Optaglio Ltd v Tomas Tethal and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Floyd,Lord Justice Lewison,Lady Justice Black |
| Judgment Date | 06 October 2015 |
| Neutral Citation | [2015] EWCA Civ 1002 |
| Docket Number | Case No: A3 2014 3855 |
| Court | Court of Appeal (Civil Division) |
| Date | 06 October 2015 |
[2015] EWCA Civ 1002
Lady Justice Black
Lord Justice Lewison
and
Lord Justice Floyd
Case No: A3 2014 3855
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
HHJ PURLE QC
[2014] EWHC 3351 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Jonathan Cohen (instructed by TLT Solicitors) for the Appellant
Andrew Mold (instructed by Gardner Leader LLP) for the Respondents
Hearing date: 28 July 2015
This is an appeal from the decision of HHJ Purle QC sitting as a deputy High Court Judge in the Chancery Division dated 10 September 2014 on an application for summary judgment. The claimant Optaglio Limited ("Optaglio"), who is the appellant in this court, brought proceedings for breach of directors' duty against the defendants and respondents Mr Tomas Tethal and Mr Philip Hudson. The judge granted summary judgment in favour of the respondents. With the permission of Lewison LJ, Optaglio appeals, contending that the case is not suitable for summary judgment. By their respondents' notice Mr Tethal and Mr Hudson contend that the judge should have dismissed the claim as lacking bona fides, or as inadequately pleaded, or should in the alternative have made a conditional order.
The alleged breach of duty consists in the withdrawal of a UK patent application which had been filed, for the benefit of Optaglio, in the name of Mr Tethal, on 18 April 2007. The application, No 0707494.1, was made for an invention "to provide a nano-featured layer structure and method of producing the same". The idea, in very general terms, was to manufacture electronic components such as diodes in planar rather than "stack" form, and to use an embossing technique to achieve this.
Optaglio specialises in the manufacture of optical technology including devices for producing holographic images. Examples of these are holographic security foils and labels for security applications. Optaglio was founded by Mr Hudson in about 2000. Mr Tethal was appointed a director in 2001. It grew to be a successful company, obtaining a turnover, according to Mr Hudson, of some £15 million by 2006. By that date it had a subsidiary company in the Czech Republic, Optaglio s.r.o. Mr Hudson was located there from 2006. In January 2006 Mr Vladimir Zhukov had acquired, through a company under his control, approximately a 90% shareholding in Optaglio.
The patent application which lies at the heart of this dispute arose in the following way. In mid 2006 Mr Tethal attended a lecture given by Professor Song of the University of Manchester ("the University") concerning planar diodes and transistors. Optaglio had developed microstructure embossing techniques, and Mr Tethal realised that there was potential for combining the ideas being discussed by Professor Song and Optaglio's manufacturing techniques.
The University had established a spin-off company called Plastic E Print Limited, subsequently called Nano ePrint Limited ("NePL") to explore possible commercial markets for Professor Song's ideas. In September 2006 the University, a company called The University of Manchester Intellectual Property Limited and Optaglio entered into a Mutual Confidential Disclosure Agreement ("the first MCDA") to enable the exchange of confidential information for preliminary evaluation purposes. At the end of 2006 and the beginning of 2007 Optaglio started tests with the University under the terms of the first MCDA. According to Mr Tethal, the results looked promising in the laboratory. Mr Libor Kotacka was the employee at Optaglio who was responsible for the co-operation programme. A further MCDA ("the second MCDA") was entered into on 2 April 2007 between the University, a consultant called Dr Lupo, Optaglio and NePL.
In the spring of 2007 Optaglio became aware that Professor Song intended to speak at a conference in Cambridge on 17–18 April 2007. A decision was taken to file a patent application as a defensive measure to guard against anything said by Professor Song becoming part of the state of the art and thus destructive of any later attempt to patent the ideas which were then under discussion. The application was filed on 18 April 2007 in Mr Tethal's name. The defendants say that the decision to file in Mr Tethal's name was taken because it was appreciated that there might be concerns over whether the application contained information confidential to NePL, and in the knowledge that the application could later be assigned to the appropriate party or parties.
At a meeting with Mr Zhukov on 16 May 2007 it was agreed that Mr Tethal would be Optaglio's sole representative on the project with NePL. This decision about representation was communicated to NePL by Mr Hudson on 23 May 2007.
It appears that by 24 May Mr Hudson had disclosed the existence of Optaglio's patent application to Mr Richard Price of NePL with the explanation that it had been filed as a defensive measure against Professor Song's possible disclosure in Cambridge. On that day NePL wrote to Optaglio to point out that the application "appears to contain elements of confidential information provided by Prof Song to Optaglio both in the context of Optaglio as a technical collaboration partner and also as a proposed investor in Plastic ePrint Ltd." The letter went on to explain NePL's understanding of the information it or the University had disclosed to Optaglio and the information Optaglio had disclosed to NePL/the University. The letter also refers to Optaglio's "recent proposal to assign the application to the University in return for a commercial agreement on origination of PEPL nanostructures (based on Optaglio's proprietary e-beam lithography process)".
Also in the background at this time was an offer by the DTI to NePL of a development grant of some £600,000 for a low cost manufacturing platform for high-throughput electronics production. The offer recognised that part of the grant would go to Optaglio. Included in the bundles are the minutes of a meeting on 26 June 2007 between Optaglio s.r.o. and NePL. The minutes record those present for Optaglio as being Mr Tethal, Mr Zhukov and Mr Kotacka, with Mr Price and Prof Song being present for NePL. The first topic of discussion was the DTI program. NePL stressed the importance of intellectual property rights, which was to be NePL's main asset. NEPL's position was that joint ownership of IP was "less attractive".
Mr Zhukov denies being present at the June 26 meeting. Mr Kotacka says Mr Zhukov was not present, but produces minutes of a different meeting, held on 26 January 2007 to support his recollection. Mr Kotacka says that Mr Zhukov would not have been present at a technical meeting, but the meeting on 26 June 2007 seems to have been more strategic than technical.
On 11 July 2007 NePL wrote to Mr Tethal outlining its position with regard to future collaboration with Optaglio. The letter offered:
i) a non-exclusive licence to manufacture and sell radio frequency identification ("RFID") products in certain territories in the markets of brand protection and security;
ii) a non-exclusive worldwide licence for origination based on NePL designs;
iii) that Optaglio would be a preferred supplier to NePL;
iv) in return Optaglio would:
a) pay royalties on sales of RFID products;
b) pay royalties on sales of origination;
c) pay a technology access fee of no less than £200,000 within 2 years;
d) recognise that all IP related to NePL background IPR whether or not developed under the collaborative technical development would be owned by NePL except relating to e-beam lithography equipment and tools;
e) accept that any licence would be conditional on the assignment to NePL of Optaglio's patent application.
There was a further meeting in Manchester on 8 October 2007 at which Optaglio explained its position. This led to a letter from NePL dated 12 October in which disappointment was expressed that it had not been possible to reach agreement. The letter made the point that any agreement would have to be on the basis that Optaglio committed to withdraw the patent application.
On 22 October 2007 Mr Tethal made some counter proposals which included this sentence:
"Optaglio further agrees to arrange with [NePL] such model, which enables both parties the use of the patent applied for…"
On 23 October 2007 NePL replied with revised proposals, accepting some aspects of Optaglio's proposal of 22 October. They requested however that the patent application be withdrawn as part of the deal and as soon as possible to avoid disclosure of any confidential NePL information.
On 30 October 2007 Mr Tethal wrote:
"After my discussion with our majority shareholder, Mr Zhukov, and as I have already indicated, Optaglio's standpoint is as follows …"
Mr Tethal then set out that standpoint and summarised in a chart the two sets of proposals of Optaglio and NePL respectively. The Optaglio proposals included as item 4 the use of the patent equally by both parties, whereas NePL's proposal was that the patent be withdrawn.
On 30 October 2007 NePL wrote to Optaglio making some concessions but insisting that agreement be reached by 1 November, in view of the fact that NePL was already in advanced discussions with other partners. On the same day NePL provided Optaglio with details of some prior published patents in the field of embossing.
On 2 November 2007 Mr Tethal emailed Mr Price of NePL to say that he had received the decision of Mr Zhukov to go...
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