A North Sea oil field service firm has condemned a court ruling for “making a mockery” of its legal rights.
Aberdeen-headquartered Westerton UK has been in a long-running dispute with Salisbury-based Edge Energy, which develops technologies for sale or to license to third parties.
Westerton accused Edge of advertising a drilling tool which was “identical” to its own in many ways.
The firm wanted the Court of Session, Scotland’s highest civil court, to stop Edge from selling and manufacturing it.
But the court dismissed Westerton’s claim.
The company said it was “surprised and disappointed” by the ruling and that it was seeking further legal advice and considering its options.
The dispute centres on the wording of a contract – signed in 2012 – under which Edge agreed to develop a downhole cutting tool for Westerton.
Then last year, when Edge Energy advertised a tool which was in several parts “identical” or “substantially the same”, Westerton took legal action.
The company claimed Edge had breached the terms of the original contract.
However, in a ruling by judge Lord Bannatyne, Edge Energy successfully argued the original contract did not put restrictions on how it could use the designs.
In its case, Edge contended “merely because someone owns certain property does not mean that another person is barred from making use of that property” and they had therefore not breached contract.
This view was agreed by Lord Bannatyne, who said the clause in question assigns property rights but “does not carry with it a use restriction”.
A spokesman for Westerton said: “We are surprised and disappointed at the decision made by the Court of Session in this case.
“The contract between the parties is clear. The tool belongs to Westerton (UK) ltd. The ruling makes a mockery of contract protections when paying a third party to develop tools.
“As a provider of technically advanced downhole cutting tools, we have invested a significant amount of time and money developing this technology and believe we should have the right to lawfully protect all our assets and intellectual property.
“We will, of course, seek further legal advice and consider our options.”
The legal decision was made by the Court of Session’s Outer House, meaning an appeal could potentially be made to the Inner House.
Thereafter any further appeal would need to go to the UK Supreme Court.
Edge Energy has been contacted for comment.