Societe Rateau and Rene Anxionnaz v Rolls-Royce Ltd and The De Havilland Aircraft Company Ltd

JurisdictionEngland & Wales
JudgeLORD JUSTICE WILLMER,LORD JUSTICE DANCKWERTS,LORD JUSTICE DIPLOCK
Judgment Date18 December 1964
Judgment citation (vLex)[1964] EWCA Civ J1218-2
CourtCourt of Appeal
Date18 December 1964

[1964] EWCA Civ J1218-2

In The Supreme Court of Judicature

Court of Appeal

Before:

Lord Justice Willmer,

Lord Justice Danckwerts and

Lord Justice Diplock.

Societe Rateau and Rene Anxionnaz
and
Rolls-Royce Limited and The De Havilland Aircraft Company Limited

MR K. JOHNSTON, Q. C. and MR G. TOMPKIN. (instructed by Messrs. Bristows, Cooke & Carpmael) appeared on behalf of the Appellants (Defendants).

MR G. ALDOUS, Q. C. and MR P. BEVAN. (instructed by Messrs. Beaumont & Son) appeared on behalf of the Plaintiffs (Respondents).

LORD JUSTICE WILLMER
1

We have before as appeals in two actions from an Order made by Mr. Justice Lloyd-Jacob on the 29th July, 1964, whereby he dismissed an application by the Defendants for leave to amend their Defence. Both actions relate to alleged infringements of certain Letters Patent in connection with the manufacture of aeroplane engines. In the two actions different infringements are alleged, but the question under appeal relates equally to both actions, and I need not refer to them separately.

2

In both actions the pleadings, as they stand at present, are in what I think I can fairly describe as conventional form

3

The Statement of Claim alleges by paragraph 1 that the Plaintiffs are the registered proprietors of certain Letters Patent. Paragraph 2 alleges that by Order of the Comptroller General dated the 13th February, 1957, the term of each was extended by a period of six years and six months. Paragraph 3 alleges an amendment of the complete specification in each case in accordance with the decision of the Comptroller General of the 8th January, 1960. Paragraph 4 alleges the validity of the respective Letters Patent. Paragraph & alleges infringement. That is followed by a prayer for the normal relief appropriate in such a case, namely, an injunction, an enquiry as to damages and an order for delivery up of the infringing material.

4

The Defence in each case admits paragraphs 1 and 3 of the Statement of Claim. With regard to the alleged extension, no admission is made. Paragraph 3 alleges that each of the Letters Patent is invalid. Paragraph 4 denies infringement. Then there is a Counterclaim for revocation.

5

The proposed amendment which it is now sought to make involves the insertion of a somewhat lengthy paragraph in the Defence. I do not think I need read it all in detail. The gist of what is alleged is that as early as the year 1952 the Plaintiffs knew of, and drew the Defendants' attention to, certain alleged infringements; but it is said that whenapplying for an extension of the Letters Patent in 1957 the Plaintiffs failed to disclose this information to the Comptroller General. The proposed paragraph goes on in this way: "The said extensions would not have been granted if the Patentees had disclosed to the Comptroller General that they were in a position to claim compensation for alleged user of the inventions on a very large scale and that they had not made any endeavour to obtain any information as to the extent of such user from sources having such information. The First Defendants will contend in the absence of any satisfactory explanation that the Plaintiffs did not disclose to the Comptroller General on the said application for an extension of term that they were in a position to claim compensation for the said alleged use of the inventions of the said Letters Patent and each of them. In the premises, if no such disclosure was made, the said extension of term is void and of no effect."

6

The application for the extension of the term had been made to the Comptroller General in accordance with the provisions of Section 24 of the Patents Act, which provides that such an extension may be granted if the Comptroller General is satisfied that the Patentee has suffered loss or damage, including loss of the opportunity for developing his invention, by reason of hostilities. It is well established that an applicant for an extension in such circumstances is under a duty to show the utmost good faith and to make full disclosure of all material information. If it appears that full disclosure has not been made, then the extension will not be granted. In the course of Mr. Tompkin's argument on behalf of the Appellants we were referred to a number of authorities in support of the principle which I have stated, but I do not think I need refer to all of them in the course of this judgment, for their validity has not been challenged. Perhaps I should mention just one of the cases, namely, Harries' Patent (65 R. P. C. p. 132 and 68 R. P. C. p. 277), because that case, like this one, wasconcerned with an application for extension on the ground of war loss, and was in fact refused because of failure to disclose alleged infringements.

7

The learned Judge delivered a judgment in which, after setting out the gist of the proposed amendment, he went on as follows: "As I understand the law it is plainly open to a person aggrieved by an order that has been made to take appropriate steps to cause that decision to be set aside on the ground that in obtaining it the party had violated an obligation which he must be assumed to have had in mind, that is to say, to make a frank and thorough disclosure of all relevent information. If the propriety of a grant is raised in the issues in other proceedings, I for myself see no reason why a party aggrieved should not institute such proceedings by way of counterclaim, but in the Insert which I am asked to approve the defendants do not go on to seek any relief in respect of the grant of that prolongation. So far as I can see in the issue raised by the Pleadings which the court will have to determine, there is no provision for the court to make an order which would set aside the grant of extension which has taken place." The learned Judge concluded: "Having given the matter the best consideration I can I have come to the conclusion that this is not the way in which this point can be raised, merely by an assertion unaccompanied by any claim to relief. In those circumstances. I must decline to permit these amendments to be made."

8

On this appeal it has been argued in the first instance that the learned Judge was wrong in saying that this point could not be raised by way of Defence. Although in the lengthy amendment which is proposed the actual word "fraud" is nowhere used, it has been contended on behalf of the Defendants that the Plaintiffs' non-disclosure of what it is said they knew amounted in all the circumstances to fraud - or perhaps I should say to "conditional" fraud, the condition, as I understand it, being that that is sufficient to render the extension order granted bythe Comptroller General void and of no effect, so that it can be disregarded.

9

In support of that proposition reliance was placed on the decision in the Duchess of Kingston's case ( 2 Smith's Leading Cawes, p. 644), and in particular on the observations of Sir William due Grey (C. J.) which appear at page 661 of the report. Dealing with the previous decision there sought to be challenged, he said this: "But if it was a direct and decisive sentence upon the point, and, as it stands, to be admitted as conclusive evidence upon the court, and not to be impeached from within; yet, like all other acts of the highest judicial authority, it is impeachable from without: although it is not permitted to show that the court was mistaken, it may be shown that they were misled." We were also referred to the case of ( The Earl of Bandon -v- Becher 3 Clark and Finnelly, p. 479), and in particular to the observations made by Lord Broughan at page 511 of the report. He is there reported as saying this: "It is not an irregularity, it is not an error which is here complained of, but it is that the whole proceeding is collusive and fraudulent; that it cannot therefore be treated as a judicial proceeding, but may be passed by as availing nothing to the party who sets it up."

10

It has been argued that in this case, by reason of the fraud which is alleged, the order of the Comptroller General can be treated as a nullity on the same principle as there set out. For the purpose of this point Mr. Tompkin accepted, and indeed contended, that there could be no question of setting aside the order, since his clients were not parties to the order, and an order for setting it aside could only be made at the suit of a party. On that ground he contended that the learned Judge was wrong in so far as he said that the point (if it is a good one) might be raised by way of counterclaim, but could not be raised by way of Defence.

11

At the conclusion of the first day of the hearing in this court our attention was drawn to the way in which the Notice of Appeal had been framed. As originally filed, the Notice of Appeal put forward no ground of appeal beyond the bald contention that the learned Judge was wrong. That, as we pointed out, is in no way a compliance with the requirements of the relevant Rule in Order 58, namely, Rule 3; and if that sort of Notice of Appeal were permitted it would defeat the whole object supposed to be achieved by a Notice of Appeal, namely, to inform the court and the opposite party of the contentions which are going to be advanced on the appeal. In those circumstances, we directed that a full Notice of Appeal should be filed, and that was done before the hearing of the appeal was resumed on the next day. The amended Notice of Appeal sets out the argument to which I have just referred and then goes on to advance an alternative contention which has also been argued on behalf of the Defendants. On the basis that the learned Judge was right in making his suggestion that the point might be raised by way of counterclaim, an Order is asked for giving leave to counterclaim, first, for a...

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