Buchanan v Alba Diagnostics Ltd [1999] ScotCS 159 (24 June 1999)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just Â£1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

The pursuer is an inventor, a number of his inventions being concerned with road vehicles. From some date prior to June 1992 until November 1993 he was the managing director and majority shareholder of Liquid Levers (Innovations) Limited ("Innovations"), a company with a research and development department with which the pursuer was actively involved.

Mr Lionel Mills has had a career as an engineer and company director with experience in design work. Shortly before June 1992 he had sold his shareholding in a company in which he had for some time been a principal and had funds available for investment. He was interested in investing in an engineering company. He learned about Innovations from an acquaintance and approached the pursuer with an offer to invest in that company. Matters appear to have moved very rapidly, Mr Mills proffering and the pursuer accepting a cheque for £500,000 at their first meeting. Mr Mills then had second thoughts. He consulted a solicitor who advised him that he would have difficulties in recovering the monies he had handed over.

Negotiations were then entered into which resulted in the execution on 20 August 1992 of a Minute of Agreement among Mr Mills, the pursuer and Innovations. This provided for the repayment to Mr Mills of £100,000 and for the treatment of the balance of £400,000 as an interest free loan by Mr Mills to Innovations repayable on demand on or after 31 December 1995. Mr Mills was granted an option exercisable on 31 December 1995 to convert the loan into an interest comprising 20% of (a) the then entire issued share capital of Innovations, (b) the then entire issued share capital of an associated company, Liquid Levers Limited, and (c) subject to certain exceptions, the whole intellectual property rights of the pursuer, so far as not previously assigned to Innovations or Liquid Levers Limited. Clause 8 of the Minute of Agreement provided -

A schedule appended to the Minute of Agreement listed in respect of the Brake Fluid Safety Meter a number of pending patents and two granted patents. The latter were grants in "Germany (Eastern)" and "South Africa". Among the pending patents listed was an International Application published under the Patent Co-operation Treaty (PCT) bearing the publication number WO90/12311, with an international filing date of 30 March 1990 and a priority date of 8 April 1989. That application (hereinafter referred to as the "311 Application") bore that the applicant was Innovations and that the inventor was the pursuer.

Following on said Minute of Agreement a deed, described as an Assignation (hereinafter referred to as the "First Assignation"), was executed by Innovations and the pursuer on 21 January 1993 and by Mr Mills on 29 January 1993. It opened as follows:-

Certain detailed obligations on the Assignors to maintain and enforce the Patents and Applications were then set forth.

Clause 6 made provision for the grant by the Assignee to the Assignors of an exclusive licence to use the Charged Assets to manufacture, use, sell, lease or otherwise dispose of or deal in any products derived from the Charged Assets for the duration of the agreement. Clause 7 made provision for the re-assignation of the Charged Assets (or the patents arising therefrom) to the Assignors in certain events. Part I of the Schedule listed the Patents and the Applications. These, with the addition of a British Application, were the same as those listed in the Schedule to the Minute of Agreement. The Applications included the 311 Application.

The invention claimed in the 311 Application was "an indicating device for indicating the boiling point of fluid especially a hygroscopic fluid such as brake fluid". Brake fluids as used in the hydraulic braking systems of motor cars and vans are mixtures of glycols and are accordingly prone to absorb over time moisture from the atmosphere. Such absorption reduces the boiling point of the resultant mixture such that at certain levels of absorption the brakes may fail. The 311 Application claimed an invention which would detect a serious lowering in the boiling point of brake fluid in the reservoirs of vehicles. The description referred to certain prior art but stated that devices made in accordance with it had the disadvantage of not being particularly accurate or forming noxious vapours due to evaporation of hydraulic fluid or both. Claim 1 of the Application defined the indicating device as -

The numbers referred to were those appearing in certain figures contained in the 311 Application.

A feature of a device made in accordance with the invention described in the 311 Application (and claimed in claim 2 thereof) was that on immersion into the brake fluid reservoir the housing filled or virtually filled with fluid, air exiting through vents placed in the upper reaches of the outer shroud of the probe as fluid entered from below. Vents so placed allowed the escape of vapour evolved as a result of heating the fluid in the housing. If, however, the device was immersed by the operative into the reservoir beyond one or more of those vents, convective currents set up as the fluid in the housing was heated tended to carry such fluid out through the vent or vents into the reservoir. There may also have been a tendency for fluid to convect inconveniently into the space between the outer shroud and the casing.

From about 1990 Innovations produced and marketed devices made in accordance with the invention described in the 311 Application and claimed in claim 2 thereof. It was intended that they be used by garage mechanics when servicing a vehicle. Several thousand were sold. A major oil company was a customer. Some development of the product took place, particularly to its electronics. At some stage a drainhole was inserted in the Tufnol sealing ring at the top of the housing. The pursuer was in overall charge of the research and development team at Innovations, although by 1992 his inventive and designing energies were largely being deployed on other devices, including a smoke meter. Mr Mills who had become a director of Innovations took an interest in certain aspects of the research and development work. Relations between the pursuer and Mr Mills were not, however, good. Mr Mills also had the impression that employees in the research and development team were not wholly open with him. Mr Mills took a particular interest in the devices made in accordance with the 311 Application.

By at least 1993 Innovations was running into financial difficulties. Its bankers insisted on the appointment of their nominee as its managing director. On 1 December 1993 Innovations went into receivership. A few weeks prior to that there had been a major dispute between other members of the Board and the pursuer who had then resigned as a director of Innovations.

In the months immediately prior to the appointment of the receiver Mr Mills had been considering his own position. He had discussions with certain persons outside Innovations and in about December 1993 joined a partnership known as Alba Tools. That enterprise was subsequently incorporated as Alba Tools Limited, the defenders to the present action, the company name having been subsequently changed to Alba Diagnostics Limited.

Following his departure from Innovations the pursuer's interest in brake safety meters revived. The devices made in furtherance of the 311 Application had not proved wholly reliable in operation. They were subject to error in the event of the probe being immersed in the reservoir to a depth other than that indicated by fins on its external surface. Garage mechanics using the device, some times in a poorly lit environment, were liable to insert the probe to an incorrect depth. At about the beginning of February 1994 the pursuer perceived what he considered would be a solution to that difficulty. It occurred to him that, if ready outflow of fluid from the housing could be prevented, the device would no longer be sensitive to variations in the depth of immersion in the ordinary circumstances of use. That, he perceived, could be achieved, consistently with allowing fluid to enter into the housing and vapour evolved during heating to vent, by placing, in the context of a device with an outer sheath, the opening in that outer sheath at a level below that of the aperture at the top of the (inner) housing. The effect would be that on immersion the housing would fill with fluid to the level but only to the level of the opening in the outer sheath, the space above that level and below the level of the top of the housing remaining filled with air. On heating, that retained air would prevent the outflow of fluid through the upper part of the housing while allowing evolved vapours or expanded air to vent in the form of bubbles through the outer opening. Thus, throughout the operation of the device, substantially the same mass of fluid would be retained within the lower portion of the housing, limited exchange of fluid with the reservoir occurring only at the base of the probe. A more thermally homogeneous fluid would thus be available for measurement by the temperature monitoring means.

The pursuer made a crude prototype of a device incorporating such an arrangement. At about the end of February 1994 he made an application for a UK Patent to the Patent Office. It was filed with a filing date of 1 March 1994. The application was published on 13 September 1995 and a patent granted on 27 March 1996 under the reference number 2287321 (hereinafter referred to as "Patent 321"). It is the patent in suit. I shall return in due course to its terms. The pursuer is referred to on the face of Patent 321 as the inventor and the proprietor.

Following the receivership of Innovations in December 1993 Mr Mills had also been active in relation to brake fluid safety devices. He had purchased from the receiver certain production materials used in the manufacture of the devices made in accordance with the 311 Application. After doing some work on it he wrote on 29 March 1994 to his patent agent, Mr Szczuka, a letter which contained the following paragraphs:-

Mr Mills attached, among other items, to this letter a sketch of a proposed arrangement. That sketch depicts an "overflow hole" from the inner tube at a height slightly above the "level hole" in the outer casing. Although Mr Mills was aware that the pursuer was also working on a brake fluid safety meter and was anxious to establish a priority in the area, he was not aware that the pursuer had already made an application for a patent; nor, of course, was Mr Mills aware of its terms. An allegation made on record that the defenders had copied the pursuer's invention after hearing about it at a trade show was departed from. I am quite satisfied that the ideas formed and developed early in 1994 by the pursuer and by Mr Mills respectively in relation to brake fluid safety meters were arrived at independently of each other, both however of course drawing on their background experience with the devices made in furtherance of the 311 Application.

By an Assignation dated 8 and 9 May 1994 ("the Second Assignation") Mr Mills assigned to the defenders (under their then style Alba Tools Limited) certain rights which had been transferred to him under the First Assignation. In the Second Assignation Mr Mills was referred to as the Assignor and the defenders as the Assignee. The dispositive clause of the Second Assignation was in the following terms:-

The narrative of the Second Assignation identified "the Patents" and "the Applications" by reference to a schedule in identical terms to the schedule to the First Assignation. So far as disclosed in the evidence, the Second Assignation was not at that time intimated to the pursuer or to Innovations.

On 10 May 1994 the defenders made an application to the Patent Office for a UK Patent. An International Patent Application was subsequently made by the defenders founded on the same claimed invention and ultimately proceeded to the grant on 15 January 1997 of UK Patent 2298928 (hereinafter referred to as "Patent 928"). Although its date of filing was 10 May 1995, its priority date having regard to the earlier application was 10 May 1994. The proprietors of Patent 928 were and are the defenders; the stated inventor was Mr Mills.

Since about August 1994 the defenders have made and sold with commercial success a brake safety meter ("the defenders' device"). In this action it is alleged by the pursuer that those activities, so far as carried on since publication in September 1995 of the relative application, constitute infringement of Patent 321.

Before discussing that issue it is convenient to discuss the other principal issue in this case. The defenders contend that Patent 321 truly belongs to them. In a counterclaim to the principal action they seek a declarator that Patent 321 was granted to the wrong person in that it should, they maintain, have been granted to them. In the principal action their defences include a plea of personal bar against the pursuer taking infringement proceedings against them. Those contentions are based primarily on the First and Second Assignations.

Mr Lindhorst, junior counsel for the pursuer (who presented the pursuer's submissions on the assignation issue), argued that the defenders were not, in a question with the pursuer, entitled to maintain any rights which may have been transferred to them by the Second Assignation, that assignation not having been intimated to him. In my view that argument is without substance. The Second Assignation was produced in this process and was founded on in the defences as lodged to the principal action and in the counterclaim in the course of its adjustment. There has thus been judicial intimation of it, "the best of all intimations" (Carter v McIntosh (1862) 24D 925, per Lord Justice Clerk Inglis at page 934).

By the Second Assignation Mr Mills assigned to the defenders "the Patents and the Applications together with all the Assignor's whole right, title and interest past, present and future in and to the Patents and the Applications and all the rights, powers, privileges and amenities conferred on the owners thereof and full and exclusive benefit of the same and all improvements, prolongations and extensions ...". Such know-how as had been assigned by the First Assignation to Mr Mills was not assigned by him to the defenders. However, the Applications referred to in each deed included the 311 Application. The expression "all improvements, prolongations and extensions" appears in the dispositive clause of both deeds.

A major issue between the parties is whether the 321 Patent granted to the pursuer is an "improvement" within the meaning of the First Assignation to (or of) the 311 Application. Mr Clark for the defenders submitted that it is. He cited Linotype and Machinery Limited v Hopkins [1908] 25 R.P.C.349, [1908] 25 R.P.C.665 (C.A.) and [1910] 27 R.P.C.109 (H.L.), Vislok Ltd v Peters [1927] 44 R.P.C.235, Sadgrove v Godfrey [1919] 37 R.P.C.7 and Osram-Robertson Lamp Works Ltd v Public Trustee [1920] 37 R.P.C.189. Mr Lindhorst submitted to the contrary. He argued that, the 321 Patent having been granted, it ex hypothesi was new and involved an inventive step (Patents Act 1977 sections 1-3). As such it was more than and qualitatively different from a "mere improvement". The 321 Patent represented a "quantum leap" beyond the 311 Application or any patent granted in furtherance of it. It did not satisfy the test for an "improvement" given by Buckley L.J. in Linotype and Machinery Limited v Hopkins at page 670. In particular, a comparison of the claims in the 311 Application and the 321 Patent showed that the latter did not retain any of the characteristic features of the former. The 321 Patent in substance proceeded from the prior art which pre-existed the 311 Application. It should not be assumed, Mr Lindhorst argued, that the English cases relied on by Mr Clark represented the law of Scotland. In the context of assignations the 1977 Act made quite distinct provision for England and for Scotland (sections 30 and 31).

This issue is one of interpretation of the First Assignation, having regard to its subject matter and to the context it which it was granted. The fact that, in relation to the nature of and transactions in patents and applications for patents, the legislature has made separate provisions for England and for Scotland does not, in my view, deny the usefulness in Scotland of English cases in which, in the context of patents, the meaning of the expression "improvement" has been addressed. Sections 30 and 31 of the 1977 Act simply reflect the differences between the two jurisdictions in concepts of property law and in the modes in which transactions in rights in relevant property may take place. As, however, the issue is one of interpretation of a particular deed, decisions on the interpretation of other deeds, whose language is inevitably different at least in some respects, are of limited value. In particular, decisions on the meaning of "improvements" when referable to a particular machine or device is of limited value when construing a deed concerned with improvements referable to patents or to applications for patents.

In my view it is plain that "improvements" in the First Assignation means improvements of or to the Patents and the Applications (that is, of or to the invention or inventions claimed therein) and not of or to any particular device made in furtherance of it or them. It is accordingly not restricted to qualitative advances in the product made by Innovations - such as, for example, the insertion of the drainhole, minor developments in the electronics or the like. Advances which constitute or include an innovative step such as would justify the grant of a new patent are not, in my view, necessarily excluded from the scope of improvements of a pre-existing invention. In Sadgrove v Godfrey the subject matter of the assignment was "one undivided tenth part or share in the said invention and of all patents and other rights both British, Foreign and Colonial relating thereto and as well granted as to be granted for the same and of and in all improvements and additions thereto ...". The defendant "stoutly maintained from first to last" that an improved method subsequently patented by him did not fall within the scope of the relative deed. Ultimately, however, his counsel conceded that that attitude was untenable (page 17), a concession which P.O. Lawrence, J. stated (at page 20) to have been rightly made. In Vislok Ltd v Peters a patented invention was held to be an improvement on an invention (pages 245-6); although the clause under discussion also referred to future inventions, the decision proceeded on the earlier part of the clause. Accordingly, I reject the submission that, by reason merely of the 321 Patent having been granted (the validity of which must be assumed for the purposes of the present disposal), it cannot be an improvement of the 311 Application. I should add that I have not found the collocation of the words "prolongations and extensions" with the word "improvements" to be of much assistance on this matter. The application of either of those words to post 1977 UK Patents is doubtful, grants thereunder being for a fixed period albeit subject to lapse in the event of failure to pay renewal fees; they may, however, be apt for the foreign patents granted or contemplated. Those words perhaps assist to the limited extent of confirming that the subject matter referable to "improvements" is patents and applications for patents, not devices or products.

Before addressing the question whether the 321 Patent is in the circumstances an "improvement" on the invention claimed in the 311 Application, it is convenient to deal with certain other arguments presented on behalf of the pursuer. Mr Lindhorst submitted that "improvements" were restricted to improvements in existence at the date of the First Assignation. I reject that submission. There is nothing in the terms of the deed or its surrounding circumstances which would justify giving it such a temporal restriction. Clause 1.1 itself contemplates future rights and interests. It is perfectly intelligible that security should be given over future improvements in the invention claimed in the 311 Application which at the time of the grant was still being exploited by Innovations. Mr Lindhorst also submitted that consequent on the receivership of Innovations on 1 December 1993 the First Assignation was "spent". Reference was made to Clauses 5.3 and 5.4 which provide that on the sale (or retention) by the Assignee of the Charged Assets the Assignee should have no further or continuing claim against the Assignors in respect of the loan of £400,000 nor "in respect of the Assignors' obligations hereunder". A sale of the Patents and Applications having been made by Mr Mills to the defenders, all rights which Mr Mills, or anyone deriving right from him, might have against the pursuer then, it was argued, effectively ended. In my view this submission fails to recognise the true purpose of the provisions in Clauses 5.3 and 5.4 relied on. The obligations there referred to are the obligations on the Assignors to maintain, progress and protect the relevant intellectual property rights which were the subject matter of the First Assignation (such as under Clause 1.2). They are not concerned with the property rights which were initially assigned in security to Mr Mills and which, in the event of an insolvency situation occurring, he was entitled to retain or dispose of as his absolute property. Were these property rights and rights incidental to such rights to fall upon the realisation of the secured property, the security would have been useless. I accordingly reject this submission.

Mr Lindhorst also submitted that on the 311 Application having progressed to a grant of patent, any obligation under the First Assignation in respect of it was discharged. It appears from evidence given by the defenders' patent agent that the 311 Application was progressed with the ultimate result that a patent was granted under the European Patent Convention and that patents were also granted in the United States of America and certain other (unspecified) countries. It is not clear from the evidence when those grants were made or to whom. The likelihood is that they were granted some time after June 1994 in favour of the defenders. On that factual basis Mr Lindhorst relied on the phrase in Clause 1.1 of the First Assignation which provides "and in relation to the Applications to the intent that the grant of any patents thereunder shall be in the name of the Assignees". The argument, as I understood it, was to the effect that, such patents having been granted, all obligations in respect of the 311 Application arising under the First Assignation had been discharged. This argument I also reject. It proceeds upon a misconception as to the purpose and effect of the phrase relied on. It appears there, in my view, to make plain that such patents as were granted in furtherance of the pending patent applications were to be taken in the name of the Assignee(s). It in no way affects the property rights in such patents or in any other intellectual property (including improvements) as were encompassed within the dispositive clause of the First Assignation.

It is appropriate also to notice at this stage a submission made by Mr Lindhorst that no rights belonging to the pursuer were in fact carried by the First Assignation. That proceeded on the basis that Innovations were in fact the sole proprietors of the intellectual property assigned by the First Assignation, the pursuer having no right, title or interest in the relevant subject matter of that deed. I shall have occasion in another context to examine the evidence bearing on the relevant relationship between the pursuer and Innovations. It is sufficient for present purposes to notice that the pursuer was undoubtedly the inventor of the invention claimed in the 311 Application. He was also a party as an individual to the First Assignation as one of the granters of the assignation contained in Clause 1.1. If Patent 321 (granted to the pursuer in March 1996) was truly an "improvement" within the meaning of the First Assignation, then the First Assignation was apt to carry the 321 Patent to the Assignee (or those in his right) as an item of acquirenda upon the coming into existence of that property. Accordingly, it matters not for the purposes of the discussion of "improvement" whether or not the pursuer had as at the date of the First Assignation a proprietorial interest in the patents or the patent applications referred to therein.

I now turn to the substantive issue. In addressing that issue it is necessary, in my view, to consider not only the respective natures of the inventions described and claimed in the 311 Application and the 321 Patent but also the context of the First Assignation. Claims 1 and 2 in the 311 Application have already been set out. To appreciate the nature of the invention described and claimed therein it is appropriate to consider the then prior art. The description in the 311 Application refers to devices for determining the boiling point of hygroscopic fluids, such as brake fluid, as described and claimed in two earlier patents. Those patents were not put in evidence in the present case but are described in Application 311 as follows. The first is there said to involve "the heating of the liquid to be tested using a heater immersed in the liquid until the liquid evaporates and gas bubbles rise along the heater, the temperature of the heater effected by the gas bubbles being measured whence the boiling point of the liquid can be ascertained". The second is said to include "a heater for fluid which also serves as a temperature sensor, the device relying on the formation of gas bubbles on the heater for a boiling point testing operation". Those prior devices are said in the descriptive section of Application 311 to "have the disadvantage of not being particularly accurate and/or forming noxious vapours due to the evaporation of hydraulic fluid". The description in the 311 Application continues:-

There then follows a statement as to the present invention which is largely replicated in the first claim of the application. The measurement by the prior devices of the boiling point of the liquid appears to have been dependent on measurement (directly or indirectly) of the temperature of bubbles evolved as the liquid boiled. The invention claimed in the 311 Application was characterised by the probe including "a casing defining a housing wherein a portion of fluid to be tested is semi-encapsulated, the temperature monitoring means sensing the temperature of the fluid in the housing heated by the heating means". Thus, a portion of fluid was by semi-encapsulation in the housing to some extent isolated from the rest of the fluid in the reservoir and was heated and its temperature sensed in the housing. The isolation was not, however, absolute since fluid inlet means were provided permitting fluid flows to and from the housing. Those inlet means were, as cross reference to the figures discloses, provided both at the top and at the bottom of the housing.

The description contained in the 321 Patent also described the then prior art. Reference is made to devices (including one shown in another patent) which required a sample of fluid to be removed from the vehicle reservoir for testing, the subsequent testing procedure being described as "of a somewhat delicate laboratory-like nature". This is said to be inconvenient and not readily acceptable for every day garage operations. Reference is then made to devices capable of testing directly at the fluid reservoir, an example being one of the patents referred to in the 311 Application. It is said, however, that that device precludes prompt temperature sensing. The description continues - "The device shown in [the 311 Application] overcomes this problem by providing a hand held sensor which, when inserted into the fluid to be tested, traps a small portion of the fluid in a semi-encapsulated chamber in a probe part of the device for heating. This device, however, relies very much on correct depth immersion in the fluid. It is an object of the present invention to provide a fluid boiling-point sensing device which is capable of being hand-held and which can be used in a more convenient manner to sense the boiling points of fluids directly at a fluid reservoir, e.g. in a vehicle brake fluid reservoir".

Against that description the claims of the 321 Patent are set out. Claim 1 (upon which all the other claims are effectively dependent) is in the following terms:-

The essential difference between the invention in the 311 Application and that in the 321 Patent is that in the latter the housing has two portions in the lower of which the fluid (liquid) to be tested is retained and in the upper of which air is retained, these portions being in direct contact ("fluid communication") with each other. The 311 Application envisaged a single space within the housing, filled (or virtually filled) with liquid. Although in the 321 Patent an aperture was provided in the casing it was located "adjacent the boundary of said upper and lower housing portions". This location made possible to a substantial extent the retention of air in the upper housing portion and of liquid in the lower housing portion. Thus flow of liquid up and out of the testing chamber during heating was largely, if not wholly, prevented.

Although in their defences to the principal action and in their counterclaim the defenders challenge on various grounds the validity of the 321 Patent, that challenge was not addressed at this stage of the litigation. By interlocutor of 6 October 1997 the parties were, in accordance with their mutually acceptable proposals, allowed a proof before answer restricted in substance to the infringement and the assignation issues. No doubt from a commercial point of view the defenders and their advisers perceived there to be an advantage in seeking to have the 321 Patent declared, in effect, to be theirs rather than in pressing at this stage a challenge to its validity. Such postponement of the validity issue gives rise to some artificiality but the consequence of it for the assignation issue is that for that purpose it must be assumed that the 321 Patent satisfies the requirements of a patentable invention, including those of novelty and inventive step.

In addressing the question whether the 321 Patent is an "improvement" on the invention claimed in the 311 Application, it is necessary, in my view, to consider both what has been changed and what has been retained. In relation to the latter factor the circumstance that a number of elements are common to the inventions being compared will not suffice to constitute relevant retention if such elements are also to be found commonly in the prior art. This appears to be the effect of the approach adopted in Sadgrove v Godfrey. However, in the present case there appear to be a number of elements special to the 311 Application (ie not shared by the prior art) that are retained in the 321 Patent. These include the provision of a housing into which fluid from the reservoir is caused to enter, thus providing a measure of isolation from the rest of the liquid in that reservoir. In neither case is the isolation absolute since both envisage fluid flow to and from the reservoir at the base of the housing. Both involve heating of fluid within the housing and the measurement of the temperature of the fluid by a temperature sensor placed therein. Such elements retained in the 321 Patent can, in my view, properly be described as characteristic parts of the invention claimed in the 311 Application and not, at least in so far as disclosed in the evidence, common to a wider prior art. The change made by the 321 Patent is the elimination or substantial elimination of the flow of liquid up and out of the housing by convection as earlier described. The result is to make the liquid to be tested more thermally homogeneous and to furnish accurate results without there being dependence on the depth to which on any particular occasion the operative happens to immerse the probe member in the reservoir.

On the assumptions that the 321 Patent is valid and is practically effective, it constituted an important advance; but that of itself is insufficient to prevent it being an improvement. In any particular case it is a matter of fact and degree. In this case, having regard to the respective inventions, I am satisfied that the advance made by the 321 Patent on the 311 Application was not so radical as to make those inventions, to use the words of P.O. Lawrence J. in Sadgrove v Godfrey, "quite distinct". On the contrary, I am satisfied, having regard to the relevant shared and differing elements, that the 321 Patent could properly be described as an improvement in or to the invention described in the 311 Application.

The foregoing comparative exercise must, of course, be done in the context of the deed in which the expression "improvement" occurs. The relevant deed in the present case was an assignation in security granted in the context of Innovations continuing to develop and market a device (or devices) based on the invention described in the 311 Application. The pursuer, the inventor of that invention, remained active in Innovations, although by January 1993 his energies appear to have been largely devoted to other devices. It was not unlikely, however, that in the course of further research work within Innovations, the problem of depth sensitivity of the device in production would have been addressed and an inventive solution found. Such an invention, whether along the lines of the 321 Patent or otherwise, might have resulted in the commercial supercession of any product based solely on the invention claimed in the 311 Application. It would not be surprising if the Assignee would wish the intellectual property rights in such a further invention to be included within the scope of his security. Nor would it be surprising that the Assignors would have been prepared to accede to such inclusion. Accordingly, there is nothing in the context, nor indeed in the other terms, of the First Assignation which tends to negative the 321 Patent being an improvement in or to the invention in the 311 Application. On the contrary it tends to support it. In the whole circumstances I am accordingly satisfied that the 321 Patent falls within the description of an "improvement" within the meaning of the First Assignation.

Mr Lindhorst also submitted that each of the First Assignation and the Second Assignation were, if construed as widely as the defenders contended, void from uncertainty and, in any event, unenforceable as being in unlawful restraint of trade. So far as the first of those contentions is concerned, it is to be noticed that the First Assignation bears to transfer, in addition to matters already discussed, "all know-how relating therein and thereto"; the Second Assignation does not bear to transfer know-how. So far as "improvements" are concerned, the expression is intelligible and not unfamiliar in connection with patent rights. Its application may in particular circumstances give rise to difficult questions but that is no ground for regarding it as void from uncertainty. Whatever uncertainty may arise in respect of "all know-how relating therein and thereto" without further definition, such uncertainty does not impinge on "improvements" any more than on the defined patents and patent applications. Accordingly, I reject the contention based on uncertainty so far as relating to improvements. I also reject the contention that the assignation of the 321 Patent as an improvement is unenforceable as in unlawful restraint of trade. This contention was advanced on the basis of the common law, no anti-competition statutory regulation or Community law provision being relied on. The only case cited by Mr Lindhorst on this aspect of this case was Berlitz School of Languages v Duchêne (1903) 6F 181. The circumstances of that case (which was concerned with a contract of employment) are far removed from those of the transfer of incorporeal moveable property in the form of intellectual property rights. I find no principle stated there which persuades me that the transactions relied on here involve an unlawful restraint of trade. Mr Clark cited in response Printing and Numerical Registering Company v Sampson (1875) L.R.19 Eq.462, where an argument that an agreement to assign future patent rights was unlawful as being against public policy was soundly rejected. Mr Clark also referred in this regard to a passage in Chitty on Contracts (27th Ed) at para.16-068 where the learned authors, under reference to Esso Petroleum Co Ltd v Harper's Garage (Stourport) Limited [1968] A.C.269, observe -

As Sir George Jessel, M.R. in 1875 observed in Printing and Numerical Registering Company v Sampson at pages 465-6:-

Public policy, he indicated, supported such activities. Nothing was put before me to suggest that at the present time such transactions are any less common or are looked on any less favourably by the common law. As to Scotland, Printing and Numerical Registering Company v Sampson is referred to in Gloag on Contract (2nd Ed) at page 577 as illustrative of a contract held to be legal. As to the particular circumstances of the present case, I assume without deciding that an assignation in security, subsequently made absolute, can constitute a contractual restraint of trade. On that assumption, however, the only relevant restraint is in respect of the scheduled patents and patent applications and what are properly improvements in or to them. The restraint does not extend to the whole or even to a major portion of the pursuer's inventive activities; it does not even extend to all brake fluid safety meters, some of which might be designed on quite distinct principles. Such limited restraint is not in my view unlawful at common law.

I turn next to certain arguments advanced by Mr Lindhorst founded on the provisions in the 1977 Act concerned with employees' inventions. Section 39 of the Act provides:-

Sections 40 and 41 are concerned with compensation of employees for certain inventions and with the amount of such compensation. Section 42 provides:-

Section 43 makes certain provisions supplementary to sections 39 to 42. Section 130(1) defines "employee" as meaning "a person who works or (where the employment has ceased) worked under a contract of employment ...".

None of these sections is referred to in the pursuer's pleadings in this case. The only averment touching on the ownership of relevant intellectual property rights is to be found at page 23D of the Closed Record where, in the context of reference to the agreement constituted by the Minute of Agreement dated 20 August 1992, it is averred "The deal agreed that the remaining £400,000 be converted into an interest free loan with an option for repayment or for a 20% share holding in December 1995 and that various intellectual property rights over inventions of the pursuer's, owned by Liquid Levers (Innovations) Limited be assigned to Lionel Mills in security". It will be recalled that by Clause 8 of the Minute of Agreement Innovations and the pursuer contracted to assign to Mr Mills "their respective interests in" the scheduled intellectual property rights. In the First Assignation the "Assignors" were defined as being Innovations and the pursuer, it was narrated that the Assignors were the proprietors of the scheduled patents and patent applications, and the Assignors assigned those patents and applications together with all improvements etc in security to the Assignee and warranted to the Assignee that they were the beneficial and unencumbered owners of the patents and applications. The pursuer was a signatory to both deeds. Nonetheless, the pursuer in evidence was at pains to emphasise that he had had no proprietorial rights in respect of the intellectual property assigned and that the sole proprietor of it was Innovations. Most, if not all, of this evidence was volunteered by the pursuer in the course of his testimony rather than elicited by direct questioning. There was no attempt in presentation of the pursuer's case positively to establish by evidence the relationship between the pursuer and Innovations at the time when the pursuer made the invention subsequently claimed in the 311 Application (which was lodged in 1989), although it incidentally appeared from the evidence that by at least June 1992 the pursuer was managing director of Innovations. No contract of employment was produced or referred to. No satisfactory explanation was provided as to why in the Minute of Agreement signed by the pursuer both he and Innovations were referred to as having "their respective interests in the Patents rights ...." or as to why in the First Assignation, also signed by him, both he and Innovations plainly are described as proprietors of the relative intellectual property (in respect of which proprietorship they both gave a contractual warranty to Mr Mills) and bear together to assign it in security. Standing the terms of the First Assignation, the pursuer would have been unable in a question with Mr Mills successfully to plead any case that, by reason of the statutory provisions in respect of employees' inventions, the invention made by him and claimed in the 311 Application (and any intellectual property rights consequent thereon) belonged solely to Innovations. The same, I accept, may not be true in a question with a third party such as the defenders. Had it been clearly averred and distinctly proved that there was satisfied one of the conditions in section 39 under which an invention is to be taken to belong to an employer, it may have been necessary to proceed in a question with the defenders on the basis that the relevant intellectual property rights were the sole property of Innovations - though I note (without founding on it) that section 39 is subject to the qualification "as between him and his employer". I am not, however, satisfied that this proposition (which flies in the face of the terms of the First Assignation) has been either clearly averred or distinctly proved. The averment makes no reference to sole proprietorship and is made in a context in which there is no reference to the statutory provisions concerning employee's inv

A finding that the pursuer had no proprietorial rights in the 311 Application was a necessary foundation for Mr Lindhorst's argument that the pursuer had no right, title or interest in the relative subject matter of the First Assignation. I have already on other grounds rejected that argument, in so far as concerned with an improvement, as irrelevant. However, the statutory provisions in relation to employees' inventions have a bearing on certain other arguments presented by Mr Lindhorst. He relied on section 42, arguing that, if the effect of the dispositive clause of the First Assignation was to entitle Mr Mills (and by derivation the defenders) to the benefit of the 321 Patent as an improvement, the pursuer's rights in that invention were thereby diminished (to the greatest extent, viz nil). He submitted that the First Assignation was a contract to which section 42 of the 1977 Act applied and that the relative terms of that assignation were by subsection (2) unenforceable against the pursuer who was an "employee" within the definition in section 130(1). Mr Clark's principal response to that submission was that the First Assignation was not truly a contract to which section 42 applied. The purpose of the section was to prevent an employer taking advantage of the weak bargaining position of his employee by requiring him to sign away any rights which he might have in inventions he might later make. It envisaged a contract in which the employee was on the one side of the bargain and his employer (alone or with another) or some other person at the employer's instance was on the other. The First Assignation, he argued, was not of such a character. Under that deed the parties were Innovations and the pursuer on the one part and Mr Mills, an independent third party, on the other. In so far as the section was ambiguous or obscure or the literal meaning led to an absurdity, it was, the argument continued, legitimate to have regard to Parliamentary debate material (Pepper v Hart [1993] A.C.593). Reference to ministerial statements during the passage of the Bill showed that the purpose of what became section 42 was consistent with the defenders' submission. Reliance was placed on Hansard (24 January 1977) Vol.379 Col.243 and (25 May 1977) Vol.932, Col.1443. Reference was also made to (5 May 1977) Vol.382, Col.1189 and (17 May 1977) Vol.383, Cols.573-4.

I accept Mr Clark's submission on this aspect, though in doing so I find it unnecessary to rely upon the Parliamentary debate material. Assuming in the pursuer's favour that this argument is open to him on his pleadings and on the evidence, I am satisfied that section 42 does not apply to a transaction of the kind constituted by the First Assignation. The parties to it were on the one hand the pursuer and Innovations and on the other Mr Mills. There is no suggestion that contractual or other pressure to grant this deed was put on the pursuer by Innovations or that Mr Mills was acting along with Innovations. This was a deed freely granted by Innovations and its majority shareholder (the pursuer) to provide Mr Mills with security for monies which he had advanced to the company. It was, in my view, neither the purpose nor the effect of section 42 to strike at deeds of this kind. I assume for this purpose that a dispositive clause of an assignation of incorporeal moveable property is a "term of a contract" which can be rendered "unenforceable". It might be thought that on delivery the transfer was complete (subject to re-assignation in certain circumstances) and that thereafter there was no term to enforce. It is, however, unnecessary to decide this point and I reserve my opinion on it.

I should add that Mr Lindhorst also submitted that, the pursuer being entitled under the 1977 Act to enforce his rights by bringing proceedings for infringement of the patent rights granted to him, he could not be prevented from exercising such statutory rights. It was further submitted that any question about those rights ought to have been and had not been referred to the Comptroller-General of Patents, Designs and Trade Marks. Reference was made to sections 8, 21, 37 and 72 of the 1977 Act. Those submissions were made primarily with reference to the defenders' plea that the pursuer was personally barred from bringing proceedings against the defenders for infringement of Patent 321. They also, however, impinge on the declaratory conclusion of the counterclaim. Reference was made to Penman v Fife Coal Co Ltd 1935 S.L.T.401. In my view, those submissions are unsound. The jurisdiction conferred on the Comptroller-General does not exclude the jurisdiction of the Court to consider questions arising as to patent rights or their enforcement. The right to bring proceedings for infringement is vested in the proprietor of the patent. The pursuer's right to bring proceedings for infringement of the 321 Patent depends on his being the person truly in right to that patent. The latter right is put in issue by the defenders in this case. If the defenders establish that they and not the pursuer are the persons truly in right to the patent, they are entitled to a declarator to that effect. They are also, notwithstanding the pursuer's present title to Patent 321, entitled, if they establish the right which they claim, to resist proceedings for enforcement at his hand since in that event the pursuer has no legal interest to pursue such proceedings. Penman v Fife Coal Co Ltd was concerned with an attempt to plead personal bar in circumstances where the employers advancing the plea had deducted wages from the employee in a way which was declared by statute to be illegal, null and void. No such issue relevantly arises here.

In the whole circumstances I am satisfied that the 321 Patent is an improvement within the meaning of the First Assignation and that the defenders are the persons truly in right to it. In these circumstances the defenders' fifth plea-in-law, to the extent that it is founded on such an improvement, will fall to be sustained to the effect that the pursuer, by reason of lack of legal interest in Patent 321, is personally barred from insisting in infringement proceedings against the defenders. The declarator sought by the first conclusion of the counterclaim is that "British Patent No.2287321 was granted to the wrong person in that it should have been granted to the defenders"; the defenders' fourth plea-in-law (as restricted) in the counterclaim seeks declarator in these terms. I have some doubt whether that formulation is exactly correct given that as at the date of the grant the Second Assignation had not been intimated to the pursuer. In these circumstances I shall, prior to sustaining any plea, put the case out By Order for discussion of the exact formulation of the substantive order to be pronounced.

The defenders' plea of personal bar is also founded on the assignation by the First Assignation of know-how. In view of my earlier conclusion, this issue does not arise for decision and I shall deal only briefly with it. It gives rise to a number of difficulties for the defenders. First, although the First Assignation refers comprehensively to "all know-how relating therein or thereto", it is far from clear on the evidence what particular property was in fact carried by that deed or what use, if any, the pursuer made of such property for the purpose of making the invention later claimed in the 321 Patent. Secondly, I am not satisfied that the defenders, to whom no right to know-how was assigned by the Second Assignation, are entitled to insist on a plea of personal bar against the pursuer in this respect.

As to the first matter, a distinction falls, in my view, to be drawn between know-how assignable as an item of property and know-how in the form of skill, experience and learning which accrues to and is retained personally by an individual by reason of his direct involvement in the making of an invention or the development of a device. The First Assignation does not constitute a contractual obligation on the pursuer not to use know-how in the second sense acquired by him in the course of making the invention claimed in the 311 Application or in producing or developing any device in furtherance of it. A question might, in any event, have arisen about the enforceability of any such contractually undertaken obligation. Moreover, no right to enforce any such obligation has been assigned to the defenders. Know-how in the first sense might include, for example, drawings or written specifications created in the course of the production or development of a device made in furtherance of the 311 Application but there is no evidence that the pursuer, subsequent to his departure from Innovations, had access to or made use of any such material.

As to the second matter, Mr Clark relied on a passage in Gloag and Henderson - Introduction to the Law of Scotland (10th Ed) at pages 57-8 where the learned authors, interpreting the famous dictum of Lord Birkenhead in Gatty v Maclaine 1921 S.C.(H.L.)1 at page 7, state:

Mr Clark argued that the defenders were a person whom the pursuer as a reasonable man was bound to regard as interested. He also referred to Rankine on Personal Bar at pages 7-8. He argued that, the First Assignation having been granted, the receivership having occurred and the pursuer being fully aware that the defenders were, in reliance on that assignation, seeking to develop a brake fluid safety meter on the basis that they had the right to the 311 concept, the pursuer was in a question with the defenders personally barred from insisting in the patent right obtained by him as a result of himself using know-how to develop the assigned concept. I do not doubt that in some circumstances personal bar may effectively be pleaded against a person with whom the party advancing the plea has had no actual relations; but even if the factual basis on which this argument proceeded was fully made out (which I doubt), I find nothing in the evidence to establish the proposition that the pursuer by his words or conduct justified the defenders in believing that a certain state of facts existed and is now seeking to affirm against the defenders that a different state of facts existed at the same time. I would have repelled the defenders' plea of personal bar in so far as based on the assignation of know-how.

As I have decided the assignation issue in so far as turning on "improvement" in the defenders' favour, the issue of infringement does not arise for decision. However, as much time was devoted to it, it is appropriate that I address it and express my conclusions on it.

The pursuer maintains that the brake fluid tester which the defenders have been manufacturing and selling since about August 1994 is an infringement of Patent 321. He avers that that device "avoids the depth of fluid into which it is plunged being critical to its accurate operation by limiting the amount of fluid which enters the chamber for heating and testing by the trapping of air above the fluid, i.e. the system which was the inventive step in the pursuer's device. The said Brake Fluid Tester infringes the pursuer's patent 2287321 by infringing claims numbered 1, 2, 4, 5, 9, 13 and 15 as per the specification in that it includes a probe casing having a lower portion retaining fluid to be tested and an upper portion retaining air with a side wall aperture or apertures adjacent to the boundary of the air and fluid housing portions, which portions are in fluid communication. It provides for the monitoring of the temperature of a given volume of the fluid to be tested trapped in the lower portion by air and heated by a heater. Thus on immersion of the probe the position of vents is below the liquid surface level and thus a pocket of air is trapped within the probe above the aperture semi-encapsulating the fluid to be heated and tested in a pre-set volume. It contains an electronic display on the tester of the temperature of the fluid measured by the probe. It is largely insensitive to the depth of fluid to be tested into which the operative plunges it".

As will be evident from the recital of those pleadings, both parties to some extent proceed upon an erroneous comparison viz between the device made by the pursuer and the device made by the defenders. The proper comparison is, of course, between the claims in the pursuer's patent, as properly interpreted, and the device made and sold by the defenders. Such an error of approach was to some extent also evident in the evidence which was adduced. There was also, in my view, an undue concentration on the terms of Patent 928, the patent subsequently granted to the defenders.

The device manufactured and sold by the defenders since about August 1994 may be described as follows. It is a hand held meter for measuring the boiling point of a range of liquids, primarily brake fluids. It is designed to be capable of drawing power from the battery of the vehicle the brake fluid of which is being tested and for that purpose leads with crocodile clips run from the upper part of the meter in which the electronics are contained. The lower part of the device comprises a probe for insertion into the reservoir containing the liquid to be tested. The probe is cylindrical in shape and tapers very slightly from its head to its base. It is about 95mm in length. At its base its diameter is about 16mm. In its base are a number of holes opening into the interior of the probe. Approximately one-quarter of its length from its base the interior of the probe is closed. Through that closure there pass from above by sealed openings a thermocouple for measuring the temperature of the liquid and two electrical leads serving a heating coil. Within the volume of the probe below the closure is a cylindrical structure made of brass forming an inner chamber. The thermocouple and the heater are in relatively close proximity to each other within that inner chamber. That inner chamber, which is open at the bottom, extends downwards to a point a short distance above the base of the probe and upwards to the lower surface of the closure. An annular space is thus formed between the external surface of the inner chamber and the internal surface of the probe casing. At the top of the brass structure there is an opening allowing communication by what was referred to in the evidence as "the cranked passage" between the inner chamber and the annular space. There is an aperture in the probe casing. This is located about 3mm below the level of the top of the brass structure. That height differential and the size of the cranked passage have been so set by the defenders in the light of practical experience of devices of varying dimensions.

When the probe is inserted, substantially vertically, into the brake fluid reservoir, liquid rises within the probe, both in the annular space and in the inner chamber, air being expelled from the annular space by the aperture in the casing and from the inner chamber via the cranked passage, the upper annular space and the aperture in the casing. Filling ceases when the liquid rises to the level of the top of that aperture. In spaces above that level air initially remains. When the device is switched on, the heater commences to raise the temperature of the liquid in the inner chamber. The heater, which has a wattage in the range of 70 to 104 (dependent on the voltage of the car battery being used as a power source), is designed to run for a fixed period of 27 seconds or thereby. The boiling point of the brake fluid in the inner chamber varies to an extent dependent on the amount of water absorbed in it. With fresh brake fluid of ordinary quality the boiling temperature is in the order of 260ºC. With the absorption of a relatively small amount of water, the boiling temperature markedly falls. It may fall as low as 140ºC or even lower. In normal operation the liquid in the inner chamber reaches boiling point before and sometimes substantially before the heating period is complete. A display arrangement on the upper part of the device indicates the measured (or calculated) boiling temperature of the brake fluid under test. It will be necessary to say something later about the electronic means (in so far as disclosed by the evidence) as to the way in which this is achieved.

At the end of the proof, as will appear, the principal technical issue between the parties was whether, in the course of operation of the defenders' device in normal circumstances, there is on boiling an overflow of liquid from the inner chamber through the cranked passage, the upper annular space and hence the aperture in the outer casing ("the weir effect") with cooler liquid being drawn into the inner chamber from below. A related issue also arises, namely, whether, if the weir effect does operate in normal circumstances, it does so only after all significant measurement of temperature has been completed.

These issues, as so formulated, are not very clearly focused in the pursuer's pleadings. However, the pursuer's case for infringement in relation to the first of these is perhaps sufficiently pled by the averment that the defenders' device "[limits] the amount of fluid which enters the chamber for heating and testing by the trapping of air above the fluid, i.e. the system which was the inventive step in the pursuer's device" - if emphasis is placed on the mechanism of "the trapping of air above the fluid". The pursuer also avers, in response to the defenders' averments, that "in operation the [defenders'] device as manufactured does not provide steady flow during boiling". These averments together may be taken to constitute an offer to prove that the defenders' device in operation does not in fact have a weir effect, liquid in the inner chamber being held there during operation by the trapping of air above it. The second issue, as formulated, does not appear at all, at least expressly, in the pursuer's pleadings, though it emerged to some extent at least in the course of the proof.

The potential significance of these technical issues can be appreciated by consideration of the claims in the patent in suit. Claim 1 of that patent has already been set out. For present purposes I must assume that this claim satisfies the requirements for a valid patent specification, including the sufficiency requirements of section 14(3) of the 1977 Act. (It is not clear on the evidence that a device constructed simply on the basis of what is taught by claim 1 would actually work; but for present purposes I assume that it would). The critical passage in it is "a casing defining a housing providing a lower housing portion wherein fluid to be tested is retained and an upper housing portion above said lower portion wherein air is retained, said upper portion being in fluid communication with the lower portion, first aperture means on the casing adjacent the boundary of said upper and lower housing portions, said temperature monitoring means sensing the temperature of fluid in said lower housing portion". The essential inventive step is that earlier described viz. the elimination or substantial elimination of the flow by convection of liquid out of the housing. There is no express provision in the quoted passage as to the period of time during which there is to be retention of fluid and of air in the lower and upper housing portions respectively. As a matter of language, there being no express limitation of time, the primary meaning might be said to be that such retention is to endure throughout each operation of the relative device. A secondary meaning might be that such retention is to endure throughout such period of the operation of the device as the temperature of the fluid is being importantly sensed by the temperature monitoring means for the purpose of ascertainment of the boiling point of the fluid under test.

There is a substantial body of authority on the interpretation of patent specifications. Section 125(1) of the 1977 Act provides:-

The Protocol on the Interpretation of Article 69 of the European Patent Convention provides:-

In Conoco Speciality Products (Inc) v Merpro Montassa Ltd 1992 S.L.T.444 Lord Sutherland at page 448 expressed the opinion that section 125(1) taken along with the Protocol did not make a material difference to the principle of construction which his Lordship had drawn from certain decided cases, including Catnic Components Ltd v Hill & Smith Ltd [1982] R.P.C.237 where Lord Diplock in particular expressed and explained the purposive approach appropriate to the interpretation of patent specifications. In Catnic the particular word under construction was "vertical". At page 243 Lord Diplock said:-

In Catnic it was held that designs whereby the back plate of a steel lintel was not precisely vertical but inclined at a slight angle to the vertical (in one case 6º and in another 8º) were an infringement of the patent in suit, the difference or variation from the precisely vertical not, on a purposive construction, being such as to take it out of the scope of the patentee's monopoly. This approach to construction was subsequently discussed and explained by Hoffmann J. in Improver Corporation v Remington Consumer Products Ltd [1990] F.S.R.181 where the expression under discussion was "helical spring". In Conoco the expression under discussion was "generally cylindrical".

There is no dispute in the present case but that a purposive approach to construction is appropriate in relation to the 321 Patent specification. I have some doubt as to the direct applicability of the three cases referred to in all of which the Court was concerned with the interpretation of express words used in the relative claim. In the present case the exercise is rather one of what temporal term is to be implied. However, in so far as it may be appropriate to speak in the present case of a primary sense and of a variant sense the former would constitute retention throughout the operation of the device and the latter retention only during that part of such operation as was important for ascertaining the boiling temperature of the fluid. In Improver Hoffmann J. distinguished between a literal and a figurative meaning.

The interpretation of a patent specification is a matter for the Court but in giving to it a purposive construction the Court must have regard to the understanding of persons with practical knowledge and experience of the kind of work in which the invention was intended to be used. Having been instructed in the course of the proof by persons with such practical knowledge and experience, including in particular the pursuer and Mr Mills, I am satisfied that the primary and variant senses which I earlier identified from the language of claim 1 are how persons with such practical knowledge and experience would understand claim 1. This conclusion does not proceed on the basis that I accepted any particular evidence in that regard but that this is a reasonable distillation of the available technical evidence as to what a hypothetical person of that type, acting reasonably, would understand. I have also had regard, in interpreting the claims in the patent specification, to the description and drawings (figures) contained in that specification and, in accordance with the Protocol, have sought to adopt an interpretation which combines a fair protection of the patentee with a reasonable degree of certainty for third parties. I have taken into account the propositions on the construction of patents formulated by Staughton L.J. in Glaverbel S.A. v British Coal Corporation [1995] R.P.C.255 at pages 268-70. A number of other cases were cited by counsel in relation to the approach to interpretation but in the circumstances of this case I find it unnecessary to rehearse or analyse them. In the light of all the material put before me, I am satisfied that the patent in suit falls to be interpreted in the way which I have indicated.

I should at this stage deal with a contention which, at least at one stage, appeared to be at the forefront of the evidence led and of the submissions made on behalf of the pursuer. Mr Stewart, senior counsel for the pursuer, submitted in effect, as I understood him, that there was infringement of the patent in suit by reason that, during the phase while the fluid in the inner chamber was being heated from cold towards boiling point, it was retained in that chamber by reason of the air in the space above it and the position of the aperture in the outer casing - a feature shared with a device made in accordance with Patent 321. This contention is, in my view, misconceived. Patent 321 claims a device for indicating the boiling point of fluid and describes the mechanism whereby, among other features, fluid is retained in the lower housing portion until at least temperature measurements have been taken sufficient to indicate its boiling point, if not for longer. This is evident from consideration of the claims, read individually or as a whole, the description and the drawings. The specification does not claim an invention for retaining fluid in a chamber in respect of a stage preparatory to significant sensing of the temperature of the fluid being heated. Had it been intended that a claim be made for such a "subordinate" invention, it would have been necessary distinctly to claim it in the patent (Clark v Adie [1877] 2 A.C.315 per Lord Cairns, L.C. at pages 320-1). Accordingly the acceptance, appropriate as it was, by the defenders' patent agent in evidence that the defenders' device shares certain features with the invention claimed in Patent 321, these being features relative to such a preparatory phase, does not justify a conclusion, even prima facie, that there is infringement.

Mr Stewart in a related submission contended that it was for the defenders to prove, as they aver, that their device innovated on the pursuer's invention in some material respect, the only material variant contended for by them being the weir effect. That submission I also reject. In my view, it is for the pursuer to prove that there has been an infringement of his patent. The pursuer does not invert the onus by proving that the defenders' device shares an incidental feature of the pursuer's patent or enjoys the advantages of such a feature - such as the retention of fluid in a lower housing portion during the preparatory pre-boiling phase. Nor is the onus inverted because it is the defenders who manufacture the allegedly infringing device and might for that reason be supposed to be in the best position to show any relevant difference in operation or performance (Conoco Speciality Products (Inc) v Merpro Montassa Ltd, per Lord Sutherland at page 456E). Nor is the onus inverted because the defenders aver a difference. Accordingly, in respect of the primary sense of claim 1 of the patent in suit, the pursuer, if he is to establish infringement, must prove that throughout the operation of the defenders' device in normal circumstances fluid is retained in the lower housing portion. (I leave aside at present any question of any other arguably necessary elements of proof such as retention of air in the upper housing portion). Alternatively, the pursuer, in respect of the variant sense, must, if he is to establish infringement, prove at least that in the operation of the defenders' device in normal circumstances fluid is so retained until such time as the boiling point of the fluid has, by whatever electronic means are deployed, been sensed by the temperature monitoring means. In the passage cited Lord Sutherland said:

Mr Stewart relied on a passage in the speech of Lord Diplock in Catnic at p.241 where his Lordship said :-

I do not, however, read those words as being at all concerned with the onus of proof of any factual matter but with identifying the issue for interpretation. Likewise the "nutshell question" referred to by his Lordship at p.244 is concerned with interpretation, albeit as seen through the eyes of the skilled person.

It is at this stage appropriate to make certain observations about the procedural history of this case. The cause being one to which Chapter 55 of the Rules of Court applies, a pre-proof hearing was fixed after the closing of the Record. At the end of the first diet of that hearing, held on 27 June 1997, parties were appointed to lodge in process no later than 8 August reports of skilled witnesses on which they intended to rely at proof in so far as relating to the issues of infringement and of assignation. They were also then appointed to lodge in process, no later than 28 August, notes of inter alia their respective proposals (if any) on experimentation and of any other proposals for further procedure. The pre-proof hearing was continued until 29 August. At that continued hearing it was reported by each party that experiments had been carried out, by Dr Lockerbie (for the pursuer) and by Dr Campbell (for the defenders). Their respective reports were lodged and notes of technical responses inter se were ordered to be lodged by 3 October. The pre-proof hearing was further continued until 6 October. Such responses were duly lodged. At the further continued hearing the scope of the proof (restricted to the infringement and assignation issues) was finally settled. That proof was appointed to proceed on 17 February 1998 and the seven ensuing days.

The proof commenced on 17 February but did not conclude in the allotted period. Further proof was heard in June, July and October 1998. In all 19 days of evidence were heard. The hearing on evidence took place in March 1999.

This protracted and undoubtedly expensive exercise was substantially contributed to by what, at least in retrospect, can be seen to have been a failure to make appropriately focused preparations for the proof. In the course of the evidence led from the pursuer himself and initially from Dr Lockerbie, although the issue of the existence or otherwise of a weir effect in the operation of the defenders' device was to some extent addressed, the general thrust was that on liquid boiling in the inner structure an uncontrolled boiling state in some circumstances occurred, the liquid being forced in an explosive and pulsating way downwards in and out of the base of that structure. The oral testimony to that effect was sought to be supported by "demonstrations" conducted in the well of the Court. At this stage in the evidence the pursuer himself acknowledged that some liquid could be expelled over the weir, though in his view most of the heat loss arose from the pulsating effect. Dr Lockerbie supported the pulsating hypothesis, though he also at that stage acknowledged that, if the boiling were to be very violent, some liquid might also pass over the weir. Although experiments had, as envisaged in the pre-proof procedure, been conducted and reported on by Dr Lockerbie, none of those experiments addressed the critical issue of the existence or otherwise of the weir effect. Indeed, Dr Lockerbie had not prior to the proof carried out any experiments on the defenders' device. The pursuer's proof on that aspect accordingly rested on hypotheses as to what happened physically in the operation of the defenders' device, combined with "demonstrations" conducted in Court. The latter, as to which I shall have certain further observations to make, were necessarily conducted in conditions wholly inconsistent with sound scientific principles for the conduct of experiments. Dr Lockerbie's testimony at this stage may be encapsulated in evidence by him that "until I have seen (the weir effect) demonstrated I find it hard to believe that it happens". As to the second technical issue (when the material temperature measurement was in the operation of the defenders' device complete) the pursuer in effect dismissed this as being a matter "merely of the electronics" and not germane to the matter in dispute. Dr Lockerbie in examination in chief did not address this issue at all. In cross examination he accepted that to identify a temperature peak it would be necessary to continue measuring temperatures beyond it but opined that that might only be to the extent of a fraction of a second. In that state of affairs the pursuer's counsel closed his case.

The use of "demonstrations" was infectious. In the course of the resumed proof in June Mr Clark for the defenders tendered a perspex device (device "T"), apparently made by Mr Mills some 10 days earlier, with which Mr Clark proposed that a "demonstration" should take place in Court. He intimated that parties were agreed that it should be lodged, the defenders accepting that it might be necessary that Dr Lockerbie be recalled to deal with the operation of that device. Mr Stewart at the same time intimated that he proposed to lodge two additional pieces of equipment, apparently for demonstration purposes. Those various items were lodged of consent. Matters were further complicated by the lodgement by the defenders at an even later stage of a yet further device, a dismantled version (device "Z") of the defenders' marketed device (device "M"), which latter device had been lodged prior to the proof. A number of "demonstrations" were conducted in Court with these and with other physical items.

The introduction of devices T and Z after the close of the pursuer's case gave rise to the question of recall of certain witnesses and, in particular, of the scope of any evidence to be led from Dr Lockerbie on being recalled. After hearing argument, I ruled that Dr Lockerbie might be recalled for the specific purpose of giving evidence in relation to device T and of dealing with any question of the validity of the demonstrations or tests which had been made with device Z in the course of the defenders' proof. Dr Lockerbie was recalled. He gave without objection certain evidence about device T. Mr Stewart then proceeded to ask Dr Lockerbie about device Z (the dismantled version) and device M (the marketed version) which the witness stated were very similar in the results which they gave. The witness was then asked whether he had been able to measure the volume of the annular space and the cranked passage. At this stage an objection to the line of evidence was taken. After a discussion in the course of which I referred to my earlier ruling as to the scope of matters upon which Dr Lockerbie could be examined on recall and received an assurance from Mr Stewart which I understood to import that my ruling would not knowingly be transgressed, I allowed the evidence subject to competency and relevancy. On further examination of the witness it emerged that in the days prior to his being recalled he had not only measured the volume of the annular space and cranked passage but had carried out, apparently under laboratory or similar conditions, a wide range of experiments on devices Z and M on the basis of which he had reached certain conclusions. Evidence in support of those conclusions, which traversed what were the critical issues in the case and was received subject to competency and relevancy, went in the event in large measure well beyond the scope of my ruling and accordingly was, at least in retrospect and to that extent, plainly incompetent. It was moreover experimental material in respect of which no expert report had been lodged or intimated - the witness, speaking from memory on occasion muddled his figures - and with the methodology and results of which the defenders' counsel had no means adequately of coping. It would be grossly unfair to have any regard to such evidence. I therefore reject it both on grounds of competency and of fairness. I took into account the criticisms, apparently well-founded, which Dr Lockerbie had of device T, and his evidence otherwise on recall to the very limited extent that it truly went to criticism of the tests carried out by the defenders in Court with device Z.

However, before leaving that chapter it is appropriate to make one further observation. Dr Lockerbie, as he acknowledged in evidence, could have carried out and reported upon such experiments, which went to the very heart of whether or not there was a weir effect, at a much earlier stage. The defenders' marketed device (M) was readily available; Dr Lockerbie also had a dismantled version of it at the time when he swore an affidavit for the purposes of an interim interdict hearing at the outset of this litigation. If there had been any difficulty in securing access to material for experimental purposes, an appropriate application could have been made well before the proof commenced. The same is true of material, including documentation, bearing on the electronics incorporated in the defenders' device. However, having rejected this evidence for the reasons which I have given, I address the critical issues on the basis of the remainder of the evidence.

None of the experiments carried out on behalf of either party prior to the commencement of the proof and described in the expert's reports was directed to these critical issues. Accordingly it is necessary, for the purpose of attempting to reach conclusions on them, to have regard to such other forms of testimony as were available. The prospectively significant witnesses on these matters were principally the pursuer (the inventor of the patent in suit), Mr Mills (who had designed the defenders' device), Dr Lockerbie (the expert led on behalf of the pursuer) and Dr Campbell (the expert led on behalf of the defenders). Mr Szczuka, the defenders' patent agent, gave certain evidence from his own professional perspective touching on those issues but I found that aspect of his evidence to be of only limited assistance. The individuals who had actually been involved in the design of devices in the field (the pursuer and Mr Mills) and the experts who were able to bring their knowledge of physics and related sciences to bear on the issues (Dr Lockerbie and Dr Campbell) seemed best placed to assist the Court.

The proof took a remarkable course. As earlier noted, the evidence of the pursuer and of Dr Lockerbie (when he first gave evidence) touched only to a limited extent on the weir effect. The limited significance ultimately placed by Mr Stewart on that evidence is confirmed by the almost total absence of any reference to it in his submissions at the end of the proof. Mr Mills gave evidence that the weir effect did occur; the whole concept of the design which had led to the creation of the defenders' device had proceeded on the hypothesis that it did. Dr Campbell, although he had conducted no experiments directed specifically to the existence or otherwise of the weir effect, had observed the defenders' device (amongst others) operated in experimental circumstances and in evidence in chief supported the hypothesis that such an effect did occur. It was consistent with the phenomenon that, as a liquid approaches boiling point, the evolution of bubbles within it tends to reduce its density and thus to enlarge its volume, such enlarged volume being maintained or, depending on the vigour of boiling, possibly further enlarged as it boils.

Dr Campbell was subjected to a long and detailed cross examination in the course of which almost 30 "demonstrations" were conducted in his presence and as to the effect of which he was questioned. Although these demonstrations ex facie gave rise to a number of interesting and difficult questions concerning the operation of the defenders' device, this elaborate exercise did not constitute, in my view, a reliable process for eliciting considered expert testimony. Of their very nature such demonstrations were not conducted under appropriately controlled laboratory or similar conditions or in accordance with any scientifically devised methodology capable of verification. It demanded of the expert witness an immediate response to pseudo-experimental tests and denied to him the opportunity of giving detailed consideration (both as to method and as to result) to what he had just observed. The expert had no opportunity to devise or conduct any experiments in response. Dr Campbell was an impressive scientific witness readily prepared to re-examine in the light of new material assumptions which he had earlier made or conclusions which he had earlier reached. In contrast to Dr Lockerbie, whom I found to be both partisan and dogmatic, I was satisfied that Dr Campbell's views proceeded on a wholly objective approach and could, in so far as based on material which itself was reliable, safely be relied on. In so far as there was a material conflict between those expert witnesses, I preferred the evidence of Dr Campbell.

Mr Stewart indeed relied heavily in his submissions on the evidence of Dr Campbell, in particular on passages in cross examination in which, it was submitted, Dr Campbell had made concessions which negatived or tended to negative the existence of a weir effect in the normal operational range of the defenders' device. The passages in question turned or substantially turned on the demonstrations, as to the value of which for eliciting scientific truth I have the gravest doubts. At the conclusion of his testimony Dr Campbell remained of the view expressed by him in evidence in chief that the weir effect did occur in normal operation of the defenders' device. Although questions were raised to which properly and fairly conducted experiments might have provided a convincing answer one way or the other, on the available evidence I accept Dr Campbell's final view. I reject Mr Stewart's submission that the only proper inference which can be drawn from Dr Campbell's testimony, read as whole, is that at least in respect of brake fluids with a boiling point above 160ºC or thereby the weir effect could not work, an equilibrium heat loss and heat gain occurring at about that temperature. That submission relied heavily on material which Mr Stewart sought to grace with the description "empirical evidence" but which in my view does not, for the reasons given above, have that character. I am satisfied that the defenders have on the acceptable evidence proved that, whatever may be the position in abnormal circumstances, in normal operation of the defenders' device the weir effect does occur in substantially the way in which its designer, Mr Mills, envisaged that it would. But I need not, in my view, go that far. The onus resting as I have held on the pursuer, I am satisfied that he has failed to prove that the weir effect does not occur in normal circumstances.

I have already expressed my doubts about the scientific value of the demonstrations. These were indulged in by both sides, though to a substantially greater extent by the pursuer than by the defenders. Some were more instructive than others but they were in general, in my view, unhelpful. Some involved the use as the tested fluid of water, others of fresh brake fluid, yet others of brake fluid to which a little unmeasured amount of water had just been added or water to which a little unmeasured amount of brake fluid had just been added. None of those tested liquids was representative of what in fact would be tested by the defenders' device in ordinary use, namely, brake fluid which had for some time been absorbing moisture from the atmosphere. Rubber bands, rubber rings and other items were deployed in a manner which fell well short of laboratory standards. None of the demonstrations involved a structured range of samples or results. Other criticisms might be made. At one point Mr Stewart was constrained to observe that "all we are doing is making the best use of the materials to hand". These demonstrations were, in my view, both doubtfully competent and wholly inappropriate modes of seeking to resolve the technical issues in dispute.

So far as concerns the other technical issue (whether, on the hypothesis that there is a weir effect in normal circumstances, that effect operates only after all significant temperature measurement has been completed), I accept that, if that effect operated only or virtually only after such completion, there would be infringement. In such circumstances, the weir effect would operate solely as an escape mechanism for liquid whose boiling temperature had effectively already been measured (or calculated) but which, in the interests of safety, required to be expelled from the lower housing portion during the phase while the heater continued to operate. The use of a heater with a relatively high output, designed to operate for a fixed period and with a consequential need for such an escape mechanism, would in such circumstances and all other things being equal, be, in my view, an "inessential integer", the existence of which would not avoid infringement. The liquid effectively being measured for its boiling point would in such circumstances be in effect the same or substantially the same mass of liquid as had been retained in the inner chamber rather than a flow of heated liquid passing upwards through and out of that chamber. However, I am not satisfied that it has been established on the evidence that the weir effect operates solely as an escape mechanism. Evidence on the electronics of the defenders' device was imprecise but the general burden was that, after the weir effect came into operation, temperature measurements relative to calculation of the boiling point by some algorithmic process continued to be taken for an appreciable, albeit in some cases relatively short, time. I prefer on this matter the evidence of Mr Mills, the designer of that device, to that of the pursuer who made certain assertions to a contrary effect; the pursuer later testified that he could not really say when within the heating cycle in the defenders' device the relative measurement was taken. Boiling point being calculated in the defenders' device essentially by reference to a maximum temperature attained by the liquid under test, a number of readings require to be made over time to determine that such a maximum has indeed been reached. That phase, in normal operation of the defenders' device, appears to extend into the period when, following the onset or virtually the onset of boiling, the weir effect comes into operation. Thus, the difference is not merely one of the mode of electronic calculation. The defenders' device operates differently from the pursuer's invention in respect of when and of what the measurements are taken. This process of measurement, although not completed at the first instant of boiling, does not, it seems, prevent the displayed temperature being, for practical purposes, reliably representative of the liquid in the reservoir as a whole.

In these circumstances the pursuer has, in my judgment, failed to prove that the defenders' device constitutes an infringement of the patent in suit. If the weir effect operates in the manner described then, on a sound construction and application of claim 1 of that patent, fluid to be tested is not retained in the lower housing portion as at elevated temperatures fluid passes over the 3mm weir and out of the lower housing portion, being replaced continuously or intermittently by liquid rising into that housing portion from below. Nor for the same reason is "air" retained in the upper housing portion, such air being at least substantially expelled out of the first aperture means by the flow of liquid through the cranked passage and the upper annular space.

I should, in parenthesis, observe at this stage that, on any view, air strictly so called is not retained in the upper housing portion. Even if there is no weir effect and fluid (ie liquid) is accordingly retained in the lower housing portion, there will, as the temperature of the liquid rises, be evolved from it gases, primarily water vapour and in some circumstances possibly lower fractions of the petroleum based brake fluid. Such gases will rise into the upper housing portion; as the pressure increases, the original air or a portion of it (possibly in-mixed with the evolved gases) will be expelled through the first aperture means. There will remain, on this hypothesis, gases, albeit not the air which was there at the outset. However, that alteration of gases and variation from the strict wording of claim 1 is not, on a purposive construction, in my view such as would of itself have avoided infringement.

I should also add that Mr Clark made certain submissions under reference to questions 2 and 3 as posed by Hoffmann J in Improver at p.189. I am not satisfied that on the available evidence I can make any useful findings of fact or reach any legal conclusions with respect to those questions.

Each of the claims in the patent in suit following claim 1 is, with the exception of claim 15, expressly dependent directly or indirectly on that claim. Claim 15 states:-

Reference to the description and to the illustrative figures discloses an inventive step dependent on that expressed in the critical part of claim 1. Accordingly, infringement of claim 1 not having been proved, the contention of infringement of other claims must also fail. I should add that, of the claims alleged in the pleadings to have been infringed, the pursuer in the end departed from any contention of infringement of claims 4, 5 or 13. He sought, without pleading to that effect, to allege infringement of claim 12 as well as of the pleaded claims 1, 2, 9 and 15. Claim 12 is, however, dependent on claim 3, which is neither pleaded nor sought to be relied on. Claim 3 includes as an essential feature a secondary tube in the lower housing portion of a kind not featured in the defenders' device. Accordingly, claim 12, even if I had been disposed to entertain it, is not infringed for that additional reason. Claim 9 is in substance a mere desideratum and of its nature cannot found proceedings for infringement. Claims 2 and 15 add nothing of material significance for present purposes to claim 1.

For the foregoing reasons I was not satisfied that the pursuer had established that the defenders' device infringed the patent in suit. Accordingly, had the matter arisen for determination, I would in the principal action have repelled the pursuer's first plea-in-law and sustained the defenders' fourth plea-in-law.

In the event, however, having regard to my decision on the assignation issue, I shall in due course sustain in the principal action the defenders' fifth plea-in-law but only to the extent that it concerns the matter of improvement. I am also minded to grant in favour of the defenders a decree of declarator in the counterclaim. However, as earlier indicated, before doing so I shall put the case out By Order for discussion as to the appropriate form of such declarator.

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Buchanan v Alba Diagnostics Ltd [1999] ScotCS 159 (24 June 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/159.html Cite as: [1999] ScotCS 159

Scottish Court of Session Decisions