A patent gives the patentee the right to sue for infringement if others enter the market with an invention similar to that protected by the patent. In most cases, the existence of the patent discourages competition. However, a patentee needs to ensure that, if third parties do infringe, they will become liable to pay damages for that infringement. To ensure that there is a right to damages, we always advise patentees to mark their products with patent numbers. The patent numbers can also be applied to packaging, and included in advertising and on websites. In addition, when they become aware that a competitor is somewhat close to their patented invention, we also suggest to patentees that we write to the competitor to put it on notice as to the existence of the patent.
The consequence of not adhering to this good practice was felt by Schenck Rotec GmbH. In a case in the Patents Court, Schenck v Universal Balancing  EWHC 1920 (Pat), Schenck’s European patent (UK) No. 1520161, claiming a device for fastening balancing weights to rotors, was found to be both valid and infringed.
However, their victory was phyrric. Universal Balancing argued that they had not known that the patent existed, and that they had no reason to believe that the patent existed. HHJ Birss, sitting as a judge of the High Court, accepted their arguments and held that Schenck were not entitled to damages from the moment Universal Balancing began infringing the patent until they were told of the existence of the patent at a meeting in July 2010.
The judge found, as a matter of fact, that Universal Balancing did not know that the patent existed until the July 2010 meeting. Schenck argued that Universal Balancing could not establish that it had no reasonable grounds for supposing the patent existed. Schenck pointed out that there were only four significant players in the propshaft balancing industry, of which Universal Balancing have a 30% market share, and that the three companies other than Universal Balancing patent their inventions. It was also argued on behalf of Schenck that a company the size of the defendant ought to employ the services of a patent attorney and should be undertaking clearance searches.
On behalf of Universal Balancing it was argued that there was only one place where Schenck had described their machine as patented and that was in a brochure which had not been seen by Universal Balancing. The company also believed that the industry was one where patenting was not relevant. They believed that there was very little possibility for new developments in the technology, and that machines were sold on the basis of the computer software provided, on accuracy and timing, as well as on after sales service and price.
The judge ruled that the facts known to Universal Balancing were not such that would lead a reasonable person to think that the patent existed. He rejected the submission that Universal Balancing ought to have been doing patent clearance searches. He also noted that Schenck, who had sent a copy of their patent to another competitor, had only themselves to blame for the fact that Universal Balancing had no reasonable grounds for supposing the patent existed until the meeting in July 2010. Therefore Universal Balancing did have a defence to damages under Section 62 until the July 2010 meeting.