MMI Research Ltd v Cellxion Ltd & Ors

In patent proceedings, failure to comply perfectly with the pleading requirements for invalidity does not automatically prevent disclosure. The court must distinguish a genuine, sufficiently intelligible invalidity case from a fishing expedition. Where the pleading raises a real issue and identifies the alleged disclosure sufficiently to define the area of inquiry, further particulars may properly follow disclosure.

Disclosure must remain proportionate and focused on the pleaded issues. The patent practice direction modifies standard disclosure but does not remove the court’s power to order specific disclosure. A party that consents to a disclosure order without objecting to the pleading must comply by reference to the pleading as it stands, although the court retains discretion when making a later order.

The claimant brought patent infringement proceedings against the first to fourth defendants. They counterclaimed for revocation on grounds of lack of novelty and obviousness. The fifth defendant was a joint proprietor of the patent, but did not intend to defend the counterclaim.

The first to fourth defendants sought an order debarring the fifth defendant from contesting the counterclaim and sought further disclosure concerning alleged prior disclosures and uses of the patent-related products. The central issues were whether the fifth defendant’s failure to serve a defence affected its disclosure obligations, whether the pleaded grounds were sufficiently particularised to support disclosure, and what disclosure was reasonable and proportionate.

1. Default and participation. Because the revocation counterclaim could not be determined separately against the fifth defendant, CPR 12.8(2)(b) prevented entry of default judgment against it alone. Nevertheless, its unequivocal decision not to defend justified an order debarring it from adducing evidence or calling witnesses contesting the allegations in the counterclaim.
2. Continuing disclosure obligation. The fifth defendant’s failure to defend did not remove its ordinary disclosure obligations. Issues concerning its prior disclosures remained live between the claimant and the first to fourth defendants. Standard disclosure was therefore directed by CPR 31.6, the duty to search under CPR 31.7, and the disclosure-statement requirements in CPR 31.10.
3. Pleading and disclosure. The special patent provisions required real efforts to provide particulars, but were a counsel of perfection rather than an automatic strike-out rule. Following Visx Inc. v Nidex Co. [1999] F.S.R. 91, the court had to decide whether the pleading raised a real issue in a way that made clear what the opposing party had to meet, or was so broad, vague or ambiguous that disclosure would amount to fishing. The pleaded allegations concerning specific conferences, police use and sales raised a genuine issue and supported further disclosure, even though some required particulars had not yet been given.
4. Scope and proportionality. The disclosure window could be extended beyond the four-year period in the practice direction where necessary to address the pleaded allegations. Disclosure was confined to proportionate categories, including relevant sales records, marketing material, promotional material and dealings with identified governments. No disclosure was ordered at that stage concerning wider design and manufacturing documents for novelty; such material was secondary evidence and required careful control in the obviousness issue.
5. Consent order. A consent order for disclosure, made without objection to the pleading, operated by reference to the pleading as it stood. The court nevertheless retained discretion, when considering a later application, to reduce or reinforce the required disclosure in the light of the principles governing patent disclosure.

Orders were made accordingly, subject to further argument on the precise scope of some disclosure.