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Title: Reference of matter to the Tribunal by managing director under section 118 of the Industrial Property Act 2001 between Vestergaard Frandesen sa, Vestergaard Frandesen group sa and vestergaard frandsen (e.a.) ltd and ole skovmand and intelligen insect control (sarl) as to ownership of patent application
Short Title: Vestergaard Frandesen SA v Ole Skovand
Venue: Industrial Property Tribunal, Nairobi
Case ID: IPT No. 59 of 2010   
Tribunal Panelists: Moses Kurgat, Maria M. Mutua, Raymond Chelulei
Date of Decision: 6th September, 2011
Applicant(s): vestergaard frandesen sa, vestergaard frandesen group sa and vestergaard frandsen (e.a.) ltd
Respondent(s): Ole Skovand and Intelligent Insect Control (SARL),
Keywords: Pre-grant entitlement proceedings; ownership of patent

Facts
The Applicants herein opposed the grant of patent to the Respondents and sought pre-grant entitlement proceedings from the Tribunal in order to establish ownership of the patent in question. The Managing Director under the authority vested by the Industrial Property Act applied to the Tribunal for directions on pre-grant entitlement.

Issues
Whether, the patent was owned by the Applicants or the Respondents.

Holding
The Tribunal allowed the pre-entitlement proceedings sought in accordance with the prescribed forms containing grounds supporting or opposing the case for the pre-entitlement grant. The Tribunal held the view that the question of ownership was a fundamental one that must be determined, and that it is a legal issue that could not be decided at the examination stage of the patent.

Cases Cited
1.    Sea Fort Tea Estates (1949) 2 ALLER 155CA
2.    Sanitam Services (E.A.) Ltd. VS Rentokil (K) Ltd. & Another (2006) eKLR.

Ruling
The Ruling herein is in respect to the directions sought by the claimant/applicant through their Advocates calling for way forward under S.118 of the Industrial Property Act, 2001.  The important legal issues arising as stated in the Managing Director’s letter of 16th August, 2010 and Coulson Harney Advocates’ letter of 25th of March, 2010 form the main crux of the substance in which directions are sought.

The patent system in Kenya ought to be subjected to considerable continuation of vocal and highly critical public scrutiny.  The scrutiny could lead to calls for serious reform of patent law as currently represented by the Industrial Property Act of 2001.  Patents, we dare say, acts as a vector that links scientific and technical research with commercial spheres.

There is a school of thought that has called for the abolishing of the whole system on the grounds that it is unnecessarily complicated, technical and obscure.  While applicants benefit, the corresponding public interest in the disclosure of technical information is not met and that it has a monopolistic nature.  These are some of the issues that crossed our minds when considering the Reference under S.118 of the Industrial Property Act, 2001.

We recognize and hereby declare without any fear of contradiction that Patents are important.  They guard the natural rights of the inventors to the products of their mental labour.  It is part of the inherent rights and justice and that is the reasoning captured by Articles 11 and 40(5) (6) of the Constitution promulgated on 27th August, 2010.  It is our pride of place.

We have considered both letters at length and also the literally brief submissions by Counsel of the parties who are involved and concerned in the prosecution of Patent Application No.KE/P/2008/00774.

We have taken note of the complexity of the matter and what one of the parties and the Managing Director of Kenya Industrial Property Institute (KIPI) call “unusual point of law in question as relates to pre-grant proceedings.”

Essentially, the Tribunal is being asked for general directions on form(s) and procedure as envisaged by Rule 37 of the Industrial Property Tribunal Rules especially where no form exists or is not provided by the Rules.  One of the parties wishes that it obtains the right to KE/P/2008/00774 opposed to it being granted to one Ole Skovmand and Intelligent Control SARL, the Respondent parties in the Reference herein.

The said party wishes to file what it calls pre-grant entitlement proceedings before this Tribunal under S.31 of the Industrial Property Act of 2001. 

The said party argues that under Rule 37(1) this Tribunal can create an appropriate mechanism for a pre-grant entitlement by way of putting in place, by way of directions, the appropriate procedure and forms to be used in the pre-grant entitlement claim proceedings.

The said party admits, and is aware by its submissions, that the Industrial Property Act and Rules do not make provision for the forms and procedures to be followed in the pre-grant entitlement proceedings and hence the necessity of seeking directions.  The pre-grant entitlement proceedings are also not expressly provided for in the said Act but when looked at keenly and applying the principle of purposive interpretation, it is possible to argue that pre-grant proceedings on entitlement are inbuilt in the provisions relevant to the proceedings herein and can be undertaken.

The Managing Director, as a result of the above, and in compliance with section 118(1) of the Industrial Property Act made a reference to this Tribunal and in which the directions tabulated here below were sought:

(i)    As between Ms Intelligent Insect Control and Ms. Vestergaard Frandsen who has the right to the Patent KE/P/2008/00774 under S.30(1) of the Industrial Property Act as read together with Rules 12(2)(b) and Section 34(3) of the Act?
(ii)    As between Ms. Intelligent Insect Control and Ms. Vestergaard Frandsen, who is the inventor of the Patent KE/P/2008/00774 under Sections 30(1) and Section 30(2) of the Industrial Property Act?
(iii)    Was the invention embodied in the Patent Application KE/P/2008/00774 made in Execution of a Commission by the Applicant as commissioned by Ms. Vestergaard Frandsen Under terms of S.32(1) of the Industrial Property Act?  If so, what is the legal effect of the Commissioning in relation to entitlement to Patent under Section 32(1) of the Act?
(iv)    Did the Applicant (Ms. Intelligent Insect Control) in the Patent Application No.KE/P/2008/00774 obtain without authorization from Ms. Vestergaard the essential elements of the invention contrary to S.31 of the Industrial Property Act and hence the provisions of S.31 should apply to vest the Patent KE/P/2008/00774 upon Ms. Vestergaard?

These are the issues that we were requested to give directions on.  They are wide in nature and we cannot give answers to all the issues before we find out how pre-grant entitlement proceedings can be undertaken.

What are Pre-grant entitlement proceedings?
These are aspects of patent prosecution process which is split into pre-grant and post-grant prosecution.  The former ordinarily involves interaction with patent office in terms of preparation of application, filing of application, search and examinations, registration, appeals and or abandonment.  Whereas post-grant takes the form of opposition and re-issue.

It is in the province of search and examination that is the main phase of prosecution of a patent leading to either a grant or refusal.  This is where pre-grant entitlement claims or proceedings come into play.  In some jurisdictions, the law provides for it expressly, in others it is fused into the provisions dealing with ownership.  This is what we have termed in this ruling as inbuilt.

The Managing Director’s queries contained in Form IPT 24 made under Rule 39(1) of the Industrial Property Rules raises questions that fall squarely in the pre-grant province as established in other jurisdictions.  It fortifies the argument that the provisions of the Industrial Property Act as represented by Sections 30, 31 and 32 have inbuilt options on pre-grant entitlements therein.  In the interest of justice and in aid of developing jurisprudence in respect to the issues raised, this Tribunal shall deal with all the issues from the said perspective.

We bear in mind the fact that the process of examination is still ongoing and hence it is not legally tenable for the Tribunal to render answers or opinion about who is entitled to the patent under scrutiny.  It is not its function at this stage.  The issues can be dealt with when properly instituted pre-grant proceedings are in place.  This demonstrates the need for pre-grant entitlement proceedings to be undertaken by the Tribunal and not the Managing Director of Kenya Industrial Property Institute (KIPI).   This is one aspect of direction and it is hereby given as requested.  The role of the examiners is, given the circumstances, put on hold for a little while until the issue of ownership is determined.

We shall look at the relevant statutory provisions in the matter at hand in order to build good grounds to justify the inbuilt arguments bringing forth into existence of pre-grant entitlement proceedings until such time that express provisions are put in place to allow pre-grant entitlement proceedings under the law.  In India, Section 25 (1) of the Indian Patent Act, 1970 provides for pre-grant proceedings.  Similar provisions exist in Japan.

Section 30(1) of the Industrial Property Act states:
“Subject to this Section, the right to a patent shall belong to the inventor”. 
This means that the right to a patent shall be determined by a finding.  Such finding has no process or procedure for us to determine ownership under the relevant Act.

This calls for explanation as to how ownership can be attained.  It is good to demonstrate how ownership can be acquired or claimed successfully.  The examiners cannot provide an answer to this and hence the need to find answers elsewhere.  In Kenya, the first to file is the norm.  Once an acceptable application has been made, it takes priority.  This ‘first to file’ however in our considered view should not and cannot avoid all legal investigations as who was the ‘inventor’.  This reasoning is premised on the fact that inventors are entitled to be named on the patent, even if they are not the applicant.  This is the main thrust of S.30 (3) of the Industrial Property Act, 2001.

The first to file occurs if there is no priority claimed but where priority is claimed from elsewhere an administrative decision has to be rendered as set out in Article 4 of the Paris Convention.

This process calls for scrutiny albeit the fact that our principal Act do not expressly provide the way forward.  In our view the same must and ought to be undertaken.  The answer lies in the Directions that are provided under S.118 of the Industrial Property Act.  It is the saving provision that can be applied to address short-comings in the Act.  It is akin to S.3A of the Civil Procedure Act, 2010.  The right to a patent is made clearer by the other subsections of Section 30.  Our reading of the said sections as much as it is plain and devoid of any ambiguity, the process of examination entails the making of a decision and that decision belongs to the Patent Office in this case Kenya Industrial Property Institute (KIPI) who however cannot go ahead and render the decision in that respect when the issue of ownership under Section 30(1) is unresolved.  This aspect is not the business of the examiners.

Section 31 on the other hand states:
“Where the applicant has obtained the essential elements of the invention which is the subject of his application from the invention of another person, he shall, unless authorized by the person who has the right to the patent or who owns the patent, be obliged to assign such person the application or, where the patent has already been granted, the patent”

The section raises questions on the mind of the examiner immediately as to who is entitled and answers to such questions calls for investigation on the applicant’s status.  This however is not a function specifically provided to the Patent Office.  The answer has to be found elsewhere.

This section by implication invites pre-grant opposition by the way it is framed.  The issue of authorization comes into play.  How is it to be resolved at that stage of the prosecution of the application other than by allowing pre-grant entitlements proceedings to take place?

It is not an issue that can arise on a daily in respect to application for patents.  This is very unusual and extraordinary in nature.  We must find answers as to the way forward and hence the directions to be given.

Section 32(1) provides as follows:
“Notwithstanding Section 30 and in the absence of contractual provisions to the contrary, the right to a patent for an invention made in execution of a commission or of an employment contract shall belong to the person having commissioned the worker to the employer!

The examiner at the Patent Office may have questions in the process of examination especially in the context of the provision of the statute above quoted.  A decision that is to be rendered before a patent is awarded calls for pre-grant entitlement proceedings which is not a function of the examiners.

The right to patent does not come easy for those who are on employment or have been in employment.  The said section contemplates some elements of disclosure or the need for disclosure in order that a correct decision can be made as to who is entitled to the patent.  This section also contemplates possibility of pre-grant opportunity before the patent can be issued in respect to scrutinizing of commission or employment contract.

Be that as it may, it is clearly obvious from the provisions of section 30, 31 and 32 that the need for pre-grant proceedings under our law is already in built.  It is actually possible but for the procedure of carrying out the same.

Pre-grant proceedings are in aid of examination of the patent application and therefore the provisions of S.31 of the Industrial Property Act must be interpreted in a manner that once an interested party appears or happens, his objections or opposition to a patent consideration should be heard and a decision rendered expeditiously in a manner that the entire process of prosecuting the application is not affected or disrupted altogether.  In other jurisdictions, third parties are allowed to file opinions on the patentability of an application.  Such opinion takes the form of an opposition interparty procedure which by virtue of the power donated to the Tribunal under S.118 of the Industrial Property Act, it is possible to undertake similar process. 

As pointed out above, the forum for that decision does not lie with the Patent Office.  The Tribunal can put in place a process of entertaining such pre-grant questions and issues that are outside the province of the examiners at the Patent Office.  The directions under S.118 of the Industrial Property Act, 2001 saves tremendous costs to the parties involved that would otherwise be incurred in post-grant proceedings.

It is a fact that the refusal to grant patent is relatable to and must of necessity be understood as a function of the Patent Office but as shown by sections 30, 31 & 32 of the Industrial Property Act, the right to ownership has to be determined prior to final prosecution of an application for a patent.  Refusal to register a patent is in our view appealable under the said Act to the Tribunal in circumstances not related to ownership.  The gap left by the Industrial Property Act in relation to determination of ownership is therefore the business of the Tribunal and S.118 provides the requisite forum for policy decision. 

Why the Need for Pre-grant Intervention?
The officers-in-charge of examinations of Patent Applications do not have at their disposal all the pertinent elements for determining patentability.  This is more so pronounced when it is realized that the provisions of the law requires interpretation by persons skilled in law.  The examiners are not legal experts and hence cannot resolve the issues which have been tabulated and made a subject of reference under S.118 of the Industrial Property Act.

On the other hand public interest demands that only valid patents which are not only well defined relative to the state of the art, should be issued but in some occasions like in the instant case, the issues touching on ownership come into sharp focus, and the resolution of such legal matters is not in the province of the examiners.

There is no need to shy away from dealing with such matters that come into sharp focus by saying the law provides for post-grant entitlements.  That is a truism but why wait when huge costs can be saved and also why wait for post-grant proceedings when the opportunity to deal with the pre-grant entitlement envisaged by S.30, 31 and 32 can dispose of the matters satisfactorily.

In any event a dissatisfied party can appeal.  The pre-grant proceedings on ownership kills off that aspect yet the inventive step, novelty and other issues can be dealt with at the post-grant stage if such issues were to arise since the examiners ought to deal with those aspects at their level as by law required under Ss.22, 23 and 24 of the Industrial Property Act of 2001.

The issue of ownership under S.30 of the Act under discussion requires intervention by interested party or parties by way of pre-grant proceedings.  The power of directions under S.118 is an opening that enables this Tribunal to undertake pre-grant entitlement proceedings.  Its hands are not hamstrung by lack of specific provisions in the Act.

The provisions of S.118 of Industrial Property Act enables the Tribunal to render lawful and useful advice and direction to the Patent Office so that it may grant valid and controversy less patents.  This is a huge saving on litigation and in particular the issues raised in the subject matter that has given rise to the reference herein.

This does not in any way amount to an attempt to supplant the role of the examiners at the Patent Office but is geared towards enabling them deal with their core responsibilities as other relevant arms deal with those issues outside the province of the examiners.  There is no conflict at all.

Once the issue of ownership is dealt with, the process of prosecuting the patent application can continue as the party or parties interested deem necessary.  The entry of pre-grant process is a useful deflection and once decided the prosecution of the patent application can continue to its logical conclusion.

The substantive examination undertaken by the Patent Office under the Act is limited to technical issues, whereas the ownership which is a legal issue that has been left unattended by the provisions of Ss.30, 31 & 32 of the Industrial Property Act.  The need for pre-grant entitlement proceedings to be undertaken cannot be gainsaid any more.

The concept of interpretation of a statute cannot be a static one and we agree with the point of view expressed in the virtual bible for interpretation to wit Maxwell on Interpretation of Statutes.  We have adopted the principles aimed at addressing the mischief and defect for correction which should capture the true reason of the remedy.  We have also adopted the principle that adds force and life to the provisions of the Industrial Property Act under scrutiny.  The crux of the matter is to find the true intent of the makers of the Act as more particularly known as ‘Probono publico’.  See Sea Fort Tea Estates (1949) 2 ALLER 155CA as per Lord Denning.

The Tribunal surmises that it cannot allow the reduction of the relevant provisions to futility.   The intent is to bring out an effective result.

Even if the provisions of Sections 30 to 32 and including S.34 (3) of the Industrial Property Act, may fall short of the object of the legislature, a more extended meaning may be attributed to them as they are susceptible of.  We have decided to do so by using a purposive approach in interpreting the relevant provisions, which entails generous interpretation rather than a legislatic one.

We direct that the issue concerning ownership should be disposed of within two (2) months as it is not a tedious process.  This is part of the directions issued in pursuance of creating an enabling environment for a smooth disposal of pre-grant entitlement proceedings and ultimately grant of valid patents that are free of controversy and are good for creating respect for Intellectual Property generally and specifically those that fall under the Industrial Property Act, 2001.

The Scope of the Consent Orders filed in the High Court in HCC No.313 of 2010
The consent thereof is between parties involved.  The Tribunal is not party to the said proceedings.  The same applies to the Patent Office.  Parties are encouraged to understand the institutions they are dealing with.  We hold that the body intended to be bound by the Consent is definitely not the Industrial Property Tribunal as established under S.113 of the Industrial Property Act, 2001.  Be that as if may, the formulation, drafting and extraction of consent order ought to be done carefully so that the order can be understood ultimately by those intended to be bound.

The undertaking of pre-grant entitlements proceedings is not an affront to the said consent or at all and hence the arguments by Counsel for one of  the parties in the reference herein that it is an academic exercise to initiate Reference under S.118 of the Industrial Property Act, 2001 is with all due respect, not correct.  There is no breach of the Consent if the proceedings for pre-grant entitlements are undertaken at the Tribunal.  The efficacy of such proceedings is found necessary and is sound in law.

There has been no proceedings at the Tribunal or the Patent Office that can fit the definition given to the term Proceedings by the Advocates for Ole Skovand and Intelligent Insect Control (SARL), the intended applicant for patent application No.KE/P/2008/00774.  The consent letter dated 2nd November, 2010 and bearing a High Court date stamp of 10th November, 2010 has an erroneous statement in paragraph three (3) thereof in that the Industrial Property Tribunal is not a party to the said proceedings.

In any event our ruling herein is about directions under S.118 which we have made our position very clear.  The pre-grant proceedings, yet to be instituted, cannot be part of a consent as indicated above.  But the choice is for the parties concerned to decide what to do after the directions under S.118 have been issued.

Litigation by parties must be coherent and purposeful.  There is no way one can stay non-existent proceedings.  The directions herein are therefore not academic as such and in any event it does not breach the proceedings or orders of the High Court in HCCC No.313 of 2010.

The power under S.118 is wide and can be exercised on the facts and circumstances of a given case where it appears to the Tribunal that there is no other efficacious remedy available or that the interest of justice requires the Tribunal to step in or interfere.  Where there is an efficacious alternative, the power cannot be used.  It is a matter of prudence and discretion.  The discretion is to be exercised judiciously as opposed to capricious or arbitrary application.

Direction according to Black’s Law Dictionary, 8th Edition, page 492, is an order, or instruction on how to proceed.  While Procedure is defined therein as a means or specific method or course of action a judicial rule or manner for carrying on a civil law suit or criminal prosecution.

Given the above we surmise that the directions sought shall be that the pre-grant proceedings on entitlement shall be undertaken by way of form similar to those used in post-grant proceedings with modification.  It shall be titled pre-grant form and with abbreviation PR/IPT at the extreme right hand corner.  The same shall contain the names of the parties involved in the dispute for the right to ownership and with it brief summary of the grounds supporting or opposing the pre-grant entitlements to the patent in issue.  This line of action is premised on Rule 37 of the Industrial Property Tribunal Rules, 2002.

It should also contain reasons in brief as to how Sections 30, 31, and 32 of the Industrial Property Act should be applied or otherwise.

The role played by each of the claimants as to deserve entitlement of grant of patent as opposed to the other must be done in a succinct manner.  The Secretary to the Tribunal appointed under S.113(6) of the Industrial Property Act is hereby directed to work out such fine details as administratively necessary and thereafter they should be circulated to the parties interested.

Once a party makes a decision to pursue pre-grant proceedings as to ownership, must file its pre-grant arguments within ten (10) days and a response by the opposing party within a similar period.  The parties may annex supporting affidavits and documents in support of the grounds they may have in Form PR/IPT, the requisite document for initiating pre-grant proceedings.

The entire exercise of pre-grant process must of necessity be completed within a period of two (2) months.  The Tribunal shall render its decision immediately thereafter.  This is informed by the reasoning that the prosecution of the application for patent has a statutory frame within which it must be completed and pre-grant proceedings as to ownership should not be tedious and lengthy.

These are our directions as per S.118 of the Industrial Property Act of 2001 as requested by the Managing Director and with the approving nod to the Reference by the parties interested in the Patent Application No.KE/P/2008/00774.

The parties interested shall have to address the issues concerning the right to patent as envisaged by Ss.30 (1) and (2), 31 and 32(1) and S.34 (3) of the Industrial Property Act of 2001 as read together with Rule 12 (2) and 37 of the Industrial Property Tribunal Rules of 2002.  We hereby direct that a party so desirous, in this case the applicant in the reference be allowed to put forth its opposition to the application NO.KE/P/2008/00774.  

The law that regulates the creation and use of patents applicable in Kenya is a hybrid mixture of national and international elements.  The later has and continues to shape the Kenyan Patent Law as exemplified by The Paris Convention of 1886, Trips Agreement etc all of which have contributed to create a trend that have galvanized International Community to move in tandem in protecting all creations of human mind by giving the inventors property rights.  Articles 11 and 40 (5) of the Constitution in Kenya does the same.  The court of Appeal in Kenya have recognized and captured the said movement in some of its pronouncements as shown in the case of Sanitam Services (E.A.) Ltd. VS Rentokil (K) Ltd. & Another (2006) eKLR.

Different jurisdictions have recognized post-grant provisions and yet others have reviewed their laws to allow for pre-grant proceedings to be undertaken. Kenya must continue to embrace best international practices.  The directions we have given in form of an order are intended to encompass and emphasize the embracing of the processes that have taken root elsewhere for the mutual benefit of patent disputing parties.  The quality of patents and opposition systems is an on-going debate at World Intellectual Property Office (W.I.P.O).  There are proposals in which all are seeking that patents must be beyond reproach.  In Kenya, we should not be left behind.  We should keep in step with developments elsewhere. 

The choice of route to grant of a patent must be in accord with national regional, if any exist, and international best practices.  These are our directions, which in essence are orders to be followed henceforth.  What we have directed to be done is a procedure that should have been adopted a long time ago but as it were everything has its moment.

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