Kerr v Laurence Shaw & Associates Ltd (t/a Laurence Shaw & Associates (In Liquidation))

A professional patent agent must take reasonable steps to protect a client’s position in countries where the client has expressed a continuing interest. This includes maintaining reminders for applicable deadlines or clearly explaining the final deadline and the need for a positive instruction.

Negligence alone does not establish liability. The claimant must prove that the breach caused actionable damage. Where the lost opportunity concerns a patent application, damage is assessed by reference to the value of the opportunity to pursue and market the patent, taking account of validity, prior art, revocation risk and possible avoidance by competitors.

The claimant alleged that the defendant patent agents negligently failed to secure a Canadian patent application for an inflatable body-armour and life-jacket invention. He sought liability and an inquiry as to damages.

The court found that the defendant should have opened a Canadian file or given explicit notice of the extended Canadian deadline. The central issues were whether that omission caused the claimant to lose a real patent opportunity and, if so, whether there was a reasonable prospect of substantial rather than nominal damage.

1. Professional standard. The defendant’s conduct fell to be measured against that of the reasonably competent patent agent, having regard to professional standards, as stated in Martin Boston & Co v Roberts [1996] PNLR 45.
2. Duty concerning deadlines. A patent agent who is retained to obtain protection in a country where the client has expressed a continuing interest must operate an adequate reminder system or give clear and explicit notice of the final deadline and of the need for further instructions. On the evidence, the claimant’s letter of 8 August 2001 required one of those steps.
3. Causation. The claimant failed to prove that he would have filed the Canadian application before the extended deadline. His financial difficulties and contemporaneous conduct showed that he had consciously decided not to proceed. The omission therefore caused no damage, and the claim failed.
4. Damages in the alternative. The court applied the approach in Andrew Master Hones Ltd v Cruikshank & Fairweather [1981] RPC 389. In a negligence claim concerning a lost patent opportunity, the relevant asset is the market value of the right to pursue the application, assessed by reference to prior art, the likelihood of opposition or revocation, and the possibility of avoiding infringement. The court need not quantify damages before ordering an inquiry, but there must be a real prospect of substantial rather than merely nominal damage.
5. The claims relied on were admitted to be invalid over prior art. The claimant also failed to show that he would have pursued the proposed amended claims. Even on those assumptions, there was no sufficient case for an inquiry. The claim was dismissed.