LPC: COMMERCIAL LAW & INTELLECTUAL PROPERTY CHAPTER 4

COMMERCIAL LAW & INTELLECTUAL

PROPERTY CHAPTER 4:
PATENTS AND THE LAW OF
CONFIDENCE Legal Practice Course

Learning Outcomes

After this chapter you should be able to:

1. understand and apply the basic criteria for the protection of an invention
by registration of a patent;
2. assess the merits of a patent infringement claim based on a given
factual scenario; and
3. have an overview of the protection of confidential information and the
steps that may be taken in the event of a breach of confidence.

Introduction

Every business must determine a strategy for protecting its inventions and
innovations. A company with a new invention could apply for a patent or rely on
the law of confidence, depending on what type of invention it is.

Grant of patent

Essentially the inventor/patent owner (once called the patentee) makes a

bargain with the state: making a public disclosure in return for the grant of a
patent for a limited period of a maximum of twenty years (subject to renewal –
see paragraph 4 below).

A patent will only be granted if enough information is given in the patent

application to the world in general to enable the invention to be used by third
parties once the patent expires. See paragraph 2.5 below on ‘sufficiency’.

During the lifetime of the patent, the patent owner may exploit the patent
himself or grant exclusive rights or license to others to use patented
technology to make the product. Accordingly, patents can be very valuable
assets of a business.

Example: A Dyson vacuum cleaner can be reverse engineered (taken

apart to see how it works) and thus it is not possible to keep the
technology confidential. It is therefore best protected via the patent
system.

Law of confidence

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This ensures that information remains confidential for as long as it has

commercial value, for example by means of confidentiality agreements.

Examples: some ‘heritage’ brands, for example of table sauces or soft

drinks, claim to have guarded a secret recipe for ‘generations’.
A management consultancy may offer to apply its own ‘proprietary
methods’ to analysing its clients’ businesses.

This chapter is divided into two parts.

Part A deals with patents and Part B with the law of confidence. Attached to this
chapter is a patent specification which will be referred to in Part A.

PART A: PATENTS

1. What is a patent?

A patent is a monopoly right to use and exploit an invention which can be used
industrially. Remember that a monopoly right means that only the patent
owner may use/exploit the invention (or grant a third party the right to do so).
So, any third party who used the invention would be infringing the patent
unless they had permission/a licence from the patent owner or could rely
successfully on one of the available defences.

The Intellectual Property Office (‘IPO’) receives tens of thousands of patent

applications each year. Patents are governed by the Patents Act 1977 as
amended (‘PA 1977’). All statutory references in this chapter are to PA 1977
unless otherwise indicated.

Patents are generally classified as ‘product’ patents or ‘process’ patents.

 Product patent - the invention relates to a new product or an

improvement to a product.

Examples of product patents: a converter device enabling car

engines to run on bio fuel; the floating plastic ‘widget’ in cans of
certain types of beer; a mouse trap.

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 Process patent - the invention relates to a new process or a new way of

carrying out a process.

Example of a process patent: the process/method of putting the

chocolate into Vienetta ice cream.

2. Criteria for registration: s. 1(1)

A patent protects an invention. Before a patent can be granted, the invention

must be examined using the criteria in s. 1 (which are set out below) to see
whether it is capable of being patented:
 Novelty
 Inventive step
 Capable of industrial application
 Not excluded

2.1 Novelty: s. 2
The invention must be totally ‘new’; i.e., the product or process must not
already form part of the state of the art known to the public as at the priority
date of the patent. The priority date is generally the date of filing the
application (s. 5(1)).

2.1.1 State of the art: s. 2(2)

‘All matter (whether a product, a process, information about either, or

anything else) which has, at any time before the priority date of that
invention, been made available to the public (whether in the United
Kingdom or elsewhere) by written or oral description, by use or in any other
way.’

Examples:
• Publications of any kind, for example in scientific journals.
• Prior applications for patents occurring anywhere in the world, even if
they have not been published anywhere provided that they have an
earlier priority date.
• Use of the invention in public, of any kind - even if no one could be
expected to have examined the invention (if such use could amount to
an enabling disclosure i.e. if a skilled person could have seen how
the invention worked).

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2.1.2 Anticipation (enabling disclosure)

A patent application will fail if the patent is deemed to have been ‘anticipated’
in the state of the art. Anticipation occurs where there has been an enabling
disclosure by means of prior use or publication of the invention.

In order for prior disclosure to ‘anticipate’ the invention, it must disclose details
of the invention sufficiently to enable a skilled person to work (i.e., implement)
the same invention so that once the patent expires third parties can exploit the
technology freely (see Introduction above).

In both the Lux and Windsurfing cases referred to below, the court concluded
that there had been an enabling disclosure and as a result the invention
sought to be patented failed because it already formed part of the state of the
art – i.e. it did not satisfy the requirement of novelty.

In the Smithkline Beecham case also referred to below, the House of Lords
confirmed that information in the state of the art would only defeat novelty if a
skilled person could take the information in the state of the art at the date of
the application and use it to work the invention.

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Examples: novelty/enabling disclosure

Lux Traffic Controls Ltd v Pike Signals Limited [1993] RPC 107

A product which controlled traffic lights was used in public (on some
traffic lights). It was not necessary to show that anyone had actually
taken a close look at the product; the mere fact that the product was
available for the public to view meant that details of the product were
considered to form part of the state of the art.

Windsurfing International v Tabur Limited [1985] RPC 59

A 12-year-old boy built a home-made surfboard with a sail and used it in

public for a few weekends at a caravan site off Hayling Island in
Hampshire. A patent was granted for a similar windsurfing board many
years later. The later patent was declared invalid because it was not
‘novel’. The boy had sailed his board in public and therefore it formed
part of ‘state of the art’ before the patent’s priority date.

This case demonstrates that a disclosure does not have to be a

‘scientific’ disclosure or widely publicised in order to destroy the novelty
of an invention.

Synthon v Smithkline Beecham [2006] RPC 10

Synthon sought to revoke SmithKline Beecham’s (‘SkB’s’) patent (for a

process of producing paroxetine salts) on the grounds of lack of novelty.
Synthon relied on an earlier patent application of its own (the
‘Application’), alleging that it contained a prior disclosure of the process
covered in SkB's patent.

The Court of Appeal held that a skilled person would not, in fact, obtain a
paroxetine salt by following the teaching of the Application alone: they
would need to do additional experiments. So, the Application did not
disclose the same invention as that claimed under SkB's patent, which
remained valid. However, the House of Lords overturned this decision,
holding that the Application did invalidate the patent as the disclosure in
the prior art did enable the ordinary skilled man to perform the invention.

A disclosure made by use in public will amount to an enabling disclosure, even

if nobody actually examines the invention, for example in the Windsurfing
case (above), it was enough that if a skilled person had been present at the
lake and had looked at the boy's board, he would have been able to see how
to do the same thing.

2.1.3 Self-disclosure

The matter disclosed will form part of the state of the art even if it is the
inventor who has made the prior disclosure. So if your client invents new
products which may be patentable, it should avoid putting them on the
market before filing appropriate patent applications.

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You should therefore always advise the client to keep all details of new
inventions totally secret (apart from disclosure to a patent agent and
solicitor). If disclosure to some extent is necessary for obtaining investment,
it is crucial to make sure the parties sign a confidentiality agreement.

Confidentiality agreements will be dealt with in SGS 4.

2.1.4 Disclosure made unlawfully or in breach of confidence: s. 2(4)

Section 2(4) provides some exceptions to the strict rule on self-disclosure.

Any disclosure will be disregarded if:
 the disclosure of the information has been made as a consequence of a
breach of confidence, or was obtained unlawfully; and
 the inventor applies for a patent within six months of the disclosure by
the party in breach.

Exercise

• David invents a revolutionary new way of making vegetable crisps

and on 9 May, he discloses the information to Krispy Crisps Limited
(‘Krispy’), making it clear that this information is confidential.

• David and Krispy enter into talks about production but they fall
through.

• Krispy then makes a new type of crisp using David’s method

precisely. These are launched on 9 July. Krispy invites journalists on
a tour of its new plant to show how the crisps are made.

Today is 10 July. David has not yet filed a patent application to protect
his process.

Can David now apply for a patent or has the novelty of his process
been destroyed?

The answer to this exercise can be found on the Hub.

2.2 Inventive step: s. 3

The new invention must also involve an inventive step which is ‘not obvious to
a person skilled in the art’ (the experienced but unimaginative technician). This
person is a legal fiction - they are taken to know the field in which the invention
is concerned, but to have no spark of original thought.

It is unusual for an invention (even a new one) to come completely ‘out of the
blue’. It is therefore necessary to ask whether it is inventive (or merely
obvious) in the light of what went before.

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Obviousness is judged as at the priority date of the patent and is assessed

according to the approach set out in Pozzoli SPA v. BDMO SA and others
[2007] All ER 275. In Pozzoli, the Court of Appeal set out a four stage test
based on the approach taken to this matter in the Windsurfing case (of which
some facts have been given above as an example relevant to novelty). The
relevant test for obviousness is therefore contained in the
Windsurfing/Pozzoli criteria set out in the box below.

Windsurfing/Pozzoli Criteria for inventive step

Windsurfing International v Tabur Limited [1985] RPC 59 and Pozzoli SPA

v. BDMO SA and others [2007] All ER 275

i) a) Identify the notional ‘person skilled in the art’; and

b) Identify what common general knowledge that person would
have at the priority date.
ii) Identify the inventive concept of the product or process.
iii) What differences are there between this invention and the state of the
art, i.e. matters known and used already?
iv) Do these differences amount to steps that would have been obvious to
the person skilled in the art if they had no knowledge of the invention in
question? If so, there is no inventive step.

The invention can be very simple and still qualify as an ‘inventive step’. Even
combining two known concepts to create a new product can still be sufficient
to satisfy the test, provided the combination is truly inventive, i.e. not obvious
to the skilled but unimaginative man having regard to the state of the art.

As mentioned earlier, it is not necessary for the invention to be an outstanding

leap forward. Some fairly simple or mundane items can be protected by a
patent. In hindsight, an invention may even seem obvious but this would not
prevent the invention from meeting the ‘inventive step’ requirement, because
the Windsurfing/Pozzoli criteria should be judged at the time of the invention
and not in retrospect.

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Examples: inventive step/obviousness

 Dyson Appliances Ltd v Hoover [2001] RPC 26

The system of dust separation which is used in the Dyson vacuum cleaner
had been used in filtering systems for air conditioning for some years, but
no one had thought of using it for vacuum cleaners (other manufacturers
had not even been trying to develop a bagless vacuum cleaner). The
invention combined two known concepts, but it was not obvious to make
such a combination. There was therefore an inventive step.

 Lilly Icos v Pfizer Ltd [2000] All ER (D) 1726,

It was held that the patent protecting Viagra was invalid for obviousness.
Pfizer had argued that, although the same chemical compounds were
known for treatment of heart disease before the priority date, the
discovery that they could also be used to treat erectile dysfunction was
‘unexpected’. The court did not agree. It took no imagination for a person
skilled in the art to deduce that the known compounds would be useful for
the development of such a treatment.

 Sabaf SpA v MFI Furniture Centres [2004] All ER (D) 168

This case concerned a gas hob. Sabaf had combined two known
refinements to conventional hobs (namely, the way in which the gas was
mixed with air and the means by which the gas-air mixture was
pressurized before ignition) to produce a particularly compact hob. There
was no indication that anybody had put these two features together in the
same product before. However it was held there was nothing ‘inventive’
about doing so. Sabaf had merely yoked together two known inventions
in one ‘package’; the product as a whole was no more than the sum of its
parts.

2.3 Industrial application: s. 4

The invention is capable of industrial application if it can be ‘made or used in
any kind of industry, including agriculture’. This is construed widely, applying
to trade or manufacture of any kind, whether or not for profit. For example, in
Crowley v UK IPO [2014], unreported, the court held that an alleged perpetual
motion machine contravened the first law of thermodynamics and was
therefore incapable of industrial application.

IPO guidelines indicate that this ground can be used to refuse grant of a
patent for an invention that cannot work (such as a perpetual motion machine).
It would be extremely rare to encounter an example of an invention incapable
of industrial application in practice.

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2.4 Not excluded: - s. 1(1)(d), and ss. 1(2) and (3)

The final requirement is that the invention must not be excluded by s. 1(1)(d).

Section 1(2) provides an open-ended list of what is not an invention for patent
purposes:
 A discovery, scientific theory or mathematical method.
 A literary, dramatic, musical or artistic work.
 A scheme, rule or method for performing a mental act, playing a game or
doing business, or a program for a computer.
 The presentation of information.

You should note that s. 1(2) applies ‘to the extent that a patent or application
for a patent relates to that thing as such’.

For example, computer programs ‘as such’ cannot be patented because they
are already protected by the law of copyright. The European Patent Office
(see paragraph 8 below) does allow patents for inventions comprising
computer programs if they produce a ‘technical effect’, e.g. an invention
comprising X-ray apparatus which is controlled by a computer programmed in
a particular way. This is patentable because the program produces a
‘technical effect’ on the operation of the apparatus as a whole.

Section 1(3) also excludes certain inventions from patentability on certain

public policy grounds.

2.5 Sufficiency
If an invention satisfies the requirements of the PA 1977, an application for a
patent may still fail under s. 14(3) or, to the extent that a patent has already
been granted, there may be grounds for revocation – s. 72(1)(c)) - due to
insufficiency. This means that the patent, as claimed, does not teach the
reader how to put the invention into practice. The patent specification itself
must contain an enabling disclosure of the invention it seeks to protect (see
paragraph 2.1.2 above). The monopoly in the patent is granted on the basis of
this ‘sufficient’ disclosure that will enable the invention to be exploited when
the patent expires.

Although the patentee must ensure the description is sufficiently wide to

amount to an enabling disclosure, they must also ensure that the scope of the
claim does not exceed the technical contribution to the art embodied by the
invention, for example, by claiming monopoly rights over matters which are not
novel. See the end of paragraph 6.4.2 concerning ‘The Squeeze’.

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3. Application for grant of patent

3.1 Sections 14 - 21
UK patent applications are dealt with by the IPO. Details of the procedure
involved in the application for a patent are beyond the scope of the CLIP
module.

Summary of the UK patent application procedure

An initial application is filed and this must contain a patent specification,

including a full description of the patent. This initial application
establishes the priority date.

The applicant may request that the IPO makes searches which will assist
it to decide whether to proceed with the application. Assuming that the
applicant wishes to proceed, further details, including the claims (see
paragraph 3.2 below) and abstract, are submitted within 12 months of the
filing date. These must not introduce any new matter.

There is then a preliminary investigation by the IPO. The applicant can

delay requesting the search, referred to above, until this stage. About 18
months after the application is made there will be an early publication,
called ‘A’ publication, which issues together with the search report.

The applicant must then request that the IPO makes a substantive
investigation and then deals with any questions raised by the IPO.
Essentially the applicant’s patent attorneys or solicitors negotiate with the
IPO examiner to agree the precise wording of the claims. This is likely to
take another two years or so.

If the application is accepted the patent is ‘granted’. (The grant of the

patent is published. This is known as ‘B’ publication.)

The UK has no opposition procedure for patents. The usual way in which
the validity of a patent is challenged is that a defendant to an
infringement claim counterclaims for revocation or invalidity of the patent.

A typical application will take up to three to five years but some applications
are eligible for an accelerated search and examination process under the so-
called ‘Fast-Track’. In Fast-Track cases it is possible to obtain grant of the
patent in a year.

The cost of making a UK patent application, including official filing fees, search
fees and patent agents’ fees, is in the region of £4,000.

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3.2 Key elements of a patent specification

A patent specification contains a description of the invention, the claims and
any drawings referred to in the description or the claims. This specification
must disclose the invention in a manner which is clear and complete enough
to be performed by a person skilled in the art. An example of a patent
specification is appended to the end of this chapter.
 The description. This gives details of the prior art (see background to the
invention at pp 1-2) and explains in general terms what the invention is.
A detailed description of the invention is given to discharge the patent
owner’s (also known as the patentee) obligation to disclose the invention
in return for the monopoly (see pp 6 -12).
 The drawings. Not all patents will have drawings. Their purpose is to
assist in explaining the invention (see the drawings at the end of the
patent application).
 The claims. It is the claims which define the scope of the monopoly and
they must therefore be drawn up very carefully. Section 14(5) provides
that the claim or claims shall define the matter for which the applicant
seeks protection; be clear and concise; be supported by the description;
and relate to one invention or to a group of inventions which are so
linked as to form a single inventive concept (see pp 13-18).

Therefore, there are usually several claims. The first one is generally
broad (see claim 1 at p 13) and is followed by a number of subsidiary
claims. Many of the subsidiary claims are dependent claims (for
example, claim 13) - simply amendments or additions to previous claims.

4. Duration: s. 25

The patent takes effect from the date of grant. It lasts for a maximum period of
20 years from the date of filing. The initial grant is for four years, after which
annual fees must be paid within three months of each anniversary of the date
of grant (Rule 38, Patent Rules 2007).

5. Ownership and licensing: ss. 7, 30, 39, 40

 The first owner will usually be the inventor or joint inventors, unless other
contractual arrangements have been made (for example, the rights to an
invention or to apply for a patent in respect of an invention have been
assigned to a third party) – s. 7(2)(a).
 Where the invention is developed in the course of an employee’s normal
duties or duties assigned to the employee, the patent will belong to the

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employer – s. 39. In some circumstances, inventions made by an

employee will belong to the employer, even if the employee is not
primarily employed to invent, provided that employee is under a special
obligation to further the interests of the employer (e.g. a company
director). In other cases the employee will own his/her own invention and
any provision in the employment contact to the contrary is unenforceable
– ss. 39(2) and 42(2).
 Employed inventors of particularly valuable inventions have rights to
apply for compensation from their employers - s. 40.
 A patent is personal property (s. 30(1)) and any rights in the patent can
assigned or mortgaged (s. 30(2)). An assignment or mortgage must be
in writing and signed by or on behalf of the assignor or mortgagor – s.
30(6). It should be registered at the IPO.
 A compulsory licence may be granted by the courts in exceptional
circumstances, for example where the proprietor of a patent has not
used the patented invention. These provisions effectively prevent patent
owners from allowing technology to go to waste where there is a market
for it. A compulsory licence cannot be applied for until three years after
the grant of a patent (s. 48).

6. Infringement: ss. 60-62

6.1 Overview
In common with other registered intellectual property rights, an analysis as to
whether the owner of a patent can bring a claim for infringement breaks down
into a series of steps.

Stage 1: Validity and ownership

Stage 2: Infringing act

Stage 3: Comparison
(construing the scope of the
patent claim if necessary)

Stage 4: Defences

Stage 5: Remedies

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6.2 Stage 1: Validity and ownership

The first matter to establish in an infringement claim is what has been
registered and that the relevant rights are currently valid. You also need to
establish who owns those rights as only the proprietor of a valid patent has the
right to bring an infringement claim.
 Has the patent come into existence? There will be no right to pursue an
infringement claim until this point in time. Section 25(1) states that the
patent will take effect on the date that the grant of the patent is
published.
 Has the patent expired? Check renewal fees have been paid if the initial
four-year period (from the date of filing the patent application) has
passed (see paragraph 4).
 Who owns the patent? This will be the person named on the register.
Check that the proposed claimant is the patent owner.

Once you are satisfied in relation to these aspects, you can consider the
elements of the infringement itself.

6.3 Stage 2: Infringing act

Direct infringement: s. 60 (1): the acts to which a patent owner can object
depend on whether the invention is a process or a product. A UK patent will
be infringed if any of the activities set out below are carried out in the UK
without the consent of the patent owner.

For a product invention

 Making, disposing of, offering to dispose of, using, keeping or
importing the product (s. 60(1)(a)).
For a process invention
 Using the process, or offering it for use…when the infringer knows or
it is obvious to a reasonable person…that its use…would be an
infringement (s. 60(1)(b)).
 Disposing of, offering to dispose of, using or importing any product
obtained directly by means of the process or keeping any such
product whether for disposal or otherwise (s. 60(1)(c)).

6.4 Stage 3: Comparison and construing the patent claims

How far do the monopoly rights of the inventor extend? The patent sets the
parameters for the exclusive rights of the patent owner. An act will only
infringe a patent if it falls within the scope of the patent’s claims.

In practice, it is fairly common for a defendant’s product or process to differ in

some way from the exact, literal wording of the claims (a ‘variant’). This
creates room for argument as to whether or not that defendant’s product or
process infringes the patent.

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The precise point to which the claims extend depends on how they are
construed by the court. Having construed the patent, the court is then in a
position to determine whether or not the defendant’s product or process falls
within the scope of the patent.

The courts must construe patent claims in accordance with the following
provisions, all of which appear in the CLIP Handbook:

Section 125(1) provides that the extent of protection conferred by a patent

shall be determined in accordance with the patent claims, as interpreted by the
description and any drawings in the specification. (Article 69 of the European
Patent Convention (‘EPC’) says, in essence, the same thing as s. 125 PA.)

Section 125(3) provides that the Protocol on the interpretation of Article 69

of the EPC (the ‘Protocol’) applies to the construction of patent claims under
UK law.

The Protocol provides that any such interpretation should aim to combine a
fair protection for the patentee with a reasonable degree of certainty for third
parties (Art. 1). The aim is to achieve a balance between two extremes,
namely between (i) a narrowly literal interpretation of the language of the
claims and a (ii) looser approach to establishing what might be called the
‘essence of the invention’. The Protocol further provides that, in cases where
a defendant’s product or process falls outside the scope of patent claims, it
may be held nevertheless to infringe under the so-called ‘doctrine of
equivalents’ (Art. 2).

6.4.1 Courts' approach to infringement claims

The correct approach to patent construction has evolved over time.

Historically, the courts used to look at the wording of the claims and take their
literal meaning. To adopt the language of the Protocol, this old approach erred
too far on the side of certainty for third parties and could result in unfairness to
patent owners. Provided the words used in the claims were not ambiguous,
the description and the drawings in the patent specification were not used to
consider or understand the context in which the patentee drafted the claims.
This meant that any deviations by the alleged infringer from the exact literal
wording of the claims (even if immaterial) could bring the alleged infringer’s
product or process outside the scope of the patent. Thus it was relatively easy
to avoid liability for patent infringement.

The law has moved on from this approach. Modern construction of a patent in
accordance with the Protocol can be described as ‘purposive’ (rather than
literal). Its approach is objective in that it is concerned with what a person
skilled in the relevant art (the notional ‘skilled person’) would understand the
patent owner to be using the words of the claim to mean.

If a court decides that, on a purposive construction, the defendant’s product of

process does not fall within the scope of the patent claims, the claimant may in
some circumstances have a ‘second chance’ under the ‘doctrine of
equivalents’ (Protocol, Art. 2). The doctrine of equivalents is a complex
aspect of patent law and you will not explore it in detail on the CLIP module.

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The facts of the following cases, which illustrate the development of the
approach that the courts have used in interpreting the scope of patents,
provide some examples of ‘variants’.

Examples: construction of patent claims

 Catnic Ltd v Hill & Smith Ltd [1982] RPC 183 (‘Catnic’)

The Catnic case marked the UK courts’ break from the old literal
approach. The House of Lords was more concerned with the intention
behind the words (judged objectively). Catnic introduced the ‘purposive’
approach to the construction of patents.

In Catnic the patent claims were expressed to include a load-bearing

lintel with a ‘vertical’ back plate. The infringer used a variant back plate,
being one at a slight angle (outside the literal meaning of the claim). So
what was really meant by the word ‘vertical’ in the patent claims? Did it
mean strictly 90° from the horizontal - or did it mean ‘essentially vertical’?
The relevant test was whether a suitably skilled builder would think that
the patent owner used the word ‘vertical’ to mean that the claims were
limited to strictly vertical back plates.

Lord Diplock concluded that it was not an essential feature of the

invention that the back plate be completely vertical. The word ‘vertical’
was given a purposive meaning to include the angle of the defendant’s
back plate. Therefore the patent was infringed.

 Improver Corporation v Remington Consumer Products Ltd

[1990] FSR 181. (‘Improver’)

The Improver case involved different hair removal devices:

- Improver Corp. (patent owner): ‘Epilady’ plucked out hair by means
of a rotating helical spring, turning and pulling to create a tweezing
effect.
- Remington (defendant): ‘Smooth and Silky’ was a rotating rubber rod
with slits in it which trapped hairs and pulled them out.

Improver’s patent claimed an invention which worked by means of a

helical spring and also ‘all variants which come within the meaning and
range of equivalency of the claims and are therefore intended to be
embraced therein’. The essential question was whether the Remington
product was such a variant.

It was held that the Remington product worked in essentially the same
way as the helical spring. This would have been obvious to a skilled
person. However, in reading the language of the claims of the patent, it
was clear that the patentee had considered only helical springs, not any
alternatives to them; the Remington product (rubber rod) did not infringe.

Although the final outcome was to give weight to the narrow, literal
meaning of the words of the claim, the court nevertheless followed a

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purposive approach. This was because the court held that the literal
meaning was what the patent owner must have intended.
The patent specification attached at the end of this chapter is of the
Improver ‘Epilady’. You will be able to see references to the helical
spring in the description and, in particular, in the text of the claims.

 Actavis UK Ltd v Eli Lilly & Co [2017] UKSC 48 (‘Actavis’), as

interpreted by Court of Appeal in Icescape v Ice-World in October
2018 ([2018] EWCA Civ 2219)

The facts of both these cases are complex. The technology in issue is,
respectively, the manufacture of medicines and coupling members for
mobile ice rinks.

The significance of these cases is that they establish the court’s current
approach to patent construction. To summarise, the Supreme Court held
that the correct approach involves two issues to be addressed in turn as
follows:
1) Does the defendant’s variant infringe any of the claims based on a
normal i.e. purposive interpretation taking into account the claims,
drawings and description?
2) If not, does the variant nonetheless infringe because it varies from the
invention claimed in a way or ways which is or are immaterial?
(applying the ‘doctrine of equivalents’).
The implications of these cases have not been fully worked through in
practice.

6.4.2 ‘The Squeeze’

The dilemma facing patent attorneys in the drafting of the patent claims is to
achieve a balance between:
 The claims being sufficiently wide to capture variants (that would
therefore infringe); and
 The claims not being so wide so that they include matter already in the
state of the art and can therefore be challenged for lack of novelty.

Traditionally, defendants to patent infringement claims have in some

circumstances been in a position to rely on this tension, to mount a so-called
‘squeeze defence’: if the patent is interpreted widely enough to catch the
defendant’s product or process, then the patent must be invalid for lack of
novelty. Some commentators have suggested that the Actavis Supreme Court
ruling casts doubt as to the extent this squeeze argument can be applied. It
remains to be seen how this point develops.

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6.5 Stage 4: Defences

 The defendant’s actions are outside the scope of the patent (i.e. that he
is not infringing) (see above).
 Acts done privately for non-commercial purposes or for experimental
purposes do not infringe - s. 60(5).
 Use began before priority date – s. 64.
 The patent is invalid due to its revocation - s. 72. There are four grounds
for revocation:
o The patent is not a patentable invention because it does not satisfy
the requirements of novelty, inventive step, capable of industrial
application or falls within an excluded category. This is the most
often cited ground for revocation.
o The patent is insufficient because the description does not disclose
the invention clearly enough for a person skilled in the art to work
it.
o The patent has been granted to the wrong owner. This is termed
‘non-entitlement’.
o The patent has been amended without permission. Making
amendments to the specification during the application process or
after grant without permission can render the patent invalid.
An application to revoke a patent can be made at any time during the
lifetime of a patent but most often such applications are made as a
counterclaim to an infringement action. Generally anyone can make an
application.

6.6 Stage 5: Remedies (s. 61)

 Injunction.
 Order to deliver up/destroy.
 Damages or an account of profits (see s. 61(2)).
 Declaration that the patent is valid and has been infringed.

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7. Intellectual Property Act 2014

The Intellectual Property Act 2014 (the ‘2014 Act’), most of which came into
force on 1 October 2014, made a number of changes to the law relating to
patents, intended to make it cheaper and easier to use and defend patents.
The key innovations included an expansion of the patent opinions service
(under which the UK IPO can give an opinion on the validity of a patent), so
that the UK IPO can start revocation proceedings on its own initiative on behalf
of a third party in clear-cut cases. It is also a consequence of the 2014 Act that
the UK IPO can share information on unpublished patent applications with
other national and regional patent offices, in order to improve international
cooperation and speed up the global patent-granting process.

8. The EU and the International dimension

8.1 Domestic law and the impact of Brexit

Patent law was not harmonised across the EU until after Brexit. Prior to that, a
small number of provisions of the Patents Act 1977 were derived from various
EU Directives. These included, for example, provisions relating to
biotechnology inventions, which remain in force as assimilated law post-Brexit.
They are outside the scope of this module.

8.2 Registrations in Europe: The Unitary EU Patent and the European

Patent.
8.2.1 The UK does not take part in the Unitary EU Patent, for which applications
have been possible since 2023, or in the Unified Patent Court (the ‘UPC’).
The Unitary EU Patent is a single patent right covering the territory all of those
EU Member States which have signed up to Unitary Eu Patent system. The
UPC is the central patent court for those states participating in the Unitary EU
Patent and it is proposed that it have exclusive jurisdiction for litigation related
to European Patents (see below) as well as Unitary European Patents.

8.2.2 The European Patent is not a creature of EU law. European patents are
granted under the European Patent Convention (‘EPC’). The EPC establishes
a non-EU system which streamlines the patent application process across
many jurisdictions, and which results in a bundle of patents in numerous
jurisdictions (known as contracting parties). All EU member states, plus some
other non-EU European states (including the UK) are signed up to the EPC
and certain aspects of the patent laws of the EPC contracting parties are
effectively harmonised.

A single application for grant of a patent in more than one EPC signatory state
can be made to the European Patent Office (‘EPO’). The patent is examined
centrally by the EPO and then proceeds to grant, and takes effect, in each of
the contracting states specified in the application. The fees are in the region
of £30,000.

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The EPC is independent of the European Union and therefore the UK remains
a contracting party to the EPC, regardless of its departure from the EU. This
means that UK practitioners will be able to file and prosecute Unitary EU
Patents after Brexit via the EPO.

8.3 Patent Co-operation Treaty (‘PCT’)

The PCT is a treaty signed by 152 member states (including the UK) which
allows the filing of a single international patent application in one language.
The object of the PCT is to eliminate the need for a separate application and
search to be made in each country. An applicant wanting patent protection
abroad will usually file a PCT application within the 12 month period after filing
the initial priority application at its home patent office. It is the application
which is ‘international’, not the patent. The applicant obtains the effect of
having filed applications in all of the PCT member states and can defer the
national patent grant procedures, and therefore payment of most filing costs,
in the respective national patent offices for up to 30 months. The applicant will
be provided with an opinion on the patentability of the invention which allows
him or her to decide whether or not to pursue his or her application in the
individual member states.

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PART B: Law of confidence

1. Introduction
1.1 Patent v secrecy
The law of confidence is an alternative way for your clients to protect their
inventions against use by competitors and it protects all kinds of confidential
information, not just information about inventions, regardless of form. It is not
possible to combine patent protection with the law of confidence.

If an invention is capable of being reverse engineered then it will obtain the

best protection under a patent. As soon as the product is marketed, a skilled
person would be able to copy it. The law of confidence is of no assistance at
this stage because it protects information only while it is kept confidential. Any
public domain disclosure, such as marketing a product, will end the protection
afforded by the law of confidence.

When an invention relates to something that cannot be reverse engineered, for

example the exact secret recipe for a soft drink or cosmetic product, it may be
better simply to keep it secret. Even if the recipe were a patentable process,
any patent would be of relatively limited value. Patents have a limited life-
span (maximum 20 years). After expiry there would be no way of preventing
others from making exactly the same product, because the patent must give
sufficient disclosure of how to work the invention it protects. In theory, a
secret can be kept confidential indefinitely – although the information may
become ‘out of date’ and lose its commercial value much sooner, particularly
in fast-moving industries.

There are other circumstances where keeping information confidential is the

most appropriate method of protecting. Some examples are set out below.
 Prior to the submission of a patent application, an inventor may need to
seek advice from various sources as to the components, design,
feasibility or marketability of an invention.
 During the negotiation for the sale of a business, the buyer is likely to
need sensitive financial information about the business.
 To protect materials specifically excluded from patent protection such as
a computer program, discoveries, scientific theories etc. (s. 1(2) PA
1977).

The law of confidence (in conjunction with the Human Rights Act 1998) has
also been used to seek to protect privacy in a number of high profile celebrity
cases such as Douglas v Hello! Ltd [2001] QB 967 (CA) and the so-called
‘super-injunction’ cases. This topic is beyond the scope of this module, which
focuses on protection of commercial information, and privacy cases will not be
considered further in this chapter.

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1.2 Confidence: confidentiality agreements

It is common for businesses to use confidentiality agreements on a fairly
regular basis. As a result, it is likely that they will have standard agreements.
There are some limits on the terms of a confidentiality agreement because it
has the potential to unduly restrict trade activities. Standard confidentiality
agreements should be drafted in such a way to ensure that there is no such
undue restriction.

The doctrine of restraint of trade – a reminder

Certain contracts are void at common law if they contravene public policy
such as the doctrine of Restraint of Trade (‘ROT’). A contract which
imposes an unreasonable restriction on a person’s right to carry on a
trade will accordingly be unenforceable.

The issue of ROT most commonly arises in the context of employment

contracts where the employer seeks to restrain the employee from
undertaking competitive activities during and after employment.

However, you should bear in mind that ROT problems can also arise
generally in commercial contracts such as in confidentiality agreements
where the discloser of information seeks to prevent the recipient from
using the information except as prescribed by the contract.

The key issues the court will consider in assessing the reasonableness of
such provisions are:

(i) whether the person imposing the restriction has a legitimate

business interest to protect; and

(ii) whether the restriction is reasonable in scope to protect that interest.

Accordingly, you need to ensure that your confidentiality agreement is

protecting a legitimate business interest of the discloser in a reasonable
fashion, and is not a restraint of trade. If the recipient was prevented from
using his/her own inventions or information obtained from other sources,
then this would be unreasonable. Restrictions should also be limited to
non-use and non-disclosure of confidential information disclosed by the
discloser to the recipient, except as specifically envisaged by the parties
for a particular purpose.

You should note that if the recipient of confidential information under a

confidentiality agreement discloses or uses the information in breach of the
agreement, the usual remedies for breach of contract would be applicable.
However, if the court finds that a disclosure by the recipient is in the public
interest, it will excuse the breach. We look at the public interest defence
briefly in paragraph 3.1 below.

The existence of a contract will make it clear that there is an obligation of

confidentiality between the discloser and recipient of the information. However,

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if the material is not in fact confidential, just stating otherwise in the contract
will not make it so.

1.3 Equitable duty of confidence: no contractual relationship

The law of confidence works by imposing obligations on the recipients of
confidential information not to use or disclose it. In practice, the easiest way to
impose such an obligation would be under contract as discussed above.

However, if there has been no contract a recipient of confidential information

may be prevented from using it if it would be a breach of confidence to do so.
A breach of confidence action can sometimes also be enforced against any
subsequent third party recipient of such information if they were aware of or
should have been aware of the obligation of confidence imposed originally by
the discloser. A claim for breach of confidence is made on equitable principles
which have developed through case law. Recent cases have widened the
scope of the law of confidence in some areas.

The traditional formulation of the modern law of confidence can be found

in Coco v Clark [1969] RPC 41 (a case relating to the copying of a design
for a moped engine), in which Megarry J set out three elements of the
claim.

The claimant must prove that:

1. the claim relates to information which has the necessary quality of
confidence;
2. which was communicated to the defendant in circumstances
importing an obligation of confidence; and
3. the defendant has made unauthorised use or disclosure of the
information to the detriment of the person communicating it.

These three essential requirements for liability are listed below, with factors
that you might consider when deciding if the test has been satisfied. The
relevance of any particular factor mentioned below to a given case will depend
on the facts and circumstances of that case.

As a preliminary question you should ask: what is “the information”? It is

important that the scope of “the information” is clear before addressing the
three requirements below.

1. The information must have the necessary quality of confidence

Potentially relevant Examples

Factor

Is the information It is logical that an obligation of confidence cannot

already in the public be imposed in relation to information that is already
domain? in the public domain. So merely describing

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information as confidential will not of itself make that

information confidential.

In Saltman Engineering Co v Campbell

Engineering Co (1948) 65 R.P.C. 203 this was
expressed as: ‘must not be something which is
public property and public knowledge’.

In Woodward v Hutchins [1977] 1 W.L.R. 760 the

fact that everyone else on a plane knew that the
singer Tom Jones had got ‘high’ was deemed to
have put that information into the public domain.

Is the information Vague ideas will not have the necessary quality of
clear and confidence.
ascertainable?
The information does not have to be in writing or
other permanent form, but ideas will only be
protected if they are expressed with particularity.
This was one of the reasons that information was
found not to have the necessary quality of
confidence in De Maudsley v Palumbo [1996]
EMLR 460. The case concerned the disclosure of
certain ideas for a new high-end night club by the
claimant to the defendant, who subsequently
opened the Ministry of Sound nightclub without the
claimant’s involvement. The Court found that there
was no real precision or detail in relation to the
claimant’s ideas for a new club based on a ’hi-tech’
style.

However, in Fraser v Thames Television Ltd

[1983] 2 W.L.R. 917 the idea for a television
programme was held to constitute confidential
information even though it had not been reduced to
a formal script or synopsis. The court thought that it
was important that the idea was sufficiently
attractive to the television company, original and
was capable of being realised
(nb contrast copyright, where it is not generally
possible to protect ideas.)

Does the Some information is assumed to be protectable by

information have its nature, for example highly technical information,
commercial value? but a trade secret must be sufficiently detailed or
important and liable to cause harm to the owner,
e.g. enable a competitor to gain an advantage in the
market. Would someone be prepared to pay for the
information? In Thomas Marshall (Exports) Ltd v
Guinle [1979] Ch. 227 four guidelines were set out
by the court in relation to information of a

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commercial nature to assist in deciding whether it

has the necessary quality of confidence.

 The owner must believe that disclosure of the

information would prejudice him or benefit his
competitors.

 The owner must believe that the information is

not in the public domain.

 The owner’s belief on these two matters must

be reasonable.

 The information should be judged in the light of

practices of the particular trade.

Is the information In De Maudsley v Palumbo the claimant’s ideas for

common the design of the club also included superior sound
knowledge? equipment, licensed all night opening, and the use
of internationally acclaimed DJs, but the Court
found that the ideas the claimant communicated did
not have sufficient novelty because it was known for
other clubs to employ these features.

Note that Megarry J made it clear in Coco v Clark

that if a party were to combine existing common
knowledge together to create something new, this
could be protected as confidential information.
There seems to be a requirement for the brain to
have been utilised in relation to the new creation.

Is the information In McNicol v Sportsman’s Book Stores (1930)

useless / merely Macg Cop Cas (1928-1935) 116 a betting system
trivial tittle tattle? that was based on the age of the moon could not be
protected.

2. The information must have been communicated in circumstances

importing an obligation of confidence

 The obligation may arise by express agreement (i.e. by way of a

confidentiality agreement) or by prior notice, or may be implied by
law due to the circumstances or relationship between the parties (for
example in an employment context). There are special rules that
apply to employees in relation to this question. This is briefly
considered at paragraph 2 below and is largely outside the scope of
the CLIP module.

 In circumstances where there is no express agreement, the Courts

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apply an objective test of whether the circumstances of the

disclosure are such as to impose a duty, i.e. it does not depend on
what the parties themselves believed but what a reasonable person
in those circumstances would have believed. In De Maudsley v
Palumbo, an important aspect of the case was that the
circumstances were merely social, although this factor alone is not
itself the definitive factor.

 The nature of the information itself or the practices of the relevant

trade can imply that the recipient should assume the discloser
intends for the information to remain confidential.

Some circumstances automatically imply a duty of confidentiality due

to a special relationship between the parties, for example a
solicitor/client or a doctor/patient relationship.

 The most effective way in practice to impose circumstances of

confidence is to make an actual statement to this effect, or to have
an express confidentiality agreement.

3. There must be actual or proposed unauthorised use of the

information to the detriment of the person communicating it

• This includes disclosing the information to other third parties or using

it for an unauthorised purpose.

• In De Maudsley v Palumbo, the court held that there was no

unauthorised use because the Ministry of Sound (the defendant’s
club) was substantially different to the claimant’s ideas and seemed
to be more similar to an existing club.

• In commercial terms, disclosure or use of business/technical

information will often result in financial loss, e.g. the defendant may
be a competitor who, in using the information, obtains an unfair
advantage in breaking into the market for a new product.

• In practice, it is now questionable whether detriment has to be

proved by the claimant – in recent cases detriment has been taken
as read.

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2. Employees and independent consultants

There are additional considerations to bear in mind when dealing with

employees over and above the Coco v Clark elements. Those considerations
differ during and after employment.

 Obligation of confidence: during employment

A well drafted contract of employment will contain an express obligation

of confidence by employees, particularly by those who deal with
technical or other sensitive information which is truly confidential. During
the course of employment this duty is likely to be enforced by the courts.

Even if there is no such clause in an employment contract, an obligation

of confidence will be implied because of the duty of good faith owed by
the employee to the employer. An employee may not disclose
confidential information, or compete with his employer during the course
of his employment.

 Obligation of confidence: after employment

A prudent employer should also include a post-employment restrictive

covenant in the contract of employment. This will be subject to the rules
relating to restraint of trade which you were introduced to earlier – see
paragraph 1.2.

In the absence of an express post-termination covenant, there will

nevertheless be an implied duty of confidentiality preventing an ex-
employee from making unconscionable use of certain information
acquired during employment.

 Employee or consultant?

A visiting consultant is not an employee and should as a matter of good

practice have a contract imposing a specific obligation not to disclose
the confidential information of the company. Such an obligation may be
implied: for example, in Vestergaard Frandsen A/S v Bestnet Europe Ltd
[2009] EWHC 657 (Ch), the High Court was prepared to imply an
obligation of confidentiality on a consultant in respect of information
arising out of the work that he was given. An express obligation is
clearly preferable in practice.

In practice, the issue of employee and independent consultants’ obligations of

confidence is within the ambit of employment law.

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3. Defences and remedies

3.1 Defences
As is usual, the defendant will no doubt try to argue that the claimant has not
made out its claim. For example, the defendant could question whether the
information has the necessary quality of confidence.

As a matter of public policy, the law has also, for some time, recognised a
public interest defence, in relation to both the breach of a contractual
obligation under a confidentiality agreement and the breach of the general law
of confidence (i.e. any express or implied duty of confidentiality). This defence
is relevant where it is in the interest of the public that the unauthorised
disclosure is made and not just that the public would be interested in it.

A good example arose in Lion Laboratories Ltd v Evans [1984] 3 W.L.R.

539. The police were exclusively using the ‘Lion Intoximeter’ for their roadside
breathalyser tests. Two ex-employees of Lion Laboratories claimed that the
test was not sufficiently reliable and approached a national newspaper with
evidence of lack of reliability, including internal company correspondence.

The Court of Appeal held that even without evidence of misconduct on the part
of Lion Laboratories, all that the defence requires is to show that it is in the
public interest that the information is disclosed.

Clearer examples where the public interest defence is raised, relate to the
disclosure of criminal activities or dangers to the general public.

Care should be taken not to rely on this defence too swiftly in relation to
newspaper scoops. Often there will be a more appropriate body to report the
matter to in the first instance. Also, this case should now be read in the light of
the Human Rights Act 1998 and the European Convention on Human Rights,
which we consider briefly in paragraph 4 below.

3.2 Remedies
The remedies available are the same as those available in the infringement of
other intellectual property rights.

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 Injunction to prevent use of the information, or to restrain further use,

for a specified period. If the information has already been put into the
public domain, it is generally too late for an injunction to restrain its use
and the court will decide that damages are a more appropriate remedy
as an injunction will usually only be granted if it is applied for promptly. If
the recipient of the information has obtained a ‘head start’ then a
‘springboard’ injunction may be granted preventing use of the
confidential information while the unfair advantage lasts.

 Damages based on the value of the information. For example, where a

competitor has got to the market faster through the misuse of
confidential information, damages would be calculated by the loss of
profit that the claimant would have had by being first on the market place
or based on a licence fee payable for the time the defendant has gained
by his use of the information (this is another example of the ‘springboard
principle’: i.e. where a defendant has gained a ‘head start’ over
competitors by unauthorised access to the confidential information).

 Account of profits that the defendant has made as a result of his

breach – for example in selling items which have been made using
confidential information which he did not own. Note that a claimant will
not be able to obtain both damages and an account of profits.

 Other remedies may also be available for misuse of confidential

information e.g. an order for delivery up, search or seizure.

4. The Human Rights Act 1998 and breach of confidence

Since the incorporation of the European Convention of Human Rights

(‘ECHR’) into UK domestic law by way of the Human Rights Act 1998 (‘HRA’)
there have been lively debates on the existence of a free-standing right to
privacy.

Two articles in the ECHR are relevant to the law of confidentiality. These are
Article 8, which concerns a right to a private life, and Article 10 which concerns
freedom of expression. Much of the case law in this area centres on the
conflict between these two fundamental human rights. Companies and other
commercial entities are entitled to claim human rights in the same way as
individuals so these rights to have relevance in commercial disputes.

In addition, section 12 of the HRA focuses on relief granted by the courts

which impacts upon freedom of expression. As such, the courts must take
account of whether publication of the information in question is in the public
interest. Issues such as the identity of the ‘victim’ and their personal
circumstances are considered when assessing what is in the public interest.

Brexit has no impact here, as the ECHR comes from the Council of Europe
which comprises 47 Member States within Europe in its broadest sense, not
the EU.

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5. The Trade Secrets Directive and the Trade Secrets

Regulations

The Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597)(the

‘Trade Secrets Regulations’) were brought in to implement an EU Directive,
the purpose of which was to harmonise national laws across in respect of the
protection of undisclosed know-how and trade secrets against unlawful
acquisition, use and disclosure. The Trade Secrets Regulations remain in
force following Brexit as assimilated law.

Many in the UK were keen to clarify the relationship between (i) the protection
of trade secrets under the Trade Secrets Regulations and (ii) the protection
available under the existing law of confidence. From the wording of regulation
3 of the Trade Secrets Regulations, it would seem that everything that applies
to a breach of confidence case at common law also applies to trade secrets
under the Trade Secrets Regulations so that infringement of trade secrets
under the Trade Secrets Regulations is aligned with common law breach of
confidence. Further, regulation 3(2) seeks to make the remedies that are
available for breach of confidence also available following infringement of the
Trade Secrets Regulations, where those remedies are wider than those
available under the Trade Secrets Regulations. Nevertheless, questions
remain as to whether or not the scope of the Trade Secrets Regulations, and
the remedies prescribed by them, are exactly the same as under the common
law of breach of confidence.

Further reading

Jennifer Davis, Intellectual Property Law (Oxford University Press)

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