Innovia Films Ltd v Frito-Lay North America, Inc.
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD |
| Judgment Date | 30 March 2012 |
| Neutral Citation | [2012] EWHC 790 (Pat) |
| Docket Number | Case Nos: HC11C03841, HC11C04566 |
| Court | Chancery Division (Patents Court) |
| Date | 30 March 2012 |
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Arnold
Case Nos: HC11C03841, HC11C04566
Iain Purvis QC and Hugo Cuddigan (instructed by W P Thompson & Co) for the Claimant
Andrew Lykiardopoulos (instructed by Bristows) for the Defendant
Hearing dates: 20–21 March 2012
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.
Contents
| Topic | Paragraphs |
| Introduction | 1–2 |
| Factual background | 3–27 |
| The parties | 4–6 |
| The disclosures by IFL to Frito-Lay | 7–15 |
| The patent applications filed by Frito-Lay | |
| The 331 family | |
| The 775 family | |
| The 500 family | 21 |
| The 033 family | |
| The relationships between the Frito-Lay Applications | 24 |
| The European Applications | 25 |
| IFL's case on entitlement and breach of confidence | 26 |
| Frito-Lay's defence to IFL's claims | 27 |
| The proceedings | |
| Legal context | |
| European Patent Convention | |
| Protocol on Recognition | 35 |
| 36 | |
| Brussels I Regulation | 37 |
| Rome II Regulation | 38 |
| Service out of the jurisdiction: general principles | |
| Stage 1 | 41 |
| Stage 2 | |
| Staying proceedings on the ground of forum non conveniens: general principles | 47 |
| Issue 1: Does this Court have exclusive jurisdiction with respect to the European Applications? | |
| Issue 2: What is the consequence of this Court having exclusive jurisdiction over the European Applications? | |
| Issue 3: Should this Court exercise jurisdiction under section 12 of the 1977 Act in respect of the other Frito-Lay Applications, and in particular the pending US applications? | |
| Issue 4: Does this Court lose jurisdiction under section 12 if an application proceeds to grant? | |
| Issue 5: What is the law applicable to IFL's claim for breach of confidence? | |
| Events prior to 11 January 2009 | 102–108 |
| Events after 11 January 2009 | 109–111 |
| Issue 6: Should IFL have permission to serve the breach of confidence claim outside the jurisdiction? | 112–121 |
| Serious issue to be tried on merits? | 113 |
| Good arguable case as to jurisdictional gateway? | 114–120 |
| Is England the appropriate forum? | 121 |
| Issue 7: What is the extent of the Texas Court's jurisdiction? | 122–126 |
| Issue 8: Which court is the appropriate forum? | 127–134 |
| Territorial connections of the parties | 128 |
| Factual connections between the events and particular courts | 129 |
| Key witnesses | 130 |
| Documents | 131 |
| Applicable law | 132 |
| Risk of irreconcilable judgments | 133 |
| Conclusions | 134 |
| Issue 9: Should Master Bragge's order be set aside for material non-disclosure? | 135 |
| Conclusion | 136 |
Introduction
In these proceedings the Claimant ("IFL") contends that it is the rightful owner of various patent applications filed by the Defendant ("Frito-Lay"), and of any patents granted as a result thereof, and that Frito-Lay has acted in breach of confidence. For the reasons explained below, IFL has commenced two actions before this Court ("3841" and "4566"). On 11 November 2011 Master Bragge granted IFL permission to serve the Claim Form in action 3841 on Frito-Lay outside the jurisdiction. There is no dispute that action 4566 was properly served on Frito-Lay within the jurisdiction by service at the offices of its patent attorneys, being the address for service provided by Frito-Lay under rule 103(1) of the Patents Rules 2007. If the two actions are permitted to proceed, it is likely that they will be consolidated.
There are now two applications by Frito-Lay before the Court:
i) An application in action 3841 (a) to set aside permission to serve the claim out of the jurisdiction, save as in so far it relates to entitlement to the European Applications (as to which, see below), on the grounds that this court either does not have jurisdiction or should not exercise jurisdiction over the claim, alternatively of material non-disclosure, and (b) for a stay of the claim so far as it relates to entitlement to the European Applications pending the determination of a claim brought by Frito-Lay in the US District Court for the Eastern District of Texas Tyler Division ("the Texas Court").
ii) An application in action 4566 that the claim be stayed either permanently on the ground that this court should not exercise jurisdiction over the claim or pending determination of Frito-Lay's claim in the Texas Court.
Factual background
The following account of the factual background is, save where indicated, based on IFL's statements of case and evidence. Frito-Lay denies any wrongdoing, but understandably it has served very little evidence addressing the substantive merits of IFL's case. In those circumstances counsel for Frito-Lay accepted that the court had to consider the present applications upon the assumption that the facts alleged by IFL are true. I should make it clear, however, that it does not necessarily follow that those allegations will be proved at trial.
The parties
IFL is the world's largest manufacturer of cellulose films for food packaging applications. It is the proprietor of the trade mark Cellophane. It has a world-class R&D centre concentrating on the development of innovative film processes and products, based in Wigton, Cumbria. It has extensive knowledge of the development of cellulose/bioplastic material combinations. IFL was the first company to develop cellulose packaging films that were compliant with the global norms for organic recycling methodologies.
IFL is part of the Innovia Group of companies which is wholly owned and controlled by Innovia Films (Holding 3) Ltd ("IFH"). The Innovia Group's US subsidiary is Innovia Films, Inc. ("IFI"), based in Smyrna, Georgia. IFI is also wholly owned and controlled by IFH. I shall refer to IFL and IFI collectively as Innovia.
Frito-Lay is a wholly-owned subsidiary of PepsiCo Inc. It manufactures and markets convenient foods, and in particular chips/crisps. It has premises in Plano, Texas.
The disclosures by IFL to Frito-Lay
Between around 7 and 11 November 2004 Jessica Hammond, a Strategic Account Manager employed by IFI, met representatives of Frito-Lay at Packexpo, a packaging trade exhibition, in Chicago. Ms Hammond told Frito-Lay that IFL was in the business of designing and developing novel configurations of food packaging film, and that these films were manufactured and distributed by IFI in the US. At that time or soon thereafter it was arranged that Innovia and Frito-Lay would meet to discuss whether IFL's proposals for films suitable for snack food packaging might satisfy Frito-Lay's requirements.
On 2 February 2005 there was a meeting between Ms Hammond and Stewart Richards (Technical Account Manager) of IFI and representatives of Frito-Lay including Anthony Knoerzer (Group Manager Packaging), Brad Rodgers (Senior Project Manager) and Steven Callahan (Senior Project Engineer) at Frito-Lay's premises in Plano at which Frito-Lay's requirements were discussed. It was agreed at the meeting that a non-disclosure agreement would be entered into.
Shortly before and on 7 February 2005 Andrew Sweetman (Business Development & Sustainability Manager) of IFL prepared a series of PowerPoint slides setting out his initial thoughts and proposals for multilayer films for packaging snack products for Frito-Lay. Mr Sweetman sent the slides by email to Ms Hammond, who sent them to Mr Knoerzer and Mr Rodgers.
On 1 and 7 March 2005 respectively representatives of IFI and Frito-Lay signed a Confidentiality and Non-Disclosure Agreement for the Mutual Disclosure of Information ("the NDA"). It is common ground that this is retrospective in effect. It provides that "The terms herein shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws". There is no reference in the NDA to IFL.
On 23 March 2005 Mr Sweetman gave a PowerPoint presentation at a meeting at Frito-Lay's premises. The meeting was also attended by Ms Hammond and Mr Richards of IFI and by Mr Knoerzer and Mr Rodgers of Frito-Lay.
On 22 August 2005 David Beeby, Innovia's CEO, attended a meeting with Mr Knoerzer and Mr Rodgers at Frito-Lay's premises at which the project was discussed. During the meeting Mr Beeby disclosed that IFL had succeeded in laminating two types of film together.
On 13 September 2005 there was a telephone conference between Mr Sweetman, Stefan van den Branden (R&D Manager), Jonathan Hewitt (Group Leader, Surface Energy), Simon Read (Senior Project Leader, Surface Engineering) and Paul Watters (Project Leader, Surface Engineering) of IFL, Ms Hammond of IFI, and Mr Knoerzer and Mr Rodgers of Frito-Lay. During the telephone conference IFL's representatives discussed the progress they had made in developing environmentally friendly packaging with improved barrier properties.
Between 13 September and 13 October 2005 Mr Hewitt and Mr Watters worked on proposals for multilayer film structures for Frito-Lay. They prepared a series of PowerPoint slides which Mr Hewitt emailed to Ms Hammond. Ms Hammond printed and bound these to present to Frito-Lay at a meeting scheduled for 18 or 19 October 2005. In the event the meeting was postponed until 9 November 2005, when the presentation was given to Frito-Lay.
IFL contends that during the course of the communications described above it disclosed to Frito-Lay confidential information comprising four categories of...
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