Patents

Mohammad Jomoa and Asif Iqbal

Kadasa Intellectual Property

 

Patent enforcement proceedings

1      Lawsuits and courts

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

Under Saudi national patent law, there is a specialised quasi-judicial committee for adjudication of patent infringement cases. The Patent Dispute Committee (the Committee) is established by a resolution of the Council of Ministers for a term of three years. Action before the Committee is initiated by submitting a statement of claims. The Committee has the power to issue interim injunctions until a final decision is issued, however, in practice interim injunctions are hardly ever granted. The Committee also has jurisdiction over infringement disputes of patents issued by the Gulf Cooperation Council (GCC) patent office.

Proceedings before the Committee are mostly based on an exchange of written statements from both parties. The decision of the Committee is appealable before the Administrative Court. Final appeal lies before the Court of Appeal.

In theory, based on specific grounds, the decision of the Court of Appeal is further appealable before the Administrative Supreme Court, however, currently the Administrative Supreme Court is not operational.

2      Trial format and timing

What is the format of a patent infringement trial?

An action before the Committee is straightforward; there are no pretrial procedures involved. The patentee will file written statement of claims with the Committee. Evidence can be submitted at a later stage, however the cause of action must be clearly stipulated in the initial statement of claims. It is not the practice of the Committee to decide on partial issues raised during ongoing proceedings. According to current practice, proceedings of patent infringement cases are decided through an exchange of documents by both parties. Each party to dispute is given one month, which is extendable by a further one month, for submission of its rebuttals.

The patent law has provision for the appointment of technical experts, and the Committee in its sole discretion can appoint such experts. The decision is taken by members of the Committee in a majority vote. The Committee can also refer to general laws in Saudi Arabia, if the provisions of patent law do not address any specific issue. For instance, in a damages claim, the Committee will require evidence of actual damages according to standards set by the principles of shariah (Islamic) law.

Depending on the complexity of issues framed, a typical trial before the Committee may last from 18 to 24 months.

3      Proof requirements

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

Burden of proof is upon the plaintiff to establish infringement. The plaintiff must submit legal and technical grounds to prove infringement. The latter should also be supported by evidence. For instance, in pharmaceutical patent disputes, chemical analysis should be submitted by plaintiff to prove that the defendant’s product is infringing the protected features of its patent.

Invalidity can be raised by defendant as a defence, in which case burden of proof will lie with the defendant asserting invalidity. The Committee is competent to hear invalidity proceedings either as defence or through a separate action. In the former, such defence should be taken in the initial stage of proceedings.

The burden of proof may shift from plaintiff to defendant if the subject of the patent claimed to be infringed is an industrial process to manufacture a certain product. In such case, the defendant must prove that the identical product was not manufactured by this process without the consent of the patentee. Reversal of burden of proof is subject to fulfilment of additional conditions.

4      Standing to sue

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

The patent owner, or an exclusive licensee can bring an infringement action before the Committee. It is recommended that the right to bring legal action by the licensee is clearly mentioned in the licence agreement. In practice most infringement actions are brought by the patentee with the licensee as co-plaintiff.

Under Saudi patent law, any unauthorised exploitation of a patent is an infringement of the patent, and will give cause of action to the rightholder. Manufacturing, selling, offering for sale, use, storage or importation of any protected product without permission of patent owner will be considered unauthorised exploitation.

5      Inducement, and contributory and multiple party infringement

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

Inducement and contributory infringements are generally not recognised in Saudi Arabia. However, in case of contributory infringement, the extent of contribution in infringement may be decisive. For instance, if the contribution to infringement is by exploiting a component of the patent, with prior knowledge of existence of the patent and that use of such component will be an infringement, it might make the contributory infringer liable for such acts.

Nothing in the law prohibits suing multiple infringers to the extent of their contribution to the infringement.

6      Joinder of multiple defendants

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all of the defendants be accused of infringing all of the same patents?

It is possible to jointly sue multiple infringers, if the patent rights are unlawfully exploited in Saudi Arabia. Multiple infringers may or may not have a commercial relationship. The liability of each defendant will be limited to the extent of the infringing act. It is not necessary that each infringer must exploit all of the patent.

So far, there is no notable case law on contributory infringement.

7      Infringement by foreign activities

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

In such cases, the foreign activities outside Saudi Arabia should establish cause of action in Saudi Arabia. Any unauthorised exploitation of a patent through activities outside the jurisdiction of Saudi Arabia will establish actionable cause, if such infringing products are imported into Saudi Arabia. In such case, the fact that the product was created outside Saudi Arabia will not be an acceptable defence. Whether small components of the product, imported into Saudi Arabia, which can be used for the purpose of infringement, will be considered infringement or not is not clear. It seems that any small components knowingly imported for the purpose of input in the infringing product might be actionable cause for the patentee. There is, however, no case law on this point and Saudi patent law does not have clear provision in this regard.

8      Infringement by equivalents

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

The doctrine of equivalents is not addressed under Saudi patent law. There is no case law on this. So far, patent infringement cases have dealt with literal infringement.

9      Discovery of evidence

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

There are no legal provisions in place for a discovery procedure. In practice, discovery of fact or discovery of documents is not possible in legal proceedings. The judge can, however, depending on the circumstances, ask any party to produce certain documents, but the law does not oblige litigating parties to produce them.

10   Litigation timetable

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

The time frame of litigation varies from case to case. At trial level, it may take 18 to 24 months. Within 60 days of a decision issued by the Committee, an appeal can be filed with an administrative court, which may take 14 to 18 months. Further appeals before the court of appeal are usually concluded within six months.

11   Litigation costs

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

A typical infringement action may cost from US$25,000 to US$40,000. There is no court fee in Saudi Arabia. Arrangement of terms for a professional fee can be agreed between an attorney and a client.

12   Court appeals

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

In infringement and invalidation actions, the decision of the Committee can be appealed by the aggrieved party before the administrative court within 60 days of issuance of the Committee’s decision. The administrative court may accept new evidence and new arguments. The law of procedure authorises the administrative court to accept additional evidence and arguments. Within one month of a decision issued by the administrative court a further appeal can be filed with the court of appeal.

As per procedure, the court of appeal either rejects the appeal or remands the case back to administrative court along with its observation. If the appeal is rejected, the court of appeal will issue a written judgment, which will be final and enforceable. In remanded cases, the administrative court may either change or maintain its earlier decision. Parties to litigation are provided with the chance to submit further arguments in cases remanded to the administrative court. If the administrative court maintains its earlier decision, another appeal can be filed before court of appeal, in which case the court of appeal will issue a final decision.

In Saudi Arabia, decisions of judicial or quasi-judicial bodies are not final and enforceable until the appeal period expires or until the case is decided by the highest judicial forum. The Administrative Supreme Court exists in theory, however, it is not operational so far.

13   Competition considerations

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

A patent owner can enforce its patent within the scope of its protection and within the period of protection without liability of competition violation. Any acts of enforcement that exceed the scope of patent rights and affect competition in the market may make the patentee liable for violations of competition law. So far, to our knowledge, there is no such case where a patentee has been liable for anticompetitive behaviour.

14   Alternative dispute resolution

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

Alternate dispute resolution (ADR) is highly encouraged under Islamic principles. Mediation and arbitration between the parties to dispute is encouraged in all form of litigations and has strongest roots in shariah law and traditions.

Arbitration in Saudi Arabia is governed under the new Law of Arbitration, issued vide Royal Decree No. M/34, which is based on the UNCITRAL Model Law on international commercial arbitration, although not adopted verbatim. Under this law, parties can exclude the jurisdiction of Saudi courts to take cognizance of a dispute between parties. Recourse to arbitration may save the parties’ time in dispute and a specialised arbitrator (who has the relevant knowledge and skill) may be selected to settle the dispute. The parties may choose the language of proceedings and place of arbitration. The notable concern is that provisions of the arbitration agreement, either executed in a separate document or referred to in the main arbitration agreement, cannot exclude the jurisdiction of Saudi courts on invalidation proceedings of awards. The law provides a list of provisions for bringing an invalidation action, therefore, keeping in mind the Saudi legal system, there is always an element of uncertainty in the enforcement of awards, especially where arbitration was held outside Saudi Arabia or by application of a non-Saudi law.

 

Scope and ownership of patents

15   Types of protectable inventions

Can a patent be obtained to cover any type of invention, including software, business methods and medical procedures?

Saudi patent law clearly stipulates which subject matters are not patentable. The following cannot be protected by patent:

  • discoveries, scientific theories and mathematical methods;
  • schemes, rules and methods of conducting commercial activities, mental activities or playing a game;
  • plants, animals and processes – which are mostly organic – used for the production of plants or animals, with the exception of micro-organisms, non-organic and microbiology processes; and
  • methods of surgical or therapeutic treatment of human or animal body and methods of diagnosis applied to human or animal bodies, with the exception of products used in any of these methods.

In addition, the patent will not be granted if its exploitation contradicts the principles of shariah law.

16   Patent ownership

Who owns the patent on an invention made by a company employee, an independent contractor, multiple inventors or a joint venture? How is patent ownership officially recorded and transferred?

Saudi patent law has clear provisions on ownership of patents in relation to the employee–employer relationship. Unless the contract expresses otherwise, ownership rests with the employer under the following conditions:

  • the patent is the outcome of the execution of a contract by the employee;
  • the employee has an obligation to exert him or herself in developing it; and
  • if the employer proves that the employee would not have developed the protected subject matter without recourse to facilities, means and data made available throughout his or her employment.

The employee (inventor) will have the right to receive remuneration as agreed with company. Remuneration can be also decided by the Committee in light of various circumstances, which may include the employment contract and the economic importance of an invention. Any agreement that deprives the employee of remuneration shall be null and void.

In the case of a joint venture, co-ownership of a patent is possible. If a patent is the result of the work of several persons, they shall be equally entitled to rights, unless there is an agreement stating otherwise. However, to prove a claim of joint ownership, a contribution to the actual invention is necessary and merely helping with its execution will not be considered sufficient.

In any case, the name of the inventor shall be mentioned on the application in the capacity of inventor.

 

Defences

17   Patent invalidity

How and on what grounds can the validity of a patent be challenged? Is there a special court or administrative tribunal in which to do this?

Jurisdiction of invalidity action rests with the Committee. Invalidity proceedings can be initiated by filing invalidity action with the Committee. Invalidity action can be initiated on the following grounds:

  • the invention lack novelty at the time of filing;
  • the invention lacks inventive step;
  • the invention is not industrially applicable;
  • the subject matter of the patent is hit by exclusionary subject matters (i.e, the subject matter is not invented. See question 15);
  • commercial exploitation of the invention violates Islamic principles; and
  • commercial exploitation is harmful to life, to human, animal or plant health, or is substantially harmful to the environment.

The decision of the Committee on invalidity action can be appealed to administrative court. Final appeal will be before the court of appeal. For the appeal procedure, see question 12.

18   Absolute novelty requirement

Is there an ‘absolute novelty’ requirement for patentability, and if so, are there any exceptions?

Absolute novelty is a mandatory requirement for acquiring patent rights in Saudi Arabia. An invention will be considered new if it is not anticipated by prior art in any part of the world by written or oral disclosure, through which the invention could be realised. The following are exceptions to the rule of novelty:

  • Disclosure during the priority period does not destroy novelty.
  • The priority period is 12 months from the date of filing in any member country of the Paris Union.
  • If the disclosure occurred as a result of displaying the invention in an officially recognised international exhibition in one of the member countries of the Paris Union during the year preceding the filing date.

19   Obviousness or inventiveness test

What is the legal standard for determining whether a patent is ‘obvious’ or ‘inventive’ in view of the prior art?

The standard of determining obviousness or inventiveness is stipulated in Saudi patent law. The legal test for assessment of obviousness or inventiveness is an ‘ordinary person skilled in art’. An invention is deemed to be inventive or not obvious, if with regard to prior art, the invention is not obvious for an ordinary person skilled in art.

20   Patent unenforceability

Are there any grounds on which an otherwise valid patent can be deemed unenforceable owing to misconduct by the inventors or the patent owner, or for some other reason?

There is no provision in the law that makes a patent unenforceable within the scope of its protection. Any attempt at enforcement that extends beyond the scope of a patent or may impede competition in the market will not be entertained. The only exception is a compulsory licence, which may be issued by the King Abdul Aziz City of Science and Technology (KACST) under the following conditions:

  • Within the stipulated time frame as mentioned in Saudi patent law, the patentee has not exploited the patent commercially, or not adequately exploited it, without justifiable excuse.
  • The applicant for a compulsory licence has exerted reasonable efforts to get the licence from the patentee under reasonable terms of licence and compensation but was not successful.

A patent cannot be enforced against an entity holding a compulsory licence. The act of such licensee, however, shall be limited to the terms of the licence only. The patentee can bring action against any activity beyond the terms of the compulsory licence.

21   Prior user defence

Is it a defence if an accused infringer has been privately using the accused method or device prior to the filing date or publication date of the patent? If so, does the defence cover all types of inventions? Is the defence limited to commercial uses?

Under Saudi patent law, if a person manufactures a product in good faith or utilises a process before the filing date of patent application or before the priority application of patent application, such person has the right to continue such acts despite the issuance of a patent. The law, however, prohibits the expansion of such acts. This provision is not limited to any specific type of invention.

 

Remedies

22   Monetary remedies for infringement

What monetary remedies are available against a patent infringer? When do damages start to accrue? Do damage awards tend to be nominal, provide fair compensation or be punitive in nature? How are royalties calculated?

The Saudi patent law authorises the Committee to award the necessary damages to the rightholder. Judicial and quasi-judicial bodies in Saudi Arabia follow shariah principles on damages. Under Islamic principles, the damages should be actual, quantifiable and should not be based on speculation. The heavy burden of proof upon the plaintiff makes it difficult to establish damages up to the satisfaction of the court, and in practice damages are not awarded.

Other than the possibility of claiming damages from an infringer, the law also imposes a financial penalty of a maximum of 100,000 Saudi riyals. The financial penalty may be doubled in the case of repeated violations. The Committee has jurisdiction over awarding damages or imposing the penalty.

23   Injunctions against infringement

To what extent is it possible to obtain a temporary injunction or a final injunction against future infringement? Is an injunction effective against the infringer’s suppliers or customers?

Interim injunctions are available in law, but in practice hardly granted by the Committee or a Saudi court of any level. Interim injunctions may be granted under the following conditions:

  • a statement of claim is already filed with the Committee or court;
  • there is the chance of irreparable damages to the commercial interest of the patentee;
  • there is a prima facie evidence of infringement; and
  • the guarantee is furnished with the Committee to compensate the defendant if the claim is not successful.

24   Banning importation of infringing products

To what extent is it possible to block the importation of infringing products into the country? Is there a specific tribunal or proceeding available to accomplish this?

Under Saudi patent law, the importation of goods under patent protection in Saudi Arabia, without authorisation of the rightholder, is infringement. The Committee has the power to take any necessary and prompt measures to prevent damages. The rightholder can file a request for an interim order with the Committee. Such a request should be made in the statement of claims against the importation of infringing goods. The law authorises the Committee to issue any orders to stop patent infringement. To our knowledge there is no case law where the Committee has issued an interim order to block the importation of infringing goods.

25   Attorneys’ fees

Under what conditions can a successful litigant recover costs and attorneys’ fees?

Attorneys’ fees may be awarded by judicial and quasi-judicial bodies to the winning party in dispute. In practice, it is very unlikely that attorneys’ fees will be granted.

26   Wilful infringement

Are additional remedies available against a deliberate or wilful infringer? If so, what is the test or standard to determine whether the infringement is deliberate? Are opinions of counsel used as a defence to a charge of wilful infringement?

The law provides a double financial penalty upon the repeated violation of patent rights. Wilful infringement depends on the circumstances, and there are no defined criteria in law to determine deliberate infringement. The Committee can refer a case to the court if there are criminal elements in the violation. We believe that in such cases wilful infringement will be an important factor.

27   Time limits for lawsuits

What is the time limit for seeking a remedy for patent infringement?

There are no specific time limits in patent infringement cases. Infringement action can be initiated as long as the patent is in force.

28   Patent marking

Must a patent holder mark its patented products? If so, how must the marking be made? What are the consequences of failure to mark? What are the consequences of false patent marking?

There is no requirement by law to mark a patent. It is, however, recommended to mark the patented product. False marking in the course of trade is an offence under Saudi law.

 

Licensing

29   Voluntary licensing

Are there any restrictions on the contractual terms by which a patent owner may license a patent?

At the outset, a licence shall be recorded with the patent office to make it effective in relation to a third party. Issuance of a licence does not automatically prevent the patentee from exploiting the patent unless specified in the licensing contract.

Patent law authorises the patent office to examine a licence contract. The patent office may instruct parties to amend any clause considered abusive to patent rights or that has a negative effect on competition. The patent law does not stipulate restricted covenants, however, any clauses that may be considered abusive to patent rights or that have a negative effect on competition will be prohibited. For example, royalties beyond the patent term or a condition that the licensee not trade in other similar non-patented goods or any restriction on the licensee supplying goods bearing patented articles to certain entities in the market might be considered abusive. Broadly speaking, a licence shall not have any clause that widens the scope of the patent beyond what is actually claimed and granted.

30   Compulsory licences

Are any mechanisms available to obtain a compulsory licence to a patent? How are the terms of such a licence determined?

The KACST can grant a compulsory licence to a third party for exploitation of invention covered by a patent. The following conditions are applicable on issuance of a compulsory licence:

  • The application for compulsory licence can be submitted only after four years have elapsed from the date of filing or three years from the date of grant, whichever is later.
  • Within the time frame mentioned above, the patentee has not exploited the patent commercially, or not adequately exploited it, without justifiable excuse.
  • The applicant for a compulsory licence has exerted reasonable efforts to get a licence from the patentee under reasonable terms of the licence and compensation but was not successful.

The above conditions do not apply if the applicant is a government body or a person authorised by a government, and the aim is to serve public interest in a state of emergency and in compelling need.

 

 

IP Decisions KSA