Analysis of Case: Dialog Axiata PLC vs. Orleander International Limited

1. Introduction This case involves a dispute over the validity and alleged infringement of Patent No. 14841, concerning a mobile money transfer system. Dialog Axiata PLC (“Plaintiff”), Sri Lanka’s largest mobile network operator, initiated the action seeking declarations of non-infringement and invalidity of the patent held by Orleander International Limited (“1st Defendant”), and invented by the late Harold Prianne Anurath Wijetunge (“2nd Defendant”). The 2nd Defendant accused the Plaintiff of infringing his patent through their “eZ Cash” mobile money service, leading to claims of unfair competition and demands for damages. This report analyzes the legal and technical aspects of the case, along with the court’s findings.

2. Factual Background

2.1 Plaintiff’s Position:

• The Plaintiff launched “eZ Cash” in 2012, providing mobile wallet services such as money transfers, utility bill payments, and purchases.
• Prior to “eZ Cash,” the Plaintiff had developed mobile money services like “eZ Pay” and “eZ Card Pal.”
• The Plaintiff contended that Patent No. 14841 did not meet the patentability criteria under the Intellectual Property Act (IPA) No. 36 of 2003 and argued that the patented invention lacked novelty and inventiveness.

2.2 Defendant’s Position:

• The 2nd Defendant claimed ownership of Patent No. 14841, granted in 2008 for a process enabling cash transfers via mobile phones.
• The Defendant alleged that “eZ Cash” infringed claims within Patent No. 14841, incorporating features disclosed during confidential negotiations in 2011 and 2012.
• The 2nd Defendant further alleged unfair competition and sought damages, asserting that the Plaintiff misappropriated proprietary information.

3. Legal Issues

3.1 Validity of Patent No. 14841: The court examined whether the patent met the three statutory criteria for patentability:

1. Novelty (Section 64 IPA):
   • The Plaintiff argued that the patented process was anticipated by prior art, including the 2nd Defendant’s own innovation patent application in Australia (2006) and UK patent (2006).
   • The court determined that the earlier patents constituted prior art, disqualifying the 2nd Defendant’s claim to novelty under Section 64.
2. Inventive Step (Section 65 IPA):
   • The Plaintiff contended that the patented process was an obvious application of existing ICT techniques.
   • The court applied the Windsurfing/Pozzoli test for obviousness and concluded that the process lacked an inventive step, being a predictable extension of existing technology.
3. Industrial Applicability (Section 63 IPA):
   • The court found insufficient evidence demonstrating the practical implementation or viability of the patented process, further undermining its validity.

3.2 Allegations of Infringement:

• The Defendant claimed that features of “eZ Cash”, such as USSD-based money transfers, PIN authentication, and SMS confirmations, infringed claims within Patent No. 14841.
• The Plaintiff countered that these features were part of its earlier services and common ICT practices.
• The court, considering the invalidity of Patent No. 14841, dismissed the infringement claims.

3.3 Claims of Unfair Competition:

• The Defendant alleged that the Plaintiff acted in bad faith, leveraging confidential disclosures made during negotiations.
• The court found no evidence of mala fide intent or misappropriation by the Plaintiff, particularly given the invalidity of the patent.

4. Key Findings of the Court

1. Invalidity of Patent No. 14841:
   • The patent lacked novelty and an inventive step, as it was anticipated by prior art and based on existing technologies.
   • The Defendant’s failure to disclose prior patents in Australia and the UK violated Section 71(1)(a)(vii) of the IPA.
2. No Infringement by Plaintiff:
   • The court concluded that “eZ Cash” did not infringe Patent No. 14841 due to the patent’s invalidity.
3. Rejection of Unfair Competition Claims:
   • The court found no evidence supporting the Defendants’ claims of bad faith or misappropriation by the Plaintiff.
4. Relief Granted:
   • The court declared Patent No. 14841 null and void.
   • The Plaintiff’s claims for non-infringement were upheld.
   • The Defendants’ counterclaims were dismissed.

Download Judgement

5. Comparative Analysis

5.1 Patentability Standards:

• The case underscores the importance of rigorous adherence to patentability standards, particularly novelty and inventive step.
• The findings align with global norms emphasizing the need for substantive disclosures during patent applications.

5.2 Confidentiality in Negotiations:

• The court’s decision highlights the challenges in proving bad faith in cases of alleged misappropriation, particularly when patents are invalid.

5.3 Judicial Trends:

• This judgment reflects judicial scrutiny of patent claims in the ICT sector, emphasizing technological transparency and adherence to legal procedures.

6. Conclusion The court’s judgment reinforces the necessity for robust patent applications, compliance with disclosure obligations, and clear evidence when alleging infringement or unfair competition. Dialog Axiata’s victory underscores the challenges faced by inventors in protecting intellectual property without meeting statutory criteria. This case sets a significant precedent for patent litigation in Sri Lanka, particularly in the fast-evolving technology sector.