Smithkline Beecham Biologicals SA v Connaught Laboratories Inc [1999] EWCA Civ 1781

EWCA-Civ

Smithkline Beecham Biologicals SA v Connaught Laboratories Inc

[1999] EWCA Civ 1781 · 1999-07-07

THE LORD CHIEF JUSTICE: This appeal concerns a number of documents supplied or disclosed by Connaught Laboratories Inc to SmithKline Beecham Biologicals S.A. pursuant to court order in the course of litigation between them. The question is whether, on the facts, each of these documents ‘has been read to or by the Court, or referred to, in open Court’. That is the language of Order 24 rule 14A of the Rules of the Supreme Court. If the question is answered affirmatively, then (subject to any contrary order the court may make) the party to whom disclosure had been made is released from the ordinary duty binding upon it to use such documents for no purpose other than the proceedings in which they have been disclosed. If a negative answer is given, the party to whom disclosure had been made remains bound notwithstanding the conclusion of the proceedings. In this case SmithKline invited Laddie J to rule that they were released from their obligation to treat as confidential documents received from Connaught. He refused to do so. SmithKline appeal against the judge’s decision, the correctness of which is the major issue in this appeal. This is the judgment of the court.

In January 1997, Connaught were granted a European patent for a biologically pure and stable protein known as pertactin, for use in a whooping cough vaccine. On 25 July 1997 SmithKline lodged a petition to revoke this patent on grounds of anticipation, obviousness and insufficiency of description. At a summons heard on 9 October 1997, directions were given for discovery, expert evidence and the exchange of experts’ reports, trial bundles and a trial then estimated to last four to five days with one pre-reading day for the judge. SmithKline were given leave to amend their particulars of objection to the patent and, later, to re-amend those particulars. Further directions were given in December when a date for a trial, now estimated to last eight to ten days with two days’ pre-reading by the judge, was fixed. Also in December, the parties made a written agreement to govern the handling of documents which either of them marked as confidential. The preparations for trial were duly accomplished, including discovery and the exchange of experts’ reports and witness statements. On 30 April 1998 the parties lodged with the court a reading guide signed by leading counsel for both parties and trial bundles, together with skeleton arguments on both sides. The reading guide invited the judge to read the patent in suit, the skeleton arguments, the particulars of objection, a number of specified documents and witness statements, and the expert reports, including a report by SmithKline’s expert Professor Findlay. Friday 1 May and Tuesday 5 May 1998 had been set aside as pre-reading days for the judge (the intervening Monday being a bank holiday). On the afternoon of 5 May 1998 Connaught’s then solicitors wrote to SmithKline’s solicitors indicating their intention to give notice to the Comptroller of Patents of Connaught’s intention to surrender the patent. They gave as their reasons a shortage of time properly to prepare their case (a ground not pursued when counsel was later taxed on the subject by the judge), and also the relative commercial unimportance to them of patent protection in the United Kingdom. SmithKline asked that the start of the trial should be postponed for a day in order to enable them to consider their response to this unexpected development, and this was done. The parties, represented by counsel, appeared before the judge on Thursday 7 May.

Mr Waugh QC, representing SmithKline, began by apologising to the judge for the amount of reading of the papers he had done before the change of front by Connaught had been notified to him. The judge observed:

“I have read it all”

. Counsel referred to litigation initiated by Connaught against SmithKline in the United States, Belgium and the Netherlands; in the Netherlands Connaught were complaining of infringement by SmithKline of the patent in the United Kingdom. There were also proceedings opposing the patent in the European Patent Office and the Japanese Patent Office. Counsel for SmithKline urged that the patent should be revoked. Counsel for Connaught said:

“I am not here to consent to an order for revocation, but if your Lordship believes that that is the appropriate order in the circumstances, then so be it.”

He resisted an application made by Mr Waugh under Order 62, Appendix 2, rule 3(3)(c) on the ground that the action had not come on for trial.

The judge gave a short judgment in which he briefly summarised the procedural history of the action and identified the point at issue between the parties:

“It is clear that the respondent does not intend to defend this petition. A point arises as to whether or not, in those circumstances, the court should take the course of making an order for revocation or whether it should simply allow the respondent to surrender the patent by making the necessary application to the Comptroller.”

Having referred to the letter of 5 May from Connaught’s solicitors, he said:

“It will be apparent from what I have said already that nine months have elapsed since the petition was presented, and two working weeks were set aside for the hearing of this trial. Because the letter from Bird & Bird came in late, I have already done the pre-reading, which was requested of me. I have seen the patent. I have seen the evidence. I can say, at the outset, that the evidence that I have seen and the issues raised would, in my mind, have led to a trial which would easily have been finished within the two-week time slot which the parties had asked for. I do not consider that the time given for this action was in any way ungenerous; rather the opposite”.

The judge then recorded that Connaught wished to surrender its patent and he referred to the statutory provisions governing surrender of patents under the Acts of 1949 and 1977. He pointed out that an offer of surrender did not of itself bring the patent to an end, and that the patent continued in existence until various procedures had been completed. He said:

“It appears to me that the position, therefore, is as follows. The offer to surrender made by the patentee is not yet effective. The patent is in existence. The day for the commencement of this trial has arrived and the application for revocation has not been withdrawn. It is open to me, therefore, to order revocation of the patent if, having regard to what is pleaded and the material which I have seen, that is the appropriate course. Alternatively, I can allow the offer to surrender to be further processed through the Comptroller. The latter course will involve advertisement, the possible involvement of third parties, delay and additional expense.

As I have mentioned already, I have had a chance to read a very large quantity of material in this case and I have read all the pleadings. I understand that in proceedings brought in the Netherlands, some form of enforcement of the U.K. designation of this patent is being sought. I have come to the conclusion that in the absence of any resistance from the respondents, the petition is well founded and that on the grounds of anticipation, obviousness and insufficiency, in the absence of an argument by the patentee, this patent is invalid as pleaded.

In all the circumstances, it appears to me that the proper course to adopt in the circumstances of this case is to order revocation forthwith. That ought to bring to an end such parts of foreign proceedings in which the respondent seeks to enforce elsewhere the U.K. designation of this patent. Nevertheless for the avoidance of doubt, I will order that the respondent does forthwith discontinue or withdraw any proceedings, or at least those parts of those proceedings where it seeks to enforce the U.K. designation.

This, therefore, leads to the issue of costs and certain other ancillary matters. The petitioner seeks, amongst other things, a certificate in relation to the particulars of objection. The issue which arises is whether such a certificate is appropriate since the Act only gives the court power to certify the particulars of objections where the matter has proceeded to trial. In my view, this matter has proceeded to trial. A certificate is accordingly possible and, in the circumstances of the case, will be given.”

In the course of dealing with an application for indemnity costs, the judge repeated that he had read the large number of documents, which were to be put before the court. The order drawn up to give effect to this judgment was not expressed to be made by consent.

SmithKline’s application for revocation was made under section 72 of the 1977 Act which empowers the court to revoke a patent for an invention on (but only on) a number of grounds which include the grounds upon which SmithKline relied in its application. Rule 3(3) (c) of Appendix 2 to Order 62 of the Rules of the Supreme Court provides, so far as relevant:

“Where - .....

.............

proceeds to trial, no costs shall be allowed to the parties serving any particulars of breaches or particulars of objection in respect of any issues raised in those particulars and relating to the patent except insofar as those issues or particulars have been certified by the Court to have been proven or to have been reasonable.”

On 21 July 1998 solicitors acting for Chiron Corporation wrote to the solicitors for both SmithKline and Connaught. Chiron were involved in proceedings in the European Patent Office opposing Connaught’s patent. They made reference to the decision of the Vice-Chancellor in Derby v Weldon (No 2), to which we refer below, and requested copies of the parties’ skeleton arguments, witness statements and experts’ reports which had been before Laddie J in the English proceedings. Connaught’s solicitors gave a dusty answer. SmithKline’s solicitors complied by supplying copies of both parties’ evidence referred to in the reading list before Laddie J and both skeleton arguments. They added that although they did not consider that SmithKline remained bound by the confidentiality agreement in relation to documents referred to in open court, it was SmithKline’s intention to make an application to the court in relation to those documents for the avoidance of doubt.

Earlier, on 13 May 1998, solicitors for Connaught had written to the solicitors for SmithKline seeking agreement, pursuant to the confidentiality agreement between the parties, that the documents disclosed and marked as confidential should (save for retention of one archive copy) be destroyed. Solicitors for SmithKline gave no substantial response, despite a chasing letter on 23 June. But on 3 September 1998 they sent Connaught’s solicitors a copy of the notice of motion formally served on 8 October, which gave rise to the judgment now under appeal. By the notice of motion SmithKline sought a declaration that it was free to use documents falling into four categories specified in a schedule, and alternatively sought the leave of the court to use such documents for the purpose of opposition proceedings in the European Patent Office and the Japanese Patent Office. The four categories of documents were these:

A) Documents annexed to the report of Professor Findlay dated 3 April 1998.

B) Documents annexed to a Civil Evidence Act notice dated 3 April 1998 comprising a report by Dr Vose of a scientific workshop held on 1 December 1989.

C) Documents annexed to and relied on in another Civil Evidence Act notice dated 3 April 1998, including a number of scientific documents some of them internal documents of Connaught relating to work carried out.

E) Documents of Connaught relating to the stability of pertactin.

A hearing of this motion took place before Laddie J on 21 October 1998 at which SmithKline contended, in reliance on Order 24, rule 14A, that the documents specified in the schedule to the notice of motion had been read to or by the court, or referred to in open court, and, if they had not, sought the judge’s leave to use the documents in the European and Japanese proceedings. In a reserved judgment dated 30 October 1998 the judge refused both applications. SmithKline no longer challenge the second ruling if their challenge to the first is unsuccessful on this appeal.

In his judgment the judge referred to the procedural history of the English action and to the hearing before him on 7 May. He said:

“8. There was never any question of there being a full trial on 7 May. I suspect that none of the independent witnesses were present on that day, because they clearly were not going to be called to give evidence. There was never going to be a formal opening by counsel for SmithKline. None of the skeletons, witness statements, expert reports or discovery documents were going to be read out or referred to. In view of Connaught’s decision not to fight, the only question of substance was how to formally terminate the proceedings as quickly as possible and without generating ongoing costs. The whole exercise must have taken a few minutes.”

The judge said:

“11. ...Although a small number of the documents referred to were identified in the reading guide sent to me for the trial, many were not. Further the documents which were referred to in Professor Findlay’s report were to be found in separate trial bundles which did not feature in the reading guide.”

After detailed consideration of Derby v Weldon (No 2)

the judge continued:

“24. The approach in Derby v Weldon (No 2) has no application in this case. There was here no question of any contested oral hearing. It was apparent from the late afternoon of 5 May that there was going to be no discussion of the skeletons, the expert reports, the witness statements, or any of the documents other than the patent itself. Nothing I said changed that. In substance I held that, as a result of what I had read in private in my room and in the light of the decision of Connaught not to contest the issues, I was going to revoke the patent. It was no different to a notification in open court of an intention to revoke the patent after a hearing in camera. In the circumstances SmithKline has failed to show that the documents they want to disclose fall within rule 14A. Unless leave is given to use discovery for purposes other than the Petition, the implied obligation of confidentiality continues to apply. Breach of that obligation is a contempt of court.”

The judge did not accept an argument advanced by Connaught based on the confidentiality agreement, but did not give SmithKline leave to use the documents in the schedule in the European or Japanese opposition proceedings.

In an affidavit sworn in support of their application to the judge, SmithKline had disclosed that the parties’ expert reports and witness statements in the English proceedings had been filed in the opposition proceedings in the Japanese Patent Office. The judge was also told, later, of the disclosure to Chiron. The judge indicated a preliminary view that these disclosures were a breach of SmithKline’s obligation of confidence and thus a contempt of court. In the light of this indication, SmithKline undertook through counsel to seek the return of the documents disclosed to the Japanese Patent Office and to Chiron.

Concerned at the implications of the 30 October 1998 judgment, SmithKline returned to the judge to seek leave to make use in other proceedings of three other classes of document. The first of these was the re-amended particulars of objection filed by SmithKline in the English proceedings. Attention was particularly concentrated on a paragraph in which SmithKline based their insufficiency objection on documents produced on discovery by Connaught. The judge gave judgment on this application on 21 January 1999. The judge referred to Order 24, rule 14A and said:

“As I set out in my judgment of October, this rule, it appears to me, is part and parcel of the group of rules and practices which are designed to ensure that, save in properly circumscribed circumstances, justice is administered in public. Mr Waugh says there can be no doubt that this re-amended particulars of objection document was read to or by the court or referred to by the court in open court. On the application to amend there was no application for the court to sit in camera. It is clear beyond a peradventure, he says, that it was a public hearing, that the re-amended particulars of objection was referred to in those proceedings and that Order 24, rule 14A applies.

I have no doubt that Mr Waugh is right that Order 24, rule 14A does apply, subject, of course, to any successful application made by Connaught for an order effectively overturning the general provisions of the rule.”

Later in his judgment he added:

“I also accept Mr Waugh’s submission that the nature of the attacks raised against the patent in the patents court here are matters which are prima facie matters which should be made known to the public so that the public revocation of the patent can be understood......If this matter was not covered by Order 24, rule 14A, I would decide that, under the inherent jurisdiction, this was a case where it would be appropriate to release the re-amended particulars of objection”.

The judge ruled that SmithKline were also at liberty to use the other documents in issue on that occasion.

The legal background

In Derby v Weldon (No 2) (unreported, 19 October 1988), Sir Nicolas Browne-Wilkinson, V-C, very clearly summarised the basic legal rule governing situations such as this:

“It will be helpful to state in outline the English law applicable to documents obtained on discovery in an action. The approach of English law is that discovery in the course of an action is an interference with the right of privacy which an individual would otherwise enjoy in relation to his own documents. As a result of the public interest in ensuring that all relevant information is before the Court in adjudicating on the claim in the action, that right of privacy is invaded and the litigant is forced, under compulsion by the process of discovery, to disclose his private documents. But, such invasion of privacy being only for the purpose of enabling a proper trial of the action in which the discovery is given, the Court is astute to prevent documents so obtained from being used for any other purpose. As a result the law is well established that the recipient of documents disclosed under compulsion of Court proceedings holds those documents subject to an implied undertaking not, without the consent of the Court, to disclose such documents to any third party or use the documents for any purpose other than the action in which they were disclosed. I will refer to that undertaking as ‘the implied undertaking’. A breach of the implied undertaking is a contempt of Court.”

The crucial issue in Harman v Home Office

[1983] 1AC 280

was whether this implied obligation continued to bind a party to whom compulsory disclosure had been made notwithstanding that the documents disclosed or material parts of them had been read aloud in open court. The judge, the Court of Appeal and a majority of the House of Lords held that it did and that disclosure of such documents amounted to a contempt of court. A minority of the House of Lords disagreed. It held that once documents had been read aloud in open court they were no longer confidential; that any duty of confidence ceased when material became public knowledge; and that maintenance of the rule favoured by the majority might well be contrary to

Article 10 of the European Convention on Human Rights

. With reference to Scott v Scott

[1913] AC 417

, and the principle that justice should be administered in public, Lord Scarman, speaking for the minority, said (at page 316D):

“Whether or not judicial virtue needs such a spur, there is also another important public interest involved in justice done openly, namely, that the evidence and argument should be publicly known, so that society may judge for itself the quality of justice administered in its name, and whether the law requires modification. When public policy in the administration of justice is considered, public knowledge of the evidence and arguments of the parties is certainly as important as expedition: and, if the price of expedition is to be the silent reading by the judge before or at trial of relevant documents, it is arguable that expedition will not always be consistent with justice being seen to be done.”

The law as established in Harman v Home Office was challenged before the European Commission of Human Rights, and the challenge was amicably settled on an undertaking by Her Majesty’s Government to seek to change the law so that it would no longer be a contempt of court to make public material contained in documents compulsorily disclosed in civil proceedings once those documents had been read out in open court (see Bibby Bulk Carriers Ltd v Cansulex Ltd

[1989] QB 155

at 159 per Hirst J). That undertaking was honoured by the introduction of what is now Order 24, rule 14A which reads:

“Any undertaking, whether express or implied, not to use a document for any purposes other than those of the proceedings in which it is disclosed shall cease to apply to such a document after it has been read to or by the Court, or referred to, in open Court, unless the court for special reasons has otherwise ordered on the application of a party or of the person to whom the document belongs”.

It is convenient to record the terms of the corresponding provision of the Civil Procedure Rules, although in our view the differences between the two rules do not affect the outcome of this appeal. Part 31.22 of the new rules provides:-

“(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –

a) the document has been read to or by the court, or 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.

(2) The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public.

(3) An application for such an order may be made --

a) by a party; or

b) by any person to whom the document belongs.”

SmithKline placed much reliance on the unreported decision of the Vice-Chancellor in Derby v Weldon (No 2) . In that case the court had made Mareva and tracing orders and had ordered the defendants to swear affidavits disclosing their United Kingdom assets and showing what had happened to the property into which the plaintiffs sought to trace. There was an appeal, and the Court of Appeal varied the order by extending the Mareva injunction and restricting the tracing relief. In support of those orders, the Court of Appeal ordered the defendants to give discovery by swearing additional affidavits as to their world-wide assets and the assets into which tracing was sought to be made. Those affidavits were sworn, but were not before the Court of Appeal when the appeal was heard. Thus there were affidavits sworn by the defendants in response to orders of the court, some relating to United Kingdom assets and some relating to foreign assets; the former affidavits had been before the Court of Appeal, the latter had not. The matter came before the Vice-Chancellor because the plaintiffs were served with a subpoena by a court in New York seised of other proceedings, and it was necessary to decide which documents the plaintiffs were free to disclose without violating their implied obligation to the English court.

The Vice-Chancellor distinguished between these two classes of affidavits. With regard to the former he said:

“a) Affidavits as to United Kingdom assets. These affidavits were sworn pursuant to my Order and were released to the Salomon Group following the judgment given by Mr Justice Mervyn Davies. The affidavits were therefore available when the case was heard by the Court of Appeal in open Court. The affidavits and exhibits were in fact used in the appeal as follows. They were included in the bundles prepared for and lodged with the Court of Appeal. The skeleton argument lodged with the Court of Appeal on behalf of Salomon Group referred to the extent of the Defendants’ United Kingdom assets and based an argument on the limited extent of such assets. In oral argument reference was made to the extent of the U.K. assets of the Defendants in general terms. After Judgment had been given, Counsel for Mr Weldon himself referred to, without reading, the affidavit as showing that Mr Weldon had means in the United Kingdom when addressing the Court on the provision to be made for interim living allowances. Finally, the Judgment of Lord Justice Parker refers to the United Kingdom assets being wholly insufficient to meet any Judgment. The affidavits and exhibits themselves were not apparently in terms read in open Court.

The question which arises under Order 24, rule 14A is whether the implied undertaking has ceased to apply on the grounds that the affidavits and exhibits have been read to or by the court or referred to in open Court. In my judgment the affidavit of U.K. assets does fall within that category. The argument contained in the skeleton argument and in oral submissions, the reference by Counsel for Mr Weldon, and the reference in the Judgment of Lord Justice Parker, could only be based on the affidavit of U.K. assets and exhibits which was contained in the Court bundle. Though the affidavit itself may not have been read, nor the exhibit as such, its contents had come into the public domain. The skeleton argument lodged by Counsel with the Court of Appeal for the members of the Court of Appeal to read before they came into Court is not perhaps technically read by the Court in open Court but it is read by the Court and, when the matter comes on for oral hearing, the skeleton argument is, of necessity, incorporated into counsel’s submissions in open Court. In those circumstances, in my judgment, references in the skeleton argument are references in open Court to the affidavit.

For all these reasons I think that the affidavit of the United Kingdom assets has been referred to in open Court and, as such, the implied undertaking has come to an end.”

The Vice-Chancellor took a different view of the other class of affidavits:

“b) The affidavits and exhibits sworn pursuant to the Order of the Court of Appeal relating to world-wide assets and tracing claims. These documents are in a different position. Documents of this class fall squarely within those to which the implied undertaking applies. They were disclosed under compulsion of a court Order for the purposes of discovery only. Moreover, they have never been used in open Court and therefore Order 24, rule 14A cannot apply to them. It follows that documents of this class are held by the Salomon Group subject to an undertaking not, without the leave of this court, to disclose them to a third party. Production of those documents in compliance with a subpoena from a New York Court would put the Salomon Group in contempt of this court and that could have serious implications for the future conduct of the English proceedings by the Salomon Group.”

The present appeal

Connaught submitted that the judge had reached the right conclusion for the reasons which he gave. SmithKline accepted that none of the documents in the four categories specified in their notice of motion had been read to or by the court in open court but submitted that those documents had been referred to in open court.

When, as in Harman v Home Office , documents or the material parts of them are read aloud in open court it is plain that the implied obligation binding on the party to whom compulsory disclosure had been made comes to an end, in the absence of any contrary order by the court. The same result must follow if counsel in open court draws the attention of the judge to a document which the judge then reads to himself. These are the simplest cases. The present appeal obliges the court to consider the application of the rule in less obvious cases, and in doing so to take account of changing forensic practice. For reasons which are very familiar, it is no longer the practice for counsel to read documents aloud in open court or to lead the judge, document by document, through the evidence. The practice is, instead, to invite the judge to familiarise himself with material out of court to which, in open court, economical reference, falling far short of verbatim citation, is made. In this new context, the important private rights of the litigant must command continuing respect. But so too must the no less important value that justice is administered in public and is the subject of proper public scrutiny.

Derby v Weldon (No 2) establishes that Order 24, rule 14A applies even though a document is not read in open court if it is pre-read by the court and referred to by counsel in a skeleton argument which is incorporated in submissions in open court, or if the document is referred to (even though not read aloud) by counsel or by the court. We have no doubt this is a correct approach. If counsel did not summarise their submissions in a skeleton argument, and if the judge did not pre-read material before coming into court, it would be necessary for counsel in open court to make his full submissions orally and to read aloud to the judge or refer him to each page of the material relied on. In this way everything read or referred to would fall within Order 24, rule 14A and would be treated as having entered the public domain. To apply Order 24, rule 14A to such material does not derogate from the private rights of the litigant and preserves the rights of the public in a changed environment of practice.

Connaught distinguish Derby v Weldon (No 2) from the present case by pointing out that it was a fully contested hearing in the course of which express reference was made to the assets of the defendants as disclosed in the affidavits they had been required to swear. That is a valid point, but it does not relieve this court of the need to enquire what in reality took place at the hearing before Laddie J on 7 May. The claim in the patent was for biologically pure and stable pertactin. SmithKline contended that Connaught could not produce biologically pure pertactin and had not been able to do so at their claimed priority date. To support this challenge they relied on the report of Professor Findlay who himself relied heavily and specifically on documents disclosed by Connaught on discovery, some of which he annexed to his report. These were documents in SmithKline’s categories A and C in their notice of motion. SmithKline also challenged the novelty of Connaught’s invention having regard to the prior art. In support of this challenge they relied on documents relating to a presentation by Dr Vose (a Connaught scientist) at a workshop at Potters Bar in December 1989. These documents were included in the reading guide submitted to the judge and were referred to in Connaught’s skeleton argument. They formed category B in the notice of motion. SmithKline also challenged the stability of Connaught’s pertactin, relying on Connaught’s own records of its laboratory results. These were expressly referred to by Professor Findlay in his report. The material was in the trial bundles and was the subject of express reference in SmithKline’s skeleton argument. These documents made up category D in the notice of motion. This was all, as it would seem to us, material which Laddie J must be taken to have read and absorbed.

If, at the hearing on 7 May, SmithKline had simply accepted Connaught’s offer to surrender the patent, and the judge had without more dismissed SmithKline’s petition by consent on that basis, we would think it plain that the implied obligation binding on SmithKline would not have ceased to apply under Order 24, rule 14A, no matter what materials had been delivered to the judge before the hearing and no matter how much of it he had read and how carefully. The documents would not have been read to or by the court in open court and the documents would not have been referred to in open court. Even under the old practice there would have been no argument and no citation of the materials relied on by SmithKline. But that was not what happened. Connaught offered to surrender the patent. SmithKline did not accept that offer and asked for revocation. The judge had power to revoke but only on certain grounds. It would not in our view have been proper for him to revoke, even in the absence of opposition by Connaught, unless he was of opinion that the grounds of objection or some of them were made out. The absence of opposition by Connaught of course made the judge’s task much easier and shorter. But if the judge had come into court without familiarising himself with the case at all, it would have been necessary for SmithKline’s counsel to outline the grounds of objection and, with reference to each ground, draw the judge’s attention, however briefly, to the material relied on to support it. The hearing would undoubtedly have been very much shorter than a fully contested hearing, but it would not have been a formality, any more than a judge’s approval of an infant settlement made with the support of both sides is a formality. In this case the hearing was very short indeed, because the judge said he had read all the material and made his decision to revoke having regard to what was pleaded and the very large quantity of material which he had read. That enabled him to conclude, in the absence of resistance by Connaught, that the petition for revocation was well-founded on grounds of anticipation, obviousness and insufficiency. This was, as Connaught rightly submitted, a compendious reference, but the judge was making a judicial decision based on what he had read and for purposes of Order 24, rule 14A his reference was, in our opinion, no less a reference because the thoroughness of his preparation relieved him of the need to ask for the grounds of objection to be expressly outlined before him. His decision was, we think, plainly based on the material before him, supporting the various grounds, which included the material in categories A, B, C and D. It is significant that the judge’s order was not made by consent; he held that the proceedings had come to trial for the purposes of Order 62, Appendix 2, rule 3; and he felt able to certify SmithKline’s particulars of objection as reasonable, a step he could not have taken had he not informed himself what the objections were and what was relied on in support of them. We do not regard this conclusion as infringing the private rights of Connaught; but we do think that any other decision would give recent procedural changes a very restrictive effect on the publicity properly attaching to the administration of justice and on SmithKline’s rights under

Article 10 of the European Convention on Human Rights

It follows, although they are not directly in issue on this appeal, that we do not share the judge’s view of the documents which SmithKline had disclosed to Chiron and the Japanese Patent Office before the issue by SmithKline of the notice of motion. It seems to us, by parity of reasoning, that these were documents which had been referred to in open court. They were materials which the judge had read, on which SmithKline relied in seeking revocation of the patent and on which the judge must be taken to have relied, among other materials, when ruling that the patent should be revoked.

Respondent’s notice

Connaught did not pursue before this court an argument, rejected by the judge, that even if Order 24, rule 14A did apply on the present facts it was overridden by the confidentiality agreement entered into between the parties. But they did argue that if, contrary to their primary submission, Order 24, rule 14A applied, the court should nonetheless for special reasons order that the implied obligation should remain binding on SmithKline as it had power to do under the rule. It advanced a number of grounds in support of this contention, foremost among them being the confidentiality agreement.

This agreement, made between the parties on 31 December 1997, permitted either party to mark material which it was disclosing as confidential; restricted the number of people to whom disclosed documents could be shown; required the parties to impose confidentiality obligations on their experts; provided for disclosed documents to be destroyed or returned at the end of the case (save for retention of one archive copy); and provided a machinery for resolution of disputes about the confidentiality of documents. We would accept that the existence of this agreement is a relevant matter to consider when deciding whether the implied obligation should continue to bind SmithKline notwithstanding reference to the documents in open court. We are not however persuaded, on that ground or any of the other grounds advanced by Connaught, that there are in this case special reasons which should lead the court to make the order which Connaught sought. Although both parties marked most of the documents which they disclosed as confidential, it is not suggested that the documents disclosed by Connaught in fact contained any trade secrets or information of a truly secret nature. It is not suggested that, had there been a full hearing, any part of it would have been conducted in camera. In patent actions, as in other actions, the court will sit in camera only when and to the extent that such a procedure is shown to be necessary, on application by the party claiming that publicity would be prejudicial. We can of course understand why Connaught would wish to maintain the confidentiality of their documents and control the use which is made of them in proceedings around the world. But there is, as it seems to us, a significant public dimension to this issue. Patent protection is internationally recognised as an appropriate reward for those who have made genuinely inventive contributions to science and technology. But it inevitably involves a restriction of competition, and if patent protection is extended to inventions which are not properly entitled to such protection, then there is an unwarrantable restriction of competition, here relating to a whooping cough vaccine, in a manner potentially damaging to the interests of the public. It is in our view unsatisfactory if in the proceedings elsewhere decisions are made in ignorance of the grounds which led the patent court in this country to hold the patent invalid on grounds of anticipation, obviousness and insufficiency. Connaught should not be in a worse position than if the materials on which Laddie J relied in making his decision had been read aloud in open court, but nor in our opinion should they be in a better position.

Since the date when Lord Scarman expressed doubt in Harman v Home Office as to whether expedition would always be consistent with open justice, the practices of counsel preparing skeleton arguments, chronologies and reading guides, and of judges pre-reading documents (including witness statements) out of court, have become much more common. These means of saving time in court are now not merely permitted, but are positively required, by practice directions. The result is that a case may be heard in such a way that even an intelligent and well-informed member of the public, present throughout every hearing in open court, would be unable to obtain a full understanding of the documentary evidence and the arguments on which the case was to be decided.

In such circumstances there may be some degree of unreality in the proposition that the material documents in the case have (in practice as well as in theory) passed into the public domain. That is a matter which gives rise to concern. In some cases (especially cases of obvious and genuine public interest) the judge may in the interests of open justice permit or even require a fuller oral opening, and fuller reading of crucial documents, than would be necessary if economy and efficiency were the only considerations. In all cases the judge’s judgment (delivered orally in open court, or handed down in open court in written form with copies available for the press and public) should provide a coherent summary of the issues, the evidence and the reasons for the decision.

Nevertheless the tension between efficient justice and open justice is bound to give rise to problems which go wider than Order 24, rule 14A. Some of those problems were explored in the judgment of Potter LJ in GIO Personal Investment Services Ltd v Liverpool and London Steamship Protection and Indemnity Association Ltd (FAI General Insurance Co Ltd Intervening)

[1999] 1 WLR 984

. As the court’s practice develops it will be necessary to give appropriate weight to both efficiency and openness of justice, with Lord Scarman’s warning in mind. Public access to documents referred to in open court (but not in fact read aloud and comprehensibly in open court) may be necessary, with suitable safeguards, to avoid too wide a gap between what has in theory, and what has in practice, passed into the public domain. Our ruling in this case permits SmithKline to use documents otherwise than in the revocation petition which gave rise to disclosure, but does not in any way oblige SmithKline to make such documents available to the public if they do not wish to do so.

For the reasons given in this judgment we allow this appeal. We hold that the documents in categories A, B, C and D are covered by Order 24, rule 14A and we do not order that they should not be disclosed.

ORDER: (Not part of judgment)

Appeal allowed with costs in this court and below; minute of agreed order to be lodged with the Court of Appeal Civil Division; leave to appeal refused.

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