English law (and the laws of countries following the English legal tradition) holds that an implied condition to any contract for the sale of goods or services is that the selling party has at the time of sale either:
(a) good title to the goods; or
(b) the right to supply the goods or services. It is unclear whether the conditions are in fact one condition described in different ways or two different conditions.
Case-law, (e.g., Niblett Ltd v Confectioners’ Materials Co Ltd, [1921] 3 KB 387) has held that agreeing to sell goods that violate another’s intellectual property rights extant at the time of delivery (in the leading case a trademark), is a violation of the condition of right to sell. However, the sale of goods that later become subject to the intellectual property rights and claims of a third party, is a breach of the warranty of quiet enjoyment but not of the condition of right to sell (see, Microbeads AC and Another v. Vinhurst Road Markings Ltd. [1975] 1 All E.R. 529).
That the vendor was not aware that it lacked the right to sell has been held not to nullify the right of the buyer to claim under the condition of quiet enjoyment (see Rowland v Divall [1923] 2 KB 500). As is apparent from the citations there is a decided shortage of recent case-law on this issue as it relates to third party intellectual property rights.