By FJ Labuschagne

The devil, more often than not, is in the detail.

When filing patent applications, the mysterious hidden element the idiom speaks of should be exorcised to avoid nasty surprises at a later stage.

In the event that an applicant for a South African patent claiming priority from an earlier application is not also the applicant for that earlier application, and there has not been a timeous assignment of priority rights, this can create a problem. To illustrate this, a short case study is set out below.

A novel pharmaceutical compound is invented by a team in the research and development section of a pharmaceutical manufacturer. By virtue of the inventor employment contracts, all inventions created by the inventors in the course and scope of their employment belong to the pharmaceutical manufacturer. For the sake of good governance, all inventors execute confirmatory assignments. The pharmaceutical manufacturer then files an application for a patent in South Africa. This application forms the base application from which all further applications going forward may claim priority (for example, the filing of either a convention application in terms of the Paris Convention for the Protection of Industrial Property in a member country or a Patent Cooperation Treaty application).

As a patent is a commercial instrument, the pharmaceutical manufacturer now has a choice to file further applications in other jurisdictions claiming priority from the South African application or to assign the invention and the South African application to a third party, which may be a subsidiary, an intellectual property holding company or an entirely different party altogether (depending on the underlying transactional facts). This is where the issue of who owns the right to claim priority becomes crucial, as is shown below.

The applicant

As in most countries, in South Africa an application for a patent in respect of an invention may be made by the inventor or by any other person acquiring from the inventor the right to apply, or by both the inventor and such other person. More often than not, an applicant will be a corporate entity filing for a patent by virtue of an assignment from an inventor.

Unity of applicant

In addition, as indicated above, patent applications may claim priority from an earlier application filed not more than 12 months previously. An application for a patent must adhere to certain formal requirements as prescribed in the Patents Act 57 of 1978 and must be accompanied inter alia by:

• An assignment of invention (if the inventor is not the applicant). (In the above example, the pharmaceutical manufacturer files the patent application as the assignee of the inventors. This requirement is in satisfaction of the applicant’s entitlement to apply for and be granted a patent in terms of s 30(4) of the Patents Act.)
• Where the applicant in the convention country is not a party to the priority application, an assignment of priority rights from the applicant of the priority application to the applicant in South Africa (which now claims the priority rights of the earlier application).

Recognition of priority rights

Unity of applicant arises in the circumstances of the second item above. International recognition of priority rights is derived from the Paris Convention for the Protection of Industrial Property. Article 4A(1) of this convention states: ‘Any person who has duly filed an application for a patent … or his successor in title, shall enjoy, for the purpose of filing in other countries, a right of priority … ’ (my emphasis).

Entitlement to apply

Section 27(1) of the Patents Act sets out who may apply for a patent. On the date on which an application is filed, an assignee applicant must be entitled to apply. It follows that a deed of assignment or the like must bear a date on or before the date of filing the application.

Unity of applicant necessitates that the applicant for a later application claiming priority from an earlier application must be the same applicant as for the earlier application. In terms of this, assigning the priority application to the applicant of the later application after the date of filing of the later application can result in the loss of priority rights. This is clearly illustrated in the English case of Edwards Lifesciences v Cook Biotech 2009 EWHC 1304 (Pat) United Kingdom Patents Court.

The Edwards case

In the Edwards matter, a priority application was filed in the United States (US) by three inventors. The later application (claiming priority from the US priority application) was filed by Cook Biotech, a company that employed one of the inventors. The other two inventors, subsequent to the expiry date of the priority period and after the filing of the later application, executed an assignment in favour of Cook Biotech. The question arose as to whether the patent was validly granted to Cook Biotech, as it was not the successor in title to all three inventors when the application was filed claiming priority from the priority application.

It was held that, although Cook Biotech was the successor in title to the rights of its employee, it was not, at the date of the filing of the later application, the successor to the remaining inventors’ rights, and was therefore not entitled to claim any priority. The consequence was that intervening prior art (dated from the time between the priority and the later application filing dates) became relevant to the validity of the patent.

The United Kingdom (UK) Patents Court ruled for a strict unity of applicant as between a priority application and a later application that claims priority from the priority application. This unity must exist at the date of the filing of the later application. It was confirmed in this case that an assignment of priority rights after the filing of the later application will be of no effect.

Assignment of priority rights

Can priority rights be tacitly assigned? Section 60(1)(a) of the Patents Act states that an applicant for a patent or a patentee may in writing assign rights in an application for a patent. It follows that in terms of this subsection, an assignment must be in writing. I submit that the word ‘may’ in the Patents Act does not offer a choice as to whether or not an assignment must be in writing, but merely denotes a choice that an application or a patent may be assigned (as opposed to being a right not capable of assignment). Unity of applicant requires that an invention cannot be tacitly assigned as entitlement must be established and proved by the lodgement of documentary proof.

Advisers need to take heed of the need for unity of applicant and ensure that the chain of title is objection proof. Unity of applicant will play a crucial role –

• when conducting an intellectual property due diligence;
• during a portfolio assessment prior to a restructuring or takeover where intellectual property is involved; or
• when involved in a multiple-filing stratagem and filing of declarations/proof of entitlement is concerned (this is especially where there has been an assignment or multiple assignments and/or acquisitions of inventions through corporate restructuring that may influence the chain of title in providing proof to the Patent Office of an applicant’s entitlement to apply for and be granted a patent).

FJ Labuschagne LLB (NWU) LLM (Corporate) (UP) is an attorney at Spoor & Fisher in Pretoria.

 This article was first published in De Rebus in 2012 (Oct) DR 38.