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CACV 32/2016
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 32 OF 2016
(ON APPEAL FROM HCA NO 1709 OF 2010)
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BETWEEN
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ACRON INTERNATIONAL TECHNOLOGY LIMITED |
Plaintiff |
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and |
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CHAN YIU WAI |
1st Defendant |
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LAW SUI CHUN |
2nd Defendant |
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Before: Hon Cheung, Hon Yuen and Hon Kwan JJA in Court
Dates of Hearing: 8 September 2016
Date of Judgment: 30 June 2017
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J U D G M E N T
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Hon Cheung JA:
1. I agreed with the judgment of Yuen JA.
Hon Yuen JA:
2.1. This is an appeal by the defendants from a judgment of Recorder Whitehead SC given on 25 January 2016 (“the Judgment”) in which he made various orders after trial.
2.2. As against the 2nd defendant, the learned Recorder:
(1) entered judgment for the plaintiff against her;
(2) ordered her to assign to the plaintiff the Invention Patent granted in the PRC (No.ZL200410091762.3) titled “A Method and Device for Fluid Purification” (“the PRC Invention Patent”);
(3) gave directions for the plaintiff to repay to the 2nd defendant the expenses she had incurred in applying for and maintaining the PRC Invention Patent; and
(4) ordered her to pay the costs of the action.
2.3. As against the 1st defendant, the Recorder:
(5) dismissed the plaintiff’s claim against him; but
(6) ordered him to pay half of the plaintiff’s costs of the action up until 5 September 20151.
2.4. The Recorder dismissed the plaintiff’s claims against both defendants for damages and/or account of profits2. There is no cross-appeal.
Background
3. Briefly, the background facts are as follows.
The parties -
- The plaintiff
4.1. The plaintiff company was incorporated in Hong Kong in 1995 and set up under an entrepreneurship program of the Hong Kong University of Science and Technology (“UST”).
4.2. The Recorder found that it was a “small start-up business which was run by a small group of highly-educated persons with scientific backgrounds, who worked ... to design and/or supply and/or build air purification/odorizing systems on an individual and tailor-made basis ... [incorporating] research and experimentation in real world conditions”3. The plaintiff had a close affiliation with the university which provided a research grant4 and access to its laboratory facilities5.
4.3. The Recorder found, on the basis of this and other evidence, that the plaintiff was engaged in the business of research and development of patentable and proprietary scientific processes and inventions6. This issue will be discussed later in this Judgment7.
- The 1st defendant
5.1. The 1st defendant, who had graduated from UST, was initially one of the shareholders and directors of the plaintiff.
5.2. In 2001, the plaintiff employed the 1st defendant first as research and development director and then, in September, as project manager.
5.3. The following year (2002), the 1st defendant ceased to be a director and shareholder of the plaintiff, but he remained indirectly involved for he was a director and shareholder of another company AISL which had interests in the plaintiff.
5.4. The Recorder found that the 1st defendant’s “normal duties were in the context of an administrator, coordinator and organizer”, and that he was not “employed to try to innovate”8.
- The 2nd defendant
6.1. The 2nd defendant had also graduated from UST. She obtained a Ph D in Chemistry, and in the course of her studies, she had conducted research with zeolites9.
6.2. In October 2001, the plaintiff first employed the 2nd defendant as research manager, then in January 2002 as research and development manager, and then in September as project manager of the Operations Department.
6.3. The Recorder found after a thorough analysis of the evidence that the 2nd defendant’s normal duties included innovative research and development of the technology involved in the plaintiff’s project for the development of purification systems10. This issue will be discussed later in this Judgment11.
The plaintiff’s NCCO project
7. The plaintiff had a project for the development of purification systems based on a process called Nano-Confined Catalytic Oxidation (“NCCO”). The following passages from the Judgment12 describe the NCCO project:
“18. NCCO involves a chemical process whereby pollutants (organic or otherwise) are adsorbed13 by molecular sieves with nanoporous or micorporous materials, and catalytically oxidized. ... [T]he process of catalytic oxidation is well known and established.
19. Certain chemical molecular structures known as ‘molecular sieves’ (adsorbent) are by nature effective in trapping contaminant gas molecules (adsorbate). Zeolites is one type of molecular sieve. There are different types of zeolites.
20. However, when molecular sieves are used alone, the pollutants adsorbed will eventually be released back to the atmosphere. Therefore, to avoid the pollutants being released back, and to remove pollutants permanently, the plaintiff says that it applied NCCO in air purification systems by, inter alia, (1) use of molecular sieves for adsorption; (2) the introduction of oxidant by an oxidant generating device; and (3) oxidation within the confined space of the molecular sieves”.
In short, the Recorder found that the NCCO process involved the application of chemical processes in the field of air purification14.
Plaintiff’s application for invention patent of air cleaner using molecular sieves
8.1. On 29 April 2002, the plaintiff filed an application under the Patent Cooperation Treaty (“the plaintiff’s PCT application”) for an invention derived from the NCCO project (“the plaintiff’s invention”).
8.2. The invention was of an air cleaner that uses molecular sieves, such as zeolites, as a filter to remove contaminant gas. It was continuously self-generating and could decompose and permanently remove the filtered contaminants.
8.3. The 2nd defendant was named in the application as one of the four inventors of the plaintiff’s invention.
8.4. Patents were eventually granted to the plaintiff in Hong Kong, the Unites States, Europe, Japan and the PRC.
Defendants’ application for PRC Utility Model Patent
9.1. On 31 August 2004 15, the defendants applied to the PRC State Intellectual Property Office for a Utility Model Patent for an “apparatus for fluid purification, comprising a housing having an outlet and inlet for the fluid, and molecular sieve wherein the said housing also comprises an oxidizing reagent generating device. ...”.
9.2. The application stated that the two defendants were the Inventors or Designers.
9.3. This application was withdrawn on 26 November 2004 when the defendants applied for the PRC Invention Patent referred to below16.
Defendants’ departure from the plaintiff
10.1. About a month after the application for the Utility Model Patent, on 5 October 2004 AISL (the company of which the 1st defendant was director and shareholder) ceased to be a director and shareholder of the plaintiff.
10.2. On 18 October 2004 both defendants17 gave notice to terminate their employment with the plaintiff and left the plaintiff’s employ a month later.
Defendants’ application for PRC Invention Patent
11.1. Eight days after they left the plaintiff’s employ, on 26 November 2004 the defendants applied to the PRC State Intellectual Property Office for an Invention Patent for a “Method and Device for Fluid Purification”.
11.2. It is notable that they claimed priority from 31 August 2004 (“the priority date”), which was the date of the application for the Utility Model Patent which they withdrew on the day they applied for the PRC Invention Patent.
11.3. That priority date is significant in our case, for it indicates that the defendants themselves regarded the Utility Model Patent to be identical or closely similar to the PRC Invention Patent. In English law18, if a priority date (31 August 2004) earlier than the date of filing of an application (26 November 2004) is sought, priority is established if the earlier document is in respect of the same invention19. Similarly in Hong Kong, the Patents Ordinance, Cap.514 provides that a person who files an application for a short-term patent20 for an invention enjoys a right of priority commencing with the date when the first application for the same invention is filed21.
11.4. I shall refer to the defendants’ claim of the priority date of 31 August 2004 later in this Judgment22.
Defendants’ applications for patents other than PRC
12. In 2005 the defendants filed applications for Hong Kong and US patents. It is recorded in the Judgment23 that in their applications for Hong Kong and US patents, the defendants also claimed the priority date of 31 August 2004.
Grant of PRC Invention Patent
13. The PRC Invention Patent was granted on 7 January 2009.
Priority claimed for PRC Invention Patent
14. In the PRC Invention Patent, there are under the heading of “Priority Number” the date 31 August 2004 and the number of the Utility Model Patent. It is therefore clear that for the granted patent, the defendants regarded the invention on which the Utility Model Patent application and the Method and Device for Fluid Purification Patent application were based as the same invention.
Examination by PRC State Intellectual Property Office and the defendants’ amendments
15.1. Meanwhile, between the application (November 2004) and the grant (January 2009) of the PRC Invention Patent, the PRC State Intellectual Property Office issued three Notices of Opinions on Examination (審查意見通知書). These were inaccurately translated as “Notices on office action”24.
15.2. Notices were issued on 28 July 2006, 9 March 2007 and 18 April 2008. The defendants responded to queries raised in the notices and made amendments to the application. According to the defendants’ own expert, the final amended version was a rearrangement and combination of the claims which had appeared in the original version25.
15.3. Thereafter the defendants were informed by the PRC State Intellectual Property Office that a patent would be granted.
15.4. I will return to the arguments based on these amendments later in this Judgment26.
Proceedings
16.1. In 2010, the plaintiff commenced proceedings against the defendants claiming that the invention under the PRC Invention Patent belonged to it, for the invention was made in the normal course of the defendants’ duties when in its employ, in circumstances where an invention might reasonably be expected to result from the carrying out of their duties.
16.2. The plaintiff claimed (in summary) that under the defendants’ contracts they were obliged to devote office time and attention to the plaintiff’s business, and that their work duties included the study and applied research of molecular sieves, in particular zeolites, in purification. The result of the study and applied research was therefore owned by the plaintiff pursuant to s.57 Patents Ordinance, the material parts of which provide:
“(1) Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purposes of this Ordinance and all other purposes if –
(a) it was made in the course of the normal duties of the employee ... 27and the circumstances ... were such that an invention might reasonably be expected to result from the carrying out of his duties ...”. (Emphasis added).
17.1. The defendants argued that s.57 did not apply for various reasons (some of which arguments are repeated on appeal and which will be discussed later in this Judgment); alternatively, that the plaintiff had an “invention policy” whereby any invention arising in the course of employment with the plaintiff would nevertheless be treated as belonging to the employee28.
17.2. Before trial, on 12 February 2014 the 1st defendant ceased to be registered as a co-owner of the PRC Invention Patent. However the plaintiff was not informed about this until nearly 1½ years later, on 5 September 2015. This had an impact on the Recorder’s order of costs29.
Issues at trial
18. At trial, the parties provided the Recorder with a list of issues. For the purposes of this appeal, only the following issues are material:
“(i) Whether the plaintiff has been engaged in the business of research and development of, inter alia, patentable and proprietary-scientific processes and inventions, which were then to be developed into products or services that would be marketed for sale. ...
(ii) Whether the plaintiff has established its claim that the invention in the PRC Invention Patent registered originally under the joint names of the defendants (and currently registered under the sole name of the 2nd defendant) belongs to the plaintiff pursuant to section 57 of the Patents Ordinance (Cap. 514);
(iii) In considering the issue in (ii) above:
(a) When was the Invention made? ...
(b) What were the scopes of the defendants’ normal duties during their employment with the plaintiff?
(c) Whether the Invention was made in the circumstances that an invention might reasonably be expected to result from the carrying out of the normal duties identified in (b) above?”
The Recorder’s Judgment
19. After an 11-day trial at which a number of witnesses, including expert witnesses, gave evidence, the Recorder found (in summary) that:
- the invention on which the PRC Invention Patent was based was made by the 2nd defendant in the course of her normal duties as the plaintiff’s employee, and
- the circumstances were such that an invention might reasonably be expected to result from the carrying out of such duties.
20. As part of that finding, the Recorder had to determine when the invention on which the PRC Invention Patent was based was made. If it was made after the defendants had left their employment with the plaintiff, then s.57 of the Ordinance would not apply in any event.
21.1. A preliminary step to that determination was first to identify what was the invention30. The Recorder heard expert evidence on this issue.
21.2. The plaintiff’s expert Dr SF Au Yeung was of the opinion that the invention on which the PRC Invention Patent was based was similar to the plaintiff’s invention31, and that the amendments to the application were not inventive steps but were mere “fine tuning”32.
21.3. For reasons set out in his Judgment, the Recorder accepted Dr Au Yeung’s expert opinion. He found that “the invention encapsulated in the PRC Invention Patent is strikingly similar to the subject matter protected under the [plaintiff’s] PCT Application” and that “the defendants decided to employ the NCCO technology embodied in the [plaintiff’s] PCT Application secretly and for their own benefit”.
22.1. The Recorder then went on to consider when the invention on which the PRC Invention Patent was based was made. The defendants’ argument was that as the “final definitive idea or concept”33 of the invention appeared as a result of the last amendment on 30 June 2008, the invention was only made shortly before then. By that time, the defendants had already left the plaintiff’s employ.
22.2. The defendants sought to rely on s.76(1) Patents Ordinance which provides, where material:
“(1) For the purposes of this Ordinance –
(a) an invention in respect of which an application for a patent has been filed shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application, as interpreted by the description and any drawings contained in that specification;
(b) an invention for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the patent, as interpreted by the description and any drawings contained in that specification,
and the extent of the protection conferred by a patent or an application for a patent shall be determined accordingly”. (Emphasis added).
22.3. At trial the plaintiff objected to the defendants’ pursuit of this defence as it had not been pleaded.
22.4. The Recorder overrode the objection, but in any event found that s.76 did not apply to the issue of when an invention was “made” under s.57.
23. Then, after a detailed analysis of the evidence, the Recorder found that whilst it was not within the normal duties of the 1st defendant to innovate, it was within the 2nd defendant’s normal duties to do so34, that the invention was made in the course of her normal duties whilst employed by the plaintiff 35, and that given the areas covered by her duties to innovate, an invention might reasonably be expected to result from the carrying out of her normal duties36.
24. The Recorder also found as a fact that there was no “invention policy” as alleged by the defendants and rejected that defence.
25. Accordingly, the Recorder found that the plaintiff’s case against the 2nd defendant had been established and gave the orders set out earlier in this Judgment37.
26.1. In respect of the 1st defendant, the Recorder found that as he had laid claim to the PRC Invention Patent, it was necessary for the plaintiff to sue him to dislodge his claim to it.
26.2. Although the 1st defendant removed his name from the patent registration on 12 February 2014, the plaintiff was not notified of this until 5 September 2015. The Recorder therefore considered that the plaintiff was entitled to costs against him until that date.
26.3. However to reflect the fact that the plaintiff’s main thrust against the 1st defendant was the s.57 claim, in which the plaintiff failed against him (although it succeeded against the 2nd defendant), the Recorder ordered that the 1st defendant would have to pay only 50% of the plaintiff’s costs until 5 September 2015.
Appeal
27. The defendants appealed. Mr Paul Lam SC, leading counsel for the defendants38, submitted that the appeal raises important issues on the construction and application of s.57. Grounds 1, 3, 4 and 5 of the Notice of Appeal were concerned with the application of s.57, in respect of which Mr Lam accepted that challenges to findings of fact made by the trial judge were involved39. Ground 2 straddled both construction and application.
The Appellants’ submissions
28.1. In regard to the construction submission, Mr Lam relied heavily upon s.76(1)40 for his argument on the construction of s.57. Put briefly, his argument was that in determining when the invention was “made” under s.57, one had to refer to s.76 to determine what the “invention” was. And since s.76(1) stipulates that the invention for which a patent has been granted “shall be taken to be that specified in a claim of the specification of the patent ...”, one must examine the claims in the PRC Invention Patent.
28.2. Mr Lam compared the claims in the PRC Invention Patent with those in the earlier Utility Model Patent application. He pointed to the fact that there were only 12 claims in the Utility Model Patent application which concerned only a device, whereas there were 14 allowed claims in the PRC Invention Patent which concerned both a device and a method. Accordingly Mr Lam argued that the “invention” (construed with reference to s.76) did not exist in any event at the time when the 2nd defendant was in the plaintiff’s employ.
29. Mr Lam’s argument on the application of s.57 included challenges to the Recorder’s findings as to the nature of the plaintiff’s business (Ground 1), the 2nd defendant’s normal duties (Ground 3), whether the invention was made in the course of her normal duties (Ground 4), and whether an invention might reasonably be expected to result from the normal carrying out of the 2nd defendant’s normal duties (Ground 5).
30. Finally there is Ground 2, which is as follows. Whilst Mr Lam accepted that the PRC Invention Patent application was related to the Utility Model Patent application41, he pointed to the amendments that had been made in response to the PRC State Intellectual Property Office’s notices, and he submitted that without the amendments, the defendants would not have been granted the PRC Invention Patent. Accordingly he argued that it was only when the last amendment was made shortly before 30 June 2008 that the invention was “complete”. Therefore the invention was only “made” then, when the 2nd defendant had in any event left the plaintiff’s employ.
Discussion
- Construction
31.1. With respect, I am not persuaded by the submission that the “invention” in s.57 should be construed with reference to s.76. First, the words “unless the context otherwise requires “in s.76 show that that section may not be applicable to all the provisions contained in the Ordinance. Context is material.
31.2. Section 76 is concerned with the “extent of invention” which, as s.76(1) shows, is particularly important for the determination of the “extent of the protection conferred by a patent”. Generally it is in the proprietor’s interests to seek the widest extent of protection, whilst it is in the interests of third parties to argue that the proprietor’s protected right was more narrowly confined. Hence, the emphasis in s.76(1) is on the claims to identify what is protected.
31.3. Even then, there may be a conflict between the proprietor and third parties as to how the claims should be considered. Section 76(3) therefore requires that s.76(1) “is to be interpreted as defining a position between these extremes [set out in s.76(3)(a)42 and (b)43] which combines a fair protection for the proprietor of the patent ... with a reasonable degree of certainty for third parties”.
31.4. That is the purpose of s.76, and the words relied upon by Mr Lam should be understood in that context. The disputes to which s.76 applies are those where third parties are challenging the proprietor on the extent of protection conferred by the patent.
32.1. In contradistinction, s.57 is concerned with the title to an invention as between employer and employee.
32.2. Section 57(1) sets out the situations in which an invention made by an employee would, as between him and his employer, be taken to belong to the employer. It is notable that there is no reference to an application for patent in that subsection, or in s.57(2) which deals with the ownership of an invention made by an employee outside those situations44.
32.3. It is clear from s.57(1) that if the situation falls within those set out in that subsection, the title to the invention vests with the employer immediately as a matter of law, with no further action being required, and regardless of whether any application is or can be made for a patent45. There is no correlation between the making of an invention (for the purposes of s.57) and an application for a patent based on the invention.
32.4. This view – that the meaning of “invention” in s.76 does not apply to s.57 – is consistent with the judgment of Jacob LJ in Markem Corp v Zipher Ltd 46where the English Court of Appeal held that the meaning of “invention” in s.125 Patents Act (our s.76) did not apply to s.8 Patents Act (our s.13), which deals with “entitlement”, i.e. the determination (before a grant) of questions as to which person may apply for the grant. Indeed the learned editors of Terrell refer to s.39 of the Patents Act (our s.57) as governing “the entitlement as between employer and employee to inventions made by an employee”47.
33. For the reasons set out above, I do not accept the submission that the construction of s.57 should be governed, or even be informed, by s.76.
- Application
34.1. As for Mr Lam’s submission on the application of s.57, he candidly accepted that this involved challenges to the findings of fact by the trial judge48.
34.2. It is well-established that an appellate court would interfere with findings of fact only if the appellant shows they are palpably wrong49.
35. I will deal with Grounds 1, 3, 4 and 5 first.
36.1. In Ground 1, Mr Lam submitted that (a) it was necessary to identify the plaintiff’s business in order to consider what were the normal duties undertaken by the 2nd defendant; (b) business connotes continuity and system; (c) even though the plaintiff was involved in a number of projects, it was only exploiting one invention (the plaintiff’s invention on which its PCT Application was based); (d) therefore, the Recorder was wrong to hold that the plaintiff’s business involved the research and development of patentable and proprietary scientific processes and inventions including the research and development of NCCO technology.
36.2. With respect, I do not accept that submission. There was evidence on which the Recorder was entitled to find that the plaintiff carried on a business of air purification, as evidenced by a number of projects50 it had undertaken. For that purpose, it conducted research projects, submitted scientific articles for publication and submitted the plaintiff’s PCT Application, which the Recorder held went to the core of that business51. The weight given to these pieces of evidence is not a matter for appeal. Mr Lam submitted that what was required was evidence that the plaintiff carried on “pure research” not directed to any client’s work. I do not see why that is required. Research does not change in character whether it is undertaken with a particular client in mind or not. The requirements of a particular client would only affect the ambit of the research done.
37.1. Grounds 3 and 4 can be dealt with together as Ground 4 is dependent on Ground 3. Mr Lam submitted that the Recorder had erred in overstating the breadth of the 2nd defendant’s normal duties. He submitted that the Recorder “overlooked to consider which particular aspects of research or development of the NCCO technology the 2nd defendant’s normal duties involved”, as she was only involved with zeolites, and not other types of molecular sieves, or the material chemistry of molecular sieves.
37.2. The word “particular” emphasised above reveals the fallacy of this ground of appeal. It demonstrates the same error that the first instance judge in LIFFE fell into. In that case, Jacob LJ held:
“[99] Since one cannot go by the contract alone I do not think one can be too precise about how the duty is to be ascertained. The contract and the general nature of the job both call for examination. It is not possible to be too analytical about this. In the end one is asking whether the employee is employed to try to innovate, and if he is, what general sort of areas his innovation duties cover. It is here I think that Kitchin J got too far into the detail of [the employee] Dr Pinkava’s day-to-day work, accepting that he was under a duty to innovate new types of future of a conventional kind but not other types of product which would be of commercial interest to [the employer] LIFFE”. (Emphasis added).
37.3. The Recorder found that the plaintiff was involved with NCCO technology. The 2nd defendant was brought in to further the company’s research and development of that technology. The fact that she had a particular expertise in zeolites did not mean that her duty, first as research and development manager and then as project manager, was confined to zeolites only. As Mr Lam accepts, the 2nd defendant was an expert not only in zeolites, but also in molecular sieves and material chemistry52.
37.4. The 2nd defendant was named as one of the inventors of the plaintiff’s PCT Application which invention was an air cleaner “that uses molecular sieves, such as zeolite or other microporous/nanoporous crystalline materials ... as a filter ...”. It is clear that zeolites was but only one type of sieve that the plaintiff’s employees including the 2nd defendant were developing for the NCCO project.
38.1. In Ground 5, Mr Lam submitted that the Recorder erred in holding that the circumstances were such that an invention might reasonably be expected to result from the carrying out of the 2nd defendant’s normal duties. The ground stated that if it was part of the 2nd defendant’s normal duties to innovate, it was confined to innovations to apply the invention embodied in the plaintiff’s PCT Application, and nothing else.
38.2. With respect, that argument ignores the language of s.5753 which refers to “the circumstances ... were such that an invention might reasonably be expected to result from the carrying out of his duties ...”. It is clear that s.57 does not apply only to a situation where the particular invention actually made by the employee might reasonably be expected to result from the carrying out of his duties. As noted earlier, the 2nd defendant was an expert not only in zeolites, but also in molecular sieves and material chemistry54 and had been credited with being one of the inventors of the plaintiff’s invention which was not confined to zeolites.
38.3. Indeed the 2nd defendant’s case is even weaker than that of the hypothetical research chemist who had been employed for 10 years to work on a cancer cure but who came up with a cure for arthritis. In LIFFE, the court held55 that the chemist could not seriously contend that he owned the invention because he was day-to-day working on a cancer cure. His duty as a research chemist was wider than his day-to-day work.
39.1. That leaves Ground 2. Mr Lam accepted that the application for the Utility Model Patent was made at a time when the 2nd defendant was employed by the plaintiff, and that the PRC Invention Patent was related to the Utility Model Patent. However he submitted that the “invention” was not complete until shortly before the final amendment (in June 2008), which was long after the 2nd defendant had left the plaintiff’s employ.
39.2. I have discussed earlier in this Judgment56 how a patent application has no correlation to the date when an invention is made for the purposes of s.57. When an invention is made is a matter of fact.
39.3. Looking then at the facts of this case, the Recorder had, after considering the expert evidence, rejected the argument that the invention was only made shortly before the last amendment. He accepted the evidence of the plaintiff’s expert that the amendments were only in the nature of “fine tuning”57. The defendants’ expert accepted that the final amended version was a rearrangement and combination of the claims which had appeared in the original version58. No additional material was added59.
39.4. It may well be that a patent would not be granted until a patent examiner is satisfied with the fine tuning, but it does not follow that it was only then that the invention was made. This view is consistent with the holding of the Full Court in University of Western Australia v Gray that one must not confuse “invention or inventive concept with the requirements of a valid patent”60.
39.5. To determine when an invention is made, one must examine the inventive concept. I have referred earlier61 to the fact that the defendants themselves had claimed the priority date of the Utility Model Patent application for their PRC Invention Patent. In essence therefore, the defendants have themselves accepted that the inventive concept came into being in August 2004 and not in June 2008. The earlier date was the priority date set out in the patent granted by the PRC State Intellectual Property Office. This is consistent with the common ground between the experts that substantial amendments are not permitted for patent applications62. If an amendment would not be permitted if substantial, a fortiori it would not be permitted if the amendment involved a novel inventive concept.
40. It follows from the above discussion that Grounds 6 and 7 must also be dismissed.
Order
41. For the reasons set out above, I would dismiss the 2nd defendant’s appeal. As no discrete grounds were advanced in respect of the 1st defendant’s appeal, it follows that his appeal should also be dismissed.
42. As I see no reason why costs should not follow the event, I would make an order nisi that the defendants are to pay the plaintiff’s costs of the appeal.
Hon Kwan JA:
43. I agreed with the judgment of Yuen JA.
(Peter Cheung)
Justice of Appeal
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(Maria YUEN)
Justice of Appeal
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(Susan KWAN)
Justice of Appeal
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Ms Rachel Lam and Ms Eva Leung, instructed by Kwok, Ng & Chan, for the plaintiff
Mr Paul Lam SC leading Ms Kay Seto, instructed by Woo, Kwan, Lee & Lo, for the 1st and 2nd defendants
1 Being the date when the plaintiff was notified that the 1st defendant’s name had been removed from the PRC Invention Patent (para.150, Judgment).
2 Paras. 143-147, Judgment.
3 Para. 44, Judgment.
4 Para. 47, Judgment.
5 Para. 48, Judgment.
6 Para. 48, Judgment.
7 Para. 36 below.
8 Para. 99, Judgment.
9 A group of minerals that can be easily dehydrated and rehydrated.
10 Paras. 101-117, Judgment.
11 Para. 37 below.
12 Paras. 18-20.
13 Adhering of molecules to surfaces.
14 Para. 50, Judgment.
15 During their period of employment by the plaintiff.
16 Para. 11 below.
17 Who later became husband and wife.
18 As informed by the European Patent Convention.
19 Terrell on the Law of Patents 18th ed. para. 7-23.
20 Original applications can be made in Hong Kong for short-term (8 year) patents cf foreign patents can be registered as standard (20 year) patents in Hong Kong.
21 Section 110(1), Patents Ordinance, Cap.514.
22 Para. 39.5 below.
23 Para. 13, Judgment.
24 And were referred to in the Judgment in those terms.
25 Para. 81, Judgment.
26 Para. 39 below.
27 The section contains another limb regarding “specifically assigned duties” which the plaintiff did not rely upon. Hence it has been omitted in this quotation of the section.
28 The defendants did not make any application for compensation under s.58 Patents Ordinance.
29 Para. 26 below.
30 There is no definition of “invention” in the Patents Ordinance.
31 Para. 63, Judgment.
32 Para. 62, Judgment, quoting Dr Au Yeung’s expert opinion dated 16 November 2004 at paras. B1 & 2 and his oral evidence at Transcript p.490.
33 A phrase borrowed from a submission in University of Western Australia v Gray [2009] 179 FCR 346, para. 240.
34 Paras. 101-117, Judgment.
35 Paras. 118- 121, Judgment.
36 Paras. 122- 125, Judgment.
37 Para. 2.2 above.
38 Leading Miss Kay Seto.
39 Para. 11, Appellants’ Skeleton Submissions.
40 See para. 22.2 above.
41 Para.17(b), Appellants’ Skeleton Submissions.
42 A strict, literal meaning of the wording in the claims.
43 The claims only serving as a guideline.
44 There is only a reference to patent applications in s.57(3), immaterial to this case, which exempts acts done in the course of a patent application by an invention-owning employee from being regarded as infringements of the employer’s protected lay-out design right.
45 In LIFFE Administration and Management v Pinkava [2007] 4 All ER 981, the invention was not patentable at all in the UK: para. 2.
46 [2005] All ER 377, paras. 100-101. This case was later overruled, but on a different point: Terrell para. 4-12.
47 Para. 4-22, Terrell.
48 Para. 11, Appellants’ Skeleton Submissions.
49
China Gold Finance Ltd v CIL Holdings Ltd CACV11/2015.
50 Para. 41, Judgment.
51 Para. 49, Judgment.
52 Para. 123, Judgment.
53 Para. 16.2 above.
54 Para. 123, Judgment.
55 Para. 97.
56 Para. 32 above.
57 Para. 62, Judgment.
58 Para. 81, Judgment.
59 Transcript T3/549.
60 Para. 261.
61 Para. 11 above.
62 Para. 80, Judgment; the defendant’s expert referred to PRC Patent Law No.33, that “once the patent [application] has been submitted, amendments can be made only if the amendments do not exceed the coverage of the original claims” (C3/1095); this appears to be similar to s.103 Patents Ordinance.
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