Eli Lilly & Company Ltd. v Neopharma Ltd & Anor

The court may order disclosure of customer identities in support of proceedings against alleged patent infringers where there is an arguable wrong, disclosure is needed to enable proceedings against the ultimate wrongdoers, and the respondent is mixed up in the wrongdoing and can provide the information.

Those conditions establish jurisdiction, but disclosure remains discretionary. The court must balance the claimant’s need for protection against the respondent’s confidentiality and commercial interests, approaching the application with caution and by reference to irreparable damage and the balance of convenience. The jurisdiction is not confined to cases where disclosure will itself establish the pleaded liability case.

Eli Lilly, proprietor of a patent covering olanzapine, applied for disclosure of the names and addresses of customers to whom Neolab had supplied generic olanzapine. The application followed interim injunction proceedings before Floyd J, at which the defendants gave undertakings substantially restraining further infringement.

Neolab resisted disclosure on grounds including confidentiality, lack of utility for establishing liability, and the alleged weakness of the patent. The application was determined as an exercise of the Norwich Pharmacal jurisdiction, with the central questions being whether its threshold requirements were met and whether disclosure was justified in the exercise of the court’s discretion.

1. Jurisdiction. The court had power to order disclosure where an ultimate wrongdoer had arguably committed a wrong, the order was needed to enable proceedings against that person, and the respondent was mixed up in the wrongdoing and able or likely to be able to provide the necessary information. Those requirements were satisfied. The jurisdiction was not limited to cases where the information would assist the claimant in proving its pleaded liability case. See Mitsui & Co Ltd v Nexen Petroleum UK Ltd [2005] EWHC 625 (Ch), Norwich Pharmacal v Customs & Excise Commissioners [1974] AC 133 and Carlton Film Distributors Ltd v VCI Plc [2003] EWHC 616.
2. Discretion. The existence of jurisdiction did not determine whether disclosure should be ordered. Customer identities warranted particular caution, but the court had to balance the parties’ interests. The approach was analogous to that used on an application for an interim injunction, including consideration of irreparable damage and the balance of convenience. The principles in Carver v Pinto Leite (1871) 7 L.R. Ch. App. 90 and Sega v Alca Electronics [1982] FSR 516 were applied.
3. Application. Both sides established potential irreparable damage. Eli Lilly’s evidence showed a real risk of substantial, unquantifiable damage through lost sales, price depression and increased generic competition if customers continued selling the product. Neolab’s confidentiality and reputational concerns were less weighty, particularly because it had launched while undertakings were being sought, had given undertakings when sued, and had failed to explain misleading pre-action correspondence.
4. The court would not assume that the stock supplied to customers was limited when Neolab had withheld evidence of its quantity and sale price. The balance of convenience therefore favoured disclosure. The application was granted.

This was a first-instance application. The judgment records that the interim injunction proceedings had previously come before Floyd J on 20 February 2008, when the defendants gave undertakings and the disclosure application was adjourned for determination.