Dupont Nutrition Biosciences ApS v Novozymes A/S

On 19 July 2010, Danisco A/S brought this claim for revocation of Novozymes A/S’s European patent (UK) No 1 804 592. Before the action came to trial, the patent was revoked in proceedings before the European Patent Office. The applications before the court raise issues as to the use which may be made of documents disclosed in the course of these proceedings for the purposes of proceedings in other jurisdictions.

Danisco A/S has subsequently changed its name to DuPont Nutrition Biosciences ApS following its acquisition by DuPont, but I will continue to refer to it as Danisco, as did the parties. Long after Danisco had commenced the action, at the end of 2011, Novozymes counterclaimed for infringement against Danisco A/S’s UK subsidiary Danisco (UK) Limited. It is not necessary to distinguish between the two Danisco companies. In parallel with the action, opposition proceedings were taking place concerning the same patent at the European Patent Office in Munich (“EPO”). The Opposition Division of the EPO revoked the patent, but that decision was appealed to the Technical Board of Appeal (“TBA”), which appeal had suspensive effect. There were also proceedings of various kinds in other European countries. Before the trial could take place, the TBA revoked the patent. The subject matter having disappeared, the claim and counterclaim come to an end. The applications which are before the court raise a number of issues concerned with the terms of the final order to be made to give effect to the termination of the action and counterclaim. The principal issue is that concerned with the use to which documents disclosed in the action here may be used in proceedings elsewhere. In particular I have to decide:

i)

The scope of the permission which has been granted or is to be granted to use documents disclosed on discovery outside the scope of the present proceedings;

ii)

Whether that permission should extend to a particular document disclosed by Novozymes but which is the subject of a claim to privilege;

iii)

Whether an injunction should be granted to restrain Novozymes from seeking to prevent Danisco from using the documents in the foreign proceedings.

Certain other issues, including whether there should be an order for indemnity costs in favour of Danisco after a particular date, and what order should be made about interest on costs were not reached at the hearing and will have to be dealt with once this judgment has been handed down.

CPR 31.22 provides, so far as material:

“(1)

A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where –

(a)

the document has been read to or by the court, or referred to, at a hearing which has been held in public;

(b)

the court gives permission; or

(c)

the party who disclosed the document and the person to whom the document belongs agree.

(2)

The court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public.”

One effect of rule 31.22(1)(a) is that the deployment of a document in the course of a public hearing has the effect of discharging the obligation which would otherwise apply to the use of that document, namely to use the document only for the purposes of the action in which it is disclosed. It can therefore be used more widely. However, the document remains subject to the control of the court. Under rule 31.22(2) the court may still restrict the use to which the document is put, even where it has been deployed in open court.

The action has a lengthy procedural history. A helpful summary of the procedural steps up to the end of 2011, which neither side challenged, is set out at paragraphs 4 to 28 of the judgment of Arnold J given on 8 December 2011 [2011] EWHC 3288 (Pat). Important for present purposes are the following:

i)

Arnold J referred to the fact that proceedings were pending between the parties in relation to the patent and related rights;

ii)

On 12 March 2010 Novozymes had started proceedings on the patent against Danisco in Denmark;

iii)

On 30 March 2010 the opposition to the patent was filed by Danisco at the EPO;

iv)

On 17 June 2010 Novozymes started infringement proceedings on the patent against Danisco in Germany;

v)

On 28 June 2010 Novozymes started revocation proceedings in the Netherlands. In those proceedings, Danisco counterclaimed for infringement.

vi)

On 15 November 2010 Novozymes started proceedings against Danisco in Finland for infringement of utility models deriving from divisional applications from the patent;

vii)

the EPO Opposition Division heard and determined Danisco's opposition to the patent on 7 July 2011. It held the patent invalid;

viii)

On 8 July 2011 Novozymes filed appeal T1839/11 against that decision, thereby suspending its effect;

ix)

On the second day of the hearing before him, Arnold J was told that the Finnish court had just revoked the utility models in issue there.

Arnold J was dealing with an application by Danisco for a stay of the action pending the decision of the TBA, and also for permission to use a limited selection of the documents disclosed in these proceedings in specified proceedings before the TBA and elsewhere. At that stage, the trial in this country was scheduled for 19 March 2012. Arnold J came to the conclusion that a stay was not justified. Although his judgment was based on a multi-factorial assessment, a prominent ground relied upon for refusal of the stay was that Novozymes had been accused by Danisco in the proceedings abroad of presenting a different picture of the primary facts than that which emerged from an examination of the documents. The early trial scheduled in this country would give Novozymes the opportunity of “clearing itself of the charge” and that issues of this nature were issues with which the English court was “well equipped to deal”. Arnold J also refused permission to use the documents in the foreign proceedings. Taking into account the fact that the English judgment would be delivered before the judgment of the TBA, he held that there were no special reasons justifying the use of the documents outside the context of the proceedings in which they were disclosed. The Court of Appeal subsequently dismissed an appeal from Arnold J’s judgment and order.

The application in respect of the use of documents in the foreign proceedings was in respect of a single report and a summary table. The summary table was a table prepared by Danisco setting out experimental results gleaned from a number of the disclosure documents. Permission to use the table was needed because information from the disclosure documents had been incorporated into it. Paragraph 3 of the draft order accompanying the application notice asked for permission to use these documents in the following proceedings:

i)

EPO Appeal proceedings T-1839/11, which were the proceedings before the TBA in relation to the European patent in suit;

ii)

Prosecution of the Divisional applications derived from the patent in suit;

iii)

The national courts of Denmark, Finland, the Netherlands and Germany in proceedings relating to other national designations of the patent in suit and utility models branched off the Divisional applications;

iv)

The national patent offices of Denmark, Finland and Germany in prosecution and/or cancellation proceedings relating to the utility models.

A “divisional application” is patent lawyer’s jargon for an application in respect of the same subject matter as another, parent application. The procedure is described by Jacob LJ at [8] to [13] of his judgment in Napp Pharmaceutical Holdings v ratiopharm GmbH and Sandoz [2009] EWCA (Civ) 252. Paragraph (ii) above, therefore, must have been intended by Danisco to refer to divisional applications derived from the application for the patent in suit. “Utility models” are a lesser form of intellectual property right granted under the national laws in some countries. Utility models in general have a shorter term than patents, and the requirements for their grant (in particular inventive step) are usually less stringent than for patents.

In January 2012 Danisco applied in this action for specific disclosure of documents from Novozymes. The documents sought went outside the two year “window” on either side of the priority date. That window is provided for in the rules applicable to patent cases to limit the volume of standard disclosure: see CPR Part 63 PD 6.1(2). Morgan J granted the application on 15 February 2012. Morgan J’s order eventually led to very substantial further disclosure by Novozymes.

A pre-trial review was held, again before Arnold J, on 2 March 2012. Although there was no formal application for an adjournment at that stage, the question of an adjournment was raised at the hearing. Novozymes submitted that the burden imposed on them by Morgan J’s order was proving a considerable one. Arnold J declined to hear an application for an adjournment in the absence of proper evidence. Novozymes accordingly made an application which was heard by Mann J on 8-9 March 2012, with the trial date less than two weeks away.

Danisco’s approach to the application for the adjournment, as ultimately articulated at the hearing, was that it should be on strict terms. Amongst the conditions which Danisco maintained should be applied were the following:

“(2)

All the Defendant’s disclosure documents can be used (including those overdue and due to be disclosed pursuant to the existing orders) in the jurisdictions in dispute (including Holland, Denmark, Germany and Finland), not just the EPO;

(3)

The parties will use their best endeavours to keep the documents confidential to the extent that the various jurisdictions so allow (but the absence of any provisions allowing such confidence to be kept will not prevent the use of the documents); …

(6)

That Novozymes will not resist the introduction of the documents into the EPO and will not seek an adjournment of the EPO proceedings because of their introduction.” (emphasis added)

Mann J came to the conclusion that Novozymes were in the position of having to ask for an adjournment as a result of their own fault. Novozymes did not seek to revisit either that conclusion or Mann J’s reasoning before me. Mann J went on to decide that it was appropriate to grant an adjournment but to impose terms. As to condition (2) and (3) he said this in his extempore judgment:

“[44] So far as condition (2) is concerned … [h]ad the trial taken place when it ought to have taken place, the disclosure documents would have been deployed in court and as a result would have been available for use in other jurisdictions subject, of course, to appropriate confidentiality regimes. The trial will now not take place when planned, but in the circumstances and since it would have been a legitimate objective of the trial to have the documents available, it seems to me clear that it is fair that in the circumstances Danisco should be able to use the documents which it would have been able to use have they been deployed at a trial which it did not want to have vacated at this point in time. In the circumstances, it seems right to me, and I rule, that those documents should be deployed.

[45] [counsel for Novozymes] did not oppose for these purposes the documents being made available for use in the EPO, but he did oppose them being made available in other jurisdictions. He based his opposition on remarks made by Arnold J in December about the need to have a more focused approach to such matters and not to have documents wildly deployed in a number of other jurisdictions, (and I stress the use of the word "wildly" is mine and not his).

[46] Whatever the position may have been last December, it seems to me that the objective of putting Danisco in the position that it would have been in had it had the trial which it currently wants requires that it be allowed to use in foreign jurisdictions documents which it would have been able to use had it been deployed at that trial. I shall make an order which permits the use of documents, as described in [condition (2)]. In all the circumstances, I think there are special circumstances which justify the use of documents which would otherwise not be deployable at this stage of these proceedings.

[47] So far as condition (3) is concerned, it goes with condition (2). If the documents are to be deployed, then the parties are to take such steps as they can reasonably take to preserve the confidentiality of such documents as require confidentiality to be imposed upon them.”

At paragraph [49], condition (6) was described as not contentious, subject to precise agreement of the form of undertaking. An undertaking to that effect was incorporated into the order. The order made by Mann J and approved by him included the following paragraphs:

“3.

The Claimant has permission pursuant to CPR 31.22(1)(b) to use the documents disclosed (or to be disclosed) by the Defendant in these proceedings (the "Documents") in the proceedings relating to EP1, 804, 592 and members of that patent family, including the pending proceedings in the European Patent Office, Denmark, Netherlands, Germany and Finland.

5.

The parties shall use their best endeavours to keep the Documents confidential to the extent that the various jurisdictions so allow (but the absence of any provisions (whether existing in law or applied by the Court or Tribunal) allowing confidence in the Documents to be kept will not prevent the use of the Documents)."

It can be seen, both from the judgment and from the order that although permission is given, it was subject to the requirement that best endeavours be used to maintain the confidentiality of the documents.

The wording of the order was agreed between the parties before the order was sealed. The agreed wording used to express the terms on which the adjournment was granted was not the same as that used in the conditions which counsel had sought and which were discussed in the judgment and approved by the judge.

The documents were duly deployed before the TBA. The patent was revoked by the TBA on 29^th June 2012.

Danisco’s application notice seeks a declaration, in summary, that Danisco is permitted under paragraph 3 of Mann J’s order to use the documents in all proceedings relating to the patent and divisional applications and utility models derived therefrom in national courts and tribunals, national intellectual property offices, the EPO, concerning the validity, infringement and/or ownership of those rights or any of them including:

i)

Use of the documents in an entitlement action commenced by Danisco US Inc. in the Danish Maritime & Commercial Court on 20^th September 2012 (“the Danish entitlement action”);

ii)

Use of the documents in any Third Party Observations to be submitted in the prosecution of [5 identified divisional applications] and/or any Opposition proceedings following the grant of these applications.

The correct approach to the construction of a judicial order has recently been set out by the Privy Council in Sans Souci Limited v VRL Services Limited [2012] UKPC 6, an appeal from the Court of Appeal of Jamaica. The appeal concerned an arbitration. The arbitrators were held by the Court of Appeal of Jamaica to have erred in their treatment of one aspect only of the assessment of damages, namely that described as “unrecoverable expenses”. No other aspect of the arbitrators’ award was called in question. The order of the Court of Appeal of Jamaica remitted the matter to the arbitrator to determine “the issue of damages only”. The issue, which ultimately came before the Privy Council, was whether this order enabled one of the parties to raise, when the matter came back before the arbitrators, issues on damages other than unrecoverable expenses.

In giving the judgment of the Privy Council, Lord Sumption said this:

“The Proprietor's response is simple, perhaps too simple. It is that the scope of the remission is determined by the Court of Appeal's order. The order allowed "the appeal against the award of damages", and remitted the award to the arbitrators to determine "the issue of damages". In the absence of any words of limitation, it is said that this unambiguously means the entire issue as to damages as formulated in the arbitrators' Terms of Reference. In the absence of any ambiguity in the language of the order, it should not be construed by reference to the limited reasons given for making it.

In the opinion of the Board, this approach to the construction of a judicial order is mistaken. It is of course correct that the scope of a remission depends on the construction of the order to remit. But implicit in the Proprietor's argument is the suggestion that the process of construing the order is to be carried out in two discrete stages, the first of which is concerned only with the meaning of the words, and the second with the resolution of any "ambiguities" which may emerge from the first. The Court's reasons, so it is said, are relevant only at the second stage, and then only if an "ambiguity" has been found. The Board is unable to accept these propositions, because the construction of a judicial order, like that of any other legal instrument, is a single coherent process. It depends on what the language of the order would convey, in the circumstances in which the Court made it, so far as these circumstances were before the Court and patent to the parties. The reasons for making the order which are given by the Court in its judgment are an overt and authoritative statement of the circumstances which it regarded as relevant. They are therefore always admissible to construe the order. In particular, the interpretation of an order may be critically affected by knowing what the Court considered to be the issue which its order was supposed to resolve.”

However, as Lord Sumption pointed out at [16], these principles do not allow the court to depart from “the inescapable meaning of an order, by arguing that the circumstances described in the judgment could not have justified an order which meant what it clearly said”. As he pointed out, any inconsistency between the reasoning and the order is a matter for appeal.

These principles continue to apply where, as here, the parties agree the wording of an order made after a contested hearing and subsequently place it before the court for approval or sealing. Nevertheless, it seems to me that there is an additional element to consider where the agreed wording of the order differs from any wording used at the hearing or in the judgment. In such circumstances one cannot simply confine one’s attention to seeking to ascertain the intention of the court, from reading the judgment and such other prior materials as may be relevant. By their choice of language the parties have agreed what the intention was. By making the order in that form, the court has given its approval to the agreed form of words as expressing that intention.

There is no dispute that the permission granted by Mann J is wide enough to encompass use of all the documents disclosed in proceedings in the TBA and in other national courts where the validity of national designations corresponding to the patent in suit was in issue at the date of his order. Danisco contends (but Novozymes does not accept) that the permission is wide enough to encompass:

i)

Use in proceedings relating to patents, divisional applications and utility models derived directly or indirectly from the priority document of the patent;

ii)

Use in proceedings not pending at the date of the order;

iii)

Use in pre- and post-grant proceedings in patent offices relating to the above rights;

iv)

Use in proceedings relating to entitlement to (i.e. ownership of) any of the above rights;

v)

Use in such proceedings by other companies in the same group as Danisco.

Mr Waugh QC, who appeared for Danisco, submits that the expression “proceedings relating to EP 1,804,592 and members of that patent family” is not restricted to proceedings relating to the various national designations corresponding to the EP (UK) in suit. He points out that the proceedings in Finland extant at the date of the order related to utility models only. Moreover the expression “patent family” is a compendious one, apt to describe all the rights which flow from a single priority filing.

Mr Miller QC for Novozymes submits that the intention of the order was to give effect to condition (2), which refers to the “jurisdictions in dispute, including Holland Denmark Germany and Finland and not just the EPO.” He submitted that this meant that the order was intended to be limited to (1) the then pending proceedings in respect of the European patent in the TBA and (2) the then pending proceedings in respect of the national designations in the national courts of the EPC countries. Nothing else was intended. He explained the reference to Finland as being a mistake, as by the date of the hearing before Mann J there were no infringement proceedings relating to the national designation in being in Finland. Instead there were only invalidity proceedings in relation to the utility models.

In my judgment the reference to EP 1,804,592 and members of that patent family is not restricted in the way that Mr Miller contends.

Firstly, the underlying rationale of the judgment of Mann J was that the trial which was, through the fault of Novozymes, no longer to take place, would have allowed Danisco to deploy the documents relevant to the validity of the patent in a manner which was likely to result in the release of the documents for other uses of the kind of which both he and the parties were aware, subject to appropriate confidentiality restrictions. Given this rationale, there is no reason why Mann J should have been concerned as to the precise nature of the other rights in dispute. I cannot see any reason why he would have wished to prevent the use of the documents in relation to a divisional patent which has the same disclosure as the patent but different claims, any more than he would have wished to restrict their use against particular newly formulated claims in the same patent. Likewise, I can see no reason why related rights properly described as members of the same patent family, such as utility models, would have been excluded.

Secondly, both parties were aware, as, it appears, was the judge, of the procedural history summarised in Arnold J’s judgment. This included not only the litigation in other European countries relating to the various national designations, but also that relating to utility models derived from the application. It would in these circumstances be odd if the expression “patent family” were used to refer to some only of these sets of proceedings.

Thirdly, I regard the fact that the order referred to the proceedings in Finland, which only relate to the utility model, as persuasive. When the parties came to agree the wording of the order, as they did, they were both aware that the proceedings in Finland related to utility models.

Finally, to use the term “patent family” to describe and describe only the bundle of national designations would be, to my mind, an unusual use of the term. As the evidence shows, the term is used by patent offices and patent practitioners to denote a group of related patents and related rights. By referring to patent families one avoids double counting of patents and other rights which are closely related to one another.

It does not follow from my rejection of Novozymes’ construction that the order would have the very extended meaning contended for by Danisco in argument, that is to say all the rights which flow from the priority filing from which the patent claims priority. As Mr Miller demonstrated, that definition would extend to rights being sought by Novozymes in the United States and China, distant cousins of the application for the European patent in suit. By contrast, the rights which the parties and Mann J had in view were all European rights related in some way to the patent. Accordingly I hold that the permission granted extends to the family of European patent and related rights which includes the patent in suit. To be clear, that includes the utility models and divisional patents.

Novozymes contend that the permission is not wide enough to cover proceedings which were not pending at the date of Mann J’s order. They point again to the original wording of the condition and to the words “jurisdictions in dispute”. This, they submit, meant that the order should be construed as limited to proceedings which were already commenced, otherwise there was no dispute.

The language used in Mann J’s order, “all proceedings relating to EP … including the pending proceedings in”, seems to me to be expressly designed to cover non-pending proceedings. This language makes it clear, in my judgment, that the permission is not limited to pending proceedings. If it had been intended to limit the class of proceedings to pending proceedings it could have done so expressly. Moreover, suppose Novozymes had issued infringement proceedings in, say, France the day after Mann J’s order. It would be an odd result if the permission to use documents should not extend to those proceedings as well. That is particularly so given that Mann J’s rationale was that deployment at the impending trial would have made out the case for use in other proceedings, subject to confidentiality restrictions. That rationale would obviously have applied to proceedings which were not pending at the date of his order but were pending by the date on which the trial took place, or were only started thereafter.

There was, as I have said, no dispute that the documents could be used in the contested TBA proceedings. To the extent that there are other contested patent office proceedings to which Danisco and Novozymes are, or become parties, and which otherwise fall within the terms of the order, I would consider that the permission was broad enough to cover them.

Apart from inter partes proceedings such as those, however, many patent offices allow for third parties to make observations to the office on the patentability of applications for patents. This facility is not an inter partes one, although the patentee will no doubt be given the opportunity to comment on the observations. The third party is not normally a party to the proceedings before the office.

Novozymes submit that the permission granted by Mann J does not extend as far as allowing Danisco to make third party observations. Danisco submit that the expression “proceedings” used in the order is a compendious one. Third party observations would be “proceedings”. Moreover use in relation to prosecution of Novozymes’ divisional patents was one of the uses for which Danisco had previously sought permission before Arnold J.

On this point I favour Novozymes’ submissions. I do not think that Mann J would have had in mind, in seeking to implement condition (2), use other than in inter partes proceedings. That is clear from the language in which condition (2) was couched. The documents were free to be deployed in disputes. The fact that Danisco had previously asked Arnold J for specific permission for use in prosecution cases does not, in my view, mean that they were asking for such relief before Mann J, far less that he granted it. The permitted use is limited to use in inter partes proceedings.

Danisco US Inc. have commenced entitlement proceedings in the Danish Maritime & Commercial Court on 20 September 2012 in relation to a patent which falls within the definition of “patent family”. They wish to deploy a document or documents disclosed here in those entitlement proceedings. Mr Waugh submits that this type of action is within the language of the order as well. The allegation of entitlement is based on a suggestion that the invention claimed in the relevant patent was derived from Danisco, something which Danisco contend can be shown from the documents disclosed. Mr Waugh suggested that as infringement was also in issue before the English court, and that as a challenge to Novozymes’ ownership of the patent was a defence to infringement, then entitlement proceedings were the kind of “proceedings” which the order must be taken to contemplate. Mr Miller submits that this goes much further than could have been contemplated by Mann J in making his order.

I agree that, read literally and out of context (and subject to the point dealt with below about the identity of the Danisco company bringing the proceedings), the meaning of the language in the order might extend to entitlement proceedings of this character. However, even allowing for the fact that Mann J was applying a broader approach than that which commended itself to Arnold J, I do not think he can have had in contemplation proceedings about ownership of this or related patents. The proceedings which Mann J and the parties can be taken to have in mind were proceedings between the parties relating to the validity and infringement of the patent and related rights, of the same general nature as the proceedings before him. Proceedings about ownership were not within anyone’s contemplation, and are of an entirely different character. They are not “proceedings” within the meaning of Mann J’s order.

Danisco submit that the order allows use by companies in the same group as the Danisco companies who are parties to this action. They submit that this is so because the order should be construed as giving to Danisco permission to use the document “by their officers, servants, agents or otherwise howsoever”. Novozymes disagree, pointing to the fact that the acquisition of Danisco by DuPont will mean that the disclosure could go far wider than was ever contemplated at the time of the order.

I do not think that the order on its face allows use by other companies in the same group. Firstly, if Mr Waugh’s argument about servants or agents were correct, Danisco could give the documents to anyone, even outside their group, provided that they appointed them as their agent for that purpose. Secondly, the permission granted was subject to seeking to maintain the confidentiality of the documents. Adding additional classes of user in this way is inconsistent with that objective.

Both sides included in their applications requests that, if I were to conclude the issues of construction against them, the order should be varied to bring it into line with their contentions. So far as Mr Waugh’s side is concerned, I have held against him on the issue of use (a) outside Europe, (b) in patent office prosecutions, (c) in the Danish entitlement action, and (d) by other companies.

I would be very reluctant to widen the permission granted by Mann J. It has to be remembered that permission to use the documents was in a sense the price that Novozymes paid for the adjournment they were granted. To widen the permission has the effect of increasing the price after the event. I would need to see cogent and focused reasons why documents which are still acknowledged to be confidential should be subject to wider disclosure than provided for by Mann J’s order. I am not satisfied that Danisco have shown in a sufficiently cogent way that they need such wider disclosure, or that it would be just for me so to order.

Mr Miller submitted that the permission granted by Mann J should be terminated with effect from June 29 2012, as thereafter the reason for the order had disappeared. Alternatively he submits that it should be limited to the documents which have been made public through the decision of the TBA. I do not think either order is appropriate. It depends on the suggestion that the sole purpose of the permission was the elimination of the national designations. I have rejected that approach. It follows that I do not accept that the reasons for the permission have disappeared. The need for the permission continues in respect of the wider rights in the patent family which Novozymes may continue to seek to enforce against Danisco in inter partes proceedings, or which Danisco may seek to have revoked in such proceedings.

In the course of giving the disclosure pursuant to the order of Morgan J, Novozymes disclosed a memorandum (“the Luna memo”) giving certain experimental results. The Luna memo is now said to be the subject of litigation privilege, having been prepared in connection with the Danish infringement action against Danisco. Although Mr Waugh did not accept that the Luna memo was in fact privileged, there is no need to resolve that issue as, for the reasons I shall give, I have concluded that privilege has been waived.

I do, however, need to describe the circumstances in which the Luna memo came to be disclosed.

On 15 February 2012 Morgan J made the order for specific disclosure. It was to include, amongst other things, documents relating to granules falling within the scope of claim 1 of the patent between September 2006 and February 2011.

The disclosure was to be given by 29 February 2012, but that time limit was subsequently extended by Arnold J (on 2 March 2012) until 5 March 2012 for certain descriptions of document and until 13 March for the remainder. The disclosure to be given by 5 March was of documents (a) dated before 11^th November 2009 or (b) which on their face were concerned with experiments on Novozymes’ product. There was to be liberty to apply if, notwithstanding (a) and (b) there was reason to believe that the documents were the subject of litigation privilege.

The reason for these two separate disclosure dates, and the somewhat unusual provision about privilege appears from the following. The solicitor responsible for conducting the exercise at Novozymes’ solicitors, Ms Brazell, was not part of the trial team. She was brought in specifically for the disclosure exercise. Ms Brazell began the exercise of examining the documents for potential privilege. However, the person at Novozymes who could definitively determine questions of privilege was a Ms Garde, who was on holiday and apparently not contactable by telephone. At the date of Ms Brazell’s first witness statement explaining the position, 29 Feb 2012, Ms Garde was on holiday in the Bahamas and uncontactable until 12 March 2012.

Ms Brazell explained in her witness statement that Novozymes had not been able to carry out the privilege review. In her fourth witness statement dated 6 March 2012 she explained that an in house team consisting of a US attorney, Mr Garbell, and one of the inventors, Mr Marcussen had, over the weekend and on Monday 5 March, reviewed all of the documents in order to identify any which were potentially privileged. She added this:

“We have produced a List in accordance with this review, in which documents which we believe to be privileged are listed separately from those where no ground for privilege has been identified. It is of course possible that some of the documents which Mr Garbell and Mr Marcussen have not recognised as privileged may be so identified by Ms Garde on her return.”

It was on this basis that the Luna memo was disclosed on 6 March in the non-privileged section of the list. On 8 March Mann J varied the order made by Arnold J to allow privilege to be claimed in the documents in the privileged part of the list. 13 March came and went without any change to the status of the Luna memo.

On 23 March the solicitors for Novozymes say that they recognised that the Luna memo was privileged. In the meantime Danisco had made use of the memo in the course of the proceedings in a number of ways. Firstly, they had referred to it in further information which it served on 12 March. Secondly, on 15 March, they had written a letter requesting more information about the document. Thirdly they had included reference to it in an expert report prepared on the morning of 23 March.

The solicitors for Danisco say that they had no ground for believing, from the contents of the Luna memo itself, that it was the subject of privilege.

The Luna memo appears to contain results for an E.coli phytase granule. E.coli phytase is the enzyme used in Danisco’s commercial product. Novozymes use a different enzyme, C.braakii phytase. Most of the other disclosure related to Novozymes’ enzyme.

CPR Part 31.20 provides:

“Where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court.”

In Al-Fayed v Commissioner of Police for the Metropolis [2002] EWCA Civ 780 the Court of Appeal explained that the principles which governed the treatment of inadvertently disclosed documents before the introduction of CPR 31.20, continued to apply. Clarke LJ (as he was then) set out the principles at [16]:

“In our judgment the following principles can be derived from those cases:

“i)

A party giving inspection of documents must decide before doing so what privileged documents he wishes to allow the other party to see and what he does not.

ii)

Although the privilege is that of the client and not the solicitor, a party clothes his solicitor with ostensible authority (if not implied or express authority) to waive privilege in respect of relevant documents.

iii)

A solicitor considering documents made available by the other party to litigation owes no duty of care to that party and is in general entitled to assume that any privilege which might otherwise have been claimed for such documents has been waived.

iv)

In these circumstances, where a party has given inspection of documents, including privileged documents which he has allowed the other party to inspect by mistake, it will in general be too late for him to claim privilege in order to attempt to correct the mistake by obtaining injunctive relief.

v)

However, the court has jurisdiction to intervene to prevent the use of documents made available for inspection by mistake where justice requires, as for example in the case of inspection procured by fraud.

vi)

In the absence of fraud, all will depend upon the circumstances, but the court may grant an injunction if the documents have been made available for inspection as a result of an obvious mistake.

vii)

A mistake is likely to be held to be obvious and an injunction granted where the documents are received by a solicitor and:

a)

the solicitor appreciates that a mistake has been made before making some use of the documents; or

b)

it would be obvious to a reasonable solicitor in his position that a mistake has been made;

and, in either case, there are no other circumstances which would make it unjust or inequitable to grant relief.

viii)

Where a solicitor gives detailed consideration to the question whether the documents have been made available for inspection by mistake and honestly concludes that they have not, that fact will be a relevant (and in many cases an important) pointer to the conclusion that it would not be obvious to the reasonable solicitor that a mistake had been made, but is not conclusive; the decision remains a matter for the court.

ix)

In both the cases identified in vii) a) and b) above there are many circumstances in which it may nevertheless be held to be inequitable or unjust to grant relief, but all will depend upon the particular circumstances.

x)

Since the court is exercising an equitable jurisdiction, there are no rigid rules.”

In Oxford Gene Technology v Affymetrix Inc. [2001] RPC 18, documents disclosed included documents in respect of which a claim to privilege was made. However the claimant stated that it was prepared to give limited disclosure in order to comply with its obligation of good faith in putting all relevant matters before the court in applying to amend its patent. The claimant consented to disclosure to the defendants’ solicitors, but the defendants wished for the disclosure to be wider. Pumfrey J (as he was then) held that privilege had been lost because the documents had been handed over to the other party, albeit on a limited basis. Nevertheless he held that he had a discretion to limit disclosure to the purposes for which the documents were disclosed. The Court of Appeal, in dismissing the appeal, held that the privilege in the document had not been lost, as the document had not been disclosed to the adversary in the litigation (see [28] and [32]). Such disclosure as there had been had been for a limited purpose, and did not amount to a waiver of privilege generally. Aldous LJ also accepted the submission of counsel at [25] that:

“whether or not any act amounted to waiver was the decision of the court. The criteria to be applied [were] justice and fairness.”

There are two questions which arise on these facts. The first is whether Ms Brazell’s statement that it was possible that some documents would be later identified as privileged, and the other circumstances concerning Ms Garde’s absence on holiday, meant that privilege had not in fact been waived in the Luna memo. The second is whether there was anything in the document which would put a reasonable solicitor on notice that the document had been disclosed by mistake.

On the first point Mr Miller submitted that the case was analogous to Oxford Gene (supra), in that in order to comply with the onerous obligations for disclosure, the documents had been supplied to Danisco for the limited purpose of allowing them to see the documents until Ms Garde had completed her review. Mr Waugh submitted that Ms Brazell’s statement was no more than a statement of the obvious, that there was a possibility that disclosure had been given of privileged documents. That was not enough to prevent a waiver of privilege in the Luna memo. He pointed out that, if such a statement were sufficient, it would be open to a solicitor to accompany any list of documents with such a statement, so that no list of documents need ever waive privilege.

I accept that where documents are supplied for a limited purpose then the court may, and often will, recognise that there has been no general waiver of privilege. That was the case in the Oxford Gene case. Similarly, where documents are disclosed for the purposes of a costs assessment, the waiver of privilege is limited to the purposes of that assessment. That is because, objectively assessed, the documents were being disclosed for a specific purpose and no other.

In the present case, the Luna memo was not being disclosed only for a limited purpose. The document was being disclosed for the general purposes of the action. Danisco set about using it for the purposes for which it was disclosed, in connection with the issues in the action. No complaint could now be made about the uses to which that document has been put.

It is true that Danisco were aware of the possibility that, in relation to any one of the (more than 100) documents disclosed in the non-privileged part of the list, a mistake might have occurred. But to advance from that proposition to the suggestion that the Luna memo was being disclosed for a limited purpose is not in my view justified.

I turn therefore to the second point, namely that Danisco’s solicitors should have appreciated that the specific document had been disclosed by mistake. Mr Miller drew attention, first of all, to the fact that the Luna memo had redactions on it which were inconsistent. Thus, he submitted, Danisco’s solicitors should have appreciated that something had gone wrong. I reject that submission. Redaction of documents on the grounds of irrelevance had occurred earlier. There was nothing in the erroneous redaction to put Danisco’s solicitors on notice that the document was privileged.

The second point made by Mr Miller is based on the technical content of the memo. The tests were on E.coli phytase which is the enzyme used by Danisco, and not by Novozymes. But there are of course perfectly valid commercial reasons why Novozymes would want to test Danisco’s enzyme. There was nothing in the document to suggest that the memo was being created in connection with litigation.

I conclude that privilege in the Luna memo was waived, and that there is no basis for placing Danisco under any restriction as to its use.

Danisco seek an injunction to restrain Novozymes from objecting to the introduction of the documents into the foreign proceedings covered by Mann J’s permission. As originally formulated, the injunction would have prevented Novozymes from objecting to the introduction of the documents into those proceedings on grounds such as irrelevance, or lateness. As such, it went far wider than would be justified. It would interfere with Novozymes’ potentially justified conduct in the foreign court. So Mr Waugh trimmed his sails: by the second day of the hearing he was asking for an injunction limited to one specific ground of objection to the introduction of the documents into the foreign proceedings. This was the objection that permission to use the documents had not been granted by the English court.

I do not think it correct to grant the injunction, even in this limited form. Firstly, I am not prepared to assume that Novozymes will seek to suggest that Danisco do not have permission to use the documents, when in fact they do. There is accordingly no sufficiently specific threat to justify intervention by the court. Secondly, I propose to grant appropriate declarations so as to make the limits of the permitted use clear.

My conclusions are:

i)

I will grant declarations to the effect that the documents may be used by Danisco A/S and Danisco (UK) Limited in inter partes proceedings in Europe, whether those inter partes proceedings are in courts or patent offices, and are in relation to the validity and/or infringement of (but not ownership of) patent and related rights in the same family as the patent in suit, whether or not those proceedings were pending on 9 March 2012.

ii)

Privilege has been waived in respect of the Luna Memo, and there is no basis for restricting its further use pursuant to the permission in (i) above.

iii)

I will not grant the injunction sought by Danisco to prevent objection to the admission of the documents in foreign proceedings.