This case involves a dispute over who owned certain patent rights. There was a factual dispute over whether Verdellen and Rolland ever came to an agreement over the assignment of the patent rights. Furthermore, the Court did not decide this issue. Rather it proceeded on the assumption there was a binding agreement, and determined whether there were grounds available to support a declaration of the rights of the parties.
Rolland started CCAA proceedings and was eventually sold to Monaghan through those proceedings. The Court held that as the agreement of purchase and sale did not restrict the business to any particular locality or jurisdiction, the patent rights conveyed were not limited to North America. Furthermore, on the day of the closing, Rolland executed and delivered to Monaghan an assignment of patent rights that specifically contained world wide rights to the invention in question.
Shortly after filing of the U.S. patent application, Verdellen and his co-inventor executed written assignments in favour of Rolland which were recorded in the USPTO. In addition, a power of attorney was signed by Rolland as the assignee, indicating Rolland was the owner of the US application. This power of attorney was also recorded in the USPTO. Furthermore, the Court held that the evidence was that Monaghan’s due diligence showed nothing inconsistent with this publically available information that Rolland held the ownership interest and the patent right. The due diligence included interviews with Verdellen. The Court thus held that even if Verdellen had a binding contract with Rolland covering the patent rights, Monahan acquired those patent rights as a good faith purchaser without notice and thus acquired them free and clear of any interest Verdellen might otherwise have had in them.
Thus, the Court declared that the purported agreement between Verdellen and Rolland is void as against Monahan as a bona fide purchaser for value from Rolland without notice of any such agreements.