HT-2021-000363 - [2025] EWHC 998 (TCC)

The Defendants seek a stay of: (a) the orders for delivery up/destruction in respect of the ICA Programs; and (b) the orders for injunctive relief in respect of the SDM, pending final disposal of an appeal by any of the Defendants to the Court of Appeal (and any further appeals).

The general rule is that an application for permission to appeal does not act as an automatic stay on execution but the Court has power to grant interim protection to a party that has been unsuccessful at trial pending an appeal. Such stays are not granted automatically but may be granted where solid grounds are shown and subject to conditions in appropriate cases: Novartis AG v Hospira UK Ltd [2013] EWCA Civ 583 per Floyd LJ at [30]-[32] and HTC Corporation v Nokia Corporation (No.2) [2014] RPPC 31 (CA) per Patten LJ at [8], both of which adopted the principles for the grant or stay of injunctive relief pending appeal set out by Buckley LJ in Minnesota Mining and Manufacturing Co v Johnson & Johnson Ltd [1976] RPC 671 at p 676:

“It is not in dispute that where a plaintiff has at first instance established a right to a perpetual injunction, the court has a discretion to stay the operation of that injunction pending an appeal by the defendant against the judgment. On what principles ought such a discretion to be exercised? The object, where it can be fairly achieved, must surely be so to arrange matters that, when the appeal comes to be heard, the appellate court may be able to do justice between the parties, whatever the outcome of the appeal may be. Where an injunction is an appropriate form of remedy for a successful plaintiff, the plaintiff, if he succeeds at first instance in establishing his right to relief, is entitled to that remedy upon the basis of the trial judge’s findings of fact and his application of the law. This is, however, subject to the defendant’s right of appeal. If the defendant in good faith proposes to appeal, challenging either the trial judge’s findings or his law, and has a genuine chance of success on his appeal, the plaintiff’s entitlement to his remedy cannot be regarded as certain until the appeal has been disposed of. In some cases the putting of an injunction into effect pending appeal may very severely damage the defendant in such a way that he will have no remedy against the plaintiff if he, the defendant, succeeds on his appeal. On the other hand, the postponement of putting an injunction into effect pending appeal may severely damage the plaintiff. In such a case a plaintiff may be able to recover some remedy against the defendant in the appellate court in respect of his damage in the event of the appeal failing, but the amount of this damage may be difficult to assess and the remedy available in the appellate court may not amount to a complete indemnity. It may be possible to do justice by staying the injunction pending the appeal, the plaintiff’s position being suitably safeguarded. On the other hand it may, in some circumstances, be fair to allow the injunction to operate on condition that the plaintiff gives an undertaking in damages or otherwise protects the defendant’s rights, should he succeed on his appeal. In some cases it may be impossible to devise any method of ensuring perfect justice in any event, but the court may nevertheless be able to devise an interlocutory remedy pending the decision of the appeal which will achieve the highest available measure of fairness. The appropriate course must depend upon the particular facts of each case.”

The principles to be applied were summarised by Floyd LJ in Novartis at [41] and also set out by Patten LJ in HTC at [9]:

“(i)

The court must be satisfied that the appeal has a real prospect of success.

(ii)

If the court is satisfied that there is a real prospect of success on appeal, it will not usually be useful to attempt to form a view as to how much stronger the prospects of appeal are, or to attempt to give weight to that view in assessing the balance of convenience.

(iii)

It does not follow automatically from the fact that an interim injunction has or would have been granted pre-trial that an injunction pending appeal should be granted. The court must assess all the relevant circumstances following judgment, including the period of time before any appeal is likely to be heard and the balance of hardship to each party if an injunction is refused or granted.

(iv)

The grant of an injunction is not limited to the case where its refusal would render an appeal nugatory. Such a case merely represents the extreme end of a spectrum of possible factual situations in which the injustice to one side is balanced against the injustice to the other.

(v)

As in the case of the stay of a permanent injunction which would otherwise be granted to a successful claimant, the court should endeavour to arrange matters so that the Court of Appeal is best able to do justice between the parties once the appeal has been heard.”

In this case, the Court has refused the Defendants permission to appeal on the basis that the appeal does not have a real prospect of success. Therefore, the starting point is that the Claimant is entitled to the benefit of the injunctive relief notwithstanding the Defendants’ stated intention to seek permission from the Court of Appeal. However, it is not conclusive and does not fetter the Court’s power to grant a stay to hold the ring pending the Defendants’ application for permission to appeal in the Court of Appeal. This Court must assess all the circumstances of the case, including the hardship that would be suffered by each side if the stay is refused or granted, so that the Court of Appeal is in a position to do justice between the parties following the permission hearing and/or substantive appeal hearing.

The injunctive relief that is ordered in respect of the SDM at Paragraph 7 of the draft Order will have a devastating impact on the business of the First Defendant, as it will undermine its financial viability, business strategy and market base. It will also cause disruption to existing customers of the First Defendant who currently have licences to use the SDM. In contrast, although the Claimant will be deprived of the injunctive relief for a further period of time, it will have the benefit of the Judgment and declaratory relief to support its market position. The application for permission to appeal is likely to be considered within a reasonable period. If there is no merit in any of the appeal grounds, the application will be dismissed and the injunction implemented; if permission is granted, the balance will lie in continuing the stay.

For those reasons, the injunctive relief set out in Paragraph 7 of the draft Order shall be subject to a stay pending the disposal of any appeal by any of the Defendants to the Court of Appeal, or further order by the Court of Appeal.

The delivery up / destruction orders set out in Paragraphs 2 to 6 of the draft Order already have built-in safeguards to preserve the materials and allow use in the ongoing proceedings. Therefore, no separate stay is required in order to do justice between the parties.

The prohibition on using information derived from breaches of the ICA set out in Paragraph 9 of the draft Order is separate from, and does not impinge on, marketing, selling or dissemination of the SDM. Therefore, no separate stay is required in order to do justice between the parties.