In Acron International Technology Limited v Chan Yiu Wai & Anor HCA 1709/2010 (date of judgment: 25 January 2016), the Court of First Instance delivered the first-ever judgment on section 57(1) of the Patents Ordinance (the “Ordinance”). The Plaintiff succeeded in its claim against one of its former employees who had made a patent application which is similar to a technology developed by the Plaintiff after their termination of employment with the Plaintiff.
In fact, before the Defendants’ Patent Application was made, the Plaintiff had already made a patent application with the use of the same technology under the Patent Cooperation Treaty in April 2002 (the “Plaintiff’s PCT Application”) and a standard patent was granted in Hong Kong on 29 May 2009 with the term commencing on 29 April 2002. Thus, the application for the standard patent was made at the time when both Defendants were still employed by the Plaintiff.
The Plaintiff alleged that the subject matter of the Defendants’ Patent Application (the “Defendants’ Invention”)incorporated the entire or a substantial part of the invention and claims under the Plaintiff’s PCT Application (the “Plaintiff’s Invention”)and made a claim against the Defendants pursuant to section 57(1) of the Ordinance.
The Law and Authority
The Court noted that there does not appear to have any Hong Kong authority which has considered the meaning of section 57 of the Ordinance and the leading authority in this regard is the English Court of Appeal judgment in LIFFE Administration and Management v Pinkava  4 AER 981.
1. The Defendants’ Inventionwas made in the course of the Defendants’ normal duties; and
2. The circumstances were such that an invention might reasonably be expected to result from the carrying out of such duties.
With regard to normal duties, Sir Andrew Morritt in LIFFE held that the source of an employee’s duty is primarily contractual though some of the terms are implied by law. In respect of the second limb, the Court, citing LIFFE, held that the use of the phrase “an invention” as opposed to “the invention” means that an employer will own any invention made from the carrying out of an employee’s duties if the circumstances are such that an invention might result, i.e. within the reasonable expectation of the employer.
The Defendants’ Normal Duties
In respect of the 1st Defendant’s duties, the Court held that his normal duties were in the context of an administrator, coordinator and an organiser. As the 1st Defendant was not employed to try to innovate, the Plaintiff’s claim against the 1st Defendant was bound to fail.
As for the 2nd Defendant, the Court accepted the Plaintiff’s evidence that the reason why the Plaintiff hired the 2nd Defendant was because the Plaintiff wanted to further develop the technology and put into practice by utilising the 2nd Defendant’s expertise. The 2nd Defendant was heavily involved in a number of projects related to the technology – she conducted analysis and performed laboratory tests in some of the projects; and was responsible for the experimental set up and implementation and was even the chief coordinator in other projects. As demonstrated by her involvement in the Plaintiff’s work projects and the publication of various articles in academic journals, it was found that the normal duties of the 2nd Defendant involved innovative research and development of the technology. The Court also held that the Defendants’ Invention was made in the course of the 2nd Defendant’s normal duties with the Plaintiff.
Other Noteworthy Issues
Nature of the Plaintiffs Business
Similarities of the Defendants’ Invention and the Plaintiff’s Invention
Notwithstanding that the Plaintiff’s expert accepted that there were three points which were unique or novel in the Defendants’ Invention, after reviewing the evidence, the Court was of the opinion that the Defendants’ Invention was strikingly similar to the Plaintiff’s Invention, which constituted compelling evidence that the Defendants’ Invention was indeed derived from the Plaintiff’s Invention such that the Defendants’ Invention might reasonably have been expected to result from the carrying out of the normal duties of the 2nd Defendant.
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2016