Ablaise Ltd v Nettec Plc & Anor

I have before me an application in effect to strike out this patent infringement action in so far as it applies to the first defendant, Nettec Plc. The action concerns a patent which relates to interactive websites. The claimant, Ablaise Limited, alleges that the first defendant, Nettec Plc, and the second defendant, Nettec Solutions Limited, have infringed the claims of the patent by, amongst other things, offering for sale website services which operate so as to come within the scope of the claims.

The first defendant, represented before me today by Mr. Meade, says that it has had nothing to do with the alleged infringement and should be removed from the action. The first defendant says that since January 2001 it has been a non-trading company. All activities since that date have been conducted by Nettec Solutions Limited, the second defendant. The date of January 2001 is important because, until November 2002, the first defendant was licensed under the patent in suit, and so the only questions of infringement arise in relation to the period after November 2002. In fact the case is somewhat more complicated than that because the defendants assert but the claimant has not accepted that in May 2003 the alleged infringing business was sold to a third party called Aspect. In any event, the first defendant says it has never committed an act of infringement even assuming, which it also denies, that the patent is valid.

The allegations made against the first defendant fall into two parts. First of all, in paragraphs 5, 10 and 11 of the particulars of claim allegations of direct infringement are made. It is not necessary at this stage to go through those allegations. I understand Mr. Meade to accept, at least for the purpose of this application, that there is now sufficient material before the court to show that the allegations of direct infringement set out, particularly in paragraph 5 of the particulars of claim are not demurrable. Therefore the case of direct infringement must proceed.

The real dispute relates to the allegation of joint tortfeasance which is to be found in paragraph 6 of the particulars of claim. The pleading is short. It reads as follows:

“Further and alternatively, the First and Second defendants have acted in concert in pursuance of a common design in the commissioning of the tort as set out herein and are liable to the Claimant as joint tortfeasors.”

Unsurprisingly, that resulted in a request for further information which request was served on 16th May of this year. In particular the claimants asked for full and proper details of all facts and matters relied upon in support of the allegations of (a) common design; (b) commissioning torts, and (c) joint tortfeasors.

The response from the claimants reads as follows:

“Prior to the disclosure hearin, the below particulars are the best information which the Claimant is presently able to give;

(i)

Two of the three principle players of the First Defendant, viz the managing director Thomas Nikolopulos and a finance director Peter Kemkers compromised the sole directors of the Second Defendant.

(ii)

The Defendants choose to organise their business such that the corporate distinction to third parties is illusory. They present themselves to the world as Nettec Plc (the trading name of the First Defendant). For example, only the First Defendant (and not the Second Defendant) appears to advertise the provision of the apparatus & methods complained of (although it appears that the same may actually be provided via the Second Defendant).

(iii)

In addition, the First Defendant accounts for and relies upon the trading activities of the Second Defendants in the drawing up of its statutory accounts.

(iv)

The Second Defendant was (at the time of issuing proceedings) a wholly owned subsidiary of the First Defendant.”

The principles which apply in deciding whether or not there has been joint tortfeasance are set out in a number of cases, and in particular in Sepracor v. Hoechst Marion Roussel [1990] F.S.R. 746 at 755-758 which refers to the leading Court of Appeal authorities Credit Lyonnais v. ECGD [1998] 1 Lloyd’s Rep. 19, Unilever v. Gillette [1989] R.P.C. 583 and Unilever v. Chefaro [1994] F.S.R. 135. As Mr. Mead puts it in his skeleton argument, there is no tort of knowing assistance. To be jointly liable, there must be conspiracy, procurement or inducement, that being a reference to the way in which the matter was put by Hobhouse LJ, as he then was, in the Credit Lyonnais case. There must be some “taking part” in an act in furtherance of the common design not merely an agreement. What has to be determined is whether there are facts from which the existence of a common design can clearly and properly be inferred, that being a reference to the way in which the matter was put by Glidewell L.J. in Unilever v. Chefaro.

The fact that the companies have common directors does not begin to be an indication that there is a common design to commit the particular act of infringement set out in the particulars of claim here. Furthermore, it is difficult to see from the claimant’s pleading what is being relied to in the statutory accounts which indicates common design. In addition the fact that one company is a wholly owned subsidiary of the other does not, in any sense, indicate common design. In the end, Mr. Davis, who appears on behalf of the claimant, placed most of his reliance upon paragraph 2 of the further information given which I have set out above. In my view, even this paragraph is inadequate. As Mr. Meade points out, the fact that the parties may give an appearance to third parties of the way in which business is conducted does not of itself indicate who is actually conducting the business or whether the business is being conducted in a way which could be said to amount to involve knowing assistance by one company in the business activities of the other.

As it stands, it seems to me that these pleadings are insufficient to make out a case of joint tortfeasance. If that were all that was before me, I would strike out paragraph 6 of the particulars of claim and therefore restrict the claimant to an allegation of direct infringement against the first and second defendant.

However, that is not all that is before me. In answer to the first defendant’s application to strike out a very large amount of evidence has been put in by the claimants explaining why it is apparent from documents issued by the defendants that the allegation that the first defendant is a dormant company and has been since 1st January 2001, cannot be accepted and that the first defendant has been deeply involved in the marketing exercises which are said to involve infringement of the patented suit.

The trouble is that as the matter came on before me, the claimant refused to amend to put all of the high points of that material into its pleadings but wished to stick to the insufficient pleadings and further information to which I have already referred. However the reality is that the claimant intends to rely on the substantial additional matters covered in the evidence which it says, and which I understand Mr. Meade does not dispute, give rise to at least an arguable case of joint tortfeasance. It seems to me the proper course for me to adopt is as follows. I will make an order that paragraph 6 of the particulars of claim be struck out unless by 4 o’clock on Friday 14 November the claimant gives further information, that is to say particulars, of all the matters it relies upon in support of its case of joint tortfeasance.