On 7 March 2013, His Honour Colin Birss QC gave judgment in Niche v Macdermid [2013] EWPCC 11 showing that English courts are not afraid of flexing its muscles by continuing to hear matters that are the subject of proceedings in other jurisdictions. The Judge refused to stay English proceedings even though parallel proceedings had been issued in Texas four weeks earlier, saying that the Texas courts were not clearly the most appropriate forum and that the case management powers of the English court meant that there was no need to grant the stay requested to avoid unnecessary costs.

Niche and Macdermid were competitors in the oil business and the case concerned statements made about Macdermid's new formulation of its fluid product called Oceanic HW 443, which is used to control the functions of oil and gas wells. The Oceanic product had been sold for over 20 years but Macdermid had recently changed the formulation of the product to comply with relevant European Regulations. Niche claimed that Macdermid was incorrect in promoting the new product as having the same characteristics as the old product.

Macdermid sued Niche in Texas under the Lanham Act (false and misleading advertising) in respect of its claims. Four weeks later, Niche sued Macdermid in the English Patents County Court for malicious falsehood. The factual question at the heart of both sets of proceedings was, in essence, whether the new formulation of Oceanic HW 443 was the same as the old formulation.

Macdermid then applied to stay the proceedings in England on the basis of forum non conveniens or alternatively under the Court's general case management powers. Macdermid argued that the English Court had to stay the proceedings unless it considered that the foreign Court was not a "natural and appropriate forum". Niche argued that the correct test was that a stay should only be granted on forum non conveniens grounds if it were persuaded that the foreign court was a clearly more appropriate forum than the English Court. Ultimately, the judge agreed with Niche and concluded that it could only sta proceedings if it were convinced that Texas was the more appropriate forum to determine the dispute. In this case, the Court was not so convinced and therefore refused the stay, even though this meant that there would be parallel proceedings and, theoretically, a risk of divergent decisions. 

Further, the Court concluded that, while it could stay proceedings under its general case management powers, it should not do so in this case since the Patents County Court would likely come to its decision on the merits before the Texas court with the result that the Texas court could see the reasons why the English Court came to its desision (whatever that may be).

Two important points to note from this judgment. First, the judge relied partly on the considerable case management powers of the Patents County Court to ensure a minimisation of costs despite parallel proceedings. The Patents County Court is a forum that has been expressly promoted by His Honour Colin Birss QC as a suitable venue for determining IP related disputes in a cost effective way. Second, the judgment is a prime example of the recent trend amongst English Courts to maintain jurisdiction over disputes that have a global dimension (see, for example, our recent client alert on Arnold J's judgment in Actavis v Lilly on pan-European declarations of non-infringement.