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Case No: HC-2015-005005
Neutral Citation Number: [2018] EWHC 2679 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)

The Rolls Building
7 Rolls Buildings
Fetter Lane 
London, EC4A 1NL

26th September 2018

Before:

CHIEF MASTER MARSH

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Between:

	(1) GLAXO WELCOME UK LT (T/A ALLEN & HANBURYS)
(2) GLAXO GROUP LIMITED	

Claimants	
	- and -		
	(1) SANDOZ LIMITED
(2) SANDOZ INTERNATIONAL GMBH
(3) AEROPHARM GMBH
(4) HEXAL AG
(5) SANDOZ AG
(6) VECTURA GROUP PLC
(7) VECTURA DELIVERY DEVICES LIMITED	

Defendants	

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MR. TOM HICKMAN (instructed by Stephenson Harwood LLP) for the Claimants
MR. MARTIN HOWE QC and MS. IONA BERKELEY (instructed by White and Case LLP) for the 1st to 5th Defendants
MS. ANNA EDWARDS-STUART (instructed by Bristows LLP) for the 6th and 7th Defendants

Hearing dates 25 and 26 September 2018

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JUDGMENT
CHIEF MASTER MARSH: 
1.	This judgment concerns three issues relating to disclosure that arose at the case management conference held yesterday.   I gave my determination of each issue during the course of the hearing with reasons to follow.   These are my reasons.
2.	The context in which the issues arose can be stated quite briefly.  This claim has been the subject of a number of judgments given previously and I will gratefully adopt the summary of the issues in the claim provided by Mr. Rosen QC (sitting as a Deputy High Court Judge) in his judgment dated 3rd July 2018.   
“2. In these proceedings Glaxo sues companies in the Sandoz group for allegedly passing off their generic inhaler product AirFluSal Forspiro, launched in the United Kingdom and elsewhere in 2015, as Glaxo’s (now out-of-patent) Seretide Accuhaler inhaler, which has apparently achieved sales of more than £62 billion globally since launch in 1999.  
3. Both products are prescription-only combination drugs for the treatment of chronic obstructive pulmonary disease (COPD) and severe asthma, marketed and sold in boxed dispensers.”
[The judgment then provides get-ups of the respective products in pictorial form and continues:]
“4. Glaxo has alleged that the defendants chose AirFluSal’s get-up ‘with the deliberate aim of deceiving or creating confusion in the mind of the relevant public’; and the defendants have accepted that the question of whether the public are deceptively confused may take into account the defendants’ intentions and that their documents relating to the design history of their product (which, it has emerged, may go back as far as 2003/4) must be reviewed and disclosed if relevant.”  
5. That exercise by the existing Sandoz defendants has, they say, so far involved the review of 406,300 documents largely identified by agreed keyword searches using 50 legally qualified reviewers and the subsequent disclosure of 75,356 documents including, those held in the custody of some 40 of its employees or former employees (thus called ‘custodians’), taking some six months and costing more than £2 million.”
3.	At the hearing before the Deputy Judge on 3rd July 2018 he made an order vacating the trial date then fixed for October 2018 and made an order joining the sixth and seventh defendants.  I will refer to them as the “Vectura defendants”.   As a consequence of the Deputy Judge’s order, the trial is now re-fixed to take place in July 2019.   The Deputy Judge’s reasons for joining the Vectura defendants are relevant to the issues I have to determine and I will refer to them briefly.
4.	At paragraph 25 the Deputy Judge makes reference to the Vectura defendants being “a key party responsible for designing, developing and licensing the product complained of”.   He also refers to Vectura’s leading role in that connection.   At paragraph 26 he makes reference to the need to join Vectura because of the “likelihood or at least a possibility of a significant ‘information gap’ if Vectura are not joined”.   He makes a similar point at paragraph 48 of his judgment.
5.	Part of the context in which the disclosure issues before me were considered is that there is, in relative terms, a fairly short period of time for Vectura to give disclosure.   That, of course has to be measured against the six months that was taken by the Sandoz defendants in undertaking that exercise.  The task for the Vectura defendants is likely to be a fairly substantial exercise which will have to be completed in three months. Against that, the universe of documents that is likely to be considered, to which the search terms will be applied, is probably fairly limited.  There are two shared drives, Gyro and BR315 and some searches of P drives will be needed in addition.   The Vectura defendants estimated in their disclosure report that the volume of data to be searched was of the order of 879 gigabytes which, in the overall scheme of things in the context of litigation of this type, is not a particularly large volume of data.  Nevertheless, they provided an estimate of the likely costs involved at £400,000.   There are, however, uncertainties because no scoping exercise has yet been undertaken.
6.	The parties have worked hard to agree a regime that complies with CPR 31.5(7), namely, “the need to limit disclosure to that which is necessary to deal with the case justly”.   In this case it is the defendants – and here the Vectura defendants – that are principally going to be the disclosing party.  There is inevitably some tension between the disclosure that Glaxo seeks and what the Vectura defendants consider is reasonable and proportionate.   The parties have agreed to give disclosure by reference to issues, that is on an issue-by-issue basis.   I remark in passing that, of course, disclosure can only ever be given by reference to issues but what the parties have agreed to do here is that the issues will be closely defined and, importantly, limited.   Much effort has gone into reaching agreement and the parties are to be commended for the work they have undertaken.  That there are genuine differences between them is not a matter of surprise and indeed is not a matter for criticism.   They have managed to agree most of the issues, all of the search terms and all of the custodians.  Thus, the issues left for the court to determine are narrow in scope.
7.	 I would add that in light of the fact that a scoping exercise has not yet been undertaken, the parties have agreed that if in any case the application of a search term produces an excessive number of hits, their agreement may be subject to further review and ultimately, if further agreement proves impossible, they may apply to the court for directions.   To my mind such an arrangement should necessarily be implicit, and probably made explicit, in every disclosure exercise where there is uncertainty about the volume of responsive hits.    In any event, here there is agreement that there is the ability to review in an appropriate instance.
8.	It is, in my judgment, important to appreciate that in defining issues for disclosure the principal audience, as it were, is the document reviewer, that is the person or persons who have to review each document in order to consider whether it is discloseable.   In the case of the exercise undertaken by Glaxo, some 50 lawyers were involved at a cost of £2 million.   No doubt the approach the Vectura defendants will adopt will involve a staged exercise with initial reviews at a relatively low level with a process for reviews by more senior lawyers.  But, plainly, clarity in the issues by which documents are to be measured is of great importance.   The greater the clarity in the issues, the simpler and speedier, and thus less expensive, will the process be.
Issue One
9.	The core issue relates to deception.  Issue one concerns intention.  It is the claimants’ case that the get-up adopted for the AirFluSal Forspiro product was deceptively similar to that used for the Accuhaler product and that the defendants intended it to be deceptively similar.   While proof of intention is not essential in a passing off claim, it may be a relevant factor.  That can be seen from the judgment of Robert Walker J in United Biscuits (UK) Limited v. Asda Stores Limited [1997] RPC 513 at page 531.   
10.	The difference between the parties arises in connection with conscious steps that may have been taken by the Vectura defendants to avoid causing deception by, as it is put by Kitchin LJ in Specsavers v. Asda [2012] EWCA Civ 24 at page 115 making “a conscious decision to live dangerously”.  Kitchin LJ goes on to say that the person “has appreciated the risk of confusion and has endeavoured to adopt a sign which is a safe distance away”.
11.	The first iteration of the issue was in the following form: 
“Documents which evidence that the defendants, or any of them, had an intention to deceive members of the public that the AirFluSal Forspiro product is a product of the claimants or connected with the claimants or the claimants Seretide Accuhaler product or equivalent substitutable for the claimants’ Seretide Accuhaler product.”   
12.	The claimants wish to make clear that in searching for documents it was necessary for the Vectura defendants to give disclosure of documents dealing with intention, including the intention to ‘live dangerously’ or ‘sail close to the wind’.  Both those terms were included in their suggested alteration to the issue.  The claimants say that an appreciation of the risk is a notion that ought to be included in the disclosure issue.   The Vectura defendants took a different approach and proposed adapting the original form of the issue merely by adding in parenthesis at the end “(including benchmarking documents)” to make clear that such a category of documents, where there is a comparison between actual and proposed product get up, was to be included.
13.	To my mind neither approach is suitable.   The claimants’ approach imports into a disclosure issue – and here I distinguish between a disclosure issue and an issue for trial – jurisprudence.  The terms to which the Glaxo parties have referred may be widely understood and, indeed, widely used in IP circles, but I consider that their application could be difficult by a reviewer.  The defendants’ approach has two problems with it.  First, it limits the application of the issue in this respect to a particular class of documents, “benchmarking documents”, and that, to my mind is unnecessarily restrictive and likely to exclude documents that should properly fall within the disclosure that is required in relation to intention.  Secondly, the term “benchmarking documents” is, to my mind, too imprecise to be of real use to document reviewers.
14.	Happily, there is an alternative form of wording put forward by the Glaxo claimants.   With some minor adaptation, I have ordered that it be adopted.   It is, to my mind, simple and clear.   The wording is this:
“Documents which evidence that the defendants, or any of them, knew or had reason to believe that: 
(a) there was a risk or likelihood of confusion; or 
(b) there was a degree of similarity or matching in both cases between the get-up and packaging of AirFluSal Forspiro or its predecessors including, without limitation, all iterations of or concepts for the GyroHaler and the claimants’ Seretide Accuhaler.”
	The inclusion of the reference to “all iterations or concepts for the GyroHaler” foreshadows my decision on the third issue which I will come to in a moment.
Issue Two
15.	Issue Two concerns goodwill.   The issue in its form as proposed by the claimants (which I do not need to read into this judgment) was of a general nature and concerned documents showing whether the claimants have established goodwill in relation to the products.   Although, plainly, goodwill is an important issue in this claim, and one which has been put in issue by the Vectura defendants, the Vectura defendants not unreasonably took issue with the very broad nature of this disclosure issue.  Their principal objection was put on the grounds of proportionality.   The likelihood is that the Vectura defendants will have few, if any, documents that fall within the standard disclosure test; that is principally documents which are adverse to them concerning an issue put so broadly.   
16.	Recognising this difficulty, Mr. Hickman, who appeared for the claimants, proposed a limitation to the issue so that it expressly relates only to goodwill in the indicia.  The indicia are, broadly speaking, colour, shape and packaging.   Thus, with that adjustment and reading only the material parts of the issue, it will be limited in the following way:
“Documents showing that the Accuhaler and Evohaler are associated in the mind of the relevant trade and public with the indicia set out in the re-re-amended particulars of claim.”  
I leave the remaining part of the issue unread.
17.	Ms. Edwards-Stuart, who appeared for the Vectura defendants, referred to the way in which the indicia are described in paragraph 14 of the particulars of claim.   She submitted that, as a minimum, it is not clear that the indicia are to be taken both individually and together.   It is certainly the case that to date the court has proceeded on the basis that the indicia are to be taken both separately and together. But it was not a question upon which it was appropriate for me to rule and I did not do so.   
18.	Obviously goodwill is central to this case and to my mind if a basis for giving disclosure that is proportionate can be worked out, then it would be wrong to exclude goodwill from disclosure altogether.   In my judgment in its more limited form, the issue, as it is now framed, will not be unduly burdensome to the Vectura defendants.   The search terms and custodians have already been agreed and, thus, the inclusion of this issue does not add to the universe of documents that are to be reviewed.   The inclusion of the issue will, I accept, add to the task of document reviewers but, in my judgment, not excessively so.  It could be that there are no documents that are responsive to this issue but, to my mind, that does not mean that the limited additional burden on this important issue should be excluded.   The issue is therefore to be defined in the amended form as it was put forward by Mr. Hickman during the course of the hearing.
Issue Three
19.	The third issue is either defined by reference to the date range for searches or by deciding whether the definition of Issue One should include all iterations of the AirFluSal Forspiro product, including its predecessors.  This is quite a short point and can be taken quite shortly.
20.	The parties have agreed that searches will be undertaken up to the present day.  The starting date for searches is not agreed.  The Vectura defendants propose 1st October 2004.   The Glaxo claimants propose 1st March 2003, some 18 months earlier.   The rationale for the Vectura defendants’ approach is set out in paragraphs 54 and 55 of the witness statement of Jeremy Blum dated 19th September 2018.  It is not necessary for me to read those paragraphs into this judgment.   The design of the product went through a number of stages.  It started in March 2003 and initially led to what is described as the “first generation GyroHaler”, the shape and colour of which are unlike the AirFluSal Forspiro product.  It is important for the purposes of disclosure to appreciate that design process involved not just the shape and colour, but also centrally, the technique for the delivery of a measured dose of serotonin.   
21.	Ms. Edwards-Stuart rightly makes the point that much of the design work and documents will relate to technical matters rather than aesthetic issues.   The evidence is that the second generation GyroHaler was developed in October 2004.  The Vectura defendants’ assumption is that a date range commencing on 1st October 2004 will capture all documents relating to the design of the second generation product which has much closer similarities to the AirFluSal product.
22.	Mr. Hickman, in support of the wider date range, points to the reasons given by the Deputy Judge for joining Vectura and to the possible gaps in disclosure that exist as between Glaxo and Sandoz.  He also points to the fact that there was no agreement between Sandoz and Vectura until early 2005, thus logically Sandoz’s disclosure is unlikely to include documents prior to this date.
23.	In my judgment it is clear that issues relating to intention need to be considered from the outset of the design process.   There are three main reasons for reaching this conclusion.   First, I have real concerns about a date range starting at a point based on evidence as vague as that set out in Mr. Blum’s witness statement where it is simply stated that an alternative design commenced “in October 2004”.   It seems to me inherently unlikely that there was a precise date, a clear line in the sand, marking the transition from one product to another.   It is far more likely that there will have been a more gradual shift.   
24.	Secondly, it is, I think, important that intention is considered from the outset of the design process, particularly with regard to the notion of living dangerously.   If the first generation product was designed to look as it did, with a view to living dangerously, that may well be a relevant matter for the purposes of this claim and therefore for disclosure.   
25.	The third ground is that I do not consider there is likely to be any undue additional burden placed on the Vectura defendants by the extended date range.   There is indeed no evidence to show that the burden will be excessive.   Of course, it will increase the volume of documents that will have to be reviewed, but there is no basis for concluding that it will do so disproportionately or add to costs excessively. 
26.	In conclusion, I record that there has been no application for an order for costs and I proceed on the basis that the costs of dealing with these issues will be costs in the case.  If there are any matters that arise from this judgment I will now hear from the parties.
(Discussion followed re form of Order)