Analysing Prior User Defence Mechanism Against Patent Infringement In India

Introduction

Prior user right” refers to the “legal right of a third party to continue using an invention that was already in use before a patent application for the same invention was filed”. This right is intended to balance the impact of the “first-to-file” principle with the interests of third parties as “prior use prevails over later-filed patent applications”. In the event of a patent infringement lawsuit brought by the patent holder against the third party, the defendant may invoke the “prior use defence clause”, subject to certain restrictions.

Prior Use Defence Mechanism In Detail

What is the prior use defence mechanism?

The doctrine of prior use entitles a person who has been using a process, machine or article for a certain period before the grant of a patent, to continue to use the same despite the grant of the patent.[1]

For example: If Company A has filed a patent application for a product X, but Company B had already been using the same product X prior to the filing, Company B may contest any infringement charges brought by Company A by utilizing the prior use defense mechanism in court. However, the application of the prior use defense may be subject to certain terms and conditions that vary depending on the jurisdiction.

Prior Use Defence Mechanism in various countries:

The application and scope of prior use defence can vary between different jurisdictions. However, countries like the United States, Japan and Germany, recognized some form of prior use of defence as follows:

United States of America:

The prior use defence is provided under 35 U.S. Code §273 and Section 282 of the US AIA Act[2]. This provision allows a person, or their successor-in-interest, who had commercially used a patented invention in the United States at least one year before the effective filing date of the patent, to continue using the invention without infringing on the patent. The prior use defence only applies to the specific commercial use made by the person, and cannot be asserted against other parties who may be infringing the patent.

To be eligible for the prior use defence, the following conditions must be met[3]:

  • The prior use must have been made in good faith and the ordinary course of business.
  • The prior use must have been made at least one year before the effective filing date of the patent.
  • The prior use must have been made by the person asserting the defence, or by their predecessor-in-interest.
  • The prior use must have been commercial, which means that it must have been used in the production or sale of a product or service.
  • The prior use defence must be asserted as an affirmative defence in a lawsuit or other proceeding alleging infringement of the patent.

Patent infringement

Germany

In Germany, the prior use defence is provided for under Section 12 of the German Patent Act [4](patG). This provision allows a person who has made use of an invention in Germany before the filing or priority date of a patent application to continue using the invention without infringing on the patent.

To be eligible for the prior use defence, the following conditions must be met:

  • The prior use must have been made in good faith before the filing or priority date of the patent application.
  • The prior use must have been continuous and sufficient to fully exploit the invention.
  • The prior use must have started at least six months before the filling or priority date of the patent application.
  • The person asserting the defence must have used the invention for the same purpose for which the patentee is seeking protection.

Japan

The patent law of Japan includes a provision for prior user rights. This means that if a person has been independently working on the same invention that is protected by a patent or has been making preparations to work on the invention in Japan, they are granted a prior user right. And also, if the business associated with the invention is transferred to another party, the prior user right is also transferred along with the business.

Conditions that must be met for invoking the secret prior art defence in Japan are:

  • The prior use must be “secret”, which means that it must not have been made available to the public before the filing date of the patent application.
  • The prior use must have been made in Japan.
  • The prior use must have been made before the filing date of the patent application.
  • The prior use must have been made in good faith, which means that the user did not know and had no reason to know that the patented invention was being used or was the subject of a pending patent application.
  • The prior use must be “continuous”, which means that it must have been made on a commercial scale and without interruption from the time of the prior use until the filing date of the patent application.

In summary, the United States, Japan and Germany acknowledge the doctrine of prior user rights. Based on the foregoing particulars, any third party utilizing a patented technology prior to the patent’s priority date is entitled to assert the prior use defense in a patent infringement lawsuit and persist in the use of the aforementioned technology, subject to certain constraints. The prior use defense may be invoked in relation to either public or secret use in order to assert a claim.

Status of prior use defence mechanism in India

In India, the Indian Patent Act of 1970, does not contain an explicit provision pertaining to the rights of prior users. In the event that a prior use defence is to be asserted, the user must instead rely on the grounds of prior use or secret use within India, as opposed to claiming prior user rights. Pursuant to Section 64(1)(l) of the Indian Patents Act, 1970, if an individual can demonstrate a prior use, it may result in the revocation of the patent, insofar as the invention is claimed in any claim of the complete specification, and was used secretly in India. The revocation of a patent will not be considered under certain circumstances if the prior user engaged in a secret use, according to the “Section 64(3) provides an exemption to Section 64(1)(l) of the Indian Patents Acts, 1970 says that:

  1. For reasonable trial or experiment only; or
  2. By the government or by any person authorized by the government or by a government undertaking, in consequence of the applicant for the patent or any person from whom he derives title having communicated or disclosed the invention directly or indirectly to the government or person authorized as aforesaid or to the government undertaking; or
  3. By any other person, in consequence of the applicant for the patent or any person from whom he derives title having communicated or disclosed the invention, and without the consent or acquiescence of the applicant or of any person from whom he derives title”.[5]

Comparison between India vs the United States, Germany and Japan in the matter of prior use defence:

  1. In the United States, Japan and Germany, the prior commercial use defence can be invoked if the accused infringer can demonstrate that they had been commercially using the patented invention in the United States before the Patent’s effective filing date. The prior use must have been made in good faith, and must not have been publicly disclosed. Additionally, the prior use must have been for business purposes and not solely for experimental or research purposes[6].
  2. In the Indian scenario, though the prior use defence mechanism is explicitly not mentioned in the Indian patent act 1970, it is interpreted through various cases such as Biswanath Prasad Radhey vs. Hindustan Metal Industries, Lallubhai Chakubhai v. Shamaldas Sankalchand, A.I.R. 1934 cases, that one can claim prior use defence mechanism only if the use was non-public, secret made in good faith and not for any commercial purpose.

 Conclusion

In India what if, a third party uses a product for secret/non-public and commercial purposes before the filing of the patent application means, will the party be liable for infringing the patent, once the patent is granted?

Referring to the case “Lallubhai Chakubhai v. Shamaldas Sankalchand, A.I.R. 1934”, the Bombay high court held that the defence of prior use is available only when the prior use is made in good faith and not for commercial purposes. The court further held that the prior use defence is available only to those who have made the prior use for their purposes and not for commercial purposes. There exists a subtle delineation within Indian patent law regarding the confidential application that qualifies as “prior use” and the one that does not. Specifically, the key distinction lies in whether the “prior use” effectively discloses its intricate details. [7]

So, if a third party uses a product in a secret/non-public and commercial manner before the filing of a patent application, and the patent is subsequently granted to another party, the prior user may still be liable for infringing the patent once it is granted.

Whether the third party shall be liable for infringement of a patent if he used a product for secret, public and commercial purposes before filing a patent?

According to Indian patent law 1970, if the prior use of a patent product is public, then the patent will be revoked using section 64 (1) (l). So, in this scenario, the defendant (third party) can take the defence of prior use, so that the third party will not be liable for infringement of the patent and if they proved with certain evidence, the issued patent may be revoked.

Author: Marishwar Mahesh, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

[1] https://indiankanoon.org/doc/1924150/

[2] https://www.uspto.gov/sites/default/files/aia_implementation/20110916-pub-l112-29.pdf

[3] https://www.uspto.gov/sites/default/files/aia_implementation/20110916-pub-l112-29.pdf

[4] https://www.gesetze-im-internet.de/englisch_patg/englisch_patg.html

[5] Section 64(3) of The Patent Act, 1970

[6] https://www.uspto.gov/sites/default/files/ip/global/prior_user_rights.pdf

[7]https://www.theippress.com/2020/10/06/prior-user-right-in-patent-law/#:~:text=A%20successful%20defence%20allows%20the,complete%20sale%20of%20the%20business.

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