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Santos Halper Limited


- and
Van Outen



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
(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 Cross-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 correctly concluded that Van Outen is not liable for breach of
b) The High Court erred in concluding that Van Outen has infringed the StampOut patent.
c.) In the alternative to b.), the High Court was correct in declining an injunction against Van
Outen in respect of patent infringement.
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 was not confidential in nature.
An action in breach of confidence arises only in respect of confidential information. 4Information
is considered confidential, only if it is characterised by the element of secrecy. 5 The courts
have undertaken the following two-pronged approach to assess the existence of secrecy:6
a. The information is not readily ascertainable,7 and

3 Coco v AN Clark (Engineers) Ltd [1969] RPC 41 (HCJ) 47

4 ibid
5 Restatement of Torts 1939, 757 comment b (US)
6Michael A Epstein, Epstein on Intellectual Property (5th edn, Wolters Kluwer Law and Business 2007)
7 Sarkes Tarzian, Inc v Audio Devices Inc (1958) 166 F Supp 250 (US-California) 265

b. The claimant has undertaken reasonable efforts to maintain the confidentiality of the
1.1.1 That the genetic information of the Snowball bees was readily ascertainable.
Information that is generally available in the public domain is readily ascertainable. 9
Also, information that has some commercial significance and is not mere trivial tittle
tattle10 will be considered confidential. As far as the genetic information of the
Snowball bees was concerned, they would assume commercial significance only after the
Snowball honey is permitted to be marketed by the regulatory authority of Erewhon, or if
a patent is obtained. Since Santos has not applied for any patent, and it has neither
obtained regulatory approval in relation to the honey, the genetic information is devoid of
any commercial significance, and is incapable of being protected as confidential
Also, the information posted on internet is deemed to be generally available in the public
domain.12It is not necessary that the complete trade secret information be floated on the
internet in order for it to be considered as part of the public domain. It is sufficient that
the posted information complements the already existing information to enable another to
derive advantage from the information.13Therefore, even though Santos didnt disclose
the genetic makeup of the Snowball bees on their website, the primary information of the
bees and the honey, coupled with the fact that they hived the bees in the open, in
8 Hoffman-La Roche Inc v Yoder (1997) 950 F Supp 1348 (US-Ohio) 1360
9 Religious Tech Centre v Lerma (1995) 908 F Supp 1362 (US-Virginia) 1368
10 Coco v AN Clark (n 3) 48
11 See: Fraser v Thames Television [1983] 2 All ER 101 (QB)
12 Religious Tech Centre v Netcom On-line Communication Services, Inc (1995) 923 F Supp 1231 (USCalifornia) 1256; See: Religious Tech Centre v Lerma (n 9)
13 See: CVD, Inc v Raytheon Co (1985) 769 F 2d 842 (US)

consequence of which the bees swarmed, is sufficient to establish that the genetic
information was not confidential.
1.1.2 That Santos has not undertaken reasonable efforts to maintain the confidentiality
of the genetic information of the Snowball bees.
Information, which initially is confidential in nature, will cease to be so, if the claimant
fails to undertake reasonable measures to maintain its confidentiality.14 The courts have
increasingly recognised some of these measures,15 which are as follows:
a. restricting access to the confidential information,16
b. physical security measures,17
c. providing notice to the world of the confidentiality of the information through express
However, Santos failed to take any such measures and hived the bees in the open, despite
the well known fact that swarming of bees is a frequently observed natural phenomenon.
Moreover, even though primary information concerning the Snowball bees was posted on
the website, no express label was posted whereby the world could be put at notice about
the confidential nature of the Snowball bees.
1.2 That Van Outen didnt owe an obligation of confidence to Santos.
An obligation of confidence on the part of the defendant arises when the circumstances (in which
the confidential information has been received by the defendant) are such that the defendant is
14 Hoffman-La Roche Inc v Yoder (n 8)
15 Epstein on Intellectual Property (n 6) 1.34-1.48
16 Pressure Science, Inc v Kramer (1976) 413 F Supp 618 (US-Connecticut) 627
17 Surgidev Corp v Eye Tech, Inc (1986) 648 F Supp 661 (US-Minnesota) 693
18 ISC-Bunker Ramo Corp v Altech, Inc (1990) 765 F Supp 1310 (US-Illinois) 1322

taken to be aware of the confidentiality of the information. This means that even if the
information is confidential in nature, it should be rendered in circumstances that will enable a
reasonable man to understand that the information is confidential, and if this condition is not
fulfilled, the defendant will not owe any obligation of confidence towards the owner of the
These circumstances indicating confidentiality may be inferred from contracts 20 or fiduciary
relationships21. There was no contract or fiduciary relationship between Santos and Van Outen,
and this fact negatives any argument about the existence of any obligation of confidence.
There are situations where an obligation of confidence is implied even in situations where there
is no contract or fiduciary relationship in picture.22However, such situations are very restricted,
such as those related to wire-tapping23 or theft24. The common thread underlying these cases is
the use of improper means25 to acquire the information: the improper means imply the use of
illegal methods26 or an unconscionable or surreptitious act on behalf of the defendant27.

19 Coco v AN Clark (n 3) 48
20 See: Exchange Telegraph Co v Gregory & Co [1896] 1 QB 147 (QB)
21 See: Jarman & Platt Ltd v I Barget Ltd [1977] FSR 260 (CA)
22 Saltman v Campbell [1948] 65 RPC 203 (CA) 211
23 See: Francome v Mirror Group Newspapers [1984] 2 All ER 408 (CA)
24 Franklin v Giddins [1978] Qd R 72 (Australia)
25 Restatement (Third) of Unfair Competition 1995, 40 (a) (US)
26 Solo Cup Co v Paper Mach Corp (1965) 240 F Supp 126 (US-Wisconsin) 137
27 William Cornish, David Llewelyn & Tanya Aplin, Intellectual Property: Patents, Copyrights,
Trademarks and Allied Rights (8th edn, Sweet & Maxwell 2013) 342-343

However, Santos had hived the Snowball bees in the open, without any physical protection
measure in sight. Moreover, it didnt provide sufficient notice of the confidentiality of the
information to the world through its website. Also, considering the qualified nature of property
right over the bees28, Santos ought to know that once the bees had swarmed to the land of Van
Outen, she was under no obligation to mention this fact to Santos. This shows that Van Outen
didnt engage in any illegal or surreptitious or unconscionable act in hiving the Snowball
Moreover, the Snowball bees were not solicited by Van Outen; they had accidentally
swarmed29 to her land. However, if the Court would imply an obligation of confidence in such
circumstances, this would encourage an undesirable practice, where an enterprise will
deliberately send some information marked as confidential to another enterprise in order to
create difficulties for the latter enterprise in its efforts at genuine acts of reverse engineering or
independent creation.30
1.3 That Van Outen didnt use the confidential information in an unauthorised way and
thereby, didnt cause detriment to Santos.
1.3.1 That Van Outen didnt use the confidential information at all.
Unlike in patented inventions, the use of confidential information is determined by the
intention of the defendant to use the information in a particular way.31Therefore, use of
the confidential information would connote commercial use 32: utilisation with a view to
production or advantage. Van Outen didnt use the information to her commercial
advantage. In fact, she didnt use the confidential information, i.e. the genetic information
28 Kearry v Pattinson [1939] 1 KB 471 (CA)
29 Secure Servs Tech v Time and Space Processing, Inc (1989) 722 F Supp 1354 (US-Virginia) 1361-62
30 William Cornish et al (n 27) 333
31 ibid 345
32 Monsanto v Schmeiser [2004] SCC 34 (Canada) [58]

at all. She merely used the Snowball bees for hiving as a hobby, and used the Snowball
honey for her private use, and she gave batches of the honey to her neighbours and
friends only in order to avoid wastage, and only seldom in return for some farm produce,
rather than as a commercial endeavour.
1.3.2 That Van Outens use of the genetic information was not unauthorised.
Even if it is conceded that Van Outen used the confidential information, it couldnt be
said that the use was unauthorised. The term unauthorised means without due
authority or permission. Valid authority or permission can be inferred from
contracts/licenses or fiduciary relationships, as long as information remains confidential.
However, if information has been conveyed in public or is communicated in other
circumstances which negative any duty of confidence, then the use of the information is
not unauthorised.33
The following negative the requirement of any authority or permission from Santos:
a. Santos disregard of physical security measures led to the swarming of bees, with no
positive act on the part of Van Outen.
b. Since Van Outen became the owner of the property in the Snowball bees, she didnt
require any permission to use them in the way she liked.
1.3.3 That Van Outens use of the confidential information didnt cause detriment to
Even if it is conceded that Van Outen used the confidential information, unauthorisedly,
the said use cannot be said to be detrimental to Santos.
The mere fact of the loss of confidential information is not detriment to the owner of the
confidential information.There is a positive requirement to demonstrate detriment that is
causally connected to the use by the defendant.34
33 Coco v AN Clark (n 3) 48
34 Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 (HL) 269-70 (Lord Griffiths)

However, the loss of confidential information in the form of the swarming of the bees
was a natural process, for which Van Outen is not responsible. Even if responsibility is to
be fastened, the same lies upon Santos, which didnt take sufficient measures to protect
the bees from swarming.
Also, since Van Outen has not used the bees for commercial purposes, but has merely
used them for private purposes, there is no occasion for a commercial injury to Santos.
2.1 That Van Outen has neither made nor used the invention within the meaning of s.
100 (1) of the Erewhonian Patents Act 1980.
The patent protection is limited only to the claims of the invention. 35This is specially in view of
the extensive monopoly that is conferred upon the patentee, which monopoly must be precisely
defined in order to prevent the abuse thereof.36
Therefore the term make or use are qualified by the term invention in s. 100 (1). This
clearly implies that StampOut patent will be infringed only and only if any of the three claimed
inventions: the chimeric gene, the transgenic maize cell or the process of modification of the
gene, are made or used by the defendant.37
But the use of StampOut plants or seeds will not infringe, as otherwise this will lead to a
practice whereby higher living forms would be indirectly protected through patents, which is not
the intended result of the patent law.38 Also use doesnt imply depriving the patentee of any
commercial benefit whatsoever flowing from anything consisting of the patented invention.39
35Kirin-Amgen Inc v Hoechst Marion Rousell Ltd [2004] UKHL 46 (HL) [18]
36 Free World Trust v Electro Sante Inc [2000] 2 SCR 1024 (Canada) [41]
37 Monsanto v Schmeiser (n 32) [130]
38 See: Harvard College v Canada (Commissioner of Patents) [2002] 4 SCR 45 (Canada)
39 Monsanto v Schmeiser (n 32) [152]

2.2 That the involuntary possession of the StampOut maize plants doesnt amount to
use of the patented invention.
Although the patent law imposes strict liability of infringement, mere possession of the
invention without more will not be an infringement of the patented invention.40
The possession of an invention only raises a presumption of its use, which presumption is
rebuttable.41Van Outen was merely in involuntary possession of the StampOut maize plants in
her field without an intention to use them.
The report of Dr. Hotenhoffer (accepted by Justice Fisher) clearly points the following, which
rebut the presumption of use:42
1. The presence of merely twelve per cent of the StampOut variety plants out of all the maize
plants on Van Outens field can be properly accounted for through the wind pollination process
from nearby farms where some of the farmers had been using the StampOut seeds, and where
Santos had been carrying out field trials of the StampOut invention. This fact distinguishes the
present case from the case of Monsanto v Schmeiser where the presence of patented variety
plants couldnt be accounted for through natural pollination.43
2. There was no reasonable way in which the StampOut variety plants could be distinguished
from other maize plants on Van Outens fields, except through a chemical test for identifying the
BART 10 protein, which couldnt be reasonably employed by Van Outen. Therefore, there was
likelihood of Van Outen collecting seeds from all her maize plants consistent with her traditional
practice without knowing which variety of seed she was collecting. This fact distinguishes the
present case from Monsanto v Schmeiser where the defendant had deliberately carried out the

40 Pfizer Corporation v Ministry of Health [1965] AC 512 (HL) 572

41 Monsanto v Schmeiser (n 32) [58]
42 ibid [86]-[87]
43 ibid

chemical test to identify the patent protected plants because of their inherent advantage, in order
to stock and use their seeds.44
Although the use of the standby utility of an invention makes possession infringing,45 the same
doesnt apply in the present case as Dr. Hottenhoffers report sufficiently brings out the fact of
involuntary possession without Van Outens knowledge of the number of plants in her field of
the StampOut variety. Crucially, unlike the farmer in Monsanto v Schmeiser, Van Outen didnt
take any affirmative steps to identify the StampOut variety plants in order to procure their seeds
for her subsequent farm operations.
An injunction is granted after consideration of the principles of equity based on the following
four factor test:46
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 That Santos has not suffered an irreparable injury from the patent infringement and
the infringement can be remedied through monetary damages.

44 ibid
45 ibid [58]
46 eBay, Inc v MercExchange, LLC (2006) 126 S Ct 1837 (US) 1839

A finding of infringement will not, as a matter of law, entail an injunction. 47Since the
infringement of StampOut patent can be remedied through monetary damages, an injunction is
3.2 That the consideration of the balance of hardships between Santos and Van Outen
doesnt warrant grant of an injunction.
The patent is a property right, with its advantages and burdens. 48Since the presence of StampOut
plants on Van Outens land can be explained through wind pollination alone, it doesnt constitute
an unreasonable burden on Santos patent rights. Rather, it is consistent with the biotechnology
companies practice not to sue for insignificant, involuntary infringement.49
An injunction, however, will unduly interfere with Van Outens traditional right to resow seeds
from her harvest, thus creating hardship for her.
3.3 That the injunction would be contrary to public interest.
Public interest prompted the legislature to create an exception to patent infringement, in favour
of farmers traditional rights in s. 100(2)(e).50 However, if the injunction is granted, it will result
in precisely the opposite effect, thus constraining the farmers rights. This will also weaken the
agricultural sector of Erewhon, depriving it of the economic, environmental and health benefits
of traditional practices, as noted by Justice Fisher.
Also, the injunction, if granted, would aid Santos and similar biotechnology companies in
armtwisting the farmers to forcibly enter into licenses with them to procure their seeds, which

47 Roche Products, Inc v Bolar Pharmaceutical Co (1984)733 F 2d 858 (US) 865-867

48 Miller v Jackson [1977] QB 966 (CA) 988G
49 See: Monsanto's Commitment: Farmers and Patents
<> accessed 8 December
50 Robert Anderson, Exceptions to Infringement in Ashley Roughton et al (eds), The Modern Law of
Patents (Lexis Nexis 2005) [4.9]

otherwise they may not desire to procure. Such an effect of the injunction will be contrary to
public interest.51

Respectfully Submitted
Counsel for the Respondent
Word Count: 2,984

51 eBay, Inc v MercExchange, LLC (n 46) 1842