England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE COURT
(His Honour Judge Kershaw QC)

		Royal Courts of Justice Strand London, WC2
		22nd January 2003

1. MR JUSTICE MORLAND: Mr's Wallis, the appellant, appeals against a judgment delivered ex tempore by Judge Kershaw QC sitting in the Manchester Mercantile Court on 8th May of last year, in which he dismissed Mr Wallis's claim against Learonal (UK) Plc, the respondent. Mr Wallis is an inventor. Using the words of the patent specification, he invented a method of and apparatus for the manufacture of double sided and multi-layer printed circuit boards. Learonal was a subsidiary company of an American organisation. There were sister companies in various European countries. Learonal in particular supplied products to businesses which manufactured printed circuit boards.
2. In 1997 Learonal became interested in Mr Wallis's invention. On about 18th April 1997 Mr Wallis went to Learonal's offices and discussed his invention with Mr Paul Smith, the managing director, and Mr Keith Whitlaw, the research and technology director. On 14th May 1997 a confidentiality agreement was signed by Mr Smith.
3. Over the next year or more tests were carried out on samples incorporating Mr Wallis's invention by Learonal. Mr Whitlaw obtained the opinions of his European counterparts as to its viability and commercial potential. As Mr Whitlaw put it in oral evidence:

"I was a proponent of Mr Wallis's process. I was keen, I liked it, I liked the idea. I wanted to make it work for multi layers."

The judge found that Mr Whitlaw was enthusiastic about this invention in November 1998 and optimistic that it would be a benefit to Learonal.

4. It was against that background that on 16th November 1998 there was a meeting in Mr Whitlaw's office between him and Mr Wallis. Mr Wallis was obviously keen to clinch a deal. Mr Wallis's case was that at that meeting there was a concluded legally binding oral agreement made between himself and Mr Whitlaw on behalf of Learonal, whereby, to put it shortly, Learonal would acquire his invention. Miss Sinclair, counsel for Learonal at the trial, conceded that if such an agreement was made, Mr Whitlaw had authority to contract on behalf of Learonal. The judge decided that there was no legally binding oral agreement.
5. There was little or no disagreement as to what was said at the meeting. What the judge had to decide, viewing the question objectively, was whether Mr Wallis had established, on the balance of probabilities, that Mr Wallis and Mr Whitlaw intended to enter into a legally binding oral agreement from what they said to each other, and did so enter such an agreement. If it was an inchoate agreement -- that is an agreed basis of the principal terms of an agreement to be made at some future date, perhaps in a formal written agreement -- Mr Wallis's claim would fail.
6. In his particulars of claim Mr Wallis pleaded his case as follows (paragraph 4):

"After yet further testing of the new process by the defendant and at the defendant's instigation the claimant met Mr Whitlaw on the 16th November 1998, at which point the defendant contracted with the claimant on the following express terms:

(i) the claimant would be paid a lump sum of £50,000.

(ii) the defendant would discharge all fees associated with the international patent application for the process.

(iii) the defendant would pay the claimant a royalty of 3% of gross sales world-wide but until such times as the royalty payments reached £30,000 or more annually, the defendant would pay the claimant £30,000 per annum.

On or about the 25th November 1998 and acting in part performance of the said contract the defendant discharged the patent attorney's fees for the international patent application.

Following the takeover/merger of the defendant company the defendant then averred no contract had been made (due as claimed to an absence of written documentation) and in breach thereof has not made any further payments to or for the benefit of the claimant."

Then there is a pleading as to the loss and damage suffered by the claimant. In paragraph 11 of the defence it is pleaded:

"On 16th November 1998, at the claimant's request, Mr Whitlaw met with the claimant. Mr Whitlaw communicated the concerns expressed by his colleagues to the claimant, explaining that the technology required further development if it were to become commercially attractive to the defendant. The claimant asked Mr Whitlaw what financial arrangement the defendant might be able to offer him in the event that the defendant ultimately did decide the purchase the method. In the light of the difficulties set out in the preceding paragraphs, Mr Whitlaw had not considered the financial aspects of any future agreement. He invited the claimant to disclose what he had in mind. The claimant stated that he had spent some £40,000 on developing the method. He therefore wished to recover that sum plus a profit. In addition, he required a royalty of 3% of gross sales worldwide and a fixed minimum payment of £30,000 per annum for 3 years or until such time as the royalty payments reached £30,000 per annum, whichever was the earlier. Mr Whitlaw informed the claimant that, if the defendant decided to purchase the method, it would not be prepared to consider agreeing to make any minimum annual payment but would be prepared to consider paying a lump sum in the region of £50,000 and a royalty of 3% on gross sales worldwide."

At paragraph 13:

"It is specifically denied that the alleged or any contract was concluded between the claimant and the defendant at the meeting on 16 November 1998."

The similarity of the evidence of Mr Wallis and Mr Whitlaw as to what was said at that meeting emerges from the transcript of their evidence. Mr Wallis said:

"A very short meeting, about 15 minutes. Mr Whitlaw said 'Learonal want your patent. How much do you want for it?' I said 'I would like you to make an offer.

He said 'I believe you have spent about £40,000 on development, and Learonal will offer you £50,000 up front.' That was more than I expected, and I said 'I will accept that', and I asked about royalties. He said 'We would give you 3 per cent of worldwide sales.' I said 'Is that gross or net?' He said 'On gross sales.' I didn't know what the gross sales would be, but I realised it would be astronomical on a firm of that size, so I said I would accept that. I think he worked some figures out on a piece of paper, and I said 'What would I get until the royalties reached a reasonable amount?' He said '£30,000 a year would be nice, wouldn't it,' and I said 'That will do for me.' That was the minimum estimate of income for the first three years of the process to Learonal, worked out on that. Sorry.

(JUDGE KERSHAW): His estimate or yours?

(MR WALLIS): No, his estimate. His estimate was, I think it was half a million pounds the first year and then in the next with a million and a half to -- -- -- It worked out at three million pounds in the first three years, of which I would get 3% on, which was £90,000, which split over three years was £30,000 a year, and he said they wanted the patent turning over to them immediately, and I said I had been with Mr Robey, who had helped me with the drafting of the first part of the patent. He had been extremely helpful, not charged me very much money, and I felt it wasn't the right thing to take the business away from him without any warning, and would it be acceptable to Learonal for Mr Robey to carry on the next stage for this process, which was due in a short time and then transfer the rights over to Learonal after that stage. Mr Whitlaw agreed to this, and said Learonal wanted to choose the countries that the international patents would be patented in. We walked towards the door, we shook hands on the deal, Mr Whitlaw said I would be hearing from their solicitors to confirm a meeting."

Mr Whitlaw in his evidence said:

"This meeting of course was some three and a half years ago, and I will recount the events as accurately as I can. I cannot remember every detail of the meeting because it was such a long time ago. Some things I have a very clear recollection of and some things I am not quite so clear on. The meeting started when I informed Mr Wallis that I had circulated some of my European colleagues and also American colleagues with information about this process, soliciting their input. I had one or two responses I explained to him, and there were one or two reservations which we discussed in terms of the drying step, the applicability to multi layer processing, and the suggested raw material cost."

Mr Whitlaw then said:

"That was a very short introduction to the meeting, no more than a couple of minutes. Mr Wallis was then keen that we start to talk about the financial arrangements that might exist between the two companies. Now as far as those facts are concerned, I have not a lot of argument in fact with what Mr Wallis said. My argument is within the context of how they were said. My objective at that meeting was to establish a framework to the kind of terms, the kind of financial settlement that Mr Wallis was looking for, so that I could then take that information to Paul Smith, our managing director. We could then get final approval from our American company, with a view to making a formal contract with Mr Wallis at some time in the future if we had completed successfully all our process evaluations. The first thing that was raised was the question of £180,000 as a one off payment. That question was couched in the terms of 'If we were to make an offer to you of £180,000, would that be of interest?' Mr Wallis replied that he did not want a one off payment. He was interested in an up front sum to cover his initial costs and then an ongoing royalty payment.

(JUDGE KERSHAW): He wanted, have I got this right, a down payment to cover his expenses? (A) Yes.

(Q) And an ongoing royalty payment? (A) Correct. That's correct, yes.

(Q) Yes, thank you. Yes? (A) He said that his initial costs were about £40,000, so it was felt that £50,000 -- -- --

(Q) No, not it was felt. What was said. That is what you have been asked to tell me? (A) I said that if that was the case, then £50,000 would be a reasonable sum, and our standard royalty rate would be 3%. We then came to the question of would there be a minimum royalty payment. Mr Wallis was insistent that there should be a minimum. I said that even at this stage of the negotiations I could not give him any real commitment that we could go to that. I said I would investigate that possibility, and I then discussed with Mr Wallis what kind of minimum payment might be appropriate. We then came to the question of the £30,000 which Mr Wallis raised. Now I have no specific recollection of that sum being mentioned at that meeting. I am not saying that it wasn't, but I'm just saying that I have no specific recollection of it, as hard as I've tried to. Mr Wallis quoted me as saying £30,000 a year seems a nice figure. I don't specifically remember saying that. I may well have done, but even so saying '£30,000 is a nice figure' is not saying that 'I would guarantee you £30,000 for the next three years, irrespective of whether we have any sales or not.'

We then came to the question of the patent issue. There was this deadline, which I believe was the 28th of November, which we needed to establish payment to establish the priority date for international applications. Now it was my intention that we needed to establish that priority date if we wanted to have access to the patent in the future, so it was in Learonal's best interests to fund that £4,000 payment as a sign of our ongoing commitment and interest. At the conclusion of the meeting we did, as Mr Wallis suggests, shake hands. That was not in my mind to signify consummation of the deal. It was simply that Mr Wallis was leaving and that was the polite thing to do. I did explain to him that we would have an official agreement drawn up with our solicitors, but I didn't tell him, which I really reproach myself for now, is that I didn't really tell him all the steps that would be involved in that for me needing to get approval from Paul Smith and then from our American parent company, and of course all this was contingent on the successful evaluation of the technology."

He went on to say that after the meeting he made a brief note of some of the figures that they had discussed. On page 15 of the transcript of his evidence he said:

"The intention was that we would draw up a legal agreement between the two companies detailing all the payment terms and the patent issues."

He went on to say:

"To be honest, I'm not disputing that you said it. I will accept that you said it, but I'm not saying that that was a firm offer of £30,000 a year.

(Q) It was a very important meeting this, and at no stage did you say that this was subject to contract, did you? (A) I did not."

The aide memoire that is mentioned by Mr Whitlaw in his evidence is to be found on page 294 of the court bundle. In my judgment, there is nothing in that aide memoire that in any way confirms the suggestion that an offer of a minimum payment of £30,000 a year was made.

7. Mr Wallis has been highly critical of the judge for failing to mention this aide memoire in his judgment but in my judgment the aide memoire is not indicative of any concluded legally binding agreement but is entirely consistent with Mr Whitlaw's evidence as to its purpose. Its significance, if any, is that there is an absence of any note supporting Mr Wallis's pleaded contention that he was to be paid £30,000 a year annually if the 3 per cent royalties did not reach £30,000.
8. Before the meeting on 16th November 1998 Mr Whitlaw had received faxes from his counterparts in Europe. He had received them on 3rd November and they had followed a fax from himself on 29th October. Clearly, he would have had in mind, as he said, those faxes at that meeting. Mr Whitlaw in his fax (page 192 of the court bundle) wrote to his counterparts in some five associated companies:

"We have been offered a new direct metallisation technique which uses the following application method."

He sets out the application method. He then sets out the advantages of the process and then he writes:

"There is a patent pending for this process and Learonal would acquire the exclusive rights. We have evaluated the process on small scale in our laboratory and found encouraging results, the coverage being good but not perfect but we are sure we can improve this by improving our application technique. At the moment the process is only suitable for double sided boards but perhaps in future with some modification could also be useable for multilayers."

The questions are as follows:

"What do we think of this technology?

Is there a market for it?

How big might that market be?

How much should we charge for this process (raw material costs are claimed to be 0.80/m² laminate)?

What is the best way to exploit this technology on a worldwide basis?

I look forward to receiving your input and comments."

Mr Hunziker replied from Switzerland (page 199 of the court bundle):

"I am excited about the new technology."

He makes a number of comments which are in the form of highly technical questions. For example:

"Is the silver loaded polymer solvent based? What is the operating temperature during application?"

He then goes on in the course of his fax to say:

"I am unable, at this early stage, to comment on your question with regards to the price we could possibly charge for this process. However, I would like to provide you with some information from the market."

He gives details about pricing, including pricing from competitors, including Shipley, which in a matter of a couple of months or so was to take over or merge with Learonal. The enthusiasm, if it can be called that, of Mr Hunziker was not shared by other writers from Europe. Mr Fuchs, writing from Germany, commented:

"Basically I am astonished that the raw material costs are in the range of £0.08/m² laminate. This seems to be not the big improvement compared to Conductron in terms of material costs."

He goes on to say:

"I have severe doubts that such a technology can be introduced easily and will be accepted by OEMS.

The above made comments may be wrong due to incomplete understanding of the described technology, but in case that the comments are evident, we should carefully check those areas and then reach decisions on how to proceed with the project."

Mr Favini, writing from Italy, says:

"I think the price is not very attractive.

Customers producing only double side are very few."

He then makes adverse comments about the technology.

9. In my judgment, it is almost inconceivable that Mr Whitlaw would have intended to enter into a legally binding agreement with Mr Wallis, furnished with those comments from his counterparts. Equally, it is inconceivable that he would have so phrased his remarks to Mr Wallis that they could be reasonably understood by Mr Wallis to indicate that a binding legal agreement was to be made.
10. In my judgment, in considering whether there was a concluded agreement the judge was entitled to look how the parties conducted themselves after 16th November as evidenced by the contemporary correspondence. What was urgent was the deadline for the patent application. On page 204 of the court bundle is a letter upon which Mr Wallis has placed much reliance. It is a letter from Mr Wallis's patent attorney, addressed to Mr Paul Smith, the managing director of Learonal. The first sentence says:

"I understand from my client, Mr Wallis, that Learonal have agreed to buy the rights to his above referenced patent application concerning printed circuit boards."

He goes on to say that he would be grateful if Mr Smith would contact him as soon as possible to confirm:

"(1) That our proposal to file an international patent application designating all available countries is acceptable, in particular, if any other countries are of interest which are not mentioned on the list, please let me know; and.

(2) That Learonal will undertake to meet our charges in respect of this."

As can be seen by the follow up letter on page 206, Mr Smith did confirm those two specific points when telephoning Mr Robey. Mr Robey's letter on page 206 is dated 24th November, which underlines the deadline for the patent application for 26th November. In my judgment, little or no weight can be given to a comment by Mr Robey to Mr Smith in the context of what Mr Robey was doing, which was making the patent application within the deadline. On 25th November Mr Wallis wrote to Mr Whitlaw in these terms:

"I have spoken to Mr Robey and arranged for him to carry on with the next stage of the patent. As arranged at our meeting on Monday 16 November 1998 when this stage has been completed all the patent rights will be transferred to your company by myself."

In my judgment, that letter does not of itself provide evidence that there was a legally binding agreement, but merely an understanding between Mr Wallis and Mr Whitlaw that of course, once there was a legally binding agreement, the patent rights would be transferred to Learonal to give effect to what was envisaged to be the legally binding agreement.

11. Other correspondence supports the view that there was no legally binding agreement as understood by the parties. On 7th January Mr Robey writes to Mr Wallis, ending his letter saying:

"I hope your negotiations with Learonal are progressing."

On 28th January Mr Wallis writes to Mr Whitlaw, saying:

"Following our meeting last Friday 22nd January and our previous meeting when you told me Learonal was being taken over by another company, I would like to set down a diary of events, from the time tests were carried out by you on my process for through- plating."

He describes his meeting with Mr Smith and what Mr Smith had said to him. He describes how further tests were set and then sets out what he says was said on 16th November. It is in these terms:

"On 16th November 1999 I had a meeting with you to discuss financial arrangements. You said Learonal wanted to use the process and they wanted the sole rights. You asked how much I wanted, and I said I preferred for you to make me an offer. You offered 3% of worldwide gross income from the process which I accepted. You also mentioned that I had previously requested a one off payment to cover earlier development work. You offered £50,000 which I accepted. We then discussed the minimum payment that would be made by you until the process was on the market and reaching reasonable royalties but an exact figure was not decided on."

In my judgment, that is a very important piece of contemporary evidence, indicating that there was no concluded agreement because a minimum payment was clearly going to be a crucial feature in the eventual agreement. The letter goes on to say:

"You agreed that Learonal should pay for the next stage in the patent and this was duly done. You asked that your patent agents would then take over the next stages which time we have now reached.

I realise that this is a difficult time of change for yourself and the company but I'm sure you can understand my concerns as it is now two months since that meeting."

That is a reference to the takeover and merger by the Shipley group of American companies that was happening at that time. He ends the letter:

"As agreed the patent should now be transferred either to Learonal or your patent agents. I look forward to receiving your instructions."

That letter was followed up by a letter from Mr Whitlaw, who makes it clear in that letter:

"I would like to advise you that no firm offer has so far been made in respecting of purchasing this technology. The indicative offers which Paul Smith and I made were on the basis that Learonal would commercialise this process, which is dependent upon us being satisfied with its technical performance and viability in the market and so far we have not yet reached that decision. If and when we decide to commercialise this process you will receive a formal written offer."

In my judgment, that passage in the letter of Mr Whitlaw makes undoubted commercial sense. On 15th February Mr Wallis wrote again to Mr Whitlaw, thanking him for the letter to which I have referred, in which he says:

"I remain fully convinced of both the technical and commercial relevance of this technology."

He does not specifically say: "Look, we have a legally binding agreement", but it may well be that Mr Wallis's explanation is right, that bearing in mind the difficult position of Learonal and Mr Whitlaw and Mr Smith at the time of the merger and takeover, he did not want to upset the apple cart. However, on 14th April 1999 Mr Wallis did write to Mr Whitlaw threatening legal action to protect his interests. What he says in the letter is this:

"We discussed our meeting held on 16 November 1998 -- that was a meeting that they had had on 30th March -- "and you agreed that the arrangements made then were as set out in my letter to you of 28 January 1999."

Again, no mention in this letter by Mr Wallis that there was any agreement with regard to any minimum payment of £30,000. On 19th May Mr Whitlaw wrote saying that they did not wish to proceed with the technology. Mr Wallis consulted solicitors who wrote a letter before action (page 240), which does set out the terms of the agreement alleged by Mr Wallis, but again does not contain any contention that Mr Wallis was entitled to any minimum payment or any minimum payment of £30,000 a year.

12. How did the judge assess the evidence and what conclusions did he reach? After referring to the faxes that Mr Whitlaw had received from Europe, the judge said (page 10D of his judgment):

"It is reasonable to infer, and I do find by inference, that although himself enthusiastic, Mr Whitlaw was not contemplating making a binding contract on that occasion in the middle of November. Now I appreciate of course that as a matter of law what matters is not what each party intended within his own brain, but what the words each party used would be reasonably understood as meaning by the other. I have heard Mr Whitlaw give evidence and I have described him as among other things, intelligent and articulate. I do not think that he was contemplating deceiving Mr Wallis, and while it would be unrealistic to expect him to remember verbatim everything that he said and heard, I think that he was well capable of expressing himself in a manner which accurately reflected what he had in mind. There was unlikely, I consider, to have been what is commonly called a failure of communication, or misunderstanding. I do not think that he would have inadvertently led Mr Wallis reasonably to believe something that was not actually his intention.

Both parties agree that the first stage of that conversation was a suggestion from Mr Whitlaw that Mr Wallis should receive £180,000 flat fee for all the rights in this invention method, and everyone agrees that Mr Wallis turned that idea down flat. He said, and I believe him, that his state of mind was he would do better with royalties.

It follows that once that opening parry was over the further discussions were on the basis of a long term arrangement. It is possible, I do not have to reach a conclusion on it, but it is possible that Mr Whitlaw might have been willing to reach a concluded agreement on the basis of a single one off payment based on his own hunch as to the value of the invention and a desire at the very worst to buy it off so that if it was good and the defendant lost the opportunity, at least no competitor would get it. That is possible, but as I say, nobody took that any further. Any long-term agreement, whatever its precise details, had that very quality of involving the long-term. I have alluded already to the lack of any assertion of any kind in the claimant's case about agreement as to how long the proposed benefit of these rights should belong to the defendant, whether the calculation of the sums to be received should be on the basis of a fixed sum until any year in which the revenue from royalties reached or exceeded £30,000 and therefore what the period should be, when the year should start and stop, what the accounting year should be for that purpose, other aspects which it is not suggested that any detail had been reached as to how payments were to be made over £30,000, monthly, quarterly, half-year, yearly, in advance, in arrears. If payments were to be made periodically over a year of say £2,500 a month, whatever it is, what was to happen if during the course of the year royalties exceeded the £30,000.

In my judgment, the complexities of a long-term agreement together with the fact that the rejection of a lump sum payment of £180,00, revealed two things: 1) that the parties would want to hammer out the terms of their agreement, and 2) that they knew that there was a lot of money involved. Certainly from Mr Wallis's point of view he was expecting over the years more, considerably more, than £180,000. So the inherent probability is that two such sensible men as these would not expect to conclude a binding agreement without anything being put down on paper, and still less without any legal advice."

In my judgment, the judge was entitled to reach this conclusion in the context of the proposed exploitation on a long term basis of a patented invention that required a considerable degree of technological testing even at that stage. The judge went on to say:

"The burden of proof is on the claimant, and I am not satisfied on the balance of probabilities that there was an agreement on all points. I think there was agreement, in the sense that £50,000 was offered or suggested as a sum that would be paid forthwith to cover, with a bit to spare, the expenses of obtaining their present protection (past expenses) and that the defendant would cover the future expenses of obtaining patent protection. There seemed to be no attempt by Mr Wallis, at least on that occasion, to 'up the ante' in respect of the 3%, although he must have had the warning not to accept the first offer ringing in his ears, and this was certainly the first offer of anything other than a lump sum, but the uncertainties about the £30,000 in my judgment had not been agreed, ...."

The judge went on to say that he was fortified in his conclusion by the conduct of the parties, and in particular Mr Wallis in the period immediately after 16th November.

13. The judge then went on to deal with the correspondence which I have outlined. He did in particular refer to a passage in the evidence of Mr Robey, the patent agent, who said that on 2nd February 1999 he had had a telephone conversation with Mr Wallis. He was questioned about this by Miss Sinclair for the defendants:

"When you rang Mr Wallis to ask who was going to pay for the next stage, he told you, did he not, he was still in negotiations with Learonal? (A) Yes, that is right."

Then he was referred to his manuscript note dated 2nd February (page 287 of our court bundle):

"Michael Wallis called. He is still in negotiation with Learonal.

(Q) Is that something he told you during the telephone conversation? (A) Presumably, yes."

The judge reached this conclusion (page 16 of the judgment):

"I do not find that there was an agreement on something which was plainly and rightly regarded as an important ingredient in the package which was being discussed. I do not think that there was intention in any event to create legal relationships orally, even if contrary to the findings which I have just made, even if there had been accord on all points, and I am not surprised that there was failure to reach agreement on the £30,000 point, because it is not at all clear that the parties were even addressing their minds to the implications of a provision for payment at a pre-determined annual rate being overtaken by the possibility of payments calculated by reference to the defendant's gross sales worldwide of this product or the possibility of this product being further developed by the defendant beyond the capabilities which were being advertised for it by the claimant, which was limited to double sided boards."

14. Mr Wallis's grounds of appeal are set out on pages 9 to 11 of the court bundle. His first ground was that the judge failed to heed the evidential presumption that, if there is a business agreement, it is intended to create legal relations. Although in my judgment there is clear authority for such a presumption (see in particular the speech of Lord Simon of Glaisdale in the Esso Petroleum case [1976] 1 WLR 1, and the authorities cited by him at pages 5H to 6E). That presumption does not arise unless an agreement is first established. In my judgment, the judge was entitled, as he did, to come to the conclusion that there was no agreement. Too many matters were left undecided. What would happen if the invention, on further testing, was not technically feasible or became commercially unviable?
15. Mr Wallis's second ground of appeal is that the judge overemphasised the lack of detail over the payment of royalties, when they were to be paid, when they would begin, when they would end. Although I accept that in a business agreement every nut and bolt does not have to be in place before an agreement can be concluded, because they can fall into place by implication, in my judgment the judge was entitled to take into account the lack of detail with regard to payment as a factor in his decision that an agreement was not concluded.
16. Mr Wallis's third ground of appeal related to the payment of the fees and instructions given to Mr Robey, the patent attorney, by Learonal. In my judgment, it was a factor that the judge had to consider, but he was entitled to accept Mr Whitlaw's account that it was a gesture or earnest of goodwill. The application had to be made as a matter of urgency. It was made in Mr Wallis's name. There was no assignment of the rights under the patent.
17. Mr Wallis's fourth ground of appeal is critical of the judge in a number of respects. He says that if there had been a concluded agreement in relation to the £180,000, why should there not have been an agreement in relation to what was then discussed? He criticises the judge for accepting that further testing of the invention would be required and for not taking account that 18 months had elapsed since the first testing had begun. Mr Wallis, naturally enough, is critical of the judge for not analysing mistakes or flaws in Mr Whitlaw's evidence, but in my judgment he had the advantage of seeing Mr Whitlaw and Mr Wallis give evidence, not only in cross-examination but in the old fashioned way in evidence-in-chief. In my judgment, there is no reason why this court should come to a conclusion based merely on argument and analysis of the documents in the transcripts that the judge erred in that direction.
18. Mr Wallis's fifth ground of appeal related to a comment that Mr Wallis had made in his witness statement in relation to Mr Whitlaw's letter of 5th February 1999, with which I have already dealt. I have some sympathy with Mr Wallis so far as this ground of appeal is concerned. I think, overall, that he perhaps took a somewhat hard view with regard to Mr Wallis in that particular respect. But in my judgment it does not flaw the judge's finding that he preferred overall the evidence of Mr Whitlaw.
19. The sixth ground of appeal related to the requirement for further testing of the invention. Mr Wallis pointed out that Mr Whitlaw, although a technical expert, had allowed tests to be carried out incorrectly and not in line with the patent specification, but in my judgment that issue has no relevance as to whether or not there was a legally binding agreement.
20. The seventh ground of appeal was that Mr Wallis asserted that his human rights had been infringed. He criticises the legal aid authorities. Mr Wallis appeared before us, as he appeared before the judge in person. I am satisfied that the judge made allowance for that, and indeed specifically mentioned in his judgment Mr Wallis's difficulty with dyslexia. I do not consider that the trial was in any way conducted unfairly.
21. In my judgment, no legitimate grounds have been made out for impugning the conclusions of Judge Kershaw. I would dismiss the appeal. In my judgment, what was achieved on 16th November 1998 was an accord or inchoate agreement which Mr Wallis and Mr Whitlaw hoped and expected would be the basis of a legally binding agreement to be drawn up at a later date. Like the judge I have considerable sympathy for Mr Wallis, who had reason to expect that his invention would be exploited following the meeting of 16th November for his financial benefit.
22. LORD JUSTICE BUXTON: I agree.
23. ;LORD JUSTICE BROOKE: I also agree. The appeal is dismissed.
ORDER: Appeal dismissed with costs.