Mvf3 Aps (formerly Vestergaard Frandsen A/s) and Others v Bestnet Europe Ltd and Others
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE ARNOLD |
| Judgment Date | 07 March 2011 |
| Neutral Citation | [2011] EWHC 477 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC06C04408 |
| Date | 07 March 2011 |
[2011] EWHC 477 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before : The Hon Mr Justice Arnold
Case No: HC06C04408
Mark Platts-Mills QC, Tom Moody-Stuart and James Whyte (instructed by Field Fisher Waterhouse LLP) for the Claimants
Martin Howe QC and George Hamer (instructed by McGuireWoods London LLP) for the First, Second, Fifth and Sixth Defendants
Hearing dates: 22–24 February 2011
Approved Redacted 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.
MR. JUSTICE ARNOLD :
Contents
| Topic | Paragraphs |
| Introduction 1–3 | Procedural history 4–42 |
| Proceedings at first instance | 4–26 |
| Proceedings in the Court of Appeal | 27–37 |
| Subsequent proceedings | 38–42 |
| The effect of the Court of Appeal's order dated 24 November 2010 | 43–60 |
| Should VF have disclosed the Documents before? | 61 |
| The role of the expert evidence at this hearing | 62 |
| Professor Stevens' evidence | 63–68 |
| Should an adverse inference be drawn from | 94–97 |
| R4 and R7 trials (February-March 2007) | 98–113 |
| R12 trial (May 2007) | 14–123 |
| R15 trial (June 2007) | 124–127 |
| R16 trial (June 2007) | 128 |
| R25 trial, Phase 1 (October 2007) | 129–132 |
| R25 trial, Phase II (May 2008) | 133–135 |
| R25 trial, Phase III (July 2008) | 136–138 |
| Question (i) | 139–146 |
| Question (ii) | 147–148 |
| Question (iii) | 149 |
| Conclusion | 150 |
Introduction
On 3 April 2009 I handed down in private a confidential judgment in this matter ( [2009] EWHC 657 (Ch), "the main judgment") holding that the Defendants were liable for breach of confidence through misuse of the Claimants' ("VF's") trade secrets. (Subsequently a redacted version of the main judgment was made available to the public.) In the main judgment I left over for further argument the question of what remedies VF were entitled to. On 26 June 2009 I handed down in private a confidential judgment on that question and a number of related matters ([2009] EHWC 1456 (Ch), "the remedies judgment"). (Again, a redacted version of the remedies judgment was made available to the public later.) After further argument on costs and other matters, I made a final order on 2 July 2009. I refused the Defendants permission to appeal against the main judgment since the Defendants were seeking to challenge my findings of fact, but I granted both parties permission to appeal against my decision as to an injunction in the remedies judgment.
As explained in more detail below, the First, Second, Fifth and Sixth Defendants applied to the Court of Appeal for permission to appeal and subsequently for permission to adduce further evidence. On 24 November 2010 the Court of Appeal ordered that:
"There be remitted for determination by the Chancery Division before Arnold J the following questions of fact, namely:
(i) how strongly the migration rate of deltamethrin is affected by the addition of LDPE to the polymer mix;
(ii) how that effect (if any) compares to the effect of the three additives referred to in paragraphs 121(i)-(iii) of the judgment of Arnold J dated 3 April 2009;
(iii) whether the outcome of issues (i) and (ii) above renders the Fence results not useful for the formulation of the Defendants' product."
This is my judgment on those questions. Before going further, I should point out that a proper understanding of this judgment is only possible if the reader has already read the whole of the main judgment and at least [1]-[11] of the remedies judgment, although I shall cross-reference particularly relevant passages in the earlier judgments.
Procedural history
Proceedings at first instance
The procedural history of the proceedings at first instance is described in some detail in the main judgment at [51]-[79]. For present purposes it is necessary to recapitulate certain points and add others.
The proceedings were commenced by a Claim Form issued on 19 December 2006. On 27 March 2007 the Defendants applied to strike out VF's claim (see the main judgment at [57]). The Defendants' application was supported by, inter alia, an expert report from Professor Gary Stevens dated 13 June 2007 (again, see the main judgment at [57]). Paragraphs 1 and 14 of that report recorded that Professor Stevens had been assisted by Dr Henryk Herman. Paragraph 49 recorded that Dr Herman had worked on Innovene polymers and formulation during his employment with BP plc.
Professor Stevens summarised his conclusions as follows:
"3. This report will show that in my professional opinion the information used to achieve the Netprotect product could all have been obtained from the public domain and from industrial information sources which are not secret. Such information is made available by both polymer and additives manufactures [sic].
4. I conclude that the two products are significantly different in respect of the polymer blend used, the additives and additive concentrations used, the absence of certain additives in the Claimant's product which only appear in Netproduct including the [ADDITIVE M] processing additive which enables the polymer melt to be extruded at lower temperatures. I consider the final Netprotect product to be an independent development and one that has distinct process differences to that of the Claimant's product.
5. I further conclude that it is possible that the experience and knowledge gained by the Defendants when working for the Claimant may have contributed to the selection of additives in the early exploratory phase of the Netprotect development. However, it is clear that this same starting position could have been obtained from the public literature and that the final product developed is significantly different to both the Claimant's product and the initial trial materials produced by the Defendant's [sic] in their own development. I conclude the final product developed by the Defendants is original and of independent design."
In paragraphs 25–38 Professor Stevens discussed in detail the use of additives in polymers such as polyethylene. During the course of this passage he said this in paragraph 35 (quoted in the main judgment at [604]):
"The benefits of plastics additives are not marginal – they make the difference between success and failure in plastics technology."
In paragraphs 75 and 76 of his report Professor Stevens stated:
"75. The interaction between insecticide in the polymer matrix is complex and difficult to predict. A change in the polyethylene matrix will make a big difference to the retention and migration of the insecticide within the polyethylene. The complexity relates to the change in the matrix acidity that the insecticide may introduce, which may affect polymer degradation, and to insecticide induced changes in crystallisation behaviour and morphology development from the melt following extrusion all of which may affect insecticide retention and loss rates. Insecticides may also interfere with the action of polymer additives and additives may also confer protection to the insecticide, such as improving heat stability and reducing the potential for oxidation.
76. Laboratory and experimental studies have explored relations between host polymer, insecticide, formulation, dosage, and effect. Durability also varies for different polymer hosts. The role of additives and polymer morphology in assisting the dispersion, retention and appropriate release of the insecticide are therefore key factors and it is clear that this is a poorly understood area where more research is needed is a design approach to formulation is to be adopted in the future. In most cases reliable formulations at [sic] arrived at by trial and error following initial guidance from polymer and additive manufacturers with experience in related applications (e.g. agricultural films)."
In both paragraphs 98–99 and paragraphs 111–112 of his report Professor Stevens pointed to differences between the polymer composition of VF's Fence product (according to the 65.F.0304.5 recipe, as to which see the main judgment at [53], [274], [346] and [608]) and Bestnet's Netprotect product (as recorded in the document entitled "NPT details.doc", as to which see the main judgment at [60], [518] and [523]). Thus in paragraph 112 he said:
"The bases [sic] polyethylene compositions of the VF and Netprotect products are very different. The Fence recipe 65.F.0 304.5 gives a polyethylene matrix that is [REDACTED]% HDPE, [REDACTED]% LDPE with the balance in additives. The Netprotect recipe [NPT details.doc] provides a polyethylene matrix that is [REDACTED]% HDPE, [REDACTED]% MDPE, [REDACTED]% LLDPE, [REDACTED]% LDPE, with the balance in additives. These are very different polymer compositions which require different additive combinations."
The Defendants' strike-out application was dismissed by Roger Wyand QC sitting as a Deputy High Court Judge on 27 October 2007 (see the main judgment at [65]).
In late October 2008 the parties exchanged experts' reports for trial (see the main judgment at [70]). The Defendants served a second report from Professor Stevens dated 21 October 2008. Professor Stevens' second report repeated most of his first report, including the passages I have quoted in paragraphs 7 and 8 above, with certain additions. Again, he acknowledged the assistance of Dr Herman.
One of the additions made by Professor Stevens in his second report was of new section...
To continue reading
Request your trial
-
Vestergaard Frandsen A/S (now called MVF 3Aps) (a company incorporated under the laws of Denmark) and Others v Bestnet Europe Ltd and Others
...3 April 2009 [2009] EWHC 657 (Ch) Remedies Judgment 26 June 2009 [2009] EWHC 1456 (Ch) Remitted Questions Judgment 7 March 2011 [2011] EWHC 477 (Ch) Liability CA Judgment 20 April 2011 [2011] EWCA Civ 424 Supreme Court Judgment 22 May 2013 [2013] UKSC 31 Strike Out Judgment 16 July 2012......
-
(1) Vestergaard Frandsen S/A (now called MVF3 APS) (2) Vestergaard Frandsen SA and Another v (1) Bestnet Europe Ltd (2) 3T Europe Ltd and Others
...1456 (Ch); iii) The "Whopes I" Judgment," 7th July 2009, [2009] EWHC 1623 (Pat); and iv) The "Remittal Judgment", 7th March 2011, [2011] EWHC 477 (Ch). The Main, Remedies and Remittal Judgments exist in both full and redacted forms. The full forms contain confidential trade secrets of both......