Trek Technology (Singapore) Pte Ltd v FE Global Electronics Pte Ltd and Others and Other Suits (No 2)

• Jurisdiction: Singapore
• Judgment Date: 12 May 2005
• Date: 12 May 2005
• Docket Number: Suits Nos 609, 604 and 672 of 2002
• Court: High Court (Singapore)

Trek Technology (Singapore) Pte Ltd

Plaintiff

and

FE Global Electronics Pte Ltd and others and other suits

Defendant

[2005] SGHC 90

Lai Kew Chai J

Suits Nos 609, 604 and 672 of 2002

High Court

Patents and Inventions–Assignment–Nature of agreement to assign rights to invention–Whether plaintiff lawful owner of patent on record–Whether defendant infringers liable to plaintiff for damages–Sections 43 and 75 Patents Act (Cap 221, 2002 Rev Ed)–Patents and Inventions–Groundless threat–Whether threat of infringement proceedings groundless–Whether patent infringement actually taking place–Patents and Inventions–Infringement–Website of defendant manufacturer containing links to websites of defendant importer and defendant distributor where purchase of allegedly infringing device possible–Whether such network amounting to offer to dispose–Whether defendants conspiring to infringe patent–Whether defendants acting in furtherance of common design to infringe patent–Whether infringement innocent–Sections 66 (1) and 69 (1) Patents Act (Cap 221, 2002 Rev Ed)–Patents and Inventions–Revocation–Misrepresentation–Whether patent owner misrepresenting ownership or inventorship of patent–Whether misrepresentation material to grant of patent–Whether patent should be revoked–Section 80 (1) (f) (ii) Patents Act (Cap 221, 2002 Rev Ed)–Patents and Inventions–Validity–Novelty and inventiveness–Whether patent invalid for lack of novelty and inventiveness

The plaintiff (“Trek”) commenced two actions against various defendants (“M-Systems”, “FE Global”, “Electec” and “Ritronics”, respectively, and collectively “the defendants”) in respect of various infringing acts allegedly committed by them in relation to its patent for a data storage device known as the ThumbDrive (“the Patent”). M-Systems claimed against Trek, in Suit No 604 of 2002, for groundless threats of infringement proceedings. All three actions were consolidated and heard together.

In Suit No 609 of 2002, Trek sued M-Systems, FE Global and Electec for infringement of the Patent by, inter alia, disposing or offering to dispose of a data storage device marketed as DiskOnKey (“DOK”) and Diskey through a network of websites from which the purchase of DOK and Diskey was possible. Trek also alleged that there was a conspiracy among them to infringe the Patent by having mutual links to each other's websites to sell the Diskey product, as well as by continuing to supply and sell the DOK despite clear notice of the Patent, and that the business arrangement between them to carry out the infringing acts was in furtherance of a common design. M-Systems, FE Global and Electec, in turn, counterclaimed for groundless threats of patent infringement.

In Suit No 672 of 2002, Trek sued Ritronics, which manufactured and sold storage devices known as SlimDisk (“SD”) and BioSlimDisk (“BSD”), on similar grounds.

In their defence, the defendants argued that the Patent was invalid as the Thumbdrive invention lacked novelty and inventiveness. In response, Trek applied to amend the Patent during the proceedings. The defendants objected to the amendments sought, claiming,inter alia, that Trek had not disclosed all relevant matters relating to the amendments.

The defendants also sought to revoke the Patent on the ground that Trek had made misrepresentations concerning the inventorship and/or ownership of the Patent. M-Systems claimed that while the ThumbDrive was invented by one Marcus and one Poo, who were employees of Trek and its related company (“S-Com”), Trek had failed to name Poo as an inventor when it applied for the Patent. Ritronics alleged that the Thumbdrive invention was, in fact, stolen from a Chinese company (“Netac”), which was owned by two former Trek employees, Cheng and Deng. Netac had filed and obtained a patent in China for a data storage device (“the Chinese Patent”) and had filed a corresponding application with the European Patent Office (“EPO”).

Additionally, the defendants argued that they had been innocent infringers of the Patent and even if they had infringed the Patent, they were not liable to Trek for damages by virtue of s 75 of the Patents Act (Cap 221, 2002 Rev Ed).

Held, allowing the claims in Suits 609/2002 and 672/2002, but dismissing the counterclaim in Suit 609/2002 and dismissing the claim in Suit 604/2002:

(1) The terms of the Patent were such that the devices that the defendants made, sold or offered for sale, or kept for disposal in Singapore were clearly clones of the ThumbDrive that fell within the scope of the Patent: at [27] and [29].

(2) The link on the M-Systems website to the Electec and FE Global websites enabled the user in Singapore to purchase the DOK, thus constituting an “offer to dispose” of the DOK in Singapore: at [34].

(3) A party would only be liable for conspiracy to infringe where it actually induced the infringement, or there was evidence of an agreement or understanding to carry out acts of infringement. A party who sold or offered to sell or dispose of an article knowing that it was going to be used to infringe might assist infringement, but could not be said, for the purpose of establishing a conspiracy, to have induced it. Even though M-Systems indemnified FE Global and Electec against any liability for damages, there was no automatic inference that this had operated as inducement with respect to continued acts of patent infringement. The threshold for conspiracy was a high one to cross: at [36].

(4) The indemnities issued by M-Systems to FE Global and Electec indicated that they had not dealt at “arms-length”. As a result of the indemnities given, FE Global and Electec continued to import and distribute the DOK in the Singapore market. A case of joint tortfeasorship was thus made out against M-Systems, FE Global and Electec, based on the furtherance of a common design to infringe the Patent: at [40] and [41].

(5) Ritronics' denial that its acts constituted infringements of the Patent was without merit. On the evidence, Ritronics had made, disposed of or offered to dispose of the SDs and BSDs, or had kept them for disposal, within the meaning of ss 66 and 67 of the Patents Act: at [42] and [46].

(6) An amendment to a patent would be permitted unless there were compelling reasons against doing so. Trek had established its case for amending the Patent. The amendments sought did not disclose any additional matter or extend the protection afforded by the Patent, and in fact restricted the scope of the Patent. The proposed amendments were clearly and sufficiently disclosed in the existing Patent specifications, and were sought without unreasonable delay. The defendants' allegations of non-disclosure against Trek did not relate to matters germane to the amendment application. Accordingly, an order to amend the Patent was made: at [55] to [60], [67], [75], [79] to [81].

(7) The defendants' challenge to the novelty of the Patent failed, as the prior art references cited by the defendants did not establish those characteristics covered by the Patent. The defendants also failed to show that the Patent, unamended or amended, lacked inventiveness. There was no device available in the market or known generally that could have led a skilled but unimaginative person to invent the ThumbDrive, or to look upon it as the obvious next step in technology. The findings of novelty and inventive step were fortified by the commercial success of the ThumbDrive: at [89] to [93], [96] to [99], [102].

(8) For a misrepresentation to be grounds for the revocation of a patent, it must have been material to the decision to grant the patent. Trek's entitlement to the Thumbdrive invention was derived from s 19 (2) (b) of the Patents Act through its employee, Marcus, as well as from an assignment, whether registered or not, of S-Com's right to the invention in favour of Trek under s 19 (2) (c) of the Patents Act (“the assignment agreement”). Trek was thus entitled to file the patent application as owner of the Patent under s 19 (3) of the Patents Act. Furthermore, the omission in naming Poo as one of the inventors of the Thumbdrive was inadvertent and not deliberate, and Trek had acted with reasonable dispatch to rectify the error. The omission of Poo as co-inventor did not materially affect the grant of the Patent: at [106], [107], [110], [115] to [117].

(9) There were notable differences between the Thumbdrive, and the Chinese Patent and Netac's corresponding EPO application. Trek could not have stolen the invention as the EPO application was filed several months after the launch of the Thumbdrive. There was also no evidence that Cheng and Deng could lay claim to the ownership of the Patent: at [121] to [123].

(10) The defendants could not claim to be innocent infringers as they already had notice of the existence of the Patent as at the date of the infringement: at [127].

(11) The claim and counterclaim for groundless threats of patent infringement were unsuccessful, given that the Patent was valid and there had been infringement of the Patent: at [131].

(12) The defendants could not rely on s 75 of the Patents Act to argue that they were not liable for damages as Trek had always been the lawful owner of the Patent on record. Trek's subsequent application to register the assignment agreement under s 43 of the Patents Act was made ex abundanti cautela and did not mean that Trek was not the lawful proprietor or owner of the Patent. The assignment agreement was an assignment of the rights to the invention, as opposed to the assignment of “any right in a patent”: at [114], [130] and [134].

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