Microbeads A.G v Vinhurst Road Markings Ltd
Jurisdiction | England & Wales |
Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL |
Judgment Date | 08 November 1974 |
Judgment citation (vLex) | [1974] EWCA Civ J1108-1 |
Date | 08 November 1974 |
Court | Court of Appeal (Civil Division) |
[1974] EWCA Civ J1108-1
In The Supreme Court of Judicature.
Court of Appeal.
Appeal by defendants from order of Mr. Justice Mars-Jones on 18th December, 1973.
Revised
The Master of the Rolls (Lord Denning),
Lord Justice Roskill and
Sir John Penhycuick.
Mr. W. A. MACPHERSON, Q. C., and MDWIN-J. GLASGOW (Instructed by Messrs, Rendall & Co.) appeared on behalf of the Appellant Defendants.
Mr. A. ROGERS (instructed by Messrs. Frere Cholmeley & Co.) appeared on behalf of the Respondent Plaintiffs.
This case raises a new and interesting point on the sale of goods. An English company bought some special machinery from a Swiss company. They used the machines for making white lines on roads. Two or three years later another English company, who owned a patent, came along and said that these machines infringed their patent. They sought an injunction to prevent the use of the machines. Have the English company, who bought the machines, a cause of action against the Swiss company who sold them?
The dates are important. I will start with the ownership of the patent. They are an English company, Prismo Universal Ltd., who carry on business near Crawley in Sussex. They hold a patent for an apparatus for applying markings on roads. It is done by the machine which carries a spray gun and a quantity of thermoplastic material. This gun sprays the material on to the roads so as to make a white and yellow liner.
For some time the invention was kept secret. The application for a patent was filed on 28th December 1966. The complete specification was filed on 28th December 1967. The Patent Office made their various examinations. Eventually on 11th November, 1970, the complete specification was published. It was on that date that it became open to the world to learn about it. It was only after that date that the patentee had any rights or privileges in respect of it, see section 13(4) and 22 of the Patent Act, 1949- On 12th January, 1972, letters patent were granted to Prismo Universal Ltd. in respect of the invention. It was only then that the patentee was entitled to institute proceedings for Infringement, see section 13(4) of the 1949 Act.
Now, before that invention was made public an English company called Vinhurst Road Markings Ltd. bought some road marking machines and accessories from a Swiss company calledMicrobeads A. G. These machines were sold and delivered to Vinhurst between January and April 1970, that is, some months before the Prismo specification was published in November 1970. The price of the machines and accessories was nearly £15.000, of which Vinhurst paid £5,000, leaving the £10,000 balance to be paid. The buyers, Vinhurst, did not know anything about the patent. They had no idea that the machines might be infringing machines. They took them in good faith and used them. But they found the machines very unsatisfactory. They were dissatisfied. They did not pay the balance of the price.
On 30th November 1970 the sellers, the Swiss company, sued Vinhurst for the balance of £10,000 owing for the machines. At first Vinhurstput in a defence saying that the machines were not reasonably fit for the purpose of marking roads.
But then in 1972 the Prismo company came down on the Vinhurst company and said these machines (supplied by the Swiss company) infringed their patent. Thereupon the Vinhurst company amended their defence so as to set up the infringement as a defence and counterclaim. The point was set down as a preliminary issue. The Judge found that the sellers, the Swiss company, were guilty of a breach of contract in this respect. The buyers appeal to this Court.
The preliminary issue was directed on these assumptions:
- (1) That the letters patent were valid.
- (2) That the machines sold by the Swiss company to the English buyers were such as to fall within the scope of the claims in the specification.
- (3) That the property in each of the machine was to pass prior to November 1970.
On those assumptions the point of law was whether there was any breach of contract on the part of the Swiss companyunder section 12( 1) or 12(2) of the Sale of Goods Act 1893 having regard to the dates of filing and publication of the specification and of the grant of the patent.
Before the Judge most of the discussion was on section 12(1). It says that "there is an implied condition on the part of the seller that he has a right to sell the goods". That means that he has, at the time of the sale, a right to sell the goods. The words a "right to sell the goods" mean not only a right to pass the property in the machines to the buyer, but also a right to confer on the buyer the undisturbed possession of the goods, see Nlblett, Ltd. v. Confectioners Materials Co Ltd. 1921 3 K. B. at page 402 by Lord Justice Atkin. Now, at the time of the sale in January 1970 the Swiss sellers were able to. confer those rights. They had made the machines out of their own materials and they could undoubtedly pass the property in them to the buyers. Moreover there was no one at that time entitled to disturb their possession. There was then no subsisting patent. The specification had not been published. No one could sue for Infringement. The buyers could, at that time, use the machines undisturbed. So I agree with the Judge that there was no breach of section 12(1).
Now I turn to section 12(2). It says that "thereis an Implied warranty that the buyer shall have and enjoy quiet possession of the goods."
Taking those words in their ordinary meaning, they seem to cover this case. The words "shall have and & enjoy" apply not only to the time of the sale but also to the future. "shall enjoy" means in the future. If a patentee comes two or three years later and gets an injunction to restrian the use of the goods, there would seem to be a breach of the warranty.
But it is said that there are limitations on the ordinarymeaning. Such limitations being derived from the civil law (as suggested by Benjamin on Sale) or from conveyancing oases.
One such limitation is said to follow from the words of Lord Ellenborough in Howell v. Richards (1809) 11 East 633 at page 642, when he said: "The covenant for title is an assurance to the purchaser, that the grantor has the very estate in quantity and quality which he purports to convey; viz., in this case an indefeasible estate in fee simple. The covenant for quiet enjoyment is an assurance against the consequences of a defective title, and of any disturbances thereupon."
Mr. Rogers said that Lord Ellenborough there meant a defective title existing at the time of the sale. The covenant, he said, did not apply to a defective title which only appeared some time after the sale. The defect here appeared after the sale, it entered in November 1970 when the complete specification was published.
The other limitation, derived from the conveyancing cases, was that the covenant for quiet enjoyment protected the purchaser or tenant only from the acts or operations of the vendor or lesser and those claiming under him, but not against the acts or operations of those claiming by title paramount, see Jones v. Lavington (1903) 1 K. 3. 253. Mr. Rogers submitted that that conveyancing rule applied to section 12(2) also. Here the claim by the patentee was by title paramount.
There is one case which supports this contention. It is a decision of Lord Russell of Killowen, Lord Chief Justice, in 1895 when he was on the Northern Circuit. It is Montforts v. Marsden (1895) 12 Patent Cases 266. But that case was disapproved by this Court in Niblett, Ltd. v. Confectioners' Materials Co. Ltd. (1921) 2 K. B. 387, and must be taken to beoverruled. Afterwards in Mason v. Burningham (1949) 2 K. 3. at page 563 Lord Greene, Master of the Rolls, made it clear that the conveyancing oases should not be applied to section 12 of the Sale of. Goods Act. He said:
"It is to be observed that in the language used in the Sale of Goods Act, 1893, there is no exception for any disturbance by title paramount. The words are as I have quoted them, that the buyer shall have and enjoy quiet possession of the goods. I invited Mr. O'Sullivan to refer us to any authority that would justify the insertion into that statutory phrase of an exception in the case of disturbance by title paramount, but he was unable to do so, and, in the absence of some such authority, I ventured to inform him in the course of the argument that I would not be prepared to introduce any such gloss on the language of the statute. He did not refer us to any authority, and. in the absence of any authority, I can only express my opinion that the statute means what it says and is not to have any such gloss put upon It."
I would follow the guidance of Lord Greene. Even if the disturbance is by title paramount - such as by the patentee coming in and claiming an Injunction to restrain the use of the machine - there is a breach of the implied warranty under section 12(2).
But Mr. Rogers' main point before us - a point which the Judge accepted - was that the defects of title must be present at the time of the sale. That is why so much turned on the date of publication, 11th November, 1970. After that date the Swiss sellers could, by taking reasonable steps, have known that their machines were infringing machines and that they could not have a right to use them. So, if they had sold after 11th November, 1970, they would be in breach of section 12(2) and of 12(1) also. But Mr. Rogers says that before that datethe Swiss sellers may have been perfectly innocent. Nothing had been published about this patent. The machines were sold in January and April 1970. There was no defect in title existing at the time of the sale. Accordingly Mr. Rogers submitted...
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