Nokia Corporation v (1) Au Optronics Corporation (2) Au Optronics (Czech) S.R.O. and Others

Hearing dates: 8–12/3/2012

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.

There are before the court a number of inter-related applications. These relate to proceedings commenced in 2009 by the Claimant ("Nokia") against a wide range of defendants, all of whom are involved in some way in the manufacture or supply of liquid crystal displays ("LCDs"). In this judgment, I refer to the individual defendants by their numbers as D1, D2 etc..

Nokia is the well-known mobile telephone manufacturer. It purchases small sized LCDs from a number of suppliers for incorporation into its mobile telephones. The proceedings it commenced in 2009 include allegations that the defendants have been involved in a cartel involving unlawful practices which contravene Article 101 of the Treaty on the Functioning of the European Union ("Article 101", ex Article 81 TEC), which have had the effect of increasing the prices for mobile telephone LCDs above what they would have been had the worldwide market for LCDs, including in the European Union and the European Economic Area, been a properly competitive market.

Article 101(1) provides:

"The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts."

Nokia obtained an order dated 15 December 2009 granting permission for service of the claims on defendants outside the jurisdiction.

The defendants are divided into distinct groups which are pleaded to be distinct "undertakings" for the purposes of application of Article 101. For present purposes the following undertakings and groupings of defendants are relevant: AU Optronics (D1, D2 and D3, represented by Mr Robertson QC), Samsung (D8, D11 and D12, represented by Mr Flynn QC), Samsung SDI (D9 and D10, represented by Mr Lasok QC), Sharp (D13, D14 and a new proposed D23, Sharp Laboratories of Europe Limited – "Sharp Laboratories", represented by Mr Jowell QC), Toshiba (D15 and D16, represented by Mr de la Mare) and Hitachi (D20, D21 and D22, represented by Mr Green QC). The other defendants have either settled with Nokia or have agreed continuing stays of the claims against them. Hereafter, I refer to the defendants appearing before me as "the represented defendants".

The AU Optronics Defendants and the Sharp Defendants did not wish to be perceived to be submitting to the jurisdiction of the court, so Mr Robertson and Mr Jowell, respectively, appeared on a watching brief and did not play a part in the oral argument. The defendants they represent were supportive of the position adopted by the other represented defendants.

In its original Particulars of Claim lodged in support of the claim form dated 23 November 2009 ("the P/C"), no doubt because of the similarity in their names, Nokia made a mistake in identifying D9 and D10 as forming part of a single Samsung undertaking in conjunction with D8, D11 and D12, rather than as companies in a distinct "undertaking", as Samsung SDI. That mistake has been corrected in the proposed Amended Particulars of Claim ("the Amended P/C"), which sets out very extensive amendments to the P/C which Nokia now seeks permission to make by one of the applications before me. I consider below whether this error in the P/C in treating D9 and D10 as part of Samsung and failing to identify them as members of the distinct Samsung SDI undertaking has a material impact in relation to any of the applications before me.

The P/C also contained another factual error. Nokia pleaded that D22 had made direct sales of (small quantities of) LCDs to it. In the Amended P/C it emerges that Nokia does not maintain that particular allegation. Mr Vajda QC, for Nokia, accepted that I should consider the claims set out in the P/C on the footing that they did not include this particular allegation of direct supply of LCDs by D22.

The Amended P/C have been drafted in light of certain disclosure obtained in related proceedings in the United States. In those proceedings, an order was made which limited the extent to which disclosed material could be used for other purposes, in particular with a view to preserving what is asserted to be commercial confidentiality in relation to some of the contents of that material. Material graded in the US proceedings as "Confidential" or "Highly Confidential" has been made subject to special restrictions as to the extent to which it can be released to other persons. The relevant US disclosure order has permitted disclosure of relevant material within a defined "confidentiality ring", including to Nokia's legal team in England. This has permitted the much extended pleading by Nokia of its claims in the form of the Amended P/C.

By order dated 17 January 2012 made by Master Bragge, provision was made for use of the US disclosure material in these proceedings, but reflecting the "confidentiality ring" arrangements contained in the US disclosure order. The Amended P/C plead by reference to the US disclosure material, but in certain cases it is made clear that details of some of the pleaded case (where it reflects "Confidential" or "Highly Confidential" material) may not be provided to in-house personnel (including in-house lawyers) of certain of the defendants. There are procedures which would allow those defendants whose confidentiality is in issue in relation to any particular item of information set out in the Amended P/C to agree to the personnel of other defendants seeing the pleading in that respect; and the order of Master Bragge contains an express liberty to any party to apply for an amendment of his order if they wish to seek a variation of it to permit wider dissemination of the information in the Amended P/C. At the time of the hearing before me, some but not all of the affected defendants had agreed to the other defendants seeing the full pleading. The Samsung SDI defendants (D9 and D10) remain subject to restrictions against their in-house lawyers seeing the full text of the Amended P/C (under the relevant arrangements their external lawyers have been permitted to see the full text). Mr Lasok, on their behalf, therefore maintained a distinct argument that the court, in its discretion, should not permit the amendment of the P/C in the form of the Amended P/C subject to that restriction. After debate, a way through this particular difficulty, acceptable to Mr Lasok, was identified: see paras. [86]-[88] below.

This was a peripheral issue. The main issues between the parties related to the claims against D12 and D22 and the assertion of jurisdiction over other defendants.

Most of the defendants are domiciled outside England and the United Kingdom. However, D12 and D22 are companies registered and domiciled in England. At the hearing, these were referred to as "anchor defendants", meaning that it is only because claims are made against them that under Regulation (EC) 44/2001 ("the Judgments Regulation") and under English jurisdictional rules the English court may be entitled to assert jurisdiction over the other defendants as well. Nokia is entitled to sue D12 and D22 in England by virtue of Article 2 of the Judgments Regulation, because they are both domiciled here. Provided Nokia has valid claims against an anchor defendant, it may be entitled to join other...