Multi-jurisdictional Robot Wars: injunctions and negotiations without prejudice


Online retailer Ocado was denied an interim injunction to prevent Autostore from referring to 2018 without prejudice to discussions between the parties (or any related document) at a U.S. International Trade Commission hearing ( “ITC”) which is due to take place in August of this year. The case is interesting both because it arose in the context of a multi-jurisdictional litigation with ongoing settlement negotiations and for the discussion of the relevant burden on granting an interim injunction in the circumstances. . In this note, we present some practical advice given that the judge ruled that there was a high burden of proof on Ocado to justify his claim.

The application was filed in infringement proceedings relating to six UK-designated European patents which Autostore claims are infringed by Ocado warehouse technology – this English action itself being part a series of patent litigation between these parties spanning multiple jurisdictions. In the related US ITC proceeding, AutoStore alleges that Ocado infringed three equivalent US patents. These patents relate to a central cavity (adapted to contain a storage bin) in robots of the type of those which handle goods in a warehouse.

One of the defenses advanced by Ocado in the ITC proceedings is an equitable estoppel defense. Ocado maintains that AutoStore has given assurances that Ocado has not infringed the central cavity patents and that AutoStore is now barred from asserting an infringement. AutoStore wishes to respond to this defense by relying on a specific document relating to the 2018 discussions between the parties. Autostore claims that this document supports the claim that Ocado was fully aware of AutoStore’s position on infringement, thereby ruling out an estoppel defense.

At the interim injunction hearing, Ocado made its case on the grounds that during the 2018 meetings it was contractually agreed that neither party should use the 2018 discussions or related documents. in the context of legal proceedings. (A fair duty of trust was also raised but Ocado dropped this point.)

It was agreed by the parties that in these circumstances the relevant charge was not the usual charge established by the House of Lords in American cyanamide ([1975] AC 396), namely whether there is a “serious question” to be judged. Ocado argued that since this was a case in which the interim injunction would likely terminate the action, the court should consider the underlying merits of the parties’ respective cases. They further argued that the judge should follow the decision by Araci vs. Fallon [2011] EWCA Civ 668 in which Jackson LJ, with whom Elias LJ agreed, said:

When the defendant proposes to act in flagrant violation of a negative undertaking, i.e. to do something that he has promised not to do, there must be special circumstances (e.g. restriction of trade contrary to public order) before the court exercises its discretion to refuse an injunction.

AutoStore, on the other hand, relied on the right to freedom of expression in relation to the publication of a document and on section 12 (3) of the Human Rights Act 1998. man to suggest that the appropriate charge is whether Ocado is likely to succeed in trial. to establish a breach of contract. AutoStore also relied on anti-prosecution injunction authorities, as their position was that Ocado’s request was, for all intents and purposes, an anti-prosecution injunction.

Decision of Hacon HHJ

In assessing AutoStore’s reliance on Section 12 (3) of the Human Rights Act 1998, Hacon HHJ conducted a brief review of the relevant case law. In doing so, he found that Article 12 covered threatened publications in the sense that they were made available to the general public. When the communication is made to a limited number of recipients and on a confidential basis, the article would not apply. Therefore, in ITC proceedings where the document in question is subject to a protection order and has not been made available to the public at large, Article 12 (3) no. was not involved.

However, Hacon HHJ accepted the argument that the authorization of the interim injunction would be decisive on the contentious issue as the ITC trial was imminent. An interim injunction would therefore mean that the ITC would not be informed of the relevant document. On the other hand, if the request were denied, the issues of Autostore’s right to rely on the document would then be referred to the ITC judge and Ocado would have the opportunity to persuade the ITC judge to should not consider this document in accordance with the relevant rules. as they apply to ITC. Hacon HHJ acknowledged that the circumstances were an inaccurate parallel to the anti-suit injunction case law, but noted that the injunction would interfere with the conduct of foreign proceedings. As such, “circumspection” was required, which meant that the threshold test for an injunction was whether Ocado had a high degree of likelihood of success at trial.

At Ocado Araci point Hacon HHJ stated that, as the existence of the relevant contractual obligation was disputed by the parties, the Araci principle would only apply if it could be satisfied (without the aid of a full trial) that AutoStore would be in flagrant violation of the contract if it were to disclose the document in question to ITC.

Hacon HHJ admitted that it was likely that the parties created (at their 2018 meetings) an implied agreement that neither party could disclose these discussions, but questioned whether it was correct to say that the parties orally agreed that the English without prejudice rule also covers matters subject to US law (such as the document in question).

An attendance note produced by Ocado’s lawyers and provided to Autostore during the 2018 discussions or shortly thereafter was the only contemporary evidence of the parties’ discussions and their agreement:

SA said this meeting was a continuation of the confidential and without prejudice discussions between Ocado and AutoStore (AS) and that all discussions on U.S. law should be governed by Rule 408 of the Rules of Evidence.

The Ocado case was advanced by a witness statement from the Chief Intellectual Property Council of Ocado (who attended the meeting) seeking to explain this memo. some participants.

In Hacon HHJ’s view, a simple reading of the attendance note indicated that discussions of US law should be governed by Rule 408 of the US Federal Rules of Evidence (and not in addition to English rules without prejudice ). He could not exclude, without suggesting dishonesty, that the memories of the witnesses were colored by the realization of the problem which arose between the parties.

Therefore, Hacon HHJ found that there was no clear indication as to which part was more accurate. Since he was unable to say (with any degree of certainty) that Ocado would succeed on this point at trial, Hacon HHJ concluded that Ocado’s case did not meet the condition precedent to granting the award. an interim injunction.

Further, he concluded that the balance of irreparable harm clearly tipped in favor of not granting an interim injunction because (in the absence of an injunction) Ocado would still have the right to challenge the admissibility of the document before ITC. On the contrary, an injunction (if it later turns out to be wrongly granted) would leave Autostore without adequate remedy – the ITC hearing would have already taken place and the damage would have been done to AutoStore.

Conclusion

This judgment serves as a warning for the parties to be clear about the legal regimes and protections they intend to cover in settlement discussions, especially when simultaneously invoking the protections offered by the rules of foreign jurisdictions. In addition, the parties should carefully consider how verbal agreements reached in meetings between the parties are to be evidenced.

Case: Autostore Technology AS v Ocado Group Plc & Ors [2021] EWHC 1614 (Pat) (June 11, 2021)


Thelma J. Longworth

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