Danisco A/S v Novozymes A/S [2011] EWHC 3288 (Pat)

Case No HC 10 C 02358[2011] EWHC 3288 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue Royal Courts of Justice, 7 The Rolls Building, Fetter Lane, London, EC4A 1NLDate 08/12/2011
Before
MR. JUSTICE ARNOLD
Between
NOVOZYMES A/SDefendant/
Transcript of the Stenographic Notes of Marten Walsh Cherer Ltd.,1 st Floor, Quality House, 6-9 Quality Court, Chancery Lane, London, WC2A 1HP.Telephone No: 020 7067 2900. Fax No: 020 7831 6864
MR. ANDREW WAUGH Q.C. and MR. DOUGLAS CAMPBELL (instructed byArnold & Porter LLP) for Claimant/ApplicantMR. SIMON THORLEY Q.C. and MR. MILES COPELAND (instructed byBird & Bird LLP) for Defendant/Respondent
JUDGMENT

Introduction

[1]I have before me two applications by the claimant in these proceedings, Danisco A/S. The first is for a stay of the proceedings pending a forthcoming hearing before the Technical Board of Appeal of the European Patent Office. Te second is for permission to use certain documents disclosed by the defendant, Novozymes A/S, in parallel foreign proceedings, including those before the EPO. For reasons that will appear, these two applications are more closely related to each other than one might anticipate.

Background

[2]Danisco's claim is for revocation of Novozymes' European Patent (UK) 1 804 592 (“the Patent”). The Patent relates to pelleted animal feed containing enzymes to increase digestibility, and in particular to the coating with certain salts of enzyme-containing granules in order to protect the enzyme from degradation during a steam treatment process. The Patent was filed on 27 September 2005 with a claimed priority date of 27 September 2004 and was granted on 11 November 2009.[3]Danisco has a salt-coated enzyme granule product called Phyzyme XP TPT which it has been selling in the European Union since 2007. Novozymes contends that dealings in that product infringe the Patent and other intellectual property rights which derive from the same application. By contrast, Novozymes does not have a product based on the patent on the EU market at present. It applied for regulatory approval for a product called Ronozyme HiPhos GT on 19 October 2011. The evidence before me is that obtaining regulatory approval can take anywhere from one to two years, and so Novozymes will not be in a position to launch the product until some time between October 2012 and October 2013.[4]There is litigation between the parties concerning the Patent and related rights in Denmark, Germany, the Netherlands, Finland and the EPO, as well as in this country. The chronology is as follows.[5]On 12 March 2010 Novozymes started proceedings against Danisco in Denmark seeking a preliminary injunction.[6]On 30 March 2010 Danisco filed an opposition at the EPO.[7]On 17 June 2010 Novozymes started infringement proceedings against Danisco in Germany.[8]On 28 June 2010 Danisco started revocation proceedings in the Netherlands. In those proceedings, Novozymes counterclaimed for infringement. The trial was held on 11 February 2011.[9]On 19 July 2010 Danisco started the present claim for revocation. In its grounds of invalidity, Danisco attacks the validity of the Patent on grounds of lack of novelty over three items of prior art, obviousness over the same two and an additional two items of prior art, insufficiency and added matter. In contrast to what had happened in Denmark, Germany and the Netherlands, Novozymes did not counterclaim for infringement.[10]On 15 November 2010 Novozymes started proceedings against Danisco in Finland for infringement of utility models deriving from the application for the patent.[11]On 4 March 2011 Novozymes obtained a preliminary injunction in Denmark after an eight day hearing. Danisco has appealed against that decision and the appeal has subsequently been fixed for another eight day hearing between 28 February and 19 March 2012.[12]On 23 March 2011 Novozymes commenced substantive proceedings on the merits in Denmark.[13]On 22 June 2011 the Dutch court gave its judgment, holding that the patent was valid and had been infringed by Danisco. Danisco has appealed against that decision, but I have no information as to when the appeal is likely to be heard.[14]With commendable speed, the EPO Opposition Division heard and determined Danisco's opposition to the Patent on 7 July 2011. It held that the claimed inventions were obvious over International Patent Application WO 92/12645 (“D1” in the EPO proceedings, and referred to as “Jacobson” in the present proceedings) read together with International Patent Application WO 00/01793 (“D3” or “EK Marcussen 2”). It also held that none of a series of auxiliary requests filed by Novozymes cured this invalidity. It therefore revoked the Patent. On the other hand, it rejected Danisco's allegation of insufficiency.[15]On 8 July 2011 Novozymes filed appeal T1839/11 against that decision, thereby suspending its effect.[16]In the meantime, the trial of this claim had been fixed for 17 October 2011. Danisco instructed as its expert witness a Dr. Alfred Gaertner. Novozymes instructed two experts, Dr. Stephen Cole, an enzymologist, and Professor Simon Clegg, a physical chemist. Experts' reports were duly exchanged on 21 July 2011. At that stage, however, Dr. Gaertner had not been able to inspect Novozymes' disclosure documents.[17]In early August 2011 Dr. Gaertner informed Danisco's solicitors that he was unwell, but nevertheless he was able to meet with them in mid-August to discuss a reply report and to start considering Danisco's disclosure documents. Subsequently, however, his condition worsened very rapidly and sadly he passed away on 8 September 2011.[18]On 9 September 2011 Danisco issued an application “(1) to adjourn the trial of this action listed to commence on 17 October 2011 due to the very recent and unexpected death of the Claimant's expert witness and the impossibility of his replacement in time for trial; and/or (2) to stay the trial of this action until determination of the Defendant's appeal to the TBA of the EPO against the revocation of the patent in issue…”[19]On 14 September 2011 the parties were able to agree that the trial be adjourned to float from 19 March 2012 "with liberty to the Claimant (if so advised) to restore its application for a stay of proceedings." For some period after that, there were without prejudice discussions between the parties, but unhappily they did not result in a resolution of the matter.[20]On 31 October 2011 Danisco set about restoring the application for a stay.[21]On 2 November 2011 Danisco issued an application for permission to use two documents in parallel foreign proceedings.[22]Since the application for a stay was restored, there have been a number of developments which I must mention.[23]First, again with commendable expedition, the TBA has fixed the hearing of Novozymes' appeal for 28 June 2012.[24]Secondly, Novozymes has continued to give disclosure in these proceedings. Novozymes served its original list of documents on 15 December 2010. Since then it has served no less than five supplemental lists, on 22 June 2011, 22 August 2011, 7 September 2011, 28 October 2011 and 30 November 2011. Counsel for Danisco criticised Novozymes for this, and pointed out that Novozymes' own evidence shows that Novozymes had failed properly to understand the advice it was given by Novozymes' solicitors as to the scope of disclosure. As counsel for Novozymes pointed out, however, Danisco has been pressing Novozymes to give proper disclosure and Novozymes has now done so. This has involved Novozymes incurring considerable costs since 9 September 2011.[25]Thirdly, on 11 November 2011 the German court stayed the German patent infringement proceedings brought by Danisco pending the hearing before the TBA, although as I understand it there will be a trial of a utility model claim on 15 December 2011.[26]Fourthly, on 30 November 2011 Danisco notified Novozymes that it had found a replacement for Dr. Gaertner as its expert witness in these proceedings, namely a Mr. Meiners, who is a specialist in the stabilisation of enzymes. It is convenient to mention at this point that Danisco also has available to it, if needed, an expert in physical chemistry, namely a Professor Thomas, who assisted Danisco in the Dutch proceedings.[27]Fifthly, on 5 December 2011 Novozymes filed its grounds for appeal to the TBA. Novozymes has filed with those grounds some 16 auxiliary requests, some of which involve rewriting the claims. It has also filed further documents and evidence, including a declaration by Erik Schmidt Marcussen, one of the inventors dated 29 November 2011, in which he reports the results of an experiment to measure humidity during the steam pelleting of food and a declaration of Professor Jesper Bendix dated 20 August 2010 prepared, it would appear, for the purposes of the Danish proceedings. Reference is also made to a declaration made by Professor Clegg filed during the course of the proceedings before the Opposition Division.[28]Sixthly, on the first day of the hearing before me, counsel for Novozymes stated that Novozymes intended belatedly to bring a counterclaim for infringement of the Patent. On the second day, he produced a draft counterclaim and draft particulars of infringement, although he accepted that those documents require some further work.[29]Counsel for Novozymes sought to explain Novozymes' delay in bringing a counterclaim on the grounds that it did not have evidence that Danisco was committing acts in the United Kingdom that would be infringing if Danisco's product falls within the claims of the Patent until admissions as to that fact had been made by Danisco in evidence recently served on this application and by counsel for Danisco in his submissions. Counsel for Danisco pointed out that a different explanation had been given by Novozymes to the Dutch court, which was that the UK was too small a market to bother with an infringement claim. Moreover, he submitted, and I agree, that it was manifest that Novozymes could have obtained sufficient evidence to bring a counterclaim by making a trap purchase, even if it did not have enough evidence without doing so.[30]I infer that Novozymes decided to bring the counterclaim in order to strengthen its arguments against a stay. Counsel for Danisco rightly did not suggest that that was an illegitimate course for Novozymes to adopt, however. Even without the counterclaim, it is clear that Danisco brought and pursued these proceedings to remove a potential threat to its business. The bringing of the counterclaim merely crystallizes that threat.[31]Seventhly, I ascertained from the Listing Office that this court could accommodate a trial of these proceedings commencing on or about 29 October 2012. I have been informed that both Novozymes' experts are available for that date and so are both Danisco's experts.[32]Lastly, I was informed by counsel for Danisco on the second day of the hearing that the Finnish court had just revoked Novozymes' utility models in issue there.[33]I should also mention one thing which has not happened. Despite having filed a large number of auxiliary requests before the EPO Opposition Division and TBA, Novozymes has not applied to amend the Patent in these proceedings. Counsel for Novozymes told me that Novozymes did not consider this necessary because its position was adequately protected by the existing subsidiary claims, a number of which it claimed were independently valid, and in particular claim 7. The stay application[34]Guidance as to the exercise of the Patent Court's discretion to stay domestic proceedings pending the determination of parallel proceedings in the EPO was provided by Mummery LJ, giving the judgment of the Court of Appeal, in Glaxo Group Ltd v Genentech Inc. [2008] EWCA Civ 23, [2008] FSR 18, as follows:
“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[35]Counsel for Danisco relied in particular upon the following factors as favouring a stay:(1) timing;(2) the costs that would be saved in the event that the appeal to the TBA is rejected;(3) the commercial situation;(4) the uncertainty as to scope of Novozymes' monopoly, if any;(5) the public interest; and(6) the late infringement claim. Timing[36]Counsel for Danisco argued that the fact that the TBA hearing had been fixed for 28 June 2012 was a strong factor in favour of a stay. It had the potential, if the appeal was rejected by the TBA, to provide certainty for the parties Europe-wide, just over three months after the revised trial date in this court, in all probability less than three months after judgment would be handed down by this court, and well before any decision of the Court of Appeal in this country. If, on the other hand, the appeal was allowed by the TBA, then the trial would only have been delayed by just over six months if it was refixed for 29 October 2012.[37]I accept that argument so far as it goes. As counsel for Novozymes submitted, however, it is necessary to go on to consider the commercial ramifications of this. Costs saved by a stay[38]It is common ground that roughly half of appeals to the TBA are upheld and roughly half rejected. Counsel for Danisco argued that a stay would save each party hundreds of thousands of pounds if the appeal was rejected by the TBA. I accept that this factor favours a stay. Furthermore, as counsel for Danisco rightly pointed out, the potential costs saving has been increased as a result of Novozymes' belated decision to bring a counterclaim for infringement.[39]Counsel for Novozymes submitted that delaying the trial from March to October 2012 would increase costs. I do not accept that there would be any significant increase. Commercial situation[40]Counsel for Danisco relied on the fact that the commercial status quo was that Danisco was on the market with its product whereas Novozymes was not, and that it would take Novozymes one to two years from October 2011 to obtain regulatory approval for its product. He argued that this favoured a stay, since nothing was going to change in this respect between now and October 2012 at the earliest.[41]Counsel for Novozymes riposted that his client's commercial objective was to be able to launch its new product free from competition. The only way in which Novozymes could achieve this was to obtain a final judgment in its favour with effect in this country by the time that it received regulatory approval. Regulatory approval would be obtained at some date between October 2012 and October 2013. It was necessary to consider what the position would be on the assumption that the appeal to the TBA was successful. On that assumption, if there was a trial in this court commencing on 19 March 2012, and any subsequent appeal to the Court of Appeal was expedited, then Novozymes had a reasonable chance of obtaining a final judgment before launch of its product. By contrast, a trial commencing on 29 October 2012 would mean that Novozymes stood little chance of obtaining a final judgment prior to obtaining regulatory approval, even assuming that any appeal was expedited. This argument has, of course, been given added force by Novozymes' belated decision to bring a counterclaim for infringement.[42]I agree with counsel for Novozymes that the commercial situation is a factor which favours refusal of a stay rather than the grant of a stay. Uncertainty as to the scope of the monopoly, if any[43]Counsel for Danisco argued that the scope of the monopoly conferred by the Patent, if any, was uncertain until the TBA had made its decision. In support of this, he relied upon the number and nature of Novozymes' auxiliary requests filed with its grounds of appeal. It does not appear to me, however, that the uncertainty is significantly greater than is usual with appeals to the TBA, since it is standard practice for patentees to file a number of auxiliary requests. In any event, I do not see that this is a factor which favours a stay. As matters stand, the trial here is to be fought upon the granted claims. If Novozymes wishes to defend itself upon some alternative basis, it will have to apply to amend. If it does apply to amend, then the trial court will be able to consider the validity of the claims as proposed to be amended. If Novozymes does not apply to amend, it will suffer the consequences if the TBA subsequently upholds the Patent with claims which were not before the trial court and materially affect the issues considered at trial.[44]Counsel for Danisco also suggested that there were inconsistencies between Novozymes' current claims to independent validity here and its auxiliary requests in the EPO. That may be so, but I do not see that it is relevant to the issue I have to decide. Furthermore, it is an issue that can be addressed by appropriate case management. Public interest[45]Counsel for Danisco submitted that, although it was in the public interest to determine the validity of a patent as soon as possible, a first instance decision in this country, in, say, April 2012, would be of little value in establishing certainty compared to the appeal to the TBA. In my view, this is just a repetition of the point on timing. Counsel for Danisco also pointed out that, if the trial proceeded in March 2012, but the appeal to the TBA was rejected, court resources would be wasted to the detriment of other litigants. I agree that that is a factor in favour of a stay. The late infringement claim[46]Counsel for Danisco argued that it would be difficult for Danisco to be ready for a trial of the infringement claim on 19 March 2012, since it would need to prepare a product and process description and there might be a need for experiments, and that this was an additional factor favouring a stay. Counsel for Novozymes argued that Danisco ought to be able to be ready in time for 19 March 2012 given that the infringement question had been litigated in other countries, but said that, if Danisco was genuinely prejudiced, infringement could be tried later.[47]While I accept that this is a factor to be borne in mind in the overall assessment, in my view this is really a case management issue which is distinct from the question of whether a stay of the main claim should be granted. As at present advised, it appears to me that it ought to be possible for Danisco to prepare for trial on infringement by 19 March 2012 if appropriate case management directions are made. Given that Novozymes has brought its counterclaim so late, those directions should be framed so as to minimise any prejudice to Danisco. Factors relied upon by Novozymes[48]For his part, counsel for Novozymes relied in particular upon the following factors as militating against a stay:(1) the fact that Danisco had elected to bring these proceedings and not to seek a stay until close to trial;(2) Danisco's failure to offer any undertakings;(3) Danisco's reliance upon Novozymes' disclosure documents in support of its allegation of insufficiency;(4) the spin-off value of an English judgment; and(5) Danisco's delay in making the application. Election[49]Counsel for Novozymes pointed out that Danisco had brought these proceedings to obtain revocation of the patent. Novozymes had not sought a stay despite the parallel proceedings in the EPO. Both parties had pursued the proceedings down to exchange of experts' reports and incurred hundreds of thousands of pounds of costs as a result. Only six weeks before trial did Danisco first intimate, and only after the original trial date did Danisco pursue, an application for a stay. He submitted that in the absence of any agreement on the part of Novozymes to a stay, Danisco should be held to its election to pursue the English proceedings unless there had been a change of circumstances which provided a strong justification for a stay and that there were no such circumstances.[50]Counsel for Danisco argued that there had been a change of circumstances. Danisco had not anticipated that the EPO would be so quick, nor that its expert would die, with the result that the trial would have to be adjourned anyway. In the circumstances in which the parties now found themselves, a stay would potentially save time, effort and money.[51]I accept that there has been a change of circumstances and, as I have explained, I also accept that the imminence of the TBA hearing favours a stay; but I consider that the fact that the proceedings have been pursued as far as they have is an important countervailing factor. No undertakings[52]Counsel for Novozymes pointed out that Danisco had not offered any undertaking to abide by the result in the TBA; i.e. not to continue with its English challenge if it lost in the EPO; nor had it offered any undertaking not to continue to market its product; nor had it made any proposal with regard to the costs incurred to date. By contrast, counsel for Novozymes accepted that, if a stay was refused but Novozymes lost the appeal to the TBA, then Novozymes would have difficulty in resisting an order to pay the costs thrown away, although he made it clear he had no instructions to consent to such an order.[53]In my view, these are all factors favouring refusal of a stay and, in particular, the absence of any undertaking by Danisco to abide by the result in the EPO. Insufficiency[54]As I shall discuss in more detail when I come to Danisco's second application, Danisco contends that the Patent is invalid on the ground that the specification does not disclose the invention clearly and completely enough for it to be performed by a person skilled in the art. Furthermore, Danisco alleges that this contention is strongly supported by documents disclosed by Novozymes in these proceedings recording the results of a series of trials conducted by Novozymes before and after filing the priority document from which the Patent claims priority. By its second application, Danisco seeks permission to use some of these documents for the purposes of parallel foreign proceedings, and in particular in support of its forthcoming response to Novozymes' appeal to the TBA.[55]Counsel for Novozymes argued that Danisco's reliance upon these documents raised issues of technical fact as to the proper interpretation of the trials recorded in the documents which this court was much better equipped to deal with, by virtue of its procedures for disclosure and cross-examination, than a tribunal like the TBA, which did not have such procedures available to it. He submitted that this was a factor which favoured refusal of a stay because then the issue could be investigated in detail at the trial scheduled for 19 March 2012. That would enable this court to give a judgment which would be of assistance to other courts and tribunals, including the TBA at the hearing on 28 June 2012.[56]Counsel for Danisco accepted that this court was better equipped to deal with the issue than the EPO, but argued that Danisco was the party which would be potentially prejudiced by being deprived of the opportunity of investigating the matter at trial in March 2012 if a stay were granted.[57]I do not accept the latter argument. As I shall describe in more detail below, as part of its application to use the documents, Danisco contends that Novozymes has misled foreign courts and tribunals, including the EPO. In these circumstances, Novozymes has a clear interest in being able to clear itself of the charge that it has misled other courts and tribunals by showing, if it can, that the documents do not bear the interpretation which Danisco places upon them. These are questions which this court is well-equipped to investigate in detail. Furthermore, I have no doubt that a judgment of this court on these matters would be of assistance to the foreign courts and tribunals. I therefore conclude that this is a factor which favours refusal of a stay. Spin-off value[58]This brings me to the next factor relied upon by counsel for Novozymes; namely what Lewison J (as he then was) at first instance in Glaxo v. Genentech called the “spin-off value” of an English decision. This is not confined to its potential value to the parties in proceedings in other jurisdictions. Counsel for Novozymes pointed out that, as is common ground, there have already been without prejudice discussions between the parties with a view to reaching a global settlement. He submitted that a fully reasoned English judgment on all the issues, including but not limited to insufficiency, might assist them to resolve their differences. I agree that this is a factor which favours refusal of a stay. Delay[59]Counsel for Novozymes pointed out that Danisco had not applied for a stay after the Opposition Division decision on 7 July 2011, but only after the death of Dr. Gaertner. Even then, it had not pursued the application until 31 October 2011. In the meantime, further costs have been incurred. Counsel for Danisco said that part of the delay was due to the settlement discussions, but more fundamentally he submitted that the delay did not matter because substantial costs could still be saved. I accept that the delay is not decisive, but in my view it is another factor favouring refusal of a stay. Conclusion[60]Weighing all the various factors together, I consider that the factors favouring refusal of a stay outweigh those favouring the grant of a stay. I therefore refuse Danisco's application for a stay. The application for permission to use the documents[61]CPR rule 31.22(1) provides as follows:
“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.”
[62]As I have already indicated, by its second application, Danisco seeks permission pursuant to CPR r. 31.22(1)(b) to use two documents in parallel foreign proceedings, including but not limited to the EPO. The first is an internal Novozymes report dated 3 May 2004 which has been disclosed by Novozymes in these proceedings. The second is a table prepared by Danisco's solicitors summarising the results of eight sets of trials conducted by Novozymes in the period from September 2003 to March 2005 recorded in other documents disclosed by Novozymes. There is no dispute to the accuracy of the table as a summary of the underlying documents; nor that Danisco needs permission to use the table, since use of the table amounts to indirect use of the underlying documents.[63]The principles applicable to an application under what is now rule 31.22(1)(b) have been considered in a number of cases. It is sufficient for present purposes to refer to two of them. The first is Cobra Golf Inc. v Rata [1996] FSR 819, where Laddie J reviewed the earlier case law in detail and suggested at pages 830-1 that the following matters and considerations were relevant to the exercise of the court's discretion: “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 [1993] 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.” (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. (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'. (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.[64]The second case is SmithKline Beecham plc v Generics (UK) Ltd [2003] EWCA Civ 1109 [2004] 1 WLR 1479, where Aldous LJ said:
“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. [1979] 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 [1987] 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. [1979] R.P.C. 97 and Sybron Corporation v Barclays Bank plc [1985] 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 [1996] 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. ….”
'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.' '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. [1979] R.P.C. 97 and Sybron Corporation v Barclays Bank plc [1985] 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.'[65]Counsel for Danisco submitted that giving Danisco permission to use the documents was in the interests of justice because the documents established a prima facie case that Novozymes had misled foreign courts and tribunals. He focused, in particular, upon statements made by Novozymes in its submissions to the EPO Opposition Division dated 19 January 2011 that "the patent specification contains repeatable examples", and on a statement made by Novozymes in its submissions to the Opposition Division dated 6 June 2011 that "the examples showed that there is a surprising improvement in retention of enzyme activity during steam pelleting for granules coated with a salt having a constant humidity of 20°C of above 60% according to the invention." He argued in summary that the documents showed, first, that the examples in the patent had been cherry-picked from a spread of results obtained by Novozymes, and secondly, that the examples were not reproducible.[66]Counsel for Danisco also submitted that Novozymes did not have a significant interest in maintaining the protection provided by r. 31.22(1) because the information contained in the documents was not truly confidential. Rather, it was experimental data, some of which had been published in the Patent and some of which, while unpublished, was of a similar nature and in any event was over six years old.[67]Counsel for Novozymes submitted that Danisco had not established the existence of special circumstances justifying the grant of permission. In support of this submission, he made two main points. First, he disputed the documents demonstrated that Novozymes had misled any foreign court or tribunal. He relied upon a second expert report from Dr. Cole, in which Dr. Cole considered the trials conducted by Novozymes in considerable detail. Counsel for Novozymes submitted that this evidence showed that Danisco had misinterpreted the experimental results recorded in the documents. He accepted that there was a serious issue to be tried as to the correct interpretation of the experimental results, but he submitted that the proper place for that trial was in the English court. As discussed above, he contended that the English court was best equipped to get to the bottom of this question by virtue of its procedures of disclosure and cross-examination. Furthermore, if a stay was refused and the trial commenced on 19 March 2012, the English court's judgment would be available in time to be of assistance to foreign courts and tribunals such as the TBA and the Dutch Court of Appeal.[68]Secondly, he submitted that Danisco's case was that Novozymes had misled the foreign courts and tribunals because the Patent was insufficient. He argued that it was commonplace for parties to English patent litigation to contend that documents disclosed by the other side assisted the receiving party's case or undermined the disclosing party's case. He submitted that the fact that such documents were disclosed in English proceedings, but not in parallel foreign proceedings, was a commonplace consequence of the different procedures in the respective jurisdictions. In practice, this difference remained despite the advent of Article 6 of European Parliament and Council Directive 2004/48/EC of 28 April 2004 on the enforcement of intellectual property rights, and in any event the Directive did not apply to proceedings before the EPO. Thus there was nothing unusual about the present case.[69]As counsel for Novozymes was forced to accept in the course of argument, however, it is not common for parties to English patent litigation to be accused on substantial grounds of misleading foreign courts and tribunals by making statements which are contradicted by their own internal documents. It follows in my view that the second point adds little to the first.[70]Counsel for Danisco made four main points in reply to the first point. First, he submitted that it was telling that no statement had been served by Mr. Marcussen. He argued that Mr. Marcussen was the person who had first-hand knowledge of the relevant facts, not Dr. Cole.[71]Secondly, he submitted that Dr. Cole's evidence was of no assistance to Novozymes because Dr. Cole had proceeded on the basis that the relevant comparison was between the experimental granules and an uncoated granule, whereas, so counsel contended, the correct comparison was between the experimental granules and the prior art wax-coated CT granule disclosed by Jacobsen, that is to say, D1 in the EPO.[72]Thirdly, he submitted that, even taken at face value, Dr. Cole's evidence supported Danisco's case that the patent was insufficient because it showed the variability of such experiments and the potential impact of a considerable number of factors on the results.[73]Fourthly, he submitted that the foreign courts and tribunals should be put in possession of the relevant facts. He argued that, if Danisco was given permission to use the documents in foreign proceedings, then Novozymes would be free to attempt to counter them by filing Dr. Cole's report, or similar evidence from another expert, or evidence from Mr. Marcussen in those proceedings. Then those courts and tribunals would be in a position to decide the matter for themselves.[74]As I remarked at the outset of this judgment, it seems to me that this application is closely related to the first application. I have decided not to stay the English proceedings with the consequence that there will be a trial commencing on 19 March 2012. In those circumstances, I agree with counsel for Novozymes that Danisco has not established that there are special circumstances justifying the grant of permission to use the documents in question in foreign proceedings. On the contrary, I consider that each of the four points made by counsel for Danisco which I have just recited supports the view that the interests of justice would be better served by investigating Danisco's allegations at that trial, with the benefit of disclosure and cross-examination.[75]As both counsel accepted, I cannot decide who is right on the material before me. If Danisco's allegations are well-founded, it will be able to prove that at the trial, and it will then be able to rely on the court's judgment to that effect in foreign courts and tribunals, including before the TBA at the hearing on 28 June 2012. If Danisco's allegations are not well-founded, then there is no reason why it should have permission to use the documents. In my view, it would be undesirable effectively to require a number of foreign courts and tribunals all to undertake the same exercise in parallel with the English court, with all the consequent expenditure of time and resources by those courts and tribunals and by the parties, by giving Danisco the permission it seeks at this stage of the proceedings.[76]For those reasons, I also refuse Danisco's second application.

Cited in 2 later judgments