Vetco Gray UK Ltd & Anor v FMC Technologies Inc [2007] EWHC 540 (Pat)

[2007] EWHC 540 (Pat)Case No HC 06 C04490Case No HC 07 C00051
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 13/03/2007
Before
MR. JUSTICE MANN
Between
(1) VETCO GRAY UK LIMITEDClaimants(2) VETCO GRAY INCClaimantFMC TECHNOLOGIES INCDefendant
Transcript of the Stenographic Notes of Marten Walsh Cherer Ltd.,6 th Floor, 12-14 New Fetter Lane, London EC4A 1AG.Telephone No: 020 7936 6000. Fax No: 020 7427 0093DX 410 LDE info@martenwalshcherer.com
Mr. John Baldwin QC, Mr. Michael Tappin and Mr. Jonathan HILL (instructed by Messrs. Wragge & Co.) for ClaimantsMr. Piers Acland (instructed by Messrs. Freshfields Bruckhaus Deringer, London EC4) for Defendant
Judgment
[1]The matters before me today are applications made by the defendant in the present proceedings (FMC Technologies Inc.) for a stay of these proceedings on forum non conveniens grounds. The applications arise in the context of a patent action. The jurisdiction in whose favour a stay is sought is that of Scotland.[2]I can most usefully start by setting out the patents in suit. The patents in suit are related to oil exploitation technology. They relate to christmas trees, that is to say a complex series of valves and pressure containment vessels and similar apparatus which are needed to sit on a well head for the proper exploitation of oil and gas under the sea.[3]The principal patent in suit is a European patent with the number EP 1 278 935, which I shall call the 935 Patent. It was granted on 21st June 2006 pursuant to an application filed on 22nd March 2001. Its nature, putting it shortly, is an alleged new method of providing for pressure containment within a horizontal Christmas tree. The patent has 49 claims.[4]The second of the patents in suit is a European patent, which I shall call the 721 Patent, EP 1 336 721 B 1. It is a divisional patent and all I need to say about it at the moment is that it is a matter related to the 935 Patent. I need not describe it further because in the circumstances to which I shall come it falls out of the picture.[5]The third matter before me is a European patent application number EP 1 707 737. I shall call that the 737 application. That is for another divisional patent. That becomes relevant in relation to what I will call the rump of the second of the actions before me.[6]The sets of proceedings involved in this matter are as follows. The first in time are Scottish proceedings commenced on 7th December 2006. If the Scots will forgive me, I will use English terminology rather than Scottish terminology for describing the parties. The claimant is FMC Technologies Inc. and the defendants are, firstly, Vetco Gray UK Limited (that is to say, the first of the claimants in these English proceedings), and, secondly, Vetco Gray Incorporated (the second of the claimants in the proceedings before me), described in the Scottish proceedings as incorporated under the laws of the United States.[7]That action is a patent action in which the claimant claims infringement of the 935 Patent, the infringement allegedly occurring as a result of the sale and exploitation of a very substantial piece of equipment made by the Vetco companies and called the HT-2. The Scottish claim claims infringement in respect of some 16 of the 49 claims of the 935 Patent. The other claims do not seem to be in issue in the Scottish proceedings.[8]The defence has two principal elements. The first is that some of the alleged infringements are themselves disputed. Second, the validity of all the claims relied on is disputed on the basis of want of novelty and obviousness. Eight pieces of prior art are relied on in those Scottish proceedings.[9]Those Scottish proceedings are currently going through Scottish procedures. I need not set out those procedures, nor need I describe where they have got to. The important thing for present purposes is the likely trial date of those Scottish proceedings, which is likely to be, on the best calculations at the moment, some time in March or April of next year, 2008.[10]There are two sets of English proceedings. The first bears the action number 4490 and is the main one of the two sets of relevant English proceedings. The parties to the English proceedings, which are those before me, are the same in Scotland except the other way round; that is to say, the Vetco companies are the claimants and FMC Technologies Inc. is the defendant. The claim form in these proceedings was issued on 21st December 2006. Particulars of claim were served on 17th January 2007, along with grounds of invalidity.[11]The claimants in these proceedings claim revocation of the 935 Patent and, in the alternative, seek declarations of non-infringement. The claims for revocation are effectively the counterpart of the claims for revocation so far as raised in the Scottish proceedings; that is to say, want of novelty and obviousness and there is also an added matter point. It will be noted that these English proceedings seek to revoke the patent. They therefore amount to an attack on all the claims in the 935 Patent. They are not confined to those which are in issue in the Scottish proceedings. Eleven items of prior art are relied on: all eight of those relied on in Scotland plus three more.[12]The second of the two actions before me is an action bearing the number 051. The claim form in this case was issued on 10th January 2007 and particulars of claim and certain grounds of invalidity were served on 25th January 2007. The parties are the same as in the 4490 action. Their claim is to revoke the 721 Patent and they seek certain relief in respect of the 737 application.[13]The 721 Patent falls out of the picture because, after a certain amount of skirmishing and conditional offers, FMC Technologies Inc. have now unequivocally indicated that they will consent to the revocation of the 721 Patent. That takes that patent, whose validity was in issue in the 051 action, out of the picture. What remains in the picture, however, is the claim in relation to the 737 application.[14]The principal claim in the proceedings relating to that application is set out in paragraph 3 of the prayer, which reads as follows:
"3. …. the Defendant has asserted that the Claimants have infringed and threaten to infringe the 935 Patent by manufacturing, offering to dispose of and disposing of the HT-2 horizontal christmas tree (which is manufactured, offered for disposal and disposed of in the United Kingdom by the First Claimant). The Claimants rely upon the issue of proceedings against them in the Court of Session, Edinburgh on 7 December 2006."
[15]The first of two paragraphs 4 in the prayer claims an injunction restraining the defendant from bringing any such proceedings. The basis on which that ostensibly rather odd relief is sought is set out in paragraphs 5 and 6 of the particulars of claim, and they read as follows:
"5. The Defendant is the proprietor of European patent application no. 06075501.4 (published as EP 1 707 737 A) ('the 737 Application'). The 737 Application is a divisional application of application no. 01920763.8, published as EP 1 278 935 A 9 'the 935 Application') upon which the 935 Patent was granted. At present, the 737 Application claims the same or substantially the same invention as the 935 Patent. The 721 Patent was also granted on a divisional application from the 935 Application. 6. It would be an abuse of process for the Defendant to bring proceedings against the Claimants in respect of the HT-2 horizontal christmas tree under any patent granted on the 737 Application or any other patent granted on a divisional application derived (directly or indirectly) from the 935 Application, either at all or in respect of the same or substantially the same invention as those claimed in the 721 Patent and/or the 935 Patent. The Defendant has known about the HT-2 horizontal christmas tree since 2005 according to paragraph 4 of its Condescendence in the said Scottish proceedings. It has had every opportunity to secure the grant of such patents as it believes it is entitled to with a view to commencing proceedings in respect of the HT-2 horizontal christmas tree. The Claimants should be entitled, upon disposal of these proceedings and those under claim no. HC 06 C04490 relating to the 935 Patent, to freedom from suit in relation to the HT-2 horizontal christmas tree based on divisional applications stemming from the 935 Application. It would be an abuse of process to subject the Claimants to repeated litigation based on a series of patents stemming from the same application."
[16]As I have already indicated, the applications before me are brought by FMC (as I shall call the defendant in this these proceedings) for a stay of these English proceedings. The stay is sought on a forum non conveniens basis. FMC's central point is that the proper issues which arise between the parties have been properly raised in Scotland, those proceedings are the more appropriate vehicle for the resolution of those issues and the English proceedings should be stayed in order to allow the issues to be tried in Scotland. There is no claim to strike out the 051 action on the basis that it is bound to fail. The application in relation to that action is also a stay on forum non conveniens grounds.[17]I will concentrate for the moment on the main action, the 4490 action, because in this context the other action is something of a sideshow. It is common ground between the parties that the way of resolving which, if either, of the English and Scottish actions should go ahead is to determine the matter on a forum non conveniens or a forum conveniens basis.[18]It is accepted by both parties that each action is properly brought within its own lights, save for a point taken in Scotland about the propriety of joining Vetco Gray Incorporated as a defendant in Scotland. That is something which will be resolved in Scotland. There is a debate in the evidence that I have seen as to whether that is most appropriately done before the trial in Scotland or at the trial in Scotland. That will have to be resolved in Scotland. It has the potential, I suppose, for some delay of the Scottish proceedings, but, subject to that, it is in my view of no great relevance to the issue that I have to decide.[19]Before going on to consider the evidence, I should remind myself of the principles applicable to an application such as this. Mr. Piers Acland, for FMC Technologies Inc., and Mr. John Baldwin QC for the Vetco companies between them took me to the relevant authorities. I need only cite a summary deployed by Lewison J in Ivax Pharmaceuticals UK Limited v. Axa Nobel BV [2006] FSR 888, paragraph 7. In that paragraph Lewison J set out a summary of the relevant principles as they appeared from the cases and as they had, in turn, been summarised by Tugendhat J in Lennon (Neil) v. Scottish Daily Record & Sunday Mail Ltd. [2004] EWHC 359. Tugendhat J said:
"7. In that situation the relevant principles are those set out in Spiliada Maritime Corporation and Cansulex [1987] AC 460. They are helpfully summarised by Tugendhat J in the Lennon case in paragraph 19 as follows: 'In a case where the defendant has been served within the jurisdiction, the approach to be adopted by the court is essentially as follows: i) The basic principle is that a stay will only be granted on the grounds of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice. ii) Initially, the burden rests upon the Defendant, "... not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum: iv) If the court's conclusion at this stage is that there is "... some other available forum which is prima facie clearly more appropriate for the trial of the action, it will ordinarily grant a stay, unless the plaintiff can discharge the burden of showing that there are nonetheless circumstances by reason of which justice requires that a stay should not be granted. In this inquiry, the court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with other jurisdiction. v) Lord Goff explicitly stated that "it was necessary to strike a note of caution regarding the prominence given to a legitimate personal or juridical advantage" of the plaintiff, "indicating that such an advantage was not decisive and was just one factor to be considered in assessing 'the interests of all the parties and the ends of justice.'"
[20]Those are the principles that I shall apply.[21]The logical first question which arises is whether the two proceedings do effectively raise the same or substantially similar issues. If they do not, then it is hard to see how it could be helpful or useful or proper to stay one in favour of the others.[22]FMC Technologies Inc. says that the cases do indeed raise the same or substantially similar issues. While the claim is in the form of an action to restrain an infringement in Scotland, the defences raised are defences which go to the root of the patent; that is to say, the claims are challenged on the basis of want of novelty and obviousness. Those are the same claims which underlie the English proceedings, which are revocation proceedings.[23]Mr. Baldwin, for the Vetco companies, says no, the case in England goes beyond that. The Scottish proceedings do not contain a revocation claim; the English proceedings do. The Scottish proceedings, therefore, do not attack the whole of the patent; the English proceedings do. Accordingly, there is no large scale identity, or sufficiently large scale identity, of issues between England and Scotland. Technically, it seems to me, Mr. Baldwin is correct, but only technically.[24]I have not had an opportunity to identify completely the scope of those claims which are in issue in Scotland and to compare them with the claims which are also in issue in England, so I cannot form a complete judgment as to the full extent to which the English proceedings will be in substance wider ranging. However, having said that, the firm impression I have is one of substantial identity. It seems to me to be likely that the claims which are not in issue in Scotland do not necessarily add an enormous amount to the matter, or they are unlikely to do so, so that, having decided the validity of the claims which are in issue in Scotland, it seems to me to be highly likely that the other issues will fall into place. In any event, the issues could be made identical if a revocation counterclaim were brought in Scotland. Mr. Acland has given an undertaking that his clients would not oppose an amendment in order to achieve that, but Mr. Baldwin says, on instructions, his clients will not do so. The fact that the bulk of the prior art is common to both the English and Scottish proceedings is, again, a pointer to the substantial identity of the issues which are likely to arise in both.[25]Having therefore decided that the actions are sufficiently similar, the next question is whether or not some forum other than England is a more appropriate forum. Obviously, Mr. Acland says, in support of his submission, that Scotland is the appropriate forum, or certainly an appropriate forum. He relies on two principal factors. First, he says that the infringement has occurred there and the Scottish defendants (that is to say the Vetco companies, or at least Vetco Gray UK Limited) has its manufacturing base there, which is probably merely a different way of saying that the infringement occurred there. Second, he relies on the facts that FMC has its own manufacturing facilities there, in Dunfermline. Indeed, in so far as it has UK manufacturing facilities, they are situated exclusively in Scotland.[26]Both those matters, as matters of fact, are true but in my view the latter is of no real significance. This action is a patent action and the matters rendering Scotland the appropriate forum, if there are any, ought to be those germane to such an action and not general connections with Scotland. The manufacturing activities of FMC do not seem to me to fall into that category.[27]Mr. Acland's first point, however, seems to me to be a good one. The infringing activities which his clients complain of took place there. They seek relief there because they seek an injunction. It is appropriate to seek that relief in that jurisdiction, and indeed it might be thought it is the only jurisdiction in which that relief can be sought. In the circumstances, it seems to me that that infringement and the infringement claim, by themselves, make Scotland an appropriate, if not the more appropriate, jurisdiction, subject to any factors pointing in favour of England.[28]Other factors came and went in the course of the evidence and in argument. Each side sought to reinforce its own case in favour of its chosen jurisdiction by reference to those factors and to knock down the appropriateness of the suggested jurisdiction of the other. At the end of the day, most of them came out fairly neutrally. They can be summarised as follows.[29]The first is cost. The evidence was subject to a degree of equivocation as to the relative cost of proceeding in Scotland and in England. Mr. Baldwin's case is that he would be prepared to accept that the cost of the Scottish proceedings would be £300,000 to £400,000 per side. Mr. Baldwin accepted, or said his clients accepted, that an estimate put forward by Mr. Acland of £800,000 to a million pounds for the cost of English proceedings would be about right. That is on the footing that that figure described the costs of both sets of parties in England, indicating that in England the costs would be likely to be £400,000-£500,000 on each side - a significant but not enormous difference. However, Mr. Acland revealed during the hearing that the £800,000 to a million pounds figure was his side's estimate of the costs of one of the parties. That seems somewhat extreme. In my view, so far as I have evidence of cost, the evidence is that the costs are going to be broadly similar both in England and in Scotland. Certainly it cannot be said that England is going to be cheaper. If anything, Scotland will be cheaper.[30]Second is timing. Timing is said to be important. Timing is always said to be important in patent actions, but some particulars are given in relation to this one. Mr. Baldwin's clients put in some evidence indicating that FMC are indulging in a certain amount of "bad mouthing" in the industry and creating some difficulties for Vetco based on its infringement claim and its allegation that Vetco is infringing FMC's patent. The evidence indicates that Vetco is hoping to do some deals, first in the autumn of this year and second in the early part of next year, which, it is suggested, would be or might be impeded if the issue is not resolved by the time those deals come to be done. Certainly the difficulties being caused in the marketplace by Vetco require that the matter be dealt with as soon as possible, according to Mr. Baldwin's evidence.[31]The dates at which it seems a trial can be had in each jurisdiction are probably March/April in Scotland and probably February in this jurisdiction. I do not consider that that difference in estimates (which are, it has to be said, only in relation to estimates) is sufficient to make one or other of the jurisdictions a more appropriate one in the current circumstances. The latest point of time at which Mr. Baldwin claims to have a deal which is going to be affected by this litigation is February of next year. With the best will in the world, I do not see how Mr. Baldwin is likely to get a judgment by the end of February in this jurisdiction, even if he has a trial in this jurisdiction. So it seems to me that, if there is prejudice to the deals, that is going to happen because a judgment cannot be obtained in either jurisdiction before those deals need to be dealt with. Otherwise, the similarity between the present estimates of the dates at which trials can probably be obtained is such that I do not consider that either jurisdiction has a material timing advantage over the other.[32]Those, I think, were two of the three principal other issues which each side tried to throw into the scale on its particular side from time to time. As I have indicated, they come out pretty neutral.[33]The third matter requires a little more development. The evidence filed by the Vetco companies suggested that this application would involve a critique of the experience of Scottish courts and certain individual Scottish judges when it came to hearing a patent dispute of this nature and this substance, with the alleged complexity of the present proceedings. Some debate was anticipated, at least by me, about the experience of the designated Scottish IP judges. However, in submissions, Mr. Baldwin disavowed any challenge to the competence of the Scottish judges. He rightly said it would have been an impertinence to mount such a challenge. He put his case differently. He relied on what he said was the acknowledged high reputation of the London patent courts, a reputation which he said (with all due deference) was not shared by the Edinburgh courts; and he relied on the very large sums of money at stake in this case, said by him and his clients to be hundreds of millions of dollars, because the equipment affected by the patent in suit is a very large and expensive piece of kit. His clients, he said, have the right to bring a case for revocation in a court of competent jurisdiction and a court of their choice and they should not lightly be shut out from their chosen jurisdiction, particularly bearing in mind the reputation which his clients wish to have the benefit of in this jurisdiction and bearing in mind the sums involved. He even went so far as to invoke the maxim that justice has not merely to be done; it has to be seen to be done.[34]I say nothing about Mr. Baldwin's otherwise flattering submissions about the reputation of the English Patents Court, but he is probably right in his basic starting point that his clients have the right to choose a court of competent jurisdiction and that right becomes even more justifiable if and in so far as they are seeking to take the benefit of a court with a high reputation in a given field. However, it also has to be acknowledged that that starting point gives way to the principles of forum non conveniens where appropriate. His clients do not have an absolute right to bring proceedings wherever they choose to bring them and it is the very adjustment of those rights, when they run up against other principles, that is in issue in this application. Accordingly, while Mr. Baldwin's clients have explained their choice of the English jurisdiction, the fact of their choice and the flattery which apparently accompanies it, do not, in my view, take the debate any further.[35]In considering the scope and implementation of Mr. Baldwin's clients' rights, and in considering such discretion as I have in this matter, I bear in mind the result of what would be the case if I were to accede to Mr. Baldwin's submissions. There is no extant application by Mr. Baldwin's clients to stay the Scottish proceedings. He accepts that, if I do not stay these proceedings, then both sets of proceedings (English and Scottish) will continue. On instructions, he told me that he would not introduce his revocation claim as a counterclaim in Scotland, despite the undertaking given by FMC, and that would give rise to a very obvious and highly undesirable duplication of costs and effort. There would be a race to judgment in order to get the benefit of potential estoppels or, worse still, the risk of inconsistent decisions if no estoppels operate. There would be an enormous waste of cost and effort in one jurisdiction. Mr. Baldwin says that the costs involved are de minimis in the context of the amounts at stake, but I am afraid I do not consider that legal costs of the order of £400,000 per side can be regarded as de minimis in anybody's currency.[36]A modern court should not be encouraging or assisting that sort of parallel litigation. I accept, of course, that that is the sort of thing that will happen if forum non conveniens grounds are not made out in any given case and it is probably not sufficient to invoke the doctrine of forum non conveniens to point to the undesirability of having two parallel sets of proceedings; but it is not attractive and, as I have said, it is not to be encouraged. At the end of the day, the state of affairs proposed by the Vetco companies, so far as it has any weight in the calculation, points in favour of a stay rather than against it.[37]There are no particular juridical advantages or disadvantages which are to be brought into the calculation in this particular case. One potential candidate that was floated has little weight. It is apparently the case that in Scotland all evidence in chief is given orally, even expert evidence, and that will mean that the no doubt complex expert evidence in chief will have to be given orally by the experts, although Mr. Baldwin does tell me there is some system for the exchange of experts' reports. The same goes for any evidence of fact that has to be given. That no doubt will lengthen the proceedings and might have been capable, if the numbers had worked out differently, of increasing the costs in Scotland to a significant extent over the costs in England. However, the costs in England seem to have their own momentum and, even allowing for the extra time necessary for extensive evidence in chief to be given, it does not seem to have any costs consequences which tell against Scotland and in favour of England. In any event, in the circumstances, I do not regard that as any particular juridical advantage or disadvantage.[38]Weighing up all these matters, I have come to the conclusion that Scotland is indeed the more appropriate forum for determining this dispute. I leave out of account the fact that proceedings were started in Scotland, although they were. As Mr. Baldwin points out on the authorities, the principal significance of a party starting proceedings in one jurisdiction rather than another is that, in an appropriate case, those proceedings may be more advanced and it may therefore be more significant to go with those proceedings. In the present case that does not apply.[39]In the circumstances, I shall order that the current proceedings be stayed in favour of Scotland. If those proceedings do not absolutely determine every aspect of the disputes that arise between the parties, it will be because Vetco has chosen not to counterclaim. I do not see that Vetco should be rewarded for their declining to counterclaim by being given the forum of its choice.[40]The positive feature of the whereabouts of the infringement is a positive, and indeed the principal positive, feature making Scotland the more appropriate forum for an infringement dispute. I shall stay the 4490 proceedings accordingly.[41]There is not much left in these proceedings once the 721 Patent has been revoked. What is left is the somewhat odd claim which I have referred to earlier in this judgment. There may be much to be said for striking out that claim on the ground that it is unsustainable in the circumstances, and I had anticipated from Mr. Acland's skeleton argument that he was going to invite me to do something like that. However, there is no such claim. The claim made in respect of this action is for a stay.[42]It has to be said that the issues arising in this claim, so far as they are discernible, are not the same as those arising in the Scottish proceedings. Different points arise in this case, even in the rump of this case, if they arise at all. There is, in my view, no basis for staying the rump of this action on the basis alleged; that is to say, the basis of forum non conveniens. It remains to be seen whether pursuing these proceedings remains sensible or is legally possible, but I will not stay these proceedings on the grounds of forum non conveniens. If another look is to be had at these proceedings on some other basis, then it will have to be had in the context of some different application and not the current application. I will therefore not stay this action. MR. ACLAND: My Lord, could I ask you to take bundle A. Bundle A tab 1 is my draft minute of order. Paragraph 4 is the stay of the first action. My Lord, I think my undertaking will need to be recorded in that minute of order. MR. JUSTICE MANN: There needs to be an amendment of paragraph 1. It is to be stayed pending any further judgment or further order. What I have in mind, Mr. Acland, is that circumstances may conspire to shift the balance back in favour of England. Therefore, if, for example, there were delays in Scotland, whether contrived or not, such as to push the date off, or were it to transpire that the needs of Scottish judges to hear the matters they have to hear means that there was not going to be a trial at the date which is currently estimated, then the balance may shift. I will not say whether it would or what would be required to shift it, but Mr. Baldwin must have the right to come back if the present basis on which I have given my judgment is falsified by later events. MR. ACLAND: I understand that. So if I insert the words after "including any appeal", it will say "or further order in the meantime", or something like that. MR. JUSTICE MANN: Or something like that. I am sure you can agree something with Mr. Baldwin's phalanx of juniors. MR. BALDWIN: A Christmas tree, no less! MR. ACLAND: My Lord, as far as costs are concerned, there is a schedule of costs from each side. The schedules are very different and I am not minded, in those circumstances, to ask you to summarily assess the costs because the magnitude of the difference is so great. It may be better for those costs to go off to an assessment. I do not know what you have in front of you. MR. JUSTICE MANN: The first thing I have in front of me is a schedule of costs which says "without prejudice", which cannot be right. MR. ACLAND: Which cannot be right. MR. JUSTICE MANN: Whose is that? MR. ACLAND: That is ours. I have discussed it with Mr. Baldwin and he has agreed not to take a point on the "without prejudice". 43. Mr. Baldwin, there is implicit in this an application in order that you should pay the costs. Do you want to say anything about that? MR. BALDWIN: Yes. MR. JUSTICE MANN: We had better deal with that first. MR. BALDWIN: My learned friend is asking for costs and he expects that we are going to pay them. You will see that his schedule divides the costs of both applications into two and he attributes 55,000 ---- MR. JUSTICE MANN: Are you dealing with the principle or quantum at the moment? MR. BALDWIN: What I am saying is that he won one and he lost one. The one that he lost, he lost for a number of reasons, one of which is that this morning, for the first time, he threw in the towel. What I say is the right order, bearing in mind he has won one and lost one, is that there is no order for costs or it cannot be costs in the case. Costs in the case is not appropriate, but a convenient order would be no order for costs because we both won one. MR. JUSTICE MANN: Right. Mr. Acland, in principle, it seems to me that an order must be made which reflects the fact that you have not won completely. MR. ACLAND: Indeed. MR. JUSTICE MANN: I do not accept that the right balance is achieved by that which Mr. Baldwin has suggested and it is appropriate to make either an order that you have the costs of one and not of the other, or some form of netting order. MR. ACLAND: The netting order then gets into the quantum. MR. JUSTICE MANN: Not necessarily because I could say you should have X% of your costs of today and then you could still assess but it will be a percentage. What is your primary submission bearing in mind that you are not going to get all your costs of today? MR. ACLAND: My Lord, can I just take some instructions? (After a pause) My Lord, I am simply going to do this off the top of my head, I am afraid, as to what the correct apportionment should be, but if I were to say 75% of the costs of today have been concerned with my application for a stay of the first action and a 25% deduction in respect of the second action, rough and ready, my Lord, that feels to me to be about right. MR. JUSTICE MANN: So you say you should have 75% of the costs of the exercise? MR. ACLAND: Indeed. MR. JUSTICE MANN: To be assessed. MR. ACLAND: To be assessed, my Lord. MR. BALDWIN: My Lord, that is inconsistent with my learned friend's certificate, which claims that there was a fifty-fifty split between the two actions. MR. JUSTICE MANN: How do I see this? MR. BALDWIN: You go right to the end, total costs split fifty-fifty, 55,000. The one I am looking at is the costs in 051 action. In relation to the second action, he is claiming 55,000, which is half of them. There is a costs schedule for each action. The one I have got happens to be for the 051. MR. JUSTICE MANN: That is why I have got two. I see, they are identical but they split it. I had not got to the bottom of that. Thank you very much. I am there now. MR. BALDWIN: Yes. So what we are saying is that it is quite wrong for my learned friend to say that he should get 75% of his costs. He himself has certified (his solicitor, that is) that half of the costs were spent on the first and half on the second. That is why I said no order. MR. JUSTICE MANN: Because you should have your costs of half and he should have his costs and they net off equally. MR. BALDWIN: Exactly. That was my approach. But bearing in mind his own figures, looking at each action, in our submission it is quite wrong for him to say he should have, in his submission, 75% of the costs of today, because a huge amount of these costs are costs in preparation. He has got 28,000 for his Scottish solicitors. We have only got 3,000 for the Scottish solicitors. There is a huge amount of costs coming forward to today. MR. ACLAND: My Lord, I am not sure I can help beyond saying that the split of fifty-fifty, I do not understand that to be a precise mathematical split and apportionment between the two applications, rather than this is the grand sum and we split it in half. That may not be a satisfactory way of doing it, but, as I understand it, that is all that that fifty-fifty is representing.44. These figures are very large sums of money. What I shall do is to make a strictly logical order and you can take your chances with the costs judge. I shall make an order that Mr. Acland shall have his costs of the application on which he succeeded and Mr. Baldwin should have the costs of the application on which he succeeded. The costs judge can work out where the costs lie in relation to each of those and there will be netting at the end of the day. The costs judge can sort it out. These are very large sums. MR. BALDWIN: My Lord, there is one final matter and that is leave to appeal. MR. JSUTICE MANN: Yes.45. My Lord, that is one reason where we submit there was an error in principle, in fairness, in not giving us an opportunity to deal with the point.46. The second point is that you assumed that a reasonable likelihood of when the trial would come on in Scotland was in March. That, at best, is a "guesstimate" based upon what the Keeper might do in May or June and, although you have given us permission to apply, we lose time by the result of the stay.47. My Lord, the third matter is that because you reached the conclusion that the infringing activity was taking place in Scotland, Scotland was more appropriate. My Lord, under the Spiliada test, merely being more appropriate is not good enough. I rehearsed the test for you and we say that, too, founds an error in principle.48. My Lord, for those reasons, we submit it is appropriate, although it is a question of your Lordship's discretion, and I know as well as most that the Court of Appeal considers that the discretion is yours and not theirs. There are circumstances, in our submission, whereby it would be appropriate and fair to give us leave to appeal.49. Is there anything else? MR. BALDWIN: We need directions on the second claim. What is required is a defence. The rules do provide for directions now the stay has been refused. Can we leave it like this, my Lord: that my learned friend and, I or my phalanx, will seek to agree directions with respect to the progress of the second action. If there is a difficulty, we will mention it at some convenient time. MR. JUSTICE MANN: If you manage to reach agreement, if it helps, I am happy to sign off on a consent order, if that is going to help, without the need for further attendance. Will that help? I assume it will. MR. BALDWIN: When you say "sign off" on it? MR. JUSTICE MANN: If you submit a consent order for directions, then if you agree them, then I will sign off. If not, it may be you will be faced with another application, but we will have to wait and see. MR. BALDWIN: Yes. I am obliged. MR. JUSTICE MANN: Mr. Acland, do you agree? MR. ACLAND: Yes. I have nothing to add, my Lord. MR. JUSTICE MANN: Technically, there would otherwise have to be a directions hearing, would there not? MR. BALDWIN: In due course, yes. MR. JUSTICE MANN: I am happy to try and avoid that. If the directions are standard and agreed, on the facts of this case, to save some money, then you can run the order past me. Make sure it comes to me so I will know what is happening. If the minute in the other action can be prepared and signed I need not see it. It can go straight to the Associate.

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