Patents

• Author: International Law Group

Gill Jennings & Every (GJE) is a firm of patent agents with an English practice. Woolcott & Company, Inc. is a reputable American corporation generally engaged in patent searching since about the mid 1970's. Arbiter Group PLC came up with a new sort of jukebox in the mid 1980's and began selling it in the U.K. market in 1987 as the "Discmaster."

Interested in breaking into the U.S. market, Arbiter needed advice on whether this would be lawful in view of existing U.S. "Patent B." In a November 12, 1987 telex, GJE asked Woolcott to provide their opinion as to whether Patent B was still in force. Six days later, Woolcott telexed back that: "Searches through the records of the US Patent and Trademark Office have revealed that the patent is still in force."

It was not until 1991 that Arbiter found out that Patent B had run out on September 20, 1987 for failure to pay maintenance fees. Concluding that it was too late to succeed in marketing its jukebox in the U.S., Arbiter filed an English action against Woolcott claiming it had breached its duty and against GJE for breach of contract and of the duty of due care to a client. GJE defended on the theory that they had delegated to Woolcott's expert searchers the assignment of determining the validity of Patent B and had a right to rely on their information. Arbiter contended on the contrary that GJE should have gotten confirmation in writing or some other evidence that corroborated Patent B's status.

When Woolcott failed to appear at the trial, the judge entered a default judgment against it. As to GJE, however, the trial judge found that it was not liable to plaintiff. According to the evidence, since 1980 a U.S. patent holder has had to pay a maintenance fee every four years computed from the date the U.S. Patent and Trademark Office (USPTO) had granted the patent. The USPTO publishes the expirations in its Official Gazette which comes out weekly but sometimes falls behind its due dates. It is also a frequent practice for some patent attorneys to check the status of a patent by phone and, for a small fee, he or she can obtain confirmation in writing. Although Woolcott made its inquiries in November 1987, the Gazette did not get around to reporting the...