Smith & Nephew Plc v Convatec Technologies Inc & Anor

Factual and Procedural Background

This case concerns a patent dispute involving silverised wound dressings. The trial occurred in November 2013, with judgment delivered on 12th December 2013. A subsequent hearing to determine relief and costs took place on 17th January 2014. The dispute centered on whether Company A’s process for manufacturing their Durafiber Ag product infringed the patent held by Company B, specifically patent EP (UK) No. 1,343,510. During proceedings, Company A disclosed highly confidential technical information about its manufacturing process, which was considered a trade secret. The disclosure was necessary for a fair resolution of the infringement claim.

Legal Issues Presented

1. Whether the confidential technical information disclosed by Company A should be protected under a confidentiality scheme during litigation.
2. The appropriateness and scope of a permanent court order under CPR r31.22(2) to maintain confidentiality of certain documents after trial.
3. The circumstances under which parts of a trial may be conducted in private to protect commercially sensitive information without undermining the principle of open justice.
4. Whether specific categories of documents relating to dealings with regulatory authorities warrant permanent confidentiality protection.

Arguments of the Parties

Company A's Arguments

• Asserted that the disclosed documents contained commercially sensitive information about manufacturing processes, equipment, dealings with regulatory authorities, and commercial strategy.
• Submitted evidence supporting the need for a permanent confidentiality order under CPR r31.22(2) for all documents listed.
• Provided a detailed witness statement explaining the commercial value and sensitivity of the information, emphasizing the competitive edge derived from the disclosed know-how.
• Maintained that the confidentiality scheme and orders were essential to protect trade secrets while allowing fair trial proceedings.

Company B's Arguments

• Did not object to the confidentiality order sought by Company A and did not attend most of the discussion on this topic.

Table of Precedents Cited

Court's Reasoning and Analysis

The court recognized that the technical information disclosed by Company A constituted a valuable trade secret essential to the fair determination of the patent infringement claim. To balance the need for open justice with protection of confidential information, the court relied on established confidentiality schemes, allowing restricted access to sensitive documents by legal teams and experts under strict terms.

The court explained the function of interim orders under CPR r31.22(2), which maintain confidentiality during trial by preventing public disclosure of confidential documents referred to in court. The court acknowledged that some aspects of confidential information might require private hearings to allow unfettered discussion and fair cross-examination, but emphasized that such private sittings must be strictly necessary and limited in scope to uphold open justice.

Company A sought a permanent confidentiality order for a broad range of documents, categorized into manufacturing process, regulatory dealings, and commercial strategy. The court found sufficient evidence to justify permanent confidentiality protection for documents relating to manufacturing and commercial strategy, as these contained commercially valuable secrets integral to the case.

However, the court distinguished certain regulatory documents that did not disclose manufacturing know-how or commercial strategy. It concluded that mere dealings with regulatory authorities, even if reflecting Company A’s experience, did not justify permanent confidentiality orders absent evidence of actual commercial harm or disclosure of proprietary know-how.

The court divided the documents into two groups: Group A, which warranted permanent confidentiality orders, and Group B, which did not. The court also addressed the propriety of private hearings during trial, noting one instance involving cross-examination on regulatory issues. The court indicated that the transcript of that private session should likely be treated as public unless Company A could show otherwise.

Holding and Implications

The court granted a permanent confidentiality order under CPR r31.22(2) for the majority of documents relating to Company A’s manufacturing process and commercial strategy (Group A), while refusing such an order for documents solely concerning dealings with regulatory authorities lacking proprietary content (Group B).

The decision preserves the confidentiality of commercially sensitive trade secrets essential to the fair adjudication of patent disputes, while maintaining the principle of open justice by limiting private hearings to strictly necessary occasions. No broader precedent beyond the application of established confidentiality principles and the balancing of open justice with commercial confidentiality was set. The order directly affects the parties by protecting Company A’s trade secrets post-trial.