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	England and Wales High Court (Patents Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Halliburton Energy Services Inc v Smith International (North Sea) Inc & Ors [2004] EWHC 2181 (Pat) (09 September 2004) URL: http://www.bailii.org/ew/cases/EWHC/Patents/2004/2181.html Cite as: [2004] EWHC 2181 (Pat)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		9th September 2004

Mr. Justice Laddie:

1. I have before me this morning an application brought by the claimant, Halliburton Energy Services, Inc., against the defendants, Smith International (North Sea) Inc., Smith International, Inc and Smith International Italia SPA (the latter will be referred to as "Smith") for the widening out of a confidentiality club containing those people who the defendants are willing to allow to see a confidential product and process description.
2. The parties are competitors in the field of designing and supplying drill bits. I understand that this is a highly competitive market with only a few major players. The parties have been engaged in patent litigation in three countries. First, proceedings were brought by the claimant (or another company within the claimant's group) in the United States of America against one or other of the defendants, or others in the Smith group, for infringement of patents. I understand that that has resulted in a jury trial in which the claimant was successful, although that decision is now under appeal. Second, there are the current proceedings in the English courts, in which three patents are alleged to have been infringed by the defendants. Those are patents relating to drill bits and software for designing drill bits. Third, there are proceedings in Italy which have been commenced more recently than the other two sets of proceedings and which are at an early procedural stage. I will refer to them more fully in a moment.
3. In January of this year Smith served on the claimant a description which related to some (but not all) of the patents now in dispute for the purpose of supporting an application for a declaration of non-infringement. Since that document was not signified as being confidential, I understand the result was that the claimant passed it on to its American and Italian lawyers. More recently the defendants have served a product and process description. It is the description which is now in dispute. That document is fuller than the document served in January, and it is a document that the defendants say should be covered by the provisions of the confidentiality club. As of this morning, the defendants have agreed with the claimant that the claimant's solicitors (Bristows), the claimant's counsel (Mr. Watson QC and Mr. Mitcheson), four internal members of the Halliburton legal team and Mr. Hall (the claimant's expert witness) should be in the confidentiality club The club will also include Mr. Landis, a specialist trial attorney who played a major part in the American proceedings.
4. However, the claimant commenced the current application to greatly widen out the scope of those on its side who were to be allowed into the confidentiality club. In particular, the claimant wanted the whole of Messrs. Trevisan & Cuonzo (the Italian law firm representing it in the Italian proceedings), the whole of Messrs. Godwin Gruber (the American firm representing it in the American proceedings) and two individuals from Ingg, Guzzi & Ravizza (who are technical personnel assisting in the Italian proceedings) to be added to the confidentiality club. That was resisted by the defendants.
5. Just before this matter came into court this morning, new evidence was provided by the claimant in which it sought to restrict the scope of its application. It no longer asked for the totality of the Italian and American firms to be added to the confidentiality club and for the Italian engineers to be added. Instead, it now only asks for two named individuals from the Italian firm and two named individuals from the American firm to be added to the confidentiality club.
6. In making its application the claimant advanced two major submissions, at least until this morning. The first was that the product and process description was not confidential at all, and that therefore restrictions on the personnel within the confidentiality club should be relaxed. Second, it was argued that the introduction of the additional personnel into the confidentiality club was of importance to the conduct of the international litigation by the claimant.
7. This morning Mr. Watson (who appears for the claimant) has conceded, at least for the purpose of this application, that the product and process description should be considered to contain confidential information going beyond that which was contained within the January document prepared by Smith and beyond the information which was disclosed in the course of the jury trial in the United States. I will therefore approach this case on the basis, as is now common between the parties, that the product and process description does contain material that is at least arguably confidential. The question therefore comes down to whether or not it is appropriate to allow the four named individuals to be added to the confidentiality club at this stage.
8. I have already indicated the very considerable team of claimant's lawyers and personnel who are already within the confidentiality club. It goes without saying that anyone who is familiar with English patent litigation would recognise that the claimant is using, for the conduct of these proceedings, solicitors and counsel of the highest quality and repute. As I have indicated also, they have the assistance not only of an expert but also of Mr. Landis from the US firm and four internal Halliburton personnel.
9. Mr. Kitchin QC (who appears with Mr. Speck for Smith) argues that it is not appropriate to force the further dissemination of the product and process description on his clients unless the claimant makes out a case for needing the assistance of additional personnel for the proper conduct of these English proceedings. In relation to that he points to the fact that the evidence served on behalf of the claimant, consisting primarily of two witness statements from Mr. David Brown (the senior partner in Bristows), is virtually silent on the issue of why the addition of any one or all of these individuals, or the firms from which they came, would contribute anything at all to the claimant's ability to conduct the current proceedings properly and efficiently.
10. When this point was put to Mr. Watson in the course of argument, his response was that he did not need evidence because it was a matter which was obvious on its face. I do not accept that submission. A party who wishes to add people to a confidentiality club has to show why it will make a significant contribution to the ability to fairly conduct the English proceedings. Most of Mr. Brown's evidence, insofar as it touches on the issue of the value of expanding the confidentiality club at all, is concerned with issues like ensuring that all members of the Halliburton legal teams are able to talk to each other so that the international litigation can be conducted (from Halliburton's point of view) more efficiently. I do not think that that is enough. I have to look for reasons why the club should be expanded so as to help the conduct of the English proceedings.
11. Mr. Watson's major arguments were directed at the introduction of Mr. Farley and Mr. Beuther from the American attorneys to the confidentiality club, and I will consider them first. He said to me that of the two, Mr. Farley was the more important because, although he was an assistant to Mr. Landis in the conduct of the American proceedings, he had been involved not only in the American proceedings but in visiting Smith's premises and operating the software which is at the heart of a large part of this dispute. Therefore, says Mr. Watson, Mr. Farley is likely to know all that there is in the product and process description, and that the defendants will not be inconvenienced or embarrassed by Mr. Farley being added to those allowed to discuss the product and process description.
12. When asked why it was necessary to have Mr. Farley as well as Mr. Landis, Mr. Watson suggested (although there is nothing in the evidence to support this) that it was a matter of logistical convenience. As he put it to me, the claimant does not know about Mr. Landis's availability and it may be that sometimes he will be in court when Bristows want to discuss something in the product and process description. When Mr. Landis will not be there it would be very convenient to have somebody else in the American team to talk to.
13. As Mr. Kitchin points out, there is no evidence at all to suggest that Mr. Landis is not readily available and, as he says and I think with some strength, if there really was a logistical problem with Mr. Landis then no doubt Bristows could apply to Mr.Kitchin's clients and ask for an expansion of the club to overcome the problems so caused. But as it is at the moment, on the evidence before me – and it is extremely thin – all that is stated is that Mr. Landis was the specialist patent counsel who had major control of the American proceedings on behalf of the claimant in the United States, and there is nothing on the evidence to suggest that there is any need to have additional assistance from the American firm. I should add that in fact there is no evidence at all as to how even Mr. Landis can make a significant contribution to the conduct of the English proceedings. As I have said, the defendants have accepted that he should be in the confidentiality club and I only have to consider whether additional personnel from the American lawyers should be added.
14. As far as Mr. Beuther was concerned, there is even less evidence relating to him than there is about Mr. Farley. Late filed evidence by Mr. Landis suggested that Mr. Farley knew at least as much about the product and process description by virtue of his close contact with the American proceedings as he, Mr. Landis, does. But he says no such thing in relation to Mr.Beuther. Indeed, at one stage during his submissions Mr. Watson said that the reason for wanting Mr.Beuther to be in the club was to avoid, as I understood it, embarrassment. Mr. Beuther is Mr. Landis's senior, and he said it would be embarrassing if Mr. Landis knew more about what was going on in the English proceedings than Mr. Beuther, a senior partner in the American firm, knew. It may well be that Mr. Watson is right that there would be an embarrassment, but I am concerned with whether or not there is a justification for adding Mr. Beuther to the confidentiality club. As far as I can see, no material has been put before the court which shows that Mr. Beuther could make any contribution at all to the conduct of the proceedings in this country. It follows that I do not think that the claimant has made out even its restricted application in respect of Mr. Beuther and Mr. Farley.
15. As far as the two Italian lawyers are concerned, the position is (if anything) worse. As I have indicated already, the Italian proceedings are at a less advanced stage than either the American or the English proceedings. As I understand it, there are imminent proceedings known as a "direzione" due in Italy which will determine whether documents seized from the defendants under the Italian equivalent of the French "saisie" proceedings should be released to be inspected by the claimant in the Italian proceedings. In other words, the Italian courts are likely to determine in the near future what material (if any) of the defendants it would be appropriate, in accordance with Italian procedural law, should be disclosed to the claimant. Mr. Watson cannot argue that there is anybody currently in the Italian proceedings who knows very much about the technology involved in this case. Certainly he cannot put to me what he said about the American lawyers; namely, that they were people brought up in a similar legal system (i.e. a common law system) who had already been through all the hoops necessary to consider issues of infringement relating to patents equivalent to those in issue in the English proceedings.
16. There is no evidence as to the contribution that the Italian lawyers (either as a firm or as two individuals) could make to the conduct of these proceedings. Mr. Watson says that he required the presence of the Italian lawyers to guard against the possibility that inconsistent things were said in the Italian proceedings; i.e. things were said in the Italian proceedings which are inconsistent with what is said by Smith in the English proceedings. It seems to me that if this is a basis for ordering admission to a confidentiality club it would apply in every case where there is multinational litigation, because in any case one party can say it is fearful that the other party may say inconsistent things in different courts.
17. For present purposes I only need to say this. There is no material before me which gives rise to even a suspicion that the defendants intend to run inconsistent cases in England and in Italy. Indeed, even if there were such evidence I am by no means convinced that that would be a justification for adding Italian lawyers to the confidentiality club. What counts for the conduct of the English proceedings is what is put before the courts here, not whether lawyers in another country (for tactical or other reasons) run a different case there. It appears to me that there is no material to justify expansion of the confidentiality club to include the two named Italian lawyers either.
18. For these reasons I will dismiss this application.