The High Court was recently required to examine issues of interpretation relating to a patent licence.
The case in question concerned the development of a new catalyst for use with respect to diesel fuel engines. It was expected that this new catalyst would incorporate nanotechnology. The defendant in the case, Neuftec, had developed the catalyst but required the services of a specialist in the field of nanotechnology to help make it market ready. These services were to be provided by the claimant, Oxonia. Neuftec consequently licensed Oxonia their current patent rights (including applications therefor) and supporting know how relating to the catalyst in return for various financial payments.
The licence defined licensed products. The definition covered any product falling within the scope of the claims of the licensed patents / applications. The definition of licensed patents included continuations, divisional applications, foreign counterparts and reissues, and any granted patent flowing therefrom.
At the date of the licence, a Patent Cooperation Treaty ("PCT") application had been filed by Neuftec. A PCT application proffers only the right to file patent applications in treaty member territories whilst retaining the benefit of the priority date of the original application giving rise to the PCT application. A PCT application alone cannot result in national patent rights. During the course of the licence, the PCT application resulted in a number of national applications, some of which contained claims more limited in scope than those contained in the PCT application.
Following on from this, Oxonia began selling catalysts which although within the claims of the original PCT application, were not within the claims of certain of these national applications. Consequently they sought a declaration in respect of the territories where the claims had been limited, that products out with these claims were not licensed products within the meaning of the licence agreement, even though they were within the claims of the underlying PCT application.
The court found that all catalysts were within the definition of licensed products. This decision centred on the ambiguity present within the definition of the term patent application, and whether this included only current subsisting claims, or also those contained within previous applications such as the PCT application.
Comment was made by the court that those drafting the agreement seemed to have used a 'boiler plate' definition of licensed products without properly considering what this actually meant when viewed within the context of the relationship and plans for exploitation and logically carried through forthcoming procedures for protection. This case underlines the importance of proper attention to drafting matters in the context of intellectual property licenses.
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