COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
The Hon Mr Justice Warren
Strand, London, WC2A 2LL
B e f o r e :
THE RT HON LORD JUSTICE JACOB
THE RT HON LORD JUSTICE TOULSON
|The Commissioners for Her Majesty's Revenue & Customs
|- and -|
|Procter & Gamble UK
Mr Roderick Cordara QC and Mr Edward Brown (instructed by Robert Newey & Co)
for the Respondent
Hearing dates: 23/24 April 2009
Crown Copyright ©
Lord Justice Jacob (giving the first judgment at the invitation of Mummery LJ:
(2) Regular Pringles are made from potato flour, corn flour, wheat starch and rice flour together with fat and emulsifier, salt and seasoning. The precise percentages of each ingredient of Regular Pringles have varied from time to time and are not identical in the range of flavours because, for example, the flavouring may affect the salt content. …
(4) Regular Pringles are manufactured by mixing the dry ingredients into dough with water and emulsifier, cutting shapes out of a dough sheet, frying it for a few seconds, adding oil and salt, cooling it and then adding flavours. A similar procedure applies to maize (in US parlance, corn) chips like tortillas. Mr Hogg considered that the unique feature of Regular Pringles was that the manufacturing process causes oil to go into the spaces throughout the texture of the product replacing the water content removed during the frying. This gives the "mouth-melt" feel when it is eaten. By contrast with potato crisps most of the fat stays on the surface.
(5) Regular Pringles have a regular shape in the form of a saddle, which aids stacking them enabling high production speeds. They are a uniform pale yellow colour, which is paler than a potato crisp. They have a crisp texture.
"5. Any of the following when packaged for human consumption without further preparation, namely, potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch, and savoury products obtained by the swelling of cereals or cereal products; and salted or roasted nuts other than nuts in shell."
The question I posed at the outset is based upon item 5. The language of the question has its meaning to be derived from that context.
The Approach on a Second Appeal
The approach on appeal to value judgments of the primary decision maker
 … In Biogen v Medeva  RPC 1 at p. 45 Lord Hoffmann said when discussing the issue of obviousness:
"The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans la nuance), of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation. It would in my view be wrong to treat Benmax as authorising or requiring an appellate court to undertake a de novo evaluation of the facts in all cases in which no question of the credibility of witnesses is involved. When the application of a legal standard such negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge's evaluation."
 Similar expressions have been used in relation to similar issues. The principle has been applied in Pro Sieben Media v Carlton  1 WLR 605 at pp. 613-614 (per Robert Walker LJ) in the context of a decision about "fair dealing" with a copyright work; by Hoffmann LJ in Re Grayan Building Services  Ch 241 at p.254 in the context of unfitness to be a company director; in Designer Guild v Russell Williams  1 WLR 2416 in the context of a substantial reproduction of a copyright work and, most recently in Buchanan v Alba Diagnostics  UKHL 5 in the context of whether a particular invention was an "improvement" over an earlier one. Doubtless there are other examples of the approach.
 It is important here to appreciate the kind of issue to which the principle applies. It was expressed this way by Lord Hoffmann in Designer Guild:
"Secondly, because the decision involves the application of a not altogether precise legal standard to a combination of features of varying importance, I think that this falls within the class of case in which an appellate court should not reverse a judge's decision unless he has erred in principle."
"I commend the Tribunal for the care which it took over this matter, but I am bound to say that, no doubt because of the submissions which were made to it by the parties, the treatment of the issue which was before it, was far more elaborate than was necessary. I do urge Tribunals, when considering issues of this sort, not to be misled by authorities which are no more than authorities of fact into elevating issues of fact into questions of principle when it is not appropriate to do so on an inquiry such as this. The Tribunal had to answer one question and one question only: was each of these products properly described as biscuits or not? If it had confined itself to that issue which is, and has to be, one of fact and degree, then the problems which subsequently arose would have been avoided."
The same applies to an appeal court, indeed even more so when the Biogen principle comes into play for an appeal court is then only concerned as to whether there was an error of law.
 We are reluctant to grade the other factors to be considered, as the Tribunal did in the Pringles Dippers case, [I shall refer to this below] who took the ingredients as the most important, the size of packaging, marketing for dipping, manufacture, appearance and taste apparently in that order (or at least taking the first three as the most important in that order). We consider that the reasonable man applies the test as a whole without applying an order. However, we do not regard the shape of Regular Pringles as particularly important to this test given the wide variety of products on the market. Nor do we regard the size of packaging as particularly important. While potato crisps may primarily be sold in smaller packs, they are often sold in larger packs, and occasionally in tubes, and a smaller proportion of Regular Pringles are sold in smaller packs. While we are aware of the potato content, the reasonable man may not be aware of the fact that a normal potato crisp has a maximum potato percentage in the 70s, the next largest ingredient being fat, or that Regular Pringles have a potato content of about 42 per cent because this is not required to be stated on the packaging. While the potato content of Regular Pringles is not advertised as such, a purchaser can see from the label that it does contain potato.
 Standing back and taking all the factors of appearance, taste, ingredients, process of manufacture, marketing and packaging together (other than the ones we have stated above that we should ignore) and applying the reasonable man test in test (a), we consider that while in many respects Regular Pringles are different from potato crisps and so they are near the borderline, they are sufficiently similar to satisfy that test.
"When he has discovered that a difference is difference of degree, that distinguished extremes have between them a penumbra in which one gradually shades into the other, a tyro thinks to puzzle you by asking you where you are going to draw the line and an advocate of more experience will show the arbitrariness of the line proposed by putting cases very near it on one side or the other, Law and Science in Law Collected Legal Papers 1921, pp.232-233,"
Putting the point another way: you do not have to know where the precise line is to decide whether something is one side or the other.
 Here the potato flour content is over 40 per cent; it is the largest single ingredient by about 9 percentage points; and it is nearly three times larger than the other flours in the ingredients taken together. We have to give a yes or no answer to the question "are Regular Pringles [partly] made from the potato, from potato flour or from potato starch" and we are bound to say yes. There are other ingredients but it is made from potato flour in the sense that one cannot say that it is not made from potato flour, and the proportion of potato flour is significant being over 40 per cent. The fact that it is also made from other things does not affect this.
I cannot begin to see anything wrong with that, still less that that was not a conclusion which any reasonable Tribunal could reach. There is more than enough potato content for it to be a reasonable view that it is made from the potato.
 … Mr Cordara contended that the intention of Parliament was clear in requiring that potato, potato flour or potato starch (or a combination of them) should be the overwhelming ingredient.
 Regular Pringles are a unique product in ingredients, taste, and shape, and so asking whether they are similar to potato crisps as required by test (a) is a difficult task. Each party produced an impressive list of ways in which they were similar, or dissimilar, to potato crisps. In Quaker Oats it was agreed that test (a) was that of the ordinary reasonable man in the street which should take into account appearance, taste, ingredients, process of manufacture, marketing and packaging.
 As Mr Cordara stated, the answer to the test depends on the level of generality at which it is posed. But if we are to take account of all the factors of appearance, taste, ingredients, process of manufacturer, marketing and packaging, it is clearly wrong to say that Regular Pringles are similar to potato crisps as a crispy savoury snack, with potato content, made by frying, and marketed as a snack.
Lord Justice Toulson:
"Any of the following when packaged for human consumption without further preparation, namely, potato crisps, potato sticks, potato puffs, and similar products made from the potato, or from potato flour or from potato starch…" (Emphasis added)
"This is an expert Tribunal charged with administering a complex area of law in challenging circumstances. To paraphrase a view I have expressed about such expert Tribunals in another context, the ordinary courts should approach appeals from them with an appropriate degree of caution; it is probable that in understanding and applying the law in their specialised field the Tribunal will have got it right: see Cooke v Secretary of State for Social Security  EWCA Civ 734,  3 All E R 279, para 16. They and they alone are the judges of the facts. It is not enough that their decision on those facts may seem harsh to people who have not heard and read the evidence and arguments which they have heard and read. Their decisions should be respected unless it is quite clear that they have misdirected themselves in law. Appellate courts should not rush to find such misdirections simply because they might have reached a different conclusion on the facts or expressed themselves differently."
"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises… "
Lord Justice Mummery:
Issue on appeal
"If a product has a number of significant ingredients it cannot be said to be 'made from' one of them."
So it is argued that Regular Pringles, which also contain fat and flour, cannot be said to be "made from the potato."