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IN THE SUPREME COURT OF EREWHON

Between:
Santos Halper Limited

(Appellant)

- and
Van Outen

(Respondent)

SUBMISSION ON BEHALF OF THE APPELLANT

A. PRELIMINARIES
A.1 The Erewhonian law on breach of confidence and patent infringement is adequately
supplemented by laws from other jurisdictions.
(a). Madam Justice Fisher had used case law from the US, Canada and UK to arrive at her
conclusions.
(b) Erewhon is party to the TRIPS Agreement, and hence its laws are assumed to be TRIPS
compliant. Since the US and the UK are also party to the TRIPS Agreement, the law on
undisclosed information1 informs the US law (trade secrets) and the UK and Erewhonian
law (confidential information).
(c) The Erewhonian law on patent infringement (and injunction), being drawn from the TRIPS
Agreement2, is also similar to that in US, UK and Canada.
A.2 Issues in Appeal

1 Agreement on Trade Related Aspects of Intellectual Property Rights (WTO), Art 39(2)(a)
2 ibid Art 28

a) The High Court of Erewhon erred in concluding that Van Outen is not liable for breach of
confidence.
b) The High Court correctly concluded that Van Outen has infringed the StampOut patent.
c.) The High Court was wrong to decline an injunction against Van Outen in respect of patent
infringement.
1. THAT VAN OUTEN IS LIABLE FOR THE BREACH OF CONFIDENCE.
In an action in breach of confidence in respect of certain information, the claimant needs to
prove that:3
1. The information was confidential,
2. The defendant owed an obligation of confidence to the claimant, and
3. The defendant used the information in an unauthorised way, to the detriment of the claimant.
1. 1 That the genetic information of the Snowball bees is confidential in nature.
Information, to be considered confidential, must have an element of secrecy. 4This can be
ascertained objectively5, through the following two pronged test:
1. The information must not be readily ascertainable,6 and
2. The claimant should have undertaken reasonable efforts to maintain the confidentiality of the
information.7
3 Coco v AN Clark (Engineers) Ltd [1969] RPC 41 (HCJ) 47
4 Restatement of Torts 1939, 757 comment b (US)
5 Michael A Epstein, Epstein on Intellectual Property (5th edn, Wolters Kluwer Law and Business 2007)
1.28
6Sarkes Tarzian, Inc v Audio Devices Inc (1958) 166 F Supp 250 (US-California) 265
7 Hoffman-La Roche Inc v Yoder (1997) 950 F Supp 1348 (US-Ohio) 1360

The information that has commercial implications is readily considered as confidential. 8The
genetic makeup of the Snowball bees has commercial significance, given the fact that the honey
from these bees is intended to be commercially distributed as a medicinal product, and that
Santos has invested substantially in the related R&D process.
1.1.1 The genetic information of the Snowball bees was not readily ascertainable.
Information that is not generally known in the public domain is considered to be not
readily ascertainable.9 The Snowball bees are genetically modified bees created by
Santos. These bees have hitherto been unknown in Erewhon, and even to an untrained
eye, the appearance of the Snowball bees is quite different from the Erewhonian
honeybees.
The testing of Snowball honey is still in the preliminary laboratory stages, and even the
clinical trials have not commenced as such. Also, Santos has not applied for any patent in
relation to the Snowball bees or honey, thus implying that no information concerning the
bees is in the public domain.10
Santos provided only insignificant description of the Snowball bees and honey on their
website. This information didnt pertain to the genetic information of the bees, and was
only limited to two photographs of the bees (which cannot be used to ascertain genetic
information) and only preliminary information about the research initiatives of Santos.11
1.1.2 Santos had undertaken reasonable efforts to maintain the confidentiality of the
genetic information.
Reasonable efforts may not always entail positive efforts to maintain confidentiality
of information. Santos act of not disclosing any significant information in relation to
8 See: Fraser v Thames Television Ltd [1984] QB 44 (QBD) 66
9Saltman Engineering Co. v Campbell Engineering Co Ltd [1948] 65 RPC 203 (CA) (Lord Greene MR)
10 A O Smith Works v Petroleum Iron Works (1934) 73 F 2d 531 (US) 536
11Religious Tech Centre v Lerma (1995) 908 F Supp 1362 (US-Virginia) 1368

the bees on the internet and elsewhere is a reasonable effort in itself to maintain the
confidentiality of the genetic information of the Snowball bees.12
Moreover, Santos was actively engaged in pursuit of the Snowball bees that had
swarmed. This active pursuit was supplemented by the communication between the
Santos in-house counsel and Van Outen, demanding Van Outen to return the Snowball
bees to Santos. This was sufficient notice to Van Outen of the secrecy of the genetic
information of the bees. Since relative secrecy, and not absolute secrecy, is the standard
for determining the reasonableness of the efforts aimed at maintaining the confidentiality
of the genetic information13, it is of no consequence that Van Outen knew about the
Snowball bees.
1.2 That Van Outen owed an obligation of confidence to Santos.
The obligation of confidence, in relation to confidential information, arises on the part of the
defendant when such information has been received by the defendant in circumstances imparting
a sense of confidentiality.14
These circumstances may be inferred from an actual notice 15, contract16 or fiduciary
relationship17. In the absence of a contract or a special relationship, such circumstances may be

12 Rockwell Graphics Systems, Inc v DEV Industries, Inc (1991) 925 F 2d 174 (US) 179
13 Stephens v Avery [1988] 2 All ER 477 (HCJ) 481
14 Coco v AN Clark (n 3) 47, 48
15 See: Sperry Rand Corporation v Pentronix, Inc (1970) 311 F Supp 910 (US- Pennsylvania)
16 See: Exchange Telegraph Co v Gregory & Co [1896] 1 QB 147 (QB)
17 See: Jarman & Platt Ltd v I Barget Ltd [1977] FSR 260 (CA)

inferred from the fact that the information has been received through improper 18or
surreptitious19means, or in an unconscionable manner20 on the part of the defendant.
Santos had unambiguously mentioned about the research and commercial significance of the
Snowball bees and the honey on its website. This information was sufficient to forewarn Van
Outen of the confidentiality of the information. Van Outen had accessed the website, and she
deliberately decided not to disclose the fact of the swarming of bees to Santos. This was
unconscionable or surreptitious on her part, and it is not necessary to demonstrate that she
had taken recourse to illegal methods.21Therefore, contrary to the opinion of Fisher, J. there is
clear indication of a reprehensible conduct on the part of Van Outen, and the facts do disclose
the dishonesty in the circumstances in which Van Outen acquired the Snowball bees.
1.3 That Van Outen used the information in an unauthorised way and to the detriment of
Santos.
1.3.1 That Van Outen used the Snowball bees and the genetic information embodied
in them.
The intention to use the confidential information in a particular way is of no consequence
to an action in breach of confidence.22 The use of confidential information denotes
utilisation with a view to production or advantage, thus depriving the owner of the
confidential information, in whole or in part, directly or indirectly, of the full enjoyment
of the confidential information.23

18 Restatement (Third) of Unfair Competition 1995, 40 (a) (US)


19 William Cornish, David Llewelyn & Tanya Aplin, Intellectual Property: Patents, Copyrights,
Trademarks and Allied Rights (8th edn, Sweet & Maxwell 2013) 342-343
20 Franklin v Giddins [1978] Qd R 72 (Australia)
21 See: Francome v Mirror Group Newspapers [1984] 2 All ER 408 (CA)
22 Paul Torremans, Holyoak and Torremans Intellectual Property Law (5th edn, Oxford Univ Press
2008) 519

Van Outen hived the Snowball bees (this is more than mere passive possession of the
bees); she procured honey from the Snowball bees; she gave away batches of the honey
to her neighbours and friends in return for their farm produce: all these facts point
towards use of the Snowball bees and the honey. Moreover, she had also deprived
Santos of the full enjoyment of the confidential information, by denying them the
Snowball bees.
1.3.2 That Van Outens use of the Snowball bees and the honey was unauthorised.
The term unauthorised connotes without due authority or permission. That the use of
confidential information is unauthorised can be inferred from the absence of
licenses/contracts, and evidence of unconscionable acts on part of the defendant to
procure the information.24
Santos had clearly not contracted with Van Outen, authorising them to use the Snowball
bees or the honey. Moreover, the bees had swarmed to her land, and despite realising the
confidentiality of the genetic information of the Snowball bees, Van Outen had
deliberately suppressed the fact of their swarming, making no communication whatsoever
to Santos. This was unconscionable on her part, and this implies that her use of the bees
and the honey was unauthorised.
1.3.3 That Van Outens use of the Snowball bees and the honey has caused detriment
to Santos.
The fact of the loss of confidential information alone is considered detriment to the
owner.25There is no requirement of some positive form of detriment to be shown, for a
successful action in breach of confidence. Therefore, on this basis, the fact that Van
Outen unconscionably used the Snowball bees and the honey, is enough detriment to
Santos.
23 Monsanto v Schmeiser [2004] SCC 34 (Canada) [58]
24 Coco v AN Clark (n 3)
25 Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 (HL) 256 (Lord Keith)

In the alternative, if it is conceded that separate detriment is to be shown, independent of


the loss of confidential information,26 there is ample evidence to this effect. Santos was
deprived of the Snowball bees and the honey. Thereby, Santos was deprived of the
genetic information embodied in the Snowball bees. This constitutes actual detriment to
Santos.
Moreover, this deprivation has caused Santos undue hindrance in their ongoing research
and development process concerned with the Snowball bees, which is highly likely to
adversely affect the ability of Santos to submit scientific evidence for regulatory approval
for the sale of Snowball honey as medicine. This will adversely affect the commercial
presence of Santos, thus constituting highly probable detriment to Santos.
2. THAT VAN OUTEN HAS INFRINGED THE STAMPOUT PATENT OF SANTOS.
2.1 That Van Outen has made or used the patented invention, within the meaning of s.
100 of Erewhonian Patents Act 1980.
The scope of the protection of patented invention is limited to the claims of the invention. 27The
claims of StampOut patent relate to a chimeric gene, a transgenic maize cell and a method of
providing resistance to a virus through gene modification. Although, in other classes of
inventions, the words make or use would only correspond to the claims of the inventions, the
same doesnt hold true for biotechnological inventions. 28Therefore, in the case of StampOut
patent, making/using the invention would not merely imply making/using the chimeric gene
and/or the transgenic maize cell but would extend to the making/using of any product that
embodies such gene and cell.
Also, in the alternative, even if it is conceded that the word make corresponds merely to the
claims of the invention, the same cannot be considered to be true for the word use. This is
because of the following independent reasons:
26 ibid 269-70 (Lord Griffiths)
27 Kirin-Amgen Inc v Hoechst Marion Rousell Ltd [2004] UKHL 46 (HL) [18]
28 See: MedImmune v Novartis [2011] EWHC 1669 (HCJ) [555]

a.) Use of an invention would also include the use of a product of which the invention
constitutes a significant part.29
b.) The words of s. 100 (1) of the Erewhonian Patents Act extend the protection afforded to a
process invention to a product directly produced through the process. 30 The maize plants and
the seeds are products directly obtained from the process claim of the invention, i.e. the process
of modification of the gene of the maize plant.
c.) The protection afforded to biotechnology process inventions is also extended to the material
obtained through such process, even if the material is obtained after multiplication or
propagation.31 The StampOut maize plants and seeds are obtained after multiplication or
propagation from the process invention protected in the StampOut patent. Therefore, the use of
the StampOut maize seeds and plants will be considered equivalent to the use of the patented
process.
d.) Similarly, the protection afforded to biotechnology product inventions is extended to the
material obtained that incorporates such product.32 The maize plants and the seeds are products
that incorporate the patented chimeric gene and the transgenic maize cell, and hence their use
will be deemed equivalent to the use of the chimeric gene or transgenic maize cell.
2.2 That Van Outens involuntary possession of the StampOut maize plants is not mere
possession so as to constitute a valid defence to an action in infringement.
In the first place, the liability for infringement under the patent law is strict and does not admit of
any defence based on the intention of the defendant in using the invention.33Although it is
generally the practice of the patentee firms of biotechnology plant cells not to sue for
29 Monsanto v Schmeiser (n 23)
30 Patents Act 1980 (Erewhon), s 100 (1)(b)
31 Patents Act 1977 (UK), Sch A2, Art 8
32 ibid Art 9
33 See: Dunlop Pneumatic Tyre Co v British and Colonial Motor Car Co (1901) 18 RPC 313 (HCJ)

infringement in cases where only occasional plants are found on the defendants land 34, the same
practice has not been translated into law. Therefore, involuntary possession of the StampOut
maize is no defence to an action in infringement of the StampOut patent.
Even if it is conceded that involuntary possession of patented invention doesnt amount to
infringement of the patent, it is only mere possession without more that qualifies for such a
defence.35However, the percentage of StampOut maize crops (twelve per cent) signifies that the
possession is not mere.
Moreover, possession cannot be termed as mere if the possession is being maintained without
immediate use, but with an intention to utilise the insurance or standby utility of the
patent.36The presumption of such stand by use arises on account of the inherently
advantageous properties of the patented invention.37 In the case of StampOut patent, the inherent
advantageous use of the invention is obvious from its virus resistant characteristics, and the
presumption of the use of its stand by utility is confirmed by the express denial of Van Outen
to refrain from growing the StampOut maize crops and using the seeds of such crops for
resowing in her field.
3. THAT VAN OUTEN BE PROHIBITED, THROUGH AN INJUNCTION, FROM USING
THE STAMPOUT PATENT WITHOUT A LICENSE FROM SANTOS.

34 See: Monsanto's Commitment: Farmers and Patents


<http://www.monsanto.com/newsviews/pages/commitment-farmers-patents.aspx> accessed 8 December
2014
35 Pfizer Corporation v Ministry of Health [1965] AC 512 (HL) 572
36 British United Shoe Machinery Co v Simon Collier Ld (1910) 27 RPC 567 (HL) 572
37 Monsanto v Schmeiser (n 23)

Injunction is granted on the consideration of principles of equity. 38However, in cases of patent


infringement, the courts have, as a matter of practice, granted injunctions because of the inability
to enforce the right to exclude otherwise, through monetary damages.39
Also, the courts have granted injunctions through the application of the following four factor
test:40
1. The proof of irreparable injury to the claimant,
2. The inadequacy of other remedies at law to enforce the patent or the right to exclude,
3. The consideration of the balance of hardships between the claimant and the defendant, thereby
warranting a remedy in equity,
4. The consideration of public interest in granting an injunction.
3.1 Santos has suffered irreparable injury, which cannot be remedied through monetary
damages and other remedies at law.
The factum of the infringement of StampOut patent is in itself the proof of an irreparable
injury.41Moreover, the continued use of the invention by Van Outen, through re-planting of the
StampOut seeds cannot be remedied through monetary damages.
3.2 The consideration of balance of hardships requires the grant of injunction.
If the injunction is granted, Van Outen will have to refrain from using the invention, which she is
already prohibited from using without a license. However, if the injunction is not granted, Santos
will bear detriment from (a) the continued use of the invention by Van Outen, and (b) the
subsequent encouragement that this continued use will stimulate in other farmers in using the
38 Roche Products, Inc v Bolar Pharmaceutical Co (1984)733 F 2d 858 (US) 865-867
39 Paul Torremans (n 22) 585
40 eBay, Inc v MercExchange, LLC (2006) 126 S Ct 1837 (US) 1839
41 See: Reebok International Ltd v J Baker, Inc (1994) 32 F 3d 1552 (US) 1556

StampOut patent without a valid license. This will negate the patent law regime, and the
declaration of patent infringement will become frivolous. The decision in Miller v Jackson42is to
be distinguished as the probability of cricket balls entering the claimants land was only
occasional whereas the infringement in the present case will be continuous, thereby
warranting an injunction.
3.3 That public interest will not be disserved by the grant of the injunction.
s. 100(2)(e), which recognises a defence to patent infringement for traditional right to re-plant
the seeds, is not an absolute defence. Rather it allows this defence when the farmer has procured
the seed from the patentee or with his/her consent. This shows that the traditional right to re-plant
the seeds is not absolute and has indeed been curtailed by patent law, in the public interest.
Moreover, the refusal to grant injunction will only weaken the patent law, thus harming the
public interest in the long run.43
Also, since Santos can help Van Outen identify the StampOut plants through chemical test for
BART-10 protein, the injunction will not be burdensome for Van Outen and will not unduly
interfere with her traditional right to resow seeds of other maize plants.

Respectfully Submitted
Counsel for the Appellant
Word Count: 2,979

42 Miller v Jackson [1977] QB 966 (CA) 988G


43 See: Why Does Monsanto Sue Farmers Who Save Seeds? <http://www.monsanto.com/newsviews/pages/whydoes-monsanto-sue-farmers-who-save-seeds.aspx> accessed 9 December 2014