![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales Court of Appeal (Civil Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Oxonica Energy Ltd v Neuftec Ltd [2009] EWCA Civ 668 (09 July 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/668.html Cite as: [2009] EWCA Civ 668 |
[New search] [View without highlighting] [Printable RTF version] [Help]
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
Peter Prescott QC (sitting as a Deputy Judge of the High Court)
HC 07 C 00437
Strand, London, WC2A 2LL |
||
B e f o r e :
THE RT HON LADY JUSTICE ARDEN
and
THE RT HON LORD JUSTICE JACOB
____________________
Oxonica Energy Limited |
Claimant/ Appellant |
|
- and - |
||
Neuftec Limited |
Defendant/Respondent |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
for the Claimant/Appellant
Richard Hacon (instructed by Watson Farley & Williams LLP)
for the Defendant/Respondent
Hearing date: 23 June 2009
____________________
Crown Copyright ©
Lord Justice Jacob:
"…. It is not disputed that Celox ….. was possessed of a body of knowhow about lanthanide oxide fuel additives – including test results on motor vehicles – whose significance cannot be dismissed".
Celox also had the idea that delivery of the additive in the form of nanoparticles might be beneficial. It sought a partner with expertise in this field and found an Oxford University spin-off company called Oxonica Materials Ltd. Although this company had nanoparticle expertise it had none in fuel additives or their market or indeed any general commercial experience or experience of the chemicals industry.
1. A method of improving the efficiency with which fuel is burnt in a fuel burning apparatus and/or a method of reducing the emissions produced by a fuel which is burnt in a fuel burning apparatus, said method comprising dispersing an amount of at least one particulate lanthanide oxide in the fuel.
Of course in practice (and as contemplated in the application) the apparatus is an internal combustion engine. And in practice the idea was to make (or have made) and sell a fuel additive for use in the method.
1. A method of improving the efficiency with which fuel is burnt in a fuel burning apparatus and/or a method of reducing the emissions produced by a fuel which is burnt in a fuel burning apparatus, said method comprising dispersing an amount of at least one particulate lanthanide oxide in the fuel, wherein the lanthanide oxide is coated with an alkyl carboxylic anhydride.
So the method actually patented in Europe is narrower than that of the PCT application – it is confined to the use of particulate lanthanide coated with an alkyl carboxylic anhydride rather than the use of particulate lanthanide oxide generally.
no reason to depart from the fundamental rule of construction of contractual documents that the intention of the parties must be ascertained from the language that they have used interpreted in the light of the relevant factual situation in which the contract was made. But the poorer the quality of the drafting, the less willing the court should be to be driven by semantic niceties to attribute to the parties an improbable and unbusinesslike intention, if the language used, whatever it may lack in precision, is reasonably capable of an interpretation which attributes to the parties an intention to make provision for contingencies inherent in the work contracted for on a sensible and businesslike basis (Mitsui Construction Co Ltd v. A-G of Hong Kong (1986) 33 BLR 14).
It also follows that, faced with such a document fine arguments based upon supposed consistency of language or even thought throughout the document, will carry less or no weight than with an obviously carefully and well-drafted document – one obviously drafted by someone who knew what he was about.
"The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear" per Lord Reid in Wickman Machine Tool v L Schuler [1974] AC 235 at 251.
(1) That it meant any product covered by the claims (in practice the widest claims) of the PCT Application. This was the Judge's interpretation. The consequence is a once and for all single question, applicable worldwide: is the product within the claims of that Application
(2) "Or" in the phrase "Licensed Application or Licensed Patent" signified alternatives. So royalties were due on any product within the meaning of either "Licensed Application" or "Licensed Patent." The consequence would be that royalties would be payable if a later patent claim was wider than the claim of the PCT application. This was Neuftec's alternative interpretation, supported in its Respondent's Notice.
(3) The phrase should be read as if the words as the case may be were added. So when and if the PCT application was superseded by a national application one looked to the claims of that. And if that in turn was superseded by a granted patent, one then went by the claims of that. So whether royalties were payable on a particular product depended on the patent position in the country of the transaction at the time of the transaction. This was Oxonica's interpretation.
WHEREAS
(A) the Company [now called Oxonica Energy] is a wholly owned subsidiary of Oxonica working with nano particle technologies.
(B) Neuftec wishes to licence exclusively its technology and know how that involves any product, development or invention containing lanthanide oxides, particularly cerium oxide (Cex0y), in whole or in part for use in connection with the combustion of fuels to the Company for a royalty income.
AGREEMENT:
1. INTERPRETATION
In this Agreement
1.1 the following words have the following meanings that is to say:
1.1.3 "the Business" means the business of the Company as carried on from time to time relating solely to the exploitation of the IP Rights."
1.1.9 "IP Rights" means the intellectual property rights licensed under the Neuftec Licence Deed."
1.1.11 "Licensed Application" has the meaning given in the Neuftec Licence Deed;
1.1.12 "Licensed Patent" has the meaning given in the Neuftec Licence Deed."
1.1.14 "Neuftec Licence Deed" means a deed in the Agreed Terms proposed to be made between the Company, Neuftec and the shareholders of Neuftec whereby Neuftec will license certain technology to the Company;
1.1.15 "Neuftec Royalty Fees" mean those royalty fees subject to those payment provisions as set out in the Neuftec Licence Deed;
1.1.16 "Notional Oxonica Royalty Fees" means notional royalty fees equal to the amount of the Neuftec Royalty Fees."
1.1.18 "the Territory" means the world.
4. PROMOTION OF THE BUSINESS
The Company and Oxonica undertake to Neuftec generally to use all reasonable endeavours to promote the Business and the interests of the Company.
6. ACCOUNTING PROVISIONS
For the purposes of this Agreement and the Neuftec Licence Deed, the following accounting provisions shall apply:
6.1 The Company shall procure that annual accounts are prepared ("Annual Accounts") on a basis consistent with the audited accounts of the Company and to be made up to the Company's financial year end. The Annual Accounts shall include:
6.1.1 a breakdown showing turnover, profit and liabilities of the Business separately from other businesses undertaken by the Company;
6.1.2 a statement of cashflow of the Business (the "Cashflow"). This shall be cash available to the Business after satisfaction of all liabilities due and payable which are attributable to the Business;
6.1.3 a statement of the annual profit of the Business ("Annual Profit") as defined in, and calculated in accordance with Clause 6.3;
6.1.4 a statement of the cumulative profit of the Business ("Cumulative Profit") as defined in, and calculated in accordance with, Clause 6.4;
6.1.5 a statement of the Neuftec Royalty Fees.
10.1 Neuftec shall not during the currency of this Agreement or for a period of one year from the date of termination of this Agreement either solely or jointly with or on behalf of any third party directly or indirectly do or permit any of the following without the prior written consent of the Company:
10.1.1 Carry on or be engaged or interested (except as the holder for investment of securities dealt in on a recognised stock exchange) in any business competing with the Business within the Territory;
10.1.2 solicit the custom of any third party who is or has been at any time during the term of this Agreement a customer, or client, or prospective customer of the Business for the purpose of offering to such customer, client, or prospective client goods or services similar to or competing with those of the Business."
14. DURATION AND TERMINATION
14.2 Any party shall be entitled to terminate this Agreement forthwith by written notice to the others in the following circumstances.
14.2.5 if the last of the Licensed Patents has expired or the last of the Licensed Applications has been revoked without right of further appeal.
WHEREAS
(A) Neuftec has developed a fuel additive invention for which an international patent application (number PCT/GB01/02911) was filed at the UK Patent Office on 29 June 2001, a copy of which is attached in the Schedule hereto.
(B) Neuftec, the Licensee and Oxonica Limited have entered into an agreement dated 7th December 2001 (the "Main Agreement") under which Neuftec agrees to grant and the Licensee agrees to accept an exclusive licence under the patent application to manufacture, use and sell certain products, as defined below, on the terms set out in this Deed.
In this Deed the following words and expressions shall, except where the context otherwise requires, have the following respective meanings.
"Business" shall have the meaning as set out in the Main Agreement.
"Licensed Application" means the application appended in the Schedule hereto and any continuation, continuation-in-part or divisional applications thereof as well as foreign counterparts and re-issues thereof;
"Licensed Know How" means all technical information owned or possessed by Neuftec at the date of this Deed and thereafter, whether patentable or otherwise, relating to the combustion of fuels using cerium oxide, which information is necessary or useful for the development, manufacture, use and/or sale of the Licensed Products hereunder;
"Licensed Patent" means any patent issuing from the Licensed Application thereof as well as foreign counterparts and reissues thereof;
"Licensed Products" means any product, process or use falling within the scope of claims in the Licensed Application or Licensed Patent;
"Main Agreement" means an agreement entered into between the Licensee, Oxonica Limited and Neuftec of even date;
"Net Sale Price" means the price paid by a purchaser of the Licensed Products excluding all discounts and costs attributable to freight, distribution and import duty;
"Neuftec Royalty Fees" are as defined in Clause 4.2.
2. GRANT OF LICENCE
2.1 In consideration of the Licensee agreeing to pay to Neuftec the payments set out in Clause 4, Neuftec hereby grants the Licensee an irrevocable (save as provided in Clauses 2.2 and 2.3) exclusive licence under the Licensed Know How, the Licensed Application and/or Licensed Patent in all fields to make, manufacture, use, sell and/or otherwise exploit the Licensed Products throughout the Territory including but not limited to the right to sub-licence the manufacture of the Licensed Products to a third party.
2.2 This Deed shall come into effect on the Commencement Date and shall continue in force until either the date on which (a) the last of the Licensed Patents has expired or (b) the last of the Licensed Applications has been revoked without right of further appeal or (c) the Licensee goes into liquidation (except for the purposes of amalgamation or reconstruction) or (d) the Main Agreement is terminated in accordance with the provisions in Clause 14 of the Main Agreement (the "Term").
2.4 Upon the termination of this Deed, the Licensee shall return all Licensed Know How, and all records and documentation relating thereto, and shall cease to make manufacture, use, sell and/or otherwise exploit the Licensed Products or sub-licence their manufacture to a third party.
3. EXPLOITATION
The Licensee shall use its commercially reasonable endeavours to exploit the Licensed Application and/or the Licensed Patent by the manufacture and sale of the Licensed Products throughout the Territory during the term.
4. ROYALTY FEES
5. PATENT PROSECUTION AND RENEWAL
8. INFRINGEMENT OF LICENSED PATENTS
Lady Justice Arden:
The President of the Queen's Bench Division: