B.I.C.C. Plc v Burndy Corporation
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE KERR,LORD JUSTICE ACKNER |
| Judgment Date | 13 July 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0713-1 |
| Docket Number | 84/0298 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 July 1984 |
[1984] EWCA Civ J0713-1
Lord Justice Ackner
Lord Justice Kerr
Lord Justice Dillon
84/0298
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION—PATENTS COURT
(MR. JUSTICE FALCONER)
Royal Courts of Justice
MR. T. L. G. CULLEN Q.C. and MR. P. R. K. PRESCOTT (instructed by Messrs. Allison & Humphreys) appeared for the Appellants.
MR. STEPHEN GRATWICK Q.C. and MR. S. J. THORLEY (instructed by Messrs. Bird & Bird) appeared for the Respondents.
This is an appeal against a decision of Falconer J. given on 27th July 1983. The appellants, the Burndy Corporation ("Burndy") who are the first defendants in the action, are a substantial U.S. company particularly concerned in the manufacture and sale of electrical and electronic connectors. The respondents, B.I.C.C. plc("B.I.C.C.") who are the plaintiffs in the action, are a substantial British company particularly concerned with the manufacture and sale of cables and wires.
In 1959, at a time when Burndy, though substantially established in the U.S. and elsewhere, had no significant position in the U.K. market, and B.I.C.C. had not been concerned with electrical or electronic connectors, the two companies decided to form a 50:50 company in the U.K., essentially, as it is put in the evidence, to exploit the know-how and rights which Burndy had in the connector field by the involvement in the U.K. and certain parts of the British Commonwealth of the extensive existing marketing force of B.I.C.C. The company so formed was called initially B.I.C.C.-Burndy Ltd. (referred to as "B.B.L."); though formally joined in the action as a second defendant, B.B.L. has played no part in the trial or at the hearing of this appeal.
In or about 1979, B.I.C.C. and Burndy decided to dissolve their joint relationship so that both companies would be left to compete freely throughout the world in the connector business. Such an unscrambling of a joint relationship which had lasted for about 20 years raised a considerable number of practical problems, and to resolve these a series of, as the judge put it, closely related interlocking and detailed agreements running to some 120 pages was entered into. Basically, there was an offer by B.B.L. to sell its manufacturing business to B.I.C.C. for a substantial sum and, in the event, which happened, that that offer was accepted, four other agreements were to have effect, which are referred to as: (1) the Principal Agreement, (2) the Commercial Agreement, (3) the Assignment and (4) the Ancillary Agreement. On this appeal we are concerned especially with the Assignment, but it is relevant to note that the Commercial Agreement provided, among other things, for the continued sale of goods by Burndy to B.I.C.C. and by B.I.C.C. to Burndy on terms which were fixed in considerable detail by the Commercial Agreement.
The Assignment, which is dated 2nd November 1981 and was made between B.B.L. (1), B.I.C.C. (2) and Burndy (3), was concerned with patent and other rights included in the definition of "the joint rights" hereinafter mentioned. The background to the Assignment was that, during the continuation of the joint relationship, numerous patent applications had been made and patents had been acquired in the name of B.B.L., mainly in the U.K. but also elsewhere. Since these patents and patent applications depended in large part on the know-how and experience of Burndy and on research done by Burndy, it was not appropriate that they should be acquired by B.I.C.C. absolutely, with the manufacturing activities of B.B.L., to the entire exclusion of Burndy. What was arranged was therefore, basically, that these various rights should be vested in B.I.C.C. and Burndy jointly with complete freedom for each of them to use and exploit the rights. It was for this purpose that the Assignment was entered into. The important clauses for the purposes of this appeal are clauses 9 and 10—particularly clause 10—but it is convenient to summarise all the major provisions of the document.
Clause 1 contains a definition of "the joint rights" as meaning, in brief, all U.K. and overseas patents and registered designs and applications therefor, copyright in literary and artistic work and all other rights in inventions and discoveries, including information as to improvements, processes, formulae, trade secrets and other know-how relating thereto which were part of the assets of B.B.L. and used by it for the purposes of its business.
By clause 3.1 in consideration of a payment by B.I.C.C. which appears to have been of no special significance, B.B.L. assigned to B.I.C.C. and Burndy jointly and absolutely all B.B.L.'s right title and interest to and in the joint rights. By Clause 7 these were to be held by B.I.C.C. and Burndy in equal undivided shares.
By clause 8 B.I.C.C. and Burndy agreed that each of them should be entitled:
(a) to assign its share in or grant non-exclusive licences in respect of any of the joint rights to any person or persons without the consent of the other of them—and
(b) to exercise or exploit in any other manner any of the joint rights for its own profit without accounting to the other of them.
Clause 9 contained mutual covenants between B.I.C.C. and Burndy as follows:
(a) not to do or omit to do or permit any act or thing whereby the protection granted by the law of any jurisdiction in which any of the joint rights subsisted should be in any way lessened or avoided.
(b) (i) to notify the other of any infringement or threatened infringement by a third party of or proceedings for revocation, cancellation or rectification affecting any of the joint rights.
(ii) to consult with the other regarding mutual commencement of proceedings to prevent such infringement or to defend such proceedings for revocation, cancellation or rectification and if agreed to institute or defend such proceedings at their joint expense and for their joint benefit, but so that if they did not agree on the joint institution or joint defence of proceedings either might act at its own expense and retain for its own benefit any damages costs and other compensation recovered.
(c) not to make any application or motion to amend the specification of any patent comprised in the joint rights without the other and that the costs of any such joint application or motion should be borne by the parties in equal shares, and
(d) to consult with the other regarding the registration of or the extension of the term of any of the joint rights and if agreed to take any proceedings for such registration or extension at their joint expense but so that, if one of the parties should be unwilling to take such proceedings, it should assign to the other without payment all its right title and interest to and in such of the joint rights to which such proceedings would relate and should do all other things required by the other party to obtain and enjoy such registration or extension and the full sole and exclusive benefit thereof.
Clause 10 provided by sub-clause (i) that B.I.C.C. should hold all documents relating to the joint rights and there was the usual acknowledgement for production and undertaking for safe custody.
Sub-clauses (ii) and (iii) of clause 10 then provided as follows:
"(ii) BICC shall be primarily responsible for the processing and maintaining of applications and patents forming part of the Joint Rights and the making of payment of costs and fees in respect thereof (including the normal and reasonable charges of BICC's Patent and Licensing Department) subject to reimbursement of one half thereof by Burndy and BICC shall give Burndy sufficient notice of any application or motion which it may be necessary or desirable to make under sub-clauses (c) or (d) of Clause 9 hereof
"(iii) If BICC shall fail to pay all or Burndy fail to reimburse BICC one half of the costs and fees incurred by BICC under paragraph (ii) above in the case of BICC when payment is due and in the case of Burndy within 30 days of a written request therefor the other party not in default shall be entitled to require the party in default to assign to it all the rights and benefits in any patent or application in respect of which such payments were due and at the request and cost of such other party the assigning party shall if necessary furnish such information and execute and do all such documents and acts as may reasonably be required to enable such other party to obtain and enjoy the full sole and exclusive benefit thereof".
It is B.I.C.C.'s case in this action, which the learned judge has upheld, that Burndy failed to reimburse one half of the costs and fees incurred by B.I.C.C. under clause 10(ii) in respect of a large number of patents and patent applications included in the joint rights within 30 days of written request as prescribed by clause 10(iii) and that B.I.C.C. is accordingly entitled under clause 10(iii) to an assignment of all Burndy's rights and benefits in such patents and applications. It is common ground and not in doubt that Burndy never intended to give up any of its rights in any of the patents or patent applications, but it is claimed by B.I.C.C., and was held by the judge, that Burndy has irrevocably lost its rights by failing to pay timeously the relatively small amounts of costs and fees involved.
Before, however, I attempt to summarise the arguments on each side, I must briefly set out the remaining facts.
During the subsistence of the joint relationship before the Assignment was entered into, there had been fees and expenses incurred by B.I.C.C. for the maintenance of certain overseas patents...
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