Cembrit Blunn Ltd Dansk Eternit Holding A/S v Apex Roofing Services LLP and ROY Alexander Leader
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE KITCHIN |
| Judgment Date | 05 February 2007 |
| Neutral Citation | [2007] EWHC 111 (Ch) |
| Court | Chancery Division |
| Date | 05 February 2007 |
| Docket Number | Case No: HC05C01951 |
[2007] EWHC 111 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
the Honourable Mr Justice Kitchin
Case No: HC05C01951
Mr Michael Hicks and Mr Alexander Learmonth (instructed by Bond Pearce LLP) for the Claimants
Mr Jonathan D.C. Turner and Mr Alexander Madgwick (instructed by Fisher Jones Greenwood LLP) for the Defendants
Hearing dates: 24, 27 – 30 November, 1, 4, 6 – 8, 11, 14, 15 December 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
MrJustice Kitchin:
Introduction
This is a dispute about fibre-cement roof slates. The second claimant (“Dansk”) is a Danish company and the parent of a multi-national group of companies which together form one of the largest producers of fibre-cement slates in Europe. The first claimant (“Cembrit UK”) is a wholly owned subsidiary of Dansk and is responsible for the sale in the UK of fibre-cement slates made by the Dansk group. The first defendant is a roofing contractor and the successor to the firm Apex Roofing Services (collectively, “Apex”). The second defendant, Mr Leader, is a member of Apex.
The fibre-cement roof slates in issue were manufactured in the Czech Republic by Cembrit CZ a.s. (“Cembrit CZ”), another subsidiary of Dansk. They have a textured surface which resembles natural slate and are sold by Cembrit UK under the trade mark “Zeeland”. Between 2000 and 2003 Cembrit UK supplied Zeeland slates to Apex for installation at two sites known as “Aberfeldy” and “Greenhithe”, where the firm was subcontracted to the main contractors Countryside Properties (in Partnership) Limited (“Countryside”) and Crest Nicholson plc (“Crest”) respectively. Apex complains that many of the slates laid at these sites have curled up to an extent which is unacceptable and has necessitated the replacement of many of the roofs. In short, it contends that the slates supplied were not of satisfactory quality. The claimants respond that the problem of curling, such as it was, was not the result of any defect in the slates but rather the result of the failure by Apex to install them properly.
The proceedings began with a claim for infringement of intellectual property rights. The claim was issued in July 2005 following the circulation by Apex of an internal letter (“the Letter”) dated 27 February 2004 written by Mr Karl Jorgensen, the Executive Vice-President of Dansk, to Mr Mark Fisher and Mr David Bailey, respectively the Managing Director and Sales and Marketing Director of Cembrit UK. The Letter considers and discusses possible settlement of a claim which had by that time been threatened by Apex against Cembrit UK in relation to the Zeeland slates installed at Aberfeldy.
The claimants contended that the circulation by Apex of the Letter constituted an infringement of copyright and misuse of confidential information and they made an application to restrain further circulation of the Letter pending trial. They also sought disclosure of the identity of the person who had provided Apex with the Letter. Apex gave undertakings not to circulate the Letter further pending judgment or further order but declined to identify its source. It also defended the allegations of infringement of copyright and breach of confidence on the grounds that the use made of the Letter was justified to counter false statements made in an earlier letter written by the claimants' solicitors to a number of parties including Countryside and Crest.
In August 2006 Apex amended its defence to introduce a counterclaim against Cembrit UK that the slates were not of satisfactory quality. Then, in September 2006, Apex revealed that the source of the Letter was a Mr Richard Cook, a building consultant employed by Cembrit UK in the spring of 2004 to advise it as a consultant in relation to the same dispute. At this point the parties recognised that the central issue between them was whether or not the Zeeland slates supplied by Cembrit UK to Apex were of satisfactory quality. The intellectual property issues were now of secondary importance. The identity of the source was known and the counterclaim would determine whether the slates were defective and whether Cembrit UK was liable to Apex. Nevertheless, I am invited to make findings in relation to the intellectual property claim because I am told that significant costs issues may depend on it.
In summary, the issues I have to determine are therefore as follows:
i) Were the claimants' Zeeland slates of satisfactory quality within the meaning of section 14 (2) of the Sale of Goods Act 1979 (as amended)?
ii) Is the Letter the subject of copyright and protected by the law of confidential information?
iii) Should the defendants have been restrained from circulating the Letter and should they have disclosed the identity of its source?
Before addressing these issues I must first describe aspects of the technical background and explain how the events which gave rise to this dispute unfolded.
Manufacture of fibre-cement slates
Production
Fibre-cement slates have been made and sold in Europe for over 70 years. They are generally made by a process developed by an Austrian, Ludwig Hatschek, in the early 1900s. He called his process “Eternit”. For this reason a number of companies in the industry include the word Eternit in their names. For example, the claimants' main rival in the UK is Marley Eternit Ltd (“Marley”) and its equivalent slate to the Zeeland is called “Garsdale”.
As their name suggests, the slates consist of cement reinforced with fibre. Originally asbestos was used. Now, for safety reasons, all manufacturers use a mixture of other fibres, most usually cellulose and synthetic polymer. The process for the manufacture of Zeeland and other similar slates begins with the production of a sheet of fibre-cement consisting of a number of layers. Each layer is itself made up of thinner laminations. Normally there are five layers and each layer has three laminations. The upper layer (that is to say the side exposed to view on the roof) is pigmented. Individual slates are then stamped out of the sheet. Standard Zeeland slates are 600mm x 300mm and provided with three pre-formed holes, one on each side near the middle of the length of the slate, and one in the centre of the tail end of the slate. The needles used to punch the holes have a diameter of 4.5mm.
Stamped out slates are then picked up and transported to a stack. In the case of slates with smooth upper surfaces, the stacked sheets are interleaved with flat steel sheets. In the case of slates with a textured upper surface (such as Zeeland slates) the sheets are interleaved with moulds, called templates. The stack of steel sheets or templates and slates is then compressed. This serves to increase the density of the slates and to mould the upper surface to create either a textured finish or a smooth surface, as desired.
After compression Zeeland slates are left for a period of time during which they cool and begin the process of curing. They are then painted. This is a two stage process. First, the slates are passed through rollers which paint their upper and lower surfaces. The rollers are automatically controlled but the process is continually supervised by an operator who tries to ensure that there is an even coating of paint by checking the weight of paint applied and by visual inspection. The rollers are made of metal and covered with soft rubber. They are replaced every seven to ten days, or sooner if they become damaged.
Zeeland slates are certified by the British Board of Agrément (“BBA”) as complying with the European Standard EN 492:1994 (“EN 492”). This standard specifies the technical requirements of fibre-cement slates and their fittings. Section 5.1.2 provides:
“The exposed face of the fibre-cement slates can be with or without texture. The fibre-cement slates can be coloured or left in their natural colour. The fibre-cement slates can also receive adherent coloured or uncoloured coatings on their surface.
The fibre-cement slates can be supplied holed for fixing.
On exposure the surface and/or its coating will be affected by weathering which may vary with site location, aspect, pitch of roof and duration of exposure. Any deterioration in this respect shall not detract from the minimum mechanical and physical characteristics as specified in this standard or from the function of the fibre-cement slate as a durable element.”
Mr Madsen, the Group Technical Manager of Dansk, explained, and I accept, that this means that the cement and fibre mixture may be pigmented or left in its natural colour, the slates may be painted or not, and the paint may be clear or coloured. But the slates must remain durable.
The standard also provides a number of tests with which the slates must comply. Two have particular relevance to these proceedings. First, it provides a water impermeability test. This involves placing a column of 250mm of water on the upper surface of the slate for 24 hours. The underside of the slate is allowed to show traces of moisture, but no drops of water must appear. Secondly, it provides for a “heat-rain” test. This involves submitting the upper surfaces of the slates to 50 wetting and heating cycles in which the upper surfaces are first wetted for just under three hours and then, following a pause, heated to 70°C for just under three hours. Following this test any visible cracks, delamination or other defects in the slates must be of a degree such as not to...
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Intellectual property
...projects, can even concern subject matter such as a letter written by one of the parties: Cembrit Blunn Ltd v Apex Rooing Services LLP [2007] EWHC 111 (Ch) at [233]–[241], per Kitchin J. “Artistic works” need not, for the purposes of copyright legislation, be of “artistic quality” as common......
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