Unilever Plc v Procter and Gamble Company

JurisdictionEngland & Wales
Judgment Date28 October 1999
Neutral Citation[1999] EWCA Civ 3027
Date28 October 1999
CourtCourt of Appeal (Civil Division)
Unilever PLC
The Procter & Gamble Company

[1999] EWCA Civ J1028-16


Lord Justice Simon Brown

Lord Justice Robert Walker


Mr Justice Wilson






Royal Courts of Justice

Strand, London, WC2A 2LL

Mr G Hobbs QC and Mr D Alexander (instructed by Bird & Bird, London) for the Appellant

Mr S Thorley QC and Mr C Birss (instructed by Simmons & Simmons, London, EC2M) for the Respondent)


Thursday 28 October 1999




This is an appeal with the leave of the judge from an order of Laddie J made in the Patents Court on 24 February 1999. His order struck out as an abuse of process an action by Unilever plc (Unilever), the appellant in this court. The defendant, the respondent in this court, is The Procter & Gamble Company (Procter & Gamble) a company based in Cincinnati, Ohio.


The principal issue raised in the appeal is as to the application of the general rule of evidence on 'without prejudice' communications to a form of proceedings peculiar to patent law and some other fields of intellectual property law, that is (as Unilever contends its action was) an action for threats brought under s.70 of the Patents Act 1977 (the 1977 Act). There are subsidiary issues (which arise partly on the notice of appeal and partly on the respondent's notice) as to whether the action was indeed an action under s.70 and as to the granting of declaratory relief under some other head of jurisdiction.


The facts


The facts can be stated quite shortly. Since Procter & Gamble's strike-out application was based on abuse of process, as well as on failure to disclose a cause of action, there was some affidavit evidence, but no significant factual dispute. Procter & Gamble is the proprietor of European Patent (UK) number 0343069 which was granted in 1993 with designations for Germany, Italy, Spain and the United Kingdom. The patent is principally for a process ("for the washing of laundry in a machine") rather than for a product but from Unilever's point of view the essential issue is whether or not the manufacture and sale of a product known as Persil Performance Tablets would constitute an infringement of Procter & Gamble's patent.


Opposition proceedings (initiated by a German company, Henkel) have been taking place in the European Patent Office and in May 1997 Henkel brought an appeal in those proceedings. There have also been proceedings in France brought in May 1998 by Procter & Gamble against a French company which is an indirect subsidiary of Unilever. It is not necessary to give details of the French proceedings, but they led to a high-level meeting in Frankfurt, on 20 May 1998, between representatives of Procter & Gamble and Unilever.


The judge described the meeting, and subsequent events, as follows,

"The meeting took place in the context of ongoing discussions with a view to settling a number of issues between the two organisations. There is no dispute that both parties agreed to those discussions being conducted on a without prejudice basis. It is said that in the course of the meeting P&G made a claim of right and threatened Unilever with proceedings for infringement of the patent in suit.

On 29 May 1998 Henkel informed Unilever that it had come to an arrangement with P&G. One of the conditions of the arrangement was that Henkel would withdraw its opposition to the grant of the patent in the EPO. Unilever immediately issued the writ in the present action. It is common ground that Unilever's motivation in starting the current proceedings was to attempt to give it locus to intervene in the appeal proceedings before the EPO pursuant to Article 105 of the European Patent Convention ("EPC"). That Article permits a third party to intervene if he proves both that the proprietor of the patent has requested that he ceases alleged infringement of the patent and that he has instituted proceedings for a court ruling that he is not infringing the patent. Unilever filed an application to intervene under Article 105 EPC. It has been challenged by P&G and the EPO will have to rule on that issue.

Unilever could have commenced proceedings against P&G in this country had it complied with the provisions of section 71 of the Patents Act 1977 by applying in writing to P&G for a written acknowledgement of non-infringement. However that would have taken time. Presumably because Unilever thought that the window of opportunity for it to try to come within Article 105 was narrow, the s.71 route was not taken.

On 5 June 1998 P&G commenced patent infringement proceedings under European Patent UK 0343069 in respect of Persil Performance Tablets in the Patents Court. It is not in dispute that the product is dealt with in this country by Lever Brothers and not by Unilever PLC. So the infringement proceedings are against Lever Brothers not against Unilever.

On 26 October 1998 P&G launched the Notice of Motion which is now before the Court seeking to strike out Unilever's action for a declaration of non-infringement."


The statement of claim in Unilever's action pleaded that Procter & Gamble had threatened to take proceedings, with the following particulars,

"(a) In early May, [Procter & Gamble] commenced proceedings in the Tribunal de Grande Instance de Paris, in France against La Societe Lever S.A. for infringement of the French equivalent of the Patent.

(b) At a meeting held in Frankfurt on 20th May 1998 attended by Mr Stephen Williams, General Counsel and Joint Company Secretary of [Unilever] and Mr James Johnson, Senior Vice-President and General Counsel of [Procter & Gamble], Mr Johnson stated that [Procter & Gamble] would be taking similar action in the United Kingdom in the near future.

(c) The said statement constituted (i) an assertion that the sale and marketing of Persil Performance Tablets in the United Kingdom infringes the Patent and (ii) a threat to take proceedings in the United Kingdom in respect of such alleged infringement."


The judge proceeded on the basis that he should assume the particulars to be true, and that they amounted to a pleading of an actionable threat even though the prayer for relief sought, not an injunction or damages, but only a declaration (and not a declaration in the terms permitted by s.70(3)(a)). The terms of the declaration sought were,

"that the manufacture, sale and/or marketing of Persil Performance Tablets in the United Kingdom (and any other act of the kind mentioned in section 60 of the Patents Act 1977 done in relation thereto) does not infringe European Patent (UK) number 0343069 and/or such further or other declaration as shall to the court seem fit."


One of the subsidiary issues is whether the judge was right in the way in which he characterised the action.


Actionable threats


An action for threats calls for some explanation for the benefit of those who do not regularly practise in the specialised field of intellectual property law. The power conferred on a patentee by the grant of a statutory monopoly was thought by Parliament to call for special safeguards, and the statutory jurisdiction was first introduced by s.32 of the Patents Designs and Trademarks Act 1883 (the 1883 Act), which was in the following terms,

"Where any person claiming to be the patentee of an invention, by circulars advertisements or otherwise threatens any other person with any legal proceedings or liability in respect of any alleged manufacture use sale or purchase of the invention, any person or persons aggrieved thereby may bring an action against him, and may obtain an injunction against the continuance of such threats, and may recover such damage (if any) as may have been sustained thereby, if the alleged manufacture, use, sale, or purchase to which the threats related was not in fact an infringement of any legal rights of the person making such threats: Provided that this section shall not apply if the person making such threats with due diligence commences and prosecutes an action for infringement of his patent."


Later statutes have contained comparable but by no means identical provisions. Section 70 of the 1977 Act, the provision now in force, is in the following terms,

"(1) Where a person (whether or not the proprietor of, or entitled to any right in, a patent) by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats (whether or not he is the person to whom the threats are made) may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming any relief mentioned in subsection (3) below.

(2) In any such proceedings the plaintiff or pursuer shall, if he proves that the threats were so made and satisfies the court that he is a person aggrieved by them, be entitled to the relief claimed unless —

(a) the defendant or defender proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent; and

(b) the patent alleged to be infringed is not shown by the plaintiff or pursuer to be invalid in a relevant respect.

(3) The said relief is —

(a) a declaration or declarator to the effect that the threats are unjustifiable;

(b) an injunction or interdict against the continuance of the threats and

(c) damages in respect of any loss which the plaintiff or pursuer has sustained by the threats.

(4) Proceedings may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of...

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