The claimant, a Norwegian company which specialised in automated warehousing technology, brought proceedings for patent infringement against the defendant group of companies, which was involved in the development and use of automated systems for online retail businesses. In the course of settlement negotiations in London a number of without prejudice meetings were held. At the third of those meetings the parties agreed that discussions concerning US matters, including the matters contained in a particular document, were to be governed by rule 408 of the US Federal Rules of Evidence (“FRE 408”). FRE 408 applied to proceedings in the US International Trade Commission (“the ITC”), a federal agency. The claimant brought proceedings against the defendants in the ITC during the course of which the defendants’ lawyers became aware that the claimant intended to deploy in that litigation information about the course of the settlement discussions in London. The defendants therefore applied in the High Court for an injunction restraining the claimant from using or referring to any information arising from those discussions in any proceedings, including in particular proceedings before the ITC, on the grounds that it was protected by without prejudice privilege. The judge heard the defendant's application on a without notice basis and granted such an injunction temporarily, but after hearing from both parties on the return day he declined to continue the injunction and dismissed the application.
On the defendants’ appeal—
Held, appeal dismissed (Nugee LJ dissenting). (1) The status of the settlement negotiations was to be construed as an agreement, whether express or implied. Since that agreement did not include any express agreement as to exclusive jurisdiction, but it was agreed that any US law discussions were to be governed by FRE 408, it followed that there was no agreement that English law was to apply to every aspect of the discussions. In view of the parties’ agreement that their US law discussions were to be governed by FRE 408, there was an analogy with the court’s consideration of the grant of an anti-suit injunction, which required the applicant to show a high probability of success in establishing an arbitration agreement, exclusive jurisdiction agreement, or agreement not to litigate elsewhere. The court ought not to grant an injunction which had the final effect of preventing a foreign court deciding whether, according to its own law and procedures, a particular document should be admitted, unless the defendants could show a high probability of establishing its case at trial (paras 54, 75–81.)
(2) The defendants had not shown a high probability of success at trial. The relevant question was whether the defendants had a high probability of showing that the question of the admissibility of the document in the ITC was governed by English law without prejudice principles. The parties having agreed that FRE 408 should decide the admissibility of the particular document in the event that US proceedings eventuated, it would be a breach of comity for the English court to interfere with those US proceedings by imposing English without prejudice rules, when the defendants had expressly stipulated FRE 408 should apply. It should be held to its bargain. Accordingly the judge had been right to dismiss the application on the return day (paras 54, 82–86).
Iain Purvis QC, Alan Maclean QC and Thomas Plewman QC (instructed by Powell Gilbert LLP) for the defendants.
Vernon Flynn QC and Kathryn Pickard (instructed by Kirkland & Ellis International LLP) for the claimant.