Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd [2013] NSWSC 1815

Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd [2013] NSWSC 1815

On the proper construction of the Patent License Agreement, the agreement operated from execution and was not conditional upon or suspended until grant of the Standard Patent; the patent described in the agreement included the Provisional Patent Application, PCT and Standard Patent. The Breakout Locks were made under and covered by the licence, and the first defendant breached the agreement by selling Breakout Locks without paying royalties and by making sales after termination. The Sanctum Lock was not a licensee's improvement, but its third embodiment was a fail safe product competing with or performing the same functions as the Barrier Release Lock, and the Sanctum Lock was...

Jurisdiction
Australia
Judgment Date
03 December 2013
Procedural Posture
Equity Division Proceedings Concerning a Patent License Agreement / Principal Judgment After Hearing
Outcome
The Court found that there was no condition precedent to the operation of the PLA and no suspension of obligations pending grant of the Standard Patent; the Breakout Lock fell within the PLA; the Sanctum Lock was not a licensee's improvement but was a competing good of the same description as the Barrier Release...
Legal Topics
['construction of Patent License Agreement' 'condition Precedent' 'suspension of Contractual Obligations' 'patent Licence Royalties' 'non Competition Clause' 'fiduciary Duties of Director' 'breach of Fiduciary Duty' 'commercial Contract Interpretation']
['contract' 'equity' 'intellectual Property' 'corporations'] ['construction of Patent License Agreement' 'condition Precedent' 'suspension of Contractual Obligations' 'patent Licence Royalties' 'non Competition Clause' 'fiduciary Duties of Director' 'breach of Fiduciary Duty' 'commercial Contract Interpretation']

Case Brief

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Procedural Posture

Equity Division Proceedings Concerning a Patent License Agreement / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the Patent License Agreement was subject to a condition precedent that the plaintiff be the holder of the patent described in Schedule 1 or the Standard Patent be granted.' 'Whether obligations under the Patent License Agreement were suspended pending grant of the Standard Patent.' 'What patent and products were described in Schedule 1 and covered by the Patent License Agreement.' "Whether the Breakout Lock and Sanctum Lock were products covered by the Patent License Agreement or licensee's improvements." 'Whether the Breakout Lock or Sanctum Lock were competing goods of the same description as, or performing the same or similar functions to, the Barrier Release Lock for the purposes of clause 12.' 'Whether the first defendant breached the Patent License Agreement by selling Breakout Locks and failing to pay royalties.' 'Whether Mr Watmough owed and breached fiduciary duties to the plaintiff by applying for the Sanctum Lock patent and related conduct.' 'What relief should follow from any contractual or fiduciary breach.']

Ratio Decidendi

On the proper construction of the Patent License Agreement, the agreement operated from execution and was not conditional upon or suspended until grant of the Standard Patent; the patent described in the agreement included the Provisional Patent Application, PCT and Standard Patent. The Breakout Locks were made under and covered by the licence, and the first defendant breached the agreement by selling Breakout Locks without paying royalties and by making sales after termination. The Sanctum Lock was not a licensee's improvement, but its third embodiment was a fail safe product competing with or performing the same functions as the Barrier Release Lock, and the Sanctum Lock was...

Court Disposition

The Court found that there was no condition precedent to the operation of the PLA and no suspension of obligations pending grant of the Standard Patent; the Breakout Lock fell within the PLA; the Sanctum Lock was not a licensee's improvement but was a competing good of the same description as the Barrier Release...

Orders

  • ['The parties are to confer on the figures for sales and on the most expeditious and cost effective way of determining the extent of sales.' 'The parties are to endeavour to reach agreement on the amount to be paid by the first defendant.' 'The plaintiff is entitled to the return of any material relating to the...