COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
His Honour Judge Fysh QC
HC 02 C03678 and HC 04 C01911
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MUMMERY
LORD JUSTICE JACOB
| Markem Corporation
Markem Technologies Limited
|- and -
Markem Technologies Limited
Markem Holdings Unlimited
for the claimants
Mr Simon Thorley QC and Mr Adrian Speck (instructed by Messrs Eversheds)
for the defendants
Hearing dates : 23-25 February, 28 February, 1 March 2005
Crown Copyright ©
Lord Justice Jacob :
Mr Buckby: Former managing director of Markem. Left in April 1999. Joined Zipher in April 2000.
Mr McNestry: a mechanical engineer who left Markem in April 2000 to join Zipher.
Mr Hart: a software engineer who left Markem in April 2000 to join Zipher.
Mr Buxton: an electronics engineer and head of technology at Markem who left Markem in June 2000 to join Zipher.
Mr Butcher: a "product manager" at Markem. His function was to liase with customers, to find out problems in the market and to indicate the sort of products which the market would want. He left in Markem in May 1999 and became involved with Zipher (actually working on matters irrelevant to this case before then) in May 2000.
Mr Podmore: a product manager and director at Markem. He left Markem in May 1999. Involved with Zipher shortly thereafter.
Markem never actually marketed a relative motion machine though a prototype was made in house.
The broad nature of the case on entitlement
"specific trade secrets so confidential that, even though they may necessarily have been learnt by heart, and even though the servant may have left the service, they cannot lawfully be used for anyone's benefit but the master's" (p.600).
That was Goulding J's third class. By "Chicken 4" Mr Watson meant a secret particularly worthy of protection because it was said to be invention.
What was done at Zipher Mr McNestry's "clever way"
Minimum 600 mm. Ribbon length. 1000mm if possible
An idea to provide a differentiated solution is to have one machine that is both intermittent and continuous motion. If the ribbon drive is a push-pull drive system then the operation could be either intermittent or continuous. It is also possible that the same machine could be both a left hand and right hand machine subject to simple reversal of a printhead 'module' (unless a bi-directional printhead is available).
[He then set out commercial advantages]
Technically such a machine would better facilitate some of the technical ideas in this document and automatically provides a machine which could do relative motion printing for example."
There is a comparison with SmartDate, which is described as "the market leader".
He says the following, amongst other things:
" - SD2c poor print performance at low speeds is a problem.
- SD2 ribbon break detection is not as reliable as required with false break detection.
- SD2 ribbon drive is less reliable than desirable, particularly on the SD2c. Often caused by roller wear it is difficult to determine the nature of the fault or for the user to be sure wear is the problem.
- The requirement for air is an increasing downside. Many new host m/c no longer have air, especially labelling machines.
Inconsistent mechanical performance, particularly w.r.t. ribbon drive and ribbon break detection has probably been the biggest problem with the SD2 range."
The patent applications
"If the patent could be drafted more widely than the embodiment of the invention which Steve [i.e. Mr Buckby] had described, and, on consideration, a competitor could get all or part of the benefit of the invention by offering a different embodiment, I would try to cover that different embodiment in the claims. I described this to Steve as 'staking a claim', that is if the monopoly was available, we would stake a claim to it. I was therefore drafting claims the scope of which would include embodiments that Zipher had not worked on. Steve was led by me as to the width of the claims which we were including."
"Mr Allman was I think, endeavouring as patent agents do, to draft the broadest claims which he considered could be supported by the disclosure, which were also appropriate in the light of the prior art as he then understood it and (in this case), which did not conflict with proprietary material of any former employer. Moreover, it is notorious that patent agents often file draft claims in applications which are deliberately broad with a view to enlarging the prior art search in the examination phase. But Mr Allman cannot be regarded as omniscient. It was for Mr Buckby (from whom he was exclusively drawing instruction) to put him right if the claims were going too wide. Looked at objectively, there was no "accident"; the claims in issue are as they are because Mr Buckby wished them to be so."
"Zodiac (Thermal Transfer Printer Drive Mechanism GB 0022206.7, 0028465.3 & 0100493.6)
Like reel-to-reel tape recorders, or indeed cassette tape recorders, thermal transfer printers must wind inked ribbon from one spool to another, typically starting with a new "full" supply spool and an empty "take-up" spool. The diameter of ribbon then decreases from the supply spool, as it increases onto the take-up spool.
These printers are low cost items and so make use of low cost stepper motors to drive the ribbon. The ribbon drive needs to have (relative to tape recorders and ribbon based office printers of the past) very high accel/decel and high speed capability, in order to perform the required functionality in the industrial application. Furthermore, ribbon should not be wasted in the process.
Current art makes use of a stepper drive pulling against a slipping clutch supply spool, which has several disadvantages that result in unreliability and higher cost of ownership, sue [sic] to production downtime, faults, wear parts.
Our invention removes these problems by using no wearing clutch at all, but instead two (not one) stepper motors, acting bi-directionally in a push-pull mode.
We require good protection at least for the following:
( Bi-directional, push-pull ribbon drive mechanism
( Dynamic tension monitoring and control system to maintain adequate tension in the ribbon
( Means of achieving the above without the use of additional sensing means, but using only feedback signals derived from the stepper drives themselves
( Limiting claims to our specific methods for achieving the above
( Means and method to "calibrate" the ribbon, once loaded into the printers, so as to know the starting diameter of BOTH spools, as well as the ratio of those two diameters. (This info is then used in combo with the dynamic tension control feedback measurements in order to maintain adequate tension in the ribbon, as well as to ensure that accurate feed speeds, feed distances and timings are adequately maintained
( Means and method for detecting Ribbon Break condition and End of Ribbon condition, by way of these same motor drive feedback signals (i.e. without use of additional sensing means)
( Narrowing claims based on our specific ways of achieving the above
Note: Ideally, we would prefer to find a level of detail which is on one hand acceptable for the GB, USA and Eur examiners, but on the other hand, does not disclose the very last details of how we achieve the result, because that provides the means for competitors to copy us, and they have greater resources to fight any legal actions.
( There are several further inventions, all of which can be made possible by the high-speed, high-response, bi-directional ribbon drive system."
"That is embodied in our original patent brief and patent application, which was just one patent application in those days. It is what it is and that is what my guys invented. The patent you are now talking about is a derivative of that and is largely the academic work of myself and the patent attorney."
In terms that answer was never challenged (Mr Watson went to say it was not an answer to his question). It summarises the position.
"33 Equally significant in this respect is the position of the three Zipher personnel who were named as inventors in the Thermal Transfer portfolio, since as I shall show, none of them admit to having invented anything in relation to the broadest claims in issue while they were at Zipher. Mr Buxton for example did not even know the patents had been filed, let alone had he discussed his contribution or their contents: Witness Statement §108.
34 In most patent actions, the identity of the persons or persons who are named inventors is usually of little consequence. On the other hand, in entitlement cases, that may not apply. Mr Watson (not surprisingly) made capital of this, pointing particularly to the Thermal Transfer portfolio. He accused Mr Buckby of scattering inventors' names about "like currants"."
The Markem materials said to give rise to entitlement
(a) The Adkin Memorandum;
(b) The "Windsor Conference"; and
(c) The "CCL Meeting"
There were some other materials too, but we do not need to refer to them. Mr Thorley QC in opening identified these three, saying that the others added nothing. He suggested that if Mr Watson wanted to rely on any of the others he should do so. In the event Mr Watson did not take up the suggestion, rightly we think. The Judge's findings were based essentially on these three matters. Mr Watson had a case based on these materials, or none at all.
(a) The Adkin Memorandum
"Key points for the design, are that the coder will contain 2 synchronised motors for advance and rewind of the print ribbon. Motor 'A' will be the master and motor 'B' the slave. Driving the ribbon by this method would be opposite to our existing arrangement. Motor 'A' would discharge an amount of ribbon, motor 'B' would drive the same distance to collect the ribbon, relying on the tension roller to compensate for any inaccuracies. Initially both motors will be calibrated, after which the position of the tension roller will determine any minor drive alterations of motor 'B'. As the number of cycles increase the software will adjust the steps moved by each motor to compensate for ribbon size."
(b) The Windsor Conference
"RESEARCH PROJECT: RIBBON DRIVE INVESTIGATION
Ideally, future product development will push the limit of what is technically possible, without any compromise in reliability. Therefore, the scope of the project is to determine:
? what is possible and how?
? where not possible, why not?
? what are the implications of lifetime, maintenance requirements and reliability?
Questions to be answered within the project:
? How fast can we drive ribbon, without breaking, stretching etc
? How fast can we accelerate and decelerate the ribbon
? What is the maximum ribbon length we can handle
? What are the maximum and minimum ribbon lengths we can handle
? What possible drive solutions/clutches to achieve the above
? The interaction of the above, eg. max ribbon length versus acceleration etc
? Implications of running different thickness (base PP or coat weight) TTR
? Implications of coloured ribbon (horizontal or vertical panels) and ribbon registration
? Performance: full reel, empty reel: print quality and ribbon
? Effect on the ribbon save functions
? Impact of high density printing (most ink removed) or ribbon printing in "slip mode"".
"PROVISIONAL SPECIFICATION: SmartDate2 NEXT GENERATION
The current SmartDate 2 printer is a successful and proven product which is in equipment terms "new" to most markets. It continues to offer a market leading specification and therefore the major development for the existing products will be the implementation of a DDA version of this product range, with performance enhancements achieved within this.
However, to maintain not only the product differentiation, but also to achieve greater uptake of the technology as a whole, the proposal is to add to the SD2 range. It is possible that this proposal could obsolete the SD2c providing that cost targets are achieved, however it would not obsolete the current SD2i product.
The new products will also be DDA in keeping with the strategy, and in addition to the functional benefits of the full DDA specification, the new products will be developed to provide:
- Increased linear print speeds for the new generation of high speed wrapping machines.
- Increased uptime at higher speeds.
- Maintained MTBF/Running costs despite higher speeds
- Additional Ribbon save features to minimise running costs and increase the use of TT.
- Enhanced repeat rates for continuous motion coding applications
This document is the proposed development specification for the development of these additions to the SmartDate2 family.
The "new" machine will have a full DDA user interface in keeping with the current product line proposals. If practical without impacting cost, it will actually have the exact same controller as the SD2 (DDA version) machines and therefore any additional I/O requirements of this product should be considered in the development of the SD2 DDA Controller.
The new machine would be available as either a 2" or 4" wide variant which could operate in either intermittent or continuous motion. The machine will ideally be designed symmetrical, with bi-direction ribbon drive. Benefits of this are:
- A 4" continuous motion machine is added to the "SD family".
- Customer has common machine, common spares, common complete spare machine and common cassettes across all machines.
- Bi-direction ribbon drive allows a whole selection of other features/enhancements over the current SD2 including:
? All ribbon save features
? New ribbon save features, e.g. interface part of the label on intermittent applications
? Use of multi-colour panel ribbons
? "head life" Cimjet style ribbon save
? Increased repeat rates
A technical assessment is required as to whether a shuttle or driven dancing arm is required (half a shuttle) to supplement or indeed provide the bi-directional drive. This should be incorporated with the proposed ribbon drive investigation (proposed project)."
(c) The CCL Meeting
The aim of the design workshop was to generate ideas to improve the performance of the SmartDate range of printers. The ideas will be ranked and the most promising selected for further development. This document describes the ideas covered in the workshop. The detail of the specification is recorded in document C6059-S-002a.
2 DESIGN WORKSHOP
2.1 Web Tension Control
Control of the tension in the web is critical to enable optimum printing speed. Existing coders use passive web tension control utilising springs.
Apply a drive to the shuttle rollers of the continuous coder
Friction between the shuttle rollers and the foil causes problems with the tension control. This resistance could be reduced if the fixed shafts of the rollers were rotated as they moved. The friction reduction is a result of the reduced differential speed between the actual "free" rollers mounted on the cassette shuttle and the "fixed" centre shafts mounted on the driving end of the shuttle control block.
The sketch below shows the idea implemented using a rack to drive the 2 rollers. An alternative method is to use a fine flexible wire wrapped around the roller, fixed at one end and tensioned with a spring.
There is also the possibility of driving the rollers directly providing the correct relationship between movement and rotation can be achieved. If the drive wire is wrapped directly around the O/D of the roller the surface speed will be the same as the foil movement. Note, it is possible that the OD under the wire may need to be reduced so that the centre of the wire is at the actual roller diameter.
2.1.2 DC take-up and Stepper delivery:
Utilise a DC take up drive and a stepper feed drive for the two reels. The DC take-up motor speed would be controlled possibly by a dancer thus keeping a constant tension in the web regardless of the foil spool diameter. The actual amount of the foil delivered would be controlled by the stepper motor.
2.1.3 Dancer Arms
Two rollers on dancer arms could be used to tension the foil. The preference was for movement in a vertical plane."
The Judge's findings of fact
"25 Mr Buckby was Zipher's principal witness having been at its helm at all material times. Prior to that he fulfilled much the same role with Prestek Ltd and at MTL. Though named as co-inventor of a number of patents granted to Prestek Ltd and MTL in printing fields which are presently of interest, other Zipher personnel have been nominated as inventors in the cases in issue. I consider this to have been Mr Buckby's decision. I have no doubt that Mr Buckby was thoroughly familiar with the technology involved in the present cases and has been the person principally responsible for the implementation and achievement of Zipher's ZODIAC and INDIGO programmes: the "ever present Mr Buckby" as Mr Watson called him.
26 Mr Buckby struck me as being an able businessman who set about a task with determination and personal enthusiasm. In responding to questions in the witness box, he radiated a strong personality. He has I believe used these attributes effectively in advancing the interests first of Prestek Ltd, then MTL and now Zipher. I cannot however be as laudatory of Mr Buckby's quality as a witness in this case. In closing, Mr Watson emotively located Mr Buckby "at the centre of the spider's web". I therefore invited him to say whether he made an attack on any of Zipher witnesses. He told he that he did not now need to, since his case in the Thermal Printer Group was established on the evidence of Zipher's three "inventors"--to which I shall in due course refer. He even suggested that Mr Buckby's "convenience of not remembering anything that is documented" could possibly be true, but invited me nonetheless to take a view of the matter.
27 I shall not say that Mr Buckby misled the court but I did not find him to be a witness in whom I had much confidence. First, it was he and not the named inventors who primarily determined the broad scope of the claims which have fuelled the part of this dispute relating to the Thermal Printer patent and applications. True, these claims were actually drafted by the patent agent Mr Allman (see §§[29-30] below), but there is no doubt that their principal architect was Mr Buckby: see §, post. Indeed, he admitted as much: witness statement §. In addition: (i) he seems to have "nominated" the three inventors in this Group without apparent consultation with them, and (ii) the relevant claims covered subject matter with which from the technical point of view, he was intimately familiar from his time at MTL."
"114 In answer to a question of Mr Watson, Mr Buckby said: "I cannot help you with the Adkin Memorandum at all." [My emphasis] There, the cross-examination on Adkin stopped. In view of this, Mr Speck submitted, the causal link between the relevant claims of '326 and the Adkin Memorandum was broken and Markem's case on this Group based on the Adkin Memorandum failed: see §§75-77 above. Taking Mr Buckby's evidence on its face, I quite see the force of Mr Speck's submission. But in the light of the ongoing importance of SmartDate upgrading within MTL and of the relatively advanced state of the work on it (in particular by those who did attend the meeting), and also having regard to Mr Buckby's commanding position within MTL (see above) and to his technical awareness, I found Mr Speck's submission unreal. In fact, I just do not believe that Mr Buckby has been frank about the Adkin affair."
"120 Mr McNestry also admitted that the Adkin Memorandum contained "the same ideas" that he said (Witness Statement §114) arose as a result of a "brainstorming" session which took place at Zipher on May 23, 2000 and which eventually led to the ZODIAC thermal printer. There was an ongoing assertion both in Zipher's evidence and in Mr Speck's submissions that the three inventors had simply "forgotten" about this meeting. When later at Zipher they had the "brainstorming" session to which I have referred, there was in effect a mental regeneration of at least part of what Adkin had recorded as having transpired. I reject this tale of collective amnesia as being inherently unlikely among persons who gave me the impression of being both alert, astute and above all, technically able.
121 Before leaving the Adkin Memorandum I must add one further material matter to which my attention was drawn by Mr Watson. In his Witness Statement, Mr Allman said:
"... it would have been very unwise for [Buckby] to allow claim 1 [of ' 602] to be drafted in the way it appears, if he had known of the Adkin drawing." And again in evidence, he said:
"As a result of my trying to get the claim to be as broad as possible I did encompass within it the Adkin design, but the drafting of those claims had absolutely nothing to do with Adkin. It was a process that was based entirely on what Zipher had presented to me and that which is described in the patent."
Though the foregoing is not perhaps directly material to my decision, I have recorded that Mr Allman struck me as a fair witness and accept what he has told me. On this point, Mr Buckby said: "Yes, it is terribly unfortunate that John Allman and I were not aware of either the Adkin report or any of the CCL work that Paul had done with the guys at CCL after I had left..." Mr Buckby had not however left MTL at the time of the Adkin Memorandum and was I am quite sure, well aware of all the technical detail of the ongoing SmartDate enhancement programme. Indeed, he was instrumental in initiating it. This is another example of the evidence of Mr Buckby in which I have little confidence."
"In the light of my earlier findings, I do not think it necessary further to dwell on the contents of papers given at this conference; I have no doubt that the abovementioned topics [i.e. bi-directional ribbon drive, unhanded printers and the use of intermittent and continuous thermal printing] were of practical and ongoing importance to employees of MTL and above all to Mr Buckby as areas wherein the SmartDate printer was soon actually to be upgraded and that they were discussed in an appropriate technical context."
"We found the use of the shuttle in the Smartdate 2c to be successful in practice and the thrust of our work was principally to look for ways to develop and enhance the existing shuttle designs."
"The work on which CCL was engaged in 1999 for MTL was appreciably different from this [i.e. Zipher's direct drive system]."
Mr Nelson was not cross-examined on either of these sentences. Nor on his statement that it is common to use a motor on both take up and supply spools so that the spool motor acts as a kind of clutch.
The Judge erred in making the adverse findings
Fairness the rule in Browne v Dunn
"I have been shown minutes of meeting which took place on 17 October 1997 which were taken by Chris Adkin (pages 772 to 773). I was not at this meeting, nor do I recall hearing that it had taken place. I had not seen this document before it was disclosed in these proceedings nor had the machine described in the minutes been made known to me in any way prior to these proceedings. Chris Adkin reported to Paul Mills rather than me, so it may well be that the report never made it as far as me. This is particularly likely to be the case as James Butcher was the product manager for the SmartDate 2 and so the report would have been more likely to go to him than me."
"Q. The Adkin -- one of the early advantages put forward for the Adkin memo is the absence of a shuttle?
Q. The Adkin memorandum, one of the early advantages, set out on the second page, is the absence of a shuttle?
A. I cannot help you with the Adkin memorandum at all."
"MR WATSON: I am not going to try to character assassinate the defendant's witness. Again, my Lord saw them and will take a view. The only thing that I would comment on is that Mr. Buckby came across, as we had heard; a forceful dominant personality and we can see how this whole mess of patents and invention came about. They all flow from his pen. He is the centre of the spider's web.
THE JUDGE: You do not really make any specific attacks on any of the witnesses.
MR. WATSON: No, I do not need to. I comment on the convenience of not remembering anything that is documented, but it could be true. I do not have anything material to suggest that it is necessarily untrue. As I have said at great length, my case does not turn on it.
"Where the court is to be asked to disbelieve a witness, the witness should be cross-examined; and failure to cross-examine a witness on some material part of his evidence or at all, may be treated as an acceptance of the truth of that part or the whole of his evidence."
"It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner's intention to rely upon such matter, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn. That rule of practice follows from what I have always believed to be rules of conduct which are essential to fair play at the trial and which are generally regarded as being established by the decision of the House of Lords in Browne v Dunn (1894) 6 R 67.
No doubt because that decision is to be found only in an obscure series of law reports (called simply "The Reports" and published briefly between 1893 and 1895), reliance upon the rules said to be enshrined in that decision seems often to be attended more with ignorance than with understanding. The appeal was from a defamation action brought against a solicitor and based upon a document which the defendant had drawn whereby he was to be retained by a number of local residents to have the plaintiff bound over to keep the peace because of a serious annoyance which it was alleged he had caused to those residents. Six of the nine signatories to the document gave evidence on behalf of the defendant that they had genuinely retained him as their solicitor and that the document was really intended to be what it appeared on its face to be. No suggestion was made to any of these witnesses in cross-examination that this was not the case and, so far as the conduct of the defendant's case was concerned, the genuineness of the document appeared to have been accepted. However, the defence of qualified privilege relied upon by the defendant depended in part upon whether the retainer was in truth genuine or whether it was a sham, drawn up without any honest or legitimate object but rather for the purpose of annoyance and injury to the plaintiff. This issue was left to the jury. The plaintiff submitted to the jury that the retailer was not genuine and was successful in obtaining a verdict in his favour. In support of that submission, the plaintiff asked the jury to disbelieve the evidence of the six signatories who had said that the retainer was a genuine one.
Lord Herschell LC said (at 70-71): "Now my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a case, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intended to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses."
His Lordship conceded that there was no obligation to raise such a matter in cross-examination in circumstances where it is "perfectly clear that (the witness) has had full notice beforehand that there is an intention to impeach the credibility of the story which he is telling". His speech continued (at 72): "All I am saying is that it will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation by reason of there having been no suggestion whatever in the course of the case that his story is not accepted."
Lord Halsbury said (at 76-77): "My Lords, with regard to the manner in which the evidence was given in this case, I cannot too heartily express my concurrence with the Lord Chancellor as to the mode in which a trial should be conducted. To my mind nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as to give them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, and, not having given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has been directed either to their credit or to the accuracy of the facts they have deposed to."
Lord Morris (at 77-79) said that he entirely concurred with the two speeches which preceded his, although he wished (at 79) to guard himself with respect to laying down any hard-and-fast rules as regards cross-examining a witness as a necessary preliminary to impeaching his credit. The fourth member of the House of Lords, Lord Bowen, is reported (at 79-80) to have said that, on the evidence of the six signatories, it was impossible to deny that there had been a real and genuine employment of the defendant. But his Lordship made no statement of general principle.
These statements by the House of Lords led to the formulation of a number of so-called "rules". They have been stated in various ways in the cases and by text-book writers, and it is fair to say that there is some room for debate as to their correct formulation. For example, in Cross on Evidence (2nd Australian ed, 1979) the authors state (at para 10.50): "Any matter upon which it is proposed to contradict the evidence in chief given by the witness must normally be put to him so that he may have an opportunity of explaining the contradiction, and failure to do this may be held to imply acceptance of the evidence in chief."
In Phipson (12th ed, 1976) the authors state the rule somewhat more discursively (at para 1593): "As a rule a party should put to each of his opponent's witnesses in turn so much of his own case as concerns that particular witness, or in which he had a share If he asks no questions he will in England, though not perhaps in Ireland, generally be taken to accept the witness's account and he will not be allowed to attack it in his closing speech, nor will he be allowed in that speech to put forward explanations where he has failed to cross-examine relevant witnesses on the point Where it is intended to suggest that the witness is not speaking the truth upon a particular point his attention must first be directed to the fact by cross-examination, so that he may have an opportunity of explanation; and this probably applies to all cases in which it is proposed to impeach the witness's credit Failure to cross-examine, however, will not always amount to an acceptance of the witness's testimony, e.g. if the witness has had notice to the contrary beforehand, or the story is itself of an incredible or romancing character."
"I remain of the opinion that, unless notice has already clearly been given of the cross-examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings."
Fairness the requirement for adequate reasons
i) Where the document was found in particular whether or not it or a copy of it was to be found in the files of any the individuals concerned, though they surely left files behind. One may perhaps infer that no copy was found in any of those files since those would be the first place one would look when trying to build up a case against Zipher, as was Mr Mills' brief.
ii) Whether there was more than one copy;
iii) Whose writing was on the document Mr Mills said that some of it was not Mr Adkin's.
i) Whether the memorandum had been circulated at all;
ii) What the meeting was called for and what the proposal was for;
iii) As to exactly what was discussed. In this connection there were rival views as to what could be inferred from certain parts of the memorandum. Mr Adkin might simply have known.
iv) Why there is a discrepancy between what is in his memorandum and the only other contemporaneous document a couple of drawings in Mr Buxton's notebook which show, not 2 stepper motors but one stepper and one "torque limited DC motor."
v) Why nothing was done about the proposal.
And even if Mr Adkin remembered very little or nothing about the proposal that would have been significant for if even the author of the document could not really remember much about it, why should others?
i) No-one else left at Markem gave any evidence about it. Mr Watson makes the point that many had gone. That is true but does not meet the point because others (besides Mr Mills and Mr Adkin) remained.
ii) There is no evidence that anyone ever mentioned the Adkin proposal at the Windsor conference less than a year later yet if it were at all in people's minds it surely would have been discussed as a follow-up to Mr Butcher's papers.
iii) It is not actually clear what the proposal was. Mr Watson relied upon the sentences from the memorandum we have quoted above. But they are ambiguous: clearly there is to be "tension roller". And there is some sort of feedback to control motor B (not, it seems, A). But is the tension constant or variable? Adkin does not say. Only if the roller were arranged to send feedback based on the tension in the ribbon would there be some sort of alternative embodiment of a generalisation of Mr McNestry's idea- another "clever way". For that one would need the roller to respond to ribbon tension, rather than merely ribbon length. The reference to "calibration" followed by the position of the tension roller determining minor drive alterations does not readily fit with the notion of response merely to tension. Mr Watson's cross-examination of the witnesses was not about what was actually discussed (for they could not remember) but about what might be inferred from the document. The use of a linear spring to provide feedback based on tape length was, in the end, accepted by Mr Mills as a possible interpretation. The Zipher witnesses were in favour of it. We do not have to resolve the matter because what mattered on Mr Watson's case was what was actually discussed, not what an expert might infer from the memorandum.
iv) The Adkin specific proposal with a dancer arm on a spring (whether constant tension or responsive to tension) was very different from Mr McNestry's "clever way." Whether or not the Adkin idea was practical was never explored. Only by generalising both ideas can one come to a common generalisation control the motors by feedback. So the idea is not a very likely starting point for Mr McNestry.
v) It is not clear what the context of the Adkin proposal was. Zipher suggested it was a proposed low cost version of the SmartDate for some Eastern markets, not an enhancement of the SmartDate. If that be right, it explains why Adkin was quickly forgotten because the idea of a low-cost version was itself dropped shortly after the meeting. We do not go to the documents which bear this out.
vi) The importance of the last point is substantial. The Judge declined to make a finding based on the surrounding circumstantial evidence contained in the documents, saying he preferred to rely upon the title to the memorandum which of course includes the word "Enhancement". But if Adkin was truly part of an enhancement project it seems impossible to explain why it was not followed up at all a matter on which, as we have said, Mr Adkin might have been able to shed some light.
The Statutory Provisions
"Right to apply for and obtain a patent
7.-(1) Any person may make an application for a patent either alone or jointly with another.
(2) A patent for an invention may be granted
(a) primarily to the inventor or joint inventors;
(b) in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom;
(c) in any event, to the successor or successors in title of any person or persons mentioned in paragraph (a) or (b) above or any person so mentioned and the successor or successors in title of another person so mentioned; and to no other person.
(3) In this Act "inventor" in relation to an invention means the actual deviser of the invention and "joint inventor" shall be construed accordingly.
(4) Except so far as the contrary is established, a person who makes an application for a patent shall be taken to be the person who is entitled under subsection (2) above to be granted a patent and two or more persons who make such an application jointly shall be taken to be the persons so entitled.
Determination before grant of questions about entitlement to patents, etc.
8.-(1) At any time before a patent has been granted for an invention (whether or not an application has been made for it)
(a) any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) a patent for that invention or has or would have any right in or under any patent so granted or any application for such a patent; or
and the comptroller shall determine the question and may make such order as he thinks fit to give effect to the determination.
(2) Where a person refers a question relating to an invention under subsection (1)(a) above to the comptroller after an application for a patent for the invention has been filed and before a patent is granted in pursuance of the application, then, unless the application is refused or withdrawn before the reference is disposed of by the comptroller, the comptroller may, without prejudice to the generality of subsection (1) above and subject to subsection (6) below -
(a) order that the application shall proceed in the name of that person, either solely or jointly with that of any other applicant, instead of in the name of the applicant or any specified applicant;
(b) where the reference was made by two or more persons, order that the application shall proceed in all their names jointly;
(c) refuse to grant a patent in pursuance of the application or order the application to be amended so as to exclude any of the matter in respect of which the question was referred;
(d) make an order transferring or granting any licence or other right in or under the application and give directions to any person for carrying out the provisions of any such order.
(3) Where a question is referred to the comptroller under subsection (1)(a) above and
(a) the comptroller orders an application for a patent for the invention to which the question relates to be so amended;
(b) any such application is refused under subsection 2(c) above before the comptroller has disposed of the reference (whether the reference was made before or after the publication of the application); or
(c) any such application is refused under any other provision of this Act or is withdrawn before the comptroller has disposed of the reference, but after publication of the application.
the comptroller may order that any person by whom the reference was made may within the prescribed period make a new application for a patent for the whole or part of any matter comprised in the earlier application or, as the case may be, for all or any of the matter excluded from the earlier application, subject in either case to section 76 below, and in either case that, if such a new application is made, it shall be treated as having been filed on the date of filing the earlier application.
(4) (5) .
(6) Where on a reference under this section it is alleged that, by virtue of any transaction, instrument or event relating to an invention or an application for a patent, any person other than the inventor or the applicant for the patent has become entitled to be granted (whether alone or with any other persons) a patent for the invention or has or would have any right in or under any patent so granted or any application for any such patent, an order shall not be made under subsection (2)(a), (b) or (d) above on the reference unless notice of the reference is given to the applicant and any such person, except any of them who is a party to the reference.
(7) If it appears to the comptroller on a reference of a question under this section that the question involves matters which would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court's jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so.
Determination after grant of questions referred to before grant
9. If a question with respect to a patent or application is referred by any person to the comptroller under section 8 above, whether before or after the making of an application for the patent, and is not determined before the time when the application is first in order for a grant of a patent in pursuance of the application, that fact shall not prevent the grant of a patent, but on its grant that person shall be treated as having referred to the comptroller under section 37 below any question mentioned in that section which the comptroller thinks appropriate.
Determination of questions about entitlement to foreign and convention patents, etc.
12.-(1) At any time before a patent is granted for an invention in pursuance of an application made under the law of any country other than the United Kingdom or under any treaty or international convention (whether or not that application has been made) -
(a) any person may refer to the comptroller the question whether he is entitled to be granted (alone or with any other persons) any such patent for that invention or has or would have any right in or under any such patent or an application for such a patent; or
(b) any of two or more co-proprietors of an application for such a patent for that invention may so refer the question whether any right in or under the application should be transferred or granted to any other person;
and the comptroller shall determine the question so far as he is able to and may make such order as he thinks fit to give effect to the determination.
(2) If it appears to the comptroller on a reference of a question under this section that the question involves matters which would more properly be determined by the court, he may decline to deal with it and, without prejudice to the court's jurisdiction to determine any such question and make a declaration, or any declaratory jurisdiction of the court in Scotland, the court shall have jurisdiction to do so.
Mention of inventor
13.-(1) The inventor or joint inventors of an invention shall have a right to be mentioned as such in any patent granted for the invention and shall also have a right to be so mentioned if possible in any published application for a patent for the invention and, if not so mentioned, a right to be so mentioned in accordance with rules in a prescribed document.
Making of Application
14.-(5) The claim or claims shall -
(a) define the matter for which the applicant seeks protection;
(b) be clear and concise;
(c) be supported by the description; and
(d) relate to one invention or to a group of inventions which are so linked as to form a single inventive concept.
(6) Without prejudice to the generality of subsection (5)(d) above, rules may provide for treating two or more inventions as being so linked as to form a single inventive concept for the purposes of this Act.
Patent not to be impugned for lack of unity
26. No person may in any proceeding object to a patent or to an amendment of a specification of a patent on the ground that the claims contained in the specification of the patent, as they stand or, as the case may be, as proposed to be amended, relate -
(a) to more than one invention, or
(b) to a group of inventions which are not so linked as to form a single inventive concept.
Determination of right to patent after grant
37.-(1) After a patent has been granted for an invention any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question
(a) who is or are the true proprietor or proprietors of the patent,
(b) whether the patent should have been granted to the person or persons to whom it was granted, or
(c) whether any right in or under the patent should be transferred or granted to any other person or persons;
and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination.
(2) Without prejudice to the generality of subsection (1) above, an order under that subsection may contain provision
(a) directing that the person by whom the reference is made under that subsection shall be included (whether or not to the exclusion of any other person) among the persons registered as proprietors of the patent;
(b) directing the registration of a transaction, instrument or event by virtue of which that person has acquired any right in or under the patent;
(c) granting any licence or other right in or under the patent;
(d) directing the proprietor of the patent or any person having any right in or under the patent to do anything specified in the order as necessary to carry out the other provisions of the order.
(4) Where the comptroller finds on a reference under this section that the patent was granted to a person not entitled to be granted that patent (whether alone or with other persons) and on application made under section 72 below makes an order on that ground for the conditional or unconditional revocation of the patent, the comptroller may order that the person by whom the application was made or his successor in title may, subject to section 76 below, make a new application for a patent -
(a) in the case of unconditional revocation, for the whole of the matter comprised in the specification of that patent; and
(b) in the case of conditional revocation, for the matter which in the opinion of the comptroller should be excluded from that specification by amendment under section 75 below;
and where such new application is made, it shall be treated as having been filed on the date of filing the application for the patent to which the reference relates.
Extent of invention
125. (1) For the purposes of this Act an invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, as the case may be, as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly.
(2) It is hereby declared for the avoidance of doubt that where more than one invention is specified in any such claim, each invention may have a different priority date under section 5 above.
(3) The Protocol on the Interpretation of Article 69 of the European Patent Convention (which Article contains a provision corresponding to subsection (1) above) shall, as for the time being in force, apply for the purposes of subsection (1) above as it applies for the purposes of that Article.
137-(7) Whereas by a resolution made on the signature of the Community Patent Convention the governments of the member states of the European Economic Community resolved to adjust their laws relating to patents so as (among other things) to bring those laws into conformity with the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-Operation Treaty, it is hereby declared that the following provisions of this Act, that is to say, sections 1(1) to (4), 2 to 6, 14(3), (5) and (6), 37(5), 54, 60, 69, 72(1) and (2), 74(4), 82, 83, 100 and 125, are so framed as to have, as nearly as practicable, the same effects in the United Kingdom as the corresponding provisions of the European Patent Convention, the Community Patent Convention and the Patent Co-operation Treaty have in the territories to which those Conventions apply.
The legal arguments
Can s.7 itself found an entitlement claim?
"A transfer printer for transferring ink from a printer ribbon to a substrate which is transported along a predetermined path adjacent the printer comprising
a printer ribbon drive mechanism for transporting ribbon between first and second ribbon spools,
a printhead arranged to contact one side of the ribbon to press an opposite side of the ribbon into contact with a substrate on the predetermined path,
a printhead drive mechanism for transporting the printhead along a track extending generally parallel to the predetermined substrate transport path and for displacing the printhead in and out of contract with the ribbon, and
a controller selectively programmable such that during printing the printhead is displaced into contact with the ribbon and either
the printhead is stationary relative to the predetermined substrate transport path and the ribbon is transported with the substrate to be printed relative to the printhead, or
the ribbon and the substrate to be printed are stationary relative to the predetermined substrate transport path and the printhead is transported relative to the ribbon."
The relevance of validity
The relevance of the claims
"The European patent application shall relate to one invention only or to a group of inventions so linked as to form a single inventive concept."
"15. It is clear that a mechanistic, element by element approach to inventorship will not produce a fair result. If A discloses a new idea to B whose only suggestion is to paint it pink, B would not be a joint inventor of a patent for A's product painted pink. That is because the additional feature does not really create a new inventive concept at all. The feature is merely a claim limitation, adequate to overcome a bare novelty objection, but having no substantial bearing on the inventive concept. Patent agents will frequently suggest claim limitations, but doing so does not make them joint inventors. Some stripping of a claim of its verbiage, may be necessary to determine the inventive concept, and consequently the inventor. But one must keep in mind that it is the inventive concept or concepts as put forward in the patent with which one is concerned, not their inventiveness in relation of the state of the art."
The cases based on Windsor and CCL
Conclusion on the entitlement issues
i) The Judge was not entitled to and gave inadequate reasons for disbelieving the inventors and Mr Buckby;
ii) The ultimate form of the wide claims to which Markem lay claim was essentially the result of a natural generalisation from the specific ideas of Mr McNestry and owed nothing to Markem;
iii) Markem's backstop case based on reliance on Mr Butcher's memorandum is flawed because firstly that memorandum contains nothing confidential, describing no more than that which would be desirable if an invention could be made and secondly the case was not put to the witnesses on that basis;
iv) Section 7 does not in itself create an entitlement claim under s.8. For such a claim to be made the applicant must show breach of some rule of law by the patentee or applicant for a patent or those from whom he claims to derive his rights to apply. He must show why he is entitled to (or entitled to a share in) the application. It is not enough merely to show he could have made his own application.
v) A claim-by-claim approach is not appropriate in proceedings under s.8. The proper approach is to identify what information was used which should not have been used or should not have been used solely by the applicant, and use that to formulate the appropriate consequential order.
The Subsequent Claim for Breach of confidence an abuse of process?
The Law as to abuse of process
"Thus the abuse in question need not involve the re-opening of the matter already decided in proceedings between the same parties, as where a party is estopped in law from seeking to re-litigate a cause of action or an issue already decided in earlier proceedings, but, as Somervell LJ put it in Greenhalgh v Mallard (1947) 2 All ER 255, 257 may cover -
'Issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them'."
"In Brisbane City Council v Attorney General for Queensland  AC 411 the Privy Council expressly endorsed Somervell LJ's reference to abuse of process and observed, at 425:
'This is the true basis of the doctrine and it ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation.'"
"The rule in Henderson v Henderson is very well known. It requires the parties, when the matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the court so that all aspects of it may be finally decided (subject, of course, to any appeal) once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed."
Mr Thorley places particular reliance on the penultimate sentence in that citation.
"The bringing of a claim which could have been brought in earlier proceedings may not be an abuse. It may in particular cases be sensible to advance cases separately. It depends on all the circumstances of each case. .. The Court has to balance a plaintiff's right to bring before the court genuine and legitimate claims with a defendant's right to be protected from being harassed by multiple proceedings where one would have sufficed."
At 31 A Lord Bingham, after reviewing the authorities, expressed his own conclusion as follows -
"Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element, such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merit-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focussing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. . While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances."
At 59 F Lord Millett said -
"There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company's action. This question must be determined as at the time when Mr Johnson brought the present proceedings and in the light of everything that had then happened."
Before us it was accepted by counsel on both sides that those passages from the decision of the House of Lords in Johnson set out the law which has to be applied, and it is clear from his judgment that Judge Fysh did consider that authority. What it requires is a careful examination of the circumstances relevant to the application to strike out, and to that we now turn.
The Circumstances in this case
"In addition to the obligation of confidentiality .any intellectual property created by Martin McNestry during his employment with MTL belonged to his employer."
A similar approach was adopted in relation to Messrs Hart and Buxton.
"49. The Named Inventors were not entitled to use or disclose for their own benefit, following termination of their employment with MTL any confidential information obtained during and as a result of their employment with Prestek/MTL (other than knowledge constituting the ordinary stock in trade of employees of this kind in respect of which no claim to be entitled is made by MTL).
50. Further or alternatively, those employees of the Buckby Group who had previously been employed by MTL and the companies of the Buckby Group have at all material times owed a duty of confidence to MTL and Markem and at no time have they been entitled to use MTL's or Markem's confidential information.
51. The Named Inventors disclosed the invention to their new employer, Zipher who later filed the application for the Patent on 5 September 2001 and claimed entitlement to it."
"The defendants have asserted that the First to Eighth Claimants and each of them are in breach of an obligation of confidence alleged to be owed to the Defendants and each of them."
A similar stance was taken in relation to the other two references. The claimants denied any breach of their obligations and sought declarations to that effect. They also sought a speedy trial. Markem responded with an application to strike out the action seeking declarations as an abuse of process.
"Jacob J: You are asserting an abuse of process by these individuals to try and clear their names. I do not accept that.
Mr Arnold: If they win, their names are cleared anyway. It is a common objective.
Jacob J: No, because they have a separate interest from their employer."
In the end the judge decided to stay the proceedings seeking declaratory relief, saying -
"I think there is no useful purpose in them going on any more, but I am not going to strike them out. They will just be superseded by the other one."
Markem having undertaken to issue entitlement proceedings in the High Court it was ordered that -
"Action 3397 be stayed pending determination of the Intended Action with costs reserved to the trial judge in the Intended Action."
The entitlement proceedings were commenced by Markem in the High Court on 9th December 2002. The only named defendant was Zipher Ltd and there was no direct allegation of breach of confidence or breach of contract, but the format was the same as that adopted in the references.
"The absence of any allegation of breach of confidence or breach of contract coupled with a palpable antipathy between the parties has made this case difficult to adjudicate."
At a hearing on 1st August 2003 to determine the form of order required in the light of the judgment Mr Watson said -
"It was not a confidential information case. I never said that there was not a misuse. I never needed to. It did not arise."
The judge then asked Mr Watson if Markem could now sue Mr Buckby and others for breach of confidence, to which Mr Watson replied -
"We could, I suppose. Of course it would only be damages now. But we chose this much clearer and easier route."
One does not normally speak of choosing a route when one is not aware of the alternative, and Mr Watson now contends that a lot was at stake, many millions of pounds lost by Markem because Zipher was able to sell Zodiac machines embodying confidential ideas first thought of by Buckby and others when they were at Markem.
The Decision of the Judge
"I am persuaded that it was the judge's independent and firm intention to 'park' (but not strike out) what was in reality all further consideration of confidential information issues generally (and not just the Declaratory Proceedings itself) until a time after the conclusion at first instance of the intended Entitlement Proceedings."
Mr Thorley submitted to us that at that point Judge Fysh fell into error because his interpretation of what happened before Jacob J was incorrect. At that stage there were in existence only the references. Once the matter was transferred to the High Court it was open to Markem, if so advised, to raise issues of breach of confidence and breach of contract, and if they had the evidence to substantiate such allegations it was reasonable to assume that was what they would do. Jacob J was entitled to conclude that there was no need for further pleadings in the action for declaratory relief because all of the issues which such pleadings might address would be resolved in the Intended Action. In reality all that was being "parked" was a decision as to the costs of the claim for declaratory relief. In our judgment the criticisms made by Mr Thorley of the interpretations placed by Judge Fysh upon the proceedings before Jacob J are well founded. That misinterpretation infected the rest of the judgment because in paragraph 42 Judge Fysh said that -
"To have issued fresh proceedings for breach of confidence (possibly only after the penny had dropped regarding Adkin) would be seen as enlivening many of the issues which had been stayed by Jacob J."
Judge Fysh went on to point out that if a new cause of action had been alleged, involving four new named defendants, that would have disrupted the timetable, and Zipher, he said, would have characterised it as "a blunt ploy to secure an adjournment". There would be the prospect of interlocutory activity, defendants possibly seeking fresh representation, and the trial date could not have been held, that date being one which the judge regarded as "above all at that time Zipher's chief concern".
"I am not surprised that Markem did not raise breach of confidence at the time."
We find that observation inexplicable. Even if Markem thought it desirable to deal with the entitlement proceedings first, once they knew or ought to have known that they had a viable claim for breach of confidence and/or breach of contract, which they might at some stage wish to pursue, it was, in our judgment, their clear duty under CPR 1.1 to put their cards on the table and seek directions. Not to do so was not as Mr Watson submitted a procedural irregularity. It was an abuse.
Conclusion on abuse of process
Lord Justice Mummery:
Lord Justice Kennedy: