For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Monday, 2 February 2009

A restoration tragedy -- and an apology

Given the miserable financial situation that many businesses face at present, failure or inability to renew a patent is an increasingly likely occurrence -- especially for small businesses with tight or non-existent credit lines.  Last week's decision in Re Bending Light Ltd [2009] EWHC 59 (Pat), 30 January 2009, a Patents Court (England and Wales) decision of Mr Justice Kitchin which was picked up by Lawtel, is therefore all the more significant. 

Bending Light owned a UK patent, the renewal fee for which fell due on 15 September 2004. Sad to say, the renewal fee was not paid by that date; nor was it paid before the end of the statutory grace period. For want of a mere £210 the patent lapsed fatally on 15 March 2005.

At this point Bending Light applied for restoration of the patent -- a merciful provision contained in Section 28(3) of the Patents Act 1977 which reads:

"If the comptroller is satisfied that—(a) the proprietor of the patent took reasonable care to see that any renewal fee was paid within the prescribed period or that that fee and any prescribed additional fee were paid within the six months immediately following the end of that period, the comptroller shall by order restore the patent on payment of any unpaid renewal fee and any prescribed additional fee".
At the hearing, it was clear from the evidence that Bending Light did actually have enough cashto renew the patent during the relevant period.  However, the company said its financial position during 2005 was dire and that, in March 2005, it had insufficient funds in its business to pay the fees that had fallen due.  The hearing officer refused the application for restoration on the basis that the section 28(3) requirements had not been met. 

Bending Light's appeal was unsuccessful. The company argued that the hearing officer failed to give adequate consideration to the evidence as to its financial situation, as a whole, throughout 2004 and 2005.  Kitchin J explained that, for restoration to be granted, the patent owner had to show it had taken reasonable care to ensure that it was in a position to pay the renewal fee. The phrase 'reasonable care' did not need explanation; the standard was that required of the particular patentee acting reasonably in ensuring the fee was paid.  In this case Bending Light had failed to show it had taken reasonable care to ensure that the appropriate fees would be paid by 15 March 2005 since it had not proved that it was not in a position to make the necessary payment.

The IPKat says, it's not just sad that Bending Light lost its patent: it's even sadder that the company would have spent an awful lot more than just £210 in preparing its application for restoration and then taking its appeal to the Patents Court.  Merpel says, wouldn't it be great if some mechanism could be found, or some fund established, for the purpose of bailing out SMEs with patent renewal problems.  Is there a realistic business opportunity here?

Restoration comedy here


Apologies to those readers who, following the link to the newly-launched PatLit patent litigation weblog, discovered that they couldn't sign up for the email.  This was because the html code had auto-mangled itself.  The problem has now been rectified and the email facility ...(unlike Bending Light's patent) restored.

3 comments:

Guy said...

The IPO does nothing to publicise the provision but many SME's could save their patents by having them endorsed "Licences of Right". The renewal fees will then be halved. There is no fee to file the request form and the process is reversible.
If the SME prospers it can pay back the past savings and have an unendorsed patent.

Anonymous said...

The mechanism exists to help out SMEs in this position - it's called "the market". If they couldn't find a buyer then very likely the reason is that the patent had no market value and they should have walked away. The system shouldn't be about helping lame ducks or vanity patents.

David said...

A slight correction may be necessary. Although the fatal effect on the patent was the failure to pay the renewal fee by the end of the extended period under section 25(4) on 15 March 2005, the patent actually ceased to have effect as from its final renewal date, which was 15 September 2004. Because this was prior to the introduction of the amended form of section 28(3) on 1 January 2005, this meant that the previous 'reasonable care' test applied, and not the current 'unintentional' test. However, it appears that Bending Light would most likely have failed this test too. All this was gone into in the comptroller's decision at the patent office (BL O/025/08).

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