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

Assistant Registrar, Mr Vincent Leow:

[1] The defendants took out an application to re-amend their amended defence to include further instances of prior art in their amended particulars of objections to substantiate their case that the plaintiffs’ patent, under which the plaintiffs had sued the defendants on the basis of infringement, was invalid. I granted the amendment and counsel for the plaintiffs then sought an ‘Earth Closet’ or ‘Scott-Paine’ order. I granted the order sought. As this order has not been the subject of any locally reported decision, I felt that it would be useful if I released my grounds on this matter.

[2] The 1 plaintiffs were manufacturers of specialised technical steel products related to concrete structures for the construction industry and they were the registered proprietors of Singapore Patent No 21011 (‘the patent’). The 2 plaintiffs were similarly manufacturers of specialised technical steel products and were the authorised licensees of the patent.

[3] Together, they sued the defendants for infringement of the patent in August 2004. In their defence filed in September 2004, the defendants stated, inter alia, that the plaintiffs’ patent was invalid on the basis that it was not new having regard to the state of the art as at the priority date as set out in their particular of objections. In January 2005, the defendants sought to amend the particulars of objections to include additional instances of prior art. That amendment was allowed. The defendants then in March 2005 further applied to re-amend the amended particulars of objections to include additional instances of prior art. It should be noted that trial was fixed for hearing in April 2005. I heard the application, granted it and vacated the trial dates. Counsel for the plaintiffs then applied for the Earth Closet/Scott-Paine order.

[7] The basis of the Earth Closet/Scott-Paine order was explained by Chitty J in Enrlich v Ihlee (1887) 4 RPC 115 as being:

[8] It should however be noted that such a risk to the plaintiff of the defendant amending his defence is inherent in literally any civil suit. Parties are always at liberty to apply at a later stage to add additional defences subject to the question of prejudice. Why then are patent cases placed on a different footing from other civil cases? The reason is that the preparation of such actions for trial is very likely to be expensive because of the need for experimentation and the employment of independent experts to give evidence: see Williamson v Moldline Ltd and Others [1986] 21 RPC 556.

[9] Hence, the situation sought to be tackled by the Earth Closet/Scott-Paine order is one where the defendant raises a new objection to the validity of the patent when he has already committed huge sums in preparing for an action where that objection was not raised and where the patent holder had no reason to suspect the existence of this significantly better prior art which forms the launch pad for a renewed attack on the validity of his patent.

[11] The Earth Closet/Scott-Paine order further requires the patent holder to consider the attacks that could be made on his patent and to consider with reasonable haste whether or not the attacks on the validity of his patent will succeed: see Photax (London) Ltd v Lustro Distributors Ltd. [1951] 68 RPC 176. Thus, the underlying assumption behind the Earth Closet/Scott-Paine order is that the prior art sought to be added was material to the patent holder’s decision to revoke his own patent and that if the prior art had been raised earlier, then the patent holder would have been able to decide to revoke his own patent earlier: see Ehrlich v Ihlee (supra).

[13] In such a scenario, the defendant will have to balance the risk of the Earth Closet/Scott-Paine order against not putting forward additional instances of prior art late in the day. The defendant’s solicitors would thus be placed in a difficult position as to how to advice their clients: see GEC Alsthom Limited’s Patent [1996] FSR 415. Furthermore, this goes against the public interest in that the court would possibly be left to decide the question of the validity of the patent on the basis of insufficient prior art: see Instance v Denny Bros Printing Ltd and another (Unreported decision of Aldous J in the Patents Court on 20 April 1993).

[14] Such a risk would be greatest where the plaintiff who sues for infringement possesses in reality (and to his mind) a weak patent and one, which he would readily be willing to accept a revocation of, but for commercial advantage, he nonetheless chooses to sue the defendants for infringement. In such a scenario, the plaintiff is able to take advantage of the Earth Closet/Scott-Paine order even though his decision to discontinue did not depend whatsoever upon the newly added prior art.

[16] I would further add that the possibility of injustice must be viewed against the entire spectrum of our civil procedure rules. Hence, it may be difficult for one to be reasonably satisfied that the defendant has had sufficient time, even with the exercise of reasonable diligence, to identify all the relevant prior art by the first filing of the defence and particulars of objections. In particular, it must be noted that the realities of modern patent litigation is that the defendant faces a steep learning curve, both legal and technical, particularly at the commencement of the action, given the world wide searches, often in a variety of languages, necessary under our law (see the definition of state of the art in s 14(2) of the Patent Act (Cap 221) 2002 Rev. Ed.). However, the same cannot be said midway into the action, where the learning curve has already tapered off. Bearing these considerations in mind, I turned to consider the appropriate approach to be taken.

[17] The first matter to be dealt with is whether the court has the jurisdiction to make such an order. This is provided under Order 20 rule 5(1) which reads:

[18] It is clear that the jurisdiction conferred upon the courts to make ancillary orders in an application for amendment of pleadings is a very wide one and that it would include the jurisdiction to make an Earth Closet/Scott-Paine order. The mere fact that such an order has never been made in Singapore is not, to my mind, a bar to the grant in the appropriate circumstances of such an order. After all, to hold otherwise would mean that our courts’ jurisprudential development would lag behind that of other jurisdictions.

[20] In England, the approach of their Patents Court has been that Earth Closet/Scott-Paine orders were made as a matter of course upon an application to amend the particulars of invalidity. This practice continued until the mid 1990s, when Laddie J in the landmark case of GEC Alsthom Limited’s Patent [1996] FSR 415 decision reversed the practice and pointed out that such an order can cause injustice in some cases. In particular, Laddie J stated:

[21] As such, Laddie J stated that the proper approach must be

[22] This decision was subsequently followed in a number of English decisions even after the 1998 overhaul of their Civil Procedure Rules: see CIL International Ltd v. Vitrashop Ltd [2002] F.S.R. 4 andMonitoring Technologies Limited v. Bell Group Plc [2003] EWHC 3136.

[23] The approach in Australia is similar. The Federal Court of Australia in the case of Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd [1999] FCA 421 (also see A'Van Campers Pty Ltd v Camoflag Pty [2003] FCA 353) stated that:

[24] Both these positions are also consistent with the position taken in Hong Kong. By way of illustration, reference need only be made to Re Wing Yick Bamboo Scaffolders Ltd [2003] HKEC 985 where Chu J noted that:

[26] In particular, the court should consider, inter alia, the following factors:

[27] I will elaborate on each factor in turn.

[29] In my opinion, what the defendant should do to discharge this burden, as a general guide, is to adduce evidence to show that they had commenced well planned and substantial prior art searches at an early stage in the proceedings. This would of course mean that defendants who are contesting validity should keep a good paper trail of their own prior art searches and endeavour to critically analyse whatever prior art they have discovered as well as the prior art disclosed by the patent’s holder’s at the earliest opportunity for further fields of investigation.

[30] Further, the nature of the search that actually turned up the additional prior art is relevant. The law does not require defendants to do things that are out of the ordinary on the off chance that a fortuitous search will unearth the proverbial needle in a haystack: see for example Josiah Wedgwood & Sons Limited v Stained Glass Systems Limited (Unreported decision of Jacob J in the Patents Court on 16 October 1996). Neither does it prejudice defendants when they stumble across some prior art through an adventitious or extemporaneous incident: see La Baigue Magiglo v Multiglow Fires [1994] RPC 295.

[31] However, holistically speaking, this factor of diligence while central is not conclusive. The Court will always have to take into account all other relevant factor in its attempt to do justice between the parties and the circumstances of the case.

[32] This is another important factor. Where the amendment seeks to raise an entirely new field of investigation, the considerations are very different from one where an additional instance of prior art is sought to be added when that particular prior art can be said to be obvious given the existing particulars of objections.

[33] Similarly, if the prior art sought to be added are already within the knowledge of the patent holder, for example if they are patents owned by the patent holder, then it is most unlikely that the Earth Closet/Scott-Paine order will be made since it cannot be said that the amendments have surprised the patent holder and thereby led him to reconsider his entire position and decide on that basis to discontinue his action.

[34] However, the mere fact that the patent holder is aware of the prior art per se is not necessarily fatal to him obtaining the Earth Closet/Scott-Paine order. It must be shown that the patent holder would reasonably have directed his mind to that prior art in relation to the issues in dispute in the current action. After all, the patent holder has no obligation to scan through the existing prior art in an attempt to determine whether his patent is invalid: see Gill v Chipman [1987] RPC 209 and CIL International Ltd v. Vitrashop Ltd (supra).

[35] The court should further take into consideration the reasons given by the defendant for the amendment. In particular, where the amendments by the defendant is in response to an earlier amendment to the patent by the patent holder, then the court should view the defendant’s amendments with greater latitude. After all, the defendant does not have to plead the entire spectrum of prior art in anticipation of any possible amendments by the patent holder. To hold otherwise would be to burden a defendant with an unduly burdensome obligation: see CQR Security System Ltd’s Patent [1992] FSR 303.

[37] However, it must be remembered in such a situation that the purpose of the Earth Closet/Scott-Paine order is not to penalise the defendants, but rather to incentivize them to carry out their searches and amendment of their pleadings with due haste: see Behr-Thomson Controls Ltd [1990] RPC 569. Hence, the court before relying upon this factor has to find that the delay was unacceptable in that a reasonable lawyer with possession of the materials would have taken out an earlier application to amend the particulars of objections: see Brivis Australia Pty Ltd v Seeley International Pty Ltd [2002] FCA 843 and Allied Colloids Ltd v American Cyanamid Co and another (Unreported decision of Aldous J in the Patents Court on 20 January 1995).

[39] In contrast, it would be easier to show that an Earth Closet/Scott-Paine order should be imposed where it is the defendant’s second or subsequent application to amend the particulars of objections. In any event, the court always retains the discretion to shift around the cutover date to suit the individual circumstances of each case: see for example La Baigue Magiglo v Multiglow Fires and others [1994] RPC 295 and Dimplex (UK) Limited v De'Longhi Limited and others (Unreported decision of Laddie J in the Patents Court on 14 February 1996).

[40] I will for the sake of completeness mention two other factors. First, the status of the amending party is relevant. Where the party seeking the amendment is the plaintiff who is suing for revocation of the defendant’s patent, then less leeway should be given. This is because in such a matter, the plaintiff must necessarily be assumed to have conducted the necessary and proper enquiries as to prior art before launching his suit: see Re Wing Yick Bamboo Scaffolders Ltd (supra).

[42] In the instant case, there was unfortunately no material in the affidavits before this court, which showed the defendants, had diligently carried out their enquiries and searches. This was despite the fact that I had adjourned the matter for the defendants to file further affidavits. In fact, there was no evidence at all as to the sort of enquiries that the defendants had carried out in search of the prior art. Neither was there any explanation in the affidavits as to why the additional prior art was not included in the first application to amend the particulars of objections.

[43] Instead, what the affidavit disclosed was that there were two sets of prior art sought to be added. First, the prior art that the defendants’ appointed expert witness had found. This included a number of textbooks, most of which had been in the defendants’ possession for a number of months. No explanation was made as to why the defendants did not choose to include these earlier despite it being clearly relevant. Second, the prior art (which included a number of European patents and some texts) that had been referred to in a patent opposition action in Europe on a related patent. In relation to these prior art, the defendants’ managing director explained that he had gone to the United Kingdom to meet another of their expert witness and it was this expert witness who had referred them to the patent opposition action. No explanation was made as to how that witness had come across the patent opposition action or why it could not have been discovered earlier.

[44] As such, there was simply no evidence to show that the defendants had been reasonably diligent. Hence, I was not satisfied that the defendants had acted with reasonable diligence and yet only just discovered the new prior art and then acted with due haste in placing their best case before the court.

[45] I also noted that it could not be said that the amendments did not take the plaintiffs by surprise or cause any prejudice. The application to amend was a substantial one – it sought to expand upon the amended particular of objection, which originally contained 5 instances of prior art to 25 instances of prior art. Even if I were to just consider the first set of prior art sought to be added, the plaintiffs would have been placed in a position where they may have to seriously reconsider whether to proceed with their patent.

[46] Further, I took into account the fact that the defendants had already applied to amend their particulars of objection in January 2005. No reasons were given or evidence adduced to show why these prior art could not have been included in that application. Lastly, the matter can be approached from another perspective – whether the plaintiffs have a weak patent and are seeking to rely upon the Earth Closet/Scott-Paine order for a windfall. This was not such a case. It was not disputed that the plaintiffs had defended this very same patent vigorously and successfully in other jurisdictions such as Europe, Korea and Thailand.

(1) The plaintiffs do by 25 April 2005 elect whether they will discontinue their action and withdraw their defence to the counterclaim and consent to an order for revocation of their patent.

(2) And if the plaintiffs do so elect and give notice thereof to the defendants by the date ordered, then the patent shall be revoked and the defendants shall be entitled to the costs of the action from the commencement of the writ to date of the first amendment to the particulars of objection and the plaintiffs shall be entitled to the costs of the action subsequent to that.

(3) These costs shall be agreed or taxed.

[48] I should add that generally if the Earth Closet/Scott-Paine order is given, then the defendants should be allowed to decide whether they prefer to withdraw their application to amend instead: see Helitune Ltd v. Stewart Hughes Ltd (supra).

[50] In closing, I would mention that while the Earth Closet/Scott-Paine order originally arose in the context of the Patent Court, it has been expanded to registered design cases: see Morris Wilson & Co v Coventry Machinists Company [1891] 3 Ch 418 and Rose & Hubble Ltd v L. Hart (Stockport) Ltd [1965] FSR 412. However, I see no reason in principle why the Earth Closet/Scott-Paine order should be restricted solely to intellectual property cases only.