Magnesium Elektron Ltd v Neo Chemicals & Oxides (Europe) Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Daniel Alexander |
| Judgment Date | 24 November 2017 |
| Neutral Citation | [2017] EWHC 2957 (Pat) |
| Docket Number | Claim No. HP-2015-000052 |
| Court | Chancery Division (Patents Court) |
| Date | 24 November 2017 |
[2017] EWHC 2957 (Pat)
Mr Daniel Alexander QC
Sitting as a Deputy Judge of the Chancery Division
Claim No. HP-2015-000052
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST
PATENTS COURT
Rolls Building
Fetter Lane, London EC4
Mr James Abrahams QC and Mr Maxwell Keay instructed by Pinsent Masons LLP appeared for the Claimant, MEL
Mr Michael Silverleaf QC, Mr Benet Brandreth and Mr Adam Gamsa instructed by Bird & Bird LLP appeared for the Defendants, Neo
Hearing dates: 8–9 November 2017
Judgment APPROVED
Mr Daniel Alexander QC
INTRODUCTION AND SUMMARY
There are two applications before the court. First, an application relating to so-called Mayne Pharma disclosure (after Mayne Pharma Pty Ltd v Debiopharm SA [2006] EWHC 164 (Pat), [2007] FSR 37). Second, an application concerning whether permission should be given to conduct testing on certain confidential samples obtained from a process inspection and to admit further experts into an inner confidentiality club and if so on what terms.
The applications have a common leitmotif: how protective should the court be of a party's confidential information when it is said by an opposing party that it may be relevant to legal proceedings? For one of the applications, it is privileged information. For the other, trade secrets. In each application, the court is invited to require the opposing party to disclose more of its confidential information than it has done already or to more people.
I gave judgment with reasons to follow on the second application on 9 November 2017. Judgment/reasons have been reserved on both applications partly because of the timing of the hearings and partly because an indication has been given that the matter may go further. The applications raise issues which are not entirely straightforward in the context of ensuring that important competing interests in modern English litigation, especially relating to patents, are appropriately addressed.
The claim
The applications arise in a claim for infringement of EP (UK) 1 444 036 ("the Patent"), owned by the claimant ("MEL").
MEL is a UK-based producer of chemicals including rare-earth mixed oxides ("REMO") which are the subject matter of the Patent. REMO products are used in a process called washcoating in which active materials, including REMO, are coated onto a ceramic substrate for use in automotive emissions catalysts. The REMO delivers oxygen when needed, taking oxygen from the atmosphere when the air/fuel mixture is lean (low in fuel, high in air) and conversely releasing oxygen when the air/fuel mixture is rich (high in fuel, low in air). The characteristics of REMO products determine how well that is done.
The main defendants (collectively "Neo") are part of a corporate group and, for most of the issues on these applications, there is no need to distinguish between them. When these proceedings started, the group was known as the "Molycorp" group and was headquartered in the US. Since then, the group has undergone restructuring and is now known as Neo. The second defendant makes the product that is the subject of the claim in China. MEL contends that the second defendant has used the patented process, and that all defendants have infringed the Patent by importing the product of the process into the UK and disposing of it here.
The action is set down for trial floating from 5 March 2018. The claim is said to be of considerable commercial significance for both sides (>£10,000,000 value) which is reflected in the fact that the combined costs of the proceedings on both sides already stand at about £2 million.
The Patent
The Patent concerns a method of producing zirconium-cerium-based mixed oxides. Claim 1, on which all other claims depend, is as follows:
"A process for preparing zirconium-cerium-based mixed oxides which comprises reacting an alkali with an aqueous solution of a soluble zirconium salt containing 0.42–0.7 mole of sulphate anion (SO4 2-) per mole of zirconium cation at a temperature of not greater than 50°C, in the presence of a soluble cerium salt to form a cerium-zirconium mixed hydroxide, and then calcining the cerium-zirconium mixed hydroxide to form a mixed oxide."
The description discloses a number of examples of processes which are said to lead to particularly successful production of such mixed oxides as well as a number of comparative examples, where conditions, starting materials and proportions were different and which are said not to achieve results as beneficial in various respects.
PROCEDURAL BACKGROUND
The background to these applications is important since they are both consequential upon previous orders made by Birss J and Arnold J in 2017. One aspect of the first application raises a direct question of interpretation of one of those orders.
Order and judgment of Birss J giving permission to serve out of the jurisdiction on 3 December 2015
It is necessary to start even further back, in 2015.
MEL required the permission of the court to serve the claim on the second defendant out of the jurisdiction. Accordingly, an application was made to the Patents Court supported by evidence designed to show that there was a serious issue to be tried, inter alia, of the technical issues relating to infringement. That application came before Birss J on 3 December 2015 and was founded on the fact that, by way of a trap purchase, MEL had obtained a sample of product manufactured by the second defendant in China and supplied by the first defendant to a customer in the UK.
MEL analysed this product, referred to as "TP1", to compare it with its own product produced by the patented process, alongside a control sample produced by a non-patented earlier method (so-called "G1"). These were tested in a set of so-called "fingerprint" experiments which had been developed over a considerable period and were referred to in general terms at para. 3.13 of the witness statement of Dr Moles of MEL. Dr Moles was a senior scientist working for MEL who is now retired and he gave his evidence on the basis of his knowledge of products of this kind. As explained in that statement, these experiments ("the Experiments") were not complete at that stage but it was said that sufficient results had been produced to raise a prima facie case that the second defendant's process was indeed the patented process.
Birss J accepted that the evidence showed a prima facie case of infringement and made the order for service out. In his reasons for making the order, Birss J summarised the technical position as follows ( Magnesium Elektron Ltd v Molycorp Chemicals & Oxides (Europe) Ltd & Anor [2015] EWHC 3596 (Pat) (15 December 2015)):
"21. Mr Moles explains that the claimant has been working with the professors to develop experiments which identify what he refers to as a chemical fingerprint of REMO obtained directly by means of the patented process. The claimant says it has found that the patented process give the REMO produced by that method a unique nanostructure which in turn provides enhanced oxygen release kinetics. The nanostructure is identified by Raman spectroscopy and the oxygen release kinetics are identified by two techniques: Hydrogen Transient Isothermal Reduction (H2TIR) and Transient Isothermal Isotopic Exchange ( 16O/ 18O). Draft protocols for these three experiments are exhibited by Mr Moles. The Raman spectroscopy reveals information about the physical bulk structure of the metal oxide solids focussing on the oxygen sub-lattice, H2TIR evaluates the concentration of labile lattice oxygen removed from the metal oxide and the oxygen isotope technique probes the mobility of surface and bulk oxygen of the oxygen sub-lattice of the metal oxide.
22. Carrying out the full experiments is a major project and is taking time to complete. The samples tested so far are (i) a sample from the trap purchase ("TP1"), (ii) two samples both made by the patented process (S1 and S2), and (iii) a control sample (S8). Samples S1 and S2 differ in that while both are made by the patented method, S1 was made especially for the experiments while S2 was taken from a batch of commercial product. The control sample S8 was made by the claimant's previous, first generation process. There are other products mentioned in the exhibit (S3 to S7) but no results have been produced in evidence for them.
23. Mr Moles has discussed the initial results with Professor Efstathiou and Professor Boghosian. They have told him that TP1 behaves almost identically to S1 and S2 and that all these three samples behave very differently from S8. The full written report is not yet available and will be produced in mid-January 2016 once all the data has been captured. Mr Moles states that:
"The experiments on the trap purchase show that the second defendant's REMO has identical characteristics in terms of nanostructure and kinetics and therefore I believe that they must have been produced by the Patented process for I know of no other process which could produce such results."
The Experiments comprise three sets of tests: Hydrogen Transient Isothermal Reduction ("H2-TIR"), Transient Isothermal Isotopic Exchange ("TIIE") analysis, and Raman spectroscopy. In each case, the experimental protocols were designed by, and the experiments carried out by, one expert. The results were then analysed and conclusions drawn by a separate expert (referred to as the "Peer Review" experts), as follows:
(1) Prof Efstathiou designed and carried out the H2-TIR and TIIE experiments. These were reviewed...
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