Rolls Building
Fetter Lane, London EC4A 1NL
Before :
MR JUSTICE ARNOLD
Between :
(1) ANAN KASEI CO., LTD (2) RHODIA OPÉRATIONS S.A.S |
Claimants |
- and - |
|
MOLYCORP CHEMICALS & OXIDES (EUROPE) LTD |
Defendant |
Thomas Raphael QC, Thomas Mitcheson QC and Miles Copeland (instructed by Hogan Lovells International LLP) for the Claimants
Hugo Cuddigan QC (instructed by Bird & Bird LLP) for the Defendant
Hearing date: 8 July
Judgment
MR JUSTICE ARNOLD :
Introduction
The First Claimant is the proprietor of European Patent No. 1 435 338 entitled “Ceric oxide and method for production thereof, and catalyst for exhaust gas clarification” (“the Patent”), which is designated in respect of Belgium, France, Germany, Italy and the United Kingdom. The Second Claimant is the exclusive licensee in respect of (at least) the German and UK designations. Claim 1 of the Patent is directed to ceric oxide having a specific surface area of not smaller than 30.0 m2/g when subjected to calcination at 900oC for five hours.
On 13 April 2016 the Claimants (“Rhodia”) commenced proceedings in this Court alleging that the Defendant (“Molycorp”) had infringed the UK and German designations of the Patent. It is common ground that Molycorp is domiciled within the UK, or more specifically England.
On 27 April 2016 Molycorp’s solicitors filed an acknowledgement of service indicating that Molycorp intended to defend the claim, but not that it intended to challenge the jurisdiction of this Court. On the same day, however, Molycorp’s solicitors wrote to Rhodia’s solicitors stating that Molycorp intended to challenge the validity of the German designation of the Patent before the German courts and asserting that in those circumstances this Court would no longer have jurisdiction to entertain the claim for infringement of the German designation of the Patent.
On 17 May 2016 Rhodia’s solicitors wrote to Molycorp’s solicitors suggesting that the parties agree that the English courts should determine infringement and validity of the UK designation of the Patent and infringement of the German designation and that the English courts’ conclusions as to the validity of the UK designation should apply equally to the German designation. Molycorp’s solicitors did not respond to this suggestion, and Molycorp can be taken to have rejected it.
On 2 June 2016 Rhodia issued and served an application seeking directions for the conduct of the matter, and in particular for the fixing of the trial date and for an order pursuant to CPR rule 25(1)(c)(iii) and (iv) for the provision by Molycorp of samples of its ceric oxide products for testing by an independent laboratory instructed on behalf of Rhodia for the purposes of Rhodia’s claims for infringement of both the UK designation and the German designation of the Patent.
On 21 June 2016 Molycorp issued nullity proceedings in the Bundespatentgericht (Federal Patent Court) challenging the validity of the German designation of the Patent on the grounds of lack of novelty over five items of prior art, lack of inventive step over a further item of prior art and insufficiency. It is common ground that the determination of the nullity proceedings at first instance is likely to take about two years.
On 23 June 2016 Rhodia’s application came before me, together with an application by Molycorp for an extension of time for the service of its Defence and Counterclaim. Counsel for Molycorp asserted in his skeleton argument that this Court no longer had jurisdiction over the claim for infringement of the German designation. Counsel for Rhodia declined to accept that that was so. Furthermore, he intimated that, even if this Court no longer had jurisdiction over the claim for infringement of the German designation, Rhodia would still wish to pursue its application for an order for the provision of samples by Molycorp for testing for the purposes of a claim for infringement which Rhodia would bring in the German courts in that event. Accordingly, I directed a hearing to determine the issues of (1) whether this Court had jurisdiction over the claim in respect of the German designation and (2) whether an order should be made for the provision of samples for testing for the purposes of a claim by Rhodia in the German courts. In the meantime, I fixed the trial of these proceedings for mid May 2017, granted Molycorp a short extension of time and ordered Molycorp to provide samples for testing for the purposes of the claim for infringement of the UK designation.
On 30 June 2016 Rhodia applied to amend its Particulars of Claim and Particulars of Infringement in the manner described below, although the amendments were slightly modified at the outset of the hearing.
On 1 July 2016 Molycorp served its Defence and Counterclaim together with Grounds of Invalidity. In paragraph 5 of the Defence Molycorp pleaded that it had challenged the validity of the German designation in the Federal Patent Court and that, if it was necessary for it to do so in these proceedings, it did so upon the grounds raised in the nullity proceedings. Molycorp went on to deny infringement of the UK designation and to challenge the validity of the UK designation on the grounds set out in its Grounds of Invalidity, namely lack of novelty, alternatively lack of inventive step, over three of the items of prior art cited in the nullity proceedings.
On 8 July 2016 I heard argument on the two issues identified in paragraph 7 above. Both sides served expert evidence of German patent law and procedure without seeking or obtaining the Court’s permission to do so. I will grant them permission to adduce that evidence, which I have read and found informative. As will appear, however, I consider that the resolution of the issues depends on questions of European and English law rather than German law or procedure.
Issue 1: Does this Court have jurisdiction over the claim in respect of the German designation of the Patent?
Counsel for Rhodia did not dispute that this Court had no jurisdiction over the claim for infringement of the German designation originally advanced in Rhodia’s Particulars of Claim and Particulars of Infringement. He nevertheless submitted that this Court did have jurisdiction over the claim in respect of the German designation advanced in Rhodia’s proposed amended Particulars of Claim and Particulars of Infringement.
Counsel for Molycorp submitted that this Court did not have jurisdiction over the claim in respect of the German designation advanced in Rhodia’s proposed amended Particulars of Claim and Particulars of Infringement. He did not oppose Rhodia’s application to amend the Particulars of Claim and Particulars of Infringement on any other ground.
Although the proposed amendments are considerably more extensive, their essence can be seen from the amendments to paragraph 4 of, and paragraph (1) of the prayer for relief in, the Particulars of Claim:
“4. The Defendant has infringed the UK and German designations of the Patent as set out in the Particulars of Infringement served herewith. In respect of the German designation of the Patent, if German designation is not invalid (which is to be determined by the German courts) the Defendant’s conduct has infringed, and/or would fall within the scope of the claims of, the German designation of the Patent.
(1) A declaration that each of the UK and German designations of the Patent has been infringed by the Defendant.
(1A) A declaration that, if German designation is not invalid (which is to be determined by the German courts) the Defendant’s conduct has infringed the German designation of the Patent. Alternatively, a declaration that the Defendant’s conduct falls within the scope of the claims of the German designation of the Patent (if not found invalid, which is to be determined by the German courts).”
The issue as to jurisdiction turns on the interpretation and application of Articles 24(4) and 27 of European Parliament and Council Regulation 1215/2012/EU of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (“the Recast Brussels I Regulation”). Articles 24(4) and 27 provide as follows:
“Article 24
The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties:
…
(4) in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, irrespective of whether the issue is raised by way of an action or as a defence, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place.
Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State;
Article 27
Where a court of a Member State is seised of a claim which is principally concerned with a matter over which the courts of another Member State have exclusive jurisdiction by virtue of Article 24, it shall declare of its own motion that it has no jurisdiction.”
These provisions replaced Articles 22(2) and 25 of Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“the Brussels I Regulation”), which in turn replaced Articles 16(4) and 19 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968 (“the Brussels Convention”). Save in one respect, there is no material difference between the current provisions and the earlier provisions. The one change which has been made is the insertion of words “irrespective of whether the issue is raised by way of an action or as a defence” in Article 24(4) which gives legislative endorsement to the decision of the Court of Justice of the European Union in Gesellschaft für Antriebstechnik mbH & Co. KG v Lamellen und Kupplungsbau Beteiligungs KG [2006] ECR I-6509 (“GAT v LuK”). Thus jurisprudence concerning the interpretation of the earlier provisions is equally applicable to the current provisions.
It is common ground that, by virtue of Article 24(4), the courts of Germany have exclusive jurisdiction over proceedings concerned with the validity of the German designation of the Patent. The issue between the parties can be formulated in this way: is the claim in respect of the German designation of the Patent advanced by Rhodia in its proposed amended Particulars of Claim and Particulars of Infringement either “concerned with” the validity of the German designation within Article 24(4) or “principally concerned with” the validity of the German designation within Article 27? Rhodia contends that it is not, because the claim is framed to as to exclude any question of the validity of the German designation and to acknowledge the German courts’ jurisdiction over that question. Molycorp contends that it is, because the question of infringement is inseparable from that of validity: the sole issue is whether Molycorp has infringed a valid claim of the German designation.
The interpretation and application of what are now Article 24(4) and 27 has been considered in a number of decisions of the English courts and of the CJEU. It is convenient to take them in chronological order.
In Coin Controls Ltd v Suzo International (UK) Ltd [1999] Ch 33 Laddie J considered the effect of what were then Articles 16 and 19 of the Brussels Convention on a claim for infringement of the UK, German and Spanish designations of a European patent which had provoked an assertion of invalidity. He held that in those circumstances, Article 19 would cover both the validity and infringement claims. His reasoning at 51-52 merits quotation at some length:
“As I have said, validity is frequently in issue, and sometimes the most important issue, in English patent infringement proceedings. … We have always taken the view that you cannot infringe an invalid patent. … However the fact that the defendant can challenge validity does not mean that he will. … Until he does, only infringement is in issue and the approach in the Pearce case [1977] Ch. 293 applies. The court cannot decline jurisdiction on the basis of mere suspicions as to what defence may be run. But once the defendant raises validity the court must hand the proceedings over to the court having exclusive jurisdiction over that issue. Furthermore, since article 19 obliges the court to decline jurisdiction in relation to claims which are ‘principally’ concerned with article 16 issues, it seems to follow that jurisdiction over all of the claim, including that part which is not within article 16, must be declined. It may well be that if there are multiple discrete issues before a court it will be possible to sever one or more claims from another and to decline to accept jurisdiction only over those covered by article 16, but I do not believe that that approach applies where infringement and validity of an intellectual property right are concerned. They are so closely interrelated that they should be treated for jurisdiction purposes as one issue or claim. That interrelationship can be illustrated in two ways. Before English courts, it is common for a defendant to run an invalidity attack for the purpose of putting a squeeze on the scope of the claims. Whether there is infringement is likely to be affected significantly by the success of the invalidity attack. Secondly whether there is infringement is dependent on the wording of the claims. Yet the attack on validity frequently forces the patentee to seek to amend his claims in the course of the proceedings. The validity attack therefore directly impinges on the issue of infringement. … So obliging infringement and validity to be run together may have significant advantages. The alternative of leaving infringement to be determined in one country and validity in another has nothing to commend it and is only likely to result in an unhelpful proliferation of proceedings.
At one stage I was attracted to the argument that in Germany questions of validity and infringement are dealt with by separate courts. Therefore it is easier to treat them as discrete and severable claims. … But in the end I have come to the conclusion that this point is bad. The fact that, for constitutional reasons, different courts deal with these issues in Germany does not alter the fact that there, as here, there is in the end only one question; ‘has the defendant infringed a valid claim?’”
Laddie J’s reasoning in the passage I have quoted was unequivocally endorsed by the Court of Appeal in Fort Dodge Animal Health Ltd v Akzo Nobel NV [1998] FSR 222 at 244-245 (Lord Woolf MR delivering the judgment of the Court) and again in Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] EWCA Civ 327, [2003] 1 WLR 2295 at [21] and [23] (Chadwick LJ, with whom Potter and Kennedy LJJ agreed).
In GAT v LuK GAT and LuK were both domiciled in Germany. GAT brought proceedings before the Landgericht (Regional Court) Düsseldorf seeking declarations that it had not infringed two French patents owned by LuK and that the patents were invalid. The Oberlandesgericht (Higher Regional Court) Düsseldorf referred a question to the CJEU as to the interpretation of Article 16(4) of the Brussels Convention. As noted above, the Court of Justice held that Article 16(4) concerned all proceedings relating to the registration or validity of a patent, irrespective of whether the issue was raised by way of an action or a plea in objection (and whether at the time the case was brought or at a later stage of the proceedings). The Court gave three reasons for this conclusion:
“26. First, to allow a court seised of an action for infringement or for a declaration that there has been no infringement to establish, indirectly, the invalidity of the patent at issue would undermine the binding nature of the rule of jurisdiction laid down in Article 16(4) of the Convention.
27. While the parties cannot rely on Article 16(4) of the Convention, the claimant would be able, simply by the way it formulates its claims, to circumvent the mandatory nature of the rule of jurisdiction laid down in that article.
28. Second, the possibility which this offers of circumventing Article 16(4) of the Convention would have the effect of multiplying the heads of jurisdiction and would be liable to undermine the predictability of the rules of jurisdiction laid down by the Convention, and consequently to undermine the principle of legal certainty, which is the basis of the Convention (see Case C-256/00 Besix [2002] ECR I-1699, paragraphs 24 to 26, Case C-281/02 Owusu [2005] ECR I-1383, paragraph 41, and Case C-539/03 Roche Nederland and Others [2006] ECR I-6535, paragraph 37).
29. Third, to allow, within the scheme of the Convention, decisions in which courts other than those of a State in which a particular patent is issued rule indirectly on the validity of that patent would also multiply the risk of conflicting decisions which the Convention seeks specifically to avoid (see, to that effect, Case C-406/92 Tatry [1994] ECR I-5439, paragraph 52, and Besix, cited above, paragraph 27).
30. The argument, advanced by LuK and the German Government, that under German law the effects of a judgment indirectly ruling on the validity of a patent are limited to the parties to the proceedings, is not an appropriate response to that risk. The effects flowing from such a decision are in fact determined by national law. In several Contracting States, however, a decision to annul a patent has erga omnes effect. In order to avoid the risk of contradictory decisions, it is therefore necessary to limit the jurisdiction of the courts of a State other than that in which the patent is issued to rule indirectly on the validity of a foreign patent to only those cases in which, under the applicable national law, the effects of the decision to be given are limited to the parties to the proceedings. Such a limitation would, however, lead to distortions, thereby undermining the equality and uniformity of rights and obligations arising from the Convention for the Contracting States and the persons concerned (Duijnstee, paragraph 13).”
In JP Morgan Chase Bank NA v Berliner Verkehrsbetriebe (BVG) Anstalt des Öffentlichen Rechts [2010] EWCA Civ 390, [2012] QB 176 Aikens LJ expressed some reservations at [66] about some of Laddie J’s reasoning in Coin Controls with respect to the relationship between what were by then Articles 22 and 25 of the Brussels I Regulation. He nevertheless concluded at [70] that:
“The analyses of Laddie J and the Court of Appeal on the relationship between issues of infringement and validity of a patent for the purposes of articles 22(4) and 25 appear to have been implicitly approved by the ECJ by its decision in the GAT case [2006] ECR I-6509. …”
In Case C-616/10 Solvay SA v Honeywell Products Europe BV [EU:C:2012:445] the Rechtbank ‘s-Gravenhage (District Court of The Hague) referred a number of questions to the CJEU, the second of which concerned the relationship between what were then Article 22(4) and 31 of the Brussels I Regulation. Article 31 is now Article 35 of the Recast Brussels I Regulation, which is set out below. The Court held that a claim for a preliminary injunction pursuant to Article 31 did not fall within Article 22(4) for the following reasons:
“44. It must be pointed out in this connection that the Court, in paragraph 24 of its judgment in Case C-4/03 GAT [2006] ECR I-6509, interpreted Article 16(4) of the Brussels Convention widely, in order to ensure its effectiveness. It held that, having regard to the position of that provision within the scheme of that convention and the objective pursued, the rules of jurisdiction provided for in that provision are of an exclusive and mandatory nature, the application of which is specifically binding on both litigants and courts.
45. The Court also considered that the exclusive jurisdiction provided for by Article 16(4) of the Brussels Convention should apply whatever the form of proceedings in which the issue of a patent’s validity is raised, be it by way of an action or a defence, at the time the case is brought or at a later stage in the proceedings (see GAT, paragraph 25).
46. In addition, the Court has stated that to allow, within the scheme of the Brussels Convention, decisions in which courts other than those of the State in which a particular patent is issued rule indirectly on the validity of that patent would multiply the risk of conflicting decisions which the convention seeks specifically to avoid (see GAT, paragraph 29).
47. Having regard to the wide interpretation given by the Court to Article 16(4) of the Brussels Convention, to the risk of conflicting decisions which that provision seeks to avoid, and, taking account of the similarity of the content of Article 22(4) of Regulation No 44/2001 and of Article 16(4) of the Brussels Convention, noted in paragraph 43 above, it must be held that the application of the rule of jurisdiction set out in Article 25 of Regulation No 44/2001, which refers expressly to Article 22 of that regulation, and of other rules of jurisdiction such as, inter alia, those provided for in Article 31 of that regulation, are capable of being affected by the specific binding effect of Article 22(4) of Regulation No 44/2001, mentioned above in paragraph 44.
48. Accordingly, it must be established whether the specific scope of Article 22(4) of Regulation No 44/2001, as interpreted by the Court, affects the application of Article 31 of that regulation in a situation such as that at issue in the main proceedings, which concerns an action for infringement in which the invalidity of a European patent has been raised, at an interim stage, as a defence to the adoption of a provisional measure concerning cross-border prohibition against infringement.
49. According to the referring court, the court before which the interim proceedings have been brought does not make a final decision on the validity of the patent invoked but makes an assessment as to how the court having jurisdiction under Article 22(4) of the regulation would rule in that regard, and will refuse to adopt the provisional measure sought if it considers that there is a reasonable, non-negligible possibility that the patent invoked would be declared invalid by the competent court.
50. In those circumstances, it is apparent that there is no risk of conflicting decisions as mentioned in paragraph 47 above, since the provisional decision taken by the court before which the interim proceedings have been brought will not in any way prejudice the decision to be taken on the substance by the court having jurisdiction under Article 22(4) of Regulation No 44/2001. Thus, the reasons which led the Court to interpret widely the jurisdiction provided for in Article 22(4) of Regulation No 44/2001 do not require that, in a case such as that in the main proceedings, Article 31 of that regulation should be disapplied.”
Thus the CJEU has held that Article 24(4) should be given a “wide” interpretation, and it has implicitly endorsed the reasoning of Laddie J in Coin Controls.
Applying these principles to the present case, I consider that the claim advanced by Rhodia is “concerned with” the validity of the German designation of the Patent within Article 24(4), or at least “principally concerned with” the validity of the German designation within Article 27. The two alternative formulations of the claim advanced in the proposed amended Particulars of Claim and Particulars of Infringement make no difference to the analysis. Either way, the issue between the parties with respect to the German designation is the single issue of whether Molycorp has infringed a valid claim of that patent. Rhodia’s formulation of its claim attempts by procedural means to split that single issue into two sub-issues, namely infringement and validity; but as a matter of substance those sub-issues are inseparable. Rhodia’s claim implicitly asserts that the German designation is valid, since if all the claims were invalid there could be no question of infringement. But, as Rhodia’s claim itself acknowledges, the validity of the German designation has been challenged by Molycorp and must be determined by the German courts.
In my view each of the three reasons given by the CJEU in GAT v LuK for concluding that Article 24(4) applied in that case is equally applicable to the present case. First, Rhodia’s amendments are a transparent attempt “simply by the way it formulates its claims, to circumvent the mandatory nature of the rule of jurisdiction laid down in that article”. Secondly, to allow Rhodia’s claim to proceed “would have the effect of multiplying the heads of jurisdiction and would be liable to undermine the predictability of the rules of jurisdiction laid down by the Convention”. Thirdly, it would “multiply the risk of conflicting decisions which the Convention seeks specifically to avoid”.
It is worth explaining the third point a little further. In order to determine both infringement and validity of any claim of the Patent, it will first be necessary for the court to construe that claim. It is axiomatic that the same construction must be applied when determining both infringement and validity. What if the English courts find that a claim of the German designation of the Patent has been infringed by Molycorp upon a construction of the claim which would result in the Patent being invalid, but the German courts find that the claim is valid upon a different construction? Within the bifurcated German system, this problem can be resolved when the infringement and nullity cases reach the Bundesgerichtshof (Federal Court of Justice), because the Federal Court of Justice will apply the same construction to the claim for the purposes of determining both infringement and validity even if different constructions have been adopted by the Higher Regional Court (infringement) and the Federal Patent Court (validity). But counsel for Rhodia rightly did not argue that the claim adopted by the English courts would be binding upon the German courts.
I should make it clear that, in saying this, I am not engaging in an analysis of which is the most convenient forum. As counsel for Rhodia rightly pointed out, Rhodia’s claim cannot be stayed on the ground of forum non conveniens. Accordingly, the comparative advantages and disadvantages of a single process to determine infringement of both the UK and German designations (such as, on the positive side, the need to adduce technical evidence to establish infringement before only one court and, on the negative side, the need to adduce expert evidence of German patent law) are immaterial.
Finally, I must address a procedural matter raised by counsel for Rhodia. He pointed out that Molycorp had not challenged the jurisdiction of this Court pursuant to CPR Part 11 and was now out of time for doing so. As counsel for Molycorp submitted, this objection is misconceived for at least three reasons. First, the CPR cannot override the mandatory effect of a European Regulation. As the CJEU made clear in GAT v LuK at [25], the timing of the challenge to validity is irrelevant. Secondly, Part 11 is inapplicable to a jurisdictional issue which is apt to be triggered not by the nature of the claim, but by the defence to that claim. In fact, Molycorp’s solicitors’ letter dated 27 April 2016 was all that was needed to raise the question: see Knorr-Bremse Systems for Commercial Vehicles Ltd v Haldex Brake Products GmbH [2008] EWHC 156 (Pat), [2008] FSR 30 at [40]-[46] (Lewison J, as he then was). In any event, now that Molycorp has launched the nullity proceedings, it is clear beyond peradventure that it is challenging the validity of the German designation. Thirdly, Article 27 requires this Court to decline jurisdiction of its own motion regardless of any application by Molycorp.
Accordingly, I conclude that this Court has no jurisdiction over Rhodia’s claim in respect of the German designation of the Patent.
Issue 2: Should an order be made for the provision of samples in aid of a claim by Rhodia in the German courts?
Counsel for Rhodia undertook on behalf of Rhodia that, if this Court did not have jurisdiction in respect of the German designation of the Patent, Rhodia would bring a claim for infringement of the German designation before a court in Germany. On that basis, Rhodia seeks an order for the provision by Molycorp of samples for testing for the purposes of that claim. Molycorp opposes this application on two grounds. First, that the Court has no jurisdiction to make such an order. Secondly, that it would be inexpedient to do so.
Jurisdiction
Article 35 of the Recast Brussels I Regulation provides as follows:
“Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter.”
Although counsel for Rhodia submitted that Rhodia did not need to rely upon Article 35, because Molycorp is domiciled in the UK, it is not necessary to decide whether this is correct, because counsel for Molycorp did not dispute that Article 35 was applicable. As is common ground, the key question is therefore whether this Court has power to make the order under its own law.
Section 25 of the Civil Jurisdiction and Judgments Act 1982 provides, so far as relevant:
“(1) The High Court in England and Wales or Northern Ireland shall have power to grant interim relief where –
(a) proceedings have been or are to be commenced in … a Regulation State other than the United Kingdom …;
…
(2) On an application for any interim relief under subsection (1) the court may refuse to grant that relief if, in the opinion of the court, the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings in question makes it inexpedient for the court to grant it.
...
(7) In this section ‘interim relief’, in relation to the High Court in England and Wales or Northern Ireland, means interim relief of any kind which that court has power to grant in proceedings relating to matters within its jurisdiction, other than—
…
(b) provision for obtaining evidence.”
It is common ground that the reason for the exclusion of provision for obtaining evidence in section 25(7) of the 1982 Act was that the proper means for obtaining evidence in aid of foreign proceedings was under the Evidence (Proceedings in Other Jurisdictions) Act 1975: see Dicey, Morris & Collins, The Conflict of Laws (15th edition) at 8-032. (The way in which evidence is now obtained in aid of foreign proceedings within the European Union is pursuant to Council Regulation No 1206/2001/EC of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, but that is a subsequent development.)
Section 2 of the 1975 Act provides, so far as relevant:
“(1) Subject to the provisions of this section, the High Court, the Court of Session and the High Court of Justice in Northern Ireland shall each have power, on any such application as is mentioned in section 1 above, by order to make such provision for obtaining evidence in the part of the United Kingdom in which it exercises jurisdiction as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court may consider appropriate for that purpose.
(2) Without prejudice to the generality of subsection (1) above but subject to the provisions of this section, an order under this section may, in particular, make provision—
…
(d) for the taking of samples of any property and the carrying out of any experiments on or with any property;
…
”
Counsel for Molycorp submitted that it was clear from section 25(7)(b) of the 1982 Act when read together with section 2(2)(d) of the 1975 Act that the Court did not have jurisdiction to make an order under CPR rule 25(1)(c)(iii) and (iv) for the provision of samples and the carrying out of experiments on such samples in aid of foreign proceedings.
Counsel for Rhodia sought to get round this difficulty in two ways. First, he submitted that the order sought by Rhodia was not designed to provide evidence for the purpose of the German infringement proceedings, but rather to preserve samples of the allegedly infringing products, to investigate their properties and to provide information. He offered an undertaking on behalf of Rhodia that, unless and until the German court called for more, Rhodia would only use the numerical results relating to the parameters specified in claims 1-3 of the Patent by pleading that information in its statement of case in Germany.
I do not accept this argument. Rhodia’s whole purpose in applying for the order it seeks is to obtain evidence to support its infringement claim in Germany. Unsurprisingly, counsel did not offer any undertaking that Rhodia would not rely upon the results to support that claim.
Secondly, counsel for Rhodia submitted that, even if the Court did not have jurisdiction to make the order under section 25 of the 1982 Act, it had power to do so under the jurisdiction recognised by section 37(1) of the Senior Courts Act 1981, which provides, so far as relevant:
“The High Court may by order (whether interlocutory or final) grant an injunction … in all cases in which it appears to be just and convenient to do so.”
In this regard, counsel for Rhodia relied upon the analysis of the extent of the Court’s power to grant an injunction in Cartier International AG v British Sky Broadcasting Ltd [2016] EWCA Civ 658 at [40]-[54] (Kitchin LJ, with whom Jackson and Briggs LJJ agreed).
I do not accept this argument either. While I accept that the Court’s power to grant an injunction is unfettered, that power must be exercised in accordance with principle. In my judgment it would not be a principled exercise of that power for the High Court to use it to circumvent the limit which Parliament has placed upon section 25 of the 1982 Act.
Accordingly, I conclude that the Court does not have jurisdiction to make an order for the provision by Molycorp of samples for testing for the purpose of the German infringement proceedings which Rhodia proposes to bring. In case this case goes further, I shall nevertheless consider the question of expediency if the Court does have jurisdiction to make the order sought.
Expediency
The leading case on expediency is Motorola Credit Corp v Uzan [2003] EWCA Civ 752, [2004] 1 WLR 113, although it must be borne in mind that that case concerned freezing injunctions, which raise somewhat different considerations. Potter LJ, who delivered the judgment of the Court of Appeal, said at [115]:
“As the authorities show, there are five particular considerations which the court should bear in mind, when considering the question whether it is inexpedient to make an order. First, whether the making of the order will interfere with the management of the case in the primary court e.g. where the order is inconsistent with an order in the primary court or overlaps with it. That consideration does not arise in the present case. Second, whether it is the policy in the primary jurisdiction not itself to make worldwide freezing/disclosure orders. Third, whether there is a danger that the orders made will give rise to disharmony or confusion and/or risk of conflicting inconsistent or overlapping orders in other jurisdictions, in particular the courts of the state where the person enjoined resides or where the assets affected are located. If so, then respect for the territorial jurisdiction of that state should discourage the English court from using its unusually wide powers against a foreign defendant. Fourth, whether at the time the order is sought there is likely to be a potential conflict as to jurisdiction rendering it inappropriate and inexpedient to make a worldwide order. Fifth, whether, in a case where jurisdiction is resisted and disobedience to be expected, the court will be making an order which it cannot enforce.”
It is clear from the same judgment at [118] that the Court endorsed an additional factor which was identified by Millett LJ, with whom Lord Bingham CJ and Potter LJ agreed, in Credit Suisse Fides Trust v Cuoghi [1998] QB 818 at 872:
“It is a strong thing to restrain a defendant who is not resident within the jurisdiction from disposing of assets outside the jurisdiction. But where the defendant is domiciled within the jurisdiction such an order cannot be regarded as exorbitant or as going beyond what is internationally acceptable. To treat it as such merely because the substantive proceedings are pending in another country would be contrary to the policy which informs both article 24 and section 25.
Where a defendant and his assets are located outside the jurisdiction of the court seized of the substantive proceedings, it is in my opinion most appropriate that protective measures should be granted by those courts best able to make their orders effective. In relation to orders taking direct effect against the assets this means the courts of the state where the assets are located; and in relation to orders in personam, including orders for disclosure, this means the courts of the state where the person enjoined resides.”
Counsel for Rhodia submitted that it would be expedient to make the order for the following reasons:
Molycorp is domiciled within the Court’s jurisdiction and subject to its control.
It is likely that the products of which samples would be required would be much the same for the purposes of Rhodia’s infringement claims in the UK and in Germany. Furthermore, having one court dealing with the matter would allow a single sampling process with one set of tests for both the UK and Germany, saving cost and time; and would allow for one court to supervise the process.
A sampling order in England would not interfere with the management of the German proceedings (Uzan point 1). Nor would it be contrary to the policy of the German courts – they also grant orders for the provision of samples in appropriate cases (Uzan point 2). There was no risk of disharmony or confusion as the German courts would happily receive the samples (Uzan point 3). There was no risk of conflict of jurisdiction (Uzan point 4). So far as any risk of disobedience is concerned (Uzan point 5), the English court would be best placed to deal with it as it has personal jurisdiction over Molycorp.
Furthermore, obtaining samples through the processes of the German courts would be slow because they would operate by requesting assistance from the Chinese courts through the Hague Convention. This is because the samples are not in the possession of Molycorp, but of its Chinese parent company Molycorp Zibo. In contrast, this Court could make an immediate order for samples; and the samples would then be available and analysed within a couple of weeks.
So far as the last point is concerned, I should explain that, at the hearing on 23 June 2016, Molycorp did not resist the provision of certain samples on the ground that they were in the possession of its Chinese parent, but submitted to an order that samples be provided on terms that allowed sufficient time for the samples to be transported from China. At the hearing on 8 July 2016, however, an issue arose as to whether other samples of the products in question were within the control or power of Molycorp. Rhodia contended that they were, but Molycorp disputed this. I adjourned consideration of that issue until both parties had had a proper opportunity to adduce evidence relating to it. As matters stand, therefore, it is not clear whether samples which are in the possession of the Chinese company are nevertheless within the control or power of Molycorp. If they are, then it would appear to follow that it would not be necessary for the German courts to direct a request to the Chinese courts, since a request could be made to this Court.
A point was raised in Molycorp’s evidence as to the inability of the German courts reliably to protect confidential information filed by parties to German court proceedings. This was rightly not a point pursued by counsel for Molycorp in his submissions, however. If this is a problem, then it is a problem which will arise whether an order for the provision of samples and testing is made by the German court or by this Court.
Counsel for Molycorp’s principal submission was that Rhodia’s application was premature: Rhodia should commence proceedings in Germany and apply to the German court for an order. If the German court wanted assistance from this Court, because Molycorp was domiciled here, it could ask for it.
In my judgment, if this Court had jurisdiction to make the order sought by Molycorp, then it would be expedient to make the order for the first three reasons given by counsel for Rhodia. I do not see why Rhodia should have to wait for the German court to request this Court to make an order (or to make an order itself, if the German court considered that it had the power to do so).
Conclusions
For the reasons given above, I conclude that:
this Court has no jurisdiction over Rhodia’s claim in respect of the German designation of the Patent; and
the Court does not have jurisdiction to make an order for the provision by Molycorp of samples for testing for the purpose of the German infringement proceedings which Rhodia proposes to bring.