The meaning of fraud of rights in patents
05 Mar 2019
What happens when you disclose a new invention that you have come up with to a potential business partner, and you later discover that they are the owner of a granted patent which discloses the invention that you disclosed to him? To make matters worse, this person sends you a letter informing you that you are infringing his granted patent by manufacturing or using your “new invention”, but conveniently does not remember or acknowledge that you had disclosed the invention to him in the first place.
The Patents Act 57 of 1978, as amended, (the Act) provides revocation grounds in section 61(1) which you can rely on to have a patent revoked. These so-called grounds of revocation can also be used to counterclaim for the revocation of a patent in defence to a claim for infringement of a patent. One of these grounds in section 61(1)(b) stipulates that a person may apply for the revocation of a patent if “the grant of the patent is in fraud of rights of the applicant or of any person under or through he claims.” It follows that only the true inventor or his assignee may apply for a patent, as per section 27(1) of the Act.
In Botha v Lindeque 1955 BP 127 (CP) at 131EF, the court states that for section 61(1)(b) to be applicable, “the Applicant’s conduct in applying for the grant of the patent must have been deliberately designed to deprive the objector of rights vested in him either as the true inventor (or co-inventor) or as an assignee or otherwise by agreement or operation of law, of which rights the applicant is aware when he filed his application.”
The Commissioner of Patents, in Bullen v Poludniak 1959 BP 35 (CP) at 36FG, had cautioned that an attack based on “fraud” should be launched with caution since a successful revocation in terms of the ground of fraud of rights would impinge the honour and integrity of the Applicant, however, an unsuccessful revocation would similarly still have the same effect of impinging the Applicant’s honour and integrity. In Page’s Application  RPC 1 at 2, it was stated that it was only logical that the court should only act on the clearest evidence. Therefore, if you do not have clear evidence that you are the true and sole inventor, it would be futile to rely on this ground.
In addition, the patented invention must not differ in material respects from the invention which you disclosed to the Applicant as was stated in Blazich v Zinc Products Ltd 1954 BP 37 (CP), otherwise it may be that the Applicant made improvements to your disclosed invention and may therefore have disclosed a new invention to which you do not have rights to.
When you elect to rely on the revocation ground under section 61(1)(b), you bear the onus of proving that the grant of the patent was in fraud of rights within the meaning of that section, as was the case in Pressings and Plastics (Pty) Ltd and Another v Sohnius  4 All SA 374 (T). It is thus very important to keep dated records of how and when you discovered the invention to ensure that you will be able to prove that you are the true and sole inventor should the need arise.
Section 25(1) of the Act states that a patent may be granted for any new invention which involves an inventive step and which is capable of being used or applied in trade or industry or agriculture. In terms of section 25(5) of the Act, an invention shall be deemed to be new if it does not form part of the state of the art immediately before the priority date of that invention. Furthermore, section 25(6) of the Act states that the state of the art shall comprise all matter (whether a product, a process, information about either, or anything else) which has been made available to the public (whether to the Republic or elsewhere) by written or oral description, by use or in any other way. One way of preventing that you fall foul of this section, is to have any persons that you disclose the invention to, albeit a potential investor, business partner or designer assisting with technical drawings or building of a prototype, sign a non-disclosure agreement (NDA). Whilst a NDA significantly improves your position, it is not fool-proof, and public disclosures of an invention that was disclosed to a party subject to an NDA, will still be regarded as a written description under section 25(6), and the existence of an NDA therefore does not constitute a recognised defence.
Any formal or informal discussions with any third party, including any potential business partner (albeit subject to an NDA or not) fall within the ambit of “disclosures” under the Act, and it is recommended that you have those discussions with a patent attorney first, in order to secure protection for your new invention before disclosing it to any third parties, which is the only fool-proof precaution to prevent someone else from applying for a patent for your new invention.
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