Cremin & Oxyvent Ltd v Ecoplus Ltd and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Roderick Murphy
• Judgment Date: 13 March 2012
• Neutral Citation: [2012] IEHC 82
• Docket Number: [No. 4239 P./2004]
• Court: High Court
• Date: 13 March 2012

[2012] IEHC 82

THE HIGH COURT

[No. 4239 P./2004]

Cremin & Oxyvent Ltd v Ecoplus Ltd & Ors

BETWEEN

TIMOTHY CREMIN AND OXYVENT LIMITED

PLAINTIFFS

AND

ECOPLUS LIMITED, PHIL CAROLAN, HUMPHREY O'LEARY, PAUL MURPHY AND DECLAN KEANE

DEFENDANTS

PATENTS ACT 1992 S27

PATENTS ACT 1992 S28

PATENTS ACT 1992 S29

PATENTS ACT 1992 S30

INTELLECTUAL PROPERTY LAW

Patents

Patented invention - Infringement - Remedies - Whether defendants infringed patent - Whether breach of confidential information of plaintiff relating to invention - Whether absence of sales by plaintiff partly attributable to acts of defendants - Whether damages appropriate - Patents Act 1992 (No 1), ss, 27, 28, 29, 30 and 53 - Convention on the Grant of European Patents 5/10/1973 - Declaration that Irish patent infringed (2004/4239P - Murphy J - 13/3/2012) [2012] IEHC 82

Cremin v Ecoplus Ltd

Facts The plaintiff had issued proceedings seeking a declaration that a patent had been infringed by the defendants. The patent in question was a central heating patent and it was contended that the plaintiff had disclosed confidential information and technical drawings regarding the invention to directors of the defendant company (which had since been struck off). It was contended that an offer was made to purchase the patent and a due diligence process was initiated. Ultimately the negotiations broke down and the arrangement was not finalised. It was contended that the defendants owed an equitable and fiduciary duty to the plaintiff only to use the confidential information for the purpose for which it was disclosed and had by their acts breached their equitable and fiduciary duty thereby causing loss to the plaintiff.

Held by Murphy J in issuing the declaration: The court was satisfied that the defendants” application infringed the plaintiff”s patent. There had been no evidence of any attempt by the plaintiff to sell his product or evidence that a price had been set in the consumers mind by the admitted consignment of less than a 100 products given to distributors by the defendants. In the absence of actual specific evidence of loss it was not possible to access the damages either for infringement or for breach of copyright. The court was not satisfied however that there had been was a breach of confidential information. The plaintiffs were entitled to a declaration that the second, third and fourth defendants had infringed the Irish Patent of the plaintiff.

Mr. Justice Roderick Murphy

1 By summons issued on the 6^th April, 2004, the plaintiffs claimed a declaration that Irish Patent No. 1 264 146 (the central heating patent) had been infringed by the defendants and/or any of them, injunctive relief, an order providing for the delivery up and destruction, an inquiry as to damages, damages and interest.

2 Mr. Cremin, the first named plaintiff, was a director of the second named plaintiff, (Oxyvent) and the patentee of the central heating patent which had been filed initially as an Irish application on the 11^th May, 2000. A second priority application was filed on the 3^rd April, 2001. The Patent Cooperation Treaty application was filed on the 11^th May, 2001, which was published on the 15th November, 2001. Mr. Cremin represented himself.

3 Oxyvent was incorporated on the 12^th February, 2001, to carry on the business of exploiting the industrial property rights of Mr. Cremin under licence. There was no representation on behalf of Oxyvent.

4 The first defendant (Ecoplus) was formed on the 6^th September, 2001, to carry on the business of the production and sale of equipment for use in heating systems. The directors of Ecoplus as of the 6^th September, 2001, were Mr. O'Leary and Mr. Murphy, the third and fourth named defendants. Mr. Keane became a director on the 10^th September, 2001.

5 A Companies Registration Office search from the 7^th December, 2011 noted that Ecoplus had been designated as dissolved. Ecoplus had been struck off on the 12^th December, 2010, for failure to file returns. The last annual return had been made on the 6^th March, 2004. There was no application by any of the parties to reinstate Ecoplus to the Register nor was it represented at the hearing.

6 The second defendant (Mr. Carolan) was a shareholder in but not a director of Ecoplus. The third, fourth and fifth named defendants, (Mr. O'Leary, Mr. Murphy and Mr. Keane) were shareholders as well as being directors of Ecoplus. Mr. O'Leary was also listed as company secretary. Mr. Carolan purported to represent himself and Mr. O'Leary, who was present, but did not give evidence. Mr. Keane represented himself. There was no appearance by or on behalf of Mr. Paul Murphy.

7 Each of the parties had been represented in interlocutory proceedings by solicitor and counsel who had drafted the pleadings. There had been changes in representation but at the time of the hearing all solicitors had come off record. As already noted above, neither of the plaintiffs was represented by solicitor or counsel nor were any of the defendants so represented. Mr. Cremin and Oxyvent had been represented by a firm of solicitors from 2004 to 2006 and a second firm from 2006 to 2008.

8 The court explained the requirement that the second named plaintiff and the first named defendant, required separate representation, but was told that there were no funds available. In any event the first named defendant had been dissolved by the Companies Registration Office before the hearing of this action.

9 By statement of claim delivered on the 14^th June 2005, it was pleaded that the defendants or one or other of them had infringed, and threatened and intended to continue to infringe, the central heating patent and further or in the alternative, it was alleged that the defendants received confidential information relating to an invention for use in heating systems which they knew, or had reason to believe, had been disclosed by Mr. Cremin in circumstances of confidentiality.

10 The particular circumstances arose in the context of discussions between the plaintiffs and Mr. Carolan and Mr. O'Leary on behalf of Winsoft Limited (Winsoft) which is not a party to the proceedings. Winsoft was incorporated on the 3^rd December, 2002, it made its last annual return on the 3^rd June, 2006. Having been struck off, it was dissolved on the 22^nd February, 2008. Mr. Murphy and Mr. O'Leary were listed as directors and a Mr. John Paul Naughton and Mr. O'Leary was listed as company secretary.

11 It was pleaded that on 30^th April 2001, Messrs Carolan and Mr. O'Leary offered to purchase Oxyvent and all patents then pending, subject to due diligence, for a lump sum payment of IR£500,000 with further remuneration thereafter. Mr. Cremin had indicated he was willing to accept that offer in principal. The due diligence process began on the 14^th May, 2001, which was expected to be completed within a period of one month. Within that period, it is alleged that Mr. Cremin disclosed confidential information and technical drawings to a Mr. Karl Steinborn on behalf of and at the request of Mr. Carolan and Mr. O'Leary.

12 On or about the 15^th May, 2001, Mr. Carolan requested that Mr. Cremin invite a Mr. Franz van Dommelen, an advisor to Winsoft, to attend a meeting on the 31^st May, 2001, to discuss the method and logistics of the manufacture of Mr. Cremin's central heating system invention. The meeting was chaired by Mr. Carolan and attended by Mr. Cremin, Mr. Van Dommelen and Mr. O'Leary, Mr. Steinborn and others.

13 Neither Mr. Steinborn nor Mr. van Dommelen were called as witnesses.

14 It was pleaded that at that meeting the entirety of the confidential information that is particularised in the pleadings was disclosed by Mr. Cremin.

15 It was pleaded, that on the 2^nd June 2001, Mr, Carolan attended at the home of Mr. Cremin with Mr. O'Leary and indicated verbally, despite the terms of the original offer made, that he would clear a debt of IR£70,000 of Mr. Cremin with a personal cheque and that "the rest would be paid when the technology was transferred by Mr. Carolan to the company to be established further to the proposed agreement". It was pleaded that, following this conversation, the offer of the 30^th April, 2001 was not genuine.

16 On the 8^th June, 2001, the offer made by Winsoft was formally withdrawn by a letter of that date from Hudson & Browne, solicitors for Winsoft.

17 It was pleaded that insofar as elements of the confidential information particularised were disclosed in the central heating patent, that these fell into the public domain on the date of the publication of the application on the 15^th November, 2001.

18 It was also pleaded that the defendants owed an equitable and fiduciary duty to Mr. Cremin to use or disclose confidential information only for the purpose for which it was disclosed, that was to bring about the exploitation of the heating system invention in the context of an agreement between Mr. Cremin and Mr. Carol an and/or those to whom Mr. Carolan was understood to represent. The defendants acted in breach of their equitable and fiduciary duty by using the confidential information other than for the purposes for which it was disclosed and had thereby occasioned the plaintiffs damage and loss.

19 A further corporate body, Bodenhill Properties Ltd (Bodenhill) incorporated on the 5^th February, 1999, appeared to be the intended purchaser of Oxyvent rather than Winsoft Mr. O'Leary and Mr. Murphy were listed as directors of Bodenhill while Mr. O'Leary was also company secretary. Bodenhill made its last return on the l^st September, 2006, and was dissolved on the 7^th November, 2008. It is not a party to the proceedings.

20 The particulars of breach of duty were that one or more the individual directors disclosed the confidential information to Ecoplus and to Bodenhill, of which Mr. O'Leary and...