England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand. London. WC2A 2LL
		23/02/2006

MR. JUSTICE LEWISON :

1. This is a case about the parallel import of trade mark goods. The products in question are the ACCU-CHECK Advantage II strips for self-testing of glucose levels in blood. The particular examples are some 18,000 units forming part of batch 448632.
2. The products were manufactured by the Roche Diagnostics Corporation in the USA. They were, I assume, packaged in the course of manufacture. They were ordered by another Roche company abbreviated as PRISA, in effect Roche Guatemala, which is Roche's distributor in the Caribbean and Central American region. They appear to have been kept in a warehouse in Costa Rica.
3. From there, they were supplied to a company abbreviated as PROPAS, which translates as the Dominican Foundation for the Promotion of Social Action in the Dominican Republic. That was a large number to be supplied to the Dominican Republic and was not supplied through Roche's usual distributor. The reason for the large supply was that PROPAS was undertaking a clinical trial in the Dominican Republic using the Advantage II test strips. PRISA agreed to supply Advantage II test strips to PROPAS on beneficial terms on the condition that those test trips were used exclusively for the clinical trial in the vulnerable communities of the Dominican Republic and that they were not resold or transferred to any third party organisations or companies.
4. Somehow, in breach of the terms on which the strips were supplied to PROPAS, many of the units, if not all of the 18,000 made their way to France. There they were bought in good faith by Kent Pharmaceuticals Limited, who imported them into the United Kingdom.
5. I must briefly describe the packaging in which the products were supplied because that is the central area of contention. There are four panels reproduced in the evidence. The panels contain information and instructions in three languages, namely, English, Spanish and Portuguese. The name of the manufacturer is given and the distributor is identified as a Brazilian company forming part of the Roche Group. The packaging indicates that the products were made in the USA for export only. The three languages are spoken in the Caribbean and Central and South America. The most significant feature of the packaging is that it bears what is called a CE mark.
6. There is no real dispute but that there has been an infringement of the trade marks subject to what is called the doctrine of exhaustion of rights. It is the contention of Kent that they have an arguable defence based on that doctrine that the products were first put on the market within the EEA with the implied consent of the trade mark owners.
7. The starting point for a consideration of this question is Articles 5 and 7 of Directive 89/104, the Trade Mark Directive. Article 5 provides that the proprietor is entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered. The right to prohibit third parties includes prohibition on importing or exporting goods under the sign or mark.
8. Article 7 of the Directive provides, "The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent". The reference to the Community is now to be taken as a reference to the EEA.
9. The scope of Article 7 received authoritative consideration by the European Court of Justice in the joined case of Zino Davidoff SA -v- A&G Imports Limited and Levi Strauss and Co. v. Tesco Stores Limited [2002] RPC 20.
10. In paragraphs 39-43 of their judgment, the ECJ emphasized that the question of what amounted to consent was a matter of European law in respect of which the court had to supply a uniform interpretation. They emphasized that the concept of consent was not a matter for the national laws of the Member States. In paragraphs 45-47 the court said this:

"45 In view of its serious effect in extinguishing the exclusive rights of the proprietors of the trade marks in issue in the main proceedings (rights which enable them to control the initial marketing in the EEA) consent must be so expressed that an intention to renounce those rights is unequivocally demonstrated.

"46. Such intention would normally be gathered from an express statement of consent. Nevertheless, it is conceivable that consent may, in some cases, be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his rights.

"47. The answer to the first question referred in each of Cases C-414/99 to C-416/99 must therefore be that, on a proper construction of Article 7(1) of the Directive, the consent of a trade mark proprietor to the marketing within the EEA of products bearing that mark which have previously been placed on the market outside the EEA by that proprietor or with his consent may be implied, where it is to be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his right to oppose placing of the goods on the market within the EEA."

11. The European Court then went on to consider some of the circumstances in which it might be possible to infer consent. The particular circumstance which they considered was whether consent could be inferred from the silence of the trade mark proprietor. The court held that it could not.
12. The relevant paragraphs bearing on this question are paragraphs 53-58 of the judgment which read as follows:

"53. It follows from the answer to the first question referred in the three cases C-414/99 to C-416/99 that consent must be expressed positively and that the factors taken into consideration in finding implied consent must unequivocally demonstrate that the trade mark proprietor has renounced any intention to enforce his exclusive rights.

"54. It follows that it is for the trader alleging consent to prove it and not for the trade mark proprietor to demonstrate its absence.

"55. Consequently, implied consent to the marketing within the EEA of goods put on the market outside that area cannot be inferred from the mere silence of the trade mark proprietor.

"56. Likewise, implied consent cannot be inferred from the fact that a trade mark proprietor has not communicated his opposition to marketing within the EEA or from the fact that the goods do not carry any warning that it is prohibited to place them on the market within the EEA.

"57. Finally, such consent cannot be inferred from the fact that the trade mark proprietor transferred ownership of the goods bearing the mark without imposing contractual reservations or from the fact that, according to the law governing the contract, the property right transferred includes, in the absence of such reservations, an unlimited right of resale or, at the very least, a right to market the goods subsequently within the EEA.

"58. A rule of national law which proceeded upon the mere silence of the trade mark proprietor would not recognise implied consent but rather deemed consent. This would not meet the need for consent positively expressed required by community law."

13. What the court is therefore looking for is an actual consent, which may be express or implied, and not a deemed consent. It is plain that Roche did not in fact consent to the sale of this batch of products within the EEA at the time when it supplied the products to PROPAS. The terms of the supply make that abundantly clear.
14. Mr. Hacon, who appears for Kent, reserves his position as regards that, but does not formally challenge it for the purposes of this application. What is relied on as amounting to the unequivocal demonstration of a renunciation by Roche of its rights is the placing on the packaging of a CE mark and the presence on the packaging of three European languages.
15. Mr. Hacon submits that the issue in law is the effect of the CE mark on the relevant public. If the relevant public treats the CE mark as equivalent to consent to sell the products within the EEA, that is good enough to amount to an unequivocal consent on the part of the trade mark proprietor to the marketing of the goods within the EEA.
16. Mr. Tappin responds by saying that what one is looking for is a consent, express or implied, on the part of the trade mark owner. That cannot depend upon the state of mind of the public or a section of the public within the EEA.
17. Kent has produced a body of evidence from a number of different persons engaged in this market and before I come to my conclusions I ought to set out the substance of that evidence. The first of the witnesses to whose evidence I should refer is that of Mr. Johnson, who is the Purchasing Director of Kent.
18. He says in paragraph 13 of his first witness statement:

"I know from the presence of the CE marking on product packaging that the product in question meets all regulatory requirements for sale in the UK. This is because the CE marking shows that the product in question has been formally approved for sale in the EU under the relevant regulatory approval regimes".

He continues in paragraph 15:

"My understanding of the CE marking is that it serves as a product marking which is used within Europe, under the relevant European regulatory regimes, for the purposes of ensuring compliance with the appropriate quality and safety standards. The CE marking is understood by traders, and increasingly by consumers, as evidence of compliance with EU standards. If a diagnostic device is not intended for sale in the EU, it does not need to carry the CE marking. I therefore regard the presence of the CE marking on any particular product as evidence that the product is intended for sale in the EU. My colleagues at Kent share my understanding and that understanding is reflected in the terms of Kent's standard operating procedure".

He goes on to say that he believes that there are operators in the marketplace who "understand the CE marking as a sign confirming that the relevant product meets European quality and safety standards". He then adds that for those reasons, the CE marking is generally treated by all parallel importers "as evidence of importability into the EU and, indeed, of importability for any movement between EU Member States".

19. Mr. Paul Houston, who is a pharmacist employed by A. Proctor and Son Limited, also states that his understanding is that any product bearing the CE marking is intended for sale in the EU.
20. Finally, I should refer to the evidence of Mr. Egglestone. He is also a qualified pharmacist. He says that, as a pharmacist, he has to be sure that the products which he dispenses meet, or exceed, UK and European regulatory requirements. He says the appearance of the CE marking on a medical device means that that device does meet the relevant European standards.
21. He continues:

"The CE marking is only addressed at European compliance and I do not believe that there is any reason to put the CE marking on a product which is not intended for sale in the EU, as regulatory requirements will be different in countries outside the EU. Indeed, I struggle to think of any reason why a manufacturer might want to put the CE marking on a product for sale outside the EU, unless perhaps the manufacturer was selling in a country where there was no regulation at all and wanted to use some sign of quality to show that it was a responsible manufacturer".

22. I comment on this body of evidence as follows. First, Mr. Johnson correctly identifies the purpose of the CE mark as showing formal approval for sale and compliance with quality and safety requirements. Without the CE mark, the product cannot be sold at all within the EU. It is obvious therefore that Mr. Houston and Mr. Egglestone, for example, would not buy a product which did not bear the CE mark. Moreover, under the European legislation applicable to in vitro devices, that is the sole function of the CE mark.
23. Secondly, as is common ground, the reasoning in paragraph 15 of Mr. Johnson's statement is faulty in its logic. It does not follow from the premise that the product marketed outside EEA does not need to carry the CE mark that a product which does carry the CE mark is intended for sale within the EEA. It is equivalent to saying that if a barrister is engaged in a summary judgment application, he need not be robed. It does not follow from that premise that if a barrister is not wearing a wig and gown, he must be engaged in a summary judgment application.
24. Mr. Egglestone, in addition, points out that one reason why a product not intended for sale within the EEA might carry a CE mark is to provide quality assurance in a less well regulated country. In any event, the premise upon which Mr. Johnson's reasoning depends is wrong. Kent's own solicitor points out that Switzerland, for example, actually requires the CE mark on products intended for marketing within that country. Switzerland, of course, is not a member either of the EU or the EEA.
25. Finally, Mr. Johnson only goes so far as to say that the CE mark is evidence of an intention to sell in the EEA. He does not say that it is conclusive or unequivocal evidence.
26. I accept Mr. Tappin's submission that evidence that can reasonably lead to two or more conclusions cannot be said to be unequivocal within the ordinary meaning of that word and the sense in which, as I understand it, the ECJ used it in the Davidoff case. Moreover, when one looks at the various websites on which Mr. Hacon relied, it seems to me that they reinforce the overall position that the CE mark is concerned with quality assurance.
27. I look first at the material to be found on the website of the Department of Trade & Industry. It begins by saying:

"CE marking is a declaration by the manufacturer that the product meets all the appropriate provisions of the relevant legislation implementing certain European directives. CE marking gives companies easier access into the European market to sell their products without adaptation or rechecking. The initials CE do not stand for any specific words, but are a declaration by the manufacturer that his product meets the requirements of the applicable European Directives".

28. A number of the questions which are then put forward as frequently asked questions on that site are all questions from the perspective of the manufacturer of a product. There are such questions as, "How do I go about getting a CE marking?", "Where can I get the artwork?", "What files/documentation must I keep ?" and so on.
29. The sentence upon which Kent relies is a sentence in answer to the question, "What requirements do I have to meet to export my product?" The sentence in question is:

"CE marking applies to the circulation of a product within the EEA. It is not required for exporting a product to non-EEA countries. You need to check on the particular regulatory requirements or standards that apply to your product in the country in question. The same standards may apply but they may also be different".

30. Taken in context, I cannot see that any reasonable reader of that information would infer that it had anything to do with trade marks or anything to do with the ability of someone to buy, as opposed to manufacture and place on the market, a product within the EEA.
31. The leaflet put out by the BIVDA, which is short for the British In Vitro Diagnostic Association, also refers to the CE mark. What it says in the first place is:

"The CE mark is applied to the product by the manufacturer before it is placed on the European market. A CE mark may only be applied to a device for which the manufacturer has signed a declaration of conformity indicating that it conforms to the requirements of the Directive".

It carries on by saying:

"The CE mark is the outward sign that a product meets all relevant new approach European Directives and is therefore permitted free access to all European markets. The CE mark is not unique to diagnostic products and you will find CE marks on electrical equipment, medical devices, even toys."

In answer to the question, "What does it mean?", the leaflet says:

"The CE mark means that the device meets a defined set of minimum safety requirements listed in Annex 1 to the IVD Directive. It also means that the device is manufactured under a quality system."

Again, the leaflet says nothing about trade marks and the fact that it says that the CE mark is, "permitted free access to all European markets", in my judgment says nothing about who is giving the permission.

32. The last of the various public statements relied on is the website of the Medicines and Healthcare Product Regulatory Authority ("the MHRA") which says as regards the CE mark: "The CE mark means a manufacturer is satisfied that his product conforms with the relevant essential requirements in the Directives and it is fit for its intended purpose."
33. In answer to the question, "Does the CE mark mean that a device is safe?", that website says:

"The CE mark is seen as a declaration by the manufacturer that the product meets all the appropriate provisions of the relevant legislation, including those relating to safety, and where required has been assessed in accordance with these. The CE mark also means that the product can be freely marketed anywhere in the EU without further control".

34. In the context of the website of a regulator, I agree with Mr. Tappin that the reference to control plainly means regulatory control. It would be taking that sentence entirely out of context to read it as having anything to do with trade marks. It is true up to a point that these various websites say, as Mr. Hacon submits, that the CE mark means that you can sell the product within the EEA. It all depends, however, on who you mean by "you". The websites and the legislation applicable to the CE mark are concerned with safety and quality. They are not concerned with trade marks, still less whether the trade mark proprietor has given consent to marketing within the EEA.
35. I accept Mr. Tappin's submission that if there is an understanding to the contrary amongst parallel importers, it is plainly erroneous. I reject Mr. Hacon's submission that this would only be known to one with detailed knowledge of the legislation. A visit to the three websites I have mentioned and a fair reading of the entirety of the sections devoted to the CE mark, rather than taking isolated sentences out of context, would be enough. Moreover, I cannot accept the submission that an illogical chain of reasoning by other traders can give rise to any plausible inference of actual consent by the trade mark proprietor to the placing of products on the market within the EEA. Accordingly, even on Kent's own evidence no unequivocal renunciation of rights has been demonstrated.
36. In addition, Roche have explained that there are a number of reasons why in fact they place the CE mark on these particular products. First, it is a worldwide mark of quality, as Mr. Egglestone in part anticipated. Secondly, other countries (not just Switzerland) accept the CE mark as sufficient compliance with their own regulatory regimes. Mexico and South American countries are among them, which may well explain why Roche Guatemala had products bearing the CE mark. Thirdly, travellers from the EEA will recognise quality stamped on the products when they travel and wish to acquire them.
37. I should refer to the decision of the Court of Appeal in Glaxo Group Ltd. v. Dowelhurst Ltd. [2005] ETMR 104 which, at first sight, may be thought to give some support to Mr. Hacon's submissions. That was a case of parallel import in which the decision of the Court of Appeal was that summary judgment was inappropriate and that the matter had to go to trial. The only reasoned judgment was given by Jacob L.J. At paragraph 31 of his judgment, he refers to the fact that the products in question looked like those on the French home market, but he said that in itself was not enough to provide a defence for goods imported into the EEA. That, he said, followed from Davidoff.
38. He then referred to some evidence which was said to amount to an unequivocal demonstration of a renunciation by the trade mark proprietor to enforce his exclusive rights. The evidence was given by a Mr. Taylor and read as follows:

"The product's packaging all bore an EMEA licence number which is considered a clear indication that the goods were placed on the market in the EEA by Glaxo or with their consent. It is common knowledge that where an originator wishes to sell products outside of the EEA, they either adopt a different pack design to that used by them in Europe, apply a non-EEA product licence to them and/or attach stickers to the packaging stating that they are not for sale within the EEA."

39. It was submitted that if that statement were proved, Glaxo had given an unmistakable signal that the goods were in free circulation. It was suggested that there was consent or estoppel under English law. Jacob LJ said, somewhat cryptically to my mind, that he could not see that those matters amounted to more than another legal analysis of the unequivocal demonstration point.
40. Jacob L.J concluded, "Whichever way it is put, on the basis of Mr. Taylor's evidence, there is enough to go to trial on this point."
41. It is not at all clear to me what it was about Mr. Taylor's evidence which turned the lack of a defence on the ground of the product looked like those on the French home market into a defence which had to go to trial. It may be that it was the identicality of packaging in addition to the EMEA licence number which led to that conclusion, but it does not seem to me that, on the facts of this case, Glaxo compels me to refuse summary judgment. The fact is that in this case Roche does adopt different packaging for products sold within the UK and Ireland which, so far as the evidence goes, are the only countries within the EEA in which this product is sold.
42. I go back to the terms on which Roche first supplied the goods outside the EEA. Those terms prohibited sale within the EEA. I cannot see how that stage it can be said that Roche had demonstrated, let alone unequivocally demonstrated that it renounced its trade mark rights. After the time when the goods were supplied to the Dominican Republic, Roche has done nothing in relation to that batch of goods.
43. I cannot see how it can be said, in those circumstances, that Roche must be taken impliedly to have actually consented to the marketing of these goods within the EEA. If Mr. Hacon is right, I would constructing a deemed consent on behalf of Roche which Davidoff prohibits. Roche has done nothing, in my judgment, which could amount to implied consent. I consider that there is no reasonable prospect that Kent will successfully defend this claim. In my judgment, Roche is entitled to summary judgment.

MR. HACON: One matter arises right away. I do ask for permission to appeal. I recognise that your Lordship has made findings on the facts primarily although there are one or two references to other matters, but what I do say is this. This case is unusual in the sense that it is quite difficult to disentangle facts from law because the assessment, for example, of the websites is again done through the eyes of somebody. Your Lordship necessarily was doing it through the eyes of the person your Lordship thought was appropriate. It needs an assessment by your Lordship, but your Lordship has to do it through somebody's eyes.

MR. JUSTICE LEWISON: I was doing it through the eyes of somebody who had barely heard of a CE mark before today.

MR. HACON: My Lord, yes. One of the matters your Lordship was considering, for example, was whether that person was looking for information on trade marks as opposed to merely wondering whether a CE mark indicates an intention to sell it in the EEA. The two are, to some degree, inevitably intermingled. On that ground, I do seek permission to appeal.

MR. TAPPIN: My Lord, we say this is a very clear case. My Lord agrees with us and we really do not see that there is any point of law that arises or any point of law intermingled with any facts.

MR. JUSTICE LEWISON: It might be said that CE marks are on many, many products of all descriptions and if that, in itself, could be a consent to putting on the market within the EEA, then that is quite an important point.

MR. TAPPIN: If my learned friend were right, it would have, I agree, wide-ranging implications, but that does not mean the matter is arguable and, just because it has wide-ranging implications, it is right. We say it is clearly wrong and my Lord should not give permission to appeal. It does not raise the kind of issue which reasonable minds could think differently. If my learned friend could persuade the Court of Appeal otherwise, that is another matter.

MR. JUSTICE LEWISON: I am going to refuse permission to appeal, Mr. Hacon. I came to a very clear view otherwise I would not have granted summary judgment. It seems to me that if you want to appeal, you will have to ask the Court of Appeal for permission.

MR. TAPPIN: There was one point in the judgment where I think you said that my submission was that what we were looking for was a state of mind on the part of the trade mark proprietor. I am not quite sure that was my submission.

MR. JUSTICE LEWISON: I may have misrepresented you, Mr. Tappin.

MR. TAPPIN: If it is a state of mind that one keeps to oneself, that is probably not ----

MR. JUSTICE LEWISON: Indeed.

MR. TAPPIN: That may be something that my Lord might want to reconsider on seeing the transcript.

The question then arises of relief. This is a matter which my learned friend did indicate in his skeleton he might have some observations to make in terms of limited form of relief. When we saw that skeleton argument, we wrote to them yesterday morning asking them to provide us by return with the wording of the injunction they would be proposing. We have not had a response to that.

MR. HACON: My Lord, if it is helpful, I have drafted a proposal. Perhaps I can hand this in.

(Document handed to judge)

MR. JUSTICE LEWISON: Do you have instructions on whether you are going to ask the Court of Appeal for permission to appeal?

MR. HACON: I can take them now.

MR. JUSTICE LEWISON: I think that would be helpful if there is a question of suspending an injunction until you have made such an application, if you are going to.

MR. HACON: The answer is, yes, there will be an application to the Court of Appeal so that does become a further issue.

MR. JUSTICE LEWISON: Do I have a copy of the proposed ----

MR. HACON: I am so sorry. I gave it to everybody except your Lordship.

MR. JUSTICE LEWISON: How do you want to deal with this Mr. Tappin? Do you want five minutes to deal with this?

MR. TAPPIN: I am not sure that, with that sort of notice, I can deal with it properly.

MR. JUSTICE LEWISON: What do you want to do?

MR. TAPPIN: It may be that if we take instructions, there may be a way in which we could find something agreeable, but that may take a little time.

MR. JUSTICE LEWISON: Do you want to do it this afternoon or do you want to go away and come back again? I do not mind. I have got things that I can do outside. You can stay here beyond 4.15 if you want to because I certainly will be. If you would rather go away and think about it, I do not mind that either.

MR. TAPPIN: My Lord, can we park that for the moment. We are going to think about it. I think what we might welcome is a 10 or 15 minutes' adjournment, which may be enough for us to sort it out. It may be long enough for us to work out that we cannot work it out and need a little longer.

The other matter that arises is the question of costs.

MR. JUSTICE LEWISON: On the face of it, you are entitled to your costs.

MR. TAPPIN: Can I just take instructions?

MR. JUSTICE LEWISON: Yes.

MR. TAPPIN: Can we hand up a schedule of costs which have been prepared. My Lord, what we are going to ask for is to let this go for a detailed assessment.

MR. JUSTICE LEWISON: Good grief.

MR. TAPPIN: And have an interim payment.

MR. JUSTICE LEWISON: Is that a one-day summary judgment application, £139,000?

MR. TAPPIN: My Lord has seen the amount of evidence that has been put in. Our evidence-in-chief has been shown to my Lord. There was various evidence in answer, a lot of which my Lord has not been taken to because we did not see it to be relevant. A lot of it we felt we had to deal with in reply. Yet further evidence came in from the defendants, again recently. There has been a lot of evidence which my Lord has not been taken to, which was driven by material put in by the defendants. One sees there is a disparity, I quite accept that, between our costs and those of the defendants. We would say that this is a matter where it probably is not something one can make a summary assessment of.

MR. JUSTICE LEWISON: I quite agree.

MR. TAPPIN: On the other hand, we would say there ought to be some kind of interim payment. We are clearly entitled to our costs and my Lord ought to make some sort of order for an interim payment of a suitable sum. Frankly, it is a matter where probably my Lord ought to choose a figure. We would say that something in the order of the costs actually incurred by the defendants ought to be about the right sum on interim payment, given the level of our costs and the level of theirs.

MR. JUSTICE LEWISON: I hear what you say. In principle, Mr. Hacon?

MR. HACON: There are two points of principle. One is that I accept that costs would normally be due and an interim payment would normally be due. The amount however is extravagant. My solicitors have done an assessment on the basis of the recommended rates for City firms.

MR. JUSTICE LEWISON: Do you want to try and push me down below £45,000?

MR. HACON: I think the irreducible minimum in this particular case would be small. Have you got my solicitor's estimate?

MR. JUSTICE LEWISON: Yes.

MR. HACON: If one takes that as some sort of guide, the usual estimate that courts do on these occasions is to say, "If half of that is the irreducible minimum, that is about right." If one assumes that is its fair price and without any deductions, then the irreducible minimum would be about half that so £26,500 would be the appropriate sum.

MR. JUSTICE LEWISON: I will order the defendant to pay the claimants' costs and I will order interim payment in the sum of £45,000. Do you want me to go away? If you need me, you will send a message through.

MR. TAPPIN: I have seen that my learned friend, in his draft order, has various other matters after the injunction. I do not know whether there is any ----

MR. JUSTICE LEWISON: I would be minded to suspend any injunction until after the consideration by the Court of Appeal of any application for permission to appeal.

MR. TAPPIN: Assuming that was made promptly in the usual ----

MR. JUSTICE LEWISON: I would not be minded to extend time to do it. It would mean then that if Kent want to apply for permission to appeal, they will have to re-apply to the Court of Appeal for an extension of the suspension. I will suspend it as far as the disposal of the application for permission so you will have to build that in.

MR. TAPPIN: We will bear that in mind.

MR. JUSTICE LEWISON: I imagine the same will apply to destruction or delivery up or whatever else you have got.

MR. TAPPIN: Yes. If there is going to be suspension, we would ask that there are proper records kept in the interim. I cannot imagine that is going to be ----

MR. JUSTICE LEWISON: Can I leave that to you to see if you can sort it out? That is the sort of order I would envisage being made. I will be there if you want me again this afternoon.

MR. HACON: If your Lordship is minded to, your Lordship might like to cast an eye over what Warren J said in Sun Microsystems. That was the main point in that application, what the relief should be.

MR. JUSTICE LEWISON: Is that reflected in your ----

MR. HACON: It certainly is, yes.

MR. JUSTICE LEWISON: All right. I will have a read of that while I am waiting for you to see if you can agree a form of order. Thank you very much.

(Short adjournment)

MR. HACON: My Lord, all concerned are very grateful to your Lordship for the time that you have given us. We have made quite considerable progress, your Lordship will be happy to hear. I am sorry to say it has not finalised because there are problems with some of the mechanics of what Roche seeks and whether that is feasible on Kent's part. I, and those instructing me, had to take instructions.

So what the parties have agreed, subject to your Lordship, is that upon certain undertakings given by me on behalf of Kent in relation to records -- perhaps I could come to those in a moment -- the final order be stood over with permission to apply. I imagine that will happen soon.

The undertakings being offered in the meantime were essentially, first of all, to preserve any records of batch and catalogue numbers of goods bearing the marks in issue, so far as are known to the defendant, and to keep records of batch numbers and catalogue numbers of goods hereafter, either supplied to the defendant or supplied by the defendant to other parties, again so far as are known to the defendant. Essentially, all batch and catalogue numbers of all goods, so far as are known, will be kept.

MR. JUSTICE LEWISON: How are you going to describe these goods? They are manufactured by the claimants or ....

MR. HACON: Goods bearing the trade marks.

MR. JUSTICE LEWISON: I see. I think that is it.

MR. TAPPIN: That is right. There is only one matter. Again, given this is being stood over with liberty to apply, we would assume that the 14 days for the interim payment are being stood over as well, and the interim payment will be made within the 14 days. I imagine we will be back before then anyway.

MR. JUSTICE LEWISON: I would envisage that the interim payment would be made within 14 days and, of course, any time for applying to the Court of Appeal runs from the pronouncement of the judgment, not from the working out of the final order.

MR. TAPPIN: Exactly, so time is running on those.

MR. JUSTICE LEWISON: Time is running on those. Instead of saying "Interim payment within 14 days", I will say "Interim payment by 9th March", then you have got a fixed date.

MR. TAPPIN: Yes. The rest of the order will be stood over. It may be best to record the matters which my Lord has dealt with, i.e. costs and permission to appeal, in this order and the rest can be stood over. For example, my learned friend may need something to show the Court of Appeal in terms of order.

MR. JUSTICE LEWISON: What order am I going to make? Declaration of infringement would be good enough, would it not, to show the Court of Appeal without the grant of an injunction today?

MR. TAPPIN: We could do that.

MR. JUSTICE LEWISON: If I declare today that there has been an infringement then Mr. Hacon has something to go and show the Court of Appeal on liability, as it were.

MR. TAPPIN: Costs can be dealt with, permission to appeal refused and the rest stood over on those undertakings.

MR. JUSTICE LEWISON: Can you draft something to give effect to that? Is that all right, Mr. Hacon?

MR. HACON: I think that is sensible.

MR. TAPPIN: My Lord, thank you for your time.

MR. JUSTICE LEWISON: Thank you both very much.