Yeda Research and Development Company Ltd v. Rhone-Poulenc Rorer International Holdings Inc & Ors

The House of Lords held that entitlement to a patent under the Patents Act 1977 is governed by section 7: the true proprietor is the person who is the "actual deviser" of the inventive concept (section 7(3)). A claimant to entitlement need not, as a general rule, found his claim on some separate rule of law such as breach of contract or breach of confidence. The comptroller has a wide discretion under the Patents Rules (rule 100) to allow amendments to the statement of case and a reference under section 37(1) is not converted into a new reference simply by permitting a claimant to amend from part to full proprietorship after the two-year period in section 37(5) has expired. Where the reference was made within the statutory two-year period, allowing such an amendment will not necessarily defeat the purpose of section 37(5).

Background and parties:

• The dispute concerned a European patent granted to Rorer (naming Dr Schlessinger and colleagues as inventors) for combined use of a monoclonal antibody and an anti-neoplastic drug. Yeda, assignee of Weizmann Institute scientists, asserted that the inventive concept originated at the Weizmann and that Yeda was therefore entitled to be proprietor.

Procedural posture:

• Yeda made a reference to the Comptroller under section 37(1)(a) and (c) seeking joint proprietorship and correction of inventorship. After the Court of Appeal's decision in Markem v Zipher, Yeda sought to amend its statement to allege breach of confidence and to seek sole proprietorship. The Comptroller allowed the amendments; Lewison J disallowed them and the Court of Appeal ([2006] EWCA Civ 1094) affirmed. The House of Lords heard Yeda's appeal.

Relief sought:

• Orders to transfer or register the patent in whole or in part in Yeda's name and to correct inventorship.

Issues framed by the court:

(i) Substantive: whether a claimant in entitlement proceedings must base entitlement on some separate rule of law (for example breach of contract or confidence) in addition to proving inventorship under section 7; and (ii) Procedural: whether the Comptroller may permit amendment of a reference after the two-year period in section 37(5), in particular changing a claim from part proprietorship to sole proprietorship.

Reasoning and conclusions:

• The House of Lords held that section 7 is an exhaustive code for entitlement: the central question is who was the "actual deviser" of the inventive concept. If the claimant proves inventorship (or a claim through an inventor under section 7(2)(b) or (c)) he is entitled; it is not necessary to plead some additional rule of law. The decision in Markem was correct on its facts but its broader principle requiring an independent rule of law in all entitlement claims was wrong.
• The court explained that questions such as novelty, prior publication and breach of confidence go to validity rather than to entitlement and should not be conflated with the statutory tests under section 7. Equitable defences (for example proprietary estoppel) remain available to a registered proprietor and may be considered by the Comptroller or the Court.
• On procedure, the House of Lords held that a reference under section 37(1) is properly regarded as the seisin of the Comptroller of the statutory question; an amendment to the accompanying statement does not necessarily create a new reference and rule 100 gives the Comptroller broad discretion to permit amendments. Allowing Yeda to amend within that discretion was not precluded by section 37(5), which limits new references made after the two-year period.

Appeal allowed. The House of Lords held that entitlement to a patent is determined by reference to section 7 of the Patents Act 1977 and requires proof of inventorship (the "actual deviser"); it is not necessary in general to rely on a separate rule of law such as breach of confidence. The Comptroller may, under rule 100, permit amendment of the statement of case and allowing Yeda to amend its claim from part to sole proprietorship did not constitute an impermissible new reference contrary to section 37(5).

Reference to the Comptroller (hearing officer allowed amendments); decision reversed by Lewison J (first instance judicial review) and that judgment affirmed by the Court of Appeal: [2006] EWCA Civ 1094; appeal to the House of Lords allowed and the hearing officer's decision restored.