Potter v Broken Hill Proprietary Co Ltd

Potter brought an action in New South Wales against Broken Hill Proprietary Co Ltd for infringement of letters patent granted in New South Wales. The defendant argued that the letters patent were invalid because they were granted pursuant to an Act of the New South Wales Parliament which, it was contended, had no power to grant such patents extraterritorially. The case was heard by the High Court of Australia.

The central legal issue before the High Court was whether the New South Wales legislature had the power to grant letters patent for inventions that had effect beyond the territorial limits of New South Wales. This involved considering the nature of letters patent as an act of sovereignty and the extent of the legislative powers of a colonial legislature under the British Crown.

The Court held that the grant of letters patent is an act of sovereignty, and the power to grant such patents is limited to the territory over which the sovereign has jurisdiction. Therefore, the New South Wales legislature could only grant patents that had effect within New South Wales. The Court reasoned that the Patents Act 1899 (NSW) did not confer any extraterritorial operation on the patents granted under it. Consequently, the letters patent relied upon by the plaintiff had no force or effect outside New South Wales, and the defendant could not be held liable for infringement within New South Wales based on acts done outside that territory.

The High Court found in favour of the defendant, holding that the letters patent were invalid in so far as they purported to grant exclusive rights outside New South Wales. The plaintiff's action for infringement was dismissed.