Smith & Nephew Plc v Convatec Technologies Inc. T.J. Smith & Nephew Ltd and Another (Third Parties)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Birss |
| Judgment Date | 31 January 2014 |
| Neutral Citation | [2014] EWHC 146 (Pat) |
| Docket Number | Case No: HP13B00085 |
| Court | Chancery Division (Patents Court) |
| Date | 31 January 2014 |
[2014] EWHC 146 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Birss
Case No: HP13B00085
and
James Mellor QC and Charlotte May (instructed by Bristows LLP) for the Claimant and Third Parties
Piers Acland QC and Tom Alkin (instructed by Bird & Bird LLP) for the Defendant
Hearing dates: 17th January 2014
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.
This is a patent action about silverised wound dressings. The trial took place in November 2013 and on 12 th December 2013 judgment was handed down. The hearing to decide questions of relief and costs was on 17 th January 2014.
The action was about whether a process used by Smith & Nephew to make their Durafiber Ag product infringed Convatec's patent EP (UK) No. 1,343,510. In the course of the proceedings Smith & Nephew gave disclosure relating to their Durafiber Ag project. This disclosure included numerous documents and summary documents which set out full details of Smith & Nephew's manufacturing processes.
Unquestionably that information can properly be characterised as a trade secret of Smith & Nephew. It is highly confidential, technical information which would be of enormous value to a competitor. Its public disclosure would be very damaging to Smith & Nephew. Ordinarily no rational commercial organisation would voluntarily do anything which put this information in the public domain. However the technical information is at the heart of the issues in the case. It would have been quite impossible to decide this case fairly without that disclosure and the evidence relating to it. In order to decide the question of patent infringement in this case it was necessary to analyse and consider detailed technical evidence which was based on that disclosure.
The difficulty in dealing with disclosure of technical secrets is a problem which has been recognised in patent cases for many years. At the stage of disclosure it is well established that in a proper case a confidentiality scheme or "club" can be set up. See three Court of Appeal authorities Warner Lambert v Glaxod [1975] RPC 354, Roussel Uclaf v ICI [1990] RPC 45 and Lilly ICOS (No 2) [2002] EWCA Civ 2. The scheme may be arranged by order of the court but is often arranged by an agreement between the parties, albeit always subject to the Court's jurisdiction. The scheme provides that documents in disclosure which are identified as confidential are identified as being part of the scheme. For the documents in the scheme, access to them and their use by the receiving party and its legal team will be expressly restricted. Commonly the documents will be accessible to the solicitors and counsel and relevant independent experts who are to give evidence in the case. Commonly also the documents will be accessible only to named individuals at the receiving party. The system is flexible and there are many variations. In some cases signed undertakings are required from some or all of the persons to whom the documents are to be disclosed. In some rare cases it is fair to restrict access to the documents even further.
As the case progresses evidence can be prepared which deals with the confidential information covered by the scheme. There may be parts of the witness statements and experts' reports which are kept confidential under the scheme as well.
The system can give rise to disputes which have to be resolved in court but by and large it can be said to be system which works well. Justice is done because the patentee is able to have sufficient access to the relevant documents to have the issue decided fairly and conversely the trade secrets of the alleged infringer are preserved. Such a scheme may also apply to documents disclosed by the patentee and to documents from third parties.
When the matter comes to trial the confidentiality of documents in the scheme is maintained in three ways, by an interim order under CPR r31.22(2), by not stating the confidential information out loud in public and by sometimes sitting in private for part of the case.
The interim r31.22(2) order is made at the start of the hearing until judgment or further order. It applies to any documents within the scheme which are read by or referred to in court. The effect of the order is that until judgment CPR 31.22(1) does not apply to such a document. Without such an order, the effect of r31.22(1) would have been that if the document was read or referred to by the court, the restriction prohibiting the receiving party from using it only for the purposes of the proceedings would not apply. Although the confidentiality scheme is distinct from r31.22, the agreement setting up the scheme will contain a corresponding provision (c.f. Lilly ICOS No 2 paragraph 10).
Making an order under r31.22(2) allows for confidential documents to be referred to in public (albeit not read out) without prejudicing their confidentiality. That way the trial can be conducted in public, the confidentiality of the relevant information is maintained for the time being and the trial process is not delayed by arguments over confidentiality. Once the trial is over, as part of the hearing to deal with remedies and costs, the court will be asked deal with r31.22. If appropriate a permanent order under r31.22(2) will be made for some or all of the documents. For any document covered by the interim order, if no permanent order is made at that stage the interim order expires.
However it is often the case that it is impractical to deal with some confidential information this way. Being unable to have an unfettered discussion about it may be impractical and it may be unfair to a witness to cross-examine them on this basis. When this happens and assuming it is appropriate to do so, the Patents Court will sit in private for part of the case.
It is well understood that it is highly desirable to avoid trials in private or partially in private (see CPR r39.2 and Lilly ICOS No. 2 para 25(v)). This well known principle was reiterated in the Supreme Court by Lord Neuberger in Bank Mellat v H.M. Treasury [2013] UKSC 38 at paragraph 2. There he said that the idea of a court hearing evidence or argument in private is contrary to the principle of open justice, which is fundamental to the dispensation of justice in a modern, democratic society but went on to recognise that in rare cases the court has power to have a private hearing if it is strictly necessary to have such a hearing to achieve justice between the parties and if the degree of privacy is kept to a minimum. Lord Neuberger referred to cases in which " commercially valuable secret information is in issue" as an example.
Lord Neuberger did not need to consider in any more detail what the boundary is between commercially valuable secret information which would justify excluding the public and what would not. It is easy to see why technical trade secrets should be treated this way but I note that Lord Neuberger did not confine himself to information of a technical nature and I note also, as Mr Mellor submitted, that in Lilly ICOS No 2 the Court of Appeal held that a document containing advertising figures should be made the subject of a r31.22(2) order. Clearly therefore commercially valuable secret information which would justify excluding the public or depriving the public from access to a document used at trial, is not limited to technical trade secrets. It includes other information as well. The nature of the information and the commercial value and secrecy of it must be sufficient, bearing in mind its role in the proceedings, to justify an order excluding the public or depriving the public of access to the document. Given the importance of open justice, it seems to me that the test must be that material used at trial should only be kept confidential if justice would not be done otherwise.
The rarity of sitting in private referred to by Lord Neuberger was referring to the courts as a whole. Many patent trials involve some...
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