Rotam Agrochemical Company Ltd v Gat Microencapsulation GmbH (Formerly Gat Microencapsulation AG)

JurisdictionEngland & Wales
JudgeTHE HONOURABLE,Mr Justice Butcher
Judgment Date25 October 2018
Neutral Citation[2018] EWHC 2765 (Comm)
CourtQueen's Bench Division (Commercial Court)
Docket NumberCL-2015-000548
Date25 October 2018

[2018] EWHC 2765 (Comm)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF

ENGLAND AND WALES

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Rolls Building, Fetter Lane

London, EC4A 1NL

Before:

THE HONOURABLE Mr Justice Butcher

CL-2015-000548

Between:
(1) Rotam Agrochemical Company Limited
(2) Rotam Agrochem International Company Limited
Claimants
and
Gat Microencapsulation GmbH (Formerly Gat Microencapsulation AG)
Defendant

Anneliese Day QC and Christopher Langley (instructed by Trowers & Hamlins LLP) for the Claimants

Hugo Cuddigan QC and Chris Aikens (instructed by Waterfront Solicitors LLP) for the Defendant

Hearing dates: 5, 9, 10, 11, 12, 16, 17, 18, 19, 23, 24, 25 July 2018

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.

Mr Justice Butcher Mr Justice Butcher THE HONOURABLE

Introduction

1

This action concerns an attempted collaboration in relation to the production of a capsule suspension formulation for Clomazone (“CS-CLO”), this being a plant protection product designed to control the growth of various weeds and to protect crops including, in particular, oilseed rape and potatoes.

2

By way of brief overview, the Claimants wished to develop and commercialise CS-CLO for sale in Europe. To do so, the Claimants worked with the Defendant for quite some time and, in the course of doing so, entered into a confidentiality agreement and made payment of certain sums to the Defendant. The Defendant, however, subsequently sold its entire business (including an exclusive licence to use the data and technology relating to CS-CLO) to another company, FMC Corporation (“FMC”).

3

The Claimants' case is that, in doing so, the Defendant breached two further contracts which they contend had been agreed after the confidentiality agreement but before the sale to FMC – namely a collaboration agreement and a data transfer agreement – with further alternative claims in unjust enrichment and the tort of negligent misstatement.

4

The Defendant's position is that there was no collaboration agreement and no binding data transfer agreement. The Defendant's case is that the payments made by Rotam were for access to information and not for ownership, as Rotam contends. The Defendant raises further arguments as to the Claimants' supposed contractual rights, and also denies liability in tort or within the law of unjust enrichment. The Defendant accepted, however, that if there were either a binding collaboration agreement or a data transfer agreement as contended by the Claimants, the sale to FMC would have constituted a breach of such agreement(s).

5

Initially, this case was listed for the determination of both liability and quantum. At the outset of the hearing, however, and by agreement, matters of quantum were adjourned for a subsequent hearing, if necessary.

The Parties

6

The Rotam Group, consisting of some 67 companies, is in the business of agrochemicals, life sciences, pharmaceuticals and packaging. It focuses on post-patent technology, that is to say technology no longer subject to exclusivity and protection by patent.

7

The first Claimant, Rotam Agrochemical Company Limited (“Rotam”), is the principal trading company within the Rotam Group. It is based in Hong Kong. The purpose of the second Claimant, Rotam Agrochem International Company Limited (“RAIC”) is to hold and pay for property (its payments being funded by other entities within the Rotam Group).

8

The Defendant (“GAT”), is a company based in Austria. It specialises in the formulation of agrochemicals and is the legal successor to GAT Microencapsulation AG. The latter was founded in 1999 as GIMENO KEG to provide research and development and analytical services to the food and agricultural industries. The food and agricultural arms of GIMENO KEG were split. GAT has a history of developing technology for the formulation of agrochemicals, and particularly for microencapsulation. It lacked the resources, by itself, to bring plant protection products to market in substantial quantities.

CS-CLO

9

As I have said, CS-CLO is a plant protection product – or agricultural herbicide – in capsule suspension formulation.

10

The active ingredient, Clomazone, is a chemical compound. It was ‘invented’ by FMC, and FMC held worldwide molecule patents in relation to Clomazone, which expired in 2001. From that point onwards, Clomazone as an active ingredient could be commercially exploited provided the particular product in question did not infringe other patents, such as any relevant formulation patents.

11

FMC had obtained a supplementary protection certificate (or “SPC”), which gave FMC an extension of protection until June 2006 in the Member States of the EU. SPCs have the effect of extending the term of a patent relating to a medicinal or plant protection product, usually for not more than five years. In addition, FMC held a suite of other patents relevant to formulations which used Clomazone as the active ingredient. One such patent relevant to these proceedings was EP1652433, which covered a polymer content of 3% to 15%. This patent expired in June 2016.

12

GAT, as I have said, specialises in microencapsulation. GAT had various patents over its microencapsulation technologies. By 2009 it had developed a capsule-suspension formulation of Clomazone, namely Clomazone 360 g/L CS, i.e. CS-CLO. It is a slurry in which microcapsules (consisting of a core material and an outer wall) are suspended in water. Compared with another common formulation of such products – namely an emulsifiable concentrate formulation – plant protection products in capsule suspension form do not disperse as easily and so present a lower risk of having an adverse effect upon other crops in the vicinity of the target.

13

GAT had not only created CS-CLO but had obtained data in relation to its use, and had obtained a Romanian national registration and was manufacturing this product as “CENIT” for sale in Romania (with the active ingredient being sourced by a third party). The registration in question, however, was not under the European regime but rather governed by pre-existing Romanian legislation.

14

In order to place CS-CLO in an EU market, it was necessary for there to be a valid registration, i.e. an approval of the product for commercialisation, for that market. To this end, under the relevant regulations, a prospective seller had to prepare a dossier containing “Annex II” and “Annex III” data. Annex II data concerns the active ingredient/molecule, while Annex III data relates to the formulation of a product and consists mainly of toxicology data, field trial and phys-chem data.

15

Throughout the relevant period (as discussed below) FMC was marketing its own Clomazone product. FMC re-registered this product in 2008, which gave FMC a period of five years during which no third party was able to rely upon or cite its Annex II data for the purposes of registration. FMC's Annex II protection was due to expire at the beginning of November 2013. What that meant was that if another company wished to obtain registration of a capsule suspension Clomazone product, it would, prior to November 2013, have to generate its own Annex II data relating to the active ingredient Clomazone. This was possible but expensive and Rotam's view was that most other companies would decide to wait until FMC's Annex II protection had expired before investing in the product in order to avoid those costs. Rotam considered that this provided a “window of opportunity” for it and GAT to produce and register their own Clomazone product.

16

For completeness, I record that Rotam had worked on a Clomazone product from 2006, namely an emulsifiable concentrate product. This was registered by 2008 and was already being sold in South America.

The Individuals Principally Involved

17

At all material times, the CEO of GAT was Dr Barbara Gimeno, to whom I will refer as “Dr Gimeno”. Her husband, Dr Miguel Gimeno, to whom I will refer as “Miguel Gimeno”, supervised technical activities at GAT. Matthias Reismüller was, from 2011 until he left GAT on 21 January 2017, Portfolio and Regulatory Manager of GAT. Dr Victor Casana-Giner was GAT's R&D and IP Manager.

18

James Bristow was, during the period January 2009 to December 2012 an employee of Rotam, who had the title of General Manager. Rotam's Regional Manager for UK and Northern Europe, who was primarily responsible for relations with GAT until June 2010, was Graham Dickinson. He was succeeded as the person with primary responsibility for the commercial relationship with GAT by Alok Kumar, who was Manager of Business Development. From about March or April 2012, his colleague, Prabhakar Kumar, who succeeded him as Manager of Business Development, became responsible for day-to-day communications with GAT. Ms Leung Ka Man, who has been called by the parties Karman Leung, was Rotam's IP and Patent Manager during the period 2009 to 2012.

The Chronology of the Relationship

19

As with many commercial disputes, this one was heavily documented. Much of the history of the relationship is set out in documents and was not the subject of any serious dispute. What follows represents an outline of the significant phases of the relationship.

Early Relationship and the FTU Project

20

From 2008, Rotam was seeking to expand its portfolio of products and to enter into new markets in Europe. On 2 June 2008, the parties first met at GAT's offices in Ebenfurth, Austria to discuss a potential long-term collaboration on a number of products. These projects did not, at that point in time, include CS-CLO, but did include GAT's Thifensuluron + Fluroxpyr mixes (“FTU”). The FTU project was to continue for some time,...

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2 cases
  • Astra Asset Management UK v The Co-operative Bank Plc
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 10 April 2019
    ...to stipulate for it, but that is not necessary if it can be implied: see Rotam Agrochemical Co Ltd v GAT Microencapsulation GmbH [2018] EWHC 2765 (Comm) § 80 “Subject to contract” status can be waived, but it has been held that any such waiver must be unequivocal and that the court will no......
  • Markus Pedriks v Serge Grimaux
    • United Kingdom
    • Queen's Bench Division
    • 21 December 2021
    ...at the whole course of those negotiations”. See also Butcher J in Rotam Agrochemical Company Limited v Gat Microencapsulation GMBH [2018] EWHC 2765 (Comm) (“ Rotam Agrochemical”) at para 141. Additionally, evidence of the subjective understanding of the parties is admissible in so far as i......
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