attention thereto,
she
would have paid the extra amount of R6,00.
The patentee, the second respondent,
was also not aware of the R6.00 increase in the fee at the time when
the R30.GG was paid. The
second respondent concedes that objectively,
the Registrar should not have accepted the payment of R30,00 as a
valid renewal payment
and ought to have informed the patentee that a
further amount of R6,00 was payable in order to renew the patent in
1992. This evidence
of the second respondent is also supported by Mr
Daniel Petrus Boshoff, a former employee of the South African Patent
Office who
was an assistant director of patents between 1985 and 1995
when he retired. Mr Boshoff also testified that the Patent Office
(the
Registrar) made a mistake in accepting the short payment. In my
view, there is much to be said for the second respondent's submission
that the Registrar and his officials were probably not aware of the
new Government Notice that had been published at a time when
most
members of the public would not have been aware thereof namely over
the Christmas holiday period.
It is common cause that the second
respondent (and also Ms Pidgeon for that matter) only got wind of the
attack on the 1992 short
payment when this application was served in
April 2010, more than 18 years after the event. Had they been aware
of any difficulties
in this regard at an earlier stage, and of a
suggestion that the patent may have lapsed as a result of the short
payment, they
would undoubtedly have applied for a restoration in
terms of section 47 of the Act. When they finally became aware of the
attack
in April 2010, the patent had already expired so that there
was no longer any room for a restoration application.
Finally, I point out that Ms Pidgeon's
8 January
1992 Form P10
renewal application forms part of the record.
According to Mr Michau, the mischief complained of namely the
acceptance of the 1992
renewal fee, manifests itself in the
Registrar's official stamp to be seen over the R30,00 revenue stamps
on the Form P10.
[19] I turn to the 1993 renewal. The
historic details appear from affidavits offered by Ms Pidgeon which
contain her undisputed
evidence on the subject. During April 1993 the
second respondent instructed Ms Pidgeon to renew the patent by paying
the renewal
fees for a period of nine years in advance, namely until
February 2002. This instruction came after February 1993 (when the
purported
1992 extension would have expired) but section 46(2) of the
Act reads as follows:
"(2) A patent shall lapse at the
end of the period prescribed for the payment of any prescribed
renewal fee, if it is not paid
within that period: Provided that the
Registrar may upon application and subject to the payment of such
additional fee as may be
prescribed, extend the period for payment of
any such fee for a period not exceeding six months."
Ms Pidgeon calculated the renewal fees
for the period of 9 years (8 February 1993 to 8 February 2002)
together with the fine for
the late payment to amount to R842.00. She
made out a cheque for this amount and the cheque forms part of the
record. She phoned
the Patent Office and enquired whether the
calculation was correct. The officer at the Patent Office told her
that the payment
was "too much" and the cheque should be
made out for an amount of R707.00. On the officer's advice she
cancelled the
first cheque and prepared another cheque for the latter
amount. This last-mentioned cheque is also part of the record. She
posted
the cheque with a schedule setting out how the figure is
arrived at and the Form P10, duly completed, asking for the 9 year
extension.
All these documents form part of the record. Subsequently,
Ms Pidgeon received the Form P10 back, duly stamped by the Registrar,
together with a receipt from the latter for the payment of R707,00.
The date stamp on the P10 is 19 April 1993 and the date stamp
on the
receipt is 20 April 1993. Ms Pidgeon was now satisfied that the
patent had been renewed for 9 years until 8 February 2002,
and
diarized her file accordingly.
On or about 3 June 2002, on the
instructions of the patentee (second respondent), she phoned the
Patent Office's renewal department
to determine the renewal fees
(plus penalties for late payment) for the remaining term of the
patent until February 2008. She was
then advised by one of the
Registrar's officers that the patent had lapsed on 8 February 2001.
The officer also advised that a
caveat had been registered on the
patent. Ms Pidgeon told the officer about the 1993 renewal and how
the amount had been calculated
and sent the relevant documents to the
officer for inspection. This satisfied the officer that the patent
had been renewed until
8 February 2002 whereupon the officer also
advised Ms Pidgeon as to the outstanding renewal fees for the
remainder of the life
of the patent and the penalties (the so-called
extension provided for in section 46(2), supra). Ms Pidgeon now
prepared the necessary
Form P10 which she posted to the Registrar
with the required revenue stamps. She subsequently received the duly
stamped and signed
Form PI0 from the Registrar. The date stamp is 5
June 2002. Ms Pidgeon and her husband were now satisfied that the
patent had been
properly renewed until it would expire in February
2008.
[20] The following events led to the
restoration application of October 2003: in February 2003 the
respondents (as plaintiffs) issued
summons against another firm of
engineers and architects for the alleged infringement of the patent.
In May 2003, these defendants
filed a plea alleging that the patent
had lapsed owing to non-payment of the renewal fees. The defendant's
attorneys informed the
attorneys of the plaintiffs (present
respondents) that they had determined, through registration of a
caveat to monitor payment
of the renewal fees already in 1998 that
the patent had lapsed on 8 February 2001 and that the renewal fees
were never paid for
the period 8 February 2001 to 8 February 2002.
The gist of this argument is that the payment of R707.00 which Ms
Pidgeon made in
1993 (on the advice of the Registrar) was not enough
to cover the renewals until February 2002 but only until February
2001. This
state of affairs was subsequently confirmed by the
plaintiffs' attorneys whereupon Ms Pidgeon instructed his attorney to
launch
the restoration application, which, as I have said, was
granted on an unopposed basis. It is clear that the omission in
paying
the full amount in respect of renewal fees was unintentional
and that there was no undue delay on the part of the respondents to
launch the restoration application.
I add that, when the second respondent
got wind of the plea that the patent had lapsed, he sent Ms Pidgeon
to the Patent Office
where she was again given the assurance that
everything had been paid up to date. The Registrar even wrote a
letter (handwritten)
which reads -
"The Patent Office acknowledges
that this payment was paid in full for the period 8 February 1993 to
8 February 2002 and not
to 8 February 2001 as was mistakenly
indicated on the Register. If any queries come in ... office for
reference."
Nevertheless, as already indicated,
the restoration application was launched, advertised and granted.
[21] I add that the Registrar's file
contains a document recording "renewals" and
"restorations". There is nothing
in the "restorations"
column, so that the 2003 restoration is not mentioned in the Patents
Register. In the "renewals"
column, it is meticulously
recorded that consecutive renewal payments were made for the period 8
February 1991 to 8 February 2007
(the first three years between 1988
and 1991 are not mentioned, but it is common cause, as already
indicated, that those renewals
were in order).
[22] In view of the aforegoing, the
"renewal history" of the patent can be summarized as
follows:
1. For the first four years of the
patent's existence, from February 2008 to February 1992, the renewals
were in order.
2. For the renewal period February
1992 to February 1993 there was a short payment of R6.00 namely
R30,00 instead of R36,00. The
payment was made by Ms Pidgeon in
January 1992, ignorant of the fact that the tariff had been increased
a few days earlier, on
27 December 1991. An equally ignorant
Registrar accepted the payment as correct. Shortly before the payment
was made (and before
the 27 December amendment of the tariff) Ms
Pidgeon visited the Government Printer where she was informed that
the previous tariff
was still in place. The Registrar's file reflects
a proper renewal for this period. The Patent Register is silent as to
any irregularity.
It is, however, common cause that the Registrar
made a mistake when accepting the short payment.
When the Registrar was asked for
reasons, in terms of PAJA, for the decision to accept the short
payment, she stated the following
on 22 July 2010:
"The acceptance of the payment of
the 1992 renewal fee on Form PIO with revenue stamps to the value of
R30.00 instead of the
prescribed fee of R36.G0 occurred due to an
administrative oversight. The Registrar condoned the irregularity in
terms of section
89 read together with
section 16
of the
Patents Act
no 57 of 1978
. A notice in terms of
section 16(1)
was not issued
since no interested party could have been identified at the time of
condonation."
Section 89
provides:
"The registrar or the
commissioner may authorize the condonation or correction of any
irregularity in any proceedings before
him, provided such condonation
or correction is not detrimental to the interests of any person."
Mr Michau argued, correctly in my
view, that the day to day renewal of patents can hardly be described
as "any proceedings
before him". It was argued that the
section deals with an incorrect procedure having been followed in
legal proceedings. It
is not clear to me whether it is necessary to
elevate the "proceedings" mentioned in
section 89
to "legal
proceedings", but it is clear, as argued by Mr Michau, that
there is no indication whatsoever that the Registrar
has the power to
condone an underpayment of renewal fees. In the case of an
underpayment, the correct procedure would be for the
patentee to
provide for an extension of time for payment of the full amount as
intended by the requirements of
section 46(2)
, or, perhaps, to
approach the court for appropriate relief if the short payment is
discovered eighteen years later, like in the
present case. In this
regard, it is alleged in the founding affidavit on behalf of the
applicant that the latter got wind of the
short payment in April
2010, after its attorneys had embarked upon an exercise to search for
irregularities in respect of all the
renewal payments.
As to the Registrar's reference to the
provisions of
section 16
, Mr Michau, again correctly in my view,
argued that
section 16
finds no application in the present case: it
deals with matters where the Registrar and the Commissioner are
vested with discretionary
powers. This is not such a case.
3. The payment which Ms Pidgeon made
in March 1993 to ensure the renewal of the patent for the next 9
years until February 2002,
was a short payment and only good enough
to ensure renewals up to February 2001. There was consequently no
renewal payment for
the period February 2001 to February 2002 so that
the patent lapsed, as intended by the provisions of
section 46(2)
,
supra, of the Act. The fact that Ms Pidgeon wanted to pay a larger
amount, but was told by the Registrar to pay the lesser figure,
is
unfortunate, but does not avail the respondents. Nevertheless, the
lapsing of the patent after 8 February 2001 was remedied
with the
successful restoration application of 2003/2004. The exact date when
the restoration was granted remains unclear to me
but it would have
been, I assume, during or about 2004.
4. As already illustrated, it is
common cause that the renewals for the six years between February
2002 and February 2008 (when
the patent expired) were properly
brought about. Has a proper case been made out for the granting of
the remaining relief sought,
namely the reviewing and setting aside
of the acceptance by the Registrar of the 1992 R30.00 renewal
payment?
[23] The main thrust of the
applicant's argument, if I understood it correctly, is the following:
the purported renewal of the patent
in 1992 (when Ms Pidgeon's
R30,00 payment was accepted) was
unlawful and contrary to the provisions of the Act so that the
patent, as a matter of law, lapsed
in 1992. In this regard, the
applicant relies on the mandatory provisions in section 46(2) that "a
patent shall lapse at the
end of the period prescribed for the
payment of any prescribed renewal fee, if it is not paid within that
period" (with the
rider that the Registrar may upon application
extend the period for payment).
Consequently, so the argument
continues, subsequent renewals and the restoration were of no moment
because if the 1992 renewal is
set aside, it would mean that the
patent had lapsed and there was nothing to renew' or restore. The
restoration application did
not seek to cure the defective 1992
renewal but only the subsequent 2001 lapse as I have explained. The
subsequent restoration
proceedings were therefore an exercise in
futility.
[24] I have difficulty in accepting
this argument. Mr Michau formulates his submission as follows in his
heads of argument:
"There had been subsequent
renewals and also a restoration of the patent in question but these
are of no moment because if
the 1992 renewal is set
aside, the patent had lapsed and there
was nothing to renew or restore."
(Emphasis added.)
It is clear, therefore, that counsel
recognizes that the "1992 renewal" first has to be set
aside before the lapsing of
the patent in 1992 can be regarded as a
reality. This is also, presumably, why the remaining relief sought is
aimed at the reviewing
and setting aside of the acceptance of the
1992 renewal payment. This is also developed further in paragraph
66.1 of the founding
affidavit (already quoted) where the applicant
seeks the review and setting aside of the "irregular acceptance
by the Registrar
in 1992 of the second respondent's Form P10 with
revenue stamps to the value of R30,00". This is also,
presumably, why I was
not asked to issue a declarator to the effect
that the patent lapsed in 1992. It should also be borne in mind that
this was not
a case of non-payment of the renewal fee as described in
section 46(2) and as happened when the patent lapsed in 2001 because
the
February 2002 payment was not made at all. This was, indeed, a
bona fide attempt to renew the patent (albeit by making a short
payment) with the full blessing of the equally ignorant Registrar. As
I already pointed out, the Registrar, in accepting the short
payment,
made a mistake and, in that sense, committed an irregular
administrative act which, in appropriate circumstances, may
fall to
be set aside on review in terms of the provisions of PAJA. This is
what the applicant seeks to achieve.
[25] It is now well settled that an
unlawful administrative act remains valid until set aside by the
court. The learned judges,
in Oudekraal Estates (Pty) Ltd v City of
Cape Town and Others
2004 6 SA 222
(SCA) at 241H to 242C put it as
follows:
"In other words, was the Cape
Metropolitan Council entitled to disregard the Administrator's
approval and all its consequences
merely because it believed that
they were invalid provided that its belief was correct? In our view,
it was not. Until the Administrator's
approval (and thus also the
consequences of the approval) is set aside by a court in proceedings
for judicial review it exists
in fact and it has legal consequences
that cannot simply be overlooked. The proper functioning of a modem
State would be considerably
compromised if all administrative acts
could be given effect to or ignored depending upon the view the
subject takes of the validity
of the act in question. No doubt it is
for this reason that our law has always recognized that even an
unlawful administrative
act is capable of producing legally valid
consequences for so long as the unlawful act is not set aside."
At 244A the following is also said by
the learned Judges of Appeal:
"If the validity of consequent
acts is dependent on no more than the factual existence of the
initial act then the consequent
act will have legal effect for so
long as the initial act is not set aside by a competent court."
- See the full discussion of the
subject in Oiidekraal from 241G-247C.
[26] From the aforegoing, it would
appear that the acceptance of the 1992 renewal payment (and with it
the 1992 renewal of the patent)
remains in force until set aside. It
follows that the consequent acts of successfully initiating and
concluding restoration proceedings
of the patent for the period 1993
to 2002 also has legal effect, at least for so long as the 1992
renewal is not set aside and,
for that matter, for as long as the
2003/2004 restoration is not set aside.
[27] Where I was not asked to decide,
in the form of a declarator, whether or not the patent promptly
lapsed in February 1992, I
decline to do so. In any event, as I
pointed out, the applicant appears to recognize that the patent
cannot be regarded as having
lapsed in 1992 before the alleged
irregular administrative act of the Registrar, when he accepted the
short payment, is reviewed
and set aside.
[28] What remains for decision, is
whether or not the irregular administrative act, performed more than
21 years ago, ought to be
set aside. I have a discretion in this
regard. In Chairperson, Standing Tender Committee and Others v JFE
Sapela Electronics (Pty)
Ltd and Others
2008 2 SA 638
(SCA) the
following was stated at 650E-G:
"In my view the circumstances of
the present case as outlined above, are such that it falls within the
category of those cases
where by reason of the effluxion of time (and
intervening events) an invalid administrative act must be permitted
to stand. While
the court a quo correctly found that the award of
each of the three tenders was invalid when made, it appears not to
have appreciated
that it had a discretion to decline to set aside
those awards. It follows that in my view the court a quo erred in
making the order
it did and this court is free to set aside that
order."
[29] It is also convenient to quote
what was said in Sapela at 649J-650E:
"In appropriate circumstances a
court will decline, in the exercise of its discretion, to set aside
an invalid administrative
act. As was observed in Oudekraal ...at
246D:
'It is that discretion that accords to
judicial review its essential and pivotal role in administrative law,
for it constitutes
the indispensable moderating
tool for avoiding or minimizing
injustice when legality and certainty collide.'
A typical example would be the case
where an aggrieved party fails to institute review proceedings within
a reasonable time ...
In a sense, therefore, the effect of the delay
is to 'validate' what would otherwise be a nullity. See Oudekraal
Estates paragraph
27 at 242E-F. In the present case, as I have found,
there was no culpable delay on the part of the respondents. But the
object
of the rule is not to punish the party seeking the review. Its
raison d'etre was said by Brandt JA in Associated Institutions
Pension
Fund and Others v Van Zyl and Others
2005 2 SA 302
(SCA)...
in paragraph 46 to be twofold:
'First, the failure to bring a review
within a reasonable time may cause prejudice to the respondent.
Secondly, there is a public
interest element in the finality of
administrative decisions and the exercise of administrative
functions.'
Under the rubric of the second I would
add considerations of pragmatism and practicality,"
[30] 1 made a point of sketching the
"renewal history" of the patent in some detail, I consider
the facts of this case
to be of relevance when it comes to
considering whether or not to exercise my discretion in favour of
setting aside the administrative
action complained of. The mischief
under attack took place 2d years ago. When this application was
launched, it was about 18 years
after the event. At all relevant
times the patentee had the bona fide intention of renewing the
patent. The 1992 payment was made
timeously and with the blessing of
the Registrar. It was made after Ms Pidgeon had checked the then
applicable tariffs with the
Government Printer. The payment was made
a few days after the new tariffs were published two days after
Christmas. The Registrar
made no mention of the short payment (or a
possible lapsing of the patent) in the Patents Register. Indeed,
according to the reasons
furnished in terms of PAJA, the Registrar
states that the short payment was "condoned". The patentee
only became aware
of the alleged short payment and irregularity when
this application was served on him in 2010. This was after the patent
had expired.
There was no room for a restoration application. The
1992 renewal could not prejudice any party, or at least any known
party for
purposes of the present enquiry: the applicant only became
aware of the patent four years later, in 1996, when the licensing
agreement
was entered into with the respondents. The allegation in
the particulars of claim (issued in 2008 after the expiry of the
patent)
to the effect that the patent was at all relevant times in
force, was made in good faith.
The lapsing of the patent in February
2001 was cured with the 2003/2004 restoration application. The short
payment, covering renewals
only up to February 2001 instead of up to
February 2002, also came about because the Registrar advised Ms
Pidgeon to pay a lesser
amount than what she intended paying in the
first place. The restoration application was duly published in the
patent journal but
not opposed by the applicant. The application to
review and set aside the restoration was abandoned, and the same
applies to the
application for the review and setting aside of the
acceptance of the 1993 renewal payment. Again, the patentee was
unaware of
the lapsing of the patent until the news was broken to him
during the 2003 litigation exercise.
[31] Before me, counsel for the
applicant complained that a refusal to set aside the 1992 renewal
payment so that the patent can
be regarded as having lapsed in
February 1992, will prejudice the applicant who will then not be able
to raise a defence in a civil
trial to the effect that the patent was
of no force and effect during the contract period. As I understand
the dicla in Oiidekraal,
supra, the patent was in any event renewed
in 1993 and stood renewed until February 2001, before it was restored
in 2004. The alleged
"lapse" of 1992 would have taken place
before the contract was entered into in 1996. The applicant will
still be entitled
to any exemptions or compensation which may be
available to it in respect of actions performed while the patent was
lapsed between
February 2001 and its restoration, in terms of the
provisions of section 48 of the Act.
[32] On the other hand, the second
respondent, as deponent to the opposing affidavit, described the
prejudice to the respondents
in the event of "a finding of
invalidity of the administrative actions of the Registrar after so
many years" and presumably
on the assumption that the
restoration application would also be set aside (when the affidavit
was deposed to, the attack on the
restoration application had not yet
been abandoned). The second respondent sketches the prejudice in the
following terms:
"Some of the relevant facts and
considerations are the following:
24.1 the third respondent has granted
between 10 and 15 sub-licences under the patent to other parties on
the basis that the patent
was validly renewed;
24.2 I roughly estimate that 120 000
RDP houses were constructed under the sub-licences utilizing the
method described by the invention;
24.3 an amount of approximately R8
750,000 was collected by the third respondent in terms of the various
licence agreements. Its
clients,
in many instances, were project
managers or engineers who collected such fees, in turn, from their
clients (the owner, contractor,
principal agent, state organ, etc);
24.4 if the patent is now to be
invalidated due to an administrative oversight, the domino effect of
claims for repayment of fees
collected and paid over by each such
role-player, will be tremendous and obviously destructive of the
third respondent's corporate
existence and also my personal financial
position;
24.5 the public therefore, represented
by all of these intermediaries, agents, principals and clients in
respect of thousands of
projects, will be severely affected by
setting aside the actions and/or decisions of the Registrar;
24.6 after the lapse of so many years,
it is impossible to trace the officials who were responsible for
taking the administrative
actions complained of by the applicant...
25. In the interest of finality,
practicality and pragmatism (mv note: this is an obvious reference to
the dicta in Sapela, supra)
I submit that the honourable court
should, in the exercise of its discretion and in the event that it
finds that the actions of
the Registrar are reviewable, decline to
set aside such actions or decisions."
[33] I find it unnecessary to decide
whether or not there was an undue delay on the part of the applicant
to investigate the status
of the patent and to launch this review
application, I consider that there are
clear signals to that effect, but I take the matter no further. As
appears from the dicta
in Sapela, supra, an undue delay is not a
prerequisite for the exercising of the discretion against setting
aside the irregular
administrative act.
[34] Finally, I make the remark in
lighter vein that there is something unusual (perhaps even something
not cricket!) about the
nature of the relief sought: the applicant is
seeking to undo the renewal exercise of 1992 in order to lay the
foundation for a
pronouncement that the patent lapsed at that time.
In a sense, the applicant is seeking to "bring about" the
lapsing
of the patent. If the applicant was confident that the patent
lapsed without more because of the short payment and the mandatory
provisions of section 46(2), it could have asked for a declarator to
that effect. And what is to become of poor Ms Pidgeon's R30,00?
Is it
to be refunded to her? And perhaps with interest by now exceeding
R6.00?
[35] In all the circumstances, I have
come to the conclusion that this is an appropriate case where I
should exercise my discretion
to decline to set aside the
administrative action complained of. This is a case where the "public
interest element in the
finality of administrative decisions and the
exercise of administrative functions" should be recognized. It
is also a case
where "considerations of pragmatism and
practicality" militate against the granting of the application.
In the result,
the application falls to be dismissed.
[36] In view of the conclusion which I
have arrived at I do not consider it necessary to deal with another
argument offered on behalf
of the respondents, namely that the
applicant failed to exhaust internal remedies at its disposal, as
intended by the provisions
of section 7(2) of PAJA, before launching
this application.
Some remarks about the question of
costs
[37] After the applicant filed its
replying papers, the second and third respondents filed a further
affidavit, with annexures,
which they described as a "rejoinder
affidavit". This was presumably done with the provisions of
Uniform Rule 6(5)(e)
in mind. The filing of this "rejoinder
affidavit" was not opposed, and the applicant responded with a
"joinder"
with some further annexures. The "rejoinder
affidavit" of the respondents starts at p278 of the record.
[38] I am not persuaded that it would
be appropriate to order the unsuccessful applicant to pay the costs
flowing from the "rejoinder
exercise". In my view, it would
be more appropriate to direct each party to pay its own costs flowing
from the "rejoinder
exercise".
The order
[39] I make the following order:
1. The application is dismissed.
2. The applicant is ordered to pay the
costs of the second and third respondents, which will include the
costs of two counsel, barring
the costs
flowing from the rejoinder affidavits,
in respect of which each party will pay its own costs.
W R C PRINSLOO
JUDGE OFTHE NORTH GAUTENG HIGH COURT
23902-2010
HEARD ON: 25 MARCH 2013
FOR THE APPLICANT: R MICHAU SC
INSTRUCTED BY: SPOOR & FISHER
FOR THE 2nd AND 3rd RESPONDENTS: L J
VAN TONDER AND A M HEYSTEK INSTRUCTED BY: D M KISCH INC