Prior Use-Rights Derived Which Constitute Another Limitation To The Patentor's Exclusive Right As Delineated In S37(2) Of The Patent Act 1983

Question 1
Clearer pictaure regarding “a prior use right” as one of the means of defense on a patent litigation in Malaysia. We have studied regarding prior use right based on your patent law article, but it is still difficult for us to find any detail information or practice about prior use in Malaysia.

1. Case law on prior use.
2. Interpretation of “prior use” under a patent law in Malaysia.
3. Textbook – if there is a fundamental textbook about patent system in English.

Answer 1
In answering the your enquiries regarding “a prior use right” as one of the defense on a patent litigation in our country. Prior use right is governed under S37(2)[1] which reads together with Section 38 (1)[2] where a person at the priority date of the patent application:-

(a) was in good faith in Malaysia making the product or using the process which is the subject of the invention claimed in the application;
(b) had in good faith in Malaysia made serious preparations towards the making of the product or using the process referred to in paragraph (a),

he shall have the right, despite the grant of the patent, to exploit the patented invention, provided that the product in question is made, or the process in question is used, by the said person in Malaysia and further provided that he can prove, if the invention was disclosed and his knowledge of the invention was not a result of such disclosure.

In section 38 (2), the provision reads that the right referred to in subsection (1) shall not be assigned or transmitted except as part of the business of the person concerned. This particular provision defined that to what extent the right conferred wherein the right may not be transferred except as part of the course of business.

Good faith is defined which includes due inquiry and implies not only an upright mental attitude but also clear conscience, and that ordinary prudence has been exercised according to the standard of a reasonable person as per Gopal & Anor V Awang Bin Mona[3].

Further, in the course of business is defined as something that is part of its activities. This can be referred to the case of Charles R Davidson & Co V M’Robb (or Officer)[4] , per Lord Dunedin.

Malaysian case that related to the above provision is Intercontinental Specialty Fats Sdn. Bhd. V Asahi Denka Kogyo KK [5]. According to this case as per Abdul Aziz J, the defendant were the proprietors of UK Patent GB 2028862B for an invention called ‘cacao butter substitute ‘.

In this case, the defendant’s patent was registered, first in the UK in 1978, citing the priority date to be August 30, 1978. It was subsequently re-registered in Malaysia under the old Registration of UK Patents Act 1951. The date of the registration of the patent in Malaysia being July 18, 1985. The plaintiff sought to argue that prior to the date of registration of the patent in Malaysia, they had manufactured the product that is the subject of the patent in good faith. By virtue of S38 of the Patents Act 1983, the plaintiff further argued that despite the grant of the subject patent, they had and continue to have the right to exploit the invention on the basis of prior use.

Abdul Aziz J found that S38 exceptions do not apply to patents that were granted prior to the 1983 Act. This is because the previous 1951 Act only deals with re-registration of UK patents and does not govern any prior use. Secondly, the phrase ‘the patent application’ in S38(1) covers only patent applications under the law 1983 Act (the new Malaysian Patent Act). The learned judge rightly pointed out that the phrase ‘priority date’ under S38 seems to point to the priority date of a patent application under the law 1983 Act. This is because the plaintiff sought to argue that for the purposes of prior use right, they quoted the date of registration in Malaysia as the priority date. With respect to obviousness, the priority date was August 30, 1978 when the patent was applied in the UK. As S38 deals with any potential prior use of a patented product or process prior to its application in Malaysia under the Act 1983 Act, the plaintiff had failed to prove that the 1983 Act governs them in any way[6] .

The essence of this right was rightly summed up by the learned judge, Abdul Aziz J, in that it covers good faith use of a product or a process which eventually is patented by someone else. On a comparative basis, this notion of ‘good faith prior use’ is similar to that of ‘honest concurrent user’ in trademark law [7].

1. Patents Act 1983
2. Ibid
3. [1978] 2 MLJ 251 at 255
4. [1918] AC 304 at 321
5. [2000] 4MLJ775 (HC)
6. Patent Law in Malaysia, Cases and commentary, Dr. Ida Madieha
7. Ibid