VISX Incorporated v NIDEX Co Birmingham Optical Group Ltd & Anor [1998] EWCA Civ 855 (19 May 1998)

Royal Courts of Justice
London WC2
Tuesday 19 May 1998
B e f o r e:
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(Transcript of the handed-down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4A 2HD
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
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MR R ARNOLD (Instructed by Messrs Rowe & Maw, London EC4V 6HD) appeared on behalf of the First Defendants/Appellants.
MR A BOYLE QC and MR J TURNER (Instructed by Messrs Lovell White Durrant, London EC1A 2DY) appeared on behalf of the Plaintiffs/Respondents
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(As approved by the Court)
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©Crown Copyright
The appeals before us are against judgments of Laddie J dated 27 January l998 and l0 March l998 in which he refused the first defendant’s application to amend their pleadings and rejected the plaintiff’s claim to privilege in respect of transcripts of depositions and answers to interrogations produced in US Interference proceedings.
The action is a patent action in which the plaintiff, Visx Incorporated, alleges infringement of EP 0151869 (869) and EP 0207648 (648). They relate to inventions for apparatus for performing ophthalmological surgery.
The inventor of 869 was Dr L’Esperance. It claims priority from a US application filed on l7 December l983. The inventor of patent 648 is named as the plaintiff. It also claims priority from a US application which was filed on 6 June l985.
At the time when the invention of patent 869 was made Dr L’Esperance was working in the same department at Columbia University as a Dr Trokel. In l989 Dr Trokel commenced Interference proceedings against Dr L’Esperance claiming that he had the prior right to patent the invention of 869.
In the UK, patents rights stem from the date of filing, in this case the date of filing in the US. In the USA the first to invent is entitled to priority over other persons who claim to have made the same invention. Any publication by an applicant within a year prior to his application does not invalidate his patent in that country. The difference in the law in the US and UK can create difficulty for US inventors and it may have done in this case. To succeed in the US Interference proceedings, the parties needed to prove early reduction to practise which could be done by establishing prior use or disclosure; whereas proof of disclosure prior to the date of application could invalidate any European patent that was obtained claiming priority for the US application.
As part of the Interference proceedings, depositions were taken by both sides. They were due to be filed at the US Patent Office and when filed would have been open for inspection by the public. Before that happened, the proceedings were settled and the right to 869 became vested in the plaintiff. The depositions were not filed and therefore they were not made available to the public. However, some documents were filed at the US Patent Office and copies were obtained by the first defendant in this action. The information in them has been used by the first defendant to formulate and plead invalidity attacks based on prior disclosure.
The plaintiff is seeking to enforce in other countries patent rights corresponding to those, the subject of this action. In Canada the first defendant in this action is also a defendant. In that country the depositions and the answers to the interrogations have been disclosed on discovery, but the first defendant is precluded from making use of the information in them, save for the purpose of those proceedings, in the same way that a litigant in this country is precluded from using documents disclosed on discovery save for the purpose of the action.
The first defendant in their Particulars of Objection pleaded disclosures which they say invalidated the patents. At the end of last year they sought to amend their Particulars of Objection by adding nine further particulars of prior disclosures using information in the published documents which had been filed in the US Patent Office in the Interference proceedings. The plaintiffs objected to the amendments upon the ground that the details given did not comply with the requirements of O.104 r.6. That submission was accepted by the Judge. In his judgment of 27 January l988 he said:
“In support of his submission that getting the pleadings right first is the correct approach, Mr Turner referred me to Avery Ltd v Ashworth, Son & Co Ltd 32 RPC 560 and Intalight International NV v Cellular Ceilings Ltd (No 1) (1987) RPC 532. Both of those cases can be distinguished on the facts, but with some reluctance I accept that they do appear to suggest that the proper course is for the pleadings to be properly drafted first and for discovery to follow on from them. Therefore he is entitled to complain that these pleadings do not meet the requirements of the rules and should not be allowed to go forward simply as a vehicle for justifying wider discovery. This is a matter which may be of some significance because it may well be that the material currently in the plaintiff’s possession in the United States proceedings disclosed prior users or prior oral disclosures which would invalidate the patent in suit. It would be most unfortunate if a patent which is invalid is allowed to stay on the patent register if such material exists and is known to the plaintiff.”
The Judge gave leave to appeal and the first appeal before the Court is against that judgment.
In patent actions, discovery is limited to documents coming into existence during a particular period, commonly called “the window”. In the present case the Judge widened the window anticipating that at least certain of the depositions taken in the Interference proceedings would be disclosed as being relevant to the pleaded grounds of attack. The plaintiff accepted that a number of depositions and answers to the interrogatories by Dr Trokel were relevant and included them in a list of documents, but claimed they were privileged. That claim was disputed by the first defendant and therefore the Judge had to decide whether the claim to privilege was justified. He held in a judgment, delivered on l0 March l998, that the depositions were not privileged and in any case any privilege there might have been had been waived. He refused leave to appeal. The plaintiff applied to this Court for leave. I ordered the application to be listed to be heard at the same time as the first defendant’s appeal, with the appeal to follow if leave was given. At the outset of the hearing before us this Court gave leave to appeal. The plaintiff’s appeal against the judgment of l0 March l998 is the second appeal before us.
At the conclusion of the hearing of the appeals, judgment was reserved, but the parties were told that the appeal against the refusal to allow the amendments would be allowed, save in respect of two of the particulars, and that the appeal by the plaintiff against the Judge’s order refusing the claim to privilege in the depositions would be dismissed. The question of whether privilege could be claimed for the answers to the interrogatories was left for further consideration.
The First Appeal
The basic requirements of pleading an attack on a patent are contained in O.104, r.6. The relevant parts of that rule provide:
“6-1(A) A party to an action concerning a patent who either challenges the validity of the patent or applies by counterclaim in the action for revocation of the patent must, notwithstanding Order l8, rule 2, serve his defence or counterclaim (as the case may be), together with particulars of the objections to the validity of the patent on which he relies, within 42 days after service upon him of the statement of claim.
(2) Particulars given pursuant to paragraph … (lA) must state every ground on which the validity of the patent is challenged and must include such particulars as will clearly define every issue which it is intended to raise.
(3) If the grounds stated in the particulars of objections include want of novelty or want of any inventive step, the particulars must state the manner, time and place of every prior publication or user relied upon and, if prior user is alleged, must –
(a) specify the name of every person alleged to have made such user,
(b) state whether such user is alleged to have continued until the priority date of the claim in question or of the invention, as may be appropriate, and, if not, the earliest and latest date on which such user is alleged to have taken place,
(c) contain a description accompanied by drawings, if necessary, sufficient to identify such user, and
(d) if such user relates to machinery or apparatus, state whether the machinery or apparatus is in existence and where it can be inspected.”
The Particulars of Objection alleged invalidity of 869 upon the ground that the patent lacked novelty and was obvious having regard to certain disclosures. Particulars are given of six published documents and six oral disclosures. The oral disclosures are pleaded in this form:
“(g) The oral disclosure by John Taboada to Stephen Trokel of the Edward S Harkness Eye Institute made during the evening of March l5 l983 at Mr Trokel’s apartment in New York that Excimer Lasers, particularly using l93nm ArF radiation, could be used advantageously in corneal surgery, either to make precise incisions (as in radial keratotomy) or to remove corneal tissue. He emphasised the exceptionally rapid healing process achieved in the cornea when such radiation was used, and the significant advantages thus achievable over the known KrF 248nm radiation.
(h) The oral disclosure of the same matters by John Taboada and Stephen Trokel to Dr Richard Keates and Mr Francis L’Esperance at a meeting of the International Ophthalmic Laser Symposium on l0 April l983.
(i) The oral disclosure on 21 September l983 by Dr Stephen Trokel at a meeting with inter alia Bernard Klimt of Lambda-Physik USA Inc that he had (with the assistance of Dr Srinivasan) been using excimer laser made by Lambda-Physik and owned by IBM for experimental corneal refractive surgery. In particular he disclosed the use of such a laser to ablate corneal tissue in various predetermined patterns using masks and had controlled the depth of the ablations by varying the fluence of the beam. The parties then discussed the possibility of designing a fully automatic machine to measure automatically the curvature of the patient’s eye and laser sculpt the eye under the control of a computer to correct curvature errors.
(j) The oral disclosure of the substances of the disclosure set out in (h) above by Mr Klimt to Dr L’Esperance at the Fifth International Congress of Lasers in Medicine at the Westin Hotel, Detroit between 6th and 9th October l983.
(k) Dr Trokel’s “public disclosures of the invention beginning in September l983” referred to in his Notice of Deposition of 28 December l989 in the Interference Case No 102, 026 Trokel v L’Esperance before the Board of Patent Appeals and Interferences of the US Patent and Trade Mark Office.
(l) The oral presentation by Dr Taboada of the paper referred to in (c) above, to the Annual Meeting of the Aerospace Medical Association in San Antonio, Texas, May l98l.”
No application has been made to strike out those particulars on the ground that they do not comply with O.104, r.6, but an application has been made for further and better particulars.
The amendments sought are in this form:
“(m) The oral disclosure by Dr Trokel to Reinhardt Thyzel, a researcher, at some time prior to l7 November l983, of his work (said work having taken place in the summer of l983) on the recontouring of corneas using the Lambda-Physik excimer laser.
(n) The subsequent oral disclosure by Mr Thyzel to Dr L’Esperance (again prior to l7 November l983) of what Dr Trokel had told him.
(o) The oral and/or written disclosure by Dr Trokel of his work on the recontouring of corneas using the Lambda-Physik excimer laser in the course of a talk given by him to the US Ophthalmic Laser Surgery Society on 20 September l983.
(p) The disclosure of the invention by Dr L’Esperance to Dr Trokel on or before May l8th l983.
(q) The disclosure of the invention by Dr Trokel to Dr L’Esperance in about August l983.
(r) The disclosure by Dr Srinivasen to Dr Trokel in the summer of l983 of his earlier work on excimer laser photoablation of human tissue (as later published in US patent 4,784,135), said work including scanning in the context of laser sculpting of the cornea.
(s) The public disclosure and demonstration of the invention by Dr Trokel (using a Lambda Physik excimer laser) at the laboratories of the Columbia Presbyterian Medical Center, 635 West 165th Street, New York, USA in or about August l983, and in particular to Dr L’Esperance in about August l983.
(t) The public disclosure and demonstration of the invention by Dr Trokel and Dr Srinivasen (using a Lambda Physik excimer laser) at the IBM Thomas J Watson Research Center, Yorkton Heights, New York, between about August and October l983.”
The allegations of invalidity made against 648 are not identical to those pleaded against 869. Certain documents are relied on as invalidating disclosures, but no oral disclosures are pleaded. By amendment the first defendant seeks to add:
“(d) The public lecture by Dr John Marshall at the International Laser Seminar at Interlaken, Switzerland, in the afternoon of June 5th l985, at which he disclosed the idea of performing wide area ablation on the cornea and varying the energy and/or exposure time applied to different areas of the cornea in order to control reprofiling. In particular he disclosed 2 alternative methods of varying energy and/or exposure time: the use of graded intensity masks and variation of the size of the exposed area over time.”
As appears from the extract of the Judge’s judgment that I have read, the Judge was reluctant to refuse the amendments, but believed that Avery Ltd v Ashworth, Son & Co Ltd 32 RPC 560 and Intalite International NV v Cellular Ceilings Ltd (No 1) (1987) RPC 532 laid down that the proper course in a patent action was for the pleadings to be properly drafted before discovery takes place. As the amendments sought did not contain the appropriate particulars and they could not be supplied until after discovery, it was correct to refuse the amendment.
The plaintiffs supported the decision of the Judge for the reasons he gave. The first defendant submitted that neither of the cases referred to by the Judge supported the proposition that pleadings in patent cases had to be fully particularised before discovery took place. In certain cases, of which this was one, detailed particulars could await discovery.
In Avery the plaintiff alleged infringement of two patents. The first, No 7411, had been amended to differentiate the prior art. The first defendant alleged that both patents were invalid upon a number of grounds. One of the allegations relied on was:
“The Defendants will rely, either by the way of anticipation or as showing the scope of the Claims of the Complete Specification, upon the matters known to the Plaintiffs or one of them, in consequence of which the Plaintiffs W & T Avery & Co Ld on the 7th day of June l905, applied for leave to amend the Complete Specification of the Patent by ( inter alia) striking out the then first Claim, for the reason that they were advised that the Claim they desire to delete covers subject-matter of doubtful novelty; …”
The first defendant sought discovery of all the documents relevant to the application to amend the patent. The plaintiffs countered with an application to strike out the allegation set out above on the ground that it was embarrassing and ambiguous.
Eve J refused to order the discovery sought and ordered that the allegation should be struck out unless proper particulars were given. No further particulars were given.
The Court of Appeal dismissed the appeal. At page 568, line l3 Warrington LJ said this:
“With regard to the other Patent, No 7411* of 1902, the matter is slightly different, because, as the Particulars of Objections originally stood they contained a paragraph which, if it were a proper particular, would, as the Plaintiffs admit, support an application for the disclosure of the documents which the Defendants wish to have disclosed, but Mr Justice Eve thought, and I agree with him, that that paragraph of the Particulars of Objections was not a compliance with Order LIIIA, Rule l7, and ought to be struck out unless it was amended. Accordingly, he made the Order in this form. He said, with regard to that part of the Defendants’ application, “the said application be adjourned until further Particulars are given as to paragraph l(D) of the said Particulars of Objections. And it is ordered that in the event of no such Particulars being given, this Court doth not think fit to make any Order on the Defendants’ said application”; and then, on the Plaintiffs’ application the learned Judge ordered that paragraph to be struck out unless it was amended, or rather he directed Particulars to be given by the 12th of July l9l5. As I understand none were given, consequently that paragraph is struck out. If it is struck out, then there is nothing on which the application for discovery can be supported. On the whole, I think the Order of Mr Justice Eve was perfectly right and ought to be affirmed.”
Both Eve J and Warrington LJ concluded that the allegation did not comply with O. 53A r.l7 which was similar to O.l04 r.6. That was, in my view, clear as it did not identify any document or oral disclosure, prior use, person or other matter. There was no allegation which, if proved, formed a basis of an invalidity attack. It did not comply with any part of O. 53A. Warrington LJ did not say that, where a proper allegation of invalidity is pleaded, albeit short of particulars, further particularisation should not, in certain circumstances, be delayed until after discovery. Warrington LJ concluded that allegation was a general allegation of invalidity which was not permissible as the rules required that a person who attacked the validity of a patent had to limit his attack to specific grounds. He said at page 567, line 50:
“The only issue raised in the action with which we are concerned is the alleged invalidity of the Patent. That issue is not properly to be regarded, having reference to the Rules, as a general allegation of invalidity. In whatever form it is raised by the Defence, it seems to me that the Defendants merely allege, and must allege in order to comply with the Rules, that the Patent is invalid for the reasons specified in the Particulars of Objections.
In reference to the Patent No 12,087 of l9l0, the defendants ask for discovery of certain documents which may tend to show that the Plaintiffs thought their Patent was invalid, or might be invalid, by reason of some other documents not specified in the Particulars of Objections. In my opinion in that case they are asking for discovery of supposed documents which are not relevant to the issue which is the only issue in the action, but to another issue altogether, and on that short ground I think the judgment of Mr Justice Eve with regard to the Second Patent, No 12,087, was justified and ought to be affirmed.”
Warrington LJ applied the general principles of discovery and pleading to a patent action. The pleadings defined the issues between the parties and discovery was only necessary in respect of documents that were relevant to a pleaded issue. Thus when a patent is alleged to be invalid, the patentee is only required to give discovery of documents that would be relevant to a pleaded issue of invalidity. The allegation made by the defendants in Avery did not specify any instance of prior use or prior publication and therefore did not plead anything which would render the patent invalid. It followed that discovery relating to the allegation was not appropriate.
The other members of the Court also concluded that the allegation was not an allegation of invalidity and therefore was irrelevant. It was in their view a fishing expedition to see whether anything would turn up. Lord Cozen Hardy MR said at page 566, line 45:
“… the Patentee (by amendment) struck out the first Claim and made an amendment by the addition of a word in the fourth Claim, which is now the third, and the Defendants ask us to say: ‘We should like to see what it was that induced you to make the amendments which the Office sanctioned in 1905: what was the reason why you did that; what was the particular reason which made you think that your Patent was in danger?’ The answer is: “The only Patent we can look at for the purposes of this action is the Specification of Patent as amended, not the original one”. In the case of Moser v Marsden in the House of Lords, which has often had cited to us, it was said: ‘You cannot look at the original Specification at all; the only Specification upon which you can go is the Specification as “amended”. That being so, I fail to see how it can be relevant to anything in this action to see what were the reasons for which this amendment was made; or what was the discovery made appearing in a document which is not the Specification of the Patent now sued upon and which really is not relevant to anything of the kind. Then it is said that it is made relevant, because in paragraph l(D) it is said: “The Defendants will rely either by way of anticipation or as showing the scope of the Claims of the Complete Specification upon the matters known to Plaintiffs or one of them in consequence of which the Plaintiffs W & T Avery & Co Ld , on the 7th day of June 1905 applied for leave to amend the Complete Specification of the Patent by ( inter alia ) striking out the then first Claim for the reason that they were advised that the Claim they desired to delete covers subject-matter of doubtful novelty.” That is really in the teeth of Rule l7. It seems to me plainly a bad notice of objection, and does not really give any substantial right to the Defendants.”
Avery decided that discovery in patent actions should be confined to the issues of invalidity pleaded. The allegation which formed the basis of the claim for discovery did not raise an issue of invalidity. Therefore it had to be struck out as embarrassing unless appropriate particulars were given. It did not decide that where bona fide allegations of invalidity are pleaded all relevant particulars have to be given before discovery. The Intalite case added nothing material.
An example of a case where particulars were delayed pending discovery was Aero Zipp Fasteners Ltd v YKK Fasteners (UK) Ltd (1973) FSR 580. In that case the defendants pleaded that the patentee, the plaintiff, was not entitled to relief having regard to its abuse of its dominant position contrary to Article 86 of the Treaty of Rome. The facts were not fully particularised, but Graham J refused to strike out the allegations.
“It is always important in my judgment to distinguish between the materiality of the plea itself and the particulars which must be given under it. The particulars here were given on the l0th April, l973, and though they went further than the original paragraph 4 of the defence, again were still in general terms. The defendants made it clear, however, when giving those particulars that they were unable to give better particulars until after discovery, and they are requesting this discovery in the proceedings before me.
In my judgment this is not an unreasonable request in the circumstances I am about to state, since it is clear that the facts of the plaintiffs’ conduct must very largely be within their own knowledge, and not within the knowledge of the defendants.”
In the present case, it is not suggested that the first defendant can at this stage give further particulars. Further it is not, for the purpose of the appeal, disputed that the plaintiff has access to the relevant persons and to documents which would enable it to ascertain the relevant facts. What is said is that the allegations sought to be pleaded do not comply with the rules and that to allow them to be pleaded would provide a vehicle for fishing discovery.
Mr Boyle QC who appeared for the plaintiff also submitted that the word “must” in O. l04 r.6 made it obligatory for a defendant who challenged the validity of a patent to set out the particulars required by the rule. That being so, no amendment should be allowed unless it contained the required particulars. That in my view is too simplistic.
A Judge has a discretion whether to allow amendments before they have been properly particularised. He should exercise that discretion to prevent amendments being made with a view to obtaining documents to discover a cause of action or defence. But such amendments need to be contrasted with those which plead a genuine case which is suitable for determination and are in sufficient detail so as to limit the area of discovery to an appropriate extent. It is a question of degree in each case as to whether the amendments are of the fishing type or plead a genuine cause of action or defence. If it be the latter and the omitted particulars are likely to be within the knowledge of the other party, then it would in general be appropriate to allow the amendment and to delay further particularisation until after discovery. Each case will differ and will need to be decided upon its own facts.
In the present case the amendments have to be viewed in the light of the Interference proceedings and the history of the patent rights relied on by the plaintiff. The allegations sought to be added by amendment came from documents produced in the Interference proceedings. In general they identify alleged instances of disclosure and give sufficient details to identify the person who made the prior disclosure and where it was made. They appear to be a genuine attempt to plead invalidating disclosures which could well have taken place. I therefore believe that they should be allowed. That does not apply to (p) and (q) which only set a cut-off date and do not identify where the disclosure took place or any detail of what was said. They appear to me to be of the fishing type and should not be allowed without further amendment.
I therefore would allow the first defendant to amend their Particulars of Objections as sought, but excluding (p) and (q). That would I believe have been the decision that the Judge would have reached if he had not thought he was bound by the Avery case.
The second appeal
The Judge made these findings which were not disputed before us:
“I think it is necessary to get one issue out of the way. In the evidence filed on this application the plaintiff has testified at some length as to the existence of the protective orders and as to the secrecy of the deposition proceedings from which these transcripts are derived. It is said, and I do not understand the defendant to dispute this, that none of the material which is sought to be discovered now on this application has been made public, either in the deposition proceedings or in proceedings in the United States or Canada. However, it is well established that an obligation to give discovery is not defeated simply because the relevant material has been kept secret. Parties frequently are required to give discovery of material which is secret.”
Having considered the authorities cited to him the Judge said:
“In my view, however, it is not shown in this case that any of the depositions given in the United States come within the exclusionary public policy considerations of litigation privilege. It appears to me that the contents of these statements are in principle no different to any other evidence given in inter partes proceedings. As I have said already, it may well be in many, if not most, cases that the court will consider that the disclosure of such transcripts will be unnecessary and burdensome and will decline to order them accordingly. But it does not appear to me that they fairly come within the scope of litigation privilege.
However, even if I was of the view that they did, I have come to the conclusion that this is a case where it would be appropriate to treat the plaintiff as if it had waived its claim to privilege. What the plaintiff has done, it appears to me, is decide on a case by case basis in which litigation and in which countries it intends to rely upon the transcripts. Not only has it not asserted privilege anywhere else in the numerous pieces of litigation it has been engaged in, but it has even relied on these transcripts, as I have indicated, not just against other litigants, but against this defendant in litigation abroad. In my view in the circumstances of this case the court should not allow the plaintiff to decide only to assert privilege in some tribunals but not in others and particularly should not allow it to do so where it will result in one of the defendants in this action knowing full well the contents of the material which is sought to be disclosed but being unable to rely on it. For this reason as well I have come to the conclusion that the claim for privilege should not be allowed to stand.”
The depositions – Mr Boyle submitted that the depositions were covered by legal professional privilege. They were documents recording information obtained by lawyers from third parties for the purposes of litigation, namely the Interference proceedings. Such documents remained privileged as they have never been made public. Further the privilege, which was originally the privilege of the parties to those proceedings, now ensures for the benefit of the plaintiff as successor in title to the patent rights involved in the Interference proceedings.
Mr Boyle drew to our attention a number of cases in which information obtained by legal advisers for use at contemplated proceedings had been held to be privileged. In Learoyd v Halifax Trust Stock Banking Co (1893) CH 686 shorthand notes of an examination of a witness under Section 27 of the Bankruptcy Act l883 by the solicitors acting for a trustee in bankruptcy so as to enable him to advise the trustee whether to bring an action were held to be privileged. In Southwark and Vauxhall Water Company v Quick (1876) QBD 315 shorthand notes of a conversation taken to obtain information to be furnished to the Company’s solicitor for advice in relation to an intended action were held to be privileged. Accounts prepared by an accountant on the instructions of the plaintiff’s solicitor in an administration action with a view to the prosecution of an action were privileged: see Goldstone v Williams, Deacon & Co (1898) 1 Ch 47. Similarly a transcript of an examination of a witness under Section 561 of the Companies Act l985 was privileged: see Dubai Bank Ltd v Galadari (1990) BCLC 90.
To support the plaintiff’s case, Mr Boyle referred us to the judgment of Falconer J in Procter & Gamble Co v Peaudouce UK Ltd 23 November l984 unreported. In that case the Judge had to decide a large number of issues on discovery. Towards the end of his judgment he came to consider whether depositions produced in proceedings in the USA were privileged. He said:
“It seems to me that judged ‘according to the practice of this Court’ (to use the language of Mr Justice Ormrod in the Duncan case) these depositions must be privileged unless and until they are read in open Court or otherwise made public. As to the responses to interrogatories -answers by one party to questions put by the other – the questions and answers remain private to the parties under the protective order and under the Seal under which they are filed as part of the Draft Pre-Trial Order. Such questions and the responses thereto may never be used in the actual presentation of the case in Court but the questions, as well as the responses thereto, are part of the preparation for trial of their respective cases by the respective parties and, as such, it seems to me are to be regarded by the practice of our Courts, as privileged unless and until they are read in Court or put on the public record of the Court – and that privilege applies to both parties in the Weyerhauser litigation. Weyerhauser’s questions to Proctor & Gamble Company are part of Weyerhauser’s preparation of the case, as Procter & Gamble’s questions to Weyhauser are part of their preparations. Indeed, the depositions of the respective potential witnesses, the responses to interrogatories and the other documents included in the Draft Pre-Trial Order and of which discovery is now sought are really all part of the preparation of their respective cases, on the one case on the one side that of Procter & Gamble Co and on the other side that of Weyhauser Co and the other defendants for use in that litigation and on my judgment, following the reasoning of Ormrod J in In re Duncan 1969 1306 … fall to be considered as privileged by the practice of our Courts.”
Mr Arnold accepted that communications between a party and his legal advisers for the purpose of obtaining legal advice; confidential communications with third parties for the purposes of litigation; documents brought into being for the dominant purpose of enabling a party to obtain legal advice relating to a claim or a potential claim; and documents which if disclosed would disclose the trend of legal advice would be privileged. All the documents considered in the cases cited on behalf of the plaintiff, save for Peaudouce fell within those categories, but the depositions were not of that character. They were transcripts of evidence given in the presence of both parties. In principle, the circumstances in which they were created were the antithesis of that which privilege was created to protect. It follows that the decision of Falconer J in Peaudouce was wrong.
I agree with the submission of Mr Arnold. It is not right to extrapolate the law of privilege from the cases referred to so as to conclude that depositions taken in the presence of both parties to litigation are the subject of legal professional privilege. That becomes clear from the principles upon which discovery and privileged are founded. As Bingham LJ said in Ventouris v Mountain (1991) 3 AER 472 at 476:
“Our system of civil procedure is founded on the rule that the interests of justice are best served if parties to litigation are obliged to disclose and produce for the other party’s inspection all documents in their possession, custody or power relating to the issues in the action. This is not of course a necessary rule but it is firmly established here. It is not however an absolute rule, as exceptions such as legal professional privilege and public interest immunity demonstrate. Nonetheless, disclosure being generally regarded as beneficial, any exception has to be justified as serving the public interest which gives rise to the exception. As Lord Edmund-Davies said in Waugh v British Railways Board (1979) 2 All ER ll69 at ll82, (1980) AC 521 at 543:
‘… we should start from the basis that the public interest is, on balance, best served by rigidly confining within narrow limits the cases where material relevant to litigation may be lawfully withheld. Justice is better served by candour than by suppression. For, as it was put in the Grant v Downs (1976) 135 CLR 674 at 686 majority judgment, “privilege … detracts from the fairness of the trial by denying a party access to relevant documents or at least subjecting him to surprise.”
The exception of legal professional privilege is based upon the recognised need that a party must be able to consult his lawyer and prepare his case in complete confidence. That was recognised in the classic statement of the law by Sir George Jessel MR in Anderson v Bank of British Columbia (1876) 2 CH D 644 at page 649:
“The object and meaning of the rule is this: that as, by reason of the complexity and difficulty of our law, litigation can only be properly conducted by professional men, it is absolutely necessary that a man, in order to prosecute his rights or to defend himself from an improper claim, should have recourse to the assistance of professional lawyers, and it being so absolutely necessary, it is equally necessary, to use a vulgar phrase, that he should be able to make a clean breast of it to the gentleman whom he consults with a view to the prosecution of his claim, or the substantiating his defence against the claim of others; that he should be able to place unrestricted and unbounded confidence in the professional agent, and that the communications he so makes to him and should be kept secret, unless with his consent (for it is his privilege, and not the privilege of the confidential agent), that he should be enabled properly to conduct his litigation. That is the meaning of the rule.
Now, as to the extent of the rule. It goes not merely to a communication made to the professional agent himself by the client directly, it goes to all communications made by the client to the solicitor through intermediate agents, and he is not bound to write letters through the post, or to go himself personally to see the solicitor; he may employ a third person to write the letter, or he may send the letters though a messenger, or he may give a verbal message to a messenger, and ask him to deliver it to the solicitor, with a view to his prosecuting his claim, or of substantiating his defence.
Again, the solicitor’s acts must be protected for the use of the client. The solicitor requires further information, and says, I will obtain it from a third person. That is confidential. It is obtained by him as solicitor for the purpose of the litigation, and it must be protected upon the same ground, otherwise it would be dangerous, if not impossible, to employ a solicitor. You cannot ask him what the information he obtained was. It may be information simply for the purpose of knowing whether he ought to defend or prosecute the action, but it may be also obtained in the shape of collecting evidence for the purpose of such prosecution or defence. All that, therefore, is privileged.
Then the rule goes a step further. The solicitor is not bound any more than the client to do this work himself. He is not bound either to collect information or to collect testimony. He may employ his clerks or other agents to do it for him, and upon the same principle as the information acquired by himself directly is protected, so the information by a clerk or agent employed by him is equally protected. But then the cases go still a step further. Suppose the information required is in a foreign country, where neither the solicitor nor his clerk nor an ordinary agent can obtain it, he may request the client to obtain it himself, and then the information so obtained by the client at the request or under the advice of the solicitor is in a sense obtained by the agent of the solicitor, although it is a very odd way of expressing it. It is turning the client, so to say, into the agent of the solicitor for the purpose of obtaining information; but it is clearly within the rule of privilege. So far as I understand, the cases in equity go no further.”
The depositions for which privilege is claimed do not fall within the rule as explained in Anderson. They are not communications made by a party to his lawyer and they are not part of the confidential preparations by a party of his case. Further, they are not the type of document that it is necessary in the public interest to exclude from the normal rule that justice is best served by disclosure. That public interest must, I believe, be a basic consideration before any decision on privilege is made as Sir Richard Scott VC made clear in Re Barings Plc and Secretary of State for Trade and Industry v Baker (1998) l AER 673. In that case privilege was claimed for reports prepared by solicitors on behalf of administrators in compliance with their duty under S.7 of the Company Directors’ Disqualification Act l986. The Vice-Chancellor held the reports were not privileged as the public interest did not require protection from disclosure. At page 678 he said:
“My initial and uninformed reaction on being told that legal professional privilege was being claimed for this statutory report was one of some incredulity. Despite the sustained and well constructed argument that Miss Gloster has presented and despite the weight of authority that she has cited my sense of incredulity remains. The rules of discovery, which require relevant documents available to one litigant to be made available also to the other litigants, are intended to assist and make more likely the achieving of a just result in litigation. However it is recognised, and established by authority, that in some circumstances a greater public interest will override the right of a litigant to obtain relevant documents from his opponent. One such greater public interest is that individuals should be able to consult their lawyers in the certain knowledge that what they tell their lawyers and the advice they receive from their lawyers, whether orally or in writing, will be immune from compulsory disclosure. Lord Brougham LC in Greenough v Gaskell (1833) l My & K at 103, (1824 – 34) All ER Rep 767 at 770 justified legal professional privilege thus:
‘But it is out of regard to the interests of justice, which cannot be upholden, and to the administration of justice, which cannot go on, without the aid of men skilled in jurisprudence, in the practice of the Courts, and in those matters affecting rights and obligations which form the subject of all judicial proceedings. If the privilege did not exist at all, every one would be thrown upon his own legal resources; deprived of all professional assistance, a man would not venture to consult any skilful person, or would only dare to tell his counsellor half his case.’
The passage I have cited from Lord Brougham LC’s judgment was, together with citations to the same effect from other nineteenth century authorities, cited by Lord Taylor of Gosforth CJ in R v Derby Magistrates’ Court, ex p B (1995) 4 All ER 526 (1996) AC 487. Lord Taylor CJ expressed this conclusion (1995) 4 All ER 526 at 540-541 (l996) AC 487 at 507):
‘The principle which runs through all these cases … is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests.’
It is easy to understand why the ordinary rights of discovery must, in the public interest, give way to the fundamental condition to which Lord Taylor CJ referred.”
The Vice-Chancellor considered the submission that privilege should be afforded to these reports as they were brought into existence for the purpose of litigation, actual, contemplated, or prospective. He said at page 679:
“There is no doubt but that documents brought into existence for the purposes of litigation may constitute a class of documents to which, on authority, legal professional privilege attaches. The reason for extending privilege to this class of documents was explained in Bray on Discovery (1885) page 392:
‘And the ground on which they can acquire privilege is that they cannot be produced without showing what was the view of the professional legal adviser as to his client’s case or the advice which he had given him: they are the materials selected by his mind and represent the result of his professional care and skill …'”
The Vice-Chancellor went on to review the authorities and concluded at page 68l:
“These citations make clear, in my opinion, that documents brought into being by solicitors for the purposes of litigation were afforded privilege because of the light they might cast on the client’s instructions to the solicitor or the solicitor’s advice to the client regarding the conduct of the case or on the client’s prospects. There was no general privilege that attached to documents brought into existence for the purposes of litigation independent of the need to keep inviolate communications between client and legal adviser. If documents for which privilege was sought did not relate in some fashion to communications between client and legal adviser, there was no element of public interest that could override the ordinary rights of discovery and no privilege. So, for example, an unsolicited communication from a third party, a potential witness, about the facts of the case would not, on this view, have been privileged. And why should it be? What public interest is served by according privilege to such a communication? But have the more modern authorities established a different and more extensive principle?”
He answered that question in the negative. Having analysed the speeches in Waugh v British Railways Board (1980) AC 521, he concluded at page 684:
Waugh v British Railways Board established that legal professional privilege could not be claimed for a document unless the sole or dominant purpose for which it had been brought into existence was that it should be used for the purpose of obtaining legal advice or being used by lawyers in possible or probably litigation. But none of the judgments divorced legal professional privilege from its historical connection with and dependence upon the principle that communications between an individual and his lawyers should be immune from compulsory disclosure. Waugh v British Railways Board , like Grant v Downs did not in any way extend the scope of litigation privilege; on the contrary, it limited it. It did so by establishing that it was not enough that a document had been prepared for the purpose of being placed before lawyers for advice, the purpose had to be at least the dominant one.”
No doubt the depositions came into existence for the purposes of litigation and perhaps can be seen as documents obtained for the purpose of preparing for a trial, but that does not mean that they are privileged from disclosure. They came into existence in the presence of both parties for use in the Interference proceedings. It was not in the public interest to prevent them from being disclosed. The claim for privilege therefore fails.
The conclusion that the law does not enable privilege to be claimed to prevent disclosure of these depositions accords with commonsense. It cannot be right, when justice is best achieved by disclosure of documents, to exclude from disclosure these depositions when they are not privileged in the US and privilege has not been claimed in Canada.
The Interrogatories – Mr Arnold accepted that drafts of answers to interrogatories were covered by legal professional privilege, but he submitted that service amounted to waiver and therefore the answers served in the Interference proceedings were no longer privileged.
Mr Boyle submitted that the answers to the interrogatories, when drafted, were plainly privileged. They were made available for the limited purpose of the Interference proceedings and that did not amount to waiver of any rights in other proceedings.
In my view the question of whether or not waiver took place does not arise and does not have any application in this case. No doubt any drafts that were produced were privileged and privilege in those documents has not been waived. However, a document containing answers to interrogatories which is served upon another party is not a privileged document and therefore waiver never occurs. Why is it not privileged? Because it is not a document falling within the class of documents for which legal professional privilege can ever be claimed. The answers may be confidential and restriction may be placed upon disclosure, but the document is no more privileged than is a pleading. The document is not of the type covered by legal professional in that it is not a document within the rules set out in Anderson nor one which public interest requires to be privileged.
Mr Boyle relied on Minnesota Mining & Manufacturing Co v Rennick (UK) Ltd (1991) FSR 97. In that case privilege was claimed for answers to interrogatories administered in ITC proceedings in the US. At page 98, Hoffman J said:
“It seems to me that documents were called into existence for the purposes of the US litigation and prima facie , therefore, would be subject to litigant’s privilege.
That appears to have been the view of Stirling J in Goldstone v Williams, Deacon & Co (1899) l CH 47, where a deposition before an examiner by a defendant in administration proceedings in Australia was held to be subject to such privilege. As the learned judge there points out, it is frequently the case that after such documents have been brought into existence they are produced in open court and, in consequence, because the proceedings in court are public, the privilege is taken to have been waived.
In the Goldstone case, however, the proceedings were compromised before the documents in question had become part of the record and the learned judge, therefore, said:
‘It appears to me that the document in question was never effectually made public, and that the use made of it does not amount to a waiver of the privilege.’
In this case the answers to the interrogatories were always subject to the protective order for the very purpose of ensuring that they did not become public and consequently, in my judgment, the actual use of the documents in the US proceedings did not constitute a waiver of the privilege. That continues to attach and, In re Duncan (1968) page 306, is authority for the proposition that a litigant’s privilege arising in proceedings in a foreign court is also an answer to a claim for production of the document in proceedings in this country.”
The Judge was mistaken in believing that Goldstone v William, Deacon & Co was concerned with proceedings in Australia. He may have had in mind North Australian Territory Company v Goldsborough, Mort & Co (1893) 2 CH 381 in which depositions taken under Section ll5 of the Companies Act 1862 were held to be privileged. Those depositions were taken for the purpose of enabling the liquidator to decide as to the propriety of bringing or continuing an action. Their confidentiality had been protected and therefore they were privileged just as much as any witness statement would be.
In Goldstone accounts were prepared for the plaintiffs’ solicitors in an action brought by the infant children of Mr Goldstone against his wife and her trustee in bankruptcy. An administration order was made and Mrs Goldstone was examined in front of an examiner. Stirling J had to decide in a subsequent action whether the accounts and depositions taken before the Examiner were privileged. It was accepted that the accounts had been privileged, but it was alleged that the privilege had been waived. He held that it had not as they had never been made public. As to the depositions, he held that they were on the file of the Court and could be inspected and therefore were liable to be produced.
I do not believe that the Goldstone case throws any light on the question of whether interrogatories are privileged and the Judge was wrong to rely on it in the 3M case. Further, it is not apparent from the judgment in the 3M case what was the background to the answers to the interrogatories. If the proceedings were similar to Interference proceedings, then this decision was wrong. The fact that documents are kept confidential does not mean that they are privileged. It is the nature of the document which determines whether privilege attaches. Answers to interrogatories supplied by a party do not form part of confidential documents passing between a party and his lawyers nor part of the confidential preparations for contemplated or actual legal proceedings.
In my view the claim for privilege in respect of the answers to the interrogatories fails.
Finally I must express my concern at the course that these appeals took. They were estimated to last one day as that was the time taken before the Judge. It became apparent that it was a gross underestimate as Mr Boyle was by l pm on the first day still opening the appeal on privilege. Counsel must have been aware that the estimate was wrong, but failed to seek directions or produce written submissions so that the time estimate could be kept to. If such inconsiderate behaviour is repeated in patent appeals, it will be necessary to have directions hearings prior to listing.
I agree with Aldous LJ that the appeal against the judge’s order of the 27th January 1998 should be allowed for the reasons given and that the order of the judge of the 10th March 1998 should be upheld for the reasons given.
The First Appeal.
The application which led to the judgment of the 27th January this year was to add allegations of prior use or disclosure as bases of objection to the patent which had not been in the original pleadings. That amendment was contested on the ground that the particulars given did not comply with the requirements of Order 104 Rule 6 of the Rules of the Supreme Court. The particulars required under order 104 Rule 6 are such that the objection to the validity of the patent being made by the party whose pleading it is, clearly defines the issue or issues the party intends to raise. The particulars must enable the other party or parties to know what case is being made against the holder of the patent and what documents the holder of the patent has to disclose relevant to that case.
The task of the judge where there is an application to strike out an allegation of objection to the validity of a patent or to order further and better particulars of such an allegation before discovery, is to determine whether the pleaded objection to the validity of the patent raises a real issue in a way in which the other party knows what he has to meet or whether the particulars pleaded are so broad, vague or ambiguous that that part of the pleading should be struck out or further and better particulars should be ordered prior to discovery, because to allow the pleading to stand and discovery to take put will place the other party in an unfairly difficult position. If the objection is pleaded so that a real issue is raised in a way which makes it clear what case the other party has to meet, the pleaded objection is not to be struck out nor are further and better particulars to be ordered prior to discovery simply because every detail mentioned in Order 104 r. 6 has not been pleaded, because at that time that detail is not known to the pleading party.
The judge has a discretion and I agree with Aldous LJ that in each case it is a question of degree whether the pleading, be it an original pleading or an amendment, is a pleading of a genuine ground of objection to a patent or whether it is what is colloquially called “a fishing expedition”.
The Second Appeal
Legal professional privilege has had two aspects. The first relates to communications between lawyers and their clients whether there is or is not litigation in existence or in contemplation. The justification of this aspect of legal professional privilege was and is that a person must be able to give information and instruction to his lawyers without fear that such information or instruction will later be disclosed to others and that the advice given by lawyers to clients will also be free from disclosure without the client’s consent. The courts consider that the public interest that the person should be able to communicate with his legal advisors in absolute confidence so that he can receive proper legal advice based on the true facts as known to him, prevails over any interest in society or others in seeking disclosure of such communications R -v- The Derby Magistrates’ Court ex parte B [1996] 1 AC 487.
The second aspect of legal professional privilege concerns preparation for litigation both before and after the actual commencement of proceedings. Here any document recording the client’s instructions to his lawyers for the purpose of litigation or his lawyers advice to the client for the same purposes are absolutely protected from disclosure unless the client waives the privilege. Other documents brought into existence for the purpose of the litigation, for example witness statements, expert’s reports were privileged from disclosure unless and until they were brought into the public domain by being used in court. The basis of this aspect of legal professional privilege is that stated by James LJ in Anderson -v- Bank of British Columbia [1876] 2 ChD 644 at 656
“Looking at the dicta and the judgments cited, they might require to be fully considered, but I think they may possibly all be based upon this, which is an intelligible principle, that as you have no right to see your adversary’s brief, you have no right to see that which comes into existence merely as the materials for the brief.”
This principle was adopted by Brett LJ in Southern Water Company -v- Quick [1878] 3 ChD 315 at 320 where having cited the dictum of James LJ, Brett LJ said:
“Now reading that passage with what was said by Mellish, LJ, in the course of the argument, it is clear that if a party seeks to inspect a document which comes into existence merely as the materials for the brief , or that which is equivalent to the brief, then the document cannot be seen, for it is privileged. It has been urged that the materials, or the information obtained for the brief, should have been obtained “at the instance” or “at the request” of the solicitor; but I think it is enough if they come into existence merely as the materials for the brief, and I think that phrase may be enlarged into “merely for the purpose of being laid before the solicitor for his advice or his consideration.””
The fact that a document had come into existence at a hearing, being a transcript of notes of a witness’s evidence did not necessarily place that document outside the scope of legal professional privilege. Thus the transcript of an examination of witnesses under s. 27 of the Bankruptcy Act 1883, upon the application of the Trustee in Bankruptcy with the view to enabling his solicitor to advise him whether an action should be brought with reference to the bankrupts affairs was entitled to privilege, see Learoyd -v- Halifax Joint Stock Banking Company [1893] 1 Ch 686. This privilege extends to documents brought into existence for the purposes of litigation in a foreign jurisdiction, see Re Duncan [1968] P 306.
Since 1968 the approach of the courts to the second aspect of legal professional privilege has altered. An important impetus to this new approach was the decision of the House of Lords in Waugh -v- British Railways Board [1980] AC 521 where their Lordships held that a document such as an internal inquiry report into an accident which was contemporary and contained statements by witnesses on the spot and which would almost certainly be the best evidence as to the cause of the accident should be disclosed, as the due administration of justice strongly required, unless the report had been prepared for the purpose of submission to the party’s legal advisors in anticipation of litigation and that had been the dominant purpose for which it had been prepared. In his speech at page 543 C, Lord Edmund Davies said:
“And in my judgment we should start from the basis that the public interest is, on balance, best served by rigidly confining within narrow limits the cases when material relevant to litigation may be lawfully withheld. Justice is better served by candour than by suppression. For as it was put in the Grant -v- Downs majority judgment, at page 686 “….the privilege…. detracts from the fairness of the trial by denying a party access to relevant documents or at least subjecting him to surprise.”
Since then in order to avoid a party being subjected to surprise, the Rules of the Supreme Court have been altered to provide for the exchange of witness statements and expert reports. It is true that under Order 38 Rule 2 A of the Rules of the Supreme Court only the statements of the oral evidence which the party intends to adduce at the hearing have to be exchanged. Order 38 Rule 36 places restrictions on the adducing of expert evidence and it is now unusual for expert evidence to be given in a trial unless the substance of the evidence has been disclosed in the form of a written report or reports to the other parties to the litigation.
This more open approach to litigation has been confirmed in more recent decisions such as that of this court in Ventouris -v- Mountain [1991] 1 WLR 607 at 611 H in a passage cited by Aldous LJ in his judgment and in the judgment of the Vice-Chancellor Sir Richard Scott in Re Barings plc & Secretary of State for Trade and Industry -v- Baker [1998] 1 All ER 673.
The view of the judges in the Victorian cases that a party to litigation is not entitled to know the contents of his opponent’s brief and is not entitled to know before the hearing how his opponent proposes to establish his case or attack the first party’s case is no longer thought to be the proper approach to litigation. This change of view must inform the approach of any court to questions such as those which arise in this second appeal.
Turning first to the interrogatories; those were not privileged in my judgment, because they came into existence not as part of the preparation of the interrogated party’s case but by reason of an order of the court that certain relevant information should be made available to the interrogating party. The answers are not brought into existence to enable the interrogated party to inform his lawyers of relevant facts nor for the interrogated party to obtain legal advice from his lawyers. I agree with Aldous LJ that answers to interrogatories, by which I refer to the answers served and not to answers in draft are never a privileged document.
The transcripts of the depositions taken for the purpose of the US Interference Proceedings I have found more difficult. I accept that these depositions did not enter the public domain in the United States proceedings, because those proceedings were settled before the depositions were used in open court. I would further accept that if those depositions were covered by legal professional privilege as documents prepared by a party for the purposes of litigation that that privilege had not been waived.
Again, in my judgment, the correct analysis is that these depositions being taken in the presence of the other party to the litigation and his lawyers and with the intention that both, or if there were more than two parties, all parties should have the depositions as records of the evidence given by a party or witness on the occasion that the depositions were taken, were never privileged documents. It may well be that such documents would be the subject of an undertaking to the American court by the parties to the American proceedings not to use them for any purpose other than in those proceedings. Such an undertaking would be enforceable by the American court against the parties who gave it, either expressly or by implication. Such an undertaking could not bind the respondents to the Second Appeal because they were not parties to the American proceedings. Nor will the existence of such an undertaking confer litigation privilege on those depositions under our law.
I too would dismiss the appeal against the judge’s ruling of the 10th March 1998 that these depositions do not come within the scope of litigation privilege.
Order: lst appeal (27.1.98) allowed: 2nd appeal (10.3.98) dismissed.
Costs awarded to First Defendants of both appeals. (Does not form part of approved judgment)