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[2020] ZASCA 28
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Nu-World Industries (Pty) Ltd v Strix Ltd (1349/18) [2020] ZASCA 28; 2020 BIP 329 (SCA) (26 March 2020)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 1349/18
In
the matter between:
NU-WORLD
INDUSTRIES (PTY)
LTD APPELLANT
and
STRIX
LIMITED RESPONDENT
Neutral
citation:
Nu-World
Industries (Pty) Ltd v Strix Ltd
(Case
no 1349/18)
[2020] ZASCA 28
(26 March 2020)
Coram:
MAYA P, MBHA, VAN DER MERWE and
MOKGOHLOA JJA and GORVEN AJA
Heard
:
12 November 2019
Delivered
:
26 March 2020
Summary:
Court order – interpretation –
infringement of patent – separation of issues –
determination of infringement
– impermissible to introduce new
infringements in determination of damages or royalties enquiry.
ORDER
On
appeal from:
Court
of the Commissioner of Patents, Pretoria (Matojane J, sitting as
court of first instance):
1 The appeal is upheld with costs to
the extent reflected in paragraph 2 hereof.
2 The order of the court of first instance is set aside
and substituted by the following order:
(a) Paragraphs 3, 4 and 5 of the application to amend
are granted.
(b) Save for paragraph (a) hereof, the application to
amend is dismissed with costs.
JUDGMENT
Gorven AJA (Maya P, Mbha, Van der Merwe and Mokgohloa
JJA concurring)
[1]
In this appeal it will
be convenient to refer to the appellant as Nu-World and the
respondent as Strix. The appeal concerns domestic
kettles which are
imported and sold by Nu-World. Strix has registered patent 95/4779
(the patent) under the Patents Act
[1]
(the Act). Claim 1 of the patent lists various components of domestic
kettles. The one material to this appeal is ‘
a
thermally sensitive overheat control arranged to operate in the event
of said element overheating so as to interrupt or reduce
the supply
of electrical energy to the element; said thermally sensitive
overheat control comprising at least two thermally responsive
sensors
arranged in good thermal contact with, and at spaced apart locations
on, the base of the container or the element, said
sensors
individually being operable, in the event only of said element
overheating when the vessel boils dry or is switched
on dry so as to
interrupt or reduce the supply of electrical energy to the element.’
In everyday parlance the control is
called a cut-out switch.
[2]
In April 2011, Strix
instituted action against Nu-World in the Court of Commissioner of
Patents, alleging that it had infringed
claim 1 of the patent. It
averred that certain kettle models imported by Nu-World contained
thermally sensitive overheat controls
protected by the patent. It listed four such controls; Liang Ji
LJ-06A, Liang Ji LJ-06, Sunlight
SLD-105A IL and Jia Tai KSD688-A.
[3]
Two of the aspects on which Strix
sought
relief relate to the present appeal. The first aspect of the relief
sought was an interdict against Nu-World preventing it
from breaching
the patent in these terms:
‘
[A]n interdict restraining the defendant
from infringing claim 1 of South African patent 95/4779 by making,
using, disposing, offering
to dispose of, or importing liquid heating
vessels containing Liang Ji LJ-06A, Liang Ji LJ-06, Sunlight SLD-105A
IL or Jia Tai
KSD688-A thermally sensitive overheat controls . . .’.
The second aspect was:
‘
as to damages
(i) an enquiry as to the damages suffered by the plaintiff as a
result of the infringement of the South African patent 95/4779
by the
defendant, alternatively as to the amount of a reasonable royalty as
contemplated in
s 65(6)
of the
Patents Act, 1978
and payment of the
amount found to be due to it;
(ii) an order directing that, in the event of an
enquiry in terms of sub-paragraph (i) being ordered and the parties
being unable
to reach agreement as to the further pleadings to be
filed, discovery, inspection or other matters of procedure relating
to the
enquiry, any of the parties may make application to the court
for directions in regard thereto.’
The
issues were separated, with the court initially dealing only with the
issue of whether the four controls of Nu-World listed
in the prayer
had infringed the patent and interdictory relief arising from any
such infringement (the infringement part of the
action).
[4]
The claim was dismissed
by Preller J, sitting in the Court of Commissioner of Patents.
[2]
He found that Nu-World had made out the defence of lack of novelty.
On appeal, this court found that this defence should not have
succeeded. It found that the Jia Tai KSD688-A control did not
infringe.
[3]
However, the other three controls listed in the prayer did infringe
the patent (the three infringing controls). On that basis,
this court
set aside the order of the court of first instance and substituted it
with the following order:
‘
(a)
the
defendant is interdicted from infringing claim 1 of South African
Patent 95/4779 (the patent) by making, using, disposing,
offering to
dispose of, or importing liquid heating vessels containing Liang Ji
LJ-06A, Liang Ji LJ-06 or Sunlight SLD-105A IL
thermally sensitive
overheat controls or any other thermally sensitive overheat controls
as claimed in claim 1 of the patent;
(b)
the defendant
is ordered to deliver up any product infringing the patent and any
article or product of which an infringing product
forms an
inseparable part;
(c)
as to
damages:
(i) an enquiry is ordered as to the damages suffered by the
plaintiff as a result of the infringement of the patent by the
defendant, alternatively as to the amount of a reasonable royalty as
contemplated in
s 65(6)
of the
Patents Act, 1978
and payment of the
amount found to be due to it;
(ii) in the event of the parties being unable to reach agreement as
to the further pleadings to be filed, discovery, inspection
or other
matters of procedure relating to the enquiry, any of the parties may
make application to the court for directions in regard
thereto;
(d)
the defendant
is ordered to pay the plaintiff’s costs, including the costs of
two counsel to the extent that such were employed
and including the
qualifying and attendance fees of the expert witness Richard
Moorhouse.’
[4]
[5]
In arriving at its
conclusion, this court reasoned:
(a) ‘The question was whether a Nu-World kettle
with any one of these [four] controls constituted an infringement of
claim
1 of the patent in suit.’
(b) ‘The Jia Tai KSD688-A kettle . . . had a
distance of 0,5 millimetres between the two sensors … . In
respect of
that kettle the infringement would not have been proved.’
(c) ‘In respect of the
remaining [three] kettles, Preller J disregarded the evidence and
erred in concluding that in relation
to them there was no
infringement.’
[5]
[6]
Strix thereafter sought
to amend its declaration. Paragraphs 3 to 5 of the Notice of
Intention to Amend were not objected to. Paragraphs
1 and 2 did
attract opposition. Paragraph 1 sought to insert the following two
new paragraphs after paragraph 5:
‘
5A Properly interpreted the Supreme Court
of Appeal order, and specifically paragraphs 2(a) and 2(c)(i)
thereof, provide that an
enquiry is ordered as to the damages
suffered by the plaintiff as a result of the infringement of the
patent by the defendant by
making, using, disposing, offering to
dispose of, or importing liquid heating vessels containing Liang Ji
LJ-06A, Liang Ji LJ-06,
Sunlight SLD-105A or Sunlight SLD-105 IL
thermally sensitive overheat controls or any other thermally
sensitive overheat controls
as claimed in claim 1 of the patent.
5B As a result of the aforesaid, the Commissioner is authorised and
required in the enquiry into damages to ascertain whether any
controller relied upon by the plaintiff in support of its claim for
damages is a thermally sensitive overheat control as claimed
in claim
1 of the patent.’
And paragraph 2 sought to insert the following two new
paragraphs after paragraph 8:
‘
8A In addition to that which is pleaded in
paragraph 8 above, the defendant imported and sold infringing liquid
heating vessels
in which the thermally sensitive overheat controller
was modified during the manufacturing process by:
8A(a) Removing one bimetal sensor where the controller consisted of
two discrete bimetal sensors and no meltable fuse;
8A(b) Removing the meltable fuse where the controller consisted of a
meltable fuse and bimetal combination;
8A(c) Fitting a thermal fuse in contact with the heating element and
connected to the controller
alternatively
to the heating
element.
8B Liquid heating vessels containing controllers
modified in the aforesaid manner fall within claim 1 of the patent.’
[7]
Nu-World objected that
it is impermissible to amend so as to include in the enquiry into
damages or royalties (the damages part
of the action) any controls
other than the three infringing controls. Sunlight SLD-105A and
Sunlight SLD-105 IL, referred to in
paragraph 5A, were not considered
in the infringement part of the action. However, Strix clarified that
the second of these two
arises from an error in the Notice. It ought
to have referred to Sunlight SLD-105A IL which is one of the three
infringing controls.
The only one not dealt with in the infringement
part of the action and sought to be introduced in paragraph 5A is
thus Sunlight
SLD-105A. Further, Nu-World complained that paragraph
5B would allow Strix to attempt to prove that other controls not even
identified
in the Notice also infringe claim 1 of the patent.
Finally, the complaint of Nu-World lay against the proposed inclusion
of modified
controls dealt with in paragraphs 8A and 8B for similar
reasons. These, too, did not form part of the infringement part of
the
action. Apart from this, Nu-World asserted that at least part of
any claim relating to any of these (if proved to have infringed)
would have prescribed because the period of the claim runs from 2008
to 2015.
[8]
The nub of the
objection, however, is that the judgment on the separated issue of
the infringement part of the action is final.
This court made no
finding on any of the controls sought to be introduced. The damages
part of the action is limited to damages
or royalties arising from
infringement by the three infringing controls. It cannot consider any
further infringements. All that
is left to determine is the quantum
of damages or the reasonable royalties payable to Strix arising from
the three infringing controls
and those controls only.
[9]
Strix squarely bases
its right to the amendment on the words in paragraph (a) of the order
of this court. This interdicts against
use of the three infringing
controls ‘or any other thermally sensitive overheat controls as
claimed in claim 1 of the patent’
(the additional words). As a
result, it says it is entitled to bring controls other than the three
infringing controls into account
in the damages part of the action.
Strix concedes that if the amendment is allowed, this ‘would
require the court hearing
the damages enquiry to determine whether
thermally sensitive overheat controls other than the three controls
already found to infringe
the patent, are also infringing’.
[10]
The application to
amend came before Matojane J in the Court for the Commissioner of
Patents. He granted the application to amend.
It is this order which
is before us on appeal, with the leave of Fourie J since Matojane J
was not available to hear the application
for leave to appeal. It is
clear that the appeal is directed only against that part of the order
allowing paragraphs 1 and 2 of
the Notice of Intention to Amend.
[11]
The appeal hinges on
the interpretation of the order of this court. It is this on which
Strix relies for its contention that controls
other than the three
infringing controls can be brought into account. The law relating to
the interpretation of court orders is
set out in
Finishing
Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Ltd and
Others
:
[6]
‘
The starting point is to determine the
manifest purpose of the order. In interpreting a judgment or order,
the court’s intention
is to be ascertained primarily from the
language of the judgment or order in accordance with the usual,
well-known rules relating
to the interpretation of documents. As
in the case of a document, the judgment or order and the court’s
reasons for
giving it must be read as a whole in order to ascertain
its intention.’
[12]
The order is premised
on a positive finding that the patent was infringed by the three
infringing controls. For present purposes,
there follow two, discrete
aspects to the order. Paragraph (a) grants interdictory relief.
Paragraph (c)(i) relates to an enquiry
into the damages or royalties
payable as a consequence of the controls found by the court to have
infringed.
[13]
This is the standard
approach in infringement claims and is based on
s 65(3)
of the
Act, which provides:
‘
A plaintiff in proceedings for infringement
shall be entitled to relief by way of—
(
a
) an interdict;
(
b
) delivery up of any infringing product or any article or
product of which the infringing product forms an inseparable part;
and
(
c
)
damages.’
And
s 65(6)
provides:
‘
In lieu of damages the plaintiff may, at
his or her option, be awarded an amount calculated on the basis of a
reasonable royalty
which would have been payable by a licensee or
sub-licensee in respect of the patent concerned.’
It
will be noted that the relief in the order of this court is based on
these provisions.
[14]
The interdictory relief
which was granted is not limited to the three infringing controls. It
includes the additional words. It
goes beyond what was sought by
Strix in its prayer. But interdictory relief is essentially
forward-looking and geared to prevent
future unlawful conduct. The
patent affords Strix, as holder, a clear right to prevent any
infringement, past or future, established
or not. Infringements not
yet committed frequently form the basis of interdictory relief. It is
designed to protect against any
future infringement, both by the
three infringing controls and by any other controls. Paragraph (a) of
the order of this court
is accordingly widely framed. It is
unremarkable that the interdict goes beyond the three infringing
controls to include the additional
words.
[15]
The proposed paragraph
5A claims that the entitlement to damages from other infringements
arises from an interpretation of this
court’s order and
‘specifically paragraphs 2(a) and 2(c)(i)’ thereof on the
basis of the additional words. There
are at least two insurmountable
difficulties with this assertion. First, paragraph 2(c)(i) of the
order does not use those words.
They are only used in paragraph 1.
Secondly, it ignores the wording of paragraph 2(c)(i) of the order
which limits the enquiry
into damages or royalties claimable ‘as
a result of
the
infringement of the patent by the defendant’.
[7]
What infringement is implicated? It can only refer to that which had
been found in the infringement part of the action. The enquiry
directed to be held into damages or royalties is firmly based on, and
limited to, the finding of actionable past conduct. The infringement
which has given rise to the order in paragraph 2(c)(i) is that of the
three infringing controls and those alone. There is no suggestion
in
the judgment that damages for any other infringements can form part
of the damages part of the action.
[16]
This interpretation is
buttressed by the fact that a separated issue has been finally
decided. As I have noted, Strix concedes that,
if granted, the
amendment will require the court to determine whether controls other
than the three infringing controls also infringed.
The purpose of
separating the issues in a suit is to deal finally with a discrete
part of it. This is because that issue might
be dispositive of the
entire matter. If it proves to be dispositive, the additional time
and expense of dealing with the other
issues is saved. Other than on
appeal, the judgment cannot be revisited. This is why such a judgment
is appealable. It is final
in effect, despite not having disposed of
all of the issues in the action.
[17]
The effect of an order made on
a separated issue is similar to that explained by Innes J in
Steytler
NO v Fitzgerald
:
[8]
‘
It is sufficient for the purposes of this
case to say that when an order incidentally given during the progress
of litigation has
a direct effect upon the final issue, when it
disposes of a definite portion of the suit, then it causes prejudice
which cannot
be repaired at the final stage, and in essence it is
final, though in form it may be interlocutory.’
This
approach has not changed. The general principle of when an order has
final effect (and is thus appealable) was explained again
in
Marsay
v Dilley
:
[9]
‘
[W]here a trial Court has under
some competent procedure (such as an application under
Rule
33(4))
made an order which has the effect of being a final decision
(ie one which cannot be corrected or altered or set aside by the
trial
Judge at a later stage of the trial) and the decision is
definitive of the rights of the parties and has the effect of
disposing
of a substantial portion of the relief claimed by the
plaintiff in the main action, then this order is a judgment (as
understood
in s 20(1) of the Supreme Court Act 59 of 1959) and is
appealable, despite the fact that the main action has not been
concluded.’
[10]
The
order concerning infringement disposed of that portion of the action
concerning which of the controls of Nu-World infringed
claim 1 of the
patent. This has been finally determined. Not only that, but the
initial order was appealed and resulted in the
order now under
consideration being granted on appeal. To allow an enquiry into
whether Nu-World has infringed by other or modified
controls amounts
to dealing with material which belongs under the infringement part of
the action on which a final judgment has
been given. This is
impermissible.
[18]
It is not as if Strix
applied to reopen the infringement part of the action. Depending on
the circumstances of a matter, this may
or may not be
permissible.
[11]
Because Strix does not seek to do so, it is unnecessary to say
anything further on this score. Instead, Strix seeks to argue that
the enquiry as to whether additional controls infringe the patent can
take place during the damages part of the action. But in
that part,
all that is to be determined is the damages or royalties which should
accrue as a consequence of the infringement which
this court
determined had taken place. Strix admits that this strays beyond the
territory of the damages part of the action, saying
that it ‘would
require the court hearing the damages enquiry to determine whether
thermally sensitive overheat controls other
than the three controls
already found to infringe the patent, are also infringing’.
This, too, is not permissible and militates
against the
interpretation contended for by Strix.
[19]
Therefore, on the basis
that the order, properly interpreted, did not open the door to new
claims of infringing controls, on the
finality of the separated
aspect of the suit dealing with past infringements, and on the fact
that the amendment would result in
the enquiry into damages or
royalties to stray beyond those arising from the three infringing
controls, the amendment should not
have been allowed. In the result,
the court of first instance erred in doing so. The appeal must be
upheld and that order must
be set aside.
[20]
The following order
issues:
1 The appeal is upheld with costs to the extent
reflected in paragraph 2 hereof.
2 The order of the court of first instance is set aside
and substituted by the following order:
(a) Paragraphs 3, 4 and 5 of the application to amend
are granted.
(b) Save for paragraph (a) hereof,
the application to amend is dismissed with costs.
________________________
GORVEN
AJA
ACTING
JUDGE OF APPEAL
Appearances
For
appellant: AJ Bester SC
Instructed
by: Bouwers Inc, Johannesburg
Phatshoane
Henney, Bloemfontein
For
respondent: P Ginsburg SC, with him KD Iles
Instructed
by: Spoor & Fisher, Pretoria
Matsepes
Inc., Bloemfontein.
[1]
Patents Act 57 of 1978
.
[2]
Strix Limited v Nu-World Industries (Pty) Ltd
[2014] ZACCP 1.
[3]
Strix Limited v Nu-World Industries (Pty Ltd
[2015]
ZASCA 126; 2016 (1) SA 387 (SCA).
[4]
See para 26.
[5]
Strix
paras 9, 22 and 24.
[6]
Finishing Touch 163 (Pty) Ltd v BHP Billiton
Energy Coal South Africa Ltd and Others
[2012] ZASCA 49
;
2013 (2) SA 204
(SCA) para 13.
[7]
My emphasis.
[8]
Steytler NO v Fitzgerald
1911 AD 295
at 313.
[9]
Marsay v Dilley
[1992] ZASCA 114
;
1992 (3) SA 944
(A) at 962C-F.
[10]
The repeal of the Supreme Court Act 59 of 1959 and its replacement
by the
Superior Courts Act 10 of 2013
has not altered the principle
involved.
[11]
In this regard see
David Hersch Organisation (Pty) Ltd and
Another v ABSA Insurance Brokers (Pty) Ltd
1998 (4) SA 783
(T)
at 787C-G;
Schmidt Plant Hire (Pty) Ltd v
Pedrelli
1990
(1) SA 398 (D)
;
Tolstrup NO v Kwapa NO
2002 (5) SA
73
(W) at 77I-J&78A.