Sun Electric Pte Ltd v Sunseap Group Pte Ltd and others

• Court: High Court (Singapore)
• Judge: George Wei J
• Judgment Date: 28 September 2017
• Neutral Citation: [2017] SGHC 232
• Citation: [2017] SGHC 232
• Docket Number: Suit No 1229 of 2016 (Registrar’s Appeal No 135 of 2017)
• Hearing Date: 30 June 2017
• Plaintiff Counsel: Ravindran s/o Muthucumarasamy and Jevon Louis (Ravindran Associates)
• Defendant Counsel: Lau Kok Keng and Leow Jiamin (Rajah & Tann Singapore LLP)
• Subject Matter: Patents and Inventions,Revocation,Validity,Civil Procedure,Appeals,Notice
• Published date: 15 January 2019

George Wei J: Introduction

In this patent infringement action, the plaintiff, Sun Electric Pte Ltd (“the Plaintiff”), made an application under O 18 r 19 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) to strike out certain parts of the amended defence and counterclaim dated 17 February 2017 (“the Defence and Counterclaim”) and the particulars of objection dated 5 January 2017 (“the Particulars of Objection”). Although the learned Assistant Registrar Justin Yeo (“the AR”) agreed with the Plaintiff on two out of the three issues raised at the hearing below, the outcome for practical purposes was that the defendants’ counterclaim was substantially allowed to remain as it was.

The Plaintiff has appealed against the AR’s decision. In Registrar’s Appeal No 135 of 2017, the main substantive question before me was this: can patent revocation proceedings be properly brought before the High Court at first instance, by way of a counterclaim in infringement proceedings before the court? Although the defendants cited a number of cases in which the court had, in previous cases, heard revocation proceedings at first instance, it does not seem that this specific question has ever been expressly raised or examined by the courts. After considering the relevant provisions of the Patents Act (Cap 221, 2005 Rev Ed), the legislative intention behind these provisions and the relevant academic commentary on this issue, I find that the High Court does not have the jurisdiction to hear revocation proceedings or to grant an order for revocation by counterclaim. Accordingly, I allow the Plaintiff’s appeal and now give my reasons. Given the significance of this issue, a more extensive review of the patent landscape and patent system in Singapore may be helpful.

Background facts

The Plaintiff is a Singapore-incorporated company which retails solar energy to consumers in Singapore. It is the registered proprietor of a Singapore patent based on Singapore Patent Application No 10201405341Y (“the Patent”), filed on 29 August 2014 and granted on 8 June 2016. This patent is in respect of a power grid system and a method of determining power consumption at building connections in the system.¹

The first defendant, Sunseap Group Pte Ltd, is the parent and holding company of the second and third defendants. The second defendant, Sunseap Energy Pte Ltd, is a licensed electricity retailer, while the third defendant, Sunseap Leasing Pte Ltd, develops and manages rooftop solar photovoltaic systems. The defendants are all Singapore-incorporated companies, and I will refer to them collectively as “the Defendants”.²

The patent infringement action and the striking-out application

On 18 November 2016, the Plaintiff brought Suit No 1229 of 2016 against the Defendants for alleged infringement of the Patent. Out of the twelve claims subsisting in the Patent, the Plaintiff asserted that the Defendants jointly or severally infringed eight of the claims: claims 1, 3, 4, 5, 7, 9, 10 and 11 (“the asserted claims”).³

In the Defence and Counterclaim, the Defendants denied all allegations of infringement and counterclaimed for the following relief:⁴ a declaration that all of the twelve claims in the Patent, including claims 2, 6, 8 and 12 (“the unasserted claims”), are and have always been invalid; an order that the Patent be revoked; a declaration that the acts complained of by the Plaintiff do not constitute an infringement of the Patent; remedies under s 77 of the Patents Act for groundless threats made by the Plaintiff, namely: a declaration that the threats are unjustifiable; an injunction to restrain the Plaintiff from continuing to make any such further threats; and damages in respect of losses sustained because of the threats; and costs, interest and any other appropriate relief.

The Defendants filed the Particulars of Objection setting out its grounds for the attack on validity. It is to be noted that the objections grounded on the prior art, lack of novelty and inventive step were made in respect of all of the claims comprised in the Patent and not just the asserted claims. That said, a separate objection based on insufficiency was only made in respect of two of the asserted claims.

In response, the Plaintiff took the view that the Defendants had improperly put the unasserted claims in issue, whether by way of a defence or a counterclaim. The Plaintiff thus filed the present application under O 18 r 19 of the ROC to strike out the following paragraphs of the Defence and Counterclaim and the Particulars of Objection, to the extent that the validity of the unasserted claims was put in issue:⁵ paras 4 and 14 of the Defence and Counterclaim, which state: 4. … The Defendants aver that the Patent is and has at all material times been invalid for the reasons set out in the Defendants’ Particular of Objection.

…

14. Without prejudice to the generality of the foregoing, the Defendants seek to rely on the invalidity of the Patent as set out in the Particulars of Objection filed herein as a defence to the Plaintiff’s allegations of infringement. para 16 of the Defence and Counterclaim, which states: 16. The Defendants aver that the Patent has always been invalid for the reasons set out in the Particulars of Objection served herewith. and para 1 of the Particulars of Objection, which states: 1. The alleged invention, which is the subject of the Patent is not a patentable invention, is invalid, and ought to be revoked by reason of Section 80(1)(a) of the Patents Act (Cap 221)…

At the hearing before the AR on 5 April 2017, leave was granted for the Plaintiff to amend the summons for striking out such that it now sought to strike out para 16 in its entirety, and not merely in respect of the unasserted claims.⁶

I note at the outset that the effect of the amendment to the striking-out summons was that the Plaintiff was not taking the position that the Patents Act prevents the Defendant from putting in issue unasserted claims subsisting in the Patent by way of a counterclaim for revocation.⁷ Instead, the Plaintiff was now asserting that the Defendants could not put in issue any claims in the Patent by way of a counterclaim for revocation. The Plaintiff’s case was that the right to institute revocation proceedings is confined to proceedings by way of an application to the Registrar of Patents (“the Registrar”), and the Defendants could not commence revocation proceedings in the High Court, not even by way of a counterclaim.⁸

The AR’s decision

At the end of the first hearing of the striking-out application, the AR directed counsel to make further submissions on prior case law, inter alia, on counterclaims for revocation before the courts. Thereafter, the AR invited response to questions on (i) the distinction between claims for revocation and for a declaration of invalidity; and (ii) the relationship between ss 80 and 82(7) of the Patents Act and whether the right to seek revocation under s 80 is confined to proceedings before the Registrar.⁹ Subsequently, on 4 May 2017, the AR delivered his decision. The full written grounds of the AR’s decision are recorded at Sun Electric Pte Ltd v Sunseap Group Pte Ltd and others [2017] SGHCR 6 (“the AR’s Judgment”).

The learned AR first held that the unasserted claims could not be put in issue by the Defendants by way of a defence against the Plaintiff’s infringement claim pursuant to s 82(1)(a) of the Patents Act. A defendant may only challenge claims that have been asserted by the plaintiff to have been infringed, and the defendant does not have carte blanche to put in issue the validity of the entire patent in its defence: see Astrazeneca AB v Ranbaxy (Malaysia) Sdn Bhd [2012] SGHC 7 at [8]-[9].¹⁰ The AR thus ordered the Defendants to amend paras 4 and 14, which were contained within the “Defence” portion of the Defence and Counterclaim, as follows:¹¹ 4. …The Defendants aver that claims 1, 3, 4, 5, 7, 9, 10 and 11 of the Patent is are and has have at all material times been invalid for the reasons set out in the defendants’ particulars of Objection.

…

14. Without prejudice to the generality of the foregoing, the Defendants seek to rely on the invalidity of claims 1, 3, 4, 5, 7, 9, 10 and 11 of the Patent as set out in the Particulars of Objection filed herein as a defence to the Plaintiff’s allegations of infringement.

Secondly, the AR also agreed with the Plaintiff that the unasserted claims could not be put in issue by way of counterclaim for groundless threats of infringement proceedings under s 82(1)(b) of the Patents Act. Section 77(2)(b) of the Patents Act requires a plaintiff in groundless threat proceedings to show that the patent is invalid “in a relevant respect” in order to be entitled to the relief claimed. The AR found that s 77(2)(b) should be read to limit an aggrieved party to putting only asserted claims in issue, especially considering that it would be futile for that party to assert the invalidity of unasserted claims in groundless threat proceedings.¹²

However, the AR decided in favour of the Defendants on the last issue and found it proper for the Defendants to have commenced revocation proceedings in the High Court at first instance. The AR added that this was particularly appropriate where infringement proceedings were already before the High Court, and revocation proceedings were brought by way of a counterclaim.

In reaching his decision, the AR considered numerous High Court precedents in which revocation proceedings were brought by way of a counterclaim, relevant provisions of the Patent Act such as ss 82(7) and 91(1), and academic opinion.¹³ The term “revocation proceedings” appears to refer to counterclaims that include a general averment of invalidity followed by a prayer for an order for revocation. I will also discuss these points in greater detail...