SmithKline Beecham Biologicals SA v Connaught Laboratories Inc

Under Order 24, rule 14A, the implied undertaking restricting the use of compulsorily disclosed documents ends, unless the court orders otherwise, where the documents have been read to or by the court or referred to in open court. In modern proceedings, actual reading aloud is unnecessary. Material pre-read by the judge may be treated as referred to in open court where it underpins public submissions or the judge’s public judicial decision.

Pre-reading alone is insufficient where a case ends without a judicial determination based on the material. A confidentiality agreement is relevant to the discretion to preserve the undertaking, but will not ordinarily amount to a special reason where there are no genuine secrets or need for a private hearing and open justice favours disclosure.

SmithKline Beecham Biologicals SA petitioned to revoke Connaught’s patent. Shortly before trial, Connaught offered to surrender the patent. Laddie J nevertheless revoked it after reading the pleaded case and trial material, including documents disclosed by Connaught.

SmithKline later sought a declaration that it could use four categories of disclosed documents in overseas opposition proceedings. Laddie J held that the material had not been read to or by the court, or referred to, in open court for the purposes of Order 24, rule 14A, and refused both the declaration and permission to use the documents.

The appeal concerned whether the judge’s public revocation decision, based on extensive pre-reading and expressed compendiously, had brought the relevant documents within the rule.

1. Appeal allowed. The documents in categories A, B, C and D had been referred to in open court within Order 24, rule 14A. SmithKline was therefore no longer bound by the implied undertaking restricting their use, and no contrary order would be made.

2. The court followed Derby v Weldon (No 2). A document need not be read aloud in court to fall within the rule. Modern practice permits judges to pre-read material and counsel to present submissions through skeleton arguments and concise oral references. If that material is incorporated into the public hearing and forms the basis of the judicial decision, it is treated as having been referred to in open court.

3. Pre-reading by itself does not release the undertaking. Had SmithKline accepted surrender and the petition been disposed of by consent, there would have been no public reference to the documents. Here, however, Laddie J made a judicial decision to revoke. Under section 72 of the Patents Act 1977, he could do so only if satisfied that one or more pleaded grounds was made out. His public statement that the petition was well founded on anticipation, obviousness and insufficiency was a compendious reference to the material he had read and relied upon.

4. The court rejected Connaught’s alternative request for a special order preserving confidentiality. The parties’ confidentiality agreement was relevant but not decisive. There were no trade secrets or genuinely secret information, and no suggestion that a full hearing would have required a private sitting. The public interest in understanding why a patent was held invalid, together with open justice and Article 10 considerations, outweighed Connaught’s wish to control later use of the documents.

5. The court added that increasing reliance on pre-reading creates a tension between efficiency and open justice. In an appropriate case, fuller oral explanation, access to documents with safeguards, and a coherent public judgment may be needed to ensure that justice is intelligible in practice.

• Court of Appeal (Civil Division): Allowed SmithKline’s appeal and held that the four document categories fell within Order 24, rule 14A.
• High Court, Chancery Division, Patents Court (Laddie J): By a reserved judgment dated 30 October 1998, refused a declaration that the documents had been read to or by the court, or referred to, in open court, and refused permission for their use in overseas proceedings.