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Trial judge says "Boileau" to patent licence; appeal court agrees

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

The draft judgment of the Court of Appeal for England and Wales in Oxonica Energy Ltd v Neuftec Ltd [2009] EWCA Civ 668 has started circulating, though the final, approved text has yet to reach this member of the IPKat team and awaits posting on BAILII. This appeal relates to a contractual dispute, heard by Peter Prescott QC acting as a Deputy Judge. Peter Prescott summed up the whole matter up in the first two paragraphs where he said:

"How do we interpret a formal commercial agreement if it is ambiguous and we have reason to believe that its draftsman did not have a deep understanding of the relevant law? I think that is what this case is about.

The secret of drafting legal documents was best described by Nicolas Boileau, who was not only a literary critic but a qualified lawyer: "Ce que l'on conçoit bien s'énonce clairement et les mots pour le dire arrivent aisément". What one conceives well can be stated with clarity and the words to say it come easily. We should all have that framed and displayed on our desks. But too often the opposite precept is followed. Bits of legal boilerplate are bolted together so that it is the words that are allowed to shape the concept instead of the other way round. In that regard the invention of the word processor has worked wonders. Sometimes, I fear, it has dispensed with the 'concept' altogether. Misfortune not infrequently follows."

The Court of Appeal (Lord Justice Jacob giving the judgment with which which Judge and Arden LJJ concurred) dismissed the appeal, adding this comment concerning the interpretation of the patent licence:

"16. Each side supported its position with what I can call ?big? arguments supported by various subsidiary arguments based on inference from other clauses. The latter have minor significance here given the poor drafting and the Mitsui principle of construction [".. the poorer the quality of the drafting, the less willing the court should be to be driven by semantic niceties to attribute to the parties an improbable and unbusinesslike intention, if the language used, whatever it may lack in precision, is reasonably capable of an interpretation which attributes to the parties an intention to make provision for contingencies inherent in the work contracted for on a sensible and businesslike basis": Mitsui Construction Co Ltd v A-G of Hong Kong (1986) 33 BLR 14)]. So it is not necessary to deal with these in detail. What matters are the big arguments.

17. Not surprisingly, each side said that the other?s position amounted re-writing the document rather than construing it. I do not agree with either view. Given that neither side suggests the agreements are void for ambiguity (a position of last resort in relation to the construction of any contract) the search is on to ascertain what the reasonable reader would make of the disputed phrase in the context of the two documents and the background".

The IPKat has complained about bad drafting on numerous occasions and continues to do so. Sometimes they are the result of inappropriate welding together of boilerplate terms; on other occasions they reflect a failure of licensor and licensee to reach agreement on certain issues or -- even worse -- an agreement not to flesh out some specifics, in case the attempt to do so should reveal a lack of consensus concerning them. But, given the regularity with which fudged and fuzzy contract terms get litigated, is the short-termism that leads to the signing of a botched job a better policy than nailing down the foreseeable issues before signing the licence?

Cure for bad drafts here

Full post as published by IPKat on July 10, 2009 (boomark / email).