For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Tuesday, 11 April 2006

BALL-GRAB BUT NO FISHING TRIP


Ball-grab but no fishing trip

Here's another triumph for wonderful website BAILII (which, incidentally, managed to get a crisp, clean corrected version of Baigent & Leigh v Random House, the Da Vinci Code case, out online at 2pm last Friday) - it's BSW Ltd v Balltec Ltd, [2006] EWHC 822 (Ch), a Patents Court decision today from Mr Justice Patten.

BSW made and sold ball-grab tools and mooring connectors for anchoring oil rigs. Its shareholders, Emmett and Walmsley, agreed to sell a majority shareholding in BSW to a company owned and controlled by Suttie. After Walmsley retired from the business, Emmett resigned as a director of BSW. Shortly after Emmet resigned as a BSW director, Balltec was incorporated, Emmett being both a director and a shareholder. Balltec began trading in direct competition with BSW in September 2004.

BSW, alleging that Balltec infringed its design right and copyright, and that Emmett acted in breach of his fiduciary duty to BSW, applied for pre-action disclosure of various documents under rule 31.16(3) of the Civil Procedure Rules:

"The court may make an order under this rule only where (a) the respondent is likely to be a party to subsequent proceedings; (b) the applicant is also likely to be a party to those proceedings; (c) if proceedings had started, the respondent’s duty by way of standard disclosure, set out in rule 31.6, would extend to the documents or classes of documents of which the applicant seeks disclosure; (d) disclosure before proceedings have started is desirable in order to (i) dispose fairly of the anticipated proceedings; (ii) assist the dispute to be resolved without proceedings; or (iii) save costs".
The application for disclosure was made on the basis that the design and other drawings relating to Balltec’s 2004 product range would reveal whether there was any substance in its belief that the designs either originated from work carried out before July 2004 or involved the use of BSW’s own designs and design drawings.

Balltec objected to discovery, contending that BSW’s evidence did not establish what rights, if any, were infringed. Nor was there any evidence to support any arguable action for infringement or for breach of fiduciary duty. According to Balltec this was a fishing expedition, based on nothing more than speculation, and there was no real foundation even for BSW’s alleged fears.

The question arose as to whether and when a potential claimant, being unable to establish its case on the available evidence, might invoke the powers of the court under CPR 31.16 in order to discover whether it did in fact have a good cause of action.

Patten J dismissed the applications for disclosure.
* to let rule 31.16 to become a means of examining a competitor’s otherwise secret designs on the basis that some kind of infringement might have taken place was not permissible unless (i) there was at least a clear and convincing evidential basis for the belief that acts of infringement might have taken place and the (ii) court could be satisfied that the pre-action disclosure sought was highly focused. Otherwise the potential for abuse was obvious.

* To say that one could establish the usual confidentiality club was not an answer in itself to the objection that there was no basis for being required to offer up the confidential material in the first place.

* the judge doubted that the real objection to the grant of discovery could be overcome by re-writing the rule so as to introduce a quite different procedure designed to allow the court, through an expert, to look at the documents to see whether they were potentially incriminating before deciding on whether to make the order actually sought. The court had no power to do that.

* this was a speculative claim in which BSW had based its apparent concerns on uncorroborated statements of impression and a theory about the time taken to design the tools which was unsubstantiated by reference to the evidence of any experienced designers in the field.
The IPKat thinks Patten J has got it just right. BSW can still sue, inviting the court to conclude that, given the similarities of Balltec’s products to BSW’s and the short lead-in time for developing them, copyright might be inferred - even in the absence of discovery. Merpel says, the idea of letting an expert determine the status of documents sought in discovery is quite appealing. Even though rule 31.16 doesn't provide for it, it might be a good idea to give judges this option - so long as they can't use it in situations where it wouldn't be appropriate.

BSW wins Queen's Award for ball-grabs here
More on Balltec here
Famous ball grab here (adult content, unless you're a soccer fan)

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