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England and Wales High Court (Patents Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Danisco A/S v Novozymes A/S  EWHC 3288 (Pat) (08 December 2011)
Cite as:  EWHC 3288 (Pat)
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Fetter Lane, London, EC4A 1NL
B e f o r e :
| DANISCO A/S
|- and -
1st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London, WC2A 1HP.
Telephone No: 020 7067 2900. Fax No: 020 7831 6864
Arnold & Porter LLP) for the Claimant/Applicant
MR. SIMON THORLEY Q.C. and MR. MILES COPELAND (instructed by
Bird & Bird LLP) for the Defendant/Respondent
Crown Copyright ©
MR. JUSTICE ARNOLD:
The stay application
"79. The following summary is offered as general guidance on the Patents Court's discretion to stay proceedings on the ground that there are parallel proceedings pending in the EPO contesting the validity of the patent in suit. It is not intended to fetter the discretion of the court nor should it be interpreted as having that effect.
"80. First, the discretion, which is very wide indeed, should be exercised to achieve the balance of justice between the parties having regard to all the relevant circumstances of the particular case.
"81. Secondly, it is the discretion of the Patents Court, not of the Court of Appeal. The Court of Appeal would not be justified in interfering with a first instance decision that accords with legal principle and has been reached by taking into account all the relevant, and only the relevant, circumstances.
"82. Thirdly, although neither the EPC nor the 1977 Act contains express provisions relating to automatic or discretionary stay of proceedings in national courts, they provide the context and condition the exercise of the discretion.
"83. Fourthly, the possibility of the duplication of proceedings contesting the validity of a patent granted by the EPO is inherent in the system established by the EPC. In practice national courts exercise exclusive jurisdiction on infringement issues and they have concurrent jurisdiction with the EPO on validity issues. As Mr. Daniel Alexander QC appearing for GSK said, the Contracting States and the UK Parliament contemplated that the national Patents Courts should be able to determine the same issues of patentability as the EPO. The resultant legislation allowed the determination by the national court and the EPO to proceed at the same time. Indeed, there is nothing in the EPC or the 1977 Act to prevent the commencement of revocation proceedings in the Patents Court on the very date of the grant of the patent by the EPO.
"84. Fifthly, this setting indicates that, in present conditions, one factor affecting the discretion will usually carry more weight than any other. That is the length of time that it will take for the respective proceedings in the national court and in the EPO to achieve some certainty on the issue of the validity of the patent in suit so that business knows where it stands. The length of the stay of proceedings, if granted, is, in general, the most significant factor in the discretion. Both the parties' legitimate interests and the public interest are in dispelling the uncertainty surrounding the validity of the monopoly rights conferred by the grant of a patent and the existence or non-existence of exclusive proprietary rights on a public register. A decision in the revocation action in the Patents Court will dispel some of the uncertainty. If the likelihood is that proceedings in the Patents Court would achieve this resolution significantly sooner than the proceedings in the EPO, it would normally be a proper exercise of discretion to decline to stay the Patents Court proceedings. They should be allowed to proceed to a decision that would supply some certainty in the public interest and the parties' legitimate interests.
"85. Sixthly, there are no grounds justifying the application by the Patents Court of a presumption that the duplication of legal proceedings in it and in the EPO is, without more, a ground for a stay of the proceedings in the Patents Court, as the EPC system allows for parallel proceedings contesting the validity of the patent in both the international court (which is what the EPO in substance is) and in the national court.
"86. Seventhly, the Patents Court judge is entitled to refuse a stay of the national proceedings where, as here, the evidence is that some commercial certainty would be achieved at a considerably earlier date in the case of the UK proceedings than in the EPO. It is true that it will not be possible to attain certainty everywhere until the EPO proceedings are finally resolved, but some certainty, sooner rather than later, and somewhere, such as in the UK, rather than nowhere, is, in general, preferable to continuing uncertainty everywhere. Thus, in this case some degree of commercial certainty could be achieved at the trial of the UK revocation action in February without unfairly prejudicing Genentech's legitimate interests in the protection of its patent.
"87. Eighthly, much weight should be given to an assertion by a commercial party that it has a good reason for resisting a stay. Normally a party is the best judge of its interests. Contentions of a competitor that there is no commercial need for early resolution of validity should be viewed with suspicion. Detailed arguments of the sort advanced here are unlikely to carry weight and a judge would be justified in dealing with them shortly.
"88. Finally, other considerations in the particular case may affect the balance of justice, such as the additional costs in the duplication of proceedings, the order in which the proceedings were commenced and so on, but, in general, the other factors, though relevant, are of lesser importance than achieving some commercial certainty somewhere sooner. The judge will receive evidence and submissions on other relevant factors, but should be wary of over-elaboration of the issues by the parties in their evidence and legal submissions. Although due consideration must, of course, be given to the evidence and the arguments, the actual exercise of the discretion does not require the judge to deliver a judgment dealing in detail with all the points taken by the parties. A global assessment of the relevant material, supported by valid reasons, is normally sufficient to justify the decision to refuse or to grant a stay."
Factors relied upon by Danisco
Uncertainty as to the scope of the monopoly, if any
The late infringement claim
Factors relied upon by Novozymes
The application for permission to use the documents
"A party to whom a document has been disclosed may use the document only for the purpose of proceedings in which it is disclosed, except where:
(a) the document has been read to or by the court, or has been referred to, at a hearing which has been held in public;
(b) the court gives permission; or
(c) the party who disclosed the document and the person to whom the document belongs agree."
"1. Documents may not be used for a collateral purpose without leave of the court or the party from whom they came.
"2. That restriction on collateral use covers not only the documents themselves but also copies of them and the information they contain.
"3. In this context collateral purpose means some purpose not reasonably necessary for the proper conduct of the action in which the discovery was given.
"4. Strictly speaking, asking for release of the documents for use outside the proceedings in which they were disclosed is itself a collateral use, since it is a use of knowledge of the contents of the documents for a purpose collateral of those proceedings, However, this must taken to be a necessary exception to the otherwise all-embracing effect of the undertaking.
"5. The unsanctioned collateral use constitutes an abuse of process or contempt of court. Whether it gives rise to a civil cause of action is not clear.
"6. The existence of the implied undertaking means that an application to release that party from restraint must be made before there is collateral use.
"7. Normally the application will be made first to the other party and only after refusal will it be made to the court.
"8. In exceptional cases, such as ones in which notice to the party of the intended use to which the documents may be put are likely to defeat the ends of justice, the application for release from the undertakings may be made ex parte.
"9. When made ex parte, the court should normally impose an inter partes return date in the near future when the affected party will be able if he so wishes to argue that the documents should not be used (see Naf Naf S.A. v. Dickens (London) Ltd  F.S.R. 424).
"10. On any application to relax the undertaking, the court has a discretion which must be exercised to achieve justice on the basis of all the circumstances of the case.
"11. The circumstances which may be taken into account include the following:
(a) The extent to which relaxation of the undertaking will cause injustice to the party which provided the discovery.
(b) Whether the proposed collateral use is in court proceedings or outside litigation (e.g. for disclosure to the press as in Harman). Prima facie if it is for use outside litigation, it is not the court's function to release for that purpose.
(c) Whether, if the collateral use is in aid of criminal or civil proceedings, those proceedings are in this country or abroad.
(d) In so far as the satellite proceedings are in this country:
(i) If they are criminal proceedings, the court must take into account the possibility of the application being a method of by-passing the privilege against self-incrimination.
(ii) If the collateral use is for civil proceedings, the court should take into account:
(a) whether the hub proceedings and the satellite proceedings are similar in character;
(b) whether the parties in the two sets of proceedings are the same;
(c) the extent to which the party seeking relaxation of the undertaking would be able to obtain discovery by another route and, if so, which route is likely to be cheaper or quicker;
(d) whether the effect of the relaxation of the undertaking will have the effect of generating new proceedings or whether it will merely help in pursuing a claim or defence which already exists or could be run anyway;
(e) prima facie it is not in the interests of justice to hinder a party from advancing a good claim or defence in other proceedings;
(f) prima facie it is not in the interests of justice to allow discovery in the hub action to be released for the purpose of supporting the initiation of contempt proceedings in the satellite action, at least if the two proceedings are 'unrelated'.
(iii) In so far as the documents are to be used in proceedings abroad,
(a) Whether those proceedings are criminal or civil.
(b) If the satellite proceedings are criminal, the court here should be wary of doing anything in this country which may subject the disclosing party to an unfair disadvantage in those proceedings.
(c) If the satellite proceedings are civil, the court should take into account whether the disclosure would put the disclosing party at a significant disadvantage in those proceedings - for example by forcing it to produce in the public domain documents which, under the local procedure, would not otherwise be made public.
(e) There does not appear to be any reason in principle why documents properly obtained as a result of an Anton Piller order should be treated differently to any other discovery documents. Once disclosed they are no more nor less protected by the implied undertaking."
"35. Mr. Thorley QC who appeared for Generics supported the conclusion and reasoning of the judge. As the judge recorded Mr. Thorley put at the forefront of his argument this passage from the judgment of Whitford J in Halcon International Inc v. Shell Transport and Trading Co.  RPC 97 at page 109:
'However, these authorities to my mind, lead to this conclusion, that the use of a document disclosed in a proceeding in some other context, or even in another proceeding between the same parties in the same jurisdiction, is an abuse of process unless there are very strong grounds for making an exception to the general rule. It does, I think, emerge that some overriding public interest might be a good example, but not the mere furtherance of some private interest even where that private interest arises directly out of or is brought to light as a result of the discovery made.'
"36. At paragraph 22 of his judgment the judge said that the dictum of Whitford J had not, so far as the researches of counsel had been able to reveal, ever been doubted or disapproved. However, that statement was not followed by the House of Lords in Crest Homes plc v Marks  AC 829 at 860. Lord Oliver said:
'Your Lordships have been referred to a number of reported cases in which application has been made for the use of a documents obtained under Anton Piller orders or on general discovery for the purpose of proceedings other than those in which the order was made. Examples were Halcon International Inc. v Shell Transport and Trading Co.  R.P.C. 97 and Sybron Corporation v Barclays Bank plc  Ch. 299. I do not, for my part, think that it would be helpful to review these authorities for they are no more than examples and they illustrate no general principle beyond this, that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery. As Nourse LJ observed in the course of his judgment in the instant case (ante, p.840G), each case must turn on its own individual facts.'
"37. The Halcon case was considered by Laddie J together with the other relevant authorities in Cobra Golf Inc v Rata  FSR 819. The guidance he gave as to the matters the court will include in its considerations is useful. However, it is important under the CPR to have in mind the overriding principles when considering whether to lift an order made under CPR 31.22. The most important consideration must be the interest of justice which involves considering the interest of the party seeking to use the documents and that of the party protected by the CPR 31.22 order. As Lord Oliver said each case will depend upon its own facts. …."