No! Don’t confuse the title of this post “rights of a prior user” with the “prior user” of the Indian trademark law. Here we are discussing the prior user right under patent law.
Let’s start with a question: you filed a patent infringement case in India and the defendant filed a counter-claim that he had secretly used the patented technology before the priority date of your patent application. What would happen?
Without going into the intricacies of the law, at the outset the court would revoke the patent for secret use of the invention in India under Section 64(1)(l) of the Indian patents act, 1970. But what would happen if the same situation occurs in a country like Germany and USA where the patent laws recognise the prior user right? Below is an attempt to answer it.
What is a prior user right? Section 12 of the German patent act and Section 282 of US AIA Act recognise the prior user right. According to these sections, any third party using a patented technology before a priority date of the patent can claim defence of the prior use in a patent infringement case and continue using the said technology subject to certain limitations. To claim the defence, the “use” can either be a public use or a secret use.
One may ask, if the prior use is made in public before the priority date of the invention, then it should cause anticipation of the patent. The question is intriguing, but the concept of prior user right means that the prior use lacks an enabling disclosure; if the prior use in PUBLIC was sufficient to provide an enabling disclosure, then only it might cause anticipation of the patent.
Benefits of the prior user right? This is a defence available to a defendant in a patent infringement case only if he is acting in good faith. The burden of proof lies with the defendant to establish that he has used the invention IN THE COUNTRY before the priority date of the patent. A successful defence allows the prior user to continue using the patented technology, limited ONLY to his own business unchanged. In order to enable others to use the prior user defence, it can only be transferred with the complete sale of the business.
Further, the prior user would not be obligated to pay a royalty to the patent holder. However, the prior user obviously cannot exclude anyone from using the patented technology. The policy consideration to allow prior user right is to balance the theory of exclusive rights and the third party rights who has invested his money in good faith.
What is more to consider here is that the burden of proof first lies on the defendant to prove that he is the prior user. However, if once it is proved, would the burden of proof shift to the patentee to in-turn prove that the prior use lacked enabling disclosure and hence, his patent should not be invalidated? We need to look into the question separately. If you know the answer, please reply in the comment section below.
US Law on prior user right
The prior user right was first introduced in the US by the court’s decision in the landmark case of State Street Bank & Trust Co. v. Signature Financial Group, Inc. This was introduced with the objective of safeguarding the interest of the domestic prior business owners using a patented business method. Eventually, section 273 was introduced. The scope of the prior user right was extended (check 35 USC Sec. 282) to all technologies with the enactment of the America Inventors Act (AIA), 2011. The prior use must have occurred at least one year before the priority date or filing date and an exception applies to this defence if the applicant is the University.
The position of India on this point appears clear, i.e. the Indian patent law does not recognise the rights of the prior user. It follows the system of First-To-File like mostly other countries. In any such situation arising, the user instead of claiming to be a prior user must take the ground of prior use or secret use in India.
In comparison, the Indian patent act provides a broader defence and no chances of a win-win situation between the patentee and the prior user. In fact, the question “what is an invention” was answered in the case of Raj Parkash vs, Mangat Ram Choudhary as, “Invention is to find out…… by anyone before …..so long as it is something novel or new, would be an invention….and the claims for anticipation by the defendant has to be either by prior user or by prior publication”. Thus, if someone proves a prior use, then it would cause revocation of the patent.
However, what is intriguing here is that in Lallubhai Chakubhai v. Shamaldas Sankalchand A.I.R., 1934. Bom. 407, it was held that if an article manufactured under a secret process is of such a character that anybody by examining it can find out the secret of that manufacture, then the sale of that article in public would amount to public use of the process. Wait! Does it mean that if the secret use of the invention was secret enough not to provide an enabling disclosure to the skilled person or anyone examining it, then that secret use would not anticipate the invention and hence, no revocation under section 64(l) of the Act? If yes, then the patentee can freely exercise his rights against the prior user – even when the invention was secretly used in India before the priority date – and it would also question India’s position on the First-To-File system.
In view of the above, I understand that recognition of the prior user right is a solution to maintain a balance between the prior trade secret user and the patentee. There is a thin line of difference that lies between the secret use that will constitute a “prior use” in the Indian patent law and the secret use that will not, i.e. if the “prior use” was sufficient to be interpreted as enabling disclosure. Though India’s position on this issue appears settled, in light of the questions raised above, it leaves me amused! Your suggestions are greatly welcome.
#Happy Patenting
Your articles are extremely knowledgeable Krishnam. I always love to read it. Good going keep it up!!
Thank you for your encouraging words.
Nicely summarized and I appreciate the attempt.
So, after reading this, can I take it like this as below?
1. In India the “prior user rights” do not exist.The only option is to invalidate/challenge the patent.No win-win situation.
2. In U.S the “prior user rights” exist but comes with the “one year” and “commercialization” conditions.
Please comment if I’m wrong.
Thank you Mr. Reddy.
My understanding of this issue absolutely echoes the first and second point mentioned by you.
Dear Krishnam,
Beautifully written. Keep it up.
Thank you very much, sir.
1) The core question : Does it mean that if the secret use of an invention was secret enough not to provide an enabling disclosure to the skilled person or anyone examining it, then that secret use would not anticipate the invention and hence, no revocation under section 64(1)(l) of the Act?
Answer by Yourself : Recognition of the prior user right is a solution to maintain a balance between the prior trade secret user and the patentee.
There is a thin line of difference that lies between-
The secret use that will constitute a “prior use” in the Indian Patent Law.
AND
The secret use that will NOT constitute a “prior use” in the Indian Patent Law if it was sufficient to be interpreted as enabling disclosure.
2) Please elaborate the “Sufficiency & Non sufficiency to be interpreted as enabling disclosure” with examples if you have. It will make picture very clear.! And won’t be an amusing to anyone anymore.
Secret prior use exist in India and mentioned in Section-64 (3)-(a),(b) & (c) and Patents can’t be Revoked/Invalidated based on above mentioned points.
Section-64(3)(a) & (b) related to experiment use and Government use.
But 64(3)(c) mentions similar activity as mentioned by you. Hence I requested to elaborate ‘Enabling Disclosure’ with an example if possible.
Otherwise after knowing most of things in Indian Patent Law one may get amused unnecessarily.! Clear Citations needed to discuss such a complex and imaginary situations in Indian Patent Law.
As correctly mentioned, Section 64(3) mentions a few exceptions to the secret use, the account of which is not taken during revocation. These are the same exceptions which are available against anticipation as well. Nevertheless, the question here is not if revocation can take place on the basis of these exceptions. The question here is if prior user can have a right to use his invention on the basis of these exceptions. These exceptions only prevent the patent from being revoked and in no way establishes a prior user right to anyone.
For example, assume that you filed a patent application in 2019 and you used the invention before filing in any conditions given in section 64(3). Accordingly, I can file a revocation proceeding against your patent application arguing that you have secretly used the invention before the filing of your application and you can counter argue that the use of the invention is allowed under Section 64(3). This is the role of section 64(3) which complements the exceptions to anticipation during examination. In other words, patentee can save his invention from being revoked if either he himself has secretly used it as per section 64 (3) (a) and (b), or by anyone else by way of theft. It does not involve the use by any third party (which could be a prior user). Therefore, if the prior user asserts that he has used the invention even secretly before your invention and successfully proves it, your invention will be revoked.
I was trying to emphasize the need of recognition of Prior Use as Trade Secret Vs Patented Invention in India. Specially in Pharmaceutical field in such public health crisis (Pandemic) time.! Where Generic OR Low cost medicine availability is the basic need of society.
Hence was in search of citations with examples where such need is clearly underlined.
Many Lawyers and IP institutions OR experts suggest same thing that IPO must clear very thin line of difference that lies between a clear Prior art which invalidate the Patent application AND First secret prior use/Trade Secret which could be in force along with second Patented invention if allowed. Hence asserting if first prior secret user is been asked to ‘enable the disclosure’ of his secret idea/invention which he was working & used before second Patent application of same idea/invention. Both must go in parallel way with their rights only for welfare of society.
I’m agree with the statement of Mr.Goyal that such need is a solution to the problem.
BUT not agree with his reply that He was in echoes with the two points specially point one. It contradicts the thoughts in an article and in the reply to the query.
I am sharing a para from an article which clearly emphasizes the need.!
Prior Use as Trade Secret Versus Obtaining a Patent.
“It may not be particularly material to a trade secret owner whether he is entitled to continued practice of his invention/trade secret because the later inventor’s patent is either invalid or is not enforceable against him. However,from a broader vantage point,it may of course be in his interest that his invention, which is now in the public domain by way of the later inventor’s patent, is not a free-for-all.
Thus, it is manifest and compelling that a right of prior user or in personam right should be enacted into law. It is badly needed. The arguments advanced in favor of such a right are
eminently logical and convincing. It would be the best and ideal solution and compromise between the clashing public policy considerations and the illogical extremes now faced by first
inventors/trade secret owners and second inventors/patentees. Unless legislation is enacted providing protection for the prior user of a trade secret and also protection for the second independent inventor who secures a patent, there could be mutual destruction of patents and trade secrets and the legal situation woefully unsettled. The solution clearly is to let the patent stand without being invalidated by a prior trade secret use and the same time assure the trade secret holder that he will not be the subject of a later filed patent infringement suit. By protecting the fights of both parties the patentee would receive protection for his invention and the independent trade secret user would be allowed to continue using his invention.
This solution would be in conformity with the Kewanee decision and would satisfy the constitutional mandate concerning the use of patents to promote the progress of the Arts and
Sciences”.
Full article with citations can be accessed via following link.
https://ssrn.com/abstract=1981674
https://dx.doi.org/10.2139/ssrn.1981674