England and Wales High Court (Patents Court) Decisions

IN THE ROYAL COURTS OF JUSTICE                                           Case No:


                                                                       Court No: 18



                                                                  Chancery Division
                                                                            Strand
                                                                 London WC2A 2LL

                                                                  Tuesday, 9th June 2009

                                Before:
                    The HONOURABLE MR JUSTICE FLOYD


BETWEEN:

                   RED SPIDER TECHNOLOGY LIMITED

                                      and

                OMEGA COMPLETION TECHNOLOGY LIMITED




                       Transcript from a recording by Ubiqus
                    Cliffords Inn, Fetter Lane, London EC4 1LD
                                 Tel: 020 7269 0370




MR D CAMPBELL         appeared on behalf of the Claimant
MR M HICKS            appeared on behalf of the Defendant




                                   JUDGMENT
                                   (Approved)

MR. JUSTICE FLOYD:




1.      This is an application made pursuant to CPR 31.16 for inspection of a valve or plug, which is in
the possession of the respondent, Omega Completion Technology Limited. The application is made prior
to the commencement of proceedings and as finally advanced, seeks the supply to an independent expert
nominated by the applicant of the valve currently in the applicant's possession, together with any
operating instructions, a sample of the standard electronics and the programming software for the
electronics.




2.      The application also, as presented this morning, asks that the applicant's independent expert be
permitted to carry out experiments on the valve to determine how the same is programmed to operate
and how easily it can be re-programmed with liberty to apply to the court for further directions in respect
of such experiments.




3.      The provisions of CPR 31.16 provide by paragraph (3) that the court may make an order
under this rule only where


           a.       the respondent is likely to be a party to the subsequent proceeding

           b.       the applicant is also likely to be a party to those proceedings

           c.       if the proceedings have started the respondent's duty by way of standard disclosure
           set out in Rule 31.6 would extend to the documents or classes of documents which the
           applicant seeks disclosure and



           d.      disclosure before proceedings have started is desirable in order to
                1. dispose fairly of the anticipated proceedings and
                2. assist the dispute to be resolved without proceedings or
                3. save costs.




4.     The application is made in a contemplated patent infringement action by the claimant, Red
Spider Technology Limited. The patent on which it is proposed to bring this action is

               No. 2425141. It is not necessary to go in any detail into the specification. It is sufficient to

              point out that the claimant claims a valve for controlling fluid flow, which provides for an

              operating range of pressure above it. In essence, the pressure must be between a lower

               pressure and an upper pressure for a given period of time in order for the valve to open. If

              the pressure goes outside the range at any time during the set time, then the valve will not

       open. This means that operations can be carried on at a higher pressure without the valve

        opening.

1       The intended claimant was encouraged to make this application when it obtained a copy of Omega's
technical specification for their PAEEV valve. The valve was said to have a pressure rating of 10,000 PSI
and an operating window, the operating window was described as being any pressure between 750 PSI and
8,700 PSI, applied for any time between 10 minutes and 10 hours, fully adjustable.
2       In correspondence prior to the making of this application, Omega explained that their valve did not
operate on the principle of the patent. The most detailed explanation of the way in which the valve operates
is given in the first witness statement of Mark Byers made in this application. He said this, that the actuating
mechanism includes a pressure switch, an electronic timer in the form of an electronic cartridge and an
actuator. The mechanism can be set up in one of two ways, the first of which is not material, the second of
which is to make the opening of the valve subject to the pressure above the valve in addition to a time
element. He describes this as follows.




                ,At the surface, the user sets a delay time on the timer using two dials, one for hours, one

                for minutes. No pressure setting is made on the electronic cartridge, nor is it possible to

                do so. The dials are the only functional interface between the user and the electronics.

                The timing operation is programmed as firmware within the electronics cartridge. There

                is no interface for the user to re-programme this

                firmware. Also at the surface, the user sets the pressure switch to activate above a

                preset pressure. The pressure switch is the only element of the valve that can be

                adjusted to react to pressure and the valve has no other pressure sensors. Only one

                pressure can be chosen. The switch used in the Omega valve is spring operated and

                the trip pressure can be set at anyone level within a lower constraint of 750 PSI and

                an upper constraint of 8,700 PSI. If the pressure is above this upper constraint, the

                switch will be permanently activated, whatever the trip setting. It is not possible to

                set the pressure switch only to activate within a given range with a preset upper and

                lower limit as described in the patent.'


        He also explains this;

        'Whenever the pressure above the valve exceeds the preset trip pressure, the switch completes

        the circuit to the electronic timer. The electronic timer then starts counting the period preset by

        the user. If the pressure drops below the preset trip level, the pressure switch deactivates causing

        the electronic timer to stop and reset to zero. If the pressure again rises above the preset trip

        level, the switch is again activated and the timer starts recounting the period from the beginning.'


7.      Mr Campbell, who appears on behalf of the applicant, accepts that if that is an accurate
        description of the way in which the valve operates, then there is no case of infringement.


8.      Mr Byers' witness statement is also backed up by extracts from the manual. Omega has not
        produced the entire manual but nevertheless they have disclosed the parts concerned with
        setting the pressure switch and setting the time delay. Those passages are entirely consistent
        with the description which has been given.



9. In the Black v Sumitomo Products [2002] 1 WLR 1562, [2001] EWCA Civ 1819, it is
emphasised that there are two separate questions which a court on an application such as this must
consider. Firstly, whether the jurisdictional threshold that the granting of pre-

        action disclosure has been met and secondly, whether in the discretion of the court an order

        for pre-action disclosure should be made. Those are separate exercises and the existence of

        a jurisdiction does not mean that the discretion will necessarily be exercised to make an

       order.

10.     The principle ground at least in argument which was advanced orally before me by Mr Hicks
was that the claim here was purely speculative and that the making of an order would be to effect a drip
effect of confidential information into the hands of the applicant without the proper control of
proceedings.



11.     It does seem to me that there is a serious question about whether it can properly be said in
accordance with 31.16 (3) (a) that in the present circumstances, the respondent is likely to be a party to
subsequent proceedings. I say this because it seems to me that once the explanation of the respondents
of the passage in the technical specification is considered, both in the letters which they wrote from
their solicitors and as confirmed by the witness statement of Mr Byers, it is difficult to see precisely
what it is that the claimants have to go on.




12.     Mr Campbell says that they simply do not accept the explanation but it seems to me that it is at
least strongly arguable that in order for the court to come to the conclusion that the intended proceedings
are likely to be commenced, one would need rather more than that. But even if I assume in the
applicant's favour that this is a case where proceedings could properly be begun in the teeth of the
explanation which has been given, it is not a case where I consider it appropriate to exercise the court's
discretion to grant the order sought.




13.     It seems to me that the strength of the case, as revealed by the witness statements, is one factor
I can take into account. I can also take into account this. This valve happens, at the moment, to be in
the possession of Omega but no time limit is placed on the investigations which the claimants wish to
perform on this valve and the associated electronics. It does

not seem to me that it is fair to them in the present circumstances, when they have been as forthcoming as they
have, to subject them to the further inconvenience of having their customer's valve out of their possession for
some unspecified time.


 14.     Thirdly, it seems to me that the potential scope of the order which is sought is too extensive. It
 allows experimentation and investigation of the electronics in a way that seems to me to amount to a
 fishing expedition and one of considerable breadth without the proper control to which experiments are
 normally subjected in proceedings in the Patents Court.



 15.     I was also in the end entirely un-persuaded of the relevance of the programme. If it be the case
 as Mr Byers has explained that the switching arrangement is as described, it seems to me that in the
 absence of any suggestion that the customer is encouraged to re-programme the device, it is very hard
 to see how an allegation of infringement either under Section 60 (1) or Section 60 (2) could be got off
 the ground.




 16.     Finally, I think it is right to be concerned about the confidentiality of the respondent's software.
 Whilst the product itself is no doubt installed where it may be inspected by at least a number of
 members of the public, the software is another matter. Where information is of


 a confidential nature is to be disclosed between competitors, the court needs to be in a position to be sure

 that the order it makes does not result in a risk of that information becoming available to the competitor.

 Mr Campbell suggests that adequate precautions could be put in place to protect the confidential

 information but there is nevertheless a need to proceed with great caution in cases where confidential

 information are involved. Where the other factors do not point towards the making of an order, I think

 one is entitled to be concerned about confidence as well.




 17.     Against all those factors, I of course have to bear in mind that an order of this kind might have

 the effect of dissuading the claimants from bringing proceedings or providing them, on the other hand,

 with the information which is necessary for them to commence proceedings.

If I were to refuse an order, then the advantages which might conceivably flow from the making of it

obviously would not so flow.

18.     Nevertheless, weighing those competing considerations, I have come to the very clear conclusion

that this is not a case in which an order should be made. I therefore dismiss the application.




MR HICKS: My Lord, I invite you to assess costs to be paid within 14 days. Does Your Lordship

have a costs schedule?

MR JUSTICE FLOYD: No.

MR HICKS: A detailed witness statement had to be produced and my instructing solicitor and I had to read

a particularly [inaudible] to try to understand what it was about. Of course, that we say, the sum claimed is

entirely reasonable.

MR JUSTICE FLOYD: Yes.

MR CAMPBELL: My Lord, the application has been dismissed [but in our view?] was very largely

dismissed because of the [comments made in?] Mr Byers' witness statement [inaudible].

MR JUSTICE FLOYD: Hmm.



MR CAMPBELL: My learned friend [inaudible] the costs incurred up to that date [inaudible] properly
incurred by trying to get to the bottom of this. We only got there when we got Mr Byers' witness statement
so the majority of the costs would be incurred by then. That is the point [it comes ?]. With regards to the
summary assessment, well My Lord, it is less than the [inaudible] but it seems to be fairly substantial,
[inaudible] and ..

MR JUSTICE FLOYD: Yes.

MR. CAMPBELL: - if you think about it what has the action done? They"ve written some sort of non-
committal letters back to us and all the work that's really been done in my submission is probably since we
actually solved the issue of the application which is why Mr Byers"