Celgard, LLC v Shenzhen Senior Technology Material Co Ltd

On an application involving alleged misuse of trade secrets, a claimant may establish a serious issue to be tried through broadly expressed technical evidence where the evidence, assessed in the round, raises a real question for trial. For Rome II purposes, damage from unfair competition occurs where the infringing goods are marketed in competition with the claimant, rather than necessarily where the trade secrets were misused in manufacture. In determining forum conveniens, the court must characterise the actual dispute and weigh all connecting factors, including the place of the wrongful marketing, the applicable law and practical justice. An interim injunction is appropriate where the claimant’s losses from market entry, incumbency and price erosion would be difficult to quantify and the balance of convenience favours relief.

Celgard sought permission to serve proceedings on Shenzhen Senior Technology Material Co Ltd outside the jurisdiction and continuation of an interim injunction restraining the marketing and importation into the United Kingdom of battery separators. Celgard alleged that Senior had used its trade secrets, obtained through a former Celgard scientist, to manufacture competing products in China for supply to a UK customer.

The applications concerned the merits threshold, jurisdictional gateways, forum conveniens, applicable law, alternative service and interim relief. The central questions were whether there was a serious issue to be tried, whether England and Wales was the proper forum, whether service by an alternative method should be permitted, and whether damages were an adequate remedy.

1. Serious issue to be tried. Celgard’s evidence, including market changes, product development, the former employee’s role and comparative binder analysis, established a serious issue that Senior’s products had benefited from Celgard’s trade secrets. Although the particulars were imprecise, the evidence raised issues that could only properly be resolved at trial. The same threshold applied to the service-out application and the injunction application.
2. Service out and forum. The CPR 6.36 application was satisfied because there was a good arguable case under one or both of the relevant PD 6B gateways. England and Wales was the proper forum. The court characterised the dispute narrowly as concerning Senior’s marketing of infringing goods to the UK customer, not all possible disputes about manufacture or worldwide misuse. Relevant connecting factors included the place of marketing and damage, English law as the applicable law, and the availability of substantial justice.
3. Applicable law. Under Articles 6(2) and 4(1) of the Rome II Regulation, the damage occurred in England because the claimed loss arose when the products were marketed there in competition with Celgard. Manufacture in China was an event giving rise to the damage, not the damage itself. The court rejected the attempt to recast the dispute by reference to broader relief that might have been sought in China.
4. Alternative service. Although the claim form would come to Senior’s attention, the Hague Service Convention applied. Under Marashen v Kenvett [2017] EWHC 1706 (Ch), exceptional circumstances were required. The evidence did not establish delay incompatible with the due administration of justice or specific litigation prejudice. Relief under CPR 6.15 was therefore refused.
5. Interim injunction. Applying American Cyanamid v Ethicon Ltd [1975] AC 396, damages were inadequate for Celgard because loss of incumbent status, wider qualification opportunities and price erosion would be difficult to quantify. Regulation 12 of the Trade Secrets (Enforcement, etc) Regulations 2018 did not add materially distinct considerations. The balance of convenience favoured an injunction, which was granted in the restricted terms sought over the trial.

First-instance decision. The judgment records earlier interlocutory orders by Mann J and Falk J, including the without-notice injunction and continuation by undertakings, but no appellate decision.