Dextra Asia Co Ltd and Another v Mariwu Industrial Co (S) Pte Ltd

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 12 April 2007
• Neutral Citation: [2007] SGHC 51
• Docket Number: Suit No 641 of 2004,Suits No 641 of 2004 and No 339
• Date: 12 April 2007
• Year: 2007
• Published date: 13 April 2007
• Plaintiff Counsel: Daniel Lim and Cindy Quek (Shook Lin & Bok)
• Citation: [2007] SGHC 51
• Defendant Counsel: Wong Siew Hong and Kalaiselvi Singaram (Infinitus Law Corporation)
• Court: High Court (Singapore)
• Subject Matter: Novelty,Whether process not new or novel due to prior use, prior disclosure to other parties and prior art,Patents and Inventions,Alleged infringement of patent for manufacturing process consisting of combination of unknown elements

12 April 2007 Judgment reserved.

Tan Lee Meng J:

1 In Dextra Asia Co Ltd and Anor v Mariwu Industrial Co (S) Pte Ltd [2006] 2 SLR 154 (the “first judgment”), I held that the plaintiffs, Dextra Asia Co Ltd and Dextra Manufacturing Co Ltd (collectively referred to as “Dextra”), the owners of rights in Asia to “Bartec”, a patented invention used in reinforcing concrete in the construction of buildings, were entitled to damages from the defendant, Mariwu Industrial Co (S) Pte Ltd (“Mariwu”), for infringement of the said patent.

2 Mariwu appealed against my decision. It had contended that the patent was not novel because there had been prior use of the patent in France and Hong Kong before its priority date. However, Dextra denied that there had been any use of the Bartec invention in France before the priority date and while the Bartec invention had been used in Hong Kong, the use was confidential and did not affect the novelty of the patent. Before the appeal was heard, Mariwu successfully applied to the Court of Appeal for the admission of further evidence, which concerned events in 1994. The Court remitted the case to the trial judge to hear the further evidence.

3 For a better perspective of the further evidence, it ought to be noted that in 1994, Dextra had not yet acquired the rights in Asia to the Bartec patent and it was then a licensee of the patent, paying royalties at the rate of 5% to Establissements A Mure (“Mure”), which had acquired the ownership of the Bartec patent from its original owner, Techniport SA. In that year, Dextra collaborated with its fellow licensee, CCL Systems Limited (“CCL”), whose former officers gave evidence in support of Mariwu, for the purpose of pressurizing Mure not to sell the Bartec patent to Erico, a common competitor of theirs, and to reduce the royalties payable by them for the Bartec patent from 5% to a lower figure.

4 The further evidence comprised the following documents:

(a) a copy of letter from French Asiatic Services & Techniques Co Ltd (“FAST”) to Mure dated 23 November 1994 (in French with English translation);

(b) A copy of a fax dated 23 December 1994 from CCL to FAST;

(c) A copy of a letter dated 23 December 1994 from CCL to Mure;

(d) A copy of a letter dated 12 December 1994 from FAST to CCL;

(e) A copy of a fax dated 13 December 1994 from CCL to one Mr Pithon with a draft letter;

(f) A copy of a letter dated 14 December 1994 from FAST to Mure (in French with English translation);

(g) A copy of a letter dated 14 December 1994 from CCL to Mure;

(h) A copy of a fax dated 23 December 1994 from FAST to CCL; and

(i) A copy of an internal CCL memorandum with notes of a meeting dated 3 November 1994.

5 The further evidence concerned Dextra’s correspondence in late 1994 with CCL and Mure as well as Mure’s alleged admission on the invalidity of the Bartec patent at a meeting on 3 November 1994 in Lyon (“the Lyon meeting”), which was attended by representatives of Mure, Dextra and CCL.

6 The Court of Appeal was of the view that the new evidence ought to be considered because it revealed that Dr J M Pithon, Dextra’s main witness at the trial, had questioned the validity of the Bartec patent in 1994 and had asserted that the patent had been commercialised in France and Hong Kong before the priority date. As he had asserted at the trial that he knew of no facts which would invalidate the patent, the new evidence put the state of his knowledge in issue.

7 At the hearing of the further evidence, only two witnesses, Dr Pithon and Mr Robert J Copping, a director of CCL from 1991 to 1998, testified.

Dr Pithon’s assertion to Mure that the process had been commercialised

8 Much attention was focused at the hearing of the further evidence on a letter dated 23 November 2004 that Dr Pithon wrote to Mure, in which the former stated as follows:

[W]e have consulted our advisors and taken note. This has enabled us to conclude that:

a) The process has been commercialized in Hong Kong and France before the deposit of the patent, and is therefore potentially nullified.

[emphasis added]

9 Dr Pithon certainly had a lot to answer for the position adopted in his letter of 23 November 2004 but it is pertinent to note that the Court of Appeal had in para 31 of its judgment stated as follows:

However, we ought to say … what Dr Pithon said in relation to the potential invalidity of the patent was not, in the context of the letter, an admission by him that the patent was potentially invalid because of prior use. It was not for him as an officer of Dextra to admit anything of that nature since Dextra did not own the patent at that time. It was an assertion made with a view to getting a better deal from Mure. Whether or not what he had said was the truth or whether it was merely a bluff, as he has now claimed in this application, is for the trial judge to determine after hearing the evidence on this issue.

10 Dr Pithon denied that that he had any real evidence of the invalidity of the Bartec patent and asserted that his claim in his letter of 23 November 2004 that the said patent had been commercialised in Hong Kong and France was an “exaggerated bluff” to pressurise Mure to reduce the royalty payment under his licence agreement, which was then 5%.

11 Dextra was not the only party claiming to have tried to bluff Mure. CCL’s Mr Copping, who was directly involved in the 1994 negotiations with Mure, admitted that CCL had no evidence of the invalidity of the Bartec patent. CCL was thus bluffing in order to pressurise Mure into reducing the royalties payable for the use of the patent when it asserted during the said negotiations that the Bartec patent was invalid. Mr Copping admitted that in 1994, CCL’s strategy was to threaten Mure that the Bartec patent was invalid and then make a “peace offer” to pay royalties at 2.5% and that if this was not accepted, it would terminate the agreement. If Mure sued, CCL would respond with an offer of a settlement. CCL considered this strategy workable because Mure could only sue for the loss of royalties plus legal costs and its lawyer had advised that if CCL capitulated immediately after receipt of a writ, Mure could claim only the minimal costs associated with filing the writ. The relevant part of the cross-examination of Mr Copping is as follows:

Q: Now, this seems to outline CCL’s strategy, … stop paying royalty, terminate the licence, but if Mure sues, back down. Do you agree that there is a little gamesmanship here….

A: Gamesmanship?

Q: Yes, being proposed here, it’s a bit of poker, a bit of bluff. Take the high ground but if you are challenged, back down.

A: That is correct.

12 As Dextra and CCL had joined hands in 1994 to fight off an attempt by a common business rival to purchase the Bartec patent from Mure and to pressurise Mure into reducing the royalties for the Bartec payment, Dextra would more likely than not have shown CCL some evidence of the invalidity of the Bartec patent if such evidence was indeed in its hands. However, Mr Copping testified that Dextra gave CCL no particulars about the alleged prior use in Hong Kong and in France. As for who came up with this strategy, Dr Pithon said as follows:

Q: Who came up with the idea to try to attack the patent? Was it yourself or someone else?

A: It was not really me or CCL, it was exploring what option of lever or threat do we have… [T]his option came into the picture, and after evaluating what other option we have, we saw there was nothing really serious to make a lever and we say, “Okay, let’s try that option”.

13 In the face of...