Weatherford Switzerland Trading And Development Gmbh Against Iiitec Limited
| Jurisdiction | Scotland |
| Judge | Sheriff P Mann |
| Neutral Citation | [2019] SC ABE 87 |
| Court | Sheriff Court |
| Docket Number | ABE-CA40-18 |
| Date | 05 November 2019 |
| Published date | 08 November 2019 |
SHERIFFDOM OF GRAMPIAN HIGHLANDS AND ISLANDS AT ABERDEEN
[2019] SC ABE 87
ABE-CA40-18
NOTE OF SHERIFF PHILIP MANN
in the cause
WEATHERFORD SWITZERLAND TRADING AND DEVELOPMENT GmbH, a company
incorporated under the laws of Switzerland and having its registered office at Westrasse
1, Baar, Zug 6340, Switzerland
Pursuer
against
iiiTEC LIMITED, a company incorporated under the Companies Acts and having its
registered office at Blackwood House, Union Grove Lane, Aberdeen, AB10 6XU
Defender
Aberdeen 5 November 2019
The sheriff, having resumed consideration of the cause following debate and following
receipt of further, written, submissions called for in the interlocutor of 7 October 2019,
Sustains the defender’s preliminary plea number 4 and Dismisses the action; Reserves the
question of expenses meantime and fixes 29 November 2019 at 2:15pm within the Sheriff
Court House, Queen Street, Aberdeen as a hearing to determine the same; further Continues
the question of the expenses for the discharged diet of debate on 19 and 20 August 2019 to
the same date.
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Note
Introduction
[1] This judgment follows upon a debate in a commercial action relating to a
Manufacturing and Distribution Agreement (“MDA”) in terms of which the defender
granted to the pursuer (1) exclusive rights of access to patent rights and know-how and
(2) warranties and indemnities in relation thereto. The purpose of the MDA is to enable the
pursuer to manufacture products for the defender by utilising the patent rights and know-
how. The pursuer seeks two remedies.
The First Remedy
[2] The first remedy is a declarator that the defender is in breach of Articles 2.1, 8(1)(a)
and 8(1)(b) of the MDA.
[3] Article 2.1(a) (being the part of Article 2.1 relevant to this action) is in the following
terms:
“Subject to the terms and conditions of this Agreement and in particular
paragraph 2.1(b) below [which refers to a subsisting grant of certain rights to a third
party], iiiTec hereby grants to Weatherford and its Affiliates an exclusive, including
as to iiiTec and its Affiliates, worldwide right of access for Weatherford and its
Affiliates to the Patent Rights and the Know-how for the purpose of being able to
make and have made, to sell and have sold and to use and have used the Product,
together with the right for their end-user customers to use the Product.”
[4] Articles 8.1(a) and 8.1(b) are in the following terms:
“8.1 iiiTec represents and warrants as follows:
(a) It has full power and authority to execute and deliver this Agreement on its
behalf and on behalf of each of its Affiliates and to perform its obligations
hereunder……..”
(b) iiiTec has good and indefeasible title to and has all right and interest to and in
all of the Patent Rights and Know-how……..”
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The Second Remedy
[5] The second remedy sought by the pursuer is an order for payment of $1,650,000 as
damages for breach of contract.
Other Relevant Contract Terms
[6] Other Articles in the MDA are relevant to the issues which were before the court.
Most of these, I think, require to be set out in some detail.
[7] The preamble states:
“Whereas Weatherford desires to manufacture and distribute the Products for iiiTec
Whereas iiiTec is willing to have Weatherford manufacture at least a portion of the
Products and further to allow Weatherford to distribute the Products for iiiTec under
the terms and conditions hereof”
[8] Article 1.5 defines “Know-how” as:
“all existing or future proprietary or confidential information, data, drawings and
Know-how which relates to a System and shall include, without limitation, any
information relating to a System to the extent that iiiTec is free to disclose or use such
as provided by this Agreement.”
[9] Article 1.7 defines “Patent Rights” as:
“all of iiiTec’s (including its predecessors’, Affiliates’, and successors’) U.S and
foreign, existing and future issued and valid patents, patent applications and
cautionary notices and licensed patents which claim the System, components thereof,
and methods of use thereof, including without limitation, the patents and patent
applications listed on Schedule A attached hereto and any and all patent applications
and patents of iiiTec (their predecessors, Affiliates and successors) that are based
upon or claim priority therefrom.”
[10] Article 1.8 defines “Product” as:
“any System made for or by Weatherford or any Affiliate that utilizes iiiTec’s Know-
how and comes squarely within the scope of the claims of any issued and valid
patents included in the Patent Rights to the extent of iiiTec’s rights therein”
[11] Article 2.3 states:
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