75

Vol. LI.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [No.3.

In the Matter of Applicat,ions by .James Lomax Cathro jar Compulsory

Licences in respect to certain Letters Patent.

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Before THE COMPTROLLER-GENERAL.

November 10th, 14th, 16th, 21st, 22nd, 24th, 27th, 28th and 30th, and
December 1st, 4th and 16th, 1933.

IN THE MATTER OF ApPLICATIONS BY JAMES LOMAX CATHRO FOR COMPULSORY

5 LICENCES IN RESPECT OF CERTAIN LETTERS PATENT.

Patents-Applications for compulsory licences 1lnder Section 27 of the Patents

and Designs Acts, 1907 to 1932, in respect of three Patents-Oppositions thereto
-Alleged abuse of monopoly rights under sub-section 2 (b), (c) and (d) in
respect of all three Patents and under sub-section 2 (a) in respect of one of
10 them-Abuse found in the case of the last-mentioned Patent and under sub-
section 2 (a) only-Admission that that Patent could not be worked efficiently
without infringing one of the others-Licences refused-Locus standi of Appz,zc-
ant-Nan-disclosure of certain documents produced as evidence, and hearings
with respect to them in camera.
15 AIJpZications were made for the grant of compttlsory licenc.es in respect of
three Letters Patent. Abuse of monopoly rights was alleged under Section 27,
sub-section 2 (b), (c) and (d) in respect of all three Patents and under sub-
section 2 (a) in respect of the third Patent. All the Patents related to screen-
grid wireless valves, and the Ap'plications were based upon the allegation that
20 there was no manufacture under the Patents of valves of a particular type,
namely, the American type, which alone are suitable for use and replacement
in receiving sets of the American type which are in use to some extent in this
country and to a considerable extent in certain of the Dominions. The Applic-
ant showed that valves of this type u'ere being imported into this country and
25 that a large demand for them in certain of the Dominions was being met by
importation from 'non-British sources. The Patentees had taken proceedings
against importing infringers in this country and in one case had settled the
action on substantial terms. Licences covering all the Patents had been granted
for manufacture in this 'country and were unrestricted as to the type of valve
30 to be manufactured, and under these licences there had been large manufactures
of British-type valves under the first Patent and a smaller manufacture (which
had ceased) of valves for export under the third Patent. The Patentees con-
tended that to manufacture and supply American-type valves would be (inter
76

No.3.] REPORTS OF PATENT, DESIGN,. AND TRADE MARK CASES [Vol. LI.

, In the Matter of Applications by James LQmax Cathro for Compulsory

Licences in respect to certain Letters Patent.

alia) to encourage the purchase and use of American-type sets and so to

assist the large American set-industry at the expense of the British set-industry.
Held, that the first Patent was being worked here on a commercial scale as

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regards British-type valves, and that, although American-type valves were not
being manufactured here under it, and were being imported, it was not shown 5
that such importation was by any or all of the classes of persons mentioned in
sub-section 2 (b); that it could not be said that the demand for the patented
valves in this country was not being met to an adequate extent and on reason-
able terms within sub-section 2 (c) merely because there were not available here
to users of American-type sets patented valves of American type but of British 10
manufacture, and that for the purposes of sub-section 2 (c) the demand must
be an actual one and not merely one which an applicant for a compulsory licence
hopes and expects to be in a position to create if and when he has obtained a
licence and commenced business; that as regards sub-section 2 (d) the trade or
industry 0/ the United Kingdom as a whole could not be said to be prejudiced 15
by the refusal of the grant of a licence to the Applicant, even assuming that
such grant would result in a substantial increase in the export trade, that the
Applicant had no existing trade which could be prejudiced, and that he did
not propose to establish a new trade or industry but merely to enter an
existing one; that no abuse of monopoly rights had been established in respect 20
.of the second Patent (which was a Patent of Addition to the first); that non-
working on a commercial scale in the United Kingdom had been shown with
regard to the third Patent under sub-section 2 (a), that satisfactory reasons
for such non-working had been given so far as the non-manufacture of British-
type valves was concerned but that the reasons put forw~rd for the non- 25
manufacture of American-type valves were not satisfactory, and that in
particular it had not been shown that British-set makers in the United Kingdom
would suffer if a portion of the demand for American-type valves in the
Dominions and in this country were satisfied by valves of United Kingdom
manufacture; that there had therefore been abuse of monopoly rights under 30
the third Patent only, but that, as it was admitted that the third Patent could
not be worked efficiently without infringing the first Patent, it would be futile
to grant a licence under the third Patent and that no other relief could properly
be given. The Applications were accordingly dismissed.
The locus standi of the Applicant and the meaning of the expression" person 35
" interested" [Section 27 (1) ], were considered. Certain documents put in by
the Patentees were ordered to be disclosed, so far as the Applicant was con-
cerned, to his Counsel only, and the Hearings at which those documents were
considered were held in camera.
 77

Vol. LL] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [No.3.

.In the Lliatter of Applications by James Lomax Cathro for Compulsory

.Licences in' respect to certain Letters Patent.

Robin Electric Lamp Oompany Ld.'s Petition, (1915) 32 R.P.O. 202, and
Applications by Brownie Wireless 00. Ld., (1929) 46 R.P.O. 457, followed and
applied.

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The facts of this case are sufficiently set out in the Decision of the Comptroller-
:5 General (Dr. 1lf. F. Lindley) which was given in writing on the 16th of
December, 1933, as follows:-
. These are Applications by James Loma:c Cathro of Hampstead, London, for
the grant of Oompulsory Licences under Section 27 of the Acts in respect of
three Patents on the ground that there has been an abuse of the monopoly
10 rights under the Patents. The first Application for a Oompulsory Licence Wa'l
made on the 3rd of February, 1933, in respect of Patent No. 230,011, which I
will hereinafter refer to as the "Hull" Patent. The second Application was
made on the 1st of March, 1933, in respect of Patent No. 255,441, which is a
Patent of Addition to Patent No. 230,011 and will be hereinafter referred to
15 as the Patent of Addition. The third Application was made on the 12th of
September, 1933, in respect of Patent No. 292,563 which will be referred to
hereinafter as the "Mitchell" Patent.
All three Patents relate to what are known as screen grid thermionic valves.
The object of the Hull invention if) to eliminate capacity effects between the
:20 control grid and the anode of the valve, and the invention effects this purpose
in the main by extending the screening grid an appreciable distance beyond
the ends of the control grid and the anode. The Patent of Addition provides
a modified construction of valves having a screening grid as claimed in the
Hull Patent. The Mitchell Patent has the same general object as the Hull
:25 Patent, that is to say, a reduction of undesired capacity effects between the
control grid and the anode, and it consists in providing, not only an innf)r
screening grid between the anode and the control grid, but also an outer
screening grid surrounding the anode and electrically connected to the inner
screening grid. .
30 All three Patents stand upon the Register in the names of The British
Thomson-Houston Co. Ld., Lliarconi's Wireless Telegraph Co. Ld., and Electric
and Lliusical Industries Ld. as tenants in common. It appears from the evidence
that the whole of the radio or entertainment rights under the Patentll are
vested in Electric and Lli usical Industries Ld.
35 The Applications were originally based upon the grounds that the Applicant
had come to England for the specific purpose of placing upon the market here
a particular construction of wireless receiver which his experience had shown
to be suitable for sale and use both in this country and the British Oolonies,
and to arrange for the supply of valves that were necessary for this set and
40 were moreover suitable for replacing the valves in certain other receiving sets
already in use in this country and the Oolonies. At the Hearing, the ~pplicant
stated that he no longer proposed to place a, special wireless receiver upon the
market, .and that his Applications must be taken as now made solely for the
purpose of enabling him to supply from this country certain types of valves
45 which are at present being supplied only from foreign countries. The valves
in question are those which are required for replacements in receiving sets of
the American type which are in use to a very large extent in certain of the
Dominions and to a certain extent in this country;
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NO.3.] REPORTS OF PATENT, DESIGN,. AND TRADE MARK CASES [Vol. LI.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

The Applications were considered under sub-section (8) of Section 27 and,

as I was satisfied that the Applicant had a bona fide interest and that a prima
facie case for relief had been made out, he was directed to serve copies of the

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Applications and Declarations upon the Patentees, and Electric and Musical
Industries Ld. thereupon filed Counter-Statements in Opposition to the Applica- 5-
tions. It will be convenient hereinafter to refer to Electric and Musical I ndus-
tries Ld. as the Patentees. Opposition was also entered by The M-O Valve Co.
Ld. who claim the right to manufacture valves in accordance with the Patents.
At the Hearings on the 10th, 14th, 16th, 21st, 22nd, 24th, 27th, 28th and 30th
of November and the 1st and 4th of December, Mr. Lloyd Jacob appeared on l(}
behalf of the Applicant; Mr. Trevor Watson, K.C., and Mr. Drewe on behalf of
the Patentees, and Mr. Burrell on behalf of the Opponents, The M-O Valve Co.
Ld. Oral evidence was given by the Applicant and Professor Appleton, who had
made a Declaration on the Applicant's behalf, by Mr. H. A. Gill, Mr. K. A. J.
JfcGlure, Mr. John Gray, Mr. W. H. Nottage and Mr. F. C. Topham who had 15,
made Declarations on behalf of the Patentees, by Mr. E. C. R. Gant and Mr.
Frederick Smith who had made Declarations on behalf of The 1If-O Valve Co.
Ld., as well as by Mr. I. Shoenberg and Mr. J. Y. Fletcher on behalf of the
Patentees, and all these witnesses were cross-examined.
Before I deal with the main issueS' involved, I will refer to one or two points 20'
of a preliminary character which were raised and in most cases settled during
the course of the proceedings.
In the first place, Mr. Trevor Watson pointed out that the Declaration which
accompanied the Application in respect of the Hull Patent contains facts not
mentioned in the Application, and that moreover certain facts not mentioned 2:>'
in the Application or the accompanying Declaration first filed were given later
in a supplementary Application which, with a Declaration, were put in by the
Applicant on the 24th of May. This supplementary Application and Declara-
tion, it should here be noted, were filed'ln' response to a request for further
and better particulars upon certain points which was made by the solicitors 30
acting for the Patentees. Mr. Trevor Watson relied in particular upon sub-
section (7) of Section 27 which states that: "Every application presented to
"the comptroller under this section must set out fully the nature of the
"a,pplicant's interest and the facts upon which the applicant bases his case
"and the relief which he seeks. The application must be accompanied by 35
" statutory declarations verifying the applicant's interest and the facts set out
,r in the application."
Mr. Watson argued that this requirement should be strictly enforced and that
any facts mentioned in the first covering Statutory Declaration and not in the
Application should be ruled out. I decided, however, that the omission from 40
the Application of certain matters which were included in the Declaration
accompa,nying it was a matter of form rather than of substance, and that the
irregularity was one which I had power to rectify under Rule 118 of the Patents
Rules, 1932; and that under that Rule and Rule 119 I had power to aUow the
amendment of the original Application to include all the facts put forward in 45
the original covering Declaration and the later supplementary Application; and
I gave leave accordingly for such amendments to be made.
Then Mr. Trevor Watson objected to the admission of Exhibit J.L.C.8 to
Mr. Cathro's Declaration of the 3rd of July, 1933, as being mere hearsay, and
to certain statements such as those contained in paragraph 14 of Mr. Cathro'.~ 50
 79

Vol. LL] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [No.3.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

Declaration gf the 3rd of February as being made merely on information and

belief. These objections I upheld; and I have been careful in arriving at a
decision to leave out of account allegations and statements not properly proved
or admitted. Oertain figures contained in a statement dated the 26th of June,

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5 1933, from the Bill of Entry Section, Statistical Office, H.M. Oustoms and Excise,
relating to importations into this country of wireless valves in the year 1932
and in the months January to May, 1933, were admitted by both sides for the
purpose of this case, as were also the figures in a statement headed" Particulars
"of radio valves and sets imported into the Oolonies as extracted from the
10 "records and approved by Messrs. Broad &; Son and Harold Baron, Esquire,"
which was handed in at the Hearing on the 1st of December. Mr. Watson
also claimed that I should take precautions, in accordance with sub-section (10)
of Section 27, against disclosure of information contained .in certain documents
which were produced by the Patentees relating to certain Licences granted
15 under the Patents in question; to, among other things, the settlement of certain
infringement proceedings; and to the relationship between certain of the Oom-
panies interested in the manufacture and sale of valves and sets; and I decided
tliat, ,so far as the Applicant is concerned, such documents should be disclosed
only to his Oounsel (Of. the Applications by Brownie Wireless Co. Ld., (1929)
20 46 R.P.O. at pages 460 and 461) and that the discussions and examination of
witnesses arising out of these documents should be held in camera. I have of
course considered these documents and the evidence relating thereto and taken
them into account in arriving at my decision, but, with a view to preventing a
disclosure ·of information which the Patentees consider would be against their
25 interest, I shall refrain from mentioning any details of the matters in this
decision.
Mr. Trevor Watson and Mr. Burrell also argued that I ought to refuse the
Applications at iJhe outset on the ground that the Applicant is not a "person
" interested" within the meaning of sub-sertion (1) of Section 27, and that in
30 any case he is not a person who should be regarded as possessing a locus standi
for the present purpose. With regard to the question as to who can be said to
be a " person interested," Mr. Burrell rontended that he must be a person who
is interested tn'the sense that he is suffering disability by reason of the abuses
of monopoly rights which he alleges. Dealing with that point first, while no
35 doubt a person suffering such a disability would be a "person interested,"
I ·think iJhat a'person can also. be interested for t,his purpose in respect of the
relief asked for, particularly if he is prepared, if he obtains the necessary
r'trlief cmttl3r"thii Section, to take steps to remedy the defect alleged to constitute
the abuse, and the Applicant here appears to be such a perSOll. Mr. Watson's
40 contention that the Applicant should not be considered to have a locus standi
was put also upon the grounds that the Applicant cannot claim to have any
technical experience in connection with the manufacture of thermionic valves,
that he proposes to put no money of his own into the manufacture beyond the
amount he has expended in connection with the present proceedings, that he
45 has had little experience of the trade in wireless apparatus at all, and that,
as Mr. Watson put it, he is merely a business man who thinks he sees a demand
which he wishes to supply for his own profit. As to this point, the evidence
is that Mr. Cathro had had no experience in connection with the manufacture or
sale' of thermionic valves before he went to Australia in 1929 as Managing
50 Director of an American firm supplying to Australia certain talking film
H
80

No.3.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [Vol. LI.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

apparatus in which such valves were used; that while in Australia he made
enquiries, particularly in retail shops, as to the kinds of wireless receiving sets
which were being sold and used in Australia; and that during 1931 and part

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of 1932 he was foreign representative for South Africa of another American firm,
The Pilot Radio &; Tube Corporation of America, when he was concerned 5
mainly with the business side of radio-set selling but had some slight connection
also with the technical side. Mr. Lloyd Jacob's reply to Mr. Watson's conten-
tion was that the Applicant can readily obtain and employ the technical skill
that he would require for the manufacture .of valves if he .obtained a Licence. I
I cannot say that the mere fact that the Applicant would have to employ such 10
Itechnical assistance, or that he would have to obtain from Gthers the capital
: necessary for working the inventions, is by itself a necessary bar to a successful
Application under Section 27, and I do not think that, in all the circumstances
of .thiscase, I should refuse these Applications at the outset on the grounds in
question. 15
Again, M'r. Trevor Wat.son and Mr. Burrell contended that I ought to refuse
to consider the Applications further, on the ground that the Applicant had not
been frank, in that he had continued to state, after he had in fact abandoned
tnei'dea of marketing a particular construction of wireless receiver, that he
required the Licences for wEich he asks, not' only in order to manufacture 20
valves for supplying replacements to wireless receiving sets already in use, but
also for fitting into a particular wireless receiver which he intended to market.
This matter caused me some anxious consideration, because an Applicant for :1
Oompulsory Licence should display the utmost frankness in his request, and
should take pains to ensure that none of his statements are misleading, and it 25
is n.o answer to this objection in the present case that, as Mr. Lloyd Jacob
pointed out, certain of the statements made on behalf of the Patentees are not
complete. On the whole, however, I came to the conclusion that in the present
case and in all tlhe circumstances I ought not to take the drastic course of
refusing to consider tIiese Applications further on this ground. In arriving 30
at this conclusion I considered whether, if the Applications had originally been
based solely upon the ground that the Applicant desired to manufacture the
valves in question for the purpose of replacements to exist,ing sets in this
country and the Colonies, I should have been satisfied, at the stage at which the
Applications fell to be considered preliminarily under sub-section (8) of 35
Section 27, that the Applicant had a bona 'fide interest and had made out a
prima facie case for relief, and I am clear that I should have been so satisfied.
In order to succeed, an Appli;)ant for a Oompulsory Licence must first
establish that the monopoly rights under the Patent in question have been
abused in one or more of the circumstances set out· in sub-section (2) of 40
Section 27, and I must consider whether the Applicant here can be said to
have established any such abuse in the case of any of the three Patents here
concerned.
The Applicant's case is based mainly upon the non-manufacture in this
country at the present time under the Patents in question of valves of the 45
American type,' that is to say valves so made as to be suitable for use and
replacement in American-type re,ceiving sets. It is shown that valves of the
British type, that is valves suitable for use and replacement in British-type sets,
cannot be used in American-type sets because the contact-pins in tJhe bases of
British-type valves are so positioned that they will not fit into the sockets of 50
 81

Vol. LI.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES

In the Matter of Applications by James Lomax Cathro for Compulsory

L~cences ,in respect to certain Letters Patent.

American-type sets; the contact at the top of the valve, whiclh in the British-
type connects to the anode, in the American-type connects to the control grid;
the filament heating arrangements which are suitable for the one type of valve
are not suitable for the other; and certain of the electrical characteristics are

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5 also different.
Dealing first with the Hull Patent, it is alleged that the monopoly rights
under that Patent have been abused under paragraphs (b), (c) and (d) of sub-
section (2), which read as follows, namely :-" (b) If the working of the
"invention within the United Kingdom on a commercial scale is being pre-
10 "vented or hindered by the importation from abroad of the patented article
"by the patentee or persons claiming under him, or by persons directly or
"indirectly purchasing from him, or by other persons against whom the
"patentee is not taking or has not taken any proceedings for infringement:
"(c) If the demand for the patented article in the United Kingdom is not
15 "being met to .an adequate extent and on reasonable terms: (d) if, by reason
" of the refusal of the patentee to grant a licence or licences upon reasonable
"terms, the trade or industry of the United Kingdom or the trade of any
" person or class of persons trading in the United Kingdom, or the establish-
" ment of any new trade or industry in the United Kingdom, is prejudiced, and
20 "it is in the public interest that a licence or licences should be granted: "
As to paragraph (b), it is not alleged that the Hull Patent is not being
worked upon a commercial scale in this country in so far as concerns the manu-
facture of British-type valves, but it is said that valves of the American type
are not being made here under the Patent, that they are being imported, and
25 that the working of the invention in this country is thereby being prevent~d
or hindered. Now the evidence shows that manufacture of British-type valves
under the Patent is taking place in this country on a considerable scale, which
I think is sufficient to satisfy the definition of the expression "working on a
" commercial -scale" given in Section 93 of the Acts. Thus Mr. Cant declares
30 that the number of valves manufactured under this Patent by one of the
Licensees, The M-O Valve Company, alone during the period 1st of April,
1928, to 31st of March, 1933, amounted to some 1,000,000. On the other hand,
it is proved that valves of the American type falling within the Patent are in
fact being imported into this country and it is not claimed that such valves
35 are at present being manufactured here. Without accepting as exact some
of the estimates that have been made as to the numbers of valves of the
American type covered by the Patent that are required for replacement pur··
poses here, it can, I think, be said that it has been sufficiently shown that such
valves are being imported in substantial quantities. I find it difficult however
40 to say that this importation or the bulk of it is by any or all of the categories
of persons mentioned in the paragraph. It is not by the Patentees, nor is
it proved that at the present time actual importations have been made by
persons claiming under the Patentees, or by persons directly or indirectly
purchasing from the Patentees; while it is shown that -actions have been taken
45 by the Patentees against certain firms for importing such valves, so that I
cannot say that it has been proved that any substantial quantities of the
patented valves are being imported by persons against whom the Patentees
are not taking or have not taken any proceedings for infringement and I
do not think that the fact that in one such case the action has been' settled
!)O upon substantial terms affects this position. I can only find therefore that it
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No.3.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [Vol. LI.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

has not been proved that the importation upon which the Applicant relies for
the purposes of paragraph (b) has been made by any' or all of the classes of
persons specified in that connection in the paragraph. In any case, it has not

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been shown that 1Jhe working of the invention within the United Kingdom is
being hindered by the importation of valves by any such pflrsons. This finding 5
renders it unnecessary for me to consider the question whether, if working on
a commercial scale has been proved, as it has here, in respflct of one form
of the patented article, it can be said that working of the invention is being
hindered (it is clearly not in such a case prevented) by the supply from abroad
of the whole of the requirements of this country in respect of another and, 10
in this country, less used form of the patented article.
As regards paragraph (c), the Applicant's allegation is that the demand for
the patented article in the United Kingdom is not being met to an adequate
extent and on reasonable terms because there are not available ,in this country
valves of the American type manufactured here under the Patent. It is not 15
suggested that the demand for patented valves of the British type is not being
adequately met, or that the demand for such valves does not constitute the
greater part of the whole demand for the patented article here. Further,
it is not proved that the demand for the patented article both ill the British
form and the American form by users in this country is not being met to an 20
adequate extent so far as quantitative considerations go. What is said is that
it is not being met upon reasonable terms because a purchaser who desires
a valve of the American type but of English manufacture is unable to obtain
such a valve. Now I think in the first place that the expression" on reason-
" able terms" in paragraph (c) refers mainly to the price charged for the 25
patented article, and I am fortified in this view by a consideration of the
summary of the kinds of abuses dealt with by Section 27 given by Mr. Justice
Luxmoore in Brownie Wi1'eless Company's Applications (46 RP.O. at page 471)
where the reference to "excessive price" (see line 31) clearly refers to the
abuse covered by paragraph (c). No doubt, however, this statement of the 30
learned Judge should not be considered to be exhaustive as to the scope of the
paragraph, and it may be that in some cases other terms than those referring
merely to price should be taken into account. In the present case, however,
I do not think it can he said that the demand for the patented article is not
being met to an adequate extent and on reasonable terms merely because, 35
although the main demand for the patented valves by users in this country
is being sufficiently met, a subsidiary demand on the part of persons who have
b~ught receiving sets which they must in many or most cases have known to
be of American manufacture, or at all events of American type, cannot be
met by valves of British manufacture. Mr. Lloyd Jacob argued further that 40
the demand for the patented valves in this country is not being met because
Mr. Cathro' 8 own demand for patented valves of American type for re-sale
to users in this country and in the Dominions is not being satisfied. Now'
while it may well be, as Mr. Trevor IV atson agreed, that a demand for a
patented article by export merchants and traders in this Qountry is one that 45
ought to be taken into account under paragraph (c), it seems to me that any
such demand must be an actual one by a trader or traders in business here
and not merely one which an applicant for a licence hopes and expects to be
 83

Vol. LT.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [NO.3.

In the Matter of Applications by James Lomax Gathro for Gompulsory

Licences in respect to certain Letters Patent.

in a position to make if and when he has obtained the licence and has com-
menced business-jllSt as the expression" the trade of any person" in para-
graph (d) (with which I deal later) means the existing trade of the Applicant.

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I pass to a consideration of the Application in respect of the Hull Patent
5 under paragraph (d). Mr. Lloyd Jacob's main contention here was that, by the
refusal of the Patentees to grant a Licence to Mr. Gathro, the trade or industry
of the United Kingdom is being prejudiced because British labour aI).d capital
are being thereby prevented from engaging in the manufacture of patented
valves of the American type for satisfying the demand for replacements in this
10 country and the very much greater demand for such replacements in the
Dominions. Now in the first place, even supposing the trade or-industry of the
United Kingdom could be said to be prejudiced by reason of the non-manu-·
facture of such valves in this country, it is no doubt arguable that any such
prejudice cannot 'Properly be said to be due to the refusal of the Patentees to
15 grant a'Licence or Licences upon rea,sonable terms, since there are already in
existence under the Patent Licences which would enable the Licensees to manu-
facture valves of the American type for sale in this country or for export to the
Dominions. In fact, as Mr. Gant's Declaration made in the. matter of the
Mitchell Patent states, some 55,000 valves manufactured under that Patent,
20 which valves it is admitted would also be covered by the Hull Pa,tent, were made
by one of the L~censees, The M-O Valve Co. Ld., and delivered for export during
the years 1930 to 1933. It might therefore no doubt be contended that, if there
were any prejudice to the trade or industry of this country due to non-manu-
facture of American-type valves under this Patent within tJhe meaning of the
25 paragraph, that prejudice would be attributable to the policy followed by the
several existing Licensees rather than to a refusal of the Patentees to grant
Licences. That, however, is probably not a sufficient rep'ly to the allegation of
abuse of monopoly rights under this head, if in fact any prejudice to the trade
or industry of this country would be removed by' the grant of a further Licence
30 to the present Applicant; and I must consider whether the trade or industry of
the United Kingdom is prejudiced within the meaning of this pa,ragraph by the
Patentees' action in preventing the Applicant from engaging in tJhe trade in
question by the refusal, which is admitted, of a Licence to him. The phrase
" The trade or industry of the United Kingdom" was considered by Mr. Justice
35 Luxmoore in the Brownie Wireless Co.'s case (above, at page 473 of the Report)
and was held to be a phrase capable of the most general interpretation and on,e
which ought to be construed in the manner indicated by Lord Warrington in
the case of the Robin Electric Lamp Co. Ld. in a passage which the learned
Judge quotes, which shows that it is to be interpreted as meaning the trade or
40 industry of the United Kingdom as a whole. I find it difficult to hold that the
trade or industry of the United Kingdom as a whole is prejudiced within the j
meaning of paragraph (d) because, among the various kinds of screen grid j
valves that might be made under the Patent, those of the Americ'an type are noti
being manufactured in this country and the Applicant has been refused aj
45 Licence to manufacture them, even assuming that by such manufacture thert~
would be an increase of a not unsubstantial amount in the export trade of thig
country; and in this view I am fortified by Lord Warrington's decision in
Robin Electric Lamp CO.'8 Petition ( (1915) 32 R.P.O. at page 213) that, in order
to show that any trade or industry in the United Kingdom was unfairly pre-
50 judiced within the meaning of Section 24 as it then stood, it was not enough to
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No; 3.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [Vol.LI.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences ·in respect to certain Letters Patent.

establish that a particular trader was un£airly prejudiced but it had to be

proved that the trade or industry as a whole was thus affected. With regard to
the other classes of abuse of monopoly rights covered by paragraph (d), the
expression" the trade of any person . . . trading in the United Kingdom"

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has to be construed as referring to the existing trade of the Applicant (see per 5
Mr. Justice Luxmo01'e in the Brownie case at page 473), and, as the Applicant
here has no existing trade, that head of the paragraph cannot be satisfied;
while" the establishment of any new trade or industry in the United Kingdom"
has to be distinguished from the entry of a fresh trader into an existing trade
or industry (see the Brownie case at page 473 and the Robin Elect1'ic Lamp case 10
\ at page 216) and all the Applicant here proposes to do is, in my view, to enter,
ifor the purpose of manufacturing American-type thermionic valves, the trade or
\industry of the making of thermionic valves or screen grid thermionic valves,
just as in the Robin Electric Lamp case the Applicant in that case with his
double-filament lamp was merely proposing to enter the trade of the making of 15
tungsten filament electric lamps. In short, paragraph Cd) does not appear to
extend to the case of prejudice resulting merely to the establishment of a new
business in an existing trade or industry. On these findings, it is unnecessary
for me to consider further under paragraph (d) whether it is in the public
interest that a Licence or Licences should be granted under this Patent. 20
In the result it follows that, so far as the Application in respect of the Hull
Pa,tent is concerned, the Applicant has not succeeded in proving that there has
been abuse of the monopoly rights under that Patent in any of the forms
specified in Sub-section (2) of Section 27, and I must accordingly refuse that
Application. 25
The invention with which the Patent of Addition is concerned relates to
certain improvements or modifications in the construction of screen grid valves
as covered by the Hull Patent. Here again the abuse of monopoly rights is
alleged under paragraphs (b), (c) and (d). Very little evidence has been given
in respect of this Patent. As regards paragraph (b) there is no evidence that 30
the patented article is being imported from abroad at all, so that a necessary
element in the abuse at which paragraph (b) is aimed is lacking. There is no
evidence of any actual demand for the patented 'article within paragraph (c);
nor, for rea·sons similar to those which I have given when considering the
allegation of abuse of monopoly rights under the Hull Patent in connection 35
with paragraph (d), has it in my view been established that the admitted
refusal of the Patentees to grant a Licence to Mr. Cathro has resulted in any of
the consequences necessary to satisfy paragraph (d). I must therefore refuse
the Application in respect of the Patent of Addition.
Turning to the third Application, namely that made in respect of the Mitchell 40
Patent, abuse of monopoly rights is here alleged not only under paragraphs (b),
(c) and (d) of sub-section (2) of Section 27, but also under paragraph (a). As I
have just been dealing with paragraphs (b), (c) and (d), it will be convenient if
I first consider this Application under those paragraphs. It was admitted by
both sides that any efficient valve constructed under the Mitchell Patent would 45
also fall under ilie Hull Pa,tent; and it appears that some at all events of the
patented valves under the Hull Patent which are being imported include the
Mitchell improvements. Moreover the Licences which have been granted in
respect of the Hull Patent extend also to the Mitchell Patent and, as I have
already indicated, there was for a timp. a certain manufacture by The M-O Valve 50
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Vol. LI.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [No.3.

In the 1Jfatter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

Co. Ld. under the Mitchell Patent for export, although that manufacture has
now ceased for the reason, The 1Jf-0 Valve Co. say, that it was found not to be a
commercially profitable undertaking. The position with respect to the allega-
tions of abuse of the monopoly rights under the Mitchell Patent under para-

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{) graphs (b), (c) and (d) is therefore in most of its aspects similar to that arising
in connection with the Applicat~on in respect of the Hull Patent. But as it
differs therefrom in that no manufacture at the present time in this country
under tlhe Mitchell Patent has been proved in respect of either British-type or
American-type valves, I have considered the Application in respect pf that
10 Patent separately under each paragraph.
First as to paragraph (b). Although there is at present no working of the
invention within the United Kingdom on a commercial scale, when I take
account of the fact that the Patentees have taken proceedings for infringement
against certain firms who have imported infringing valves, I cannot say that it
15 has been shown that importation has taken place by any other persons on such
a scale or in such circumstances as to prevent or hinder the working of the
invention here.
As to paragraph (c), there is no proof of any demand in this country for
valves of the English type embodying the Mitchell improvements; 'and there is
20 no proof that such demand as exists for such valves of the American type by
users in this country is not being adequately met, so far as quantities go, by
imported valves. And here again, since the patented valves of the American
type are required only for replacement purposes in sets of American manufac-
ture or American type, I cannot say that the demand in the United Kingdom
25 is not being met on reasonabl.e terms merely because all the valves available on
the market in this country for that purpose are of American origin. With.
regard to Mr. Cathro's own demand, the considerations are the same as those I
have mentioned above in respect of the Hull Patent.
So far as paragraph (d) is concerned, refusal of a Licence to the Applicant
30 by the Patentees is again admitted; but here also, for reasons similar to those I
have already given in the case of the Hull Patent, I cannot find that the trade
or industry of the United Kingdom, meaning (as I have shown on the authorities
that expression must be taken to mean) the trade or industry of the United
Kingdom as a wlhole, is prejudiced by the refusal of a Licence to the Applicant,
35 or that the necessary prejudice has been shown under either of the other heads
mentioned in the paragraph.
As I have mentioned, however, in the case of the Mitchell Patent, abuse of
monopoly rights is alleged also under paragraph (a) of sub-section 2. That
paragraph (with a proviso which is immaterial here and which I therefore omit)
40 reads as follows :-" (a) If the patented invention (being one capable of being
"worked in the United Kingdom), is not being worked within tJhe United
" Kingdom on a commercial scale, and no satisfactory reason can be given for
" such non-working." I am satisfied that in this case the invention is not now
being worked within tlhe United Kingdom on a oommercial scale, and it remains
45 therefore to consider whether satisfactory reason has been given for such non-
working.
. So far as failure to manufacture valves of the British type under this Pat.ent
IS concerned, the reasons put forward for non-working are as follows. In the
first place it is said tlhat the improvements which this invention effects are
50 more readily applicable to and suitable for American-type than British-type
 86

No.3.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [VOl. LT.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

valves, if indeed they can usefully be applied to British-type valves at all. In

the second place it is said that, in any case, valves made under the Patent must
always inc01'Porate for their efficiency the Hull invention, that valves can be
made by the use of the Hull invention to attain precisely the same electrical

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characteristics as those attained by valves made by the use of the Mitchell inven- 5
tion, that large numbers of valves are in fact being made and sold in this
country under the Hull Patent, and that there is no demand in the United
Kingdom for valves of British type incorporating the Mitchell improvements.
On tlhe whole it seems to me that I must treat these reasons as satisfactory ones
in so fa.r as the non-manufacture of valves of the British type with the Mitchell 10'
improvements is concerned. The Mitchell invention consists in a modification
or modifications of the Hull invention; and although it may well be that in
some cases it would be no satisfactory reason within paragraph (a) to say that
a patented invention was not being worked because it was a mere improvement
on another invention which was in fact being sufficiently worked, this question 15
must I think depend on all the circumstances of each case. I am directed by the
proviso to sub-section (2) of Section 27 to have regard to the fact that Patents
:£01' new inventions are granted "not only to encourage invention but to secure
" that new inventions shall so far as possible be worked on a commercial scale
" in the United Kingdom without undue delay". In having regard to the latter 20
purpose, I must not, as Mr. l'revor Watson and Mr. Burrell reminded me, over-
look the former, and it seems to me that it would not be for tlhe encouragement
,of invention if a Patentee who h8!d made and patented minor modifications of
his basal invention, which modifications had not been found to be sufficiently
important to be utilised in practice, were always liable to have a manufacture 25.
competing with his own sufficient manufacture under the main Patent set up by
a person who had obtained a Compulsory Licence under the improvement
Patent; and this consideration is reinforced by the further consideration that in
general, and as I shall show later is the case here, a Licence to work the improve-
ment Patent would be of no avail unless it carried a corresponding Licence under :\0
the main Patent.
So far as the non-manufacture of valves of the American type under the
Mitchell Patent is concerned, the reasons for non-working put forward by the
Patentees and The M-O Valve Co. Ld. are, first, that there has in fact been a
working under tlhe Patent by The M-O Vaz've Co. Ld. as Licensees, amounting 35
to some 55,000 valves, but that the Licensees have now ceased to manufacture
valves of the type on the ground that it was found not to be ccmmercially
profitable to ,do so. The answer to this given by the Applicant is that The M-O
Valve Co. are not free to dispose of the valves they manufacture upon the open
market and that the Licensees' failure may be due entirely to that fact; and 40
I do not think that non-profitableness can be regarded as a satisfactory reason
for non-working in this case.
The second reason put forward by the Patentees and their Licensees under
this head is that manufacture of valves of the American type under this Patent
would increase the· number of types of valves on the market and tend to con- 45
fusion. The answer which the Applicant makes to this reason-an answer in
whiclh there appears to me to be a good deal of force-is that in view of the
large number of types of valves already upon the market there can be no serious
objection on this score to the addition of a llew type or types; while in any
case valves made under the Patent in America and of American type are already 50
on the market here.
 87

Vol. LI.] REPORTS OF PATENT, DESIGN, AND TRAnE :MARK CASES [No.3.

In the Matter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

The main reason wliich the Patentees and the Licensees, The M-O Valve Co.,
put forward for non-working in respect of American-type valves is, however,
that the ready availability of such valves on the market in this country and in
the Dominions for replacement in American-type receiving sets would encourage

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5 the importation here and into the Dominions of such receiving sets, and so give
an advantage in those markets to the powerful American set-industry with its
large basal demand in America, to the detriment of the smaller British set-
inuustry which.in the main produces sets of the British type. The Applicant's
reply to this reason is that, so far as this country is concerned, numbers of
10 sets of the American type have already been made or assembled here, that such
sets are still being imported, and that as a consequence considerable numbers
of such sets are already in use in .this country and the numbers are likely to be
increased, and that the users of these sets are satisfying their requirements for
replacement valves by procuring valves imported from America. It is said
15 therefore that iQ these circumstances the reason with which I am now dealing
is not a satisfactory one to a·ccount for non-working under the Patent so far
as the market in this country is concerned. As regards the Dominions, it is
said that, as is shown by tlhe agreed figures of importations of valves and sets
into Australia, New Zealand and Oanada, the numbers of valves and sets of
20 the American type imported into those Dominions so largely exceeds those of
British type there imported that the mere absence of American-type valves of
British manufacture from the markets of t.he Dominions will not hamper the
importation of American sets; and that there is no sufficient reason why the
replacement valves of American type, which will in these circumstances in any
25 case be required in those Dominions, should not be supplied from this country.
On this last-mentioned point tlhe Applicant's contention received support from
the evidence of Mr. ~Pletcher, a Director of The General Electric Co. Ld. and
The M-O Valve Co. Ld., who gave evidence on behalf of the Patentees, when
the agreed figures of importations into Australia, New Zealand and Oanada
30 were put to him by Mr. Lloyd Jacob. These figures show a large preponderance
of importations of valves and sets from the United States, and especially, in
some cases, from the United States and the Netherlands taken together, as
compared with importations from the United Kingdom. It may well be that
not all the figures relate to American-type screen-grid valves or to American-
35 type sets, but it was not disputed that in the main they are made up of such
valves and sets; and while Mr. Fletcher said tlhat, even in these circumstances,
he would still endeavour to get British-type sets and British-type valves into
the markets of those Dominions, I think it is a fair inference from his evidence
as a whole that, in the circumstances admitted, he saw no strong reason on
40 grounds of broad policy for the non-supply of British-made American-type valves.
On full consideration, I cannot find that t.he supply from this country of a
portion of the demand in the Dominions in question for American-type valves
would make appreciably more difficult the task of a British set maker who was
endeavouring to get British-type sets into those markets; and I cannot find,
45 although this aspect of the matter has given me more difficulty, that the set-
making industry here would seriously suffer if, under the conditions which the
documentary and other evidence has disclosed as to the supply and use of
American-type sets and American-type valves in this country, the demand for
the valves was satisfied in whole or in part by the home-made product.
88

No.3.] REPORTS OF PATENT, DESIGN,. AND TRADE MARK CASES [Vol. LI.

In the ilJatter of Applications by James Lomax Cathro for Compulsory

Licences in respect to certain Letters Patent.

On the whole, I agree with the Applicant that none of the reasons put
forward by the Patentees and their Licensees for the non-working of the Mitchell
Patent in this country in respect of American-type valves can be said to be
satisfactory within the meaning of paragraph (a) of sub-section 2, so that the

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Applicant has in my view proved an abuse of monopoly rights under the 5
Mitchell Patent within the meaning of that paragraph.
I ought here to mention that a good deal of Mr. Lloyd Jacob's cross-examina-
tion of the Patentees' witnesses had regard to the relationship between certain
Companies in this country and certain interests in America with a view to
showing that the non-manufacture of American-type valves under the Patent 10
in this country was due to American control. Mr. Trevor Watson objected
strongly to this line of cross-examination, but I allowed it. to be pursued (some
of it in camera as I have already mentioned) on the ground that the Applicant
alleged that such a control, and not the reasons put forward by the Patentees,
was the real reason for non-working or insufficient working. Having carefully 15
considered all the evidence bearing upon the point, however, I can only find
that no such American control as the Applicant alleged has been proved here.
I turn to the question as to what relief, if any, ought to be given to the
Applicant on the ground that he has established an abuse of monopoly rights
under the Mitchell Patent within the meaning of Section 27 (2) (a). Prima 20
facie, the most appropriate relief would appear to be the grant to the Applicant
of a Licence under paragraph (b) of sub-section (3). But here a difficulty pre-
sents itself. It is admitted on both sides that the Mitchell Patent cannot be
wqr}{;.E~ELl:)fficiently witliouiinfrirlging the Hull Patent, and Mr. Lloyd Jacob
Imade it plain that any valves which the Applicant desires to be licensed to 25
!make under the Mitchell Patent must include the invention covered by the Hull
Patent. Now I have already found that no abuse of monopoly rights under
the Hull Patent has been established in connection with the Application made
in respect of that Patent. Mr. Lloyd Jacob, anticipating the conclusions at
which I have arrived, argued that, if I decided that the Applicant had made 30
out a case for a Licence under the Mitchell Patent only, the grant of such a
Licence would alter the position with regard to the Hull Patent, and that it
could then be said tha.t refusal of the Patentees to grant a Licence under the
Hull Patent meant that a demand for the Hull valves was not being met to an
adequate extent and on reasonable terms within paragraph (c) of sub-section (2). 35
or that the trade or industry of the United Kingdom or the trade of a person
or class of persons trading in the United Kingdom was thereby prejudiced
within paragra.ph (d), and that this would justify the grant of a Licence under
th~ Hull Patent in so far as was necessary to enable the Licensee to work the
Mitchell Patent. I cannot however agree with these views. Paragraph (c) 40
deals with the demand for the patented article and not, so far as I can see,
with a refusal by a patentee to grant a licence to manufacture-which is dealt
with by paragraph (d). Nor can I find that the trade or industry of the
United Kingdom as a whole can be said to be prejudiced within the meaning
of paragraph (d) by a refusal which in the circumstances with which I am now 45
dealing would still result merely in preventing the entry of another manufacturer
into the screen grid wireless-valve trade; and I do not think that the mere
grant of, or a decision to grant, a compulsory licence could be said to invest
the Applicant with an existing trade which could be prejudiced within the
meaning of paragraph (d). 50
 99

Vol LT.] REPORTS OF PATENT, DESIGN, AND TRADE MARK CASES [No.3.

Tn the Matter of Applications by James Lomax Cathro for Compulsory

Licence.~ in respect to certain Letters Patent.

Mr. Lloyd Jacob further argued that in any case, even if a Licence under
the Mitchell Patent could not at present be worked without infringing the Hull
Patent, I ought nevertheless to grant such a Licence to the Applicant since
the Hull Patent might be found in the more or less distant future to be invalid.

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5 I have given very careful consideration to this contention, but I do not think it
would be proper f{)r me to grant a Licence which at present and perhaps for
an indefinite time would be abortive. It clearly would not be fair to the
Applicant to include in any such Licence any conditions to be performed by
him, such as the payment of a minimum royalty, so long as he could not w{)rk
10 the invention, and any such Licence might well fail altogether of practical
effect on both sides.
F{)r similar reasons, ap. Order that the Patent be endorsed with the words
"Licences of Right" under paragraph (a) of sub-section 3 w{)uld be futile
under the existing conditions, and in any case I do not think that the case
15 made out here is sufficient to justify such an indorsement; nor do I think that
I should be justified in taking the extreme course of revoking the Patent under
paragraph (e)-a step which more{)ver would still leave the Hull Patent in the
Applicant's way.
In the result, the Applicant in my view has failed to establish the existence
20 of any abuse of monopoly rights in respect of the Hull Patent or its Patent of
Addition, while in the case of the Mitchell Patent he has shown that an abuse
of monopoly rights exists for which in the special circumstances I have described
there is no pf{)per relief which I can {)r ought to grant. I order, therefore,
that the Applications in respect of all three Patents be dismissed.
25 In the circumstances I have very carefully considered the question of costs.
Mr. Watson asked that in this case I should award costs on a more substantial
scale than that usually adopted by the Office in patent cases. I do not think,
however, that the case is one in which I should in this respect pr{)ceed upDn
different principles fr-om those hitherto followed under the Section. In arriving
30 at the amounts that should be awarded, I have taken into account the facts
that the Patentees and the other Opponents have succeeded altogether as
regards the Hull Patent and its Patent of Additi{)n; that the inclusi{)n of the
Patent of Addition, however, affected the costs to only a slight extent; that
the Applicant succeeded under one head in proving the existence of an abuse of
35 monopoly rights in respect of the Mitchell Patent, for which, however, he gets
n{) relief; and that the evidence filed and taken largely applied to all three
Applications; and I have set off such costs as I think the Applicant is entitled
to against the costs which it seems to me should be given to the other parties.
On the whole, I think that it will be just to make the following Orders;-
40 I award Elect1'ic and Musical Industries Ld. the sum of Thirty-five guineas
(£36 15s.) and The ill-O Valve Co. Ld. the sum of Ten guineas (£10 lOs.) in
respect of their costs, and direct that such amounts be paid to them by the
Applicant, James Lomax Cathro.