Buchanan v Alba Diagnostics Limited and the Right to Improve a Patent Innovation

The House of Lords in Buchanan v Alba Diagnostics Limited [2004] UKHL 5 has confirmed that it is implied that in a purchase or assignment of a patent, the right to improve it is given. The reason for this is to avoid the situation where the vendor, after selling the patent, comes up with something that, without being an infringement nor an improvement accomplishes the desired object in some other way and therefore destroying the value of what has been purchased. Â

In Buchanan, the meaning of improvement was settled by saying that it is not a term of art and can have wider or narrower meanings according to the context. In the present case the court held that a part for a machine, although it may be strictly considered another product, is an improvement as long as it can be fixed to the machine and it adds efficiency or value to the machine to which it is attached.

In Buchanan, the court has tried to give an answer to the question: ‘Is, in a patent agreement, a clause reserving the right to improve the patent a void restraint of trade?’ This was answered in the negative, following Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269, 300. However, it must be noted that the decision in Esso is reached after balancing the bargaining powers of the parties and the trader’s interest (in a similar way as if it was the case of an unfair contract clause).