Friday 7 February 2014

Keeping evidence secret post-trial: a common-sense ruling in Convatec case

Smith & Nephew plc v Convatec Technologies Inc; TJ Smith & Nephew Ltd and Smith & Nephew Medical Ltd (third parties) [2014] EWHC 146 (Pat) is the latest in a series of rulings in fairly acrimonious litigation that has occupied the courts of England and Wales for the past few years. Discussion of much of this earlier litigation can be found on the IPKat, here.

So what was the latest round of litigation all about? Smith & Nephew (S&N), in the course of earlier proceedings in which it sought a declaration of non-infringement in relation to Convatec's  patent, disclosed numerous documents that set out in full the details of its manufacturing processes. A confidentiality scheme existed between the parties to deal with this confidential disclosure and an interim order was made under the Civil Procedure Rules, CPR r.31.22(2).

Once the declaration proceedings were over, with Birss J ruling that Convatec's patent was valid and partially infringed, S&N sought a permanent r.31.22(2) order in relation to various documents which, it said, contained commercially sensitive information relating to its manufacturing processes and equipment, its dealings with regulatory authorities and/or its commercial strategy. According to a witness for S&N, those documents, taken together, painted a very detailed picture of the development of the company's product, providing a window into its internal workings and know-how which it had built up over years of experience in new product development.

Mr Justice Birss granted the order, but only in part.  In his view,

* the parties well understood that sitting in private should only occur when it is strictly necessary and should be kept to a minimum: "That is what happens in the Patents Court".

* It was first necessary to explore both the nature and details of S&N's secret processes, since justice could not be done without it. The Court of Appeal had already recognised in Lilly ICOS Ltd v Pfizer Ltd (No.2) [2002] EWCA Civ 2 that patent cases presented particular problems because parties might feel constrained to hold back from disclosing relevant or potentially relevant documents if they were afraid of the consequences of their information seeing the light of day.

* On the facts, a permanent order was appropriate in relation to the documents relating to S&N's manufacturing processes and equipment and its commercial strategy.  While some of those documents played a crucial role at trial, its outcome could still be understood without them.

* In contrast, apart from some regulatory documents which referred to S&N's manufacturing or development testing work or commercial strategy, no further permanent r.31.22(2) order would be made. While S&N had built up substantial experience and know-how in dealing with regulatory authorities, disclosure of those documents would not reveal that know-how or damage S&N at all. Accordingly, the only documents to be covered by the order were those that made reference to manufacturing or process information or commercial strategy.

Convatec did not object to the order sought by Smith & Nephew and did not attend for the majority of the discussion on this issue.

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