Syngenta Ltd and Others v Chemsource Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr. D. Alexander,and |
| Judgment Date | 29 May 2012 |
| Neutral Citation | [2012] EWHC 1507 (Pat) |
| Docket Number | Case No: HC 11 C 03433 |
| Court | Chancery Division (Patents Court) |
| Date | 29 May 2012 |
[2012] EWHC 1507 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. D. Alexander Q.C.
(Sitting as a Deputy Judge of the Chancery Division)
Case No: HC 11 C 03433
Miss Anna Edwards-Stuart (instructed by Bristows) appeared on behalf of the Claimants.
Mr. Simon Malynicz (instructed by Leathes Prior) appeared on behalf of the Defendants.
Mr. D. Alexander Q.C.:
Introduction
These are applications by the claimants and defendants respectively for certain procedural orders in this action for patent infringement, trade mark infringement and passing off.
Among the orders sought by the defendants is a costs capping order pursuant to CPR 44.18. Because such orders are not commonly sought in intellectual property cases and, so far as I am aware, have never been made, save by consent, in a patent case, I reserved judgment on these applications. The other orders sought relate to disclosure, further information and an application to amend the pleadings.
The applications are respectively supported and answered by evidence from Mr Robert Barlow, partner of Leathes Prior, solicitors for the defendants, and Ms Sally Field, partner of Bristows, solicitors for the claimants, from which the factual material in this judgment is drawn. The court has also been referred to the earlier evidence on the case management conference.
Background to this claim
The claimants are members of a substantial agrochemical businesses group concerned in the development, manufacture, distribution and sale of crop protection and related products. Among their products is a fungicide known as azoxystrobin. The claimants' sales of azoxystrobin worldwide in 2010 were in excess of £1 billion and, in the UK alone in that year, £17 million.
The first claimant is the proprietor of EP(UK) 382,375 which covered azoxystrobin and which expired on 24th January 2010. Azoxystrobin continued to be protected by a SPC GB/97/016 until 3 April 2011 when the SPC based on that patent relating to that product expired. The second claimant was the first claimant's licensee under the patent and SPC. The third claimant is the proprietor of certain registered trade marks for a device and for the shape or a container and the second and third claimants are alleged to have a substantial goodwill and reputation in the device marks and in the shape of the containers.
The defendants are dealers in agrochemical products. The first defendant, Chemsource, is a small company with limited assets as shown in its abbreviated balance sheet to 28th February 2011. The second defendant, Agchemaccess, is an agrochemical broker with a substantial turnover and a profit in the latest year for which details are exhibited of about £400,000. Its business involves dealing in both genuine proprietary products sourced from within the EEA and generic products.
In 2010, the first claimant commenced previous proceedings from infringement of the SPC against Agchemaccess. That resulted in a consent order dated 11th June 2010 whereby Agchemaccess undertook not to deal in azoxystrobin products save those manufactured and/or first marketed by or with the consent of the first claimant in the European Economic Area.
At some point prior to expiry of the SPC, the claimants found a container of azoxystrobin in the hands of a distributor in the UK which, from its label, purported to originate with Chemsource. It was labelled "CS Azoxy" and the container bore certain similarities to the containers in which the claimants have marketed their azoxystrobin products. The claimants took the container away for analysis of its contents, providing a container of their own azoxystrobin in exchange.
The claimants' laboratory analysis showed that the defendants' CS Azoxy product differed from the azoxystrobin formulations manufactured by or on behalf of the claimants in two ways. First, there were different levels of a by-product known as R290237. Second, the defendants' CS Azoxy product did not contain propylene glycol, which the claimants' azoxystrobin formulations do contain. Although it is not stated in the evidence what the propylene glycol is there for, one common use for that additive is as a non-toxic anti-freeze suggesting perhaps that the CS Azoxy tested may have been intended for warmer climates. The claimants' conclusion from this testing was that the product in the 5-litre containers purporting to originate from the first defendant was a generic product, the sale of which in the UK infringed the SPC.
Tests are provided to the defendants
The results of the claimants' tests were provided to the first defendant on 29 March 2011, well before commencement of these proceedings, and samples were offered for testing. On 1st April 2011, the first defendant's solicitors stated that, according to their instructions, since October 2010, it had purchased and sold 2000 litres of CS Azoxy. They enclosed two supplier invoices and one customer invoice. The first supplier invoice, dated 15th October 2010, was from a Romanian company. The product sold was described as "AMISTAR (azoxystrobin 250gl)" in 5 litre packs. The total quantity was 1600 litres for a price of some 62,000 Euros. The second supplier invoice was dated 8th October 2010 and was from a company named AgChemAccess. Com Limited in respect of a product described as "Syngenta Quadris" 400 litres at a total price including VAT of some £13,000. The customer invoice dated 25th November 2010 was to AgchemAccess. Com Limited and was for 2,000 litres of a product described in the invoice as "CS Azoxy". The total invoice value was for some £71,000 including VAT. Instructions were given on the invoice to deliver the product to AgChemAccess. Com Limited at an address in Norwich. The letter of 1st April 2011 also stated that the Syngenta Quadris product had been supplied by Verde Bio in Italy and that details of the batch numbers were not available but further enquiries were being made.
After some further correspondence the first defendant responded by its solicitors, noting that they were unable to take a view on the reliability of the test results. They did not, however, request samples to undertake their own tests.
The proceedings
After further correspondence over the summer of 2011 including unsuccessful attempts to resolve the matter, these proceedings were commenced on 4th October 2011. The claim includes claims for an injunction to restrain trade mark infringement and passing off (together with delivery up of infringing product and materials), damages in respect of infringement of the SPC, trade mark infringement and passing off, publication of the judgment and, by proposed amendment, a declaration that certain rights have been infringed. There are also claims for further and other relief.
As regards infringement of the SPC, the only acts in respect of which relief is sought are the sale of the 2,000 litres of CS Azoxy. The defendants contend that the profit on the sale of this consignment would not have exceeded some £7,000 and that the claim is therefore for a sum which, in the context of the claimants' business, the defendants' business and by the standards of the High Court patent claims, is very small.
The defence and counterclaim, served on 16th November 2011, stated, among other things, that the defendants were "very successful companies" and gave the turnover of the second defendant as £24 million. The defendants denied trade mark infringement and passing off and contended that the marks relied on were invalid. They admitted that they had disposed of a formulation of azoxystrobin under the name "CS Azoxy", but contended that the products were made by or under licence of the claimants, or any of them, and that they were first placed on the market in the EEA with the consent of the claimants. They stated that, pending inspection and/or testing, the defendants were unable to admit or deny whether the product specifically pleaded in the particulars of infringement was an example of such products. They did not admit the inferences sought to be drawn by the claimants that the product in question had originated from them.
The reply and defence to counterclaim served by the claimants on 8th December 2011 noted that at least the first defendant had been notified of the claim on 10th March 2011 and was provided with a copy of the analysis of the product referred to in the particulars of infringement and that a sample had been offered for testing as had inspection of the container. The claimants denied that the azoxystrobin formulation in the consignment which contained the 5 litre container in question was made by, or under licence of, the claimants or any of them or that they were first placed on the market in the EEA with the consent of the claimants. The claimants, inter alia, contended that neither the Romanian company, SC Axopan, nor the Italian company, Verde Bio, from which the defendants' product was alleged to have come, were authorised distributors of the claimants' azoxystrobin products or were licensed to manufacture or sell the claimants' azoxystrobin products.
A number of specific responses were also made to the pleadings relating to the trade mark and passing off issues, but it is not necessary to outline these here.
In January 2012, there was an exchange of requests for further information...
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