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Saturday, 20 October 2007

Pouring oil on troubled waters; Meridian madness strikes software contract

Now here's a curiosity - a Court of Appeal for England and Wales decision on Thursday 18 October in a patent dispute, in which the court cites no law at all. It's Novartis AG v IVAX Pharmaceuticals UK Ltd [2007] EWCA Civ 971, in which the three-man appellate tribunal (Lords Justices Buxton, Jacob and Hughes) dismissed an appeal against the decision of Mr Justice Pumfrey that Novartis' patent for a pharmaceutical composition for an active ingredient, an 'oil-in-water microemulsion', was not infringed by the Ivax Equoral product in which at least 86% of the active ingredient was carried by particles that were larger than microemulsion size. According to Novartis, the 14% of active ingredient carried by particles of microemulsion size could not be regarded as de minimis and that the microemulsion was present, even though it had been mixed up with emulsion, Ivax's product being not hugely efficient but sufficiently okay for commercial purposes.

The Court of Appeal (for whom Jacob LJ delivered the main judgment) dismissed the appeal. The fundamental question was that of how a skilled person have understood the language used by the patentee. Whether Ivax's product was inefficient but sufficiently effcient for commercial purposes was not the issue since Equoral was mainly comprised of all that Novartis was actually trying to avoid since at least 86% of the active ingredient was carried by particles that were larger than microemulsion size.

IPKat post on the first instance decision here



So far not yet available on BAILII but spotted by LexisNexis Butterworths' subscription-only service is Meridian International Services Ltd v Richardson and others, a Chancery Division for England and Wales decision from Robert Ham QC, sitting as a deputy High Court judge, on Thursday 18 October.

Meridian was a company that provided software solutions. The first defendant Richardson, who used to work for Meridian, was a shareholder in the second defendant company; a third defendant, a computer programmer, had also worked for Meridian from time to time. Meridian sought to push on with a project to design and develop a piece of software known as StratX, for an international corporate client with which, it seems, no formal contract had yet been entered into. During 2005 Meridian engaged both Richardson and his company for that purpose. A variety of problems on both sides led to a breakdown in relations between the parties around the end of that year, without the project having got underway. During January 2006 an interchange of correspondence resulted in work by the defendants commencing, but on terms that could not be described as being anything other than nebulous. It was not until April 2006 that Meridian signed the contract with its client, warranting that it was the owner of all relevant IP rights in StratX. Subsequently the third defendant assigned his rights to Richardson. Once Meridian realised what happened, it sought to establish that there was either an express or implied term of the January agreement that the intellectual property rights would be assigned to it.

Robert Ham QC dismissed the claim on the basis that, on the evidence, it could not be proved that Meridian had the benefit of either an express or an implied term that it was entitled to the IP in StratX, with the consequence that both the legal and the equitable rights in that software remained with the defendants.

The IPKat remains astonished that the project can have been allowed to get so far without legal advice relating specifically to the IP issues. Merpel says, it just goes to show -- every £1 saved by not instructing a transactional lawyer in the first place is worth £10 in the pocket of a litigation lawyer later".

An apparently unrelated StratX computer application here
Other Meridian Internationals here (Center), here (School), here (Group)

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