Government Powers to use Third Party IP Rights

By Kathryn Leake, Solicitor

In these times of extraordinary government measures, we thought it would be interesting to discuss a recent case that addresses “Crown use” – the government’s ability to use or permit others to use a third party’s IP rights without prior consent from the patentee. We also review the government’s powers to use third party IP rights without compensating the owner in times of emergency.

Crown use

Under sections 55 to 58 of the Patents Act 1977 (“PA 1977”), the government has powers to use a third party’s patent without first seeking permission from the patentee. These powers are not all-encompassing – a patentee has the same right to sue the government for patent infringement as it does to sue any other party if the government’s use of the patent falls outside these Patents Act provisions – but in certain circumstances they allow the government to use or permit others to use a third party’s patent quickly, without first needing to enter into protracted discussions with the patentee.

Section 55 PA 1977 provides that a government department or person authorised in writing by a government department may do several acts in relation to a product or process protected by a third party’s patent that would normally constitute infringement, for the services of the Crown. These acts include making, using or importing a product, and even selling it in restricted circumstances, and using a patented process. The government authorisation can be given before or after the act in question takes place.

While the government does not need to seek permission from the patentee prior to using his patent, the relevant government department is required to notify the patentee as soon as practicable after the use has begun, and, under normal circumstances, must also pay the patentee a royalty for such use.

IPCom GmbH & Co KG v Vodafone Group Plc

The recent case of IPCom GmbH & Co KG v Vodafone Group Plc, [2020] EWHC 132 (Pat) addressed Crown use as a defence to patent infringement. The case looked in detail at what exact act the government department in question must authorise in writing to rely on the defence, as well as the scope of the phrase “for the services of the Crown” under sections 55 and 56 PA 1977. It also considered whether running tests that involve the third party’s patented technology could fall within the government’s authorisation, and therefore constitute Crown use for the purpose of this defence.

In this case, it was alleged that Vodafone had infringed IPCom’s patented 3G technology by using it to provide access to Vodafone’s network for emergency responders under the Mobile Telecommunications Privileged Access Scheme (MTPAS).

Vodafone relied on Crown use as a defence to infringement, and Recorder Douglas Campbell QC held that this defence was made out for the following reasons:

  • Vodafone was authorised in writing by a government department (in this case the Cabinet Office) to provide priority access to its network in an emergency situation. While the authorisation allowed Vodafone to do a specific act, it did not explicitly permit Vodafone to use technologies covered by third party patents, or name IPCom’s patent. However, Recorder Campbell QC still held that the authorisation was sufficient to invoke Crown use, and there was no need for it specifically to mention any patent rights that may be infringed, as this would place a heavy burden on the relevant government department, particularly in telecoms, where an authorised act may involve infringing several patents at once.
  • Furthermore, it was held that Vodafone did not need to prove that it was necessary to practise IPCom’s patent specifically to do the authorised act, because otherwise this defence could not be relied upon if it is necessary to implement two different patents to produce the desired effect.

The case also considered the scope and meaning of the phrase “for the services of the crown”, a requirement under s.55 PA 1977 for Crown use to be made out, for which s.56(2) PA 1977 lists the following as acts that constitute such services:

  • the supply of anything for foreign defence purposes;
  • the production or supply of specified drugs and medicines; and
  • purposes relating to the production or use of atomic energy or research into matters connected therewith.

It was held that this list is not exhaustive, so other acts could also be classed as being “for the services of the crown” for the purpose of this defence, including Vodafone’s use of IPCom’s patented technology in response to emergencies as defined by the Civil Contingencies Act 1994.

Finally, the case dealt with the question of whether Vodafone’s use of IPCom’s patented technology to run tests on its response to MTPAS requests could also constitute Crown use. Recorder Campbell QC considered whether this testing fell under “use in an emergency” as authorised by the Cabinet Office, and held that, because Vodafone’s testing was not excessive or in bad faith, and was not connected to its other activities, it also fell within this emergency use, and was therefore allowed as Crown use. Similarly, he held that the keeping of equipment that infringed IPCom’s patent was permitted for so long as the MTPAS request was in operation.

Similar provisions for other IP rights

There are similar provisions under section 12 and Schedule 1 of the Registered Designs Act 1949 and sections 240 to 244 of the Copyright, Designs and Patents Act 1988 allowing Crown use of both registered and unregistered designs. The defence of Crown use was mentioned in Società Esplosivi Industriali SpA v Ordnance Technologies (UK) Ltd [2007] EWHC 2875 (Ch), a case involving infringement of unregistered design rights in a multiple warhead system. However, as the defendant did not have proof of written authority from the Ministry of Defence or its contractor to use the unregistered design, the defence was not available. This demonstrates that the requirement for written authority from a government department will be strictly construed.

Crown use in emergencies

During a declared period of emergency, the government has very wide-ranging powers that go beyond its usual abilities to practise or authorise the practice of a third party’s patent without first notifying the patentee.

Under s.59 PA 1977,  during a period of emergency as declared by Order in Council, the government is able to do any act which would otherwise constitute infringement of a patent, for example in order to engage in a war, or to deal with a scarcity of life-essential supplies in the community, without any requirement to compensate the owner with a royalty for such use.

Comment

While not widely relied upon (we are not aware of any reported decisions as to Crown use in emergencies under the 1977 Act), the Crown use provisions for patents, registered and unregistered designs form an important part of the government’s arsenal to respond quickly and effectively to situations that require use of a third party’s proprietary IP, particularly in emergencies, by allowing it to take advantage of all available inventions and designs without needing to obtain prior permission from IP rights holders.

Crown use may well be a useful tool therefore to assist the government in its current efforts to deal with the Coronavirus crisis, either under the usual provisions under sections 55 to 58 PA 1977, or, if needed, under a declared state of emergency, which would afford it the widest powers possible to take advantage of third party IP rights.