Autostore Technology as (a company incorporated under the laws of Norway) v OCADO Group Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee,Lady Justice Nicola Davies,Sir Geoffrey Vos |
| Judgment Date | 07 July 2021 |
| Neutral Citation | [2021] EWCA Civ 1003 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2021/1052 |
[2021] EWCA Civ 1003
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
HHJ Hacon sitting as a Judge of the High Court
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Geoffrey Vos, MASTER OF THE ROLLS
Lady Justice Nicola Davies
and
Lord Justice Nugee
Case No: A3/2021/1052
Mr Iain Purvis QC, Mr Alan Maclean QC and Mr Thomas Plewman QC (instructed by Powell Gilbert LLP) for the Appellants
Mr Vernon Flynn QC and Ms Kathryn Pickard (instructed by Kirkland & Ellis International LLP) for the Respondent
Hearing date: 1 July 2021
Approved Judgment
Introduction
This appeal arises in the course of patent litigation. The Respondent, AutoStore Technology AS ( “AutoStore”), is the Claimant in the substantive proceedings. It is a Norwegian company which specialises in automated warehousing technology. The Appellants are the Defendants in the substantive proceedings. The 1 st to 5 th Defendants are companies in the Ocado group of companies, which is involved in the development and use of automated systems for online retail businesses; the 6 th Defendant is a manufacturer and supplier of certain robots to the Ocado group. It is not an Ocado group company, but for the purposes of the appeal there is no relevant distinction between the Appellants and I will refer to them collectively as “Ocado”. In the substantive proceedings AutoStore, which holds a number of patents, sues Ocado for infringement.
There is other patent litigation between the parties elsewhere in the world. In particular there are current proceedings before the US International Trade Commission ( “the ITC”). Ocado's lawyers became aware that AutoStore intended to deploy in that litigation certain information about the course of discussions between the parties that had taken place in London in 2018. Ocado therefore applied for an injunction restraining AutoStore from using or referring to any information arising from those discussions in any proceedings, including in particular proceedings before the ITC, on the grounds that it was protected by without prejudice privilege.
On 28 May 2021 HHJ Hacon, sitting as a Judge of the High Court, ( “the Judge”) heard Ocado's application on a without notice basis and granted such an injunction temporarily pending the return day. But after hearing from both parties on the return day (10 June 2021) he declined to continue the injunction for the reasons given in a judgment given by him the next day at [2021] EWHC 1614 (Pat) ( “the Judgment” or “Jmt”) and by his Order dated 11 June 2021 he dismissed the application.
Ocado appeal with permission given by the Judge himself. The parties needed to know the position as soon as possible and we heard the appeal on an expedited basis on 1 July 2021, less than three weeks after the Judgment, and at the conclusion of the hearing announced our decision to dismiss the appeal.
That was the decision of the majority, consisting of the Master of the Rolls and Nicola Davies LJ. I have the misfortune to disagree with them, and would myself have allowed the appeal, and in this judgment I give the reasons why I would have taken this course.
Background
In the substantive proceedings AutoStore has sued Ocado for infringement of six patents relating to automated storage technology. Ocado denies infringement and has counterclaimed for invalidity. The details do not matter for present purposes, but in summary AutoStore has developed a system for automatic storage and retrieval of goods called the AutoStore system. This consists of a cubic structure where containers are stacked on top of each other in columns; robots move across a horizontal grid at the top of the column structure to retrieve containers and deliver them to workstations. The system has the advantage of having a high storage density enabling the footprint of the facility to be greatly reduced as compared to that of a traditional warehouse where goods are stacked on shelves arranged in aisles. Ocado has developed an automatic storage and retrieval system called the Ocado Smart Platform which is also based on robots moving around a grid to retrieve and deliver goods. This system is the subject of the patent infringement claims. Three of the patents in suit are UK designated European patents concerning a central cavity in robots which is adapted to hold a storage bin.
As is not uncommon in patent disputes there is other litigation between the parties elsewhere in the world. There are proceedings in Germany, brought by Ocado, in Munich and Mannheim; there are opposition proceedings before the European Patent Office. In the US, there are proceedings brought by AutoStore in Virginia, and by Ocado in both Virginia and New Hampshire; and, most pertinently for the purposes of the present appeal, there are also proceedings brought by AutoStore in the ITC. The ITC is a quasi-judicial federal agency that has the power to prohibit importation into the US of articles that constitute unfair competition, including articles found to infringe a valid US patent. Patent infringement proceedings are heard in a formal judicial process by specialist judges called Administrative Law Judges. The evidence is that due to its nature and expertise, the ITC has been the forum of choice for many patent suits between competitors.
AutoStore (and, among other Complainants, its US subsidiary) brought proceedings in the ITC in October 2020 relying on five US patents, and seeking injunctions against the importation and use of Ocado's allegedly infringing products. Three of the patents relied on were central cavity patents corresponding to the central cavity patents relied on in the English proceedings.
Among other defences in the ITC proceedings Ocado has pleaded an equitable estoppel defence. We were not shown the details of this defence, which again do not matter for present purposes, but in broad terms the nature of the defence is that AutoStore made certain statements regarding the scope of the invention (and in particular as I understand it the scope of the central cavity patents), and that Ocado relied on those statements in the design and manufacture of robots first imported to the US market in 2020, such that AutoStore is estopped in equity from asserting infringement of those patents.
In order to rebut this defence, AutoStore wishes to deploy in the ITC proceedings evidence in relation to discussions which took place between the parties in London in 2018 ( “the London discussions”). It is that which Ocado is trying to prevent.
The London discussions
It is necessary to give some account of the London discussions although I will try to avoid revealing the substance of them.
The discussions took place in the period up to November 2018. In particular three meetings took place in London on 6 June, 8 June and 25 July 2018. The first and third meetings took place at the offices of Ocado's London lawyers, Powell Gilbert LLP ( “Powell Gilbert”), and were attended by Powell Gilbert and the London lawyers then acting for AutoStore, Bristows LLP ( “Bristows”), as well as representatives of the parties. The second, at Heathrow, was attended only by representatives of the parties. No US lawyers attended any of the meetings.
The purpose of the discussions was to discuss the merits of the parties' respective positions in the context of a possible negotiated settlement. The focus of the discussions was the UK patent infringement claims, but they also touched on the position elsewhere in the world.
Ocado's position is that all the London discussions were held on a without prejudice basis. The relevant material is as follows:
(1) The evidence of Mr Simon Ayrton, a partner at Powell Gilbert who attended the first and third meetings, is that at the outset of the first meeting it was expressly agreed that the discussions were confidential and would take place on a without prejudice basis; and that he had been informed that the same was true of the second meeting. None of that has been disputed.
(2) A series of e-mails passed between Bristows and Powell Gilbert in the run-up to the third meeting on 25 July 2018, each of which was headed “Confidential & Without Prejudice”.
(3) In particular by e-mail sent on 3 July 2018 to Mr Ayrton (headed, like the others, “Confidential & Without Prejudice”) Dr Myles Jelf of Bristows offered to provide Powell Gilbert with advance materials before the next meeting; that was followed up by an e-mail sent on 6 July 2018 (similarly headed) by Ms Rachael Cartwright of Bristows to Mr Ayrton which attached a number of documents, and referred to them as follows:
“Please find attached the advance[d] materials (provided for the purposes of settlement only), comprising…”
The third of the documents which were attached is the particular document which AutoStore wish to refer to in the ITC proceedings. I will refer to it as “the Document”. It is unnecessary to say anything about its contents save that it concerned US matters. As sent by Ms Cartwright it is marked on each page:
“CONFIDENTIAL & WITHOUT PREJUDICE
PROVIDED FOR PURPOSES OF SETTLEMENT
NEGOTIATIONS ONLY”
(4) The agenda for the third meeting (itself marked...
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