COMPTROLLER'S POWER PRESERVED; NEW ISSUE OF ECONO-COMP JOURNAL

1 Paxman vobiscum, Mr Comptroller

The prowling IPKat has found a little patent gem on BAILII: Paxman v Hughes [2005] EWHC 2240 (Pat), another early decision from newly-appointed Patents Court judge Mr Justice Kitchin (dated Friday 21 October) on the powers of the Comptroller of Patents.

Above: testing out the new drinks cooler

Paxman and Hughes were joint proprietors of a patent for a type of drinks cooler. They formed a company, Trim Cool, to sell the patented coolers. After the parties fell out, Paxman sought an order permitting him to grant licences to certain specified third parties to make and supply the coolers. Hughes objected that the Comptroller of Patents had no jurisdiction to make such an order because (i) the terms of the order would require an extra-territorial jurisdiction, (ii) the comptroller had no general jurisdiction to permit a co-proprietor to grant commercial licences to third parties against the wishes of another co-proprietor and (iii) Paxman's fiduciary duties as a director of Trim Cool stopped him even asking the Comptroller for such an order.

At a preliminary hearing Mr Probert, for the Comptroller, struck out the proceedings. In his opinion (i) the Comptroller had no jurisdiction to order the licensing of a foreign patent; if the application were not struck out, Paxman would need to amend his application to make it clear that the relief he sought was confined to the United Kingdom; (ii) the Comptroller did have jurisdiction, under the Patents Act 1977, s.37, to determine whether a licence should be granted to a third party in the circumstances of this case but (iii) the order Paxman wanted would inevitably result in his breaching his duties as a company director.

Below: the Comptroller's mission statement

Kitchin J allowed Paxman's appeal. He held that

* the circumstances of the case and the fact that Paxman's application was based on his status as co-proprietor of the patent, not as a director of Trim Cool, Mr Probert was wrong to conclude that the order would automatically constitute authorisation to do something that would inevitably amount to a breach of his fiduciary duties;

* it was plain from s.36 of the Patents Act 1977 that co-proprietors should not have the right to grant licences to third parties. Nevertheless, s.36 was expressly subject to s.37, which gave the Comptroller discretion to order licences in favour of third parties where appropriate. It In other words, where co-proprietors are deadlocked and could not exploit an invention themselves, one or other should be entitled to apply to the Comptroller and ask him to break that deadlock by ordering that a licence be granted to a third party.

* on such an application, the Comptroller had a wide discretion to grant such a licence, He could exercise it only on reasonable grounds and any order made had to protect the interests of the co-proprietor.

The IPKat applauds the judge's succinct reasoning in this decision, which lays open the entirely reasonable and pro-commercial basis of ss 36 and 37 of the 1977 Act. Merpel adds, I'm still not making any silly puns about the kitchin (sic) being the appropriate place for a drinks cooler ...


2 Competition Law and Economics

As autumn's leaves turn gold and rustle gently to the ground, the IPKat is briefly reminded of the summer when he reviews the June 2005 issue of the Oxford University Press quarterly Journal of Competition Law & Economics which has recently squeezed in through his letter box.

Moaning as usual about how little of the subject matter seems to address intellectual property rights, the IPKat has to concede that there is a wider picture of which IP forms just one small corner. However, in the absence of anything that's IP-specific, Merpel notes that 'Class Certification in the Microsoft Indirect Purchaser Litigation' by William H. Page (left) is not only really very interesting but can even be made relevant to IP policy enthusiasts. Class actions, whether brought by IP licensees or by purchasers of monopoly products, represent an absolute Amazon basin of unexplored legal and commercial issues arising from the attempts to balance the IP owner's power with the interests of those who are subject to it.