Before: The Hon. Mr. Justice Jacob
 
 

B E T W E E N

JUDGMENT
 
DATED: 28 April, 1997

Mr. Justice Moses:

Union Carbide sue BP Chemicals for infringement of two patents. The alleged infringement consists solely of the carrying out of the processes covered by those two patents. BP carry out two processes. They were originally sued on what is called the Mark 1. They changed to an alternative called the Mark 2. Both processes are said to infringe. The action is due to come on for trial in late June this year, having been running since September 1994.

Union Carbide apply for leave to amend their statement of claim to add what they describe as a "new cause of action". They do so by a proposed paragraph 4 which reads as follows:

An order for delivery up or (at the Plaintiff's option) the destruction upon oath of any patented product in relation to which the said patents or either of them is infringed or any article in which such product is inextricably comprised, in the possession power or custody of the Defendant.

They also seek to amend the relief claimed by paragraph 2, which reads as follows:

An injunction to restrain the Defendant, whether acting by its directors, officers, servants, agents or otherwise howsoever from unjustly enriching itself by licensing to any third parties any process or information the development or generation of which was enabled wholly or in part by the infringement of either or both of the said patents.

There was a further claim for a "mandatory injunction requiring the defendant forthwith to take all practical steps to terminate any licence by reason of which the defendant has been unjustly enriched as aforesaid." Some of the difficulties of that were set out in the defendants' solicitor's affidavit. The plaintiffs thought better of that so no application is made to amend the claim for relief for a mandatory injunction.

There was also a claim for "an inquiry into damages, or the plaintiffs' option an account of profit due to unjust enrichment." That is superadded to the existing claim for damages for infringement or the plaintiffs' option for an account of profits.

Before me the case has been argued on three bases. First, the defendants say that this cause of action does not exist in law and cannot reasonably be said to exist and on the usual principles therefore the amendment ought not to be allowed. Secondly, they say so far as the trial is concerned it is quite impossible for all the matters involved in this short plea to be gone into by the time of trial. Thirdly, they say the plea is ambiguous.

So far as the time of trial is concerned the plaintiffs accept that it is not possible to go into all the activities by way of licensing of the defendants' process and do justice in June. They suggest in the alternative that the question of an injunction to restrain this alleged unjust infringement could be dealt with at any subsequent inquiry if either of the patents are found to be valid and infringed by one or other process.

First then: does the plea support a cause of action? Mr Thorley suggests that independently of the law of infringement the law also recognises a cause of action — and he firmly puts it as a cause of action relating to unjust enrichment. He took me to a number of passages in the leading work on restitution, Goff & Jones (1993 ed). It is not necessary to go to all the passages he cited. The best passage from his point of view is perhaps at page 721 where the authors state as follows:

In our view English courts should adopt a similar principle: namely, if it can be demonstrated that a tortfeasor has gained a benefit and that benefit would not have been gained but for the tort, he should be required to make restitution.

"Here", said Mr Thorley: "assume the defendants have infringed the patents. They have created a lot of data about how their process works and they have established to the outside world that the process can be carried out and they are, and have been, in an excellent position to license their process to third parties, probably not in this country, but abroad. They have in fact licensed their process. They therefore used the patented process to gain profits for themselves, a benefit. That benefit would not have been gained but for the infringement and therefore they should be required to make restitution."

Mr Thorley reinforces his argument by reference to a number of cases. He principally relies on the Spycatcher case: A-G v Guardian Newspapers (No 2) [1990] 1 AC 109. That was a case in breach of confidence and the Attorney-General's difficulty was that the subject-matter of the alleged breach of confidence had been widely published as a result of Mr Wright's activities. It made no real sense to grant an injunction to restrain breach of confidence as such. The information was well in the public domain.

Lord Goff, however, considered another possible remedy or cause of action. He said at pages 288E to G:

I have considered whether the confidant who, in breach of duty, places confidential information in the public domain, might remain at least under a duty thereafter not to exploit the information, so disclosed, for his own benefit. Suppose that the confidant in question is a man who, unwisely, has remained in this country, and has written a book containing confidential information and has disposed of the rights to publication to an American publishing house, whose publication results in the information in the book entering the public domain. The question might at least arise whether he is free thereafter to dispose of the film rights to the book. To me, however, it is doubtful whether the answer to this question lies in artificially prolonging the duty of confidence in information which is no longer confidential. Indeed, there is some ground for saying that the true answer is that the copyright in the book, including the film rights, are held by him on constructive trust for the confider — so that the remedy lies not in breach of confidence, but in restitution or in property, whichever way you care to look at it.

Mr Thorley says that just as Lord Goff suggested there might have been in that case something like a cause of action for restitution, or a constructive trust, so there is here in respect of the data generated by BP in the course of their infringing activities (activities, of course, which I assume to be infringing for the sake of the present decision).

Mr Thorley also, although less strongly, relies upon a decision of the Court of Appeal which has not been much referred to since it came out in 1914. The case is of Chappell & Co, Limited v. Columbia Graphophone Company [1914] 2 Ch 745. In that case the plaintiff, a copyright owner by assignment, did not have rights which extended to the manufacture of gramophone records of music of which he was the copyright owner. Owing to the complications of the transitional provisions, that particular right, introduced for the first time in 1911, remained vested in the author, the composer of the music. What the defendant did by way of infringement was to make one copy of the sheet music, probably in the form for an arrangement for an orchestra. The orchestra had performed from the infringing sheet music to produce the gramophone record. The court ordered delivery up of the gramophone records which were not themselves infringing copies of the plaintiff's copyright. There was probably no question of infringement of the author's copyright either because the defendant had made a composition with him.

Lord Cozens-Hardy, Master of the Rolls, was brief as to the remedy. He said:

I think the authorities which have been cited justify us in saying that this is a case in which things have been produced by the use of the infringing copy, and it is a case in which it is right to hand over those, including the matrix and the records which have been made, for destruction.

Kennedy LJ said:

With regard to the remedy, I should be sorry to suppose that in this, which is practically an action of tort, it could have been successfully argued that all the damage the plaintiffs were entitled to was the damage up to the date of the bringing of this action, by reason simply of the defendants having infringed their copyright with regard to the musical score, so that the defendants could reap all the proceeds of their wrong-doing by the further sale of the records. That is putting it, perhaps, more strongly than the learned counsel put it, and in justice to him I should add that he said that if there was any claim for damages let it be a claim for damages. It seems to me that on the authority which has been cited, which is not a direct authority but a good authority by analogy, as to the form of judgment, the order that was made by my brother Neville was quite right. The appellants cannot be allowed, having done this thing, to retain the benefit, and the Court has the power to take care that that which has been created by the infringement shall cease to exist in derogation of the rights in law unquestionably possessed by the plaintiffs.

Swinfen Eady LJ said:

Then with regard to the relief, the power of the Court clearly extends to ordering, to be delivered up for destruction all articles created in violation of the plaintiffs rights. The order for delivery up for destruction is not based upon any notion that the property has passed to the plaintiffs. Whether the property has passed to the plaintiffs or not, the articles may be ordered to be delivered up for destruction, because they are articles manufactured in violation of the plaintiffs' rights, and there is general jurisdiction in the Court to order such articles to be destroyed.

Chappell puts the question of any injunction as by way of delivery up as essentially one of remedy. Mr Thorley, as I say, goes much further. He says that there is a cause of action of unjust enrichment.

I turn to what Mr Young says on behalf of the defendants. He begins with the Patents Act. "After all", he says, "this is a patents action at the moment." He says that Parliament has essentially spelled out the remedies for infringement of patents in section 61 and what constitutes an infringement in section 60(1). Beginning first of all with what constitutes an infringement in relation to processes, he says that section 60(1) provides as follows:

Subject to the provisions of this section, a person infringes a patent for an invention if, but only if, while the patent is in force, he does any of the following things in the United Kingdom in relation to the invention without the consent of the proprietor of the patent, that is to say —

(b) where the invention is a process, he uses the process or he offers it for use in the United Kingdom when he knows, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent.

He drew my attention to the limitation which is explicit in our Act — "if, but only if", that limitation is not to be found in the Community Patent Convention, Art 25, from which our section 60(1) is derived. I do not think that the words "if, but only if", add anything nor do I think they are critical to Mr Young's argument. When one is construing the Patents Act 1977, one must bear in mind that may be provisions are derived from international treaties, and intended to implement those treaties. If one finds language which is only in our Act, it is unlikely to have any added significance beyond that of the corresponding international treaty.

Mr Young's point remains the same. The Act makes an infringement use of a process in the United Kingdom or offering it in the United Kingdom. Here he says is a complaint that his clients have been offering abroad a process which either constitutes an infringement if carried out here or is derived from something which would constitute an infringement if carried out here. "That is not contemplated by the Act", says Mr Young. "How can that possibly be within the scope of any remedy contemplated by Parliament for patent infringement?"

Then says Mr Young "let us look at the remedies provided for in section 61(1)":

Subject to the following provisions of this Part of this Act, civil proceedings may be brought in the court by the proprietor of a patent in respect of any act alleged to infringe the patent and (without prejudice to any other jurisdiction of the court) in those proceedings a claim may be made —

(a) for an injunction or interdict restraining the defendant or defender from any apprehended acts of infringement.

"There," says Mr Young, "that is the limit of it. That is what Parliament has contemplated — just an injunction to restrain infringement. In relation to an infringing process, all that can be restrained is the carrying out of the process or offering the process for use in the United Kingdom."

"Likewise", says Mr Young, "sub-paragraph (d) of the Act refers to an account of profits derived by the defendant from the infringement." "Well", says Mr Young, "any derivation and exploitation of information from the carrying out of a process might be regarded as a profit." I interpolate that Mr Young makes no concession that is so, and there must plainly be limits as to how far one can goon what is a derivation. So, Mr Young says "that is what Parliament has set out as the remedy for the use of a process. It would be passing strange if Parliament, having set all that out, had contemplated that there could be this extra cause of action derived and founded on (as it must be) infringement which is not mentioned anywhere in the Act."

I think Mr Young is right. The Patents Act goes a long way to setting out the remedies available to a patentee. It sets out the purpose of the patent, monopoly period for a certain period and what must not be done by way of infringement of that monopoly. I do not think that Parliament began to contemplate the kind of wide-ranging cause of action which Mr Thorley suggests, nor do I find anywhere in Goff & Jones anything which supports anything as strong as that. Yes, if you take a passage out of context you can see that it might lead on to what Mr Thorley suggests, but in my judgment it cannot be that the law of restitution can supplement the law of patents to the extent suggested.

Mr Young went on to say that the Act was the complete code so far as remedy. I am not sure that is so. I was referred to three cases, all of which were concerned not with cause of action but remedy for infringement, a point which was not really pushed by Mr Thorley. They are all cases where a remedy was given beyond the actual infringement.

The first of those is an old English case Crossley v. The Derby Gas Light Company (1834) 4 LT Ch 25. The Lord Chancellor said:

This case is very peculiar. It is distinguishable from all other cases in the book. It appears that the plaintiff obtained his patent on 9^th December 1815 and that on 28^th November 1829, only a few days before the patent expired, he filed his bill. It was objected that the court would not interfere just on the eve of the expiration of a patent and grant an injunction which would only last a week. The point has never yet been decided, but I am of the opinion that the Court would interfere even after a patent has expired to restrain the sale of articles manufactured previous to its expiration in infringement of a patent product. The party would not be allowed to prepare for an expiration of a patent by illegally manufacturing articles and permitting the articles for expiration to deluge the market with the produce of his piracy. Thus reaping the reward of his improbus labour in making it. The Court would, I say, in such cases restrain from selling them even after expiration of the patent.

Likewise, in Holland there has been a recent case where the defendants obtained authorisation to market their medicinal product by generating information from a little bit of infringement which had been carried out before the patent expired. (Actually the infringement had been carried out by the defendants' predecessor in title. That did not matter as far as the Dutch court is concerned because the defendants knew perfectly well that the data which had been derived from this little bit of infringement had been derived in breach of the patent.) It is the case of Smith Kline & French Laboratories Ltd v. Generics. The court of first instance, the Court of Appeal and the Dutch Supreme Court all decided that an injunction should be granted to restrain the use of any of the information which had been obtained in breach of the patent.

There is a reference pending to the European Court of Justice. Advocate-General Jacobs could see no objection in Community law to that kind of injunction. He has pointed out that the most appropriate remedy in a particular case concerning the infringement of a national law should, as a matter of general principle, be for the national court (paragraph 63). (The judgment of the European Court of Justice is now reported at [1997] RPC 801 sub nom Generics BV v. Smith Kline & French Laboratories Ltd.)

The third case went the other way in South Africa. There data generated during the life of the patent by infringement of the patent was held untouchable by the courts. After expiry of the patent the South African court took the view that once the patent had expired there could be no remedy for what goes on after that expiry. It did so in Chesebrough-Ponds (Pty) Ltd v. Monsanto Co 1988 (1) SA 805.

I think there may be cases where the strict rights as set out in section 61 of the Patents Act do not limit what the court can do in furtherance of the policy of the Patents Act. The Dutch case is an example of "jumping the gun". By infringement the generation of the data enabled the defendants to be in a position to market the day the patent expired in a way which would not have happened if the patent monopoly had been observed. The court in granting an injunction, as the Dutch court did, for a limited period put the defendants back to where they would have been if they had applied for authorisation and set about generating data the day the patent expired. The court was furthering the policy of the Patents Act that there should be a monopoly of the set term.

That is quite different from what is here sought by the plaintiffs where they want not only what is set out by the Act by way of remedies for infringement, but also on extensions of them in a whole host of different directions. The injunction they seek would cover acts not in this country. The injunction they seek would cover processes not covered by the patent. None of these things were contemplated by Parliament and I cannot think that it furthers the policy of the Act for this wholly novel alleged cause of action to exist and I do not think it does.

I have considered whether the alternative way of putting it, namely a form of relief for infringement, and no more than that, should exist, as in Chappell v. Columbia. Mr Thorley did not push it very hard. I have very considerable doubts as to whether the court will ever grant the kind of relief that is sought here in its discretion when the data concerned is essentially novel data generated by the defendants. It is not the same sort of data as in the Smith Kline & French case, which is essentially no more than marketing data and by and large reproducing the data already existing in relation to this particular medicinal product. As I say, Mr Thorley did not push this as part of the relief.

Mr Young did say that Parliament has set out all the consequential relief. It is an account of profits or nothing. As I say, I think in very limited cases that may not be so. But I am firmly sure that is the position in relation to data that just happens to be generated by carrying out a process. Data is generated when all processes are carried out and the claims here would be far reaching indeed. I therefore decline to allow the amendment on the first ground argued by Mr Young.

I also think that I should decline to grant relief on the second ground, namely that the pleading as it stands is ambiguous. All it says is that the defendant has developed the processes complained of and has generated information which is of value. Then it goes on to say: "Without [i.e. 'for but'] such acts [i.e. of infringement] the defendant would not have been able to develop the process and generate the information." Any information which was obtained via the infringement, however remote, would come within this language.

Nearly always in the law of torts "but for" is an insufficient pleading. As I observed in Gerber Garment Technology Ltd v. Lectra Systems Ltd [1995] RPC 383 if it were otherwise Adam and Eve would have a lot to answer for. No limit is put as to any information which is sought to be covered by the unjust enrichment claim and no limit is put in relation to the injunction that is sought. The injunction which is sought relates to "information, the development or the generation of which was enabled wholly or in part by the infringement or either or both of the said patents." "Enabled wholly or in part" is extremely wide. It would in practice mean that anything that BP sought to license would, or might, be caught by this injunction. Curiously, the injunction sought does not include, as it might well have done on Mr Thorley's argument, a claim to stop BP from carrying out acts which did not infringe the patent, but which had only been possible because they had learned a few things when they were infringing. The more one tries to think of examples that might fit this plea, the more one realises that it covers all sorts of potential activities and is just too wide on the grounds of remoteness.

Finally, I come to the question of discretion. As I say it is really common ground that it cannot be tried with the infringement action. Mr Thorley suggested that it should be tried at the same time as the inquiry as to damages. I do not think that would be right in the circumstances of this case. The complaint about the licensing has been going on now since early on in the action. Originally, the plaintiffs wanted to say that the licensing itself constituted an infringement within section 60(1)(e). They applied for an amendment, BP objected and that application was not pursued. Next a pleading was put in saying that this would all be collectable by way of damages or an account of profits in the subsequent inquiry. That remained the position until February 27 this year. Now they want to put it in by way of a claim for an injunction. I do not think it would be fair or just for this new claim for an injunction to be left hanging in the air for such a long time. They had their opportunity to put this in originally. They knew what the point was and I do not think it would be appropriate in this action to allow the amendment to come in at any stage.

I therefore dismiss the application.