Between 1904 and 1906 British Westinghouse supplied 8 steam turbines. They were defective in design and used excessive quantities of steam. The railway company did not reject them but reserved its claim to damages for breach of contract. In 1907 the railway company replaced them with more efficient turbines made by Parsons. The railway company claimed damages for the excessive fuel used while they were operating the British Westinghouse turbines and the whole cost of replacing them with Parsons turbines. The arbitrator found that the railway company had acted reasonably and prudently in acquiring the Parsons turbines to mitigate their continuing loss in using excessive fuel, but the Parsons turbines were so efficient that it would have been to the advantage of the railway company to replace the British Westinghouse turbines when they did, even if the latter had been in accordance with the contract specification.
Held: The additional benefits gained by the railway company from acquiring the Parsons turbines, over and above what would have been their contractual entitlement as against British Westinghouse, had to be brought into account in calculating the damages. The House distinguished cases in which the plaintiff had received benefits which ‘did not arise out of the transactions the subject-matter of the contract.’ These were res inter alios acta. But where -‘the person whose contract was broken took a reasonable and prudent course quite naturally arising out of the circumstances in which he was placed by the breach’ it was necessary to look at any additional benefits which he thereby acquired and to ‘balance loss and gain.’
A court must be careful of the danger of hindsight in assessing the obviousness of a patent.
Moulton LJ said: ‘I confess that I view with suspicion arguments to the effect that a new combination, bringing with it new and important consequences in the shape of practical machines, is not an invention, because, when it has been eleven been established, it is easy to show how it might be arrived at by starting from something known, and taking a series of apparently easy steps. This ex post facto analysis of invention is unfair to the inventors and, in my opinion, it is not countenanced by English Patent Law.’
Judges:
Lord Haldane LC
Citations:
[1910] 27 RPC 209
Jurisdiction:
England and Wales
Cited by:
Cited – Rocky Mountain Traders Limited and Hewlett Packard Gmbh; Westcoast Limited and Fellowes Manufacturing (UK) Limited CA 20-Dec-2000
The claimant appealed an order finding its patents for mechanisms for labelling CDs invalid for obviousness.
Held: the judge had applied the correct tests for obviousness, and the view taken by the judge of the expert evidence was not open to . .
Cited – Catlin Estates Ltd and Another v Carter Jonas (A Firm) TCC 31-Oct-2005
The defendants had been employed to manage a building project which it was said went wrong. The court had to consider several different factual claims. . .
Cited – Philips v Ward CA 1956
The Plaintiff had relied on a negligent survey to purchase a substantial Elizabethan property and land. The report did not mention that the timbers of the house were badly affected by death watch beetle and worm so that the only course left to him . .
Lists of cited by and citing cases may be incomplete.
Intellectual Property
Updated: 06 May 2022; Ref: scu.188263
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