BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST
Fetter Lane, London EC4
B e f o r e :
Sitting as a Deputy Judge of the Chancery Division
|MAGNESIUM ELEKTRON LIMITED||Claimant|
|- and -|
|(1) NEO CHEMICALS & OXIDES (EUROPE) LIMITED|
|(2) ZIBO JIA HUA ADVANCES MATERIAL RESOURCES CO LTD|
|(3) NEO INTERNATIONAL CORP.|
|(4) NEO PERFORMANCE MATERIALS (SINGAPORE) PTE LTD|
|(5) NEO CHEMICALS AND OXIDES LLC||Defendants|
Mr Michael Silverleaf QC, Mr Benet Brandreth and Mr Adam Gamsa instructed by Bird & Bird LLP appeared for the Defendants, Neo
Hearing dates: 8-9 November 2017
Crown Copyright ©
MR DANIEL ALEXANDER QC
INTRODUCTION AND SUMMARY
"A process for preparing zirconium-cerium-based mixed oxides which comprises reacting an alkali with an aqueous solution of a soluble zirconium salt containing 0.42-0.7 mole of sulphate anion (SO42–) per mole of zirconium cation at a temperature of not greater than 50°C, in the presence of a soluble cerium salt to form a cerium-zirconium mixed hydroxide, and then calcining the cerium-zirconium mixed hydroxide to form a mixed oxide."
The description discloses a number of examples of processes which are said to lead to particularly successful production of such mixed oxides as well as a number of comparative examples, where conditions, starting materials and proportions were different and which are said not to achieve results as beneficial in various respects.
Order and judgment of Birss J giving permission to serve out of the jurisdiction on 3 December 2015
"21. Mr Moles explains that the claimant has been working with the professors to develop experiments which identify what he refers to as a chemical fingerprint of REMO obtained directly by means of the patented process. The claimant says it has found that the patented process give the REMO produced by that method a unique nanostructure which in turn provides enhanced oxygen release kinetics. The nanostructure is identified by Raman spectroscopy and the oxygen release kinetics are identified by two techniques: Hydrogen Transient Isothermal Reduction (H2TIR) and Transient Isothermal Isotopic Exchange (16O/18O). Draft protocols for these three experiments are exhibited by Mr Moles. The Raman spectroscopy reveals information about the physical bulk structure of the metal oxide solids focussing on the oxygen sub-lattice, H2TIR evaluates the concentration of labile lattice oxygen removed from the metal oxide and the oxygen isotope technique probes the mobility of surface and bulk oxygen of the oxygen sub-lattice of the metal oxide.
22. Carrying out the full experiments is a major project and is taking time to complete. The samples tested so far are (i) a sample from the trap purchase ("TP1"), (ii) two samples both made by the patented process (S1 and S2), and (iii) a control sample (S8). Samples S1 and S2 differ in that while both are made by the patented method, S1 was made especially for the experiments while S2 was taken from a batch of commercial product. The control sample S8 was made by the claimant's previous, first generation process. There are other products mentioned in the exhibit (S3 to S7) but no results have been produced in evidence for them.
23. Mr Moles has discussed the initial results with Professor Efstathiou and Professor Boghosian. They have told him that TP1 behaves almost identically to S1 and S2 and that all these three samples behave very differently from S8. The full written report is not yet available and will be produced in mid-January 2016 once all the data has been captured. Mr Moles states that:
"The experiments on the trap purchase show that the second defendant's REMO has identical characteristics in terms of nanostructure and kinetics and therefore I believe that they must have been produced by the Patented process for I know of no other process which could produce such results."
(1) Prof Efstathiou designed and carried out the H2-TIR and TIIE experiments. These were reviewed by Prof Goodwin.
(2) Prof Boghosian designed and carried out the Raman spectroscopy. This was reviewed by Prof Martínez Arias.
APPLICATION 1 – MAYNE PHARMA DISCLOSURE
Order and judgment of Birss J at the case management conference on 27 April 2017
The judgment relating to Mayne Pharma disclosure
"That paragraph [of Mayne Pharma] makes it clear that the context that Pumfrey J was concerned with was, as he said, the work up of an experiment. It does not say that the context in which Pumfrey J was concerned was the work up of an experiment used only to prove an inevitable result."
and at 
"In my judgment…the principle is not confined only to cases where the experiment is to show anticipation by inevitable result, but is concerned with the question of work-up of experiments in general. It is a narrow question because it is confined to work-up of experiments, but it is about experiments in patent cases irrespective of the legal conclusion on which they are being deployed to prove. That conclusion makes sense in any event…This principle does apply on the facts of this case. Accordingly there will come a time when work-up disclosure may well need to be provided by the claimant. However, the question is when."
"The defendants, assuming the proceedings continue, will have to give a product and process description (PPD) and the claimant, assuming the proceedings continue, will have to give Mayne v. Debiopharm disclosure relating to the experiments which it has provided at this early stage."
Paragraph 10 of Birss J's CMC order
"The Claimant shall, on or before 17 July 2017, give standard disclosure by list in form N265 (modified as appropriate) (including, for the avoidance of doubt, privileged material pursuant to Mayne Pharma v Debiopharm  FSR 37) in relation to the documents directly associated with or underlying the evidence adduced under paragraph 6 of this Order".
The materials provided pursuant to Birss J's order at the CMC
(1) Martínez Arias 1: This is a 15 page witness statement/expert report plus a lever arch file of exhibits. This was provided pursuant to para. 6 of Birss J's order.
This statement relates to the Raman spectroscopy experiments. The statement, together with exhibits, include full details of Prof Martínez Arias' instructions, the finalised protocols for the experiments, the finalised data from the experiments, and the Professor's conclusions at para. 3.64. The exhibits include his full technical report.
(2) Goodwin 1: This is a 19 page witness statement/expert report plus two lever arch files of exhibits. This was also provided pursuant to para. 6.
This statement relates to the H2-TIR and TIIE experiments. The statement together with exhibits include full details of Prof Goodwin's instructions, the finalised protocols for the experiments, the finalised data from the experiments, and Prof Goodwin's conclusions at para. 3.40. The exhibits include his full technical report.
(3) Bould 5: This is a 55 page witness statement with seven lever arch files of exhibits.
Ms Bould is the partner at Pinsent Masons, MEL's solicitors, with conduct of the case. Her statement describes the full detail of the processes of carrying out the Experiments, including details of the instructions given to Professors Boghosian and Efstathiou and the iterations of the protocols.
Bould 5 also confirms that Ms Bould has considered the entirety of the documents and that she considers that the three witness statements and exhibits present the complete picture in relation to the matters covered by them.
(4) Raw data results of the Raman spectroscopy (32 lever arch files).
(5) Raw data results of the H2-TIR experiments (12 lever arch files).
(6) Raw data results of the TIIE experiments (8 lever arch files).
In total this comprised 89 pages of narrative witness statements plus 62 lever arch files of documents. On any view, that is a formidable body of material relating to the Experiments. Part of the exhibits include the instructions notifying the experts that they may be asked further questions about the Experiments and there is no suggestion that they would not answer them. I have reviewed the reports and related material, albeit not in great detail, and it appears that they are the fruit of careful analysis with the experts being responsive to comments and suggestions as to how the Experiments could be improved. The material exhibited and the narrative in Bould 5 reveals an interactive process in developing the protocols in which Pinsent Masons was involved in various respects making suggestions of various kinds.
Costs of the exercise so far and projected costs
Neo's criticisms of this material and request for further disclosure
(1) Documents relating to the experiments before 2014;
(2) Documents prepared by lawyers with comments on the experiments;
(3) Drafts of the expert reports.
MEL contends that this material should not be disclosed for a range of reasons.
(1) Disclosure in precisely the terms of Birss J's order has not been provided;
(2) Documents have been provided which are said by MEL to be "better than" disclosure, including a large quantity of detailed material relating to the Experiments but which Neo disputes is "better" in any relevant respect;
(3) A great deal more material is sought on the footing that Birss J's order should be interpreted as having already ordered that it should be provided.
Compliance with Birss J's order
The core issues including interpretation of Birss J's order and the scope of Mayne Pharma disclosure
"The principle which runs through all these cases, and the many other cases which were cited, is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus much more than an ordinary rule or evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests".
"7. Two of the principles relevant to construction are not in dispute. First, LPP is a fundamental human right long established in the common law. It is a necessary corollary of the right of any person to obtain skilled advice about the law. Such advice cannot be effectively obtained unless the client is able to put all the facts before the adviser without fear that they may afterwards be disclosed and used to his prejudice. The cases establishing this principle are collected in the speech of Lord Taylor of Gosforth CJ in R v Derby Magistrates Court, Ex p B  AC 487. It has been held by the European Court of Human Rights to be part of the right of privacy guaranteed by article 8 of the Convention (Campbell v United Kingdom (1992) 15 EHRR 137; Foxley v United Kingdom (2000) 31 EHRR 637) and held by the European Court of Justice to be a part of Community law: A M & S Europe Ltd v Commission of the European Communities (Case 155/79)  QB 878.
8. Secondly, the courts will ordinarily construe general words in a statute, although literally capable of having some startling or unreasonable consequence, such as overriding fundamental human rights, as not having been intended to do so. An intention to override such rights must be expressly stated or appear by necessary implication. The speeches of Lord Steyn and myself in R v Secretary of State for the Home Department, Ex p Simms  2 AC 115 contain some discussion of this principle and its constitutional justification in the context of human rights. But the wider principle itself is hardly new. It can be traced back at least to Stradling v Morgan (1560) 1 Pl 199."
(ii) Waiver of privilege
"The general rule is that:
Where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.
The key word here is "deploying". A mere reference to a privileged document in an affidavit does not of itself amount to a waiver of privilege, and this is so even if the document referred to is being relied on for some purpose, for reliance in itself is said not to be the test. Instead, the test is whether the contents of the document are being relied on, rather than its effect. The problem is acute in cases where the maker of an affidavit or witness statement has to give details of the source of his information and belief, in order to comply with the rules of admissibility of such affidavit or witness statement. Provided that the maker does not quote the contents, or summarise them, but simply refers to the document's effect, there is apparently no waiver of privilege. This benevolent view has not been extended to the case where the maker refers to the document in order to comply with the party's need to give full and frank disclosure, e.g. on a without notice (ex parte) application".
"…although this statement may well have been privileged from production and discovery in the hands of the [defendant] at one stage, nevertheless when it was used by cross-examining counsel in this way he waived privilege, certainly for that part which was used; and in a case of this kind, if the privilege is waived as to the part, it must, I think be waived also as to the whole. It would be most unfair that cross-examining counsel should use part of the document which was to his advantage and not allow anyone not even the judge or opposing counsel, a sight of the rest of the document, much of which might have been against him."
"11. Based on the authorities which I am about to refer to, it seems to me that the relevant process should be as follows:
i) One should first identify the "transaction" in respect of which the disclosure has been made.
ii) That transaction may be identifiable simply from the nature of the disclosure made – for example, advice given by counsel on a single occasion.
iii) However, it may be apparent from that material, or from other available material, that the transaction is wider than that which is immediately apparent. If it does, then the whole of the wider transaction must be disclosed.
iv) When that has been done, further disclosure will be necessary if that is necessary in order to avoid unfairness or misunderstanding of what has been disclosed.
That chain is not articulated in terms in the authorities to which I am about to refer, but it seems to me that it is apparent from it.
12. The starting point to me seems to me to identify what Hobhouse J called the "transaction" in General Accident Fire and Life Assurance Corp Ltd v Tanter  1 WLR 100. In that case Hobhouse J was dealing with a wide ranging request for disclosure and inspection of otherwise privileged documents (covered by legal professional privilege), on the basis of use of one note at a trial. Hobhouse J refused to order that disclosure, and in the course of his judgment he considered the then existing authorities on the point. At page 111, he cited part of the judgment of Cotton LJ in Lyell v Kennedy 27 Ch D 1, which he described as "the cardinal quotation":
"There was this contention raised, which I have not forgotten, that the defendant had waived his privilege, and therefore could not claim it at all. That, in my opinion, was entirely fallacious. He had done this, he had said 'Whether I am entitled to protect them or not I will produce certain of the documents for which I had previously claimed privilege – I will waive that and I will produce them' but that did not prevent him relying on such protection with regard to others which he did not like to produce. It is not like the case of a man who discloses part of a conversation and then claims protection for the remainder, and we think there is no ground for the contention that there has been here a waiver of privilege."
13. It is apparent from that that it is open to a party to disclose some but not all of the documents falling within a privileged category. If further authority for that proposition is required, it is to be found in Paragon Finance v Freshfields  1WLR 1183 at p.1188D where Lord Bingham of Cornhill CJ said:
"While there is no rule that a party who waives privilege in relation to one communication is taken to waive privilege in relation to all, a party may not waive privilege in such a partial and selective manner that unfairness or misunderstanding may result."
14. The question therefore arises as to where the boundaries of the waiver are, or are taken to be. The first boundary is defined by reference to the "transaction" in relation to which disclosure is made. In the course of his judgment in Tanter Hobhouse J summarised various principles which applied and they included the following (at pp.114 – 5):
"Sixth, by adducing evidence at a trial one does get involved in potential further waiver. The underlying principle is one of fairness in the conduct of the trial and does not go further than that. The fact that this principle does not arise unless you adduce the evidence at the trial is clearly stated in the judgment of Mustill J [in the Nea Karteria case] and it was clearly raised by the facts in the Doland case and it was likewise raised by the facts in the Great Atlantic and Burnell cases. Further, if the evidence is adduced, then the extent of the waiver relates to the transaction to which that evidence goes. The extent of the transaction has to be examined and where it is what somebody said on a particular occasion, then that is the transaction. It is not the subject matter of those conversations. It does not extend to all matters relating to the subject matter of those conversations." Hobhouse J's principles, including that one, were cited with approval by the Court of Appeal in Tanap Investments (UK) Ltd v Tozer (unreported, 11th October 1991, Balcombe and Taylor LJJ). It is from his sixth principle that the need to identify the transaction is apparent. It is the first means of ascertaining what limits there are to the waiver that has been made.
15. Earlier passages in Hobhouse J's judgment shed light on what he means by the "transaction". At page 113 he considers the judgment of Mustill J in the Nea Karteria case and says:
"Furthermore, he applies what for convenience can be called a single transaction test. He looks to see what is the issue in relation to which the material has been deployed. He held that the issue was what was said at the meeting between the lawyer and the Greek seaman, and the correct evaluation of that meeting, but he did not accept that it extended to other matters which did not form part of the transaction…. Furthermore, it is central to Mustill J's judgment that you must define what is the subject matter with which you are concerned. He did not treat the subject matter as all the things about which the seaman spoke, but he merely treated as the subject matter what had been said on that occasion."At page 114C, applying his principles to the facts of his case (which involved the disclosure of information about one conversation) he said:"What will have happened is that the putting into evidence of that document will have opened up the confidentiality of that transaction. It has not opened up the confidentiality of later privileged communications….."
That process enables the parties and the court to identify how far the disclosing party has gone (it being that party's right to limit waiver if he wishes to do so).
16. A similar approach can be detected in the judgment of Auld LJ in the Factortame case, though he uses different language. In that case (of which only an unpaginated transcript was made available to me) he started his analysis by referring to the:
"…classic judicial statement of principle…of Mustill J in Nea Karteria at 139: 'Where a party is deploying in court material which would otherwise be privileged, the opposite party and the court must have an opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood.'"The most obvious application of that principle is in relation to a single document, where a party waives privilege as to part of it but seeks to withhold the rest of it…... It also extends to attempted partial waiver of privilege in respect of certain of a number of documents relevant to the same issue or transaction. Of course, the scope for unfairness depends on the breadth of the matter in issue or their severability if more than one, and on the exact relationship and/or relevance to such issue(s) of the documents respectively disclosed and sought to be withheld. It may or may not be that partial disclosure of documents going to a matter or matters in issue, say in an exchange of correspondence with legal advisers, would be unfair."Much depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an 'issue in question', the expression used by Mustill J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which material is withheld. The more confined the issue, for example as to the content of a single document or conversation, the more difficult it is likely to be to withhold, by severance, part of the document or other documents relevant to the document or conversation."
17. In that passage, Auld LJ refers to the "transaction" but he also uses the expression "issue", which was the word used by Mustill J in Nea Karteria. He is apparently using the same concept as that deployed by Hobouse J.
18. What those citations show is that it is necessary to bear in mind two concepts. First of all, there is the actual transaction or act in respect of which disclosure is made. In order to identify the transaction, one has to look first at what it is in essence that the waiving party is seeking to disclose. It may be apparent from that alone that what is to be disclosed is obviously a single and complete "transaction" – for example, the advice given by a lawyer on a given occasion. In respect of disclosure before a trial that may be all that the non-disclosing party has to go on, because a wider context may not yet be apparent (or at least not until the exchange of witness statements). This may explain the contrast that Hobhouse J drew between disclosure before a trial and deployment at trial. However, in order to ascertain whether that is in fact correct one is in my view entitled to look to see the purpose for which the material is disclosed, or the point in the action to which it is said to go. That explains at least some of the references to the "issue" or "issues" in the judgments of Auld LJ and Mustill J. Mr Croxford submitted that the purpose of the disclosure played no part in a determination of how far the waiver went. I do not agree with that; in some cases it may provide a realistic, objectively determinable definition of the "transaction" in question. Once the transaction has been identified, then those cases show that the whole of the material relevant to that transaction must be disclosed. In my view it is not open to a waiving party to say that the transaction is simply what that party has chosen to disclose (again contrary to the substance of a submission made by Mr Croxford). The court will determine objectively what the real transaction is so that the scope of the waiver can be determined. If only part of the material involved in that transaction has been disclosed then further disclosure will be ordered and it can no longer be resisted on the basis of privilege.
19. Once the transaction has been identified and proper disclosure made of that, then the additional principles of fairness may come into play if it is apparent from the disclosure that has been made that it is in fact part of some bigger picture (not necessarily part of some bigger "transaction") and fairness, and the need not to mislead, requires further disclosure. The application of this principle will be very fact sensitive, and will therefore vary very much from case to case, as Auld LJ observed in the first paragraph of his judgment cited above. It is in this sense too that the disclosure may be partial. It is part of some greater whole, not necessarily part of some larger individual transaction. I confess, with all due respect, to having had some difficulty in understanding precisely what he meant in the last sentence of the citation, but I think that my analysis is consistent with his judgment.
20. I think that the point can be illustrated by how the principles worked in the Factortame case itself. One of the issues in that case was whether or not the United Kingdom's infringement of community law was intentional or reckless. The government had received advice from time to time on the legality of the legislation, and that went to the issue I have just referred to. The Secretary of State waived legal professional privilege in respect of legal advice up to a date in October 1987, but did not waive it for advice given after that date. That limitation was challenged, and it was said that in the light of the way that it took place, there should "in fairness" also be disclosure for a later period. The Court of Appeal held that the limitation of disclosure was not inconsistent with principle. The Secretary of State expressly stated that he would not suggest at the trial that his conduct after the October date was governed by the disclosed legal advice received before that date. Auld LJ held that in the light of that:
"It is not a case of partial disclosure in relation to his conduct throughout the period in issue, but one of clear severability over two periods within it and of the disclosed and undisclosed documents relating respectively to each period. If the Secretary of State keeps to Mr Richards' word, I can see no unfairness to the applicants…. If the Secretary of State does not seek to take an unfair advantage of his partial discovery at the trial, whether as a matter of evidence or argument, the applicants would be entitled to invite the trial judge to reopen the matter and determine whether there should be further disclosure."Auld LJ did not at that point identify what the particular transaction was for these purposes, but it is to be inferred that it was one of two things. It was either the giving of advice on each relevant occasion, or, more likely, the giving of advice on the legal issue in question across the period in question, which presumably comprised several events. I say that the latter is more likely, because Auld LJ took the advice across the period as in effect one entity. One can only do that if one looks to some extent at the purpose of the disclosure, that is to say the reliance that would be placed on it in the proceedings. Since advice was only being relied on in order to support the government's case on its mental state for a certain period, that both defined and limited the transaction in question. However, if it were to transpire that use was to be made of the discovery outside that period and purpose, then it might transpire that that use would be unfair and that further matters would be opened up. Whether that is because the waiver would be taken to have been extended by virtue of the unfairness of limiting it, or whether it is because there is a separate principle of unfairness operating alongside or concurrently with the extent of the actual waiver, does not matter for these purposes. That is how the scheme seems to me to operate."
"28. As Mr Richards observed, all or most of the reported cases deal with narrow issues of that sort. See e.g. the Great Atlantic, per Lord Templeman at 536D-F; Konigsberg, per Peter Gibson J at 1265C-G; and Derby v. Weldon (No 10), per Vinelott J at 918a-b. In Konigsberg the matter in issue was a transfer of land and the question was whether it was a gift or a sale. Peter Gibson J held that the party asserting that it was a sale and who had waived privilege in respect of a letter from her solicitor apparently supporting her case, could not claim privilege in respect of an affidavit sworn by him doubting it. Where the issue is broad, or there are several of them, or where the history giving rise to the litigation is long and/or complicated, partial disclosure which is clearly confined in its impact to one aspect of the case may well not require the all or nothing approach. In such a case it is not, in my view, apt terminology to ask whether a series of connected events or matters is a single "transaction" or series of separate "transactions" for this purpose. Where a party's conduct over a period of time is in issue the effect of partial disclosure of documents must depend on the particular facts of the case, usually as seen before trial in the pleadings and in other interlocutory battle-lines drawn by the parties.
29. As I have said, on this application Mr Richards has stated that the Secretary of State will not suggest at the trial that his conduct after 29th October 1987 in relation to the enactment and implementation of the 1988 Act was governed by the disclosed legal advice that he received before that date. It is not a case of partial disclosure in relation to his conduct throughout the period in issue, but one of clear severability of two periods within it and of the disclosed and undisclosed documents relating respectively to each period. If the Secretary of State keeps to Mr Richards' word I can see no unfairness to the applicants. The applicants and the Court know his stance, that of a party prepared to reveal the legal advice that he received as to his conduct over one period but not over another, with all the suspicion and adverse inference that that may engender. If the Secretary of State does seek to take an unfair advantage of his partial discovery at the trial, whether as a matter of evidence or argument, the applicants would be entitled to invite the trial judge to re-open the matter and determine whether there should be further disclosure."
Implied or consequential waiver
Relevance to specific contexts of waiver
(iii) Mayne Pharma disclosure relating to experiments in patent cases
The varieties of experiment
Illustrations from the present case
Procedural aspects of experiments and the avenues for challenging them
7.1 A party seeking to establish any fact by experimental proof conducted for the purpose of litigation must, at least 21 days before service of the application notice for directions under paragraph 7.3, or within such other time as the court may direct, serve on all parties a notice–
(1) stating the facts which the party seeks to establish; and
(2) giving full particulars of the experiments proposed to establish them.
Requirement to state facts to be established
Right to repetition and to serve responsive notice
Court control of experiments
Mayne Pharma disclosure
"waives the privilege in work up experiments for that experiment"
on the Nea Karteria basis (emphasis added). He did not purport to extend his reasoning or conclusion to other experiments.
"The scope of the waiver in any particular case is a question of fact. I have no difficulty in saying that the waiver in the present case which is effected by the giving of the notice of experiments in relation to an experiment conducted on the instruction of the lawyers for the purposes of litigation, extends to the workup of the particular experiment forming the subject matter of the notice. Whether it extends further I am more doubtful and I will not express a view."
"…preliminary investigation leading to the experiment forming the subject matter of a notice of experiments put in by Mayne."
Straightforward Mayne Pharma cases
"Inevitable result" cases
"Completeness of data" cases
(iv) Disclosure and other ways of obtaining information
"…there is a growing move towards earlier and more flexible case management…with an altogether more bespoke approach to the ambit of disclosure, rather than the 'one cap fits all' standard disclosure too easily adopted in the past as an unthinking default approach. This should assist in finding that happy but elusive compromise between attaining justice and proportionate expense on a case by case basis".
The options for disclosure
"20. I turn to CPR Part 31 and rule 31.5 in particular. By r31.5(2), unless the court otherwise orders, paragraphs (3) to (8) of r31.5 apply to all multi-track claims other than claims including a claim for personal injuries. There is no reason to "otherwise order" in this case. Rules (3) to (6) provide for disclosure reports, EDQs and discussions before the CMC. Save for the point about the effect of Husqvarna's Disclosure Report, these paragraphs are not germane to the issue before me. The key provision is r31.5 (7) which provides as follows:
(7) At the first or any subsequent case management conference, the court will decide, having regard to the overriding objective and the need to limit disclosure to that which is necessary to deal with the case justly, which of the following orders to make in relation to disclosure –(a) an order dispensing with disclosure;(b) an order that a party disclose the documents on which it relies, and at the same time request any specific disclosure it requires from any other party;(c) an order that directs, where practicable, the disclosure to be given by each party on an issue by issue basis;(d) an order that each party disclose any documents which it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of any other party, or which leads to an enquiry which has either of those consequences;(e) an order that a party give standard disclosure;(f) any other order in relation to disclosure that the court considers appropriate.
21. Two things emerge from this. First is the reference to the overriding objective and the need to limit disclosure to that which is necessary to deal with the case justly. This helps to focus the court's mind on the task to be undertaken. Second, and critically, is that the effect of this provision is that standard disclosure is one of six options. Counsel for Husqvarna submitted that this meant that standard disclosure was not the default option any more. I agree. The Chancery Guide (paragraph 17.35) makes the same point. As the Guide states, careful consideration should be given to the alternatives to standard disclosure.
22. In Nichia v Argos Rix LJ was concerned not to introduce a "blanket prima facie rule against standard disclosure". The amended form of CPR r31.5(7) does not go as far as introducing such a rule but in my judgment it does have the effect of providing that there is no longer a blanket prima facie rule in favour of standard disclosure.
23. It is certainly not the case, and counsel did not suggest, that the fact that no disclosure at all is one of the options (at (a)), means that a party seeking an order for some disclosure has a difficult burden to discharge. That would not be appropriate. Nevertheless any court deciding which of the options to adopt has to have some basis for that selection. Rule 31.5 expressly maintains disclosure as a feature of key importance to the interests of justice in civil litigation but the rule replaces a single approach (standard disclosure) with a series of options. The current form of r31.5 means that the selection of the correct approach is something governed not by a prima facie rule but by the overriding objective to deal with cases justly and at proportionate cost.
24. In this case the question of whether to order standard disclosure is in substance the same as the question of whether to order disclosure on obviousness under r31.5(7)(c), i.e. on an issue by issue basis. That is because of the nature of patent disputes. It is common ground that disclosure on infringement should be given. The fact that it is being given by the mechanism of a PPD under PD 63 paragraph 6.1 does not alter that. Stated at a high level of generality there are only two other issues in the case, validity and a point about whether Positec has a sufficient commercial interest to bring the declaratory proceedings. As to the latter, they plainly do. The point was resolved at the CMC and is no longer live. So the only other issue is validity and within that the only issue on which disclosure might matter is obviousness. There is no allegation of prior use, this is not an inevitable result case nor is there any allegation of insufficiency. So issue based disclosure on obviousness would be the same as standard disclosure.
25. In either case, the question is whether it would be in accordance with the overriding objective to make such an order. Proportionality will be important and two major considerations are the likely probative value of the material which could be produced and the cost of doing so, putting that cost into the context of the proceedings as a whole (CPR r1.1 (2)(c) and 1.4(2)(h)). In the end the question comes back to fairness and the interests of justice."
Other principles relating to disclosure
Other options for finding out information
(a) Requesting further information
(1) The court may at any time order a party to –
(a) clarify any matter which is in dispute in the proceedings; or
(b) give additional information in relation to any such matter,
whether or not the matter is contained or referred to in a statement of case."
(b) Putting written questions to experts
(1) A party may put written questions about an expert's report (which must be proportionate) to –
(a) an expert instructed by another party; or
(b) a single joint expert appointed under rule 35.7.
(2) Written questions under paragraph (1) –
(a) may be put once only;
(b) must be put within 28 days of service of the expert's report; and
(c) must be for the purpose only of clarification of the report,
unless in any case –
(i) the court gives permission; or
(ii) the other party agrees.
(3) An expert's answers to questions put in accordance with paragraph (1) shall be treated as part of the expert's report.
(4) Where –
(a) a party has put a written question to an expert instructed by another party; and
(b) the expert does not answer that question,
the court may make one or both of the following orders in relation to the party who instructed the expert –
(i) that the party may not rely on the evidence of that expert; or
(ii) that the party may not recover the fees and expenses of that expert from any other party.
(i) Limited approach to waiver of privilege
(ii) Issue-specific information
(1) Does not allow the absolute protection of legal privilege to be easily eroded;
(2) Limits implied or consequential waiver to situations of unfairness and selectivity which has regard both to the material deployed and the purpose for which it is deployed;
(3) Ensures that the scope of implied or consequential waiver is examined and determined at a relatively high level of specificity;
(4) Encourages bespoke use of the range of civil litigation tools, of which disclosure is one, to obtain more information about and enable challenge of proposed evidence, having regard to proportionality, necessity and cost while retaining the ability to test evidence comprehensively;
(5) Encourages the provision of issue-based information, not necessarily disclosure of documents in which privilege is taken to have been waived.
THE CATEGORIES OF DOCUMENTS IN THIS CASE
(i) Documents relating to tests in 2013/2014.
(1) The materials which have been provided already;
(2) The ability of Neo to challenge the Experiments in various other ways;
(3) The ability of Neo to find out more information about the Experiments by more focussed requests either for more information or for more specific disclosure.
(ii) Legal advice concerning the Experiments
(iii) Draft expert reports
Overall conclusion on the categories
Manner of giving disclosure
MEL's application for declaratory relief
Conclusion on application 1
APPLICATION 2 - SAMPLE TESTING AND EXPERTS
Confidentiality of the PPD
Birss J's order relating to the Inspection (April 2017)
"Any information and materials obtained by the Claimant's representatives or independent expert at the inspection, or provided by the Defendant during or for the purposes of the inspection (including notes, photographs and video or sound recordings), may be provided to and seen only by persons falling within paragraph 14 of the Order."
Arnold J's order relating to the Inspection (September 2017)
(1) MEL would need an expert witness at trial to deal with the issues of infringement and the infringement expert would need to be provided with the PPD and all the materials generated at the inspection.
(2) The identity of the experts to attend the inspection was "very closely related to, if not the same as, the issue of the identity of the Claimant's infringement expert".
(3) It would be necessary for the inspection team to understand the various chemical reactions being carried out at the various stages of the process to understand what samples would need to be taken and why.
(4) The expert "may well need to give an opinion as to whether any difference between the Defendant's method of producing zirconia-ceria REMO and the patented process….was an immaterial variant".
Confidentiality terms are agreed for the inspection experts
A limited confidentiality club for the Inspection
Correspondence concerning sampling prior to the Inspection
The requests for sample testing and new experts
The current confidentiality regime
(1) It applies not just to documents but also to "materials obtained at the Inspection". That includes samples taken, with the effect that it is accepted for present purposes that samples may not be handled by any person not within the regime.
(2) As is usual, non-lawyer members of the confidentiality regime (and the General Counsel of MEL's parent company) have signed confidentiality undertakings. The terms of such undertakings were settled during discussion at the hearings before Arnold J in September 2017.
(3) The confidentiality regime has two tiers relating to (i) a complete and (ii) a redacted PPD. The redacted PPD has the identities of two particulars substances removed – Substances X and Y – that Neo say are particularly sensitive.
(4) The confidentiality undertakings include stringent restrictions on MEL's experts from working in the field of REMO in the future. The hearing before Arnold J involved extensive debate about how wide those restrictions should be. However, Arnold J did not have to settle the terms of the restrictions finally because the proposed experts were prepared to sign compromise restrictions on terms that Neo accepted. Such restrictions were accepted on MEL's part solely on the basis that the experts were prepared to accept them, without MEL conceding that they were necessary, appropriate or precedent-setting. In addition, it was specifically contemplated that MEL could revisit the extent of the confidentiality restrictions.
(a) Whether permission should be granted to implement the testing regime proposed for certain intermediate samples taken from the inspection and certain related matters relevant to testing of these samples?
(b) Whether permission should be granted to admit the two academics into the confidentiality club and if so on what terms?
Issue (a) - Inspection and process verification
"If in a particular case it is right that disclosure of any facts should be made by one party to his opponent's advisers before trial, it must normally follow as a matter of course that the opponent should be entitled to know the facts so disclosed. His advisers are his agents in the matter, and strong grounds must be required for excluding the principal from knowledge, which his agents properly acquire on his behalf. But this principle must be subject to some modification if trade secrets are to be protected from disclosure to possible competitors. Suppose, for example, that in a case such as the Coloured Asphalt case the court makes an order for inspection of the kind which was made in that case and the plaintiff's advisers, having inspected the defendant's process, report that in fact no infringement has taken place. The whole object of the procedure would be defeated if the plaintiff could insist as of right on knowing the details of the defendant's process, and no useful purpose would be served by his doing so. Where a matter in question in an action, begin that matter in question in an action, being the matter upon which inspection or disclosure will throw light, is of a technical nature, the party seeking discovery may well require inspection by, or disclosure to, technical and professional advisers. If the matter be of a kind on which the party will be likely to be able with the aid of those advisers to form some kind of view of his own, it seems to me that he should normally be allowed to know as much about the facts as his advisers. If, however, the case were one of so esoterically technical a character that even with the help of his expert advisers the party himself could really form no view of his own upon the matter in question but would be bound to act merely upon advice on the technical aspects, disclosure to him of the facts underlying the advice might serve little or no useful purpose. In such a case a court might well be justified in directing disclosure of allegedly secret material only to expert or professional agents of the party seeking discovery on terms that they should not, without further order, pass on any information so obtained to the party himself or anyone else, but should merely advise him in the light of the information so obtained. Even so, if the action were to go to trial, it would seem that sooner or later the party would be bound to learn the facts, unintelligible though they might be to him, unless the very exceptional course were taken of excluding him from part of the hearing. Even where the information is of a kind the significance of which the party would himself be able to understand, it may nevertheless be just to exclude him, at any rate during the interlocutory stages of the action, from knowing it if he is a trade competitor of his opponent."
"Each case has to be decided on its own facts and the broad principle must be that the court has the task of deciding how justice can be achieved taking into account the rights and needs of the parties. The object to be achieved is that the applicant should have as full a degree of disclosure as will be consistent with adequate protection of the secret. In so doing, the court will be careful not to expose a party to any unnecessary risk of its trade secrets leaking to or being used by competitors. What is necessary or unnecessary will depend upon the nature of the secret, the position of the parties and the extent of the disclosure ordered. However, it would be exceptional to prevent a party from access to information which would play a substantial part in the case as such would mean that the party would be unable to hear a substantial part of the case, would be unable to understand the reasons for the advice given to him and, in some cases, the reasons for the judgment. Thus what disclosure is necessary entails not only practical matters arising in the conduct of a case, but also the general position that a party should know the case he has to meet, should hear matters given in evidence and understand the reasons for the judgment."
"….At the stage of disclosure it is well established that in a proper case a confidentiality scheme or "club" can be set up. See three Court of Appeal authorities Warner Lambert v Glaxo  RPC 354, Roussel Uclaf v ICI  RPC 45 and Lilly ICOS (No 2)  EWCA Civ 2. The scheme may be arranged by order of the court but is often arranged by an agreement between the parties, albeit always subject to the Court's jurisdiction…. The system is flexible and there are many variations…."
Disclosure to a party cf. disclosure to a third party
Summary of principles
(1) Reasonably necessary to address a serious issue at trial;
(2) Protected by confidentiality provisions which are sufficient to minimise and/or mitigate the risks of the confidential information becoming known, disclosed or used in an unauthorised manner having regard to all the circumstances including the nature of the information in question, the identity of the proposed recipient and the proposed use of the information for the litigation; and
(3) Consistent with the overriding objective of the CPR.
Inspection sample testing
Agreed testing – starting materials and finished product (Categories 1 and 4)
Disputed testing – intermediate samples (Categories 2 and 3)
Category 2 samples
Reasonably necessary to address a real issue in the case
Category 3 sample testing by Professors Boghosian and Efstathiou and disclosure of confidential calcination conditions
Reasonably necessary to address a real issue in the case
"Disclosure of commercially sensitive material is a necessary part of litigation in this Court and there are commonly used procedures in the form of confidentiality clubs and the like which are employed to limit the recipients of such disclosure and its analysis for the purposes of resolving the issues in dispute. Some disclosure to the parties themselves is necessary and inevitable for the litigation process to operate. Similarly, evidence may be available to support design right and copyright infringement on the basis of which wider disclosure of other sensitive material may be required. But to allow CPR 31.16 to become a means of examining a competitor's otherwise secret designs on the basis that some kind of infringement might have occurred cannot in my view be permissible unless there is at least a clear and convincing evidential basis for the belief that acts of infringement may have taken place and the Court can be satisfied that the pre-action disclosure sought is highly focused. Otherwise, the potential for abuse is obvious. To say that one can establish the usual confidentiality club is not an answer in itself to the objection that there is no basis for being required to offer up the confidential material in the first place".
Nature and probative value of the proposed Category 3 sample testing
Issue (b) - Admission of Professor Hardacre and Dr Chansai to the inner confidentiality club
Professor Hardacre and Dr Chansai
Two new experts?
Reasonably necessary to address a real issue in the case
(1) Determining whether there is a credible case of infringement by equivalence at all;
(2) Formulating such a case, should such exist.
The need for expert evidence for the potential equivalence case
The need for a new expert
The proposed confidentiality terms
(a) the nature of the information in question as a trade secret, what is now said about the various respects in which the information is said to be confidential (including the level of detail);
(b) the importance of ensuring that the parties and the court are able to have the benefit of expert evidence on important issues;
(c) the risk, which I assess as low in the light of the further evidence about confidentiality, of dissemination of sufficiently specific confidential information to be of real incremental assistance to others over and above that which is not confidential as a result of what is proposed to be disclosed to Professor Hardacre (on the assumption that the confidentiality terms are complied with by him);
(d) the nature of the intended recipient, the fact that he is independent of the parties and his primarily academic role;
(e) the fact that enquiries have not identified any other expert with relevant expertise who is prepared to act on stricter confidentiality terms;
(f) whether the additional lifetime, industry-wide restrictions of the kind sought by Neo would risk imposing unreasonable fetters on the ability of the expert in question to undertake his academic and other work in future including work in which he is currently engaged.
Conclusion on confidentiality terms for Professor Hardacre
Conclusion on application 2
(1) An order as to testing of Category 1 and 4 samples in the form agreed between the parties;
(2) No order as to the testing of Category 2 and 3 samples or the provision of the second defendant's confidential calcination conditions but with permission to reapply;
(3) An order admitting Professor Hardacre to the inner confidentiality club on the terms indicted in the judgment above.