Illumina, Inc ("Illumina") & Ors v Illumina, Inc & Ors

On 1 July 2016, I heard an application in these proceedings to permit the defendant to introduce what were referred to as ‘non-technical’ defences by way of additional pleadings in these two actions. Those were essentially competition law defences which, if the defendant failed at the initial, ‘technical’ patent trial, would be heard and determined at a subsequent, ‘non-technical’ trial. (There are two defences because there are two actions, but they are to be heard together.) For reasons set out in a judgment delivered that day, I adjourned the issue to be determined as directed by the trial judge after the handing down of judgment in the ‘technical’ trial, with permission for the defendant to substitute a revised draft non-technical defence following that judgment: [2016] EWHC 1726 (Pat).

At the same time I directed specific disclosure by the claimants of the unredacted version of a particular document called the Pooled Patents Agreement between the first claimant (“Illumina”) and Sequenom Inc (“Sequenom”), dated 2 December 2014 (the “PPA”) but only within a confidential ring. That was because the defendant was relying upon that document in its draft non-technical defences but was hampered in setting out its case by the fact that the copy of the PPA to which it had access was heavily redacted. Since one complaint advanced by the claimants against the grant of permission to amend was that the draft pleadings were too vague, it seemed appropriate that the defendant should have access to a full copy of the PPA provided that the claimants’ confidential information could be protected: see the judgment at [12].

It was left to the parties in the usual way to produce a written form of order for approval. However, although liaison between the parties’ representatives led to agreement on much of the proposed order, there was one aspect on which the parties were unable to agree - indeed on which they were completely opposed. It arose in this way.

As I have just mentioned, the decision on specific disclosure required the claimants to disclose an unredacted copy of the PPA within a confidentiality ring. The usual form of undertaking required from those within the confidentiality ring would include an assurance that the confidential information in the PPA would be used only for the purposes of these proceedings.

As referred to in my earlier judgment, the European Commission (“the Commission”) was at the time conducting what appeared to be a preliminary investigation of potential infringements of competition law by Illumina, which it seems may cover some of the same ground as is raised in the non-technical defences. In the light of that, the defendant sought to include in the order a requirement for the claimants to inform it once any of them had disclosed an unredacted version of the PPA to the Commission; and to incorporate in the undertaking permission for its advisers, once it was informed that such disclosure had been made, to use the confidential information in the unredacted PPA to make submissions to the Commission. The claimants, who of course include Illumina and Sequenom, strongly resisted the inclusion of those provisions and incorporation of this exception to the prohibition on use.

I was accordingly presented with two different forms of order, reflecting the positions of the two sides, accompanied by a series of written submission in support of the respective drafts. Neither side requested a further hearing, which would clearly have been disproportionate. I decided that the position adopted by the claimants was correct and made the order accordingly on 27 July 2016, for reasons to be delivered subsequently. This judgment sets out my reasons.

In her submissions on behalf of the claimants, Ms Ronit Kreisberger confirmed that the Commission had already received a full, unredacted version of the PPA. Accordingly, the real issue was whether the defendant should be permitted to use the confidential document which it received by reason of the court’s order for specific disclosure to make submissions to the Commission.

Unsurprisingly, the defendant sought to rely strongly on my judgment in Infederation Ltd v Google, Inc [2015] EWHC 3705 (Ch). Those were proceedings alleging that the defendant (“Google”) had abused a dominant position contrary to both EU and UK competition law. That claim substantially overlapped with an investigation being conducted into Google by the Commission. The English proceedings were commenced in June 2012 and I subsequently ordered disclosure by Google to the claimant of the documents which had been provided to the Commission in connection with the latter’s investigation. On 15 April 2015, the Commission issued a statement of objections to Google and as a result it was agreed that the trial of the action could not proceed pending the outcome of the Commission’s investigations, having regard to the obligation under article 16 of Council Regulation 1/2003, to avoid any inconsistency. The claimant had been a complainant against Google to the Commission, and sought permission to disclose to the Commission a copy of the analysis it had made of the documents supplied under the disclosure order, which were documents already in the hands of the Commission, on the basis that this would assist the Commission’s case team in the understanding of those documents. The application was accordingly made in that case, as in the present, pursuant to CPR rule 31.22, the so-called “collateral purpose rule.”

In my judgment in that case, I referred to the discussion of the rational of the collateral purpose rule and the statement of principles by the Court of Appeal in Tchenguiz v Director of the Serious Fraud Office [2014] EWCA Civ 1409, where Jackson LJ said, at [66]:

“(i)

The collateral purpose rule now contained in CPR 31.22 exists for sound and long established policy reasons. The court will only grant permission under 31.22(1)(b) if there are special circumstances which constitute a cogent reason for permitting collateral use.

…

(iii)

There is a strong public interest in facilitating the just resolution of civil litigation. Whether that public interest warrants releasing a party from the collateral purpose rule depends upon the particular circumstances of the case. Those circumstances require careful examination. There are decisions going both ways in the authorities cited above.

Having considered the application of the pre-CPR version of the rule as regards disclosure to the Commission in connection with a competition investigation by Ferris J in Apple Corps Ltd v Apple Computer Inc [1992] 1 CMLR 969, and the summary of the governing approach for such a case by Lightman J, post-CPR, in Computer Services (UK) Ltd v ICL (Sorbus) Ltd [2002] ICR 112, I held that the claimant should be permitted to provide to the Commission its analysis of the meaning of the Google documents.

I shall not repeat the quotations from those previous authorities here. Although there are obvious similarities between Foundem v Google and the present case, there are also significant differences. There, the documents had been disclosed in the English proceedings over a year after they had commenced, at a stage in the process of managed disclosure for the purpose of the action. The application to use them for the purpose of submissions to the Commission was made about 1½ years later. That was a case where there were truly parallel proceedings pending in the English court and before the Commission, even though the overlap was not complete.

By contrast, in the present case the order for disclosure of the unredacted PPA is being made at a very preliminary stage of the proceedings. The defendant still needs the permission of the court to serve a non-technical defence raising allegations of breach of competition law, and the question of whether to grant that permission will now not be determined for some considerable time. Thus, as regards the competition claim (here raised by way of defence), the disclosure of the unredacted PPA is akin to pre-action disclosure: it has been ordered so as to enable the defendant to formulate and plead its case, so that the court can determine whether that case may go forward. I regard that as a very different situation from disclosure made after pleadings have closed when the parties can see the shape of the action. If the defendant succeeds on its technical defences, or if it fails in whole or in part but the court then refuses permission to serve the non-technical defences, there never will be a competition issue in these proceedings for which purpose the unredacted PPA was disclosed. As Ms Kreisberger puts it in her written submissions in reply for the claimants: “In that event, the defendant will have successfully procured an advantage in relation to the Commission’s procedure as a result of non-extant domestic competition proceedings….”

In my view, this significantly affects the balance in determining whether to allow an exception from the strictures of the collateral purpose rule in the present circumstances. As the Court of Appeal emphasised in Tchenguiz, the rule serves an important public policy objective. To allow the use of the disclosed document now applied for, would encourage applications for disclosure at the outset of competition proceedings for the collateral advantage of furthering a public authority’s inquiries or investigation.

However, while I therefore have refused to allow the proviso sought in the present order, I should emphasise that this does not preclude a further application by the defendant to that effect if and when it may be given permission to advance the non-technical defences. Once competition issues become ‘live’ in these proceedings, the circumstances will be materially different, and the question of whether to permit use of the document to make submissions to the Commission can be considered afresh. If the Commission does instigate proceedings by the issue a statement of objections to Illumina, it seems unlikely that the Commission proceedings would have been concluded by then.

The claimants sought their costs of this particular dispute regarding the wording of the order. Any reasonable costs incurred will be very small in relation to the overall dispute. However, I think that the claimants are entitled to those costs, especially as this matter was not raised in oral argument when the disclosure of the PPA was discussed, but only by subsequent submissions in writing. If not agreed, those costs will be summarily assessed upon the submission of a costs schedule.