Mark Richard Jones v Irmac Roads Limited

Under the Patents Act 1977, the right to apply for a patent is a proprietary right. It falls within section 30(6)(a) and may be assigned only in writing. An oral agreement may nevertheless transfer the equitable interest in that right.

In construing an option agreement, “trading activities” means buying or selling goods or services, extended where appropriate to orders or conduct reasonably demonstrating an ability to exploit the invention. Preparatory commercial activity alone is insufficient. A defective proposed completion date does not invalidate an option notice where the agreement imposes no obligation to specify such a date and the contractual completion period remains ascertainable.

The claimant was the sole inventor of an improved infra-red road-heating system. The defendant was the registered proprietor of the resulting patent, although the claimant’s name appeared as an inventor.

The claimant sought a declaration under section 37 of the Patents Act 1977 that he was the true proprietor. He had agreed to transfer intellectual property rights to a company in return for a share option, but later obtained an option requiring the company to assign the rights back if it had not commenced and continued trading within six months of the patent application number being allocated.

The central issues were whether the right to apply for a patent had been assigned, whether the trading condition had been satisfied, and whether the claimant’s option notice was valid.

1. Proprietorship. The claim succeeded. The claimant was entitled to a declaration that he was the true proprietor of the patent under section 37 of the Patents Act 1977.
2. Nature and assignment of the right. On making an invention, the person entitled under section 7 acquires an exclusive right to file a patent application. That right is an inchoate proprietary interest distinct from rights in a later application or patent. The statutory definition of “right” in section 130(1) includes it. Section 30(6)(a) therefore requires an assignment of the right to apply for a patent to be in writing. No written assignment had been made to IL, so the claimant retained the legal interest. The agreement and subsequent consideration transferred the equitable interest to IL.
3. Construction of “trading activities”. Applying ordinary contractual construction principles, the phrase meant buying or selling goods or services. In the commercial context, it included orders for the patented heater because these could demonstrate an ability to exploit the invention. Preparatory steps, including business planning, marketing material, a website, investor discussions and a video, did not amount to trading activities, even cumulatively. The contractual condition was therefore unsatisfied, making the option exercisable.
4. Option notice. The notice was valid despite specifying a completion date which pre-dated service. The agreement required completion within seven to 21 days after service but did not require the notice to specify a date within that period. The stated date was an obvious mistake and merely a proposal. No alternative date was agreed, so the contractual completion window remained operative. Service transferred the equitable interest back to the claimant and imposed on IL an obligation to assign the legal interest.
5. The defendant’s later patent application was therefore made by a person not entitled to apply for the patent. The claimant held both legal and equitable interests in the right to apply and was the true proprietor of the granted patent.