Yeda Research and Development Co Ltd. v Rhone-Poulenc Rorer International Holdings & Anor

This appeal is from a judgment of Lewison J of 16^th February 2006 [2006] EWHC 160 Ch, [2006] RPC 24. He reversed the decision of 20^th October 2005 of Mr R C Kennell, the Deputy Director of the Patent Office acting for the Comptroller. Mr Christopher Floyd QC argued the case for the appellants (“Yeda”), Mr Peter Prescott QC that for the respondents who are the patentees (“Rorer”) and their exclusive licensees (“ImClone”). The Comptroller appeared by Mr Michael Edenborough.

The case is an entitlement dispute. The patent concerned, EP (UK) 0667165, is for a medicine. It is uncontroversially described by Mr Kennell:

“[1] The patent in suit relates to therapeutic compositions containing certain monoclonal antibodies in combination with anti-neoplastic drugs. The antibodies are specific to a human receptor for epidermal growth factor ("EGF") and can inhibit the growth of human tumour cells that express human EGF receptors by binding to the extra-cellular domain of the receptors to form an antigen-antibody complex. The invention rests on the discovery that the combined treatment is more efficient than the use of either agent by itself because it kills the cancer cells (a cytotoxic effect) rather than merely prevents them from replicating (a cytostatic effect). It also allows the use of lower amounts of toxic or sub-toxic anti-neoplastic drugs.”

The patent was applied for and is in the name of Rorer. The grant was “mentioned” (the odd word used by Art. 97 of the European Patent Convention to signify publication of the grant of a patent, publication being what in law actually gives effect to grant ) in the European Patent Bulletin on 27 March 2002. The patent was applied for on 15^th September 1989, claiming as its first priority date 15^th September 1988. The application was not published until 16^th August 1995.

Why it took the unacceptable period of nearly 13 years for the European Patent Office to examine and grant the patent was not a question before us and we did not ask why. It does mean however, that whatever the ambit of the entitlement dispute, it will be one going back over many many years. Such delay is thoroughly undesirable both commercially and from the point of view of fair dispute resolution. From the commercial point of view industry needs to know where it stands – otherwise investment and development will be put at risk or impeded. From the dispute resolution point of view, entitlement disputes often involve conflicting evidence as to who exactly contributed what and who said what to whom. To decide that after so many years is at best deeply unsatisfactory.

I do not suppose the fathers of the modern European patent system expected for a moment that the patenting process would or could take so long. So when Art. 23 of the Community Patent Convention was drafted so as to provide (broadly) for a 2-year from grant time limit for attacks on title, they never contemplated that national limitation periods of the lex fori might come into operation before the 2-year period was up. I am sure they expected Art.23 to operate as an early, not a back-stop time bar.

Markem v Zipher [2005] EWCA Civ 256, [2005] RPC 76 decided that in the UK at least (but I would be surprised if it were different elsewhere) the basis of an entitlement claim must be a breach of the claimant’s right to the invention and that that right must stem from the operation of a rule of law (e.g. breach of contract or confidence). It is against that general basis for an entitlement claim that this case must be decided. And that is why a stale claim can involve questions of limitation under the Limitation Act 1980, the law of the lex fori.

In this case the position is as follows. Mr Kennell, by a first interim decision of 17^th June 2005, refused a stay of the proceedings pending determination of US proceedings which may in part involve the same issues. I do not read the decision as dealing in any way with a possible limitation defence under domestic law. The second interim decision (that leading to this appeal) was concerned with the allowability of amendments to the Statement of Case having regard to s.37(5) – no point of a defence of limitation under domestic law was directly raised. This may be because the full implications of Markem had not been seen. Limitation under domestic law was, however, raised before Lewison J.

In broad terms (I have to consider the detail below) the Statement as filed claimed that Yeda were entitled to co-ownership of the Patent. Yeda seek to amend the Statement so as to claim sole ownership – to oust Rorer completely. Mr Floyd told us that his clients’ commercial objective if they can gain sole ownership would be to grant licences to third parties. By implication, however, if terms cannot be agreed, Yeda may be able to prevent Rorer (and more particularly its exclusive licensee ImClone) from exploitation of the patented invention even though it will be Rorer or its licensee which did all the risky and expensive development work to bring it to market.

In this connection Mr Floyd, probably to soften the impression of what Yeda would get if they could succeed in their sole ownership claim, suggested the Comptroller could, having decided there was sole entitlement in a referrer, make provision by way of a licence to the original patentee if he had contributed to the development of the invention. Mr Floyd submitted that there was no “clear water” between a claim to sole and a claim to joint ownership.

To demonstrate the absence of clear water, Mr Floyd cited IDA v University of Southampton, 2^nd March 2006, [2006] EWCA Civ 145 at [42], [2006] RPC 21, where I said:

“the s.8 jurisdiction, although based on an entitlement, is free-standing with its own remedies. The Comptroller is given a very wide discretion once a finding of entitlement is made: he can order licences, cross-licences, the power to sub-licence and amendment of the patent, all to fit the justice of the case – see s.8(2). There is no need for an all-or-nothing solution. So if B, having taken A’s idea, genuinely adds inventive material of his own, there is ample power to produce an equitable and fair commercial solution.”

This is to read more into the passage than it was about. I was dealing with the problem of what happens in an entitlement case where both the referrer and the original patentee have contributed to the patented invention. The passage was not intended to have a wider meaning.

However, it is true that s.8(2) (dealing with an entitlement reference before grant) says:

“Where a person refers a question relating to an invention …. the comptroller may, without prejudice to the generality of subsection (1) above and subject to subsection (6) below -

…..

(d)

make an order transferring or granting any licence or other right in or under the application …

And also that s.37(2) (dealing with a post-grant entitlement reference) says:

(2)

Without prejudice to the generality of subsection (1) above, an order under that subsection may contain provision -

…..

(c)

granting any licence or other right in or under the patent;

This does suggest that there may be a jurisdiction to grant even an ousted patentee a licence. But, even if there is, it would often not be a proper exercise of the Comptroller’s discretion, having decided that a person had no entitlement whatsoever to a patent which he had applied for in breach of someone else’s legal rights, to decide that nonetheless that person (or his licensee) should have a licence under the patent. Things may, I suppose, be different if the ousted patentee has in good faith made a considerable investment in the invention, particularly if the true owner had stood by for a number of years allowing this to happen.

What I do think is that there is no escaping the fact that the sole entitlement claim is indeed a claim with the real potential that Rorer and its exclusive licensee could be ousted completely.

However, Mr Floyd’s “no clear water” argument is in any event beside the point. For the construction of s.37(5), the provision with which we are mainly concerned, depends (see below) on the meaning of the corresponding provision of the Community Patent Convention. What our domestic law provides about clear water and any means of bridging it is irrelevant. What Mr Floyd needs is something in the CPC bridging the gap. He says there is, under Art. 24.2 – a point to which I will return.

These proceedings were initiated on 26^th March 2004 by the filing of Patents Form 2/77 on behalf of Yeda. Under the heading “Relevant section(s) of the Patents Act 1977” was entered “Sections 37(1)(a) and 37(1)(c).” The accompanying Statement of Case under the heading “Question to the Comptroller” said:

“The Referrer hereby refers to the Comptroller the following questions:

i)

whether it should be joint proprietor of [the patent] (section 37(1)(a));

ii)

whether [certain named persons, called “the Weizmann inventors”] should be named as co-inventors of the Patent (section 37(1)(c)).”

Section 37 of the Act as amended reads:

“37.-(1) After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question -”

(a)

who is or are the true proprietor or proprietors of the patent,

(b)

whether the patent should have been granted to the person or persons to whom it was granted, or

(c)

whether any right in or under the patent should be transferred or granted to any other person or persons;

and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination.

(5)

On any such reference no order shall be made under this section transferring the patent to which the reference relates on the ground that the patent was granted to a person not so entitled, and no order shall be made under subsection (4) above on that ground, if the reference was made after the end of the period of two years beginning with the date of the grant, unless it is shown that any person registered as a proprietor of the patent knew at the time of the grant or, as the case may be, of the transfer of the patent to him that he was not entitled to the patent.

The proceedings were initiated just before the 2-year time limit of s.37(5) expired. The proposed amended Statement was filed well outside that period, on 29^th June 2005. The questions sought to be referred now read (the underlinings and strikethroughs showing the amendments):

“questions to the Comptroller

The Referrer hereby refers to the Comptroller the following questions:

(i)

whether it should be sole proprietor or, in the alternative, joint proprietor of [the Patent] (section 37(1)(a)); and

(ii)

whether the Patent should have been granted to Rorer (section 37(1)(b));

(iii)

whether all or any of the rights in or under the Patent (including any licence) should be transferred or granted to the Referrer (section 37(1)(c)); and

(ii)

(iv) whether [the “Weizmann Inventors”] should be named as inventors or, in the alternative, co-inventors of the Patent (section 37(1)(c)).”

The order sought has likewise been expanded, reading:

“The Referrer requests that the Comptroller order that:

(i)

that the Patent be transferred into sole ownership of the Referrer or, in the alternative, co-ownership of Rorer and the Referrer, such ownership or co-ownership to take effect as though the Patent had originally been granted to the Referrer alone or, in the alternative, to both co-owners;

(ii)

that the pPatent be amended so as to name the Weizmann Inventors as inventors or, in the alternative, co-inventors; and

(iii)

that any Supplementary Protection Certificate(s) granted under the Patent be transferred into the sole ownership of the Referrer or, in the alternative, co-ownership of Rorer and the Referrer;

(iii)

(iv) that Rorer do everything within its control to effect the necessary changes to the Patent and the Patent Register to give effect to the change in proprietorship and inventorship.;

(v)

such further or other order as shall be appropriate in relation to any licence under the Patent, including, without limitation, an order for an account to be taken of all licence fees paid under any such licence and an order to transfer all of these monies or, in the alternative, a proportion of these monies, to the Referrer, with interest thereon at an appropriate rate to be determined by the Comptroller;

(vi)

such further or other order to enable the Referrer fully to exploit or, in the alternative, equally to exploit the Patent, including, without limitation, the right to grant licences without reference to Rorer or ImClone;

(vii)

that Rorer and/or ImClone do pay the Referrer’s costs, to be assessed if not agreed; and

(viii)

further or other relief.”

Stripped of matter immaterial to the present point (such as the claim to the SPC or an account – either or both of which may not be within the Comptroller’s jurisdiction – I do not decide), the claim is now fair and square to full sole ownership with co-ownership relegated to an alternative claim. Rorer and ImClone say that cannot be done after expiry of the two year s.37(5) limitation period.

Now s.37(5) is one of those provisions of the Act which are the subject of a special interpretation provision, s.130(7). This reads:

“(7)

Whereas by a resolution made on the signature of the Community Patent Convention the governments of the member states of the European Economic Community resolved to adjust their laws relating to patents so as (among other things) to bring those laws into conformity with the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-Operation Treaty, it is hereby declared that the following provisions of this Act, that is to say, sections 1(1) to (4), 2 to 6, 14(3), (5) and (6), 37(5), 54, 60, 69, 72(1) and (2), 74(4), 82, 83, 100 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty have in the territories to which those Conventions apply. ”

What does this mean? I think it means that the provisions concerned have the same meaning as the corresponding provisions in the Treaties. No more, no less. To give a meaning so framed as to have, as nearly as practicable, the same effects is best achieved by reading the relevant provisions of the Treaties directly. Our Parliamentary draftsmen have a curious, and entirely less than helpful, practice, when implementing an international treaty as part of UK law of re-writing specific provisions which are meant to be implemented directly. I can understand why, when the Treaty concerned gives a measure of discretion as to how it is to be implemented, there is a need for our Parliamentary draftsman to work out for themselves how the implementation is to be effected, but I cannot see, and never have seen, any point in trying to re-write a specific provision which has to be implemented as is. I cannot understand how there can even be a sensible debate about the merits of re-write versus copy-out in such a case.

I have so expressed myself with vigour in a number of cases, both in intellectual property and in VAT, see for instance Customs and Excise Commissioners v Century Life [2001] STC 38 (CA, where the other members of the Court agreed), British Sugar v James Robertson [1996] RPC 281 at p. 291, Philips v Remington [1998] RPC 283 at p. 290, Menashe Business Mercantile v William Hill [2002] EWHC 397 (Pat), and Markem at [94]. I have no compunction in re-citing what I said in the Customs case and what was said in Markem as part of the judgment of the Court:

Customs at [6] “One wonders why a draftsman implementing a Directive or other international treaty provides his own elaborate language attempting to set out what the implemented law is supposed to be. I have commented on the unnecessary complications that this process causes in intellectual property. For instance in Beloit Technologies v Valmet Paper [1995] RPC 705 at p.731 I said:

‘… it helps no-one for the Parliamentary draftsman to re-write matter in a treaty or convention (or EU directive for that matter) which is to be implemented in the United Kingdom. If the language of the basic document is obscure or less than complete it makes things worse if the Parliamentary draftsman tries to “clarify” it in some other words. Where he does, he simply causes extra complications (and therefore legal uncertainty and costs) .... The point at which obscurities should be avoided is in the underlying international document. If they are unfortunately there, it is too late for our Parliamentary draftsman to help and the problem must be left for industry to pay for in the courts. The particular question here is a typical example of what could be avoided by simply adopting the language of the underlying document as it stands.’”

Markem [94] “Before doing so, we begin by what must be the rational way to approach this [i.e. the Patents Act 1977], whatever section is under consideration. Parts of it are intended to implement the European Patent Convention of 1972. In a peculiarly cack-handed way the draftsman chose to re-number and re-write some of these and then say, in s.130(7) in effect that his re-writing does not count – that the relevant provision is “so framed as to have, as nearly as practicable, the same effect in the UK as it has in the EPC”. No one has ever identified any difference in meaning between a 1977 Act provision and the meaning of a corresponding provision of the EPC and we do not suppose anyone ever will.”

What I said in Markem in my opinion applies as much to a provision in the Community Patent Convention identified in s.130(7) as it does to a provision in the EPC so identified. It is true that the CPC was never implemented. But I think that makes no difference. I should mention, however, what Neuberger LJ discussed in Coflexip v Stolt Offshore (No.2) [2004] EWCA Civ 213, [2004] FSR 708:

“[127] As a matter of ordinary language, given that the Convention has not been ratified, and has never come into effect, there are no “territories to which the Convention appl[ies].” There is, therefore, in my judgment, real force in the point that unless and until the Convention is brought into force, it is scarcely possible to talk about a provision such as Art.56(1) having “the same effects” in the sense for which Stolt contend, namely the consequences set out in Art.33, as Art.56(1) or its equivalent has “in the territories to which [the] Convention … app[lies]”, in circumstances where the Convention does not apply in any territory at all.

In this connection, it should be mentioned that the effect of Art.6(2) of the Convention (mirroring Art.98 of the 1975 form) is that it can only come into effect when all the signatory states have ratified it.

I appreciate that the point found no favour with Jacob J. on the basis that s.130(7) “is an interpretation section”, and that the same view appears to have been taken by this court in Kimberly-Clark Worldwide Inc v Procter & Gamble Ltd [2000] R.P.C. 422 and Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] R.P.C. 31. However, it appears to me that, particularly if the word “effects” is given the wide meaning for which Stolt contends in the present case, the closing words of s.130(7) indicate that, so long as the Convention is not in force, the subsection may well not apply. However, if the narrower meaning, which I believe to be correct, is given to the word “effects”, then it would appear to me to strengthen the contrary view reached by Jacob J, and, indeed, apparently assumed to be correct by the Court of Appeal. I should add that it appears clear that there was no argument on the point in either of the two cases before the Court of Appeal.

In all the circumstances, I do not consider that we should decide the second ground raised by Mr Miller for rejecting Stolt’s case based on the Convention. It is unnecessary to decide it, and the reason I have discussed it is to only explain why it impressed me rather.

The other members of the Court (Peter Gibson LJ and Sir Martin Nourse) thought that there was:

“considerable force in the contention of Mr Miller that as there is no territory to which the CPC applies, s.130(7) does not in this respect have application”

Coflexip was not a case where the court was simply being asked to construe one of the provisions of the 1977 Act identified in s.130(7). It was concerned with a much more far-reaching submission: that an article of the CPC (Art.33) not having any counterpart in our Act was nonetheless made part of our law as an incident or consequence of the fact that our provisions dealing with the grounds of revocation did have corresponding provisions in the CPC. That argument was rejected. What was said about the effect of s.130(7) so far as construction of the identified provisions was concerned was obiter dictum and expressly so.

Here the point is critical. Is the court to construe s.37(5) as having the same meaning as the provision in the CPC about bringing entitlement claims more than 2 years after grant? Or can one simply forget about the CPC because it never came into force and so had no effect anywhere? I have no hesitation in holding the former. I quite accept that the bizarre s.130(7) talks about “the same effects in the UK as the corresponding provisions of [the specified Conventions] have in the territories to which those Conventions apply.” And that in the case of the CPC it has no effect anywhere because it is not in force. But I am unable to read the sense of the provision as saying the CPC is to be used for construction only if and when it comes into force.

I say that because of the wholly unreasonable result entailed in the other view. It simply cannot make sense for this construction provision (the whole of s.130 is under the heading “Interpretation”) to be switched on only when and if the Treaty came into effect. Parliament cannot have intended that our courts should paddle their own canoe, disregarding the Treaty whilst it was not in force, and then start out all over again in a different canoe when it was. Any decision about an identified provision made before the Treaty came into force would, on such a view, be up for reconsideration all over again – which makes no sense.

It must be remembered here that besides the relatively minor provisions with which we are concerned with here (s.37(5), corresponding with Art. 23 of the CPC), cornerstone provisions of the Act also have corresponding CPC provisions. For instance s.60 (“Meaning of infringement”) corresponds to Arts. 25, 26, and 27 of the CPC. Other European countries have similarly taken their infringement provisions from those of the CPC, as part of the harmonisation measures which all had in mind at the time of the Treaties and the 1977 Act. Parliament must surely have intended that our courts should, from the outset, be trying to apply the same rules for such a major subject as infringement as the courts in other European States were trying to apply. The aim, even without the common court of appeal envisaged by the CPC, is that the same result should apply for a given set of facts right across Europe, irrespective of the court concerned.

There is another, much more conventional, route for holding that the identified provisions are to be construed in accordance with the meaning of the corresponding provisions of the Treaties. It is that the Treaties are part of the travaux preparatoires of the provisions concerned. Even in the absence of s.130(7), the relevant provisions of the Treaties are the very basis of the UK provisions. So on conventional principles as to construction, the UK provisions should be construed so as to have the same meaning as the provisions upon which they are based.

Thus I approach s.37(5) assuming that Parliament meant it to have the same meaning as the corresponding provision of the CPC, envisaging that if the provisions were in force, the same result would be reached whatever Member State the case was started in.

The actual question posed in this case by s.37(5) is whether the claim to sole ownership is a “reference ... made after [the expiry of the two-year period]”. If it is, then there is a complete statutory bar and the amendment by which the claim is made must be disallowed.

Logically the first thing to consider is the claim prior to amendment. For if that included within it in one way or another a claim to sole ownership, then the point simply does not arise. Mr Floyd contended it did in two alternative ways: firstly that the application form and the statement were in themselves sufficient to invoke a claim for sole ownership and second that the facts pleaded in the unamended statement were enough to raise such a claim.

The first point is based on the fact that the initiating documents (Form 2/77 and the Statement) refer to s.37(1)(a) – the “question who is or are the true proprietors of the patent.” The argument is that includes therefore all questions about proprietorship including whether or not Yeda are entitled to it.

But it is necessary to see what the initiating documents are for. Rule 54(1) of the Patents Rules 1995 provides:

“(1)

A reference under s.37(1) shall be made on Patents Form 2/77 and shall be accompanied by a copy thereof and a statement in duplicate setting out fully the nature of the question, the facts upon which the person making the reference relies and the order which he is seeking.”

So Form 2/77 and the accompanying statement must be served together – and it follows they can and should be read all of a piece. And they must be read in the context of rule 54(1) which sets out what they are for and what they are to do.

On that basis there can really be no doubt that the only question referred by the unamended documents was whether Yeda should be a joint owner. The only questions explicitly referred were “whether it should be joint proprietor” along with the ancillary question of whether the Weizmann inventors should be named as co-inventors. The only orders sought were on the basis of joint proprietorship. It is true that s.37(1)(a) is mentioned in both Form 2/77 and the Statement, but only in the context of the question asked and the order sought. Clearly s.37(1)(a) overlaps with s.37(1)(b) for the question “who is the true proprietor” carries within it in some cases the question “whether the patent should have been granted to the person to whom it was granted”. It does not follow that the mere mention of s.37(1)(a) in the context of a claim only for joint ownership can be fairly said to raise a question of sole ownership. Such a mere mention does not “bring into play the whole question of who is the true proprietor” as was submitted by Mr Floyd by way of a written submission following argument.

The other way Mr Floyd suggested that sole ownership was raised by the unamended statement was this: he submitted that even though the questions asked and orders sought were all on the basis of joint ownership only, the facts actually pleaded disclosed a case of sole inventorship by the Weizmann inventors. For that purpose he took us to what was said by me at first instance and Robert Walker LJ in this Court in Henry Bros. v MoD [1997] RPC 693, [1999] RPC 442 before taking us in detail through the statement.

I said this at p.706:

“I do not think it is right to divide up the claim for an invention which consists of a combination of elements and then to seek to identify who contributed which element. I think the inquiry is more fundamental than that. One must seek to identify who in substance made the combination. Who was responsible for the inventive concept, namely the combination? That was solely Mr Z. It was his idea which turned a useless collection of elements into something which would work. The patent, as I have said already, is really about the joint. The remainder of the elements of the claim, although necessary, are peripheral.”

Robert Walker LJ said this at p. 449:

“I cannot entirely agree with the judge’s approach in the passage of his judgment (at 706) which I have already set out. I am not inclined to think that the invention was a “combination” of elements. Mr Z saw Mr X’s drawing (at a meeting at which Mr X was not present) and replaced one type of joint (intended to produce a labyrinthine effect) with another type (a key-joint intended to produce distribution of blast pressure, including rebound pressure). Mr X’s drawing of the joint was not so much useless as directed at a different objective. Nevertheless I feel no doubt that the judge was correct in his conclusion.”

I read this as differing from what I said on the facts, not the legal approach – that in that case it was not right to regard the invention as a combination. The test I proposed: “who was responsible for the inventive concept” remains the key question.

Applying that here, Mr Floyd submitted that the unamended statement alleged that those responsible for the inventive concept were solely the Weizmann inventors. The invention was based on the discovery that the two known agents had a surprising synergistic effect. The statement alleged that that discovery was made by the Weizmann inventors only. So they were the only inventors and it follows that the statement made out a case for sole ownership.

I cannot accept that submission. The unamended statement says this:

“One of the Rorer Inventors, Dr Schlessinger, provided to the Weizmann Inventors monoclonal antibodies to the EGF receptor which are referred to in the Patent as ‘108’ and ‘96’”

It goes on to allege that the “relevant practical work using these antibodies” was done by the Weizmann inventors. That is not enough to exclude Dr Schlessinger’s contribution as being inventive. Suggesting what is to be tested may indeed lie at the heart of an invention, the testing itself being a matter of what is routine. What the true position is will depend on the detailed facts. For present purposes it is sufficient to say that the unamended statement does not disclose a case of sole inventorship. It accepts and proceeds on the basis that Dr Schlessinger’s contribution was inventive.

So I proceed on the basis that the proposed amendment does add, for the first time, a claim to sole proprietorship and a prayer for a corresponding order implementing that.

Now there is a significant difference between the rights of co-owners and those of a sole proprietor. A sole owner has his monopoly as against all other parties. Thus s.60(1) says:

“… a person infringes a patent if .. he does any of the following things in the UK without the consent of the proprietor ……”

But a co-proprietor has no rights as against any other co-proprietor. This is made explicit by s.36(2):

“(2)

Where two or more persons are proprietors of a patent, then, subject to the provisions of this section and subject to any agreement to the contrary -

(a)

each of them shall be entitled, by himself or his agents, to do in respect of the invention concerned, for his own benefit and without the consent of or the need to account to the other or others, any act which would apart from this subsection and section 55 below, amount to an infringement of the patent concerned”

The same is provided for in the CPC but in a different way. The infringement provisions (Arts 25 and 26) open with the words:

“A Community patent shall confer on its proprietor the right to prevent all third parties not having his consent from…”

A co-proprietor is simply not a third party and so no right is given against him.

It is with that in mind that one can consider what the position as regards an out-of-time claim to sole proprietorship is under the CPC. I set the relevant provisions out:

“PART 11. SUBSTANTIVE PATENT LAW

Chapter I. Right to the Community patent

ARTICLE 23

Claiming the right to the Community patent

1.

If a Community patent has been granted to a person who is not entitled to it under Article 60(1) of the European Patent Convention, the person entitled to it under that provision may, without prejudice to any other remedy which may be open to him, claim to have the patent transferred to him.

2.

Where a person is entitled to only part of the Community patent, that person may, in accordance with paragraph 1, claim to be made a joint proprietor.

3.

Legal proceedings in respect of the rights specified in paragraphs 1 and 2 may be instituted only within a period of not more than two years after the date on which the European Patent Bulletin mentions the grant of the European patent. This provision shall not apply if the proprietor of the patent knew, at the time when the patent was granted or transferred to him, that he was not entitled to the patent.

4.

The fact that legal proceedings have been instituted shall be entered in the Register of Community Patents. Entry shall also be made of the final decision in, or of any other termination of, the proceedings.

ARTICLE 24

Effect of change of proprietorship

1.

Where there is a complete change of proprietorship of a Community patent as a result of legal proceedings under Article 23, licences and other rights shall lapse upon the registration of the person entitled to the patent in the Register of Community Patents.

2.

If, before the institution of legal proceedings has been registered,

(a)

The proprietor of the patent has used the invention within the territory of any of the Contracting States or made effective and serious preparations to do so, or

(b)

a licensee of the patent has obtained his licence and has used the invention within the territory of any of the Contracting States or made effective and serious preparations to do so,

he may continue such use provided that he requests a non-exclusive licence of the patent from the new proprietor whose name is entered in the Register of Community Patents. Such request must be made within the period prescribed in the Implementing Regulations. The licence shall be granted for a reasonable period and upon reasonable terms.

3.

Paragraph 2 shall not apply if the proprietor of the patent or the licensee, as the case may be, was acting in bad faith at the time when he began to use the invention or to make preparations to do so.”

Art 23.1 refers to “a person not entitled to it under Art.60(1) of the EPC.” Art. 60(1) EPC provides:

“1.

The right to a European patent shall belong to the inventor or his successor in title. If the inventor is an employee the right to the European patent shall be determined in accordance with the law of the State in which the employee is mainly employed; if the State in which the employee is mainly employed cannot be determined, the law to be applied shall be that of the State in which the employer has his place of business to which the employee is attached.”

Mr Prescott submits that Art. 23 draws a clear distinction between a claim to sole proprietorship (Art.23.1) and a claim to joint proprietorship (Art.23.2). They are distinct different claims which may be made – for distinct and legally different rights. Then, he says, Art.23.3 says legal proceedings for either of the rights can only be instituted within the two-year period. Here an Art. 23.2 claim was made within time, but an Art.23.1 claim was not. [I here put aside for later consideration his submission that even the claim that was made in time was inadequate and cannot be cured by amendment out of time].

He submitted that Art. 23 is for legal certainty. Once the two-year period is passed without any attack on his title, a man knows he is safe and can press on with development and marketing of the invention accordingly. Others too will know they can provide finance to exploit the invention in his hands. If his title is attacked only on the basis of joint ownership he knows that even if he loses he will not be prevented from exploitation of the invention. That is not so if it is possible he may be wholly deprived of the patent.

Mr Prescott reinforces his argument by reference to Art 24. This makes all licences lapse if there is a “complete change of proprietor”. That emphasises, says Mr Prescott, that the CPC was really drawing a sharp distinction between a claim to become a joint proprietor and a claim to become a sole proprietor.

Mr Floyd, supported by Mr Edenborough, submitted that there is no such sharp distinction between joint and sole ownership: that there is no clear water between the two. The submissions were based on the provisions of the UK Act discussed in [8]-[12] above. As I have said I do not think they are relevant – this case is about the meaning of s.37(5) which takes its meaning from the CPC alone. The fact that the UK Parliament has removed, or potentially removed, the clear water in an entitlement case cannot affect the meaning of Art.23 of CPC or the implementing provision s.37(5).

Mr Floyd’s other route to soften the distinction was based on Art. 24.2. This provides that an ousted proprietor may (unless he started in bad faith – see Art.24.3) continue using the invention if he started using the invention or made serious and effective preparations to do so before the claim to legal proceedings have been registered (which I suppose means started). There is similar protection for a licensee of an ousted patentee. I do not regard this provision as having Mr Floyd’s desired effect. On the contrary it proceeds on the clear basis that an ousted patentee is in a quite different position legally from one who merely finds that his ownership should be joint rather than sole.

Mr Floyd accepted that Art 23 was to provide legal certainty. The parties were agreed that the travaux preparatoires to the CPC are of no assistance to either side. In 1989 a report to the President of the EPO by Mr Vincenzo Scordamaglia, who was in charge of the secretariat for, amongst others, the 1975 version of the CPC was made. The Report said:

“In the interests of legal certainty, Article 23(3) CPC provides that legal proceedings in respect of transfer and joint proprietorship can only be instituted within two years of publication of the mention of grant of the patent. Any legal proceedings will be time-barred after this period, which means that upon its expiry not only can the person entitled no longer take legal action to claim a right to the patent, but he will also be precluded from applying for the patent to be revoked on the grounds that the proprietor is not entitled to it.

This time limit will not apply, however, if the proprietor knew, at the time when the patent was granted or transferred from a third party, that he was not entitled to become proprietor of the patent. If he learns only later that he is not entitled, this will not affect the time limit. This solution, giving precedence to legal certainty, requires actual knowledge of the lack of entitlement at the time of grant (or of acquisition of the patent by transfer). A proprietor not entitled to a patent may invoke the two-year time even if he was seriously at fault in failing to establish the position.”

This indeed shows that the intention behind Art. 23 is to provide certainty – but does not condescend to specify the degree of certainty intended. One cannot tell whether it was intended that, in proceedings started within the 2-year period, an amendment can be made outside that period whereby, for the first time, a claim for a different remedy or a claim based on a different cause of action for entitlement can be introduced.

Mr Floyd suggested that the degree of certainty intended was merely that some sort of entitlement proceedings had to be started within the 2-year period. Once entitlement proceedings had been started in time, amendments could be made if allowable in accordance with the principles of the lex fori. He pointed particularly to Art. 23.4 as giving an indication of the degree of certainty intended. This says that “the fact that legal proceedings have been instituted shall be entered on the Register of European Patents.” So, submitted Mr Floyd, all a third party could know was that some sort of entitlement proceedings had been started. So, by inference, that was the limit of the certainty to be provided.

I cannot accept that submission. Generally the person to whom legal certainty will matter most is not a third party but the patentee. His legal certainty is that if no claim to sole ownership is made against him in time, he is safe to exploit the invention. Moreover, even as far as third parties are concerned, in practice it will be enough for them to know that there is an entitlement dispute of some sort going on. In commercial reality, once a third party knows that, he will find out from the patentee what the position is if he intends to invest in the invention or purchase the patent. If the patentee refuses to say, the third party will as a commercial matter know enough – probably not to proceed further.

Nor am I impressed by Mr Floyd’s reliance on the words “in accordance with paragraph 1” in Art.23.2. He submitted that this meant that Art.23.1 is to be construed as including a claim merely to joint ownership – that no fundamental distinction is being drawn between a claim to sole and a claim to joint ownership. In other words sub-paragraph 2 is merely there for the avoidance of doubt. I do not think they are apt for this purpose. Much more convincing is Mr Prescott’s submission, which I accept, that they mean in effect mutatis mutandis – a joint owner can make a claim in accordance with the fact that a sole owner can make a claim.

Both sides made submissions about the title of the part in which Art.23 is to be found. The heading reads “Substantive Patent Law” and Chapter I is entitled “Right to a Community Patent”. Mr Prescott suggested that this reinforced his submission – that the provision was dealing with substantive rights, not mere procedure. I do not see how that really assists his case. True it is that Art.23.3 provides a limitation period. That is unusual in that it is an international rule of law whereas limitation periods are normally set by local law and are generally treated as part of the lex fori. But that seems beside the point here. Clearly some of the provisions in the Chapter (e.g. the provision about an entry on the Register) are not concerned with substantive legal rights.

The most telling of Mr Floyd’s points was his submission about a hypothetical situation where a person had made a claim only for sole ownership. Suppose, he asked, the tribunal came to the conclusion that he was only entitled to joint ownership? Could it give effect to that conclusion, or would Art.23 prevent it? If, as Mr Prescott submitted, the two types of right were entirely distinct and you could not claim one out of time, it would follow that in such a case joint ownership could not be awarded. That is absurd. So the Prescott argument must be wrong.

Mr Prescott felt the force of that. His response was that a claim to sole ownership necessarily included within it, if necessary, a claim to joint ownership – the greater includes the less. I accept that submission. True it is that it involves treating any claim to sole ownership as a claim to the two sorts of right in the alternative, but I see no intellectual bar to this. In particular the aim of legal certainty is achieved. If you are assailed by a claim to sole ownership you know you may be dispossessed entirely – the fact that you may end up as a co-owner does not alter things. It is just a less than worse case scenario.

Accordingly I agree with Lewison J that s.37(5) bars the making of a new claim out of time. Insofar as the proposed amended reference claims sole ownership and seeks to set up facts in support of that remedy it is a “reference … made after [the expiry of the two-year period].”

That is not an end of the matter. For Mr Prescott contends that in any event the proposed amended Statement does not actually disclose a valid claim against his clients, Rorer. Following Markem an applicant claiming entitlement (whether sole or joint) must show a reason in law why he is entitled to the patent or a share in it. Here the patentees are Rorer. There is no pleading alleging that Rorer were not entitled to apply for the patent.

Being more specific, the amended pleading first alleges that the invention was made by the Weizmann inventors only. It then says that the invention was communicated to Dr Schlessinger in the form of a draft article. It asserts the communication was in confidence (quite why is not explained, but let that pass). It is then asserted that Rorer applied for the patent and that was done in breach of Dr Schlessinger’s [emphasis added] duty of confidence. It is not asserted that Rorer were in any breach of duty to anyone.

Mr Floyd submitted that an allegation of breach of duty by Rorer was implicit. Dr Schlessinger was a Rorer employee and Rorer were necessarily infected with his breach of confidence. But there are two objections to this. It is not even pleaded that Dr Schlessinger was a Rorer employee. No legal or other link to Rorer is spelt out. Second, even if it is assumed that Dr Schlessinger was an employee there is nothing pleaded which makes Rorer’s application for the patent unlawful or as vesting the rights in the application and subsequent patent in Yeda. No Markem cause of action against Rorer is pleaded.

So I would refuse the amendment also on the more conventional basis that it simply does not disclose a cause of action against Rorer for sole ownership. I recognise that this point was not taken below, but it does not depend on evidence and no injustice is caused by allowing it to be taken now.

I would also refuse the amendment for the same, limitation, reasons that I refer to below. I make no comment on whether the originally pleaded case for joint ownership also fails to make out a cause of action or whether, if it does not, it can be cured or whether a limitation defence applies to it anyway. That forms no part of the appeal or the application which led to the decision below.

That is not an end of the matter. For Yeda also seek to rely on the amendments or some parts of them in support of their original claim for joint ownership. Lewison J held that:

“92.

The amended claims are new claims both for the reasons given by the Hearing Officer and also because in my judgment that is implicit in Article 23 of the CPC. The claims based on breach of confidence and employment rights are also new claims in the sense of raising wholly new causes of action. If, as I consider, Rorer's defence of limitation remains available, there is no useful purpose in allowing the amendments.

Mr Floyd could not find any answer to that. Art. 23 does not override national limitation laws – it supplements them – and as I have said above was almost certainly expected to operate as a bar to entitlement claims coming into operation ahead of national limitation rules. Just because the proceedings are entitlement proceedings and were started in the Patent Office is no reason for disapplying the Limitation Act 1980.

Accordingly I would dismiss this appeal. I would add that, with the benefit of hindsight, it would have been better if the case, with all its complexities of fact and particularly law, had been transferred by the Office to the High Court at an early stage. I adverted to the desirability of transfer in complex cases in IDA v University of Southampton [2006] EWCA Civ 145 at [44 (iii)-(iv)]. This case brings out another advantage – that a tier of potential appeal is removed.

I agree.

I agree that this appeal should be dismissed and only add a few words of my own because I have had considerably more doubts than Jacob LJ. My doubts relate to the true construction of Arts 23 and 24 of CPC. It seems to me that there is something to be said for Mr Floyd’s submission that, provided that entitlement proceedings are commenced within two years of the relevant date, amendments to the proceedings are permitted if allowable in accordance with the provisions of the lex fori. By Art 23.4 the fact of such legal proceedings must be entered in the Register of Community Patents, so that a third party, including the patentee, will know that entitlement proceedings have been started. He will in those circumstances sufficiently be put on notice.

Further, there is I think force in the point to which Jacob LJ has referred in [60]. It can be put in this way. Mr Prescott accepted that, if a claim to sole ownership is made, without any claim to part ownership, within the two year period, the claimant could subsequently bring a claim for part ownership outside the two year period. He did so on the basis that a claim for sole ownership implicitly includes a claim for part ownership. However, if (as Jacob LJ says) a claim for sole ownership under Art 23.1 is a different claim from a claim for part ownership under Art 23.2, it must logically follow that a claim for part ownership is a different claim from a claim for sole ownership. It must further follow that a later claim brought out of time is, on Jacob LJ’s analysis, barred.

On this basis I was inclined to accept Mr Floyd’s submission but, given the opinion of Jacob LJ, who has great experience in this field, and given the fact that Keene LJ agrees with him, I have reached the conclusion that it would not be appropriate to express a dissenting opinion. I too would therefore dismiss the appeal on this ground.

I would not, for my part, have decided the appeal against the appellant on the basis of the point discussed by Jacob LJ in [62] to [65]. This is not a point which was taken before the judge and I am not persuaded that there may not be ways of curing the defects in the pleading which Jacob LJ has identified.

On the other hand I agree with Jacob LJ that the appeal should be dismissed on the basis set out by Lewison J in paragraph 92 of his judgment. I agree with the judge that the claims based on breach of confidence and employment rights are new claims. In those circumstances Mr Floyd was not able to submit that the claims were not time barred under English law.