Re British Nylon Spinners Ltd [1963] HCA 28; (1963) 109 CLR 336 (9 August 1963)

HIGH COURT OF AUSTRALIA

Ex parte BRITISH NYLON SPINNERS LTD. [1963] HCA 28; (1963) 109 CLR 336

Patents

High Court of Australia
Dixon C.J.(1), Taylor(1) and Windeyer(1) JJ.

CATCHWORDS

Patents - Extension of term - Applicant - Exclusive licensee of patented invention within a limited field - Whether competent to apply - Patents Act 1952-1960 (Cth), ss. 95, 96.

HEARING

Melbourne, 1963, May 23, 24;
Sydney, 1963, August 9. 9:8:1963
CASE STATED

DECISION

August 9.
THE COURT delivered the following written judgment:-
For reasons which it is unnecessary to specify the question raised by the curious form. It is whether the applicants are not entitled to apply for an extension of the term of letters patent for an invention relating to an improved process for meltspinning of Nylon yarn. As appears from the case the letters patent were originally granted to Imperial Chemical Industries Limited (hereinafter referred to as I.C.I.) but they were later assigned to a company known as E.I. Du Pont de Nemours and Company (hereinafter referred to as Du Pont). Thereupon Du Pont granted to British Nylon Spinners Limited (hereinafter referred to as B.N.S.) what was called an exclusive licence to make use exercise and vend the invention within a certain limited field. It is sufficient for the purposes of the case to say that the "limited field" was defined generally by reference to yarn of which the filament, or any of the filaments, do not exceed 0.09 millimetres in its largest cross-sectional dimension in the drawn condition. Subsequently, Du Pont granted to I.C.I. a licence under the letters patent which was expressed to "be subject to the B.N.S. licence but otherwise exclusive". Each licence was for the unexpired term of the letters patent and for any prolongation or extension of the term. I.C.I. and B.N.S. have now joined in making an application for an extension of the term of the letters patent pursuant to s. 95 of the Patents Act 1952-1960. (at p339)

2. Sections 94 and 95 of the Act provide means whereby a patentee may seek extension of the term of his letters patent where, in the one case, "he has been inadequately remunerated by his patent" and, in the other, on account of what is generally referred to as war loss. These two sections are to be found in Pt IX of the Act"Extension of Patents" - and in terms they permit such extensions to be granted on the application of a patentee. But s. 96 provides that in Pt IX "a reference to a patentee includes a reference to an exclusive licensee". In turn s. 6 of the Act defines the expression "exclusive licensee" to mean "a licensee under a licence granted by the patentee which confers on the licensee, or on the licensee and persons authorized by him, the right to make, use, exercise and vend the patented invention, throughout Australia, to the exclusion of all other persons, including the patentee". (at p339)

3. The contention is advanced on behalf of the applicants that each of them answers to the description contained in this definition and that each is, therefore, an exclusive licensee within the meaning of s. 96. In support of this contention counsel asked us to disregard initially the concluding words of the definition - "to the exclusion of all other persons, including the patentee" - and then to ask ourselves whether each of the appellants does not hold a licence which confers upon it "the right to make, use exercise and vend the patented invention, throughout Australia". Clearly enough each does hold such a licence limited respectively to the fields of which mention has already been made. Then, so runs the argument, each licence, within each limited field, confers upon each applicant a right to make use exercise and vend the patented invention throughout Australia "to the exclusion of all other persons, including the patentee". But the argument is fallacious in the extreme. And if it were sound it would create a situation where, for instance, B.N.S. might apply for an extension of the term of the letters patent under s. 95 and find itself opposed by I.C.I. as a "person interested" pursuant to sub-s. (7). Further in such an application the loss or damage for consideration would be that of B.N.S. alone unaffected in any way by gains or profits which might have been made by I.C.I. by the exploitation of the invention in fields other than that reserved to B.N.S. by its licence. However, strange as these and other obvious consequences of accepting the contention would be, the question must be solved by consideration of the terms of the definition. (at p340)

4. In approaching this question it is to be observed that any number of licences may be granted conferring a right to make use exercise and vend a patented invention. Perhaps it may be said that any number of licences may be granted conferring the right to make use exercise and vend a patented invention. But the introduction of the definite article into the definition suggests that the right must be found in a single licensee for it is the right to make use exercise and vend the patented invention which the licence must be found to confer. However this may be, the concluding words of the definition make it clear beyond doubt that the licence must confer that right to the exclusion of all other persons including the patentee. One of several licences which confer upon each of the respective licensees a right to make use exercise and vend a patented invention within a series of limited fields does not, therefore, constitute an exclusive licence. It may be true to say that each of such licensees has the exclusive right within his limited field to make use exercise and vend the patented invention but this is far from saying that each has the right to make use exercise and vend the patented invention throughout Australia to the exclusion of each other. It is worth observing that s. 101 of the English Patents Act of 1949 contains a definition of "exclusive licensee" which is substantially different from that contained in the local Act. In the English Act it means "a licence from a patentee which confers on the licensee . . . to the exclusion of all other persons (including the patentee), any right in respect of the patented invention". This has been said to "permit a plurality of exclusive licensees to be created in respect of any one patent monopoly": see per Lloyd-Jacob J. in In the Matter of Courtaulds Ltd.'s Application (1956) RPC 208, at p 210 . But an exclusive licensee as so defined has no right to apply for an extension of the term of the patent. The type of licensee who may make such an application is that referred to in s. 25 - "a person holding a licence from the patentee giving to the licensee . . . to the exclusion of all other persons, permission to make use exercise and vend the invention" - and s. 25 is said to contemplate "but one potential applicant, and such applicant must not only derive title from the patentee, but must secure permission to make, use, exercise and vend the invention to the exclusion of all other persons" (1956) RPC 208, at p 210 . This observation may be made with equal force with respect to the Australian legislation. (at p341)

5. It was somewhat faintly suggested as an alternative argument that, since the applicants' licences together cover the whole field in which the invention may be used, they should jointly be regarded as the holder of an exclusive licence as defined. But the difficulties in the way of accepting this proposition are both obvious and insuperable. In our view the question asked should be answered in the affirmative. (at p341)

ORDER

Question raised by the case stated answered "Yes". Costs of the case stated reserved for the order of the Court disposing of the application under s. 95.