Prosyscor Ltd v Netsweeper Inc & Ors

Under section 39 of the Patents Act 1977, an employee’s invention belongs to the employee unless it was made in the course of the statutory categories of employment duty. “Normal duties” are assessed realistically. The contract is the starting point, but the court must ask what the employee was employed to do, including the general area in which innovation was expected. Duties may evolve over time. Work does not cease to be within normal duties merely because it is performed at home, outside working hours or on personal equipment, where its nature falls squarely within the employee’s paid role. A claim for breach of confidence must identify the confidential information with sufficient precision and prove both its confidential character and misuse.

Prosyscor claimed ownership of an international patent application and related applications concerning authentication and filtering access to websites. It alleged that Bradley Kite devised the relevant inventions while employed by Netsweeper, and that Netsweeper later misused confidential information disclosed during a proposed collaboration.

The court determined who devised the inventive concepts, whether Mr Kite’s contribution was made in the course of his normal duties under section 39 of the Patents Act 1977, and whether Netsweeper breached a confidentiality agreement.

1. Mr Erb was joint inventor of the claim 1 concept because he devised the authentication-token improvement. On the balance of probabilities, he also devised the inventive concept assumed to exist in claim 11.

2. The relevant principles under section 39 were those identified in LIFFE Administration and Management v Pavel Pinkava [2007] EWCA Civ 217. The statutory categories are mutually exclusive. Normal duties are not determined by substituting tests such as ordinary, day-to-day or primary duties. The contract is the starting point, but it is not conclusive. The question is what the employee was employed to do, assessed realistically and at the date of invention. Duties may expand or contract through the parties’ conduct.

3. Mr Kite was employed to develop software and product capabilities for Netsweeper, whose business concerned filtering access to websites. Devising the claim 1 concept fell squarely within his normal duties. The fact that he worked at home, outside office hours and on his own equipment did not alter that conclusion. The internal posts of the concept on Netsweeper’s confidential intranet supported the inference arising from his employment contract.

4. The Ancillary Agreement could not diminish Mr Kite’s statutory rights under sections 39 and 42 of the Patents Act 1977. It nevertheless supported the conclusion that inventions within the scope of Netsweeper’s business were understood to belong to Netsweeper. No relevant invention was made after Mr Kite’s employment ended.

5. A breach-of-confidence claim must identify the information relied upon. Information that a process works could in theory be confidential, but the claimant had to prove that it was confidential and that it was used in breach of confidence. Prosyscor failed to do so. Netsweeper was therefore entitled to ownership of the PCT Application and was not in breach of the Confidentiality Agreement.

First-instance decision. The judgment states that the Comptroller declined jurisdiction in favour of this court following a reference under section 12 of the Patents Act 1977.