Anan Kasei Co Ltd & Anor v Neo Chemicals & Oxides (Europe) Ltd & Anor

Under Practice Direction 51U, a document may be an adverse document even where its relevance or comparability is disputed. The court may order disclosure before extended disclosure where doing so serves the interests of justice and advances the overriding objective. The document’s evidential weight and its status as an adverse document are separate questions. Early disclosure is more readily justified where it will enable a party to plead a material issue with greater specificity. Disclosure of comparable licences is not automatic. The court must assess the pleaded issues, the evidence of relevance, and the procedural context in which disclosure is sought.

The claimants, patentees, pursued damages for patent infringement and had elected an inquiry into damages rather than an account of profits. Liability had been determined at an earlier trial, and the proceedings were approaching case management for the quantum phase.

The defendants sought early disclosure of a licence agreement concerning HSA cerium oxide products and licences concerning mixed oxide products containing cerium oxide. The application was advanced principally under Practice Direction 51U, and alternatively by reference to documents mentioned in evidence and the overriding objective. The central issues were whether the documents were adverse documents and whether early disclosure was justified.

1. Practice Direction 51U. The court had jurisdiction to order early disclosure where a document was an adverse document and early disclosure was in the interests of justice and furthered the overriding objective. The proper time for disclosure of adverse documents under the existing scheme was ordinarily with extended disclosure, rather than initial disclosure, although that did not remove the court’s power to order earlier disclosure.
2. Party A agreement. The agreement was an adverse document. There was a pleaded issue about whether damages should be assessed by reference to a reasonable royalty, and the agreement was likely to be inconsistent to some degree with the claimants’ pleaded case. Arguments about its comparability, including that it was made after infringement began, went to the weight of the evidence rather than its relevance or classification.
3. Interests of justice. Early disclosure of the Party A agreement would assist the defendants to plead their response to the alternative reasonable-royalty case with appropriate specificity. Disclosure was therefore ordered on a limited external-eyes-only basis, subject to the agreed mechanism protecting the commercial interests of Party A and other affected persons.
4. Mixed oxide licences. The defendants had not shown that licences concerning different patented products were sufficiently relevant to justify early disclosure. The issue of whether they might fall within extended disclosure was left for fuller consideration at the case management conference.
5. The order was limited to the identified Party A agreement and did not extend to further HSA cerium oxide or mixed oxide licences.