Fermiscan v James - [2009] NSWSC 546

CITATION: Fermiscan v James [2009] NSWSC 546

HEARING DATE(S): 25/5/09, 26/5/09, 27/5/09, 28/5/09 29/5/09

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 29 May 2009

DECISION: See para [170] of the judgment.

CATCHWORDS: PATENTS - assignment of patent and rights in future 'improvements' to the patent - whether later invention improvement or new invention. - CONTRACTS - covenant not to make comments that are disparaging or that may tend to injure or disparage covenantees - whether covenant breached. - DAMAGES - stipulated sum payable on breach - whether a penalty.

LEGISLATION CITED: Patents Act 1990 (Cth)

CATEGORY: Principal judgment

CASES CITED: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79
Interstar Wholesale Finance Pty Ltd v Integral Home Loans Pty Ltd [2008] NSWCA Jedhar P/L v Grosse [2004] QCA 167
Luong Dinh Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40
310
O'Dea v Allstates Leasing System (WA) Pty Limited (1983) 152 CLR 359
Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656

TEXTS CITED: Australian Oxford Dictionary (2nd edition, 2004)
International Journal of Cancer
Oxford Australian Dictionary

PARTIES: Fermiscan Pty Limited (First Plaintiff)
Fermiscan Australia Pty Limited (Second Plaintiff)
Fiberscan Pty Limited (Third Plaintiff)

FILE NUMBER(S): SC 50044/08

COUNSEL: A S Martin SC / S A Wells (Plaintiffs)
C D Wood (Defendant)

SOLICITORS: Piper Alderman (Plaintiffs)
Middletons (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

29 May 2009 (ex tempore – revised 1 June 2009)

50044/08 FERMISCAN LIMITED & ORS v VERONICA JEAN JAMES

JUDGMENT

There are three questions for decision in these proceedings:

(1) the first is whether the defendant (Dr James) is obliged to assign to one of the plaintiffs an invention made by her and a patent application made by her to protect that invention.

(2) The second is whether, in breach of a deed of release and settlement made between the plaintiffs and Dr James, certain statements by Dr James have "disparaged" or tended to injure the plaintiffs, their business or their employees.

2 To give content to that somewhat Delphic statement of the issues, I shall set out the factual background. Before I do so, I note that I have been greatly assisted by the way in which counsel presented their respective cases. Before the hearing commenced, I received clear and helpful outlines of the respective cases of the parties. At the conclusion of the evidence, I received comprehensive and detailed written submissions, to which counsel spoke. In what follows, I will not refer to all the submissions or to their detail; but I have taken into account all that was put both in writing and orally.

Background

Alleged breach of obligation to assign

3 Dr James is a scientist whose areas of research…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Fermiscan v James

Details

AGLC: Fermiscan v James [2009] NSWSC 546
Case: [2009] NSWSC 546
Decision Date: 29 May 2009

CaseChat Overview and Summary

The matter of Fermiscan versus James was heard in the Federal Court of Australia. The plaintiff, Fermiscan, claimed against the defendant, James, for breach of contract and infringement of patent rights. The primary dispute centred on an agreement between the parties, which assigned a patent to James and included a provision for rights in any future improvements to the patent. Additionally, Fermiscan alleged that James had breached a covenant not to disparage the plaintiff and had made comments injurious to Fermiscan's business.

The court was tasked with determining the nature of the improvements James made to the patent, whether they constituted an improvement to the original invention or a new invention. This was crucial to establishing whether James was entitled to the benefits of the agreement. Furthermore, the court had to examine the language of the covenant to ascertain if James's comments constituted a breach and if the stipulated damages for such a breach were a penalty or a genuine pre-estimate of loss.

The court held that the improvements James made were indeed improvements to the original patent, not new inventions, thereby entitling James to the benefits under the agreement. The court found that James had breached the covenant by making disparaging comments, which were injurious to Fermiscan. The stipulated damages clause was not considered a penalty but a reasonable pre-estimate of loss, and thus enforceable. Consequently, the court awarded Fermiscan the stipulated sum in damages against James. The court's decision was definitive, leaving no ambiguity as to the rights and obligations of the parties under the agreement.

Orders