On Wednesday 24 October 2007 the House of Lords unanimously rejected the Court of Appeal's approach to determining patent entitlement disputes. In so doing, it has provided a welcome clarification and simplification of what had become a complex and controversial area of law.
Yeda Research v Rhone-Poulenc Rorer  UKHL 43 concerned a patent for a therapeutic composition of an antibody and an anti-plastic agent for the treatment of cancer. Scientists at the Weizmann Institute of Science in Israel, who later assigned relevant rights to Yeda, were said to have devised the invention with some assistance from Professor Schlessinger, who supplied antibodies while employed by a company which later became Rorer. A draft of an unpublished article by the scientists documentating the invention was sent to the Professor, following which Rorer applied for a patent for the invention which was granted, some years later, in the UK.
Yeda applied under section 37 of the Patents Act 1977 for a reference to the Comptroller of Patents seeking to be declared the joint proprietors of the patent, within the time limit of two years from grant dictated by s.37(9). Following experience in parallel litigation in other jurisdictions, Yeda sought to amend its claim to one of sole proprietorship, but was outside of the two year limit under s.37(9).
What does a person claiming entitlement to a patent in another's name have to prove?
This was the first of the two questions addressed by the House of Lords. The issue here arose following the Court of Appeal's decision in another case, Markem v Zipher  RPC 31. In that case, which concerned a patent for an invention by former employees of Markem who moved to Zipher, the leading judgment was given by Lord Justice Jacob. Markem claimed to be entitled to the patent. In dismissing Markem's claim, Jacob LJ's view was that where a person, A, claims to be entitled to a patent which has been granted to B, A could not succeed merely by proving that he had been the inventor and B had not. Jacob LJ said that:
"[A] must be able to show that in some way B was not entitled to apply for the patent, either at all or alone. It follows that A must invoke some other rule of law to establish his entitlement − that which gives him title, wholly or in part, to B's application."
Jacob LJ gave as examples of breaches of "some other rule of law" both breach of confidence and breach of contract. This decision came after Yeda had filed its initial claim, so it sought to amend it to introduce additional claims as required by Markem.
Markem's argument in that case, and indeed Yeda's in this, was that section 7 of the Act, headed "Right to apply for and obtain a patent" alone provided the basis for entitlement to a patent, without the need to show the breach of some other rule of law, as required by Jacob LJ's Markem principle. Section 7 provides that a patent for an invention may be granted to the inventor (ie, the actual devisor) or someone claiming through him, and no other person.
Lord Hoffmann held that the contents of s.7 provide "an exhaustive code for determining who is entitled to the grant of a patent." The vital question was 'who was the inventor?', who (as per Laddie J in IDA v University of Southampton  RPC 220) "came up with the inventive concept". Lord Hoffmann said:
"The statute is the code for determining entitlement and there is nothing in the statute which says that entitlement depends upon anything other than being the inventor. There is no justification, in a dispute over who was the inventor, to import questions of whether one claimant has some personal cause of action against the other."
Therefore, the principle laid down by Jacob LJ in Markem was, in Lord Hoffmann's view, wrong. The other four Law Lords agreed.
Court of Appeal confused the rules of entitlement with the rules of validity
Lord Hoffmann thought that Jacob LJ's principle confused the rules which go to entitlement (which are exhaustively stated in section 7) with the rules of validity. In the UK (as with much of the rest of the world, and perhaps soon the US), if two people independently make the same invention the "first to file", A, is entitled to a patent. The "second to file", B, will not be entitled to a patent because his patent will not be novel, the first application (by virtue of section 2(3)), deemed part of the state of the art.
Where B gets in first, having learnt of the invention through A, "some other rule of law", such as confidence, only has an effect on the validity of the patent. A duty of confidence will then only be relevant where it is lacking – because then the disclosure to B will become part of the state of the art and remove the novelty of the invention, rendering any patent invalid. Confidence, be there a duty or not, has no effect on entitlement – in this example A is entitled because A is in fact the devisor – B has invented nothing. The only effect of confidence on an argument as to entitlement is that it determines whether there is anything to argue over in the first place. It may also explain, as Lord Walker noted, why B has applied for a patent in respect of an invention A claims to have devised.
When joint entitlement is claimed under s.37, can the claim be amended to one of sole entitlement after the time limit under s.37 has run out?
This was the second question to be decided by the House of Lords and was a procedural one. Section 37(9) of the Act states that any post-grant reference to the Comptroller on a question of entitlement must be commenced within two years from the date of grant of the patent. In this case Yeda met that deadline in respect of their claim to be joint proprietors, but were out of time for any new claim when they sought to amend their claim to one of sole proprietorship. The lower courts held that a claim to sole proprietorship was a new and different claim, based on a number of factors including (a) their interpretation of Article 23.3 of the Community Patent Convention (which has never come into force but is used to aid the interpretation of certain provisions of the domestic statute); (b) the different consequences of sole and joint proprietorship claims on licensees; and (c) the fact that notice of a s.37 reference must be entered in the register of patents.
Lord Hoffmann was unconvinced by these factors (with regards to (c), he noted that the notice only refers to the reference, and does not say if it involves a claim for sole or joint proprietorship), doubting that the two claims could be said to be different in kind, rather than extent. Indeed the Court of Appeal had no objection to the narrowing of a claim from sole to joint proprietorship, and Lord Hoffmann held that there should be no objection (as a matter of principle) to the reverse. Amending a reference under s.37 in this way did not amount to a new reference. Again, the remaining four Law Lords agreed.
The conclusion of this case and the House of Lords' clear and concise judgment on the law brings an end to several years of uncertainty for those bringing entitlement proceedings. Jacob LJ's principle in Markem took many by surprise, including the applicants in IDA v University of Southampton and Yeda themselves as both of those cases had started before the decision in Markem (at which time there was no suggestion in statute or case law of the "other rule of law" requirement). It also made entitlement proceedings more complex, with the Court of Appeal requiring that breach of confidence or contract should be pleaded and that, in all but the simplest cases, the Comptroller should refer questions of patent entitlement to the High Court.