Can confidential discussions between parties in the UK be disclosed in parallel litigation in the US?
The Court of Appeal was divided on this question in AutoStore Technology AS v Ocado Group Plc & Ors [2021] EWCA Civ 1003, which arose as part of proceedings in which AutoStore is suing Ocado for patent infringement.
Discussions between the parties had taken place in 2018, and Ocado became aware that AutoStore intended to deploy information about these discussions before the US International Trade Commission (ITC). Minutes which were recorded by a solicitor following one of the meetings stated that “this meeting was a continuation of the confidential and without prejudice discussions between Ocado and AutoStore (AS) and that any US law discussions were to be governed by rule 408 of the rules of evidence. The parties agreed that there was no intention to waive privilege.”
At first instance, HHJ Hacon declined Ocado’s request to grant an injunction restraining AutoStore from using the information from the discussions before the ITC. The request was based on the grounds that the information was protected by without prejudice privilege. The Court of Appeal upheld this decision, but was split 2-1.
Qualification of "without prejudice"?
Sir Geoffrey Vos, Master of the Rolls, said the parties had agreed that the discussions were without prejudice and that the disputed document was provided only for the purpose of the settlement negotiations, but that discussions about US matters were to be governed by the relevant US procedural provision (FRE 408).
He found that “the provision in the minutes was a clear qualification to the overall without prejudice blanket covering the discussions” and added: “I accept AutoStore’s argument that in a case of this unusual kind, the court should not grant an injunction which has the final effect of preventing a foreign court deciding whether, according to its own law and procedures, the Document should be admitted, unless Ocado can show a high probability of establishing its case at trial.”
Sir Geoffrey concluded that Ocado had stipulated that FRE 408 should apply, and it should be held to its bargain: the ITC will be able to decide the admissibility of the document. Lady Justice Nicola Davies agreed with his reasoning.
But, in his dissenting judgment, Lord Justice Nugee said that he would have concluded that the FRE 408 provision supplemented, rather than replaced, the without prejudice protection: “the US law discussions, and the Document, remained subject to a contractual agreement between the parties that they would be without prejudice and confidential.”
The moral of the story seems to be that the basis for any settlement negotiations should be kept as simple possible. If they had only been "confidential and without prejudice", this issue is far less likely to have arisen.
To find out more about the issues raised in this blog contact Rosie Burbidge, Intellectual Property Partner at Gunnercooke LLP in London - rosie.burbidge@gunnercooke.com