Shenzhen Senior Technology Material Co Ltd v Celgard, LLC (Rev 1)

A claimant seeking permission to serve abroad and an interim injunction for misuse of trade secrets must show a real, rather than fanciful, prospect of success. Trade secrets must be properly particularised, but the required precision depends on the circumstances and stage of the proceedings. The court may consider whether the defendant’s non-cooperation has impeded fuller particulars.

For unfair competition affecting a specific competitor, article 4(1) of the Rome II Regulation generally selects the law of the country where direct damage occurs. Where goods allegedly benefiting from misused trade secrets are imported and marketed in the United Kingdom, damage to that market occurs here even if manufacture and the original acquisition of information occurred abroad.

Celgard alleged that its former employee disclosed trade secrets concerning battery separators to Senior in China. It claimed that Senior used those secrets to manufacture goods which it imported into, and proposed to market in, the United Kingdom. Celgard advanced a direct claim against Senior and a claim that Senior was vicariously liable for the employee’s disclosure.

Trower J, in [2020] EWHC 2072 (Ch), permitted service of the claim form in China and granted an interim injunction restraining specified dealings with battery separator film in the United Kingdom. Senior appealed. It argued that the alleged trade secrets had not been sufficiently identified, that Chinese rather than English law applied, and that China was the proper forum.

The central issues were whether the claims had a real prospect of success and whether England was clearly or distinctly the appropriate forum.

1. Appeal dismissed. Celgard had shown a serious issue to be tried. Its case concerning a particular binder was adequately pleaded and supported by evidence which the appellate court could not re-evaluate. That case alone provided a real prospect of success and justified the judge’s conclusion.

2. Proper identification of the allegedly misused trade secrets remains important at an interlocutory stage. It enables the defendant to know the case to meet and ensures that an injunction has an ascertainable scope. The required degree of particularisation nevertheless depends upon the circumstances and procedural stage. Less detail may suffice at the outset, particularly where the claimant cannot yet provide fuller particulars because of the defendant’s non-cooperation. Celgard had done enough for the time being, although further particulars would be required later.

3. The Direct Claim was probably governed by English law. Under articles 6(2) and 4(1) of the Rome II Regulation, the relevant connection was the country where direct damage occurred. Confidential information is not property, and trade-secret protection forms part of unfair competition rather than intellectual property law. Importing and marketing allegedly infringing goods damaged Celgard’s United Kingdom market directly. Their manufacture in China was immaterial to that question.

4. The law applicable to the unlawfulness required by article 4(5) of the Trade Secrets Directive presented a difficult question. The court’s provisional view was that it should be determined through the Rome II Regulation, rather than by an implicit choice-of-law rule in the Directive. No final decision was necessary at this interlocutory stage.

5. The Vicarious Claim, as pleaded, concerned disclosure in China and was probably governed by Chinese law. It also appeared unable, by itself, to support relief against later importation into the United Kingdom. This mismatch did not defeat permission because the Direct Claim was the principal claim and Senior accepted that both could be served if permission was granted for the Direct Claim.

6. England was clearly or distinctly the appropriate forum. The dispute had to be characterised by reference to its substance and totality, not merely the chosen remedy. The principal claim concerned damage to the United Kingdom market through acts of importation and marketing here. Those acts, the location of loss and the probable application of English law supported England, notwithstanding relevant Chinese witnesses and documents.

1. Court of Appeal (Civil Division): The court unanimously dismissed Senior’s appeal and upheld the orders permitting service outside the jurisdiction and granting an interim injunction: [2020] EWCA Civ 1293.
2. High Court, Chancery Division: Trower J granted Celgard permission to serve Senior in China and an interim injunction restraining specified dealings with battery separator film in the United Kingdom: [2020] EWHC 2072 (Ch).