Patents: meaning of exclusive licence
The High Court has ruled on the meaning of exclusive licence in relation to the right of the licensee to bring an action under section 67(1) of the Patents Act 1977 (1977 Act) (section 67(1)).
Background
Section 67(1) provides that an exclusive licensee may bring patent infringement proceedings in its own name.
Section 130(1) of the 1977 Act (section 130(1)) defines "exclusive licence" as a licence from the proprietor of or applicant for a patent conferring on the licensee, or on him and persons authorised by him, to the exclusion of all other persons (including the proprietor or applicant), any right in respect of the invention to which the patent or application relates.
The High Court has held that the grant of a licence to a company "and its affiliates" was not exclusive even though the affiliates were under the company's control, but a licence subject to reserved rights including to grant a non-exclusive licence to the Hong Kong government in certain circumstances was exclusive (Illumina v Premaitha [2017] EWHC 2930).
Facts
A patent was owned by H and licensed to O (the licence). The licence was stated to be an exclusive worldwide licence, but subject to a provision in a collaboration agreement between H and a third party which gave that third party the right to request a non-exclusive licence. No such request had been made.
O sued P for patent infringement. P counterclaimed for revocation of the patent.
P applied to strike out O's claim on the grounds that, under the terms of the licence, O was not an exclusive licensee within the meaning of the 1977 Act so could not sue.
Decision
The court held that, unless and until there had been a request from the third party, the licence was exclusive to O, so O was entitled to bring the claim against P.
The question here was whether a licence was an "exclusive licence" within the meaning of section 130(1) if a third party had an option to take a licence under the patent, but had not yet done so. This exact question had never previously been decided by a UK court. No assistance was to be gained from other areas of intellectual property law, where the statutory regimes were different.
P argued that, as the Hong Kong government in Illumina had to satisfy certain conditions in order to request a licence, this differed from the licence where the third party had no conditions to satisfy in order to make the request. However, the Illumina criteria were not onerous, and so it was not appropriate to distinguish between that very low hurdle, and the similarly…
