Cinpres Gas Injection Ltd v Melea Ltd [2008] EWCA Civ 9

[2008] EWCA Civ 9Case No A3/2006/2326
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
THE HON MR JUSTICE MANN
HC 03C 04152
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 24/01/2008
Before
THE RT HON SIR IGOR JUDGE, PRESIDENT OF THE QUEEN'S BENCH DIVISIONTHE RT HON LORD JUSTICE JACOBTHE RT HON LORD JUSTICE RICHARDS
Between
CINPRES GAS INJECTION LIMITEDAppellant
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Peter Prescott QC and Jessie Bowhill (instructed by Wragge & Co) for Appellant/ClaimantIain Purvis QC and Benet Brandreth (instructed by Nabarro) for Respondent/DefendantHearing Hearing dates : 27/28 June 2007and 20 November 2007
Judgment
[1]This is the judgment of the court on appeal from a decision of Mann J [2006] EWHC 2451 (Ch). It followed a trial of 15 days. The dispute is about the ownership of European Patent (UK) No. 0,424,435. Mann J had the unenviable task of deciding, as between two liars and perjurers, what the truth was (or at least what was most likely) about the making and ownership of the invention the subject of the Patent. His task was made all the harder because most of the supporting witnesses were themselves unreliable.[2]James Hendry was one of the liars. The other was Michael Ladney. Neither deserves the courtesy of a “Mister.”[3]Mann J observed at the outset that “this is a very strange case.” It has got a good deal stranger since then. Both sides have taken or tried to take fresh points to such an extent that the case hardly seems the same as the one with which Mann J had to deal.

Introductory

[4]The Patent is registered in the name of a Gibralterian company, Melea Ltd. Hendry is named as the sole inventor. Melea is a company which is wholly or mainly a creature of Ladney. He gave perjured evidence to the effect that he knew little about it, whereas in fact he controlled it enough to cause it to buy a yacht for $1.9m. Melea is a vehicle of Ladney. It derives its title (or purported title) to the patent from Ladney via another Ladney company called Milad created for the purposes of defeating his creditors, particularly the US Government. Ladney originally claimed his title from Hendry, the alleged inventor.[5]Cinpres and Melea are competitors in the plastics moulding industry. The invention is called the “spillover” process. The Judge describes it at [4]. It avoids sink and weld marks in hollow plastic articles. The Judge found that Hendry “acquired, and indeed deployed, knowledge of the spillover process whilst he was at Cinpres” (para. 118) and that the process was used at Cinpres for making plastic plinths for a Bell and Howell projector in early 1985.[6]At the end of 1985 Hendry went to work for Ladney (personally at the time). In 1987 Ladney wanted to persuade General Motors that a plastic moulding could be used for a car door – the car in question being called a Baretta. Hendry used the spillover process and it worked. Ladney caused him to apply for a US patent. Thereafter international patent applications, claiming priority from Hendry’s US application, were made. Ladney claimed to be the owner and Hendry the sole inventor. Later the benefit of the applications was assigned by Ladney first to Milad and then onwards to Melea. It is conceded that Melea can have no better title than Ladney. It is not conceded that Ladney could have no better title than Hendry[7]In January 1991 Cinpres started proceedings against Hendry and Ladney (this was before any onward assignment) under s.12 of the Patents Act 1977 claiming that the application should proceed in its name. It is a curiosity of s.12 that it confers jurisdiction over entitlement disputes not only for UK patent applications but for corresponding applications all over the world. S.12(1) says: At any time before a patent is granted for an invention in pursuance of an application made under the law of any country other than the United Kingdom or under any treaty or international convention (whether or not that application has been made) -(a) any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) any such patent for that invention or has or would have any right in or under any such patent or an application for such a patent; or(b) any of two or more co-proprietors of an application for such a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person; and the comptroller shall determine the question so far as he is able to and may make such order as he thinks fit to give effect to the determination. (a) any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) any such patent for that invention or has or would have any right in or under any such patent or an application for such a patent; or (b) any of two or more co-proprietors of an application for such a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person;[8]Eventually that dispute came before the Comptroller’s Hearing Officer, Dr Ferdinando. Hendry swore that he had made the invention only in 1988 when working for Ladney; that he had not known of it when working for Cinpres. He was believed, even though there was evidence, which was accepted, from a Mr Sayer an employee of Cinpres that it was he who had had the basic idea. In short the Hearing Officer held that two people, Mr Sayer and Hendry, had independently hit upon the same idea, Mr Sayer at Cinpres and Hendry, later, with Ladney. On appeal Laddie J thought Dr Ferdinando had failed to take into account certain undisputed evidence and reversed the decision. But his decision, on a yet further appeal, was itself reversed by this Court (Ladney and Hendry’s International Appn. [1998] RPC 319). The basic reason was that the Hearing Officer had had the advantage of seeing and hearing the witnesses, though the court clearly had some misgivings. Peter Gibson LJ said that the hearing officer’s decision could not be said to be “plainly right”, although he himself was uncertain whether he would have reached the same decision.[9]So Cinpres lost. The patent was eventually granted by the European Patent Office on 4th July 2001. It names Melea as patentee and Hendry as sole inventor.[10]Much later Hendry told Cinpres that he had perjured himself in the first Patent Office proceedings. The Judge describes how this came about at [50-55]. On 30th June 2003 (within the two-year special limitation period provided by s.37(5)) Cinpres started entitlement proceedings in the Patent Office pursuant to s.37 of the Act. This is the provision which comes into play once a patent is granted. International jurisdiction is not conferred by it. It provides:
“(1) After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question – (a) who is or are the true proprietor or proprietors of the patent; (b) whether the patent should have been granted to the person or persons to whom it was granted; (c) whether any right in or under the patent should be transferred or granted to any other person or persons; and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination. (2) Without prejudice to the generality of subsection (1) above, an order under that subsection may contain provision – (a) directing that the person by whom the reference is made under that subsection shall be included (whether or not to the exclusion of any other person) among the persons registered as proprietors of the patent; (b) directing the registration of a transaction, instrument or event by virtue of which that person has acquired any right in or under the patent; (c) granting any licence or other right in or under the patent; (d) directing the proprietor of the patent or any person having any right in or under the patent to do anything specified in the order as necessary to carry out the other provisions of the order. ………. (8) If it appears to the comptroller on a reference under subsection (1) above that the question referred to him would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court’s jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so. (9) The court shall not in the exercise of any such declaratory jurisdiction determine a question whether a patent was granted to a person not entitled to be granted the patent if the proceedings in which the jurisdiction is invoked were commenced after the end of the period of two years beginning with the date of the grant of the patent, unless it is shown that any person registered as a proprietor of the patent knew at the time of the grant or, as the case may be, of the transfer of the patent to him that he was not entitled to the patent”
[11]Very sensibly and properly (for it is not a tribunal experienced in complicated questions of general law or dealing with cases of acute conflicts of evidence or allegations of a quasi-criminal nature) the Office exercised its power under s.37(8) to decline to deal with the case; a decision which by that provision conferred the jurisdiction of the Patent Office on the court. So the current proceedings were commenced in November 2003.[12]Before Mann J the proceedings were fought on the assumption that if Hendry had made or acquired knowledge of the invention whilst at Cinpres, subject to the res judicata point, the invention belonged to Cinpres. Mann J held: a) That the invention was made at Cinpres and that Hendry had perjured himself in the first proceedings: b) That Ladney did not know that; c) Accordingly the perjured evidence of Hendry was not to be attributed to Ladney. d) As a matter of law, based on the authority of Odyssey v. OIC Run-Off [2000] EWCA Civ 71, Cinpres’ claim to the patent must fail by operation of the doctrine of res judicata. Odyssey decided that although there is an exception to that doctrine where the first judgment is obtained by the fraud of a party (which includes his perjury), the exception is limited to the fraud of the party concerned.[13]Following Mann J’s judgment there were lots of developments. Firstly Mr Peter Prescott QC for Cinpres in his skeleton and oral argument in June of 2007 sought to take a number of points not taken below. Following the oral argument we received further written submissions and ourselves asked the parties further questions in writing. The further submissions included a fresh point advanced by Mr Purvis QC for Melea. In October in Yeda v Rhone-Poulenc Rorer [2007] UKHL 43the House of Lords held that a decision of this court, Markem v Zipher [2005] RPC 31 about entitlement to a patent was wrong in law. We reconvened to hear fresh oral argument in November. As we have said the case now bears little resemblance to that before Mann J.[14]The result of all this is that we now have the following points to consider: i) Did Mann J decide that Hendry made the invention whilst working as a consultant for Cinpres? (“Was Hendry the actual devisor?”) ii) If so, did Cinpres have the right to apply for the patent by virtue of the agreement it relied upon to give it entitlement? (“Did Cinpres acquire the right to apply?”)[15]These two points are independent of the res judicata point. All the remaining points were aimed by Mr Prescott at circumventing the decision in Odyssey. (3) If it did, is Mann J’s finding of fact, that Ladney did not know the invention was made at Cinpres, insupportable? (“The question of fact”). (4) Was Hendry more than a mere witness in the earlier litigation and a vital part of the litigation team such that his evidence is to be attributed to Ladney? (the “team litigation point”). (5) Is this a case of issue estoppel rather than cause of action estoppel so that the rule in Odyssey does not apply? (“Issue Estoppel?”) (6) Does the former equitable jurisdiction to set aside a decision of a court of equity by a procedure called a Bill of Review still exist and if so is it applicable here? (“Bill of Review”) (7) Does the fact Hendry was actually a party to the first proceedings (so could not himself invoke res judicata) mean that his that co-party in those proceedings, Ladney, should be treated likewise? (“Hendry a Party point”) (8) Should the false evidence of Hendry the first time round treated as the evidence of Melea because it is also a general representation to the world on Melea’s behalf - it is only via Hendry that Melea have title? (“The title point”) . (9) That as between the rival claimants to the invention, equity would favour the first – that no man of conscience in the position of Ladney would hold on to the patent once he knew the truth (“the equity point”).

Section 7 and the decision in Yeda

[16]Before turning to answer the first two of these questions we need to set forth what Yeda decided about the interpretation of s.7 of the Patents Act 1949. This provides: 7.-(1) Any person may make an application for a patent either alone or jointly with another. (2) A patent for an invention may be granted -(a) primarily to the inventor or joint inventors;(b) in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom;(c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned; and to no other person. (3) In this Act “inventor” in relation to an invention means the actual deviser of the invention and “joint inventor” shall be construed accordingly.[17]The House decided that, in the words of Lord Hoffmann: [19] … the first step in any dispute over entitlement must be to decide who was the inventor or inventors of the claimed invention. Only when that question has been decided can one consider whether someone else may be entitled under paragraphs (b) or (c). [20] The inventor is defined in section 7(3) as “the actual deviser of the invention”. The word “actual” denotes a contrast with a deemed or pretended deviser of the invention; it means, as Laddie J said in University of Southampton’s Applications [2005] RPC 220, 234, the natural person who “came up with the inventive concept ….” (1). Was Hendry the actual devisor?[18]We turn to the first question. The first stage is to identify the actual devisor. Mann J clearly set about this task, saying: [63] The main issues in these proceedings are therefore as follows:(i) …(ii) Did Mr Hendry make the invention in 1985? If so, he perjured himself. Alternatively, if he did not make the invention himself, did he find out about it during the course of his engagement with Cinpres? Again, if so, he perjured himself. I should record that Mr Purvis disputed that the alternative issue arose. He pointed out that the pleaded case was that Mr Hendry was actually the inventor, and Mr Hendry’s current evidence was to the same effect and not that he was told by Mr Sayer what the latter had discovered. I shall, however, treat the issue as arising. [63] The main issues in these proceedings are therefore as follows:[19]Later he said: [117] I have concluded that Mr Hendry acquired knowledge of the spillover technology while he was at Cinpres. To that extent I accept the evidence of Mr Sayer, Mr Jordan and Mr Hendry himself. However, I still have to determine what it was that he acquired knowledge of, and in what circumstances he acquired it. Mr Hendry has given evidence of the genesis of the ideas in terms of the paintbrush mould incident. Despite my reluctance to accept his evidence if uncorroborated, I accept his evidence of that incident. I do not think that he has made that up.[20]And under the heading “What in fact happened in this case?” he said: [131] I have already found that Mr Hendry acquired knowledge and experience of the spillover technology when at Cinpres. When he left Cinpres, Mr Hendry took that knowledge with him.[21]The phrase “acquired knowledge of the invention” does not of itself involve a finding as to whether Hendry came up with the concept himself or took it from others. Mr Prescott argued that the most that could be decided is that Hendry was a joint inventor or simply stole the idea. We do not accept that assertion. Mann J accepted the “paintbrush” story. He had earlier recounted this: [8] …. Mr Hendry gave evidence that in 1985 Cinpres received a mould for making paintbrushes from a company. He was carrying out various activities in order to see how best to make the product. From somewhere came the suggestion that he should try gas injection with the mould. One Saturday morning he attempted to do this. At some stage in the morning (which he put at some time in the winter because he remembers it being cold outside) he left the machinery on and ready to deploy while he went out to get some refreshments. When he came back he did not notice that the plastic had been heated at a high temperature for longer than usual, with the result that its viscosity had decreased. When he then operated the injection mechanism, with gas, the process of injection was carried out more vigorously than normal. The effect was that the mould split slightly and plastic and gas vented through certain vents and other parts. He was concerned that he had damaged the mould, but it turned out that he had not. When he examined the product, it appeared to be thinner and lighter than usual in a way which was desirable. The moulded items had “fazed” around the outside, which created rough edges at the point or points where the molten plastic had shot out into the room. The plastic had not been collected anywhere – it had simply been ejected into the workshop. He thought this an interesting result, and was able to repeat it. … {9] Mr Hendry says he realised that the discovery could have a wide application where it was necessary to lighten plastic parts and where one wanted to make sure that the gas got to the extremity of the mould and eliminated sink marks.[22]Accepting that as correct, as the Judge did, is a finding that Henry was the sole devisor of the invention – for the key inventive concept is all there. Whether Mr Sayer also devised it independently does not matter. Actually he could not remember who had proposed the idea.[23]So the Judge found that Hendry was the sole inventor – which indeed was Cinpres’ primary pleaded case. We proceed on the basis of that finding. (2). Did Cinpres acquire the right to apply?[24]This is a wholly new point taken in this Court for the first time. As we have said it emerged only in written submissions following the oral argument in June and before the decision in Yeda. It was never raised in the earlier proceedings at all (though to be fair it was not Cinpres’ case in those proceedings that Hendry had made the invention at all). It is not a point dependent on the decisions in Markem or Yeda. Nor, if it is right, does it involve any question of estoppel. Mr Prescott did not object to the point being raised now.[25]Mr Purvis submits that even though the invention was made by Hendry whilst he was a consultant to Cinpres, the contractual arrangements between him and Cinpres did not entitle Cinpres to apply for a patent for it.[26]The question is whether those arrangements made Cinpres a successor in title to the invention within the meaning of s.7(1)(c) of the Act.[27]The ultimate agreement between Cinpres and Hendry (and Hendry’s company, HEI), and that which it is said conferred title upon Cinpres, was entered into after Hendry’s consultancy with Cinpres was over. It is an agreement dated 28th November 1986. It was to replace earlier agreements and assignments and to effect a settlement of litigation between Cinpres and Hendry and other disputes. Its recitals set out the background:
“WHEREAS, Hendry, HEI, Peerless Foam Moulding Company Limited (hereinafter “PFM”) and Gahan are parties to an existing agreement dated May 17, 1984 (hereinafter the “Original Agreement”), concerning technology relating to injection molding; and WHEREAS, pursuant to an assignment dated September 19, 1984, to which Hendry and HEI were also parties (hereinafter the “Assignment”), PFM assigned to Cinpres all rights, benefits and obligations under the Original Agreement; and WHEREAS, the Original Agreement was amended by an amending agreement dated November 12, 1984 to which Cinpres, HEI, and Hendry are parties (hereinafter the “Amending Agreement”); and WHEREAS, under their existing Agreements with Cinpres, Hendry and HEI are under certain obligations of confidentiality; and WHEREAS, there has been no communication of technology relating to injection molding between Cinpres and Hendry or HEI since December 18, 1985; and WHEREAS, certain disputes have arisen between Hendry, HEI and Cinpres concerning an alleged relationship between Hendry and Sajar Plastics, Inc. and concerning certain other matters; and WHEREAS, Hendry and HEI have questioned the enforceability of certain provisions of the Original Agreement; and …”
[28]The purpose of the agreement is then set out in the final recital:
“WHEREAS, for reasons of convenience and economy the parties hereto desire to resolve all disputes and claims between them on the terms and conditions of this Agreement.”
[29]The agreement then sets out definitions of which the following are material: 1.1 In this Agreement: The “Existing Agreements” means all of the Original Agreement, the Assignment and the Amending Agreement. The “Patents” means patents and patent applications in various countries claiming priority from any of the three applications listed in Schedule 1 hereto…..” “The “Cinpres Technology” means technology developed by or for Cinpres or PFM prior to December 18, 1985 for the production of plastic mouldings having a smooth surface, certain features of which are described in the Patents.”[30]The identified Patents do not include the patent in dispute here. However Mr Purvis accepts that the invention of this patent does fall within the definition of “Cinpres Technology”.[31]Clause 2 of the agreement sets out the release of all existing claims any party might have against the other and that existing UK proceedings (which were by Cinpres against Hendry) be discontinued.[32]Clause 9 provides for confidentiality:
“4. Confidentiality. (i) For a period of seven (7) years after the Effective Date (the “Confidentiality Period”), neither Hendry nor HEI, their Directors, officers and employees (for whose acts or omissions Hendry and HEI shall be liable), shall use or disclose to any persons any feature or combination of features of the specifications, structure, function or methods of operation or control of the pneumatic and/or fluid injection sub-assembly of the Cinpres Conversion Kit which shall be outside the public domain (or in the public domain if due to default by Hendry or HEI or their directors, officers or employees). Hendry and HEI warrant that there has not prior to the Effective Date been any disclosure of such information to any person not a party to this Agreement or released hereunder. (ii) At all times during the Confidentiality Period, Hendry and HEI shall keep all information they possess with respect to the Cinpres Technology beyond that protected under clause 4.1 confidential to the extent in accordance with their regular business practice. (iii) [irrelevant].”
[33]Clause 5 deals with obligations concerning the Patents (i.e. those listed in Schedule 1). It provides:
“5. Patents (i) HEI and Hendry undertake jointly and severally with Cinpres that they will execute sign and do all such instruments, applications, documents, acts and things as may reasonably be required by Cinpres to maintain the Patents in force and to resist any attacks by third parties on their validity. (ii) Without prejudice to the generality of clause 5.1, HEI and Hendry agree to use their best efforts to assist Cinpres in the prosecution of the applications within the Patents. This obligation includes the prompt execution or swearing of any necessary or desirable assignments, other formal papers, affidavits, oaths and petitions and powers of attorney in favor of Cinpres or its prosecuting attorneys or patent agents. (iii) Cinpres shall pay all reasonable costs and expenses incurred by HEI or Hendry in complying with the obligations provided in clauses 5.1 and 5.2. (iv) Hendry and HEI hereby warrant to Cinpres that to the best of their knowledge they have done nothing which would invalidate the Patents or any of them.”
[34]Of some importance is clause 6.3: Neither Hendry nor HEI shall hereafter assert any rights in or to the Cinpres Technology except as provided in clause 4.3[35]The last provision we need to mention is an entire agreement clause, which makes it clear that all other agreements are superseded: 6.8 This Agreement represents the entire understanding of the parties in relation to its subject matter and with effect from the Effective Date supersedes and cancels all previous agreements between the parties, whether oral or in writing.[36]Cinpres pleaded entitlement to the invention in the following way in the Re-Amended Particulars of Claim:
“23. The true position … was that during the period of his consultancy in around January 1985, Mr Hendry’s experience of working with gas-assisted injection moulding led him or him together with Matthew Sayer to invent a process for injection moulding a hollow plastic article according to the aforesaid US Patent Application No 217,175 and the Patent (hereinafter “the Over-Spill Concept”). At the time Mr Hendry regarded this as a promising lead to improved gas injection moulding. 24. The Over-Spill Concept was technology developed for the Claimant prior to December 18 1985 for the production of plastic mouldings having a smooth surface and was accordingly “Cinpres Technology” within the meaning of the Final Agreement, and in respect of which Mr Hendry was under an obligation to the Claimant to keep confidential until 12 August 1993 in accordance with clause 4.2. Further or alternatively, the Over-Spill Concept was information generated in the course of Mr Hendry’s consultancy which was confidential and confidential to the Claimant, and in respect of which Mr Hendry was under an equitable duty of confidence to the Claimant not to disclose or use any part thereof without the Claimant’s prior consent. In the premises the Over-Spill Concept was a valuable asset of the Claimant.”
[37]So it is not suggested that this is a s.7(2)(b) case. It is not alleged that Cinpres were entitled to apply for the patent at the time when Hendry actually had the concept, even though at that time he was their consultant. He was not an employee (if he had been s.39 would have vested the invention in the employer) and his contract at the time did not provide that all inventions made by him arising out of and during the course of his consultancy would be vested in Cinpres. Mr Purvis seeks to get something out of this, as we discuss later.[38]Cinpres say simply that by virtue of clause 4.2 of the final agreement the invention, being admittedly “Cinpres Technology” was information which Hendry was obliged to keep confidential and Cinpres could do what it liked with it. Moreover Hendry was expressly precluded from claiming any rights in that information (cl.6.2). The information (“an invention is a piece of information” as Lord Hoffmann said in Merrell Dow v Norton [1966] RPC 76 at 86) was “a sort of inchoate property” (as Lord Walker described an inventive concept prior to the patenting process – the Act itself speaks of “property” in an invention – see.s7(2)(b)). Given that Cinpres could do what it liked with the property, it could use it, disclose it or, if it so chose, patent it. So the agreement effectively made Cinpres the owner of and thus the successor in title to the information constituting the invention. Thus Cinpres were entitled to apply for a patent for it.[39]Mr Purvis marshalled an array of points to counter this argument. First he pointed to clause 5 about Patents. Here, he submitted, was the provision about patenting. It required, as one would expect co-operation from Hendry and contained other provisions about the patenting process. But the provision does not relate to any patent for anything comprised within “Cinpres Technology” – it relates to the defined patents only. By implication therefore the parties cannot have intended that Cinpres were to be entitled to any other patentable invention within the definition – otherwise the machinery and safeguards provided for by clause 5 would have been made broad enough to cover it.[40]Next he said that Cinpres were in effect asserting an implied term: that it had a right to apply for a patent for any invention forming part of “Cinpres Technology.” Such a term was not even pleaded. And if any attempt were made now to amend so to do it would be too late – for there might have been evidence at trial about the “matrix of fact” surrounding the making of the agreement.[41]Mr Purvis then turned to one “matrix” matter which was clearly in evidence – the previous agreements. It is not necessary to turn to much of the detailed wording of these for nothing turns on their precise language The key points are:(a) Under the agreement in force at the time Hendry was a Cinpres consultant and had the inventive concept, Cinpres (or its predecessor) were not entitled to the invention. The agreement relates to three inventions which had already been made and Hendry assigned the right to apply for patents for these for royalties. They were the same inventions the patents for which formed the subject of clause 5 of the final agreement.(b) There was provision about “improvements” made by either Hendry or Peerless (Cinpres’ predecessor in title). But the agreement expressly contemplated that the relevant party could patent inventions it had made. The provision reads: 10. Improvements10.1 In accordance with clause 5.3 [a duty on the parties to communicate to each other the results of R&D] the parties will promptly communicate developments to the other parties.10.2 In any case where HEI or Mr Hendry obtains a patent in respect of any improvement HEI or Mr Hendry shall grant a sole royalty-free licence thereunder with power to grant a sublicence to Peerless10.3 In any case where Peerless obtains a US Patent in respect of any improvement this shall be included within any licence granted to HEI under clause 3 without further payment. So pursuant to the agreement in force at the time of the conception of the invention, it was Hendry who was entitled to apply for a patent. But he was not free to exploit however he liked. All he could do was to use the invention himself. He could not grant a licence to third parties. And Peerless (later Cinpres) would have a royalty free sole licence.(c) Nor at the time of agreement was an improvement even described as “Cinpres Technology.” The name used in the agreement was “Smooth Surface Technology”. It was changed later, when there was an assignment of 19.9.84 (to which Hendry was a party) from Peerless to Cinpres, and re-confirmed in the agreement of 12.11.84 which amended the original agreement. The latter said in a recital: B. The “Smooth Surface Technology” which is the subject of the Original Agreement is now referred to as “Cinpres Technology”. Accordingly the “Cinpres Process” and “Cinpres Know-how” as used herein are the same as “the Process” and “the Know-how” respectively are as defined in the Original Agreement.[42]Based on this background to the final agreement, Mr Purvis submitted that it would be wrong to construe it so as to have the effect of completely conferring on Cinpres the right to apply for patents for improvement inventions. Mr Hendry would – or might - be giving up something substantial, yet all he got financially under the final agreement was a payment of US$50,000. He would be giving up the right to exploit the invention himself.[43]Mr Purvis submitted that one would need an investigation into the factual matrix to consider whether what Hendry was giving up was indeed substantial – that had not happened at trial. In substance there was an allegation of an implied term conferring rights to improvement in Cinpres – to consider whether such a term is necessary you have to know the full background circumstances – and it is too late for that now.[44]We conclude that Cinpres are right – the final agreement had the effect of conferring upon it the right to apply for the patent and made Cinpres a “successor in title” to Hendry within the meaning of s.7(2)(c) of the Act. The following are our reasons.[45]First we reject Mr Purvis’ “too late” point. As we have said the point is pleaded clearly enough that clause 4.2 of the final agreement had the effect of conferring entitlement on Cinpres. It would have been quite open to Melea to lead evidence about the background to the agreement if it had so desired. Besides, it hardly lies in Melea’s mouth, in taking the point for the first time now, to complain that things are too late.[46]More fundamentally, it seems to us that Cinpres are right when the agreement is construed as a matter of business common sense. True it is that prior to the agreement Hendry was entitled to patent any improvement. But commercially he could not do much with it – a retained right to exploit personally or through his one-man company (which is what HEI was) was commercially not really viable. So not much was really given up. Most significantly the agreement overall was clearly intended to create a clean break. The previous arrangements for payment of royalties went with no replacement (so there was to be no longer an ongoing active relationship between the parties) and the existing legal action against Hendry was settled.[47]Next the parties were by then calling the technology “Cinpres Technology” – which hardly suggests they regarded Hendry as owning for the future anything comprised within that term – yet such is the effect of Mr Purvis’ contention.[48]Most fundamentally of all, we simply see no sensible answer to Cinpres’ argument spelt out at paragraph 38 above. Putting it again shortly, Cinpres was to own the “rights” in the information and Hendry was not to own any. If Cinpres owned all the rights, they could apply for a patent.[49]One final point is this. If Mr Purvis is right, then neither Cinpres nor Hendry could apply for a patent. Cinpres could not because on his argument the contract does not entitle it do so and Hendry could not because he was not entitled to disclose the information (cl.6.1) and not entitled to assert any rights in it (cl 6.3). That is a wholly unbusiness-like conclusion: contrary to either parties’ interests. One does not read a business document as intended to have an unbusiness-like effect unless absolutely forced to. Mr Purvis had to accept the logic of the point. He had no real answer: the best he could submit was that when Hendry applied for a patent, that was be a breach of his obligations under the agreement for which he would be personally liable but that could not affect Ladney or his successors in title. That is not an answer at all. (3). The question of fact: did Ladney know of Hendry’s perjury at the time?[50]We start with the approach to be adopted by the Court of Appeal concerning a finding of fact. There was no real difference between the parties about this. The approach is summarised in Assicurazioni Generali SpA v. Arab Insurance Group [2003] 1 WLR 577. This Court essentially affirmed the previous practice in relation to appeals concerning a judge’s findings of fact. Clarke LJ (as he then was) said in a passage endorsed by the House of Lords in Datec Electronic Holdings v UPS [2007] 1 WLR 1325: [12] Thus, for example, in cases in which the court was asked to reverse a judge's findings of fact which depended upon his view of the credibility of the witnesses, it would only do so if satisfied that the judge was plainly wrong. This can be seen from many cases, as for example The Ikarian Reefer [1995] 1 Lloyd's Rep 455, where the court reversed the decision of the trial judge that the plaintiff insured shipowners had not deliberately scuttled their vessel or cast her away. Giving the judgment of the court, Stuart-Smith LJ addressed the correct approach as follows, at pp 458-459:
"(1) The burden of showing that the trial judge was wrong lies on the appellant ... (2) When questions of the credibility of witnesses who have given oral evidence arise the appellant must establish that the trial judge was plainly wrong. Once again there is a long line of authority emphasising the restricted nature of the Court of Appeal's power to interfere with a judge's decision in these circumstances though in describing that power different expressions have been used. In SS Hontestroom v SS Sagaporak [1927] AC 37, 47 Lord Sumner said: 'None the less not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge and unless it can be shown that he has failed to use or has palpably misused his advantage, the higher court ought not to take the responsibility of reversing conclusions so arrived at merely on the results of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case ... Finally in Mersey Docks and Harbour Board v Proctor [1923] AC 253, 258, Viscount Cave LC said: 'In such a case ... it is the duty of the Court of Appeal to make up its own mind not disregarding the judgment appealed from and giving special weight to that judgment in cases where the credibility of witnesses comes into question, but with full liability to draw its own inferences from the facts proved or admitted and to decide accordingly.' (3) When a party has been acquitted of fraud the decision in his favour should not be displaced except on the clearest grounds. This proposition is not in contest and is supported by the House of Lords in Akerhielm v De Mare [1959] AC 789, 806, where the earlier authority of Glasier v Rolls (1889) 42 Ch D 436 is cited" [13] In my view, although it is true that RSC Ord 59, r 3 expressly refers to a rehearing, the exercise upon which the court was engaged was essentially one of review. That is I think so, even though the extract from the speech of Viscount Cave in Mersey Docks and Harbour Board v Procter [1923] AC 253, 259 might suggest that that was not so because of the reference to the court having "full liability to draw its own inferences from the facts proved or admitted"
. However, I observe that CPR r 52.11.1(4) expressly gives the appeal court (which of course includes this court) power to draw any inference of fact which it considers justified on the evidence. There is no suggestion that that rule applies only to appeals by way of rehearing under rule 52.11(1)(b), so that the court has that power when conducting a review. In these circumstances, it seems to me that in the type of appeal in which the court is asked to reverse findings of fact based upon the credibility of the witnesses, the same approach should be adopted in this court whether the appeal is by way of review or rehearing. "(1) The burden of showing that the trial judge was wrong lies on the appellant ... (2) When questions of the credibility of witnesses who have given oral evidence arise the appellant must establish that the trial judge was plainly wrong. Once again there is a long line of authority emphasising the restricted nature of the Court of Appeal's power to interfere with a judge's decision in these circumstances though in describing that power different expressions have been used. In SS Hontestroom v SS Sagaporak [1927] AC 37, 47 Lord Sumner said:
'None the less not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge and unless it can be shown that he has failed to use or has palpably misused his advantage, the higher court ought not to take the responsibility of reversing conclusions so arrived at merely on the results of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case ... Finally in Mersey Docks and Harbour Board v Proctor [1923] AC 253, 258, Viscount Cave LC said: '
In such a case ... it is the duty of the Court of Appeal to make up its own mind not disregarding the judgment appealed from and giving special weight to that judgment in cases where the credibility of witnesses comes into question, but with full liability to draw its own inferences from the facts proved or admitted and to decide accordingly.' (3) When a party has been acquitted of fraud the decision in his favour should not be displaced except on the clearest grounds. This proposition is not in contest and is supported by the House of Lords in Akerhielm v De Mare [1959] AC 789, 806, where the earlier authority of Glasier v Rolls (1889) 42 Ch D 436 is cited" [14]The approach of the court to any particular case will depend upon the nature of the issues kind of case determined by the judge. This has been recognised recently in, for example, Todd v Adams & Chope (trading as Trelawney Fishing Co) [2002] 2 Lloyd's Rep 293 and Bessant v South Cone Inc [2002] EWCA Civ 763. In some cases the trial judge will have reached conclusions of primary fact based almost entirely upon the view which he formed of the oral evidence of the witnesses. In most cases, however, the position is more complex. In many such cases the judge will have reached his conclusions of primary fact as a result partly of the view he formed of the oral evidence and partly from an analysis of the documents. In other such cases, the judge will have made findings of primary fact based entirely or almost entirely on the documents. Some findings of primary fact will be the result of direct evidence, whereas others will depend upon inference from direct evidence of such facts.[51]Given that we are being asked to find that Ladney perjured himself about his lack of knowledge, Mr Purvis particularly drew our attention to Stuart-Smith LJ’s third point in the Ikarian Reefer, the requirement for “clearest grounds” where a finding of fraud was sought on appeal. That has little force here, given that Ladney was himself a perjurer about other matters. It is one thing for the Court of Appeal to hold a man a perjurer for the first time on appeal but quite another to hold that an established perjurer was more extensive in his perjury than held by the judge. The real question here is simply whether the Judge was wrong in his evaluation of all the evidence.[52]Mr Prescott accepted that he could not have a higher hurdle to surmount. But, he contended, that he should succeed in doing so – that the evidence was overwhelming. He relied upon the following matters:(a) The general dishonesty of Ladney. His actions in defrauding his creditors, his denial of any knowledge of Melea when in fact it was his creature were prayed in aid.(b) Ladney’s well-known propensity to “use litigation ruthlessly” to cause people to bend to his will. Ladney was indeed shown to instigate proceedings with no proper basis and to have a powerful, bullying, unjustifiable way of starting proceedings. He would have used such techniques against material witnesses or, at the very least, they would have been fearful of this even without any express threat.(c) A particular example related to a potential witness hostile to Ladney in the first round of proceedings, a Mr Erikson. An ex parte injunction was obtained over the telephone against him (as it happens from Jacob LJ when he was a first instance judge). It was based on allegations of breach of confidence. Mr Prescott submitted that the obvious real purpose was to prevent Mr Erikson from giving evidence in the patent office. That evidence would have been to the effect that Hendry had not only said the invention had been made at Cinpres but that Ladney had so been told.(d) Another example relates to a Mr Nelson. He was a Melea witness, called to say that he worked with Hendry on the Baretta door and that Hendry had given no indication of any prior knowledge of the overspill invention. In fact an attendance note of a solicitor, made some 2 years before, indicated otherwise. When cross-examined he accepted that he had no reason to doubt its accuracy. When he had finished giving evidence, Ladney was overheard to say to him:
“Why did you not just say what I told you to say?”
This it was submitted, showed Ladney trying to cause a witness to give false evidence. (e) Yet another example involves the witness Mr van Muren, accepted as a witness of truth. His evidence was to the effect that Hendry had told him that he, Hendry, was in a position to reveal that he had come up with the invention whilst at Cinpres. Mr Prescott particularly relied upon an incident, not mentioned by the Judge, to the effect that Ladney turned up at a deposition in the US apparently to intimidate Mr van Muren. (f) Finally there was the potential evidence of a Mr Colgate, a Melea employee who was not called. The suggested point here is that it was Hendry’s evidence, given in his witness statement, that he had told Ladney that he had come up with the invention whilst at Cinpres in the presence of Mr Colgate. Mr Colgate was not called to refute that. Instead a Mr Tuttle, Ladney’s attorney, gave evidence to the effect that he had spoken to Mr Colgate having shown him Mr Hendry’s affidavit and Mr Colgate said he had no recollection of any such conversation. The judge described Mr Tuttle as “an extremely cagey” witness and it also emerged that Ladney had been in direct contact with Mr Colgate.[53]Mr Prescott submitted that all these matters, taken together, provided an overwhelming case that Ladney had been told the invention was made at Cinpres. Moreover, he submitted, Hendry had a motive for telling Ladney that the invention was made at Cinpres. For if he did not, and it later emerged, he would be in real trouble. Better to let the dishonest Ladney decide what to do with the stolen invention than take the risk himself.[54]These are powerful points. But not enough, to our mind, to show that the Judge was wrong. It is to be noted that in some of these cases, the evidence simply went to whether Hendry had made the invention (which is what he claimed, though the Judge found otherwise) at Cinpres, not to whether Ladney had been told that. That much does not help prove Ladney knew.[55]In other cases, the evidence as it emerged did not support the case of knowledge. Mr Erikson was called and found to be an unsatisfactory witness. It was not shown that the ex parte injunction was the cause of his failing to give evidence the first time round and he did not establish that Ladney knew the invention had been stolen.[56]Clearly Mr Nelson, also found unsatisfactory, was under pressure from Ladney. But his evidence simply did not relate to whether Hendry had told Ladney the invention was stolen.[57]Similarly Mr van Muren was not tendered to show that Ladney had been told.[58]As for Mr Colgate, Mr Tuttle gave evidence to the effect that he was advised by his daughter (he was now retired) not to get involved. That is entirely plausible in the circumstances. You have dealings with these people at your peril.[59]The Judge, rightly to our mind, concentrated on the only occasion when the dishonest Hendry is alleged to have told the dishonest Ladney that the invention came from Cinpres. The judge had to choose which story, from perjurers, was the more likely. He rejected Hendry, whose evidence about this very point changed (at one point he alleged Ladney was “furious” but in cross-examination there was a different story). And after all, Hendry had a motive for applying for the patent, namely royalties from Ladney.[60]The fact is that the Judge analysed and weighed all the evidence with considerable care and in detail. There are no contemporary documents to go by. We are not satisfied that he reached the wrong conclusion on the facts. Ladney is not shown to have been complicit in Hendry’s perjury at the time. It does not follow, however, that he has not himself adopted and relied upon that perjury and Hendry’s false story – a point we consider below. (4). The litigation team point[61]This was neither pleaded nor taken before the Judge. Mr Prescott submits that he should be allowed to take it now because no further evidence is or could be involved and that Melea is defeated by its own evidence.[62]Although it will be necessary to return to Odyssey later, for present purposes it suffices to say that the majority (Nourse and Brooke LJ) held that the perjured evidence of a Mr Sage which had procured the first judgment should be treated as the evidence of Orion, the party which had called him. This was because (per Nourse LJ, accepting the submission of Mr Sumption QC):
“Mr Sage was a person who had, in relation to the first action, a connection with Orion that was so close as to make it unjust that it should be entitled to disavow the evidence even though it had no knowledge that the evidence was perjured.”
[63]Sage had been a director of Orion at the time of the events about which he had given evidence, but not at the time he gave evidence. But this was not the main factor in the majority decision. Nourse LJ expressed his reason for holding that Sage had “the status necessary to make his evidence the evidence of Orion” thus: I am satisfied that, at the time that he went into witness box in November 1989, Mr Sage did have the status necessary to make his evidence the evidence of Orion. In my judgment the two most important considerations are, first, that he was the witness, above all others, on whose evidence the success of Orion’s case had come to depend. He was its “vital” witness. There is nothing fanciful, adopting the words of Eveleigh J, in treating Mr Sage as having been, for the purposes of the trial, Orion itself. Of equal importance is the consideration that he had acquired that status not simply because his evidence related to a transaction for which he had been personally responsible as part of Orion’s directing mind and will at the time, but also because in the six months or so before the trial he had been a committed member of the team which took decisions as to how Orion’s case was to be presented.[64]Clearly Hendry was a “vital” witness on whose evidence Ladney’s cased depended. But it is not enough that a witness’s evidence is vital, he must be a committed member of the team which takes decisions about the litigation. We are not satisfied that it would right so to hold here. True it is that there is material showing Hendry taking an active part in the litigation team (even writing a memorandum for use by the lawyers conducting the appeal to the Court of Appeal), but given that the point was neither pleaded nor taken below, one cannot rule out the possibility that other evidence might have been called to show that in substance at all times he had no authority over the case. It is just too late to take the point.[65]We have considered the point here on the narrow basis argued under the ‘litigation team’ head, but the issue merges with the ‘Hendry a party’ point (and to some extent with the ‘title’ point considered later).[5]Issue estoppel?[66]This is also a point not raised before the Judge. Mr Purvis faintly objected to its being taken now, suggesting that somehow the evidence might have been different. We do not see relevantly how, for it is a point of law only.[67]The argument goes in two stages. First that this is not a case of cause of action estoppel. Second is that the Odyssey principle only goes to cause of action estoppel. Only an issue estoppel is involved here and for that a more liberal test is involved.[68]The first stage was uncontroversial. There are two possible sorts of estoppel by reason of a judgment, cause of action estoppel and issue estoppel. Lord Keith (with whom three other members of the House agreed) in Arnold v National Westminster Bank [1991] 2 AC 93 at 104 said: Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter such could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the matter to be re-opened.[69]At p.109 he set out the more liberal rule for issue estoppel: In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of the point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could by reasonable diligence have been adduced in those proceedings. The latter rule would be enough for Cinpres’ purposes but the former not.[70]So the key question on this point is whether the cause of action the first time round is the same as that now. Mr Prescott says it is not. He says the first case was under s.12 of the Patents Act and was concerned with rights in the patent application, whereas this case is under s.37 and is concerned with rights in the patent. You have to plead and prove different things in the two cases, namely, in the one an application, and in the other a patent. True it is that both cases involve the same question, but that is an issue, not a cause of action. Mr Prescott accepts that the distinction is very technical, but he submits it is enough to make the case one of issue estoppel.[71]Mr Prescott fortified his submissions by reference to New Brunswick Ry v British and French Trust Corp [1939] AC 1. There it was held that a previous action on the construction of bond No. 3300 did not operate as estoppel to prevent the defendants from raising the proper construction of 992 other bonds in the same series, even though they were, in fact, identically worded.[72]He also relied on Coflexip v Stolt Offshore [2004] EWCA Civ 123, C.A. where the previous proceedings had concerned the validity and infringement of a patent by the use of a ship. The majority said (at §153):
“We agree with Mr Henderson on this point [that there was no strict cause of action estoppel], technical though it is. The 14 contracts other than that relating to Magnus Swift field give rise to different causes of action. However, by issue estoppel Stolt would be estopped from asserting in the inquiry [as to damages] that the patent was not valid and subsisting at the time of the infringement …”
[73]Perhaps his best case was Buehler v Chronos Richardson [1998] EWCA Civ 509. The European Patent Office had decided not to revoke a patent. But the English court held that there was no cause of action estoppel to prevent the English court from doing so on similar grounds. Aldous LJ said: Cause of action estoppel is founded upon the principle that there must be finality to litigation. It applies to the issues raised and also to matters which might have been raised and decided in the earlier proceedings. But it only applies when the cause of action in the earlier proceedings is identical to that in the later proceedings. The causes of action in the proceedings before this Court can be ascertained from the defence and counterclaim. In the defence invalidity is pleaded as a defence to an allegation of infringement. Thus the cause of action is infringement. The counterclaim raises a separate cause of action, namely that the patent, which is to be treated as if it were a patent granted under the l977 Act, should be revoked pursuant to the Court's jurisdiction under Section 72. Before the Opposition Division of the European Patent Office, the cause of action, if it be a cause of action, was whether the patent should be maintained or revoked pursuant to the jurisdiction given to the Opposition Division by Articles 100 to l02. The European Patent Office did not have before it and did not decide infringement. It follows that any submission that the Respondents were estopped from challenging the validity of the patent as part of their defence in the action cannot be right. The important point here is that even the counterclaim for revocation was not barred by an estoppel.[74]We think Mr Purvis provided the answer. There are three sections in the Act dealing with ownership disputes. Section 8 relates to national applications, s.12 to international applications and s.37 to granted patents. The former two sections treat ownership by looking ahead to the moment of grant of the patent. Each starts with the words “at any time before a patent is granted for an invention … any person may refer to the comptroller the question whether he is entitled to be granted … any such patent for that invention.” Section 37 looks back at the moment of grant:
“After a patent has been granted for an invention, any person … may refer to the comptroller the question … who is the true proprietor or proprietors of the patent … [and] whether the patent should have been granted to the person … to whom it was granted.”
So both sets of sections are in fact concerned with the same cause of action - a claim to entitlement to the grant of the Patent.[75]Section 9 explicitly deals with what happens if an application the subject of s.8 proceedings matures into a patent. It says: If a question with respect to a patent or application is referred by any person to the comptroller under section 8 above, whether before or after the making of an application for the patent, and is not determined before the time when the application is first in order for a grant of a patent in pursuance of the application, that fact shall not prevent the grant of a patent, but on its grant that person shall be treated as having referred to the comptroller under section 37 below any question mentioned in that section which the comptroller thinks appropriate.[76]So a s.8 application is transmuted into a s.37 application upon grant. That can only be because the subject-matter – the cause of action - of the two applications is the same. Although, oddly, there is no similar provision for s.12 (perhaps because s.12 covers not only UK but foreign applications) the logic is the same. In short whether the dispute is about a right to an application or to the patent resulting from an application, the cause of action, entitlement, is about one indivisible thing, ownership.[77]Mr Prescott’s cases do not help. The first cause of action in New Brunswick was about the rights stemming from the bond concerned. The second cause of action was about the rights stemming from other bonds. The first Coflexip case was about a claim for damages for one contract, the “later” case (raised on the inquiry as to damages) was about 14 other contracts. (We set aside for present purposes any doubts as to whether Coflexip was really a case of issue estoppel because all 15 contracts were the subject matter of the claim from the outset - see Unilin v Berry [2007] EWHC Civ 364, [2007] FSR 635 at [47-50]). Buhler involved the special situation concerning the relationship between a national court and the EPO. The EPO was never intended to provide final solutions on validity if the patent survives opposition (see Unilin).[6]Bill of Review?[78]Prior to the fusion of the administration of law and equity in 1875, there was a procedure in the courts of equity for setting aside an earlier decree of a court of equity. It was initiated by a “bill of review.” The test which was applied was more liberal than that which applied in the common law courts for setting aside an earlier judgment. For that, as held in Odyssey, not only was it necessary to show that the previous judgment had been obtained by fraud, but that fraud had to be that of the party who had obtained the judgment: he could not rely on his own fraud. Mr Prescott submits that the more liberal bill of review jurisdiction still exists, and can and should be applied here.[79]It is not strictly necessary to consider this, given that we are allowing the appeal on other grounds (see below). But since the point was fully argued we will give our views.[80]In outline the bill of review argument ran thus: i) Hendry took the invention in breach of his duty of confidence owed to Cinpres; ii) A claim for breach of confidence is an equitable claim; iii) Courts of equity were never constrained by the “fraud of the party” rule the subject of the decision in Odyssey and the authorities relied upon there. iv) Well before the Judicature Acts, the courts of equity had a jurisdiction, invoked by a bill of review, to rectify a miscarriage of justice. The party concerned had to show either that the earlier judgment had been obtained by fraud or produce fresh material evidence which could not have been previously procured. v) That was this case.[81]Mr Purvis’ answer was three-fold. First that the supposed jurisdiction no longer existed, second that the claim was not an equitable claim. and third that if the claim was an equitable claim we should not allow the point to be taken for the first time now.[82]First then, is there a separate jurisdiction which would formerly have been exercised by a bill of review? Mr Prescott set out his stall in the words of the US Supreme Court in Purcell v Miner, 71 U.S. 519, 521 By Lord Chancellor Bacon's rules, it was declared:
‘No bill of review shall be admitted except it contain either error in law appearing in the body of the decree without further examination of matters in fact, or some new matter which hath arisen in time after the decree; and not on any new proof which might have been used when the decree was made. Nevertheless, upon new proof that is come to light after the decree was made, which could not possibly have been used at the time when the decree passed, a bill of review may be granted by the special license of the court and not otherwise.’
And in Hazell-Atlas Glass v Hartford-Empire Co 322 U.S. 238, 259 (Justice Frankfurter concurring): Since Lord Bacon's day a decree in equity may be reversed or revised for error of law, for new matter subsequently occurring, or for after discovered evidence. And this head of equity jurisdiction has been exercised by the federal courts from the foundation of the nation. Such a bill is an original bill in the nature of a bill of review.[83]The English authorities in the immediate post-Judicature Acts period (when lawyers and judges would have been familiar with and heavily influenced by the divisions between purely equitable and common law rights), clearly recognise the jurisdiction. Mr Prescott gave us a number of examples.[84]In Flower v Lloyd (1877) 6 Ch D 297, 299 Sir George Jessel MR said: If there were no other remedy I should be disposed to think that the relief now asked [a rehearing before the Court of Appeal] ought to be granted, for I should be slow to believe that there were no means whatever of rectifying such a miscarriage if it took place; but I am satisfied that there is another remedy. In the first place it must be remembered that the old practice remains where not interfered with by the new rules, and secondly, it must be remembered that all the jurisdiction of the old Court of Chancery is transferred to the High Court of Justice. Now, had the Court of Chancery any jurisdiction to give relief in such a case? It plainly had… [T]here is no doubt that under the old practice you could have brought an original bill to impeach a decree for fraud, and could have got relief if fraud in obtaining the decree was proved. There was another totally different class of cases where you discovered subsequent matter that showed that the decree was wrong, although there was no fraud in obtaining it. [Mr Prescott’s emphasis] That was called a supplemental bill in the nature of a bill of review, which brought the new matter forward, and again enabled the Court to do justice and get rid of the original decree. That always required leave.[85]In Charles Bright v Sellar [1904] 1 KB 6, 12 Cozens-Hardy LJ delivering the judgment of the Court of Appeal said: Doubtless there is ample jurisdiction now to deal by fresh action with some matters which were formerly the subject of a bill of review, or a supplemental bill in the nature of a bill of review. For instance, where a judgment has been obtained by fraud, Birch v Birch [1902] P 130, or where fresh material evidence has been obtained since the judgment which could not have been previously procured, Boswell v Coaks 6 R. 167, an action may be maintained. Actions of this nature do not invite the High Court to review upon the old materials. Fresh facts are brought forward, and the litigation may be well regarded as new and not appellate in its nature, because not involving any decision contrary to the previous decision of the High Court. Reliance was naturally placed on the observations of Kay J in Falcke v Scottish Imperial Insurance Co, to the effect that the old jurisdiction of the Court of Chancery to allow a bill of review is not affected by the Judicature Acts. The learned Judge was dealing with an application for leave to bring a fresh action on the ground of the discovery of a new and material document. It was a case falling within the second branch of Lord Bacon’s order. His decision that such an action may be maintained was quite correct …[86]In re May 28 Ch D 516, 521 Cotton LJ said (Lindley LJ concurring):- There was a well known mode of proceeding. If a judgment was obtained in a suit against the plaintiff because he had not made out his case as a matter of evidence, he could not any more relitigate the question without coming to the Court [of Chancery] and getting leave to file what was called a supplemental bill in the nature of a bill of review. That was to review the whole judgment by supplemental evidence, brought forward in order to enable the Court or require the Court to come to a different decision. Now what did the Court require under those circumstances? Unless leave was granted, there would be a plea or other proper defence to the suit; but what the Court required was this, that before any such bill could be filed, the person desiring to file it and to bring forward further evidence should come and get the leave of the Court, satisfying the Court not only that the evidence which he proposed to adduce was material, but that he had not got it when he litigated the question on the former occasion, and that he could not by reasonable diligence have acquired that evidence.[87]In Phosphate Sewage v Molleson (1879) LR 4 App Case 801, 814 Lord Cairns characterised the nature of the new evidence that would be required: “I will shew you that this is a fact which entirely changes the aspect of the case, and I will shew you further that it was not, and could not by reasonable diligence have been, ascertained by me before”.[88]Other authorities on the ‘bill of review’ jurisdiction are: Falcke v The Scottish Imperial Insurance (1887) 57 LT 38 (proposition that the Judicature Acts had abolished the bill of review jurisdiction “startling” and “not the law”); and Scott v Alvarez [1895] 1Ch 596, 622-3, 627 (previous decision of Court of Appeal declared “not binding” in subsequent proceedings upon discovery of highly material fresh evidence).[89]Under the old procedure a party who wished to proceed on ‘fresh material evidence’ had to obtain the leave of the Court to protect the other party from vexation.[90]Most significantly the House of Lords in Boswell v Coaks (1894) 6 R 167 appears to recognise that the bill of review jurisdiction continued to exist. Lord Selbourne, giving a speech with which the other members of the House concurred said at p.159: The old practice of the Court of Chancery applicable to bills of review may not be, and I assume for the present purpose that it is not, now in use. A simpler and less formal and technical code of procedure generally has been adopted, which does not expressly require a preliminary application to the Court when a proceeding in the nature of a bill of review to set aside a formal judgment otherwise final is taken. The same new code of procedure, while omitting to repeat the old rule of the Court requiring leave to be given for the commencement of such an action, contains this other power of a summary nature, that the defendant, who is harassed by the action, can apply to the Court, if the case be a proper one, to stay its further prosecution. That is what has been done in this case. I conceive that the principles applicable to an old bill of review ought to be kept in mind and ought to be applied in their full force [Mr Prescott’s emphasis], and even with greater freedom than before, when an application of this kind is made to stay the prosecution of an action to get rid of a former judgment. Later he set out what ought to have been considered on the facts: … whether anything material to disturb (if proved) the judgment of this House [i.e. the first judgment, which had been appealed up to the House of Lords] had been newly discovered by the plaintiff. That involves a double proposition; first that something has been newly discovered .. and then that that something is material.[91]So, submitted Mr Prescott, procedurally things had changed: you no longer applied for leave to issue a bill of review. Instead you left it to the party claiming the estoppel to apply to stay the second action. But the jurisdiction itself had not gone. The standard was very high (“ought to be applied in their full force”). On the facts of Boswell it was not met.[92]The jurisdiction continued to be described in the White Book until late in the 20th century. Furthermore it is still set out in Halsbury in Vol 16(2) at para 985. There it is described as a jurisdiction for “getting rid of the res judicata” rather than as a way of defeating a plea of res judicata, a point to which we will return.[93]We turn to the later authorities. Re Barrell Enterprises [1973] 1 WLR 19 is of key importance. Giving the judgment of this court, Russell LJ said:
“In none of the cases brought to our notice [these included those cited by Mr Prescott, including Boswell v Coaks] has an action to set aside on the ground of fresh evidence succeeded. Indeed there is nothing to show that in the last 100 years any such action has even been brought, though in Falcke’s case, 57 LT 39 in 1887 there was an unsuccessful attempt to bring one. In so far as any of the dicta tend to show that an action will lie they are obiter. The reason which Sir George Jessel MR gave in In re St Nazaire Co., 12 Ch. D 88 for the view that the jurisdiction to order a rehearing was vested by the Judicature Act in the Court of Appeal and not in the High Court is of equal weight in relation to fresh evidence as to the type of case with which he was dealing. Even if, technically, the High Court was at first clothed with this jurisdiction we are opinion that this cause of action has long since lapsed because applications for rehearing on the ground of fresh evidence have for generations been made only to the Court of Appeal.”
[94]That is a (fairly) recent authoritative interpretation of the earlier cases. Much more recent is Odyssey itself. Buxton LJ, with whom the other members of the court agreed, referred to the judgment of this court in Boswell (which had been obtained from the House of Lords papers). He said:
“The burden of their judgment was, however, that the fraud must either be that of a party or be procured by a party. That in my view remains the law.”
Buxton LJ makes no reference to the decision in the House of Lords and particularly to Lord Selbourne’s apparent statement of a wider rule. We suspect the court was not referred to it (it is only reported in that rare and obscure series known as the “Reports”).[95]Mr Prescott submits that both Barrell and Odyssey are obiter so far as claims in equity are concerned. Barrell was a litigant-in-person’s attempt to set aside an earlier finding of contempt. Moreover it cannot be reconciled with what Lord Selbourne had said in Boswell. Nor can Boswell be distinguished on the grounds that it was a case about alleged fraud. And, even if the jurisdiction has not been exercised for a 100 years that does not matter: once there is jurisdiction there is always jurisdiction. Jurisdiction does not fade with time.[96]So far as Odyssey is concerned, Mr Prescott submits it is distinguishable because no claim in equity was made. Moreover it should be regarded as per incuriam in that it appears to have been decided without reference to the key decision of the House of Lords in Boswell.[97]Mr Purvis submitted that it was not open to this court now to hold there was any wider rule for defeating res judicata than that laid down in Odyssey – the fraud of party rule. The rule was the same whatever the nature of the cause of action. We think we are driven to accept that. In particular Barrel clearly considered and interpreted Boswell. Technically Mr Prescott might be right about it being obiter so far as an equitable claim is concerned, but we do not think that matters. Technicalities about whether a claim was in equity or at common law (which, so long since fusion, are not well understood) should not matter these days. The rule about re-opening a matter once decided should be the same for any sort of cause of action.[98]We are fortified in this view by what was said by Lord Keith (with whom three other members of the House agreed) in Arnold v National Westminster in the passages we have quoted. To say that this authoritative passage was obiter insofar as it might apply to a purely equitable cause of action is, to our mind, not open.[99]Accordingly we think Mr Prescott’s “bill of review” point fails as a matter of jurisdiction.[100]We have to say that we are not entirely happy with the position. It would make for better justice in principle for a prior decision to be impugnable on the grounds for which a bill of review once lay, namely that there was fresh evidence not discoverable by reasonable diligence, which “entirely changes the aspect of the case” (Lord Cairns’ phrase in Phosphate Sewage v Molleson (1879) 4 App. Cas. 801). That appears to be the rule (or something like it) in Scotland, as noted by Lord Keith. No one suggests that the Scottish courts are markedly more burdened than those in England by attempts to re-litigate cases already decided. Both countries have their share (more than they would like) of such cases but the different rules do not, so far as we know, cause any significant difference between England and Wales on the one hand and Scotland on the other in either the number of such cases or their outcomes. Similarly the somewhat more liberal rule clearly applies in cases of “issue estoppel” (see above) without causing a mass of inconsistent judgments.[101]Before finally passing from this question, we should record that we were not asked to re-open the first decision of the Court of Appeal pursuant to the jurisdiction recognised in Taylor v Lawrence [2003] QB 528 subsequently explicitly provided for in CPR 52.17. We do not say an application would have succeeded. The limits of the Taylor v Lawrence jurisdiction are not yet fully determined; see for instance Jaffray v Society of Lloyds [2007] EWCA Civ 586 where it was doubted whether it would apply in a case of perjury even by a party – the proper remedy being instead being by way of an action to set aside on the ground of fraud.[102]It is not necessary to say more about this point now other than that the whole subject of re-opening earlier decisions, whether on appeal or not, could do with clarification. Clearly the jurisdiction to re-open an earlier decision is related to the doctrine of res judicata. So also is the procedural question of whether you can attack an earlier decision collaterally in a later claim or must get it set aside first.[103]Much more briefly, if we were wrong about the jurisdiction for setting aside being the same for all causes of action, whether at common law or in equity, the bill of review argument would fail on the simple grounds that the present claim is not one that sounds in equity. That was a fundamental assumption of Mr Prescott’s bill of review argument. The right to the patent is claimed via a contract, and contractual rights historically were judged by courts of common law, not equity.[104]It is not necessary to consider Mr Purvis’ third line of defence – that it is too late and his clients are deprived of the opportunity of putting in evidence to show a material change of position or the like. Mr Prescott had a possible answer, which might be good, namely that all that could be taken into account later in exercising the discretion under s.38. But we do not go into the limits of that discretion in this judgment. It would be a step too far.[7]Hendry a party point[105]Odyssey decided that a judgment cannot be set aside unless it was obtained by the fraud of a party or procured by a party (per Buxton LJ). Perjury by a “mere witness” is not enough.[106]Quite apart from the “litigation team” point (which we have rejected) we have come to the conclusion that Hendry’s evidence the first time round should be regarded as that also of Ladney and that Hendry’s fraud should be treated as also that of Ladney. Both Hendry and Ladney were actually parties to the first proceedings. Hendry was seeking to justify his claim to be the inventor, to be named on the patent as such and to have had the right to have assigned the property in the invention to Ladney. Ladney was claiming to be the owner of the right to apply for the patent by virtue of assignment from Hendry. They had a common foe, Cinpres, and made common, and completely intermixed cause against it. One could not succeed without the other. True it is that Ladney’s claim was much the more valuable commercially, but we do not see that value has anything to do with it. Besides even Hendry had a commercial interest in the patent belonging to Ladney for he would be entitled to royalties if that were so. Not so if the patent belonged to Cinpres.[107]Putting it another way it would be wrong to say that Hendry was a “mere witness” in the first proceedings. He was more than merely a witness for Ladney – he was Ladney’s “comrade in arms”. His fraud by way of perjury was being adopted by Ladney and should be regarded as Ladney’s. Hendry himself clearly could not resist the earlier judgment being set aside on the grounds of his fraud. Given that, the whole judgment is unravelled and should be set aside.[8]The Title point[108]Further Ladney’s “title” completely depended and continues to depend on Hendry’s false claims to have made the invention whilst working for Ladney and to have been entitled to assign the right to apply for patents to Ladney. Ladney (and hence Melea) cannot stand in a better position than Hendry. Ladney’s “title” depended on the fraud. Melea are currently in effect saying to the world:
“we are the legitimate proprietors of the patent by succession from Ladney who was entitled to apply for it as a successor to Hendry, the devisor.”
But that has been exposed in these proceedings as false. So Melea are publicly maintaining a false story – the same false story as the subject of evidence in the first proceedings. Unlike the false evidence in Odyssey it is a continuing false representation. Melea are thereby adopting it as their own.[109]In doing so they are also saying:
“the evidence given in the first proceedings was true”
. That is dishonest, and it is Melea’s dishonesty. We see no reason why that should not be treated as within the “fraud of the party” rule for the purposes of setting aside a previous judgment and every reason why it should.[110]Consider also this. The patent is a public monopoly. Any third party who infringes can be sued. Likewise any licensee of Melea who stops paying. None of these are conceivably bound by the estoppel. What if any of these were sued by Melea?[111]The Act, by s.60, makes it an infringement to do certain things “without the consent of the proprietor”. It does not say “consent of the registered proprietor”. Although Melea is the registered proprietor, the fact of registration is not conclusive evidence of its title. On the contrary by s.32(9) the register is only “prima facie evidence of anything required … to be registered.” Proprietorship is one of those things (see the Patents Rules).[112]So suppose a third party were sued for infringement by Melea. Would it be free to challenge Melea’s ownership? Or suppose Cinpres were to sue, saying “although not registered as such, we are the proprietor by virtue of the facts proved before Mann J?” Could the third party just ignore that, and rely on the fact that Melea was registered as proprietor?[113]Section 32(9) strongly implies that the prima facie position is rebuttable. Moreover the Act itself clearly contemplates actions by proprietors who are not registered: s.68 restricts his right to claim damages for infringements occurring prior to registration.[114]Mr Purvis submits that analysis is not right. He says that if a third party were sued by Melea, it could not challenge its legal ownership. Likewise he contends that if Cinpres sued claiming to be the proprietor, the third party could rely on the state of the register showing Melea as proprietor as a complete defence.[115]It might be suggested that s.37 proceedings are more than inter partes; that they are designed to produce an answer in rem (“refer the question as to who is or are the true proprietor”). But that cannot be right. Such proceedings can only decide matters between the parties to them. There is clearly some sort of fault line between s.32(9) and the provisions about disputes as to ownership – Parliament seems to have thought about disputes over ownership but not the position of third parties who wish to challenge title rather than claim ownership themselves. That perhaps needs future consideration.[116]Under the present legislation the position was, we think, accurately stated by Lord Hamilton in Buchanon v Albas Diagnostis [2000] RPC 367 at p.387: The jurisdiction conferred on the Comptroller-General [under ss. 8, 12, 37 and 72] does not exclude the jurisdiction of the Court to consider questions arising as to patent rights or their enforcement. The pursuer’s right to bring proceedings for infringement of the 321 Patent depends upon 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. It must follow also that a third party, not himself claiming any interest in the patent, can defend a claim by the registered proprietor by rebutting the presumption[117]So we reject Mr Purvis’ submission. Third parties can challenge title to sue, just as a man sued for trespass can challenge the claimant’s possession of the land over which he is said to have trespassed.[118]Thus this is a particularly graphic way of illustrating the fact that Melea, by simply maintaining the patent in its name, is even now relying on Hendry’s false story and is doing so against all the world. We see every reason to hold that it thereby adopts it and continues to adopt it. That will not do. Odyssey was not concerned with such a case. It was merely about a judgment obtained by perjury.[119]We would only add that we consider the link between the perjured evidence and the party, Ladney, in this case to be stronger than that found to give the necessary status to challenge res judicata in Odyssey. There it was forming a part of the litigation team, here the perjured evidence was not only Ladney’s case before the court but the substance of what was alleged was to be the very basis of his title.[120]Finally in relation to this and the former point, we should consider the fact that it was not raised below. That is so, but it does not in any way depend on evidence. It is a pure point of law on facts which are now beyond dispute. We see no reason why, particularly given that this area of law is not easy, the point should not be taken now. Indeed it would be an injustice not to allow that. The Judge was clearly unhappy with the result he thought he had to reach (“might be considered by some as less than satisfactory”) but he could only go on the arguments then deployed.[9]The Equity point[121]Having reached the conclusion we have, we think it unnecessary to consider Mr Prescott’s point about what a man of conscience would do. It is doubtful whether, in the light of Yeda it could even apply. Even if it could it would be some kind of equitable claim and moreover it is too late. There are real difficulties about the point given that so much time passed before Ladney and Melea learned of the true position. There may well be questions of change of position and the like involved.[122]In the result we allow the appeal.

Cited in 8 later judgments