23rd May 2023
His Honour Judge Hacon concluded that two of the patents which Autostore asserted against Ocado were actually invalid due to a lack of novelty after Autostore disclosed some proposed designs to EVS in an email in July 2010, prior to the patent filing date. Whilst UK law considers whether a party is ‘free in law and equity’ to share the relevant information, here the disclosure was made by a Norwegian company to a Russian company with no prior agreement in place. The question of which law should be applied therefore became the main area of dispute between the parties. Ultimately, UK law turned out to be of little relevance, and it became clear that jurisdiction matters in patent disputes. Alan Harper and Eleanor Hunt of the Intellectual Property team at Walker Morris explain the practical implications of the case.
Where there is a ‘conflict of laws’, the Court will consider the provisions of Regulation (EC) No 864/2007 of the European Parliament and of the Council f 11 July 2007 on the law applicable to non-contractual obligations (Rome II). This is a retained piece of EU legislation designed to assist the Court in determining which national law applies to disputes involving non-contractual obligations. The Court will first consider if Rome II applies and if it does, which article of Rome II has then been engaged.
In this particular case, the Court decided that Article 12(2)(a) of Rome II had been engaged which states that the applicable law is the law of the country in which the damage occurs. Therefore Russian law was the applicable law. Under Russian law, establishing if an obligation of confidence exists largely depends on whether or not the parties have entered into an express contract of confidentiality. Autostore had not entered into a contract with EVS before making the disclosure and therefore it was not deemed to have been made in confidence. The disclosure was deemed to be a valid public disclosure and so the Court concluded that the patents were invalid due to a lack of novelty.
The food and drink industry is a global one and it is increasingly common for UK clients to be dealing with companies from across the world either as customers or suppliers. When dealing with either, you should be mindful of what laws would apply to such dealings as this could change the way you do business. In the above case the judge noted that had UK law been applicable, an obligation of confidence would have existed which only reiterates the importance of jurisdiction. In the event of a dispute and any alleged ‘conflict of laws’, entering into an agreement first means that Article 12(1) of Rome II should be engaged which states that the applicable law is the law which applies to the contract. So if you do deal formally with your customers or suppliers, make sure there is an express jurisdiction clause in the contract.
In any event, before making any disclosures regarding an invention that may be the subject of a patent application, clients should always consider whether a non-disclosure agreement should be entered into first and failing that, what the impact of the disclosure could be.
At Walker Morris we have an award-winning Intellectual Property team which offers specialist advice across the full spectrum of intellectual property law. Our lawyers are specialists in the field and are trusted by many household names, innovators and manufacturers to manage and protect their valuable brands and technology. Our team includes both solicitors and chartered trade mark and design lawyers. This means we can provide a complete service for the whole spectrum of IP related matters.