Permavent Wins Court Case on Easy Roof System Patents

PERMAVENT, manufacturer of the Easy Roof System, has won a court case that protects its right to the patents for its products.

The case centred around two business partners, Steven Makin and Timofei Yeremeyev. Timofei Yeremeyev remains a director of Permavent. The two partners supplied products, mainly for the roofing industry, through a group of companies, including the claimants in the case – Permavent and its parent company Greenhill Industrial Holdings.

Steve Makin invented and patented roofing products under the name Easy Roof System. In 2014, he granted a licence to Permavent to manufacture, use, sell and supply the Easy Roof System products.

System Patents

In 2016, the relationship between Makin and Yeremeyev broke down. Makin left the business in 2017, saying he would terminate the patent licences and withdrawing permission for suppliers of some of the Easy Roof System products to produce the patented products.

Permavent brought a claim against Makin in July 2017. The company wanted a declaration that Permavent owned the patents and patent applications (the IP Rights). Permavent also requested an injunction to prevent Makin from transferring or licensing the IP Rights.

The parties in the case eventually agreed a settlement under which Makin assigned the IP Rights to Greenhill. Additionally, in return for his agreement not to challenge the ownership or validity of the IP Rights, Makin would be entitled to various payments.

Agreement Breach Clause

Importantly, the agreement included clauses saying that the payments would be forfeited and repayable if the agreement was breached.

However, when Makin sought to register an interest in the IP Rights, Permavent stopped making the agreed payments.

The case went to the Patents Court and Makin was found to be in breach of the agreement. The court then had to decide whether the clauses constituted an unenforceable penalty.

The Patents Court Decision

The Patents Court said that the agreement clauses were not classed as unenforceable penalties.

Citing a Supreme Court decision in Cavendish Square Holding BV v Talal El Makdessi the judge said that whether an obligation amounts to a penalty depends on whether legitimate business interests are served and protected. Also, whether the loss imposed on Makin was extravagant, exorbitant, unconscionable or out of all proportion to the business’s interests.

The Court found in Permavent’s favour. The judgement said the IP Rights to the Easy Roof System were very important to the business. A challenge to the Rights could affect profits by losing sales and lead to reputational damage, as it would damage the business’ ability to source, manufacture and sell products.

Justice Zacaroli said that the clauses were “undoubtedly harsh” on Steve Makin. But he added the penalties were not considered extravagant, exorbitant or unconscionable, nor disproportionate because a breach in the agreement could cause significant harm to Permavent.

The Court also said Makin’s aggressive and hostile behaviour in the period leading up to the settlement agreement being signed showed he was likely to challenge the IP Rights and would attempt to maximise his gain from that. It also said that because he had received legal advice on the settlement agreement, he could not be unaware of its consequences if it was breached.