Anan Kasei Co. Ltd & Anor v Molycorp Chemicals & Oxide (Europe) Ltd & Anor

For service out of the jurisdiction in a tort claim, gateway 9 requires a plausible evidential basis for significant damage sustained, or resulting from an act committed, within the jurisdiction. The evidence need only be contested but plausible at the jurisdiction stage. The value of infringing goods and their possible effect on sales may establish that threshold.

Where permission to join a party was granted on a defined factual basis, the resulting inquiry should remain within the pleaded claim and that basis. A party should not face a substantial expansion of the inquiry based on speculation about other acts lacking a plausible evidential foundation.

The application concerned an order joining Neo Performance Materials, Inc to patent infringement proceedings and permitting service out of the jurisdiction. The underlying trial had established that the patent was valid and infringed. The joinder order treated the second defendant as potentially jointly liable for dealings by the first defendant with two shipments of cerium oxide seized by UK Border Force and released in December 2017.

The second defendant sought to set aside or vary the order. The principal issues were whether the requirements of gateways 2 and 9 in Practice Direction 6B were met, and whether the inquiry into joint tortfeasor liability should be confined to the seized goods.

1. The application to set aside the order was refused. The court upheld the conclusion that gateways 2 and 9 of paragraph 3.1 of Practice Direction 6B were satisfied.

2. Gateway 9 requires significant damage. The court applied Metall und Rohstoff v Donaldson Lufkin and Jenrette Inc [1990] 1 QB 391, where the Court of Appeal stated that some significant damage in England was sufficient. At this stage, the claimant had to show a plausible, albeit contested, evidential basis for significant damage resulting from infringing acts in the jurisdiction.

3. The seized goods were valued at about £650,000. Some might have reached the German market and caused or contributed to lost sales. That provided a plausible evidential basis for significant damage consequent upon infringing acts in the United Kingdom. Gateway 9 was therefore satisfied.

4. Gateway 2 was also satisfied. If the claim succeeded at trial, the claimants would be entitled to seek an injunction against both defendants.

5. The court varied the order. The judge who made the joinder order had granted permission solely because of Neo Canada’s arguable involvement in infringement relating to the seized goods. The pleaded claim identified liability in relation to those goods, and a wider inquiry based on possible other acts had no plausible evidential basis. Neo Canada’s potential liability as joint tortfeasor was therefore limited to acts done in relation to the seized goods.

6. An additional argument based on gateway 11 was left aside because it had been raised late and added nothing to the conclusions already reached.

The underlying patent infringement trial was decided by Roger Wyand QC in January 2018, with judgment handed down on 23 April 2018. An order joining Neo Performance Materials, Inc was made by Nicholas Caddick QC sitting as a Deputy High Court Judge on 18 December 2018. This judgment refused to set that order aside but varied it to confine potential joint-tortfeasor liability to the seized goods.