Intellectual Property Enterprise Court

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

		Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL
		29/01/2015

Judge Hacon :

Introduction

1. This is an application by the claimants for summary judgment in relation to their allegation against the first and second defendants of unjustified threats of proceedings for patent infringement. Proceedings against the third defendant have been settled. Hereafter 'the defendants' should be taken to mean just the first and second defendants. There are other allegations against the defendants raised in the Particulars of Claim, not relevant to the application for summary judgment, and there is a counterclaim.
2. The application was heard at the same time as the case management conference. The parties agreed that I should decide first whether the claimants should have summary judgment before finalising directions in the CMC.

Background

3. The claimants are companies in the same group. They are in the business of selling flood defence products. The first defendant is a Dutch company which competes in the same business. The second defendant is the owner and managing director of the first defendant.
4. Between 23 November 2010 and some point between December 2013 and February 2014 the parties co-operated by means of an exclusive patent licence agreement between the first defendant and the first claimant. The first defendant's patent rights are based on PCT application WO2009/139622A1 from which European Patent Application No. 2315880 was derived, among other rights. The agreement licensed the first claimant to sell a flood defence device known at the 'self closing flood barrier', referred to by the parties as the 'SCFB'.
5. The parties fell out. The licence agreement came to an end at a date no later than 18 February 2014. The claimants stopped selling the SCFB and instead began to sell an alternative flood defence product, the 'self activating flood barrier' or 'SAFB'. I say an 'alternative' product: the defendants submit there is nothing significantly different between the SCFB and the SAFB whereas the claimants say that in relation to the European Application there is a crucial difference – the SCFB falls within the claims and the SAFB does not. For reasons that will become apparent I will not resolve that dispute in this judgment.
6. The defendants objected to the claimants' continued activity in the flood defence market. Three notices were put on the first defendant's website alleging infringement of their patents ("the Website Notices"). The second defendant also became aware of a reception organised for 11 March 2014 at the House of Commons entitled "Britain Prepared – A Flood Resilient Society" at which Frank Kelly, chief executive officer of the second claimant, was due to speak. On 3 March 2014 the second defendant sent a letter by email to Sir Peter Luff MP, one of the organisers of the event, complaining about the second claimant and its infringement of the first defendant's patent rights.
7. On 6 May 2014 the claimants issued the claim form and filed Particulars of Claim alleging, among other things, that the Website Notices and the letter to Sir Peter Luff contained groundless threats of infringement proceedings. By an application notice dated 17 October 2014 the claimants seek summary judgment in relation to that part of their case.
8. The defendants do not deny that the Website Notices and the letter contain threats within the meaning of s.70(1) of the Patents Act 1977 ("the Act") or that the claimants are persons aggrieved by the threats within the meaning of s.70(2). The defendants say that all the threats are justifiable and that there is a defence to each of them pursuant to s.70(2A).

The threats

9. The copy of the first of the Website Notices in the evidence was taken from the first defendant's website on 17 February 2014. It was in relevant part as follows:

"Important message

We are sorry to inform you that we have terminated the cooperation with Global Flood Defence Systems Ltd by the first of January 2014.

Global Flood Defence Systems LTD in the UK is therewith not longer allowed to manufacture, marketing and distribute the Self Control Flood Barriers.

Infringements of our patents by any party, which have not explicit our written approval, will be prosecuted by court."

10. The copy of the second Website Notice in the evidence was dated 4 March 2014. It was headed "Important warning with regard to global Flood Defence Systems!" and stated that licences granted to the claimants had come to an end. It went on as follows:

"Global Flood Defence Systems Ltd and UK Flood Barriers Ltd are, however, still marketing the Self Closing Flood Barrier as is shown on their website.

At this stage, we have taken legal proceedings against Global Flood Defence Systems Ltd and UK Flood Barriers Ltd for infringing our patent rights as well as our intellectual property rights.

Under these circumstances we need to advise you that Infringements of our patents by any party (also buyers), without our explicit and written approval, will be brought to court."

11. The letter to Sir Peter Luff MP of 3 March 2014 included this:

"We have seen an invitation of UK Flood Barriers for the reception of "Britain Prepared - A Flood Resilient Society on the 11 March 2014 at the Churchill Room, House of Commons, London SW1A 0AA.

On the list of speakers we see Mr. Frank Kelly CEO of UK Flood Barriers. Therefore it is our duty to warn you that Mr Kelly will speeks in his presentation about the Self Closing Flood Barriers, he is not allowed to do this and will probably suggest the stakeholders that Global Flood Defence Systems Ltd or UK Flood Barriers Ltd are the inventors and / or own the IP of these or same specific barriers.

At this moment we have taken proceedings against Global Flood Defence Systems Ltd for infringing our patents and the intellectual property rights.

We will warn you that infringements of our patents by any party (also buyers), which have not explicit our written approval, will be prosecuted by court.

The new distributor of the Self Closing Flood Barriers (SCFB) for the UK and Ireland is FloodControl International Ltd at Tavistock, Devon.

When you need more information please contact us or our Sollicitor Mr. Richard Arnold from Quality Solicitors Wilson Brown at Kettering rarnold@qswblaw.com."

There was a third notice put on to the home page of the first defendant's website on about 7 March 2014 but it adds nothing.

The defence to the claim for threats of infringement proceedings

12. To date the first defendant has no granted patent with claims that cover the claimants' flood defence products in the UK. However, it owns European Patent Application 2315880, which designates the UK, and asserts that it has the contingent right to claim relief in relation to the sale of such products pursuant to s.69 of the Act:

69. (1) Where an application for a patent for an invention is published, then, subject to subsections (2) and (3) below, the applicant shall have, as from the publication and until the grant of the patent, the same right as he would have had, if the patent had been granted on the date of the publication of the application, to bring proceedings in the court or before the comptroller for damages in respect of any act which would have infringed the patent; and (subject to subsections (2) and (3) below) references in sections 60 to 62 and 66 to 68 above to a patent and the proprietor of a patent shall be respectively construed as including references to any such application and the applicant, and references to a patent being in force, being granted, being valid or existing shall be construed accordingly.

(2) The applicant shall be entitled to bring proceedings by virtue of this section in respect of any act only -

(a) after the patent has been granted; and

(b) if the act would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent, but also the claims (as interpreted by the description and any drawings referred to in the description or claims) in the form in which they were contained in the application immediately before the preparations for its publication were completed by the Patent Office.

13. The defendants say that once EPA 2315880 has matured to grant they will be entitled to bring proceedings against the claimants in relation to sales of their flood defence products between the publication of EPA 2315880 and the grant of the patent because if the patent had been granted on date of publication of the application, those sales would have infringed both the claims of the patent and the claims of EPA 2315880 (in the form they took immediately before the preparations for its publication).
14. A claim raised under s.69, where there is no granted patent, is necessarily contingent: it depends among other things on (a) the patent being granted and (b) the granted claims being in a form which covers the product or process complained of.
15. The defendants say this makes no difference – s.70(2A) of the Act still provides a potential defence sufficient to defeat a claim for summary judgment.
16. Section 70(1) and (2) of the Act provide for the right to sue a party making threats of bringing proceedings for patent infringement and claim relief:

70. (1) Where a person (whether or not the proprietor of, or entitled to any right in, a patent) by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats (whether or not he is the person to whom the threats are made) may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming any relief mentioned in subsection (3) below.

(2) In any such proceedings the claimant or pursuer shall, subject to subsection (2A) below, be entitled to the relief claimed if he proves that the threats were so made and satisfies the court that he is a person aggrieved by them.

17. Section 70(2A) provides for a defence to an allegation of threats:

(2A) If the defendant or defender proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent -

(a) the claimant or pursuer shall be entitled to the relief claimed only if he shows that the patent alleged to be infringed is invalid in a relevant respect;

(b) even if the claimant or pursuer does show that the patent is invalid in a relevant respect, he shall not be entitled to the relief claimed if the defendant or defender proves that at the time of making the threats he did not know, and had no reason to suspect, that the patent was invalid in that respect.

18. Section 70(3) sets out the relief available where there is a successful claim for groundless threats:

(3) The said relief is -

(a) a declaration or declarator to the effect that the threats are unjustifiable;

(b) an injunction or interdict against the continuance of the threats; and

(c) damages in respect of any loss which the claimant or pursuer has sustained by the threats.

Consideration of s.70 by the Court of Appeal

19. If section 70(1) were to be interpreted literally it would provide no remedy for a threat to sue for infringement of s.69 rights – that is to say a threat to bring proceedings once a patent application is granted and to include in those proceedings a claim for relief in respect of acts done in the period between publication of the application and the grant of the patent. Section 70(1) refers only to threats of proceedings for infringement of a 'patent'.
20. In Patrick John Brain v Ingledew Brown Bennison & Garrett [1996] FSR 341 the Court of Appeal rejected such an over-literal construction of s.70(1). In that case the threat made by the first defendant, a firm of solicitors, on their clients' behalf was unequivocally stated to be in relation to the rights that would be available under their client's patent application if the patent were to be granted. The solicitors wrote:

"The purpose of this letter is to ensure that you are aware that the patent application has been made, that if granted it will have retrospective effect, and to give you notice that our client intends to take appropriate action to restrain the infringement of its rights and the use of confidential material as well as seeking damages for all past such infringements and use."

At first instance it was argued that such a threat was not within the ambit of s.70(1) and therefore not actionable. This was rejected by Jacob J ([1995] FSR 552). The argument was not pursued on appeal. Even so, it was again rejected in terms. Aldous LJ said this (at p.347-8):

"I agree with the judge and as his conclusion is no longer challenged there is no need for me to go further. In any case, I contemplate that where a threat is made prior to grant, it would be understood as a threat to bring proceedings once the patent is granted. That is a threat of proceedings for infringement of a patent and therefore actionable."

21. The related matter which remained in dispute in the appeal was this: given that a party could sue for a threat to bring proceedings to enforce s.69 rights, was there a defence of justification available to the party who issued the threat? (At the time of the Brain litigation such a defence was provided for by what was then s.70(2) of the Act. The change introduced by the repeal of that subsection and the introduction of s.70(2A) makes no difference here.) Aldous LJ observed that it would be illogical to provide for a cause of action for a threat to bring proceedings for infringement of s.69 rights and yet deprive the threatening party of a defence of justification. Accordingly there is such a defence. He said this (at p.344):

"Section 70 is designed to prevent groundless threats of patent proceedings being made. Thus it would be illogical to construe section 70 as giving rights to a person threatened with proceedings for infringement of a patent albeit in respect of pre-grant acts, if the threatener could not establish that his threats were proper. That illogicality does not in my view arise. Section 70(2)(a) allows the threatener to avoid liability if he proves that the acts in respect of which the proceedings were threatened constitute or if done would constitute an infringement of a patent. The acts, to be an infringement, must fall within section 60. That section is to be read subject to section 69. Thus a threat of the type contemplated in this case, is a threat to bring proceedings when the patent is granted for acts which are actionable acts by reason of section 69. No difficulty arises in deciding whether the threats can be justified, provided appropriate steps are taken to ensure the patent is granted before the action comes to trial."

22. Thus, Aldous LJ's primary view was that where a defence of justification was being run by a party threatening to bring proceeding for infringement of s.69 rights, that party should make sure that the patent is granted before trial. He went on to consider what the position might be if the patent had not been granted by then. He said this (at p.348):

"If, however, there is an extraordinary delay in grant of the patent, the court could perhaps look at the published specification and decide, upon the balance of probabilities, whether the alleged acts will infringe the patent when granted and whether a valid patent will be granted."

23. Hobhouse LJ agreed that threats to bring proceedings for infringement of s.69 rights could be brought under s.70(1) and justified under what was then s.70(2). But he was not persuaded that a defence under s.70(2) could ever be available unless the patent had been granted before the trial (at p.355). Beldam LJ agreed with both judgments.
24. Following the appeal the plaintiffs applied to strike out the defence of justification under s.70(2) on the ground that the second defendant's patent application was still pending before the European Patent Office. As a consequence the defendants were unable to give particulars of each patent claim which they said would be infringed or of the respective alleged infringing acts. Laddie J ([1997] FSR 271) considered the earlier judgment of the Court of Appeal. He ruled that there was a strict limit to the defence of justification available under s.70(2) where the threat had been in relation to s.69 rights: there could be no such defence if the patent had not been granted by the time of the trial.

Law in relation to summary judgment and construction of communications

25. Mr Campbell who appeared for the claimants and Mr Alkin who appeared for the defendants agreed that the test I had to apply was whether the defence advanced under s.70(2A) of the Act lacked reality. In so far as that test turned on a point of law or construction in relation to which there was no prospect of further significant evidence at trial, or at least nothing more than the mere possibility that there may be such evidence, the point should be decided. I was referred by Mr Campbell to Three Rivers DC v Bank of England (No.3) [2001] 2 All ER 513; ED&F Man Liquid Products v Patel [2003] EWCA Civ 472; [2003] CP Rep 51 and ICI Chemicals & Polymers v TTE Training [2007] EWCA Civ 725.
26. It was also agreed that the Website Notices and the letter to Sir Peter Luff should be interpreted through the eyes of a reasonable person in the position of the reader of the website or letter, as the case may be. The communications should be taken to mean what that person would have understood the writer to mean, in each case taking into account the communication as a whole and the reader's knowledge of relevant circumstances at the date the communication was written, see Best Buy Co Inc v Worldwide Sales Corporation España SL [2011] FSR 30. In the present case the reader of the Website Notices would be a person in the United Kingdom in the flood control industry.

The claimants' reasons why the defence under s.70(2A) lacks reality

27. Mr Campbell advanced three reasons why the defendants' argument that their threats could be justified under s.70(2A) lacked reality, such as to entitle the claimants to summary judgment:

(1) The defendants had not established on the evidence that there is any prospect that a patent will be granted pursuant to EPA 2315880 by the time of the trial.

(2) A threat to bring proceedings for infringement of s.69 rights can only be justified under s.70(2A) if it is a contingent threat to bring proceedings in the future, i.e. if and when the patent is granted (as was the case in Brain). The defendants' threats had either been, or had included, threats to bring proceedings imminently for infringement of a granted patent. The defendants did not own a relevant patent in force in the UK, so those threats could never be justified.

(3) The threats had been at least in part to bring proceedings for infringement by reason of the claimants' sale of SAFB products. Unarguably these fell outside the claims of EPA 2315880 and therefore the threats could not be justified at trial.

No prospect that a patent will be granted by the time of trial

28. Mr Campbell argued that the evidential burden rested on the defendants to prove that there was at least an arguable prospect that a patent would be granted pursuant to EPA 2315880 by the time of the trial. The best that the defendants could point to was this in paragraph 11 of the witness statement of the second defendant, Mr van den Noort:

"It is my understanding from the Patent Attorney that … it is expected that the patent will be granted in the near future and before the trial of the action."

Mr Campbell pointed out that this was in the section of the witness statement dealing with the background facts, not matters relevant to the defendants' case on justification. It was in any event too nebulous to be given any weight. There was nothing from the EPO about the likely date of grant – or the likelihood of grant at all for that matter – and no direct evidence from a patent attorney. Mr Campbell also criticised Mr van den Noort for giving outdated information regarding the communications between the first defendant and the EPO.

29. Mr Alkin said that the defendants' evidence had not addressed the timing and likelihood of grant of the patent because it formed no part of the grounds relied on by the claimants in their application notice for seeking summary judgment.
30. Box 3 of the application notice said this:

"The Claimants make this application because the First and Second Defendants have no real prospect of defending the claim, for the reasons set out in the attached witness statement of Kerry Louise Russell dated 17 October 2014 and there is no other compelling reason for the claim to be disposed of at trial."

Ms Russell's witness statement only addressed Mr Campbell's second reason for summary judgment.

31. Mr Campbell's response was that the pleaded Defence had never asserted that the second defendant's patent would be granted before trial. The nearest it got was to plead at paragraph 36 that the defendants did not accept that EP2315880 had no prospect of being granted at all. Ms Russell had only addressed in her witness statement the defences pleaded by the defendants and their prospect of success at trial, and these did not include any assertion that the patent would be granted in advance of the trial.
32. This to-ing and fro-ing was about who bore the burden of raising the likelihood that the patent would be granted and if so the likely time of grant, and who should have filed evidence about it. But it gave rise to another issue which emerged at the hearing. The Brain litigation, specifically the judgment of Laddie J, established that an indispensible plank in the defence of a party relying on justification under s.70(2A), where the alleged threat was to bring proceedings to protect s.69 rights, is an assertion that the patent will be granted before trial. No such assertion appears in the Defence in the present case. So the matters pleaded in the Defence do not support a defence under s.72(A). If the Defence (which was not drafted by Mr Alkin) is left unamended the defendants' reliance on s.70(2A) falls away on that ground without the need for summary judgment.
33. I asked Mr Alkin whether he was applying to amend the Defence. He eventually said he was. Mr Campbell resisted the application.
34. I take the view that this matter should not turn on the pleading point. I think Mr Campbell's first argument must rest on the assumption, apparently made by the claimants, that the defendants do say that their patent will be granted before trial. No objection under CPR 63.23(2) arises. I therefore give the defendants permission to amend their Defence to plead that the patent will be granted by the time the trial is heard.
35. That still leaves open the question whether on the evidence before me this contention – that the patent will be granted before trial – is sufficiently plausible for the defendants to resist summary judgment. In my view it is. Mr van den Noort's evidence that he had been informed by the second defendant's patent attorney that the patent will be granted in the near future is at least something, and it has not been contradicted by the claimants. Secondly, it is apparent from the exchanges between the patent attorney and the EPO that the prosecution of the patent has reached the stage at which the patent attorney is submitting claims intended to satisfy objections raised by the EPO examiner. Of course the examiner may never be satisfied. Alternatively, these exchanges might go on for a long time, more than a year, before the EPO is finally prepared to grant the patent. But taking a realistic view on the limited information I have, it seems to me that there is a real prospect (as opposed to a fanciful one) that the patent will be granted in the course of this year. Such is the crowded state of the IPEC diary currently, absent an application for a speedy trial (there has been none) the trial will not be fixed until December 2015. For those reasons I reject Mr Campbell's first argument.

The SAFB unarguably falls outside the claims of EPA 2315880

36. I will next take Mr Campbell's third argument because I can deal with it briefly. Mr Campbell admitted that Ms Russell had not made any reference to this argument in her witness statement. I can see why the defendants did not expect to have to deal with it or have to put in evidence as to whether the SAFB falls within the claims of EPA 2315880. Even if they had, I would have been reluctant to allow this hearing to develop into a mini-trial on infringement. As it turned out, I was not taken to the claims. I therefore do not accept Mr Campbell's third argument.

The defendants' threat to bring imminent proceedings for infringement of a granted patent could never be justified at trial

37. There were two aspects to Mr Campbells' second argument. The first was about the proper construction of the Website Notices and the letter to Sir Peter Luff. It was whether they were threats to bring imminent proceedings for infringement of a granted patent, as opposed to being contingent threats to bring proceedings under s.69 if and when the patent were to be granted. On the assumption that they would be interpreted to threaten imminent proceedings for infringement of a granted patent, the second aspect of the argument was whether s.70(2A) could provide a defence to such threats.
38. The first Website Notice is ambiguous as regards when proceedings were to be brought. The threat is certainly stated to be in relation to a granted patent, though, and there is nothing contingent about it. Mr Alkin argued that the notional reader would realise that it had not been written by a native English speaker and the reader would accordingly not give the words a strict interpretation. Whatever the reader's assumptions about the writer's fluency in English, I doubt that that the first Website Notice would be taken to be a contingent threat of proceedings if and when the patent referred to is granted. In any event, there is no need to spend time on the ambiguities in the first Notice. In my view the second Website Notice and the letter to Sir Peter Luff undoubtedly suggest that (a) proceedings had already been brought against the claimants, (b) these included claims for infringement of a granted patent and (c) similar proceedings would be taken against other infringers, including purchasers of the claimants' products.
39. This takes me to the second part of the argument. Mr Campbell submitted that in contrast to the threats in Brain the threat here was to join third party purchasers in proceedings for infringement of a granted patent and this could happen imminently. There was never any prospect of the defendants making good on such a threat and therefore it could never be justified under s.70(2A).
40. Mr Alkin argued that this was to misread s.70(2A). The subsection does not provide a defence where the threats are justified by the defendant – justified in the sense that the defendant makes good on what he is threatening to do. Section 70(2A) requires the defendant to prove that the acts in respect of which proceedings are threatened constitute (or if done, would constitute) an infringement of a patent. Mr Alkin said that the defendants in the present case have a real prospect of establishing at trial that the sale of the claimants' products between the date of the threats and the grant of the patent, i.e. the relevant acts, infringed the first defendant's s.69 rights.
41. I agree with Mr Alkin. Section 70(3) which deals with the relief available to a party which succeeds in an action for threats, speaks in s.70(3)(a) of a declaration "to the effect that the threats are unjustifiable". For this and other reasons it is common among practitioners to refer to the burden on a defendant in a threats action as a requirement to prove that the threats are justifiable. The shorthand seldom matters but it can distract attention from the real effect of s.70(2A). Take the simple instance of a threat made by a defendant that certain acts infringe his rights and that he will bring infringement proceedings. Where those rights are derived from a granted patent, the burden on the defendant at trial under s.70(2A) is to show that the acts infringe the patent. Following what was said cumulatively in Brain, where the rights are s.69 rights the burden on the defendant is (a) to make sure the patent is granted before trial and then to establish that (b) the acts would have infringed the patent had it been granted on the date the patent application was published and (c) the acts would have infringed one or more claims of the application in the form they took immediately before preparations for its publication were completed by the relevant patent office. There is no requirement in s.70(2A) that the defendant must have identified the correct patent right in his threatening communication. Getting the patent number wrong in a threatening letter, for instance, would not necessarily be fatal to a defence under s.70(2A).
42. I am reinforced in this construction of s.70(2A) by the fact that if Mr Campbell were right, it would be possible for the party issuing threats in relation to certain acts to prove at trial that those acts were unlawful, being contrary to his rights under s.69, and yet be unable to justify his threats in relation to those acts. That seems to me to be contrary to the purpose behind s.70(2A) as explained by Aldous LJ in Brain.
43. I therefore reject the claimants' second argument. Their application for summary judgment is dismissed.

Whether there should be conditional leave to defend

44. The claimants argued that in the event that I were to refuse summary judgment, there should be an order making the defendants' permission to defend conditional on their paying a sum of money into court – see CPR 24.6, 3.1(3) and CPR 24PD 5.1. The claimants propose that the sum should be £50,000, the cap on recoverable costs in the IPEC, on the basis that in the end the claimants are likely to recover that maximum sum in costs.
45. Although the rules provide that a party which does not succeed in an application for summary judgment may obtain alternative relief, I do not believe that this is to be approached as if it were a runner-up prize. The need for such relief must always be justified on the facts and will only be granted if it is necessary to do justice between the parties.
46. In Allen v Bloomsbury Publishing Limited [2011] EWHC 770 (Ch); [2011] FSR 22 Kitchin J reviewed the authorities on alternative such relief and at [32] summarised the principles to be drawn from them. On appeal Kitchin J's summary was not challenged and was quoted with approval by the Court of Appeal: [2011] EWCA Civ 943, at [7]. Kitchin J said this:

"32. I derive from these authorities the following propositions which have a bearing on the application before me:

(i) The court has jurisdiction under r.24.6 to make an order which is tantamount to an order for security for costs.

(ii) That jurisdiction extends to requiring someone advancing an unpromising claim to secure the defendant's costs.

(iii) Before ordering security for costs in any case, the court should be alert and sensitive to the risk that by making such an order it may be denying the party concerned a right of access to the court; whether or not the person concerned has raised or can raise the money will always be a prime consideration.

(iv) The court has a wide discretion to ensure that justice is done in any particular case.

(v) Relevant considerations, beside the ability of the person to pay, include his conduct of the proceedings and the apparent strength of his case.

(vi) A party only becomes amenable to an adverse order for security under rule 3 once he can be seen either regularly to be flouting proper court procedures or orders or otherwise has demonstrated a want of good faith, that is to say a will to litigate a genuine claim or defence as economically as reasonably possible in accordance with the overriding objective.

(vii) Likewise, an order for security for costs would not be appropriate in every case where a party appears to have a somewhat weak claim or defence.

(viii) Exorbitant applications for summary judgment in misguided attempts to obtain conditional orders providing security for costs are not to be encouraged.

(ix) The occasions when security for costs is ordered solely because the case appears weak may be expected to be few and far between.

(x) It would be wrong to encourage litigants to regard r.3.1 as providing a convenient means of circumventing the requirements of Pt 25 and thereby providing a less demanding route to obtaining security for costs. When the court is asked to consider making an order under r.3.1(3) or 3.1(5) which is or amounts to an order for security for costs or when it considers doing so of its own motion it should bear in mind the principles underlying rr.25.12 and 25.13. In my judgment, the court should also bear this principle in mind when considering whether to make a conditional order under r.24.6."

47. Of these principles, Mr Campbell relied only on part of (vi). He submitted that the key factor was that in the second Website Notice and in the letter to Sir Peter Luff the defendants had falsely alleged that litigation had already started.
48. I agree that this statement by the defendants was not correct but in my view it does not provide a sound reason why the defendants should now pay £50,000, or any sum, into court.

Conclusion

49. The claimants' application for summary judgment is dismissed.