Malaysia Federal Court Decision: Merck Sharp & Dohme & Anor v Hovid Berhad

A longstanding uncertainty surrounding the validity of dependent claims due to the invalidation of its independent claim has finally been put to rest in the recent Federal Court Decision in Merck Sharp & Dohme & Anor v Hovid Berhad. With this ruling, the Federal Court has departed from the decision made in the SKB Shutters Manufacturing Sdn Bhd v. Seng Kong Shutter Industries Sdn Bhd & Anor case (“SKB Shutters”).

The SKB Shutters Dilemma

The SKB Shutters conundrum stemmed from one of the independent claims being found invalid, which thus impacted the validity of the related dependent claims. Citing the Australian case of EI Du Pont De Nemours & Co. v. Imperial Chemical Industries PIc. & Anor. (2007) FCAFC 163 (“Du Pont” case), the Federal Court stated that the only way a dependent claim can survive and stand if at all is if the dependent claims are redrafted to incorporate the features of the claim upon which they are dependent on, and made into an independent claim. There are however no such provisions in the Malaysian Patent Acts 1983 that would allow for amendments of patent claims pending litigation in respect of its validity, and therein was the problem – an invalidation of the independent claim would result in the falling of all related dependent claims as it appeared there was no law that allowed for the amendment of the dependent claims. In essence, entire patents were vulnerable to invalidation if you were able to invalidate the independent claim – a frightening proposition for patent owners.

Departure from SKB Shutters

In a not-often seen turn of events, the apex court in Malaysia has departed from the decision of SKB Shutters, which brings a collective sigh of relief to patent practitioners and patent owners in Malaysia. The Federal Court was tasked with considering the question of whether the adjudication of an independent claim as invalid, automatically renders claims which are dependent on the independent claim invalid, without the need for the court to consider separately the validity of each and every dependent claim – in essence revisiting the ruling of the SKB Shutters case.

The Federal Court carried out a comprehensive analysis into various elements of the SKB Shutters case, a summary of which is provided as follows:-

Determining the interdependency of claims is paramount for deducing which dependent claims might become invalid when the independent claim is invalidated – all claims must be read and construed in full and evidence heard. Independent and dependent claims should be treated and assessed separately.
Categorization of claims into Type 1 (dependent claims being subsets of the independent claim i.e. narrower in scope) and Type 2 claims (dependent claims having additional features over and above the independent claim) – the determination of the type of claim will affect the treatment of claims when it comes to invalidation
The reliance on the Du Pont case was not accurate as the case was relating to the issue of estoppel and was not focused on laying down any form of rule for the treatment of dependent claims as a consequence of the invalidation of independent claims
The Federal Court re-iterated that it is essential in ascertaining patent validity that each independent and dependent claim must be assessed separately
On the subject of the inability to amend claims pending litigation (resulting in dependent claims falling as a result of the independent claim being invalidated), by virtue of construing Section 56(3), Section 57(2), and Section 79A(3) together, applications to amend dependent claims would be permissible after court proceedings, and the court may also be implicitly empowered to order amendments of surviving claim(s)

The departure of the Federal Court from the SKB Shutters decision is a very welcome decision as it clarifies the definition and standing of independent and dependent claims, and has also brought to light further practice directions that can be utilized in future patent litigation, especially in construing patent claims and assessing its validity. The apprehension and fear of enforcing patents in Malaysia is also alleviated, as patent owners can now tread forward confidently without the worry of having their patents shuttered.

ADVANZ FIDELIS IP SDN BHD

January 2020