Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd

Breakout Barrier Release Systems Pty Ltd ("Breakout") sued Breakout Barrier Release Systems Australasia Pty Ltd ("Breakout Australasia") for breaches of contract and equity. Breakout and Breakout Australasia were related companies engaged in the manufacture of products using patents for a barrier release lock. Breakout alleged that Breakout Australasia breached a Patent License Agreement ("PLA") by developing and manufacturing competing products without Breakout's consent. Breakout further alleged that Breakout Australasia breached fiduciary duties owed to Breakout.

The court had to determine whether the Breakout Locks and the Sanctum Locks were products covered by the PLA or were improvements made by Breakout Australasia. The court also needed to decide if the Breakout Locks and the Sanctum Locks were of the same description, performed the same function or were similar to the Barrier Release Lock. Additionally, the court had to consider whether the PLA was subject to a condition precedent, namely the grant of a Standard Patent, and if so, whether obligations under the PLA were suspended pending the grant of the Standard Patent. The court also needed to determine if Mr Watmough owed fiduciary duties to Breakout and whether any such duties were nullified by the PLA and if they were breached.

The court found that the Breakout Locks and the Sanctum Locks were not products covered by the PLA. They were considered to be improvements made by Breakout Australasia. The Breakout Locks and the Sanctum Locks were neither of the same description, performing the same function, nor of a similar description to the Barrier Release Lock. The court determined that the PLA was not subject to a condition precedent and that the obligations under the PLA were not suspended pending the grant of the Standard Patent. The court also concluded that Mr Watmough did not owe fiduciary duties to Breakout or that any such duties were nullified by the PLA. The court held that there were no breaches of fiduciary duties.

The court found in favour of Breakout Australasia and dismissed Breakout's claims. It was ordered that Breakout pay Breakout Australasia's costs of the proceeding.