Finecard International Ltd (t/a the Ninja Corporation) v Urquhart Dyke & Lord (A Firm) & Anor

For the purposes of a summary judgment application, a causation defence may be struck out where the defendant’s alleged intervening act could not reasonably be treated as breaking the chain of causation. An intervening act need not itself be negligent. The question is whether, on the particular facts, it was so powerful that the defendant’s original wrongdoing ceased to be a cause and became merely part of the surrounding circumstances.

Where a patent right is asserted for a particular period, the transaction, instrument or event which creates the right relied upon must be registered under section 68 of the Patents Act 1977. It is insufficient to rely on an earlier, expired or superseded licence. The statutory purpose is to give the world notice of rights asserted in patents.

The claimant brought proceedings against its former patent and trade mark agents and a partner, alleging loss caused by their delayed registration of a patent licence. The defendants admitted breach of duty but pleaded that the claimant’s own legal presentation of an earlier infringement claim, including failure to rely on New York law, broke the chain of causation.

The claimant applied under CPR 24 for summary dismissal of that causation defence. The central questions were whether the proposed arguments about the effect of the 1997 and 1999 licences could have altered the result of the infringement remedies hearing, and whether the claimant’s conduct could constitute a causative intervening act.

1. Application granted. The defendants’ causation defence had no reasonable prospect of success and was struck out under CPR 24.
2. The defendants’ proposed New York law evidence would not have altered the result. Even if the 1997 licence had not been retrospectively extinguished by the 1999 licence, the 1999 licence was the instrument which entitled the claimant to sue for infringements after the relevant date. It therefore had to be registered under section 68 of the Patents Act 1977.
3. Section 68 establishes a registration regime intended to place the world on notice of asserted patent rights. The relevant transaction, instrument or event is the one creating the right relied upon for the period in question. The construction advanced by the defendants would require the addition of the word first to the statutory reference to the person who becomes an exclusive licensee and would produce irrational results.
4. For summary judgment purposes, the claimant was entitled to assume the facts and law advanced by the defendants. Even on that basis, the failure to register the 1999 licence exposed the claimant to uncertainty and potential loss. Registration was the obvious protective step, given the ease of registration and the severe statutory consequences of non-registration.
5. An intervening act need not be negligent. The court must examine its effect on the original wrongdoing and decide whether it was sufficiently powerful to mean that the defendant’s conduct was no longer a cause, but merely part of the surrounding circumstances. The claimant’s conduct in presenting the earlier case did not satisfy that test on the pleaded facts.
6. The ruling did not finally determine quantum. The defendants’ arguments were not necessarily hopeless, so damages might later require assessment on a loss-of-chance basis and might require consideration of any contribution by the claimant’s former legal advisers.

First-instance decision on an application under CPR 24. No appellate history is stated in the judgment.