Administrators establish power of sale over patent rights held in trust, but not without Court supervision

Peter Heerey AM, QC, Tom Cordiner & Alan Nash

Correspondents for South Australia, Victoria and Western Australia

Note:  Where any of the barristers were involved in a case reported below and the matter is still running, or potentially so, the other correspondents have taken the role of reporting that case.

Re Bacchus Distillery Pty Ltd (Administrators Appointed) [2014] VSC 111 (26 March 2014):  In the last issue, we reported that the assignee of certain rights to an invention used to manufacture clean skin spirits obtained a declaration in the Federal Court that the registered proprietor of the corresponding patent held that patent on trust for itself and the applicant as co-owners in equity: Neobev Pty Ltd v Bacchus Distilleries Pty Ltd (Administrators Appointed) [2014] FCA 4.  Nevertheless, Bacchus’s administrators wished to sell the patent (along with Bacchus’s other assets) and sought declarations in the Supreme Court of Victoria that they were entitled to sell the patent and give Bacchus priority over Neobev when applying the proceeds from the sale.  The administrators successfully established a power of sale under various bases, but failed to establish that Bacchus or the administrators would enjoy any priority over any claim of Neobev to a share of the proceeds.  Justice Judd also concluded by noting that the administrators’ success in making out a right to sell the patent was “not to be taken as authorisation that they may do so”.  Neobev’s “very real interest” in the sale process (including as to allocation of price between Bacchus’s assets, including the patent) meant that continuing supervision by the Court was required.

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