Danisco A/S v Novozymes A/S

The Patents Court’s discretion to stay domestic validity proceedings pending parallel EPO proceedings is broad and must achieve justice on all relevant circumstances. The most important consideration will usually be the time required to obtain meaningful commercial certainty. A stay should ordinarily be refused where the national proceedings are likely to provide certainty materially sooner, particularly where an English trial can investigate technical evidence through disclosure and cross-examination.

Permission to use disclosed documents in foreign proceedings under CPR rule 31.22 requires a case-specific assessment of the interests of justice. Special circumstances must be shown. Where the documents raise disputed technical issues best investigated at an imminent English trial, permission may properly be refused.

Danisco sought revocation of Novozymes’ European patent concerning salt-coated enzyme granules for animal feed. Parallel validity and infringement proceedings were pending in several European jurisdictions and before the EPO. The EPO Opposition Division had revoked the patent, and Novozymes had appealed to the Technical Board of Appeal.

After Danisco’s expert died, the English trial was adjourned. Danisco applied to stay the proceedings until the EPO appeal and sought permission under CPR rule 31.22(1)(b) to use disclosed documents in foreign proceedings. The central issues were whether the balance of justice favoured a stay and whether special circumstances justified collateral use of the documents.

1. Stay application refused. The court applied the guidance in Glaxo Group Ltd v Genentech Inc [2008] EWCA Civ 23, [2008] FSR 18. The discretion is very wide, but must be exercised to achieve the balance of justice having regard to all relevant circumstances.

2. The likely duration of the stay and the time needed to achieve commercial certainty ordinarily carry particular weight. The EPO hearing was imminent and a stay might save costs, but the English proceedings could reach trial and judgment earlier. Novozymes’ commercial objective, the parties’ failure to offer undertakings, the extent to which the proceedings had already been pursued, Danisco’s delay, and the value of an English judgment in resolving technical issues all favoured refusal.

3. Uncertainty arising from auxiliary requests before the EPO did not justify a stay. Novozymes had not applied to amend the patent in England. Any amendment application could be addressed through case management, and Novozymes would bear the consequences of failing to raise claims relevant to the English trial.

4. The late infringement counterclaim was principally a case-management matter. It did not require a stay of the revocation claim, although directions should minimise prejudice to Danisco.

5. Permission to use documents refused. Under CPR rule 31.22(1)(b), collateral use requires the court’s permission. The governing consideration is the interests of justice, assessed on the individual facts, applying the principles discussed in Cobra Golf Inc v Rata [1996] FSR 819 and SmithKline Beecham plc v Generics (UK) Ltd [2003] EWCA Civ 1109, [2004] 1 WLR 1479.

6. Danisco had not established special circumstances. The documents raised disputed technical questions which the English court was better placed to determine through disclosure and cross-examination. It would be undesirable to require several foreign courts and tribunals to undertake the same investigation in parallel. Both applications were therefore refused.