GlaxoSmithKline Australia Pty Ltd v Ritchie & Anor [2008] VSC 164

1 The plaintiff, GlaxoSmithKline Australia Pty Ltd ("GSK") is, and its predecessor Glaxo Wellcome Australia Ltd ("GWA") was, a major manufacturer of opiate alkaloids for the global NRM ("narcotic raw materials") and API ("active pharmaceutical ingredients") markets. Among the products of both are and were opiate alkaloids extracted from the opium poppy (papaver somniferium). GSK alleges that the methods by which the extraction is effected are confidential to it. Despite this, the defendants have unlawfully employed those methods for their own purposes, and have profited thereby. GSK, meanwhile, has suffered damage as a result. GSK further alleges that the defendants have misused other of GSK's confidential information, with like outcomes. Future misuse is, the plaintiff asserts, to be anticipated. Injunctive relief is therefore likewise sought. Hence this litigation. The principal - but not the only - issues raised by it are the identification of the information GSK claims to have been misused, the proper classification of this information as confidential or otherwise, and (so far as it is confidential) the extent to which, if at all, it has been misused - or threatened to be misused - by the defendants. The current statement of claim (the second further amended statement of claim, dated 15 October 2007) also pleads a breach by the first defendant, Jarrod David Ritchie, of the duty of good faith and fidelity which, as an employee of the plaintiff, he owed to it.

2 The process of extraction of the opiate alkaloids contained within GSK's successive crops of papaver somniferium is the responsibility of its "Chemicals Division". The core business of that Division is "overseeing the growing and processing of poppies into dried, raw, poppy material (referred to in the industry as 'poppy straw') which is in turn manufactured (through a series of intricate extractional processes) into saleable end-products (namely, opiate alkaloids and value added derivatives of opiate alkaloids) for supply by GSK to consumers in the worldwide licit opiates market".[1] The "straw" is the material which makes up the (dried) capsules of the poppy; a small proportion of the stem may be included.[2] In 2005, GSK supplied 25% of this market, exporting to over 30 countries. The Chemicals Division then employed about 110 people, and its revenue was approximately A$100 million. Of this, some $20 million has over the past 10 years been allocated to the Division's Research & Development Department. I accept that research and development is an important aspect of GSK's involvement with opiates, which involvement is itself an important aspect of the production of very beneficial pharmaceutical products.

3 The entire Australian crop of papaver somniferium, which supplies about 40% of the world's market for medicinal opiates, is grown in Tasmania. (I do not know whether any of the harvest is sold overseas before the alkaloids are extracted, but - excluding the second defendant - there are two Australian manufacturers of medicinal poppy products: the plaintiff, and a company called Tasmanian Alkaloids.) After harvest, the seeds are collected before being sold for human consumption, generally on bakers' products. In the case of GSK, the seeds and capsules are separated in Latrobe, in Tasmania. It is there, too, that the capsules, free of seeds, are converted into pellets. The pellets are then shipped to Port Fairy in Victoria for extraction of the opiate alkaloids contained within them; and it is at Port Fairy that the principal functions of the Chemical Division are performed, although important elements of the Division's administration are located in GSK's administrative headquarters in the Melbourne suburb of Boronia.

4 Raw poppy straw contains four key alkaloids: morphine, codeine, thebaine and oripavine. Poppies can be bred, or when growing treated, to produce a relatively greater proportion of thebaine as against morphine; subject always to the inherent limitations imposed by nature, the proportions will depend on the view that the grower or manufacturer takes of its market. As one would expect, morphine straw contains a greater proportion of morphine than does thebaine straw; and vice versa. Morphine and codeine are commonly used analgesics. The other two, thebaine and oripavine, are not themselves analgesics, but form the basis of the manufacture of pain-relieving opiate derivatives such as naloxone and oxycodeine. Indeed, GSK was in 2003 involved in a joint venture ("[XXXXXXXX] project") with a key customer, [XXXXXXXXXX], to develop a new process for the manufacture of [XXXXXXX]. This project received some attention in the evidence, and will be referred to again later in this judgment.

5 In 2005, 5% of the alkaloids produced by the Chemicals Division were for internal GSK use. The remainder were exported to a limited number of third party customers, each of whom is a major international producer of pharmaceutical goods. It is they who manufacture, from the products supplied by GSK, pharmaceutical grade opiates.

6 The production of opium from the thickened and dried juice of the unripe capsules of the opium poppy first began in the very remote past; for example, opium was described, in the first century AD, by Dioscorides - whose work De Materia Medica was for centuries afterwards the leading text on pharmacology. The basic science is therefore neither new nor (in scientific terms) sophisticated. This is not to suggest that there is anything trite about the mass production of opiate alkaloids for medicinal purposes. Morphine was not isolated as an active constituent until early in the 20th century. Since then, the manufacture of opiates for modern medicinal use has been constantly refined. In the case of GSK, that research and development is carried out by the Chemical Division's Research & Development Department. It is located at Port Fairy. Much of its work is confidential, as are many of the results of its work.

7 Two of the principal witnesses in this case were for a time based together at Port Fairy. As Site Operations Manager, Timothy Allan Bowser occupies the most senior position at that location. He is also responsible for so much of the company's manufacturing operations as are carried out at Latrobe. The first defendant, Jarrod Ritchie, was on 4 December 1996 employed by GWA as a casual analyst in the quality assurance department of the company's Chemicals Division. He was then about to qualify as a Bachelor of Science from Deakin University. In early 1997, he enrolled in that University's honours course, which he completed over the next two years. His particular area of expertise is in organic chemistry.

8 On 1 October 1997, Mr Ritchie became a permanent employee and was promoted to the position of development chemist. I do not know to what extent, if at all, he was then exposed to information that GWA regarded as confidential. In any event, he was not at that time asked to sign any agreement, or to give any undertaking, the purpose of which was to protect the confidentiality of his employer's confidential information. His duties included the conduct of pilot trials for the extraction of thebaine, in the course of which equipment was rented from a company called Chem Eng Contracts Pty Ltd ("Chem Eng") (which company subsequently played an important part in the events the subject of this litigation, as did its sole director, Mr David Connolly). On 1 February 1999, Mr Ritchie was promoted again, this time to the position of Laboratory Manager. A further promotion followed on 1 September that year, when he was appointed as the Division's Process Development Manager, reporting for the first time directly to Mr Bowser. In this role, Mr Ritchie was responsible for research and development at Port Fairy, for its laboratory work and for conducting further pilot and plant trials. A new thebaine plant was commissioned as part of this program.

9 Mr Ritchie's final promotion came in November 2001. He was then appointed Research & Process Development Manager. This is a senior position. It carried with it commensurate responsibilities for the proper preservation of his employer's confidential information. He admits, in paragraph 8 of his amended defence dated 30 April 2007, that he owed GSK a duty of good faith and fidelity. He also acknowledges that it was his obligation to limit his use of GSK's confidential information to "his work in the plaintiff's business". Yet, until July 2002, he remained unencumbered by anything other than such constraints regarding confidentiality as are to be implied in his employment contract. This is not for a moment to deny the importance of such implied terms, or to give less emphasis than is its due to the fiduciary duty of an employee to his or her employer. The only point is that, until he signed an undertaking in the form of a letter presented to him in mid 2002, Mr Ritchie's contract of employment contained no express term dealing with issues of confidentiality.

10 In November 2001, the position of Research & Process Development Manager attracted a salary of some $120,000 per annum. It required Mr Ritchie to report directly not to Mr Bowser, but - over his head - to Mr Rick Gain, then the General Manager, Chemicals (but now Managing Director of GSK - Thailand/Myanmar). At the same time, Mr Ritchie became a member of the Chemicals Division Executive Committee. This carried with it membership of the Chemicals Leadership Team and Site Leadership Team. In addition to his previous duties, Mr Ritchie also became responsible for the development of new commercial opportunities.

11 The plaintiff alleges that, pursuant to a business sale agreement dated 30 June 2002, GWA on 1 July that year transferred to GSK "the rights in respect of" the former's confidential information. Although this allegation is, in the amended defence dated 30 April 2007, denied, it was not the subject of controversy at trial. Mr Ritchie admits that, on and after 1 July 2002, his employer was GSK.

12 This relationship came to an end when, on 17 December 2003, or perhaps the following day, Mr Ritchie tendered his resignation. It was to take effect the day after that. During the balance of the month, he worked as a consultant to an enterprise that he was then in the process of creating. It was incorporated, either in January 2004 or early the following month, as TPI Enterprises Pty Ltd. Now, as the second defendant, it has been re-named TPI Enterprises Ltd. I shall refer to it as "TPI". On 4 August 2005, it obtained a licence from the Government of Tasmania to plant trial crops of opium poppies, and in November that year commenced the construction of a manufacturing facility in Cressy in that State. By September the following year it had been granted, by the appropriate State and Federal authorities, all the licences necessary to manufacture, sell and export opiates for lawful use.[3]

13 TPI has been established to compete in the licit opiates market. It proposes to engage, on a continuing basis, Tasmanian farmers to grow and harvest opium poppies. Poppy straw and seeds will then be purchased from those farmers by TPI, which also proposes to extract the opiate alkaloids from the straw, and to sell the resultant product into the market in which GSK and other opiate manufacturers find their customers.

14 There can be no complaint about the entry into that market of a new competitor. GSK does not make that complaint. Rather, it contends (among a number of allegations the subject of this proceeding) that the process of alkaloid extraction planned by TPI is illegitimately based upon, or was illegitimately developed from, confidential GSK information wrongly used by Mr Ritchie on TPI's behalf. I briefly examine, below, the question of confidentiality before outlining my understanding of the processes of extraction.

15 This case touches upon nice issues of law and fact arising from the nature of the opiate manufacturing industry and the role the parties play in it. The evidence is that GSK supplies 25% of the world market for opiate alkaloids. The remaining 75% is, therefore, supplied from other sources. The entirety, however, is the product of a manufacturing process certain aspects of which are common to all. I accept the evidence of Mr Ritchie that "[t]he same sequence is used by all companies that extract opiate alkaloids". I also accept that it is not possible to extract opiate alkaloids from poppy straw without first processing the crop, extracting the alkaloids into a liquid, ensuring that they are concentrated appropriately in the alkaloid-rich extract, making appropriate pH adjustments, then finally removing them by precipitation for product isolation and packaging. [4]

16 But while those steps may be uniform across the industry, others are not. Both plaintiff and defendant accept that the desired end - the extraction by optimum means of the maximum quantity of alkaloid, with each of the four members of the family taking up an appropriate proportion of the total - is reached only after the completion of a number of different processes using different ingredients, different equipment and different plant. And each of these must be designed so as to draw on and mesh with the characteristics or elements or "parameters" (as these are known in the jargon of the industry) of the previous or succeeding step, or both (depending upon where the particular step lies in the continuum). The aim, therefore, is that, in combination, the totality of the processes will result in the production of the four alkaloids as efficiently and economically as possible, each individual alkaloid in the desired proportion as against the other three.

17 The position, then, is that broad similarities in over-all approach give way to differences, perhaps very significant differences, in the detail of what is a chemically and technically sophisticated manufacturing process. In these circumstances, it is not surprising that each manufacturer protects as secret the details of its own methods, and the results of their incorporation in the extraction process. Yet the broad similarities necessarily embedded in the operations of each manufacturer produce the consequence that, while the individual details of the various methods or approaches may have been arrived at independently, the possibility remains of much, albeit unwitting, commonality in those details. Thus, to take a hypothetical example, the formulae adopted by one manufacturer may unwittingly replicate in whole or in part those of a competitor. It is also true that the employment, somewhere in the entirety of the extraction process, of a particular chemical or technique or item of equipment may be within the public domain to the point of being trite knowledge. While sophisticated chemistry and technology is involved, much of the learning is - for those in the field - relatively basic. Nevertheless, particular combinations - as included, for example, in a given formula - may be highly confidential to an individual member of the industry. So too, of course, may be the complete formula or formulae; as may be the adoption of a particular parameter.

18 In this context it is pertinent to refer to the expert evidence given on behalf of GSK by Dr Andrew Ross. He holds a PhD and BSc (Hons) from the University of Glasgow in organic chemistry and chemistry. He is currently Head of Chemistry Primary Supply for GalxoSmithKline Plc, based in Scotland. This role requires him to "look after the chemistry needs for GalxoSmithKline's primary [pharmaceutical] manufacture".[5] From late 2004 to late 2006 he worked as the Process and Research Development Manager for GSK in its Port Fairy operation.

19 Dr Ross was asked to comment on the similarities between various GSK processes, and the processes developed, or in the course of development, by the defendants. As things turned out, however, he laboured under something of a disadvantage. On 19 October last year, four days before the trial began, I gave the plaintiff leave to file and serve both the second further amended statement of claim dated 15 October and the further amended confidential schedule (to which I shall refer as "the FACS"). This amended document considerably narrowed the scope of the plaintiff's claim. I have used it for its intended purpose: as the touchstone for the detailed examination of the information said to have been misused in this case. At the time that Dr Ross prepared his written materials, he did not have either document. Neither had been created. They were not handed to him until his arrival in Australia to give his oral evidence.[6]

20 At the outset I should say something about Dr Ross' approach. It is incumbent on GSK to establish that the information it seeks to protect is indeed confidential to it. The scope of GSK's case in respect of confidential information is defined by the FACS. Consistently with the rigorous approach taken by the courts to claims for misuse of confidential information, the subject matter must be identified with precision. Ambit claims covering vague and wide-ranging subject matter cannot be sustained. It seems to me that the simple comparison between one set of documents and another, with the similarities being seized upon and displayed as proof of misappropriation, falls foul of the general approach which the authorities have indicated must be taken. We are concerned, after all, not with a claim for breach of copyright, but with alleged breaches of confidence. Similarities between processes, or particular parts of them, will of course be relevant; but, in my opinion, the exercise of simply comparing the two is inappropriate. The first task is to identify that which is confidential, not that which is similar; and here the touchstone must be the information as identified by the FACS. It is to that document that first recourse must be made. Unfortunately, Dr Ross did not have that opportunity. To the extent, then, that Dr Ross has sought to comment on aspects of the two processes that have not been identified in the FACS as items of allegedly confidential information, or on documents not referred to as repositories of alleged confidential information,[7] I put his opinion aside.

21 Dr Ross' opinion should also be viewed having regard to the legitimate use that Mr Ritchie may make of his knowledge of chemistry, and of the production of opiate alkaloids - his know-how. Mr Ritchie is not the subject of a restraint of trade clause, and GSK does not seek to prevent him and TPI from establishing a competing business. It is the case that particular parameters or elements or sequences of GSK's production regime are not in the public domain, and would only have been incorporated into it after significant trials and laboratory work, together with an extensive review of the literature. Another reality, however, is that Mr Ritchie is an experienced, qualified chemist who held a senior position in GSK's R&D department and who worked, on a daily basis, to improve GSK's alkaloid extraction processes and his own knowledge and skill. During the course of his work he had cause to, and I accept did in fact, review the literature about the extraction of alkaloids from papaver somniferium with an eye to addressing problems being experienced by GSK. His general body of knowledge covered, of necessity, much of that which GSK did at Port Fairy, as well as his own academic and other professional training.

22 The role of information in the public domain also needs to be mentioned. It is of course true that an item of GSK information cannot be excluded from the defendants use simply because it does not appear anywhere in the public domain. Whether or not it appears in that domain is a factor to be considered when determining the validity of any claim for confidentiality. But it may be so trite as not to be worthy of publication. In any event, once Mr Ritchie's employment with GSK came to an end, he became free "to use his full skill and knowledge for his own benefit in competition with his former master".[8]

23 Dr Ross prepared a report dated 23 August 2007.[9] He prefaced his opinion about the similarity between the GSK documents and the defendants' processes by making the following comment, which I accept as being in accordance with commonsense and logic:

In process design and development two processes could be similar in overall philosophy and conceptual design and this may indicate that one was used as the basis for the design of the other. However, it is not categorical that the two processes are based upon each other. In my opinion, the greater the similarities the higher the likelihood that the two processes originate from the same design. Furthermore, it is my opinion that very specific details regarding control parameters and design philosophies would be a stronger indicator that one process was the bases [sic] of the other.[10]

24 It is also entirely possible that two processes, attempting to achieve the same thing, may be not only very similar, but in some respects identical; and this notwithstanding that the second was not developed by using the first. This will be particularly true where well known chemistry is employed and where a degree of logic will dictate that certain steps will follow others, coupled with the fact that the persons designing the process are experienced in the field.

25 Given the circumstances against which the extraction of opiate alkaloids is undertaken, the degree of confidentiality sought by those in the industry is nevertheless readily understandable. The inter-relationship of the parameters means that an alteration in one may produce a chain reaction, and so affect one or more of the others. A positive result in one direction may be cancelled out by a negative effect in another; or be so expensive as to be commercially inappropriate. The ultimate result may be either very adverse, or very beneficial. Or somewhere in between. Determining the best possible combination is a matter of trial and error, of adjustment and experimentation, of skill and experience. So both the result and the means by which it was obtained may properly be the subject of the protection of the law.

26 GSK alleges that the defendants misused information of this kind; information which in these respects was confidential to GSK. Indeed, as I understand its position, it alleges that the information covering the totality of its manufacturing processes, taken together and as a whole, amounts to a trade secret, or perhaps to several trade secrets.[11] Information covering a discrete stage might also qualify as such. Its case, however, is not that it has perfected a means for the extraction of opiate alkaloids that is on an altogether higher plane of sophistication or advancement than any of its competitors. It cannot make that claim, because it does not know enough about its competitors to make the claim good. It is therefore not its case that it has possession of a trade secret or trade secrets that put it in a class above the rest. Its basic premise, as I understand it, is that it is a major player in the relevant world market, and that it is therefore doing what it is doing well enough, although it is always looking for ways to do it better; but it has reached its present position by calling on its skill, experience and knowledge, and by conducting trials and tests and experiments. The results of this combination of qualities constitute valuable and confidential information that it is anxious to preserve to itself and which the defendants are not entitled to exploit.

27 Although at times asserting that it seeks to protect "the combination of the data and precise nature of processed details as described in [certain of] GSK's ... documents",[12] GSK does not seriously contend that the defendants have effected a wholesale misappropriation of GSK processes. It cannot put that contention (although, like a moth attracted to a candle, it could not resist flirting with it) because on no view have the defendants done this. Rather, the plaintiff alleges that different, albeit very significant, portions or parameters or elements have been called upon by the defendants at different times for different purposes as they moved towards finalisation of their own means of extraction of the opiate alkaloids they plan to manufacture and market. The precise identification of that which the plaintiff contends has been misused by the defendants; whether what is identified ever was, or (if it was) remains, confidential; and whether, if so, it was misused - these are the difficult issues in this case.

28 Those difficulties have been created by the circumstances surrounding this litigation. No one could sensibly suggest that the defendants could permissibly acquire for themselves exactly the same raw material, chemicals and plant and equipment as GSK and then - using the same manufacturing techniques, processes and procedures - commence to manufacture the same opiate alkaloids. At times during the course of the trial, and in its closing submissions, the plaintiff came close to alleging that that was nevertheless what the defendants had done. But, in my opinion, such a conclusion could not possibly be justified on the basis of the evidence called in this trial. TPI, in moving towards its aim of becoming a player in the field, began by preparing a series of schemata for what it might do. The principal aim of those exercises, I find, was not to establish TPI's means of extraction of opiate alkaloids. It was to work out what it might cost to establish TPI as a manufacturer of licit opiates. It was in the course of that exploratory process that the defendants or their agents produced documents that have come to be known as confidential exhibits DC4 (or "the first draft overview"), DC5 ("the second draft overview"), DC6 and JDR29 (a block flow diagram for secondary extraction dated 18 June 2004).[13] These exhibits are referred to in the second further amended statement of claim as the "extraction process documents". They have since been supplemented by plans that take TPI in directions very different from those of GSK. What TPI calls its "new process" is described by Mr Ritchie in an affidavit sworn by him on 11 October 2007. I shall return to that affidavit later in this judgment, especially at paragraphs 65 and following.

29 The plaintiff has seized on the extraction process documents as demonstrating the defendants' improper use of GSK's confidential information. The first, DC4, was prepared while Mr Ritchie was still an employee of GSK. All of them drew on his knowledge, skill and experience - a significant portion of which he had acquired as an employee of GSK. All were prepared by the director of Chem Eng, Mr David Connolly. Because these exhibits formed an important part of the evidence in this case, it is convenient at this point to outline something of their background.

30 Mr Connolly is a graduate of The University of Melbourne, with a degree in Chemical Engineering (1966). For more than 20 years he has been a fellow of the Institute of Chemical Engineers (UK) and a fellow of the Institution of Engineers of Australia. He founded Chem Eng in 1982. Indeed, he has some connection with all of the parties to this litigation. Most importantly, he is a shareholder in the second defendant; but he is, in addition, a former advisor to both GSK and Tasmanian Alkaloids. I accept that, as he says in his affidavit, he has "particular and specialised skill in the application of chemical engineering principles in the extraction of natural products". His evidence was in my opinion impressive. I find him to be a witness of truth.

31 It is Mr Connolly's evidence, which I accept, that Mr Ritchie contacted him in about August or September 2003. Mr Ritchie explained at the outset that he was not speaking on behalf of GSK. Rather, he was considering the establishment of a third Australian poppy alkaloid processor. Because the plan was not much more than an idea, Mr Ritchie's present concern was to obtain nothing more than a rough estimate of the cost of commissioning a morphine extracting plant capable of producing between 20 and 30 tonnes of morphine per annum. The estimate had to be rough, because a process had not yet been designed.[14]

32 Mr Connolly agreed to assist. Armed with the scant details with which he had been provided, he produced DC4. It was, he says, "extremely rough" and "no plant could be designed or constructed" on the basis of it.[15] But it enabled Mr Connolly to tell Mr Ritchie that housing and equipping the envisaged enterprise would require the expenditure of between $10,000,000 and $20,000,000.

33 As further information came to hand, and as plans were amended and re-amended, a second design overview was prepared by Mr Connolly. It took the form of DC5, and was prepared in June 2004. By then, some six months had passed since Mr Ritchie's departure from GSK. DC6 followed about six months later again, inspired in part by Mr Ritchie's desire to avoid the use of solvents in TPI's manufacturing process.

34 Taken as a whole, exhibits DC4, DC5, DC6 and JDR 29 together embodied those elements of GSK's processes which are necessarily shared by every manufacturer of opiate alkaloids. In addition, each had other points of similarity with GSK's operational parameters. All of them also had points of difference, the significance of which is in dispute.

35 Some of the similarities were trite, such as the common use of well known pieces of plant or equipment. Others, however, concerned GSK parameters that it had only adopted after careful research and development; and here one issue is whether the information on which they were based had become so much part of Mr Ritchie's store of knowledge, skill and experience as to be his own - or whether he, as "a person of ordinary intelligence, in all the circumstances of the case, including, inter alia, the relationship of the parties and the nature of the information and the circumstances of its communication, [would] recognise this information to be the property of [GSK] and not his own to do as he likes with".[16]

36 A further point of contention is of course fundamental to the outcome of this case. It is whether the characteristics of the manufacturing processes that TPI will (when fully established) in fact adopt, be so different from DC4, DC5, DC6 and JDR29, and the processes of GSK, as to be immune to the GSK charge that TPI has misused GSK's confidential information.

37 The question of misuse looms large. The plaintiff's allegations cover wide ground. The defendants, in response, contend that either there was no relevant use at all - none of their plans involved a misuse of information, and there has certainly been no actual misuse - or (which is, in part, the same thing) that the information in question was and is not a trade secret, and has become part of Mr Ritchie's general background knowledge. He is, the defendants contend, a skilled chemist. He has appropriate formal qualifications in chemistry. He has much experience in the operation of large-scale plant as well as in the laboratory. He was entitled to seek opportunities outside GSK, and to put his professional attributes to their best use. He did no more than that.

38 In these circumstances, careful pleading is required. It ought not be the judge who is left to identify that which, in a breach of confidence case, the plaintiff contends has been misused. I do not wish to be unjustly critical, and appreciate the problems to which confidential information litigation gives rise: it must often be difficult for those in whom that information reposes to know with certainty whether any misuse of information has occurred and, if so, to identify that information. What is more, cases such as the present confront non-lawyers with the difficulty of understanding the relevant procedural, and especially pleading, rules, while demanding of the lawyers an understanding of highly technical information sufficient to marry the client's claims with those rules while assessing the likelihood of obtaining, by litigation, the desired relief. Yet the law must insist not only upon the clear and precise identification of the information upon which the plaintiff relies, but also that that identification be restricted to information that is properly characterised as confidential. I respectfully adopt the words of Laddie J in Ocular Sciences v Aspect Vision Care Ltd:[17]

The requirement of particularity may impose a heavy burden on the plaintiff. In a case where the plaintiff has a large quantity of confidential information and much of it has been taken by the defendant, the obligation to identify all of it might involve a great deal of work and time. ... The normal approach of the court is that if a plaintiff wishes to seek relief against a defendant for misuse of confidential information it is his duty to ensure that the defendant knows what information is in issue. This is not only for the reasons set out by Edmund Davies LJ in Zink (John) & Co Ltd v Lloyds Bank Ltd [1973] RPC 717 but for at least two other reasons. First, the plaintiff usually seeks an injunction to restrain the defendant from using its confidential information. Unless the confidential information is properly identified, an injunction in such terms is of uncertain scope and may be difficult to enforce ... Secondly, the defendant must know what he has to meet. He may wish to show that the items and information relied on by the plaintiff are matters of public knowledge. His ability to defend himself will be compromised if the plaintiff can rely on matters of which no proper warning was given. It is for all these reasons that failure to give proper particulars may be a particular damaging abuse of process.

These principles do not apply only to the question of the content of the pleadings. Just as it may be an abuse of process to fail properly to identify the information on which the plaintiff relies, it can be an abuse to give proper particulars but of information which is not, in fact, confidential. A claim based even in part on wide and unsupportable claims of confidentiality can be used as an instrument of oppression or harassment against a defendant. It can be used to destroy an ex-employee's ability to obtain employment or a competitor's ability to compete. The wider the claims, the longer and more expensive the litigation. ... A competitor or ex-employee is entitled to copy non-confidential material, but if the plaintiff mixes a large amount of technology together, some of which has been copied by the defendant, there is a risk that the court will jump to the conclusion that some of what was copied must have been confidential.

His Lordship went on to speak about the possibility of excessively wide injunctions creating a new form of industrial slavery in which individual employees find it impossible to work for anyone except the plaintiff. I add that the requirement that all injunctions be clear and precise is so firmly grounded in considerations of justice and practicality as to need no further justification. An injunction prohibiting the use of information is accordingly only appropriate if the information the subject of the injunction is clearly identified by, or identifiable by reference to, the injunction itself.

39 Some further points should be made. First, the reference in the judgment of Laddie J to the reason set out in the judgment of Edmund Davies LJ is a reference to the importance, in litigation in which accusations of serious misconduct are made, of providing the person against whom the accusations are directed with full particulars of them. Secondly, there may be almost insurmountable difficulty in pleading, then proving, then enjoining, the misuse of confidential information. Prevention, perhaps by means of an appropriately worded clause in a contract of employment or other relevant agreement, may therefore be better than any attempt to devise a cure.

40 The plaintiff's initial pleadings did not meet the requirements of the pleading rules. The confidential schedule to the original statement of claim, and the amended confidential schedule of 25 November 2005 (filed 13 months or so after the litigation began) itemised 14 lever arch folders of allegedly confidential material that the defendants had used or were threatening to use. But in fact the link between what was confidential and what was misused, an essential link in a claim based upon the misuse of confidential information, had not been carefully drawn. The spectre of an abuse of process of the kind to which Laddie J referred was raised. Then, on 19 October last year, both the second further amended statement of claim and the FACS were filed and served.

41 The effect was dramatic. The schedule did not merely amend its predecessors; it supplanted them. As a consequence of its creation, a very large quantity of material - many lever arch folders of documents - became irrelevant. But all the affidavit evidence had been prepared having regard to the earlier particulars, including those now discarded. The result has been both very great difficulty in relating the evidence to the plaintiff's repleaded case, and a commensurate delay in the preparation of this judgment.

42 A short description of the process will illustrate the point. Under the heading "GSK Confidential Information" paragraph 4 of the second further amended statement of claim alleges that the plaintiff has in the course of its business acquired, developed and maintained for use in its business certain confidential information not being in the public domain. This information is referred to collectively in the pleading as "the GSK confidential information", and includes:

(a) scientific and technical information (the GSK technical information) incorporating GSK's processes and development activities relating to:

(b) business and commercial information (the GSK business information) about GSK's opiates clients, including information as to pricing and quantities supplied to these clients by GSK, and details of relevant client contacts.

Paragraph 12 of the second further amended statement of claim then states that further particulars of the GSK confidential information are contained in the FACS.

43 Much of the latter document is in tabular form. The tables contain two principal columns. The first of these includes a description of the information which GSK claims is confidential. The second identifies the page or pages in the court book in which that information is to be found. In examining the plaintiff's case it has therefore been necessary for me to ask, first, whether the description of the information given in the first column of the relevant FACS table matches that contained in the document or documents identified in the second column. I have then examined that document or those documents for that purpose. The next step has been a consideration of the question whether the information is confidential. That exercise has required a very careful examination of the evidence, much of it in the form of witness statements prepared before the FACS was in existence, and much consisting of answers given in cross-examination after the FACS was created. I have then had further recourse to the evidence in seeking to answer the question whether the information was used by the defendants. Finally, additional recourse to the evidence has been required in order to determine whether, if the information was used, it was misused.

44 I have, of course, taken the FACS as a principal point of reference in preparing this judgment. It is the repository of all the information which the plaintiff alleges is not only confidential to it, but has also been misused by the defendants. It is therefore the point of departure when undertaking the task of determining whether the plaintiff has discharged its burden of proof and, if it has, whether it is entitled to any of the relief which it claims. The process has necessarily been slow. Particularly troublesome has been the task of relating the affidavit evidence to a pleading document which did not exist at the time the affidavits were prepared.

45 The defendants do not challenge the proposition that a proportion of the store of knowledge accumulated by the plaintiff over the course of its involvement in the manufacture of opiate alkaloids is confidential to the plaintiff. Indeed, the defendants claim that their own processes, actual or proposed, are covered by a general cloak of confidentiality. In answer to the claims of the plaintiff, the defendants contend that no information employed, or threatened to be employed, by them has been misused. They assert that all such information was either generated independently of the plaintiff, or was in the public domain, or was (and is) for other reasons not properly characterised as confidential, or had become part of Mr Ritchie's general stock of knowledge and - because none of it qualified as a trade secret or secrets - was therefore his to exploit.

46 It is in the public interest that, in general, employees be free to work where, and with whom, they will. They may have, as part of their stock of knowledge (sometimes called their "know-how") information which is not a trade secret, but which their employer may for proper commercial reasons wish to remain confidential. If so, the employees must respect that confidentiality so long as they remain employed by the same employer, or that employer's successor in title. But it is in the public interest that they and employers and potential employers be free to bargain over the best means of exploiting the employees' knowledge, experience and talent. The latter may not, in that bargaining process and while they remain with their current employer, disclose any information that is properly confidential to that employer. Subject to that proviso, however, the law will not - in the absence of a suitably confined and otherwise binding restrictive covenant - seek to prevent those who wish to practice their profession or trade from doing so simply because their work for someone other than their former employer may put that former employer at a financial or competitive disadvantage. And this is true even if the exploitation by the former employees for the benefit of their new employer of the employees' stock of knowledge results in information once confidential to the former employer being used to the advantage of the new. Were it otherwise, the benefits of employee mobility for the better exploitation of employee skill and experience would be lost. An employee's stock of knowledge cannot by deliberate choice be forgotten; and, if retained in the memory, cannot be discarded when the employee carries out tasks, which necessarily draw on that knowledge, for the new employer.

47 It follows that, if the employee were forbidden from using his or her skill, experience and retained memory concerning general principles or items of information for the benefit of a new employer, the choice would be either to remain in the former employment, or not use that skill, experience and knowledge at all. For this reason, and putting trade secrets to one side, non-trivial information which would otherwise be protected will not be so if, by reason of the nature of the information and the employee's or ex-employee's exposure to it, that information has become part of his or her general background knowledge; has become, in other words, inseparably incorporated in the form of his or her skill and experience.

48 The relevant law was expounded by Lord Wilberforce in Stenhouse Australia Ltd v Phillips.[18] His Lordship there said:

The accepted proposition that an employer is not entitled to protection from mere competition by a former employee means that the employee is entitled to use to the full any personal skill or experience even if this has been acquired in the service of his employer: it is this freedom to use to the full a man's improving ability and talents which lies at the root of the policy of the law regarding this type of restraint. Leaving aside the case of misuse of trade secrets or confidential information ... the employer's claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee, may have contributed to its creation. For while it may be true that an employee is entitled - and is to be encouraged - to build up his own qualities of skill and experience, it is equally his duty to develop and improve his employer's business for the benefit of his employer. These two obligations interlock during his employment: after its termination they diverge and mark the boundary between what the employee may take with him and what he may legitimately be asked to leave behind to his employers.

49 There is as yet no settled meaning of the expression "trade secret". According to Butterworths Australian Legal Dictionary (1997) it is not a term of art but an ordinary term of the English language.[19] In The Law of Trade Secrets and Personal Secrets, Dr Robert Dean says that:

courts have categorised a trade secret in terms of confidential information of a commercial character, using description by example and relying on specific indications of secrecy to determine whether information is a trade secret. It is a term that changes as the commercial environment changes.[20]

50 For present purposes, I take a trade secret to be information which "can fairly be regarded as a separate part of an employee's stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his old employer, and not his own to do as he likes with".[21] For the purposes of this case, I therefore take a trade secret to be an item of confidential information, learnt during employment, the confidentiality of which, as an employee of ordinary honesty and intelligence would acknowledge, must be maintained even after that employment has come to an end. In other words, a trade secret has an inherent quality that takes it above and beyond more general knowledge, albeit that the general knowledge may to a lay person be very specialised. Whether information amounts to a trade secret is a question of fact, to be determined in the particular circumstances. A trade secret is to be distinguished from knowledge of no special significance such as that which an employee with familiarity with the relevant art might acquire (without employing any more skill than that of an ordinary practitioner of the art) simply by building upon the information necessarily made available to him in the ordinary course of his employment.

51 Mr Ritchie may be taken for present purposes as being at least as expert in the relevant field, and at least as familiar with the relevant art, as an ordinary practitioner in that field.

52 On 16 July 2002, or thereabouts, Mr Ritchie signed a letter in the form of an undertaking to treat certain GSK information as confidential. That letter was prepared by or under the supervision of Mr Gain, who was concerned (the defendants contend without justification) that Mr Ritchie was engaging in activity which cut across his duties as an employee of GSK. It contains the only express terms of Mr Ritchie's contract of employment that cover this topic. It is appropriate at this point to set out, in full, the operative terms of the letter, to which I shall return when examining in more detail Mr Gain's concerns. The letter reads:

Further to our recent conversations regarding your duties, I wish to take the opportunity to remind you of the importance in regard to the management of company information.

Accordingly, during the course of employment with GlaxoSmithKline, you will access commercially sensitive information which is confidential and the proprietary (sic) of GSK and not available to people outside the company. This information includes:

1. scientific and technical information concerning the research and developmental projects and activities of the company;
2. information discovered, developed, generated or otherwise produced by you on behalf of the company in the course of your employment with GSK;

1. scientific and technical information concerning the manufacturing and other production activities of the company;

1. medical and technical information concerning the products of the company;
2. commercial, business and financial information concerning products of the company;
3. strategic information concerning future activities of the company;
4. business and commercial information about GlaxoSmithKline's suppliers, customers and other entities with whom the company has dealings; and
5. any other trade secrets, scientific, technical, medical, operating, commercial, business or other information which is commercially sensitive in nature.

It is expected that you will undertake to treat all such information as confidential and will not disclose any such information to any party. Furthermore, it is expected that your work activities are of a full-time nature and are specifically for the best interests of GlaxoSmithKline and that you will not engage in any work (contract, consulting) related activities outside of GSK.

I, therefore, request that you confirm this undertaking by signing and returning the enclosed copy of this letter.

Please contact me should you require further information and I look forward to your continued commitment in supporting the business objectives of our Chemicals Division.

53 The reference in this document to work activities being "of a full-time nature", and the prohibition of "work ... related activities outside of GSK" are directed to Mr Ritchie as a GSK employee. More generally, any undertaking given by Mr Ritchie when he signed it does not in my opinion extend beyond the period of his employment so as to prevent him exploiting his general skill, knowledge and experience for another employer. Certainly, the evidence does not disclose anything in Mr Ritchie's contract of employment, including anything in the undertaking of July 2002, that explicitly covered his post-employment obligation of confidence. The result, in my opinion, is that he is entitled to use on the defendants' behalf all the information (whether, at the moment before his employment ceased, that information was confidential or not) which at that time formed part of his general stock of knowledge - his "know-how" - and which is not a trade secret. Trade secrets, not being for these purposes included in what I mean by his "general stock of knowledge", were not and are not covered by this entitlement. Honesty requires that their secrecy be maintained.

54 I observe in passing that the document is not well drawn. It suffers from its failure to acknowledge that it might well be in GSK's interest for the information covered by the document, or some of it, to be passed by Mr Ritchie to GSK customers and others in a business relationship with it. Indeed, it might be Mr Ritchie's duty to do just that as an employee, and it might be to GSK's benefit for him to do it as an ex-employee. And were the letter, properly construed, to purport to prevent Mr Ritchie, as an ex-employee, exploiting his general skill, knowledge and experience, then it would in my opinion be an unjustifiable restraint of trade and therefore unenforceable against him.

55 Although it is appropriate in layman's circles to speak of a number of "stages" in the journey of opiate alkaloids from their original repository in the straw of the opium poppy to their use for medicinal purposes, the expression "stage" "has a specific meaning in the science of liquid extraction".[22] But in any event, the parties to this litigation are concerned with two principal segments or phases of that journey: the initial phase, during which the straw releases its alkaloids (together with impurities and other unwanted material, which must be at least partially removed before the subsequent phase or segment); and the second segment, when further purification is undertaken and the alkaloids are separated from the extractants and from each other.

56 Following the physical separation of straw and seed, and, in the case of GSK, the conversion of the straw into pellets, the initial extraction stage begins. The pellets are finely ground and then slurried with a liquid extractant. So far as the present evidence goes, the parties' chosen initial or primary extractant consists of water, either alone or with another liquid or other liquids. In the case of GSK, [XXXXXXX] are used where the source material is morphine straw; and [XXXXXXXXXXXXX] where thebaine straw is the source. TPI employs, or proposes to employ, [XXXXXXXXX]. The slurry is then filtered, and an aqueous extract obtained. Being rich in alkaloids, it is referred to in the industry as a "rich extract" or "RE".

57 An alternative primary extractant is dilute acetic acid (a relatively weak organic acid, being the second constituent behind water in plain vinegar). Its possible use as an extractant has been the subject of scientific literature. This includes papers by Walter R. Heumann, who as a member of the academic staff of Montreal University in the 1950's was a leading researcher in the relevant field. His work, including his work with acetic acid, was and is well known to those involved in this litigation. Nevertheless, acetic acid has never been used by GSK as an extractant in the initial stage. Nor is it proposed to be used by TPI. Both parties have, I find, conducted experiments which have failed to satisfy either that its use in initial extraction is to be preferred to [XXXXXXXXX] (TPI's choice) or to those extractants favoured by GSK. As I shall have reason to observe later in this judgment (paragraphs 209ff), one problem with acetic acid is that, while being an efficient tool for the extraction of opiate alkaloids from poppy straw, it also extracts much unwanted, extraneous material. Another disadvantage with its use is that it causes the straw to swell, making the process of filtration more difficult than otherwise.

58 It is in these circumstances paradoxical, or at least somewhat so, that GSK complains that TPI has misused GSK's information about an extractant, acetic acid, that neither uses. But much of the evidence led in the trial was directed to this complaint; and it is therefore one with which, later in this judgment, I must deal.

59 Because in the manufacture of opiate alkaloids the object of the initial phase of extraction is to remove as much of the alkaloid content of the straw as is physically and economically feasible, that which is obtained before the residual straw is discarded is referred to as the "yield". The yield at the conclusion of the initial extraction phase will, of necessity, never be less than the yield when the manufacturing process is complete. The latter yield is referred to as the "over-all yield", and is expressed as a percentage of the raw material in its original form.

60 The experience of GSK as outlined in its manufacturing guide known as Manufacturing Guide Basic Chemicals 1 ("MGBC1") is that approximately [XX]% of the morphine formerly in morphine straw is captured in the rich extract after the straw has been "washed" or re-slurried a number of pre-determined times (the "wash" or "re-slurry" stages) during what is known as a "counter-current" operation.[23] The percentage of codeine removed is typically [XX]%. By contrast the figure for thebaine is typically [XX]%.

61 Once the alkaloids have passed from the poppy straw into the extracting liquid, it is necessary to increase their concentration so that they can be more efficiently removed from that liquid. Different techniques have been adopted for this purpose. One, employed by GSK, necessitates the use of organic solvents. The other, chosen by TPI in 2004, involves no solvents, but rather [XXXXXXXXXXXXXXXXXXXXX] of the initial extracting liquid. Indeed, TPI applied for planning permits to construct its Tasmanian plant on the basis that it would "not use solvents in extracting or concentrating alkaloids".[24] Yet, by another seeming paradox, GSK accuses TPI of misappropriating GSK's confidential information about the choice of solvents and their place among the parameters of the secondary extraction process.

62 The rich extract contains not only alkaloids but also impurities, including unwanted organic matter. This must be removed. As I understand the process described in the "process summary" section of MGBC1, the pH of the rich extract is to this end adjusted from [XXXX] to [XXXX], a step that precipitates the unwanted organic material which may then be removed by further filtration. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. This allows the filtered rich extract to be mixed with a solvent, the latter rising through the former. As the solvent rises, it attracts the morphine, codeine and thebaine. The spent aqueous is then expelled, while sodium hydroxide (caustic soda) is added to the rich solvent. This enables the morphine to be back-extracted into the aqueous using counter-current techniques. The caustic aqueous solution is adjusted to pH [X], and the morphine precipitated, while the codeine and thebaine remain in the solvent until they are acid extracted at pH [X].

63 It is important to note here that the first step of the process impacts on what follows. Likewise, intermediate steps influence what went before, and in turn also influence succeeding steps. The final step is of course the product of that which precedes it. Thus, in the primary stage of extraction, the size of the milled particles of poppy straw impacts upon (a) the surface area of the straw that comes into contact with the initial extractant, and (b) the means by which and the ease with which the filtering process is effected. The choice of that extractant ([XXXXXXXXXXXXXXXXXXXXX]; or some alternative to these) will affect not only the proportion of alkaloid extracted but also the quantity of organic waste that becomes part of the rich extract mix - and that therefore must subsequently be removed, with the difficulty (to differing degrees) such removal necessarily entails. Unless the pH of the mixture is at the appropriate time adjusted by an appropriate means to the appropriate level, the next step in the over-all extraction process will not be conducted with maximum efficiency. And so on.

64 An example of the inter-relatedness of the several parameters of the manufacturing process may be found in the procedures adopted by GSK. It uses [XXXX] in the initial stage. [XXXX] when employed in this way produces [XXXXX] as a by-product. That necessitates its removal, and therefore the incorporation of a step designed to effect that end. This in turn has required the adjustment of other steps. TPI, not having incorporated [XXXX] into its production regime, does not need to make like adjustments; but it will have its own to deal with.

65 It is important in this context to emphasise the point that, if the evidence given by Mr Ritchie in his affidavit of 11 October 2007 is to be believed (and I do believe it), TPI will not in manufacturing its opiate alkaloids follow the path trodden by GSK. It follows, the defendants contend, that they cannot have used any GSK information; certainly not in the way GSK alleges. The steps in the TPI process depend upon and relate to each other as they do in the GSK process. It is the combination of steps or parameters that is important. The combination adopted by TPI is different - TPI says, very different - from that which GSK has embraced. TPI therefore contends, without making any admissions, that, if there has been any transmission of information from GSK to TPI, that information has not been used by the latter as it was, and is being, used by the former; and in any case its use is the product of Mr Ritchie's skill and experience. It has as its source his background as an astute, experienced and skilful practitioner in the field.

66 TPI operates, or plans to operate, in some respects as does GSK: that is inevitable, given that both are in the business of manufacturing opiate alkaloids; and both must therefore process the crop, extract the alkaloids into a liquid, ensure that they are concentrated appropriately in the alkaloid-rich extract, make appropriate pH adjustments, discard impurities, then finally remove the targeted alkaloids from the mother liquid by precipitation for product isolation and packaging.

67 Otherwise, TPI contends that it takes a distinctively different approach to that adopted by GSK, and that it has decided upon its approach after conducting its own trials and experiments. It mills its poppy straw using a different process, [XXXXXXXXXX]. It uses a different primary extractant ([XXXX]) and a different filter ([XXXXXXXXXXXXXXXXX]) in the initial extraction stage. After the first straw-liquid slurry is filtered, GSK washes the partly-depleted straw; TPI [XXXXXXXXX]. The ratio adopted by GSK as between the volume in litres of rich extract taken off and the dry weight in kilograms of the poppy straw from which the alkaloids are extracted is [XX] (morphine) and [XX] (thebaine). If one includes, in the rich extract taken off, the alkaloid-rich water that remains in the straw after a previous extraction, TPI's ratio is [XX]. It uses a different technique for concentrating the alkaloids ([XXXXXXXXXXXXXXXXXXXXXXXXXXX]). Following [XXXXXXXX], TPI [XXXXXXXXXXXXXXXXXXXXXXX]; GSK does not [XXXXXXXXXXXX]. After initial extraction, TPI [XXXXX] the alkaloid-rich extract at pH [XX], whereas GSK adopts a pH of [X] or thereabouts when filtering impurities, and pH [X] or thereabouts when filtering [XXXXXXXXXXX]. GSK favours [XXXXXXXXXXXXXXXXXXXX]; TPI "[XXXXXXXXXXXXXXXXXXXXXXXXXX]". TPI uses [XXXXXXXXXXXXXX] rather than [XXXXXXXXXXX] as the reacting base in manufacturing codeine by the methylation of morphine.

68 One might have expected the evidence put forward by Mr Ritchie in his affidavit of 11 October last year to have been at the centre of controversy during the trial. If believed it does, after all, directly contradict that part of the plaintiff's case which relies on proving that the manufacturing processes actually adopted (as opposed to considered as planning options) by TPI were so closely allied to those of GSK as to be relevantly indistinguishable. It also tends to contradict GSK's claim that many of its individual parameters were impermissibly employed by TPI. This is so, the defendants' argument runs, because it puts sinews on their contention that, even if they did use GSK information, and even if that information was not also held by Mr Ritchie as part of his general body of relevant learning, then their use of it was not to be equated with GSK's use: the relevant TPI combination of parameters did not match any comparable GSK combination.

69 I have thus far been concerned to provide some the background to (a) the main areas of dispute and (b) the particularly significant evidence in this litigation. It is now convenient to move to discrete claims not involving the alleged misuse of information. Rather, it involves an allegation by GSK that Mr Ritchie was in breach of his obligation as an employee of GSK to serve his employer with good faith and fidelity.

70 In paragraph 9 above, I recorded the defendants' admission that Mr Ritchie as an employee of GSK owed the plaintiff a duty of good faith and fidelity. This, it is settled law, is a duty to which in the employment relationship employees are subject. It has been described by Lord Greene in Hivac v Park Royal Scientific[25]nstruments25 as "rather vague". Nevertheless, it is not only invariably asserted as an implied term of the contract of employment, but seems to be a duty known to both the common law and equity. Whatever its total compass in the employment relationship, it has been applied consistently so as to condemn in damages or by way of an injunction the employee who subverts his employer's business in furtherance of a competitor's or his o[26] interest.26

71 The second further amended statement of claim alleges, in paragraph 13, a series of breaches by Mr Ritchie of the terms and conditions of his employment agreement. One of these is a breach of "his duty of good faith and fidelity owed to GSK". Then, in the particulars under this paragraph, the plaintiff asserts that Mr Ritchie breached this duty by (a) becoming involved in what was referred to in this litigation as "the Premgen project"; (b) by seeking (and obtaining) confidential details of the GSK budget for 2004; and (c) by preparing the extraction process documents. It is to this aspect of the case that I now turn, in reverse order to that set out in the previous sentence. A fourth allegation of bad faith centres upon work assigned by Mr Ritchie to a junior GSK chemist, Mr Nick Hayes. I consider that aspect of this case at paragraph 307 and following.

72 I have already observed (paragraph 35 above) that a principal issue in relation to the extraction process documents (exhibits DC4, DC5, DC6 and JDR 29) is whether the information on which they were based had become so much part of Mr Ritchie's store of knowledge, skill and experience as to be his own - or whether he, as "a person of ordinary intelligence, in all the circumstances of the case, including, inter alia, the relationship of the parties and the nature of the information and the circumstances of its communication, [would] recognise this information to be the property of [GSK] and not his own to do as he likes [27]th".27 In other words, a principal issue is whether the information allegedly misused, or any of it, was a trade secret. GSK contends that there is a further issue, going beyond a mere examination of the status of the information in question as its property. That further issue is whether, in the preparation of the extraction process documents, Mr Ritchie breached his duty of good faith and fidelity.

73 In my opinion, only exhibit DC4 is here relevant. The remaining extraction process documents were prepared after Mr Ritchie ceased his employment with GSK. He also ceased, at that time, to owe the duty of good faith and fidelity to which GSK had up to then been entitled. It did not constrain him in his work on DC5, DC6 or JDR 29, although he of course remained obliged to refrain from disclosing trade secrets - that is, treating as his own such of GSK's information as "a person of ordinary intelligence ... [would] recognise ... to be the property of [GSK] and not his own to do as he likes with".

74 There is no reason why an employee should not during the course of his or her employment decide to change employers, or become self-employed, and take such preparatory steps as amount to neither a breach of the duty of good faith and fidelity nor (which may, at least in many instances, be the same thing) an injury to the employer. Thus, the employee may lease premises and order materials from which and with which, after the present employment ends, he or she will carry on business in competition with the present employer.[28] In the absence of any disclosure of confidential information, it would not matter, it seems to me, that in selecting either the premises, or the materials, or both, the employee called upon knowledge and experience acquired during his or her time with the present employer.

75 In my opinion, what Mr Ritchie did was relevantly similar to this example. In saying this, I bear in mind that DC4 was produced while Mr Ritchie's concept and plans for TPI were in a very embryonic stage. I find, for reasons which appear elsewhere in this judgment, that he wished to be provided with a rough estimate of the cost of establishing a third Australian player in the medicinal opiate alkaloid field. Without such a point of reference, the likely viability of the proposed enterprise, and its attractiveness to those whose financial assistance it needed, could not be assessed. So Mr Ritchie at that stage was far from seeking to design a working model for the production of opiate alkaloids. This, I find, explains why in several important instances (such as the failure to identify the solvent to be used in the liquid to liquid stage - stage two - of the extraction process) DC4 does not include that level of specificity which would enable the information it contains to have any more than an approximate relationship with reality. In other words, DC4 was and remains totally inadequate as a working description as a viable commercial enterprise for the extraction of alkaloids from opium poppies. It provided no more than a skeleton; only a portion (if any) of which might be incorporated in the final structure.

76 During the trial GSK referred to, but did not emphasize, the distinction between DC4 as a document prepared during Mr Ritchie's employment and the later extraction process documents (each of which was prepared post-employment). For this reason, it was difficult to examine in isolation the evidence concerning it. I trust, nonetheless, that the reasons I have endeavoured to express below will justify my conclusion that Mr Ritchie was not, in giving the instructions upon which DC4 is based, guilty of a breach of his duty of good faith and fidelity. I have found that GSK has not established its claims in respect of information which it says the defendants have used in the preparation of DC4.

77 A copy of DC4 (the first draft overview) was originally forwarded to Mr Ritchie by Mr Connolly on 14 October 2003. It necessarily follows that Mr Ritchie was working on the creation of TPI whilst still a GSK employee. He admits as much. Indeed, Mr Ritchie also admits that he prepared a business plan for TPI in August that year, and consented to be a director of a company formed to be the only shareholder in TPI. He however denies the allegation that he allowed any of this to detrimentally affect his work for his employer. He asserts that between September 2003 and his resignation from GSK, he spent between about one and four hours per week on TPI.[29] He also maintains that all his work on the business plan was done outside his "long" and "difficult" GSK working hours.[30] I accept this evidence; and I am not satisfied that his involvement in TPI had any adverse impact on his performance of his duties for the plaintiff. In particular, I reject the evidence that he was absent from Port Fairy when he should have been there. That evidence was largely second hand, coming from a witness, Geoffrey Zippel, who was not at any relevant time an officer of GSK, although he is now its managing director. He relied for this aspect of his evidence on accounts given to him by persons who were either not called as witnesses themselves or, if called, did not give evidence on this topic. The only exception is Mr Bowser; but Mr Ritchie did not report to him in 2003, when the absences were alleged to have occurred. I prefer Mr Ritchie's evidence to his.

The GSK Chemicals Division Budget Book (FACS 2.1)

78 As part of its normal operational practice, the Chemicals Division of GSK maintains what it calls a "budget book". This is the repository of relevant information for each budget year: profit targets, forecasted sales by customer and product line, overhead and production costs and unit costs, as well as less detailed equivalent forecast information for the next two years.[31]

79 At least when current, this data is necessarily highly confidential, because commercially sensitive. Access to the secure directory on which is stored the electronic copy of the budget book is therefore restricted to Ms Claire Hampton (the Finance Manager of GSK's Chemicals Division) and the three people in that Division's finance section who assist her. Of the Chemicals Leadership Team, only Mr Bowser has full electronic access to the secure directory.[32] On the other hand, eleven full copies of the Budget Book are circulated each year (usually between Christmas and the first week of January of the budget year). Nine of these go to the Chemicals Leadership Team[33], of which Mr Ritchie was a member.[34] In addition, managers might from time to time be given access to selected pages to enable them to perform their roles. For example, Mr Morris (the Chemicals Division Sales and Marketing Manager) had access to the sales sheets, while Mr Doyle (the Research and Development and Field Operations Manager in Tasmania) had access to the crop data and expenses pages.[35] Mr Ritchie himself was provided with "actual and forecasted sales, production planning, financial analysis, scenario planning, product quality ... capital plans and technical data". He was also "one of only two people at the Port Fairy site, the other being [Mr Bowser] who received copies of the full monthly financial reports for the Chemicals Division business."[36]

80 GSK alleges that, in December 2003, Ms Hampton - at Mr Ritchie's request - provided him with pages from the GSK draft budget book for 2004. She did so unaware of what GSK contends was his improper purpose: to advance his scheme to establish TPI in competition with his former employer. The pages which Mr Ritchie thus dishonestly obtained contained commercially sensitive, and therefore especially confidential, information. The data in question falls into the category described in the pleading as "GSK Business Information".[37] It has been further particularised in a confidential schedule, to which pages from the 2002, 2003 and 2004 budget books have been attached.[38] According to GSK, this information was not required by Mr Ritchie for the performance of his duties as Research and Process Development Manager.[39] Nevertheless, the pages were not returned by Mr Ritchie when he left GSK's employ. GSK says that Mr Ritchie thereby breached his employment agreement.

81 Mr Ritchie's response is that he has no recollection of making the alleged request; but if he did, he did so for an entirely legitimate purpose. He was, he says, acting in his capacity as a member of the Chemicals Division Management Committee. Having been troubled by something that arose at a Chemicals Division Leadership Team strategy meeting held at Queenscliff on 18 November 2003, he wanted to check certain figures in the 2004 budget. If he subsequently did approach Ms Hampton, this was the reason.

82 These accounts each neglect to mention a fact that has since emerged, having in the interim been forgotten by both Ms Hampton and Mr Ritchie. On 7 November 2003, the latter forwarded a one-sentence email to the former: "Could you send me a copy of the budget plan for 2004".[40]

83 Against this background, three issues arise. The first concerns what Mr Ritchie sought, and what he was given. The second is whether he had a legitimate reason for seeking such access. The third is whether the information he received was improperly used by him to the disadvantage of GSK.

84 Mr Ritchie was not given, nor had he sought, electronic access to the secure directory, although he had an electronic copy of his department's expenses. So armed, he was able to assist with the completion of this segment of the budget. It is Ms Hampton's evidence that in or about early to mid December 2003 he approached her in her office in Boronia. He asked whether work on the budget book for 2004 had been completed. If it had, he wanted a copy. Ms Hampton told him that the information was not quite ready, but would be shortly. Mr Ritchie nevertheless pressed her for the data relating to sales contained in "a few selected pages" which Ms Hampton recalled to be "the divisional profit, commercial profit and customer sales budget figures for 2004".

85 According to Ms Hampton, this approach was unusual. She could not remember previously receiving such a request from someone in research and development. She did not know of any reason why Mr Ritchie would need the information he sought. He proffered no explanation. She was nevertheless unsure whether she could refuse his request; he was, after all, a senior manager in the Chemicals Leadership Team. She therefore photocopied the pages for him while he waited.[41] She identifies the pages she copied as being page 1 ("Chemicals Division Profit Summary"), page 2 ("Chemicals Commercial Profit Summary") and pages 5 to 7 ("2004 Sales Budget").[42] Unlike the corresponding pages of the budget book for earlier years, which covered a three year period, these pages contain budget data for 2004 and 2005 only.

86 After Mr Ritchie resigned from GSK, Mr Bowser conducted a search of the documents remaining in his office at Port Fairy. He was not then looking for any pages of the budget book, because at that stage Ms Hampton had told no-one of what she now says was Mr Ritchie's request. In any event, Mr Bowser found nothing from the draft 2004 budget book among Mr Ritchie's remaining documents.[43]

87 Ms Hampton relied upon her recollection in order to identify the pages that, she says, she gave to Mr Ritchie.[44] The defendants submit that this reliance is misplaced. They contend that mistakes made by her in giving her evidence demonstrate that her memory is unreliable. She was, for example, initially certain that the only request by Mr Ritchie occurred in early to mid December 2003; but, during cross examination, she conceded the existence of the email dated 7 November 2003.[45] Moreover, (so the defendants submit) her characterisation of Mr Ritchie's request as "unusual" is inconsistent with emails forwarded in early December 2003 between herself, Mr Ritchie and Mr Bowser. I add that, in the context, "unusual" is a loaded word; I have already noted (paragraph 79 above) that the information contained in the budget book, while undoubtedly in great part, if not in its entirety, confidential, was disseminated as required for GSK's purposes to authorised GSK personnel - of whom Mr Ritchie was most certainly one. In the normal course, the entire budget book came to him shortly after Christmas in each year during which he was a member of the Chemicals Division Management Committee. This fact must have coloured Ms Hampton's reaction to any request of the kind she described.

88 The subject matter of the December emails was [XXXXXXXXXXXXXXXXXXXXXXX] (the [XXXXX], to which I referred in paragraph [X] above).[46] Two of the emails - one from Mr Bowser to (among others) Mr Ritchie and Ms Hampton dated 3 December 2003, and the other Mr Ritchie's response on 8 December 2003 - have been admitted into evidence.[47] They support Mr Ritchie's contention that he was indeed concerned about [XXXXXXXXX], and was communicating with Ms Hampton about it in early December 2003. He described this concern, which (he said) arose as a result of the Queenscliff meeting, in the following terms:

Mr Ritchie denies taking any budget book pages with him on his departure from the company.

89 The defendants also point to the telephone records which detail the use by Mr Ritchie of his mobile telephone as at the end of November and in December 2003.[49] These records, so the defendants contend, undermine Ms Hampton's evidence. The only call logged as being made in Boronia was made on 18 December 2003, the day Mr Ritchie resigned. This was outside the period specified by her. [50]

90 There are of course limits to the use that can properly be made of records such as these: those employed in relation to this issue only cover Mr Ritchie's mobile telephone. It is also conceivable that, even in these days of relentless mobile telephone use, a person might be at some location without making or receiving telephone calls or messages while there. However, if the records show calls being made by Mr Ritchie in a place other than Boronia - Port Fairy, for example - then he could not at the same time be in Ms Hampton's office.

91 That is not this case. An examination of the relevant records suggests that, contrary to the position taken by the defendants, those records support Ms Hampton. It is true that, with one exception, they point to Mr Ritchie being in Port Fairy or Warrnambool from Thursday 27 November to Thursday 11 December 2003 (when he went on leave).[51] But the exception is telling. A call was made from his mobile phone at 5.11 pm on Tuesday 2 December 2003. Another was made at 6.52 pm that day. Both were routed through the Ferntree Gully mobile exchange tower. I take judicial notice of the fact that the suburb of Ferntree Gully is adjacent to Boronia. The proximity of Ferntree Gully to GSK's Boronia premises, and the timing of the calls, render it conceivable that Mr Ritchie made those calls either going to or coming from the alleged meeting with Ms Hampton.

92 Mr Collinson submitted that the evidence about the fact of the meeting in Boronia, and its timing, is not a matter about which Ms Hampton could be mistaken: her evidence on these points must be accepted, or I must find that she was lying.[52] I agree, at least about the fact of the meeting. I do not find that Ms Hampton lied. I find that the Boronia meeting did occur; and I am satisfied that it took place on 2 December 2003. The only question is whether Mr Ritchie was then given the pages of the budget book which, according to Ms Hampton, she copied for him - or whether she copied, and he received, the pages which he accepts he might have been given.

93 The characterisation of Mr Ritchie's request as "unusual" is relevant to Ms Hampton's identification of the five pages tendered through her. As I understand it, she was later able to identify those pages because they did not relate to Mr Ritchie's sphere of immediate responsibility. But if that is how, when later examining her records for evidence in this case, she came to select the pages upon which GSK relies, their identification does not necessarily add anything. Moreover, her insistence under cross-examination that the request was unusual must be seen against the circumstance that she did not think it so unusual as to warrant its being drawn to the attention of her superiors. She conceded that she could have raised her concerns with Mr Zippel at the time - but did not.[53]

94 Mr Ritchie accepted that, notwithstanding that he had no recollection of the request, he may have asked for pages from the budget book. He nevertheless disputed that he sought copies of the five pages identified by Ms Hampton.[54] Then, replicating the bootstrap argument that infected the identification of the pages exhibited by her, he asserted that those pages did not address the issues which, according to his affidavit evidence, concerned him in his capacity as a member of the Chemicals Division Management Committee. Accordingly (he maintained) he would not have asked for them. Instead, the pages he would have sought would be those - to be found towards the back of the book - which covered cost allocations.[55]

95 I find that Mr Ritchie had a legitimate reason to ask for, and be given, the cost allocation pages of the draft budget book. As the December emails to which I have already referred confirm, there was at that time an issue, within the Chemicals Division, about [XXXXXXX]. It was in the interest of GSK that that dispute be resolved with the right answer having been reached. Mr Ritchie would be better placed to assess the correctness of the several positions then being espoused once he had the relevant pages of the budget book to hand.

96 There is another reason to conclude that Mr Ritchie did not ask for, and was not given, the pages identified by Ms Hampton. He gave evidence in cross-examination that the majority of the contents of the five pages identified by her had been disclosed by her in any event during a presentation she gave at the 18 November meeting at Queenscliff - although he did not recall receiving any pages of the budget book at that stage.[56] Further, he had earlier been provided with "an excellent summary" by Mr Morris, GSK's Chemicals Division Sales and Marketing Manager, of the information about GSK customers, their history and their projections. This was part of GSK's preparation for a meeting between GSK and its customers in Frankfurt in October 2003.[57] Mr Ritchie insisted that he was present at meetings in that city during which prices and volumes were discussed with customers; and while he might not be able to recall specific rates for specific customers, he was aware of the relevant parameters.[58] As Research and Development Manager he was, he said, "acutely aware of pricing" because his job "was to reduce the ... manufacturing price to increase the revenue" and his bonus "was specifically measured by the company's performance in terms of profitability".[59]

97 It is true that information of this kind would often be of benefit to someone preparing to establish a competing business. Mr Zippel's evidence is that the kind of information disclosed in the two pages of profit summary - for example, GSK's margins (and where there was capacity to reduce them), currently profitable markets and future growth areas, and fixed and variable costs - would be of significance to any person wanting to establish a business plan or a cost effective business model to compete with GSK.[60] The three pages of the sales budget disclose information about GSK's proposed selling price for particular products to particular customers. Given the small number of clients in the global NRM ("narcotic raw materials") market and that negotiations are mostly conducted at a similar time, this information could be used by a competitor to gain insight into GSK's core strategies and marketplace focus.[61]

98 But much would depend on the currency of the information. Mr Collinson submitted that Mr Ritchie's aim was to undercut GSK on price, and that he sought to prepare cash flow forecasts for TPI using GSK pricing data with this aim in mind.[62] At the time Mr Ritchie made the request of Ms Hampton, he was on the verge of leaving GSK to establish a competing business. Within a month of obtaining the information, and, so GSK alleges, in the context of negotiations with MacFarlane Smith, he had emailed a TPI financial summary to Mr Paul McMullan[63] (who, between 1 July 2000 and the end of 2004, was a partner with Pricewaterhouse Coopers ("PwC"). This summary used a sales assumption of US$[XXX] per kilogram for morphine in 2006. While not a precise match with the GSK 2004 figure of US$[XXX] per kilogram for Macfarlane Smith,[64] the figure was "pretty close".[65]

99 The defendants say that there is no evidence of any misuse of the information by Mr Ritchie; at most there is an assertion made in final address.[66] The figures used are not the same, and being pretty close is not being close enough. While not fully endorsing this proposition, I am not satisfied that GSK has discharged its burden of proof on this issue. Having regard to all the relevant evidence, I cannot be satisfied on the balance of probabilities that Mr Ritchie improperly obtained information from the budget book, still less that he used a projected GSK figure for 2004 to arrive at a possible TPI figure for a funding proposal in 2006.

100 One of the complaints brought by GSK against Mr Ritchie is that, without GSK's knowledge or consent, he pursued outside private work while he was still employed by GSK. Not only did he set in train the incorporation of TPI, but he also involved himself in what in this litigation has become known as "the Premgen Project". Although the pleadings do not give a date on which Mr Ritchie's involvement in this project is said to have commenced, it would seem that, according to plaintiff, the impugned behaviour began in late 2001 or early 2002. This preceded, but was interrupted by (and, according to GSK, was in disobedience of) the undertaking which Mr Ritchie had given his employer in July 2002. The project in question was for the manufacture, using the urine of pregnant mares, of a bio-equivalent of Premarin. This is an oestrogen replacement treatment to reduce moderate to severe hot flushes in women after menopause. According to GSK, Mr Ritchie: (a) assisted in the preparation of a business plan for a company named Premgen Pty Ltd; (b) assisted in seeking private equity investment in that company; (c) entered into negotiations to subscribe for shares in it; (d) accepted on or about 3 April 2003 an appointment as a director of it; and (e) used GSK email facilities and computer equipment for conducting activities relating to the establishment of the company and the Premgen project.[67] GSK alleges that, by engaging in such conduct, Mr Ritchie breached not only the duty of good faith and fidelity that he owed to GSK simply as an employee, but also his written undertaking not to "engage in any ... work-related activities outside of GSK".

101 GSK relies on an affidavit made on 17 October 2005 by Rick Gain, who was then GSK's General Manager, Chemicals, and who at the relevant time was the person authorised to give to or withhold from Mr Ritchie permission to work on outside projects. In his affidavit, Mr Gain states that, during a discussion at a chemical leadership team/executive meeting in around Christmas 2001 or January 2002, Mr Ritchie told him that he had been approached by Dr Jonathan Upfal with a proposal "that GSK become involved in a project to extract ingredients for use in a hormone replacement therapy treatment from horse urine".[68] Mr Gain told Mr Ritchie that such a project had nothing to do with the opiates business, and that he should confine himself to his core duties - the research and development of that business.[69] Consistently with this, he also told Mr Ritchie that he did not want him "to have anything to do with the Premgen project";[70] and that "he must focus on the role of extraction of opiates and process improvement and not get involved in projects outside the core business of GSK".[71] He therefore asked Mr Ritchie to undertake that his work would be entirely devoted to GSK. A document, in the form of the letter (reproduced at paragraph [52] above) embodying what GSK contends was an appropriate undertaking, was produced; and Mr Gain said, in effect: "If you do not sign the confidentiality undertaking, then there will be obvious consequences ... You are going to have to exit the co[72]any"72. Mr Gain was, as he said himself, concerned that Mr Ritchie "was not focusing on the key business of GSK".

102 The letter was signed as GSK had asked. Mr Gain acknowledged receipt of it on 16 July 2002. That, GSK contends, is where the matter ought to have ended - and where Mr Gain thought it had come to rest. According to Mr Gain, Mr Ritchie never spoke to him again about Premgen. In particular, he sought no permission to become involved in any hormone replacement treatment ("HRT") program.

103 GSK also relied on evidence given by Mr Paul McMullan the PwC partner to whom I referred in paragraph 98 above. Between 1 July 2000 and the end of 2004, his firm provided professional services to GWA; and between 2001 and 2003 it likewise acted for GSK. Mr McMullan's area of responsibility was the provision of research and development consulting services. He first met Mr Ritchie in 2001 at Port Fairy when giving a presentation to GSK about possible tax concessions for research and development ("R&D") into the production of opiates. Mr Ritchie was thereafter his principal contact at GSK's Port Fairy operations; and the two worked closely to prepare GSK's R&D tax concession claim. They met at Port Fairy about once a year, but were in contact when, at other times, Mr McMullan had queries about R&D at Port Fairy. Indeed, the two came to share a business-centred friendship which nevertheless included "among other things, our mutual enjoyment of golf".

104 According to Mr McMullan, it was early in 2003 that Mr Ritchie first mentioned the Premgen project to him. Mr McMullan was told that the possible involvement of GSK in the project had been raised with that company, but it was not interested. In these circumstances, Mr Ritchie wanted to delay any decision about his own participation until he knew whether Premgen could obtain capital funding. He also had another consideration in mind: he "did not want GSK to find out that he was becoming involved in the Premgen project until he was sure that he would leave GSK".[73] It was in these circumstances that he asked Mr McMullan whether there was someone at PwC who he could approach about investigating Dr Upfal's credentials, and for assistance in obtaining private equity for a start-up company. In response, Mr McMullan said he could introduce him to another PwC partner, Vivian McCarron. She specialised in capital raising and funding grants for small start-up projects.

105 Mr McMullan was as good as his word. He told Ms McCarron about his conversation with Mr Ritchie, "who was one of my key relationship contacts at GSK", and asked her to look at the proposal for him.[74] Mr McMullan also suggested that Mr Ritchie arrange for Dr Upfal to forward the business plan for Premgen to Ms McCarron; and a draft business plan was accordingly emailed on the evening of 4 February 2003 by Dr Upfal to Mr McMullan, who in turn provided it to Ms McCarron the next day.[75]

106 A meeting was thereafter organised at the PwC offices in Melbourne. Those in attendance were Ms McCarron (and those of her colleagues who worked in her field); Mr Ritchie; Dr Upfal; and another person involved in the project, Brian Patterson. Mr McMullan was not present, but met the group later at dinner. Thereafter, Mr McMullan "kept an eye on the project and its progress" but was not directly involved in it.

107 In about the middle of 2003 there was some negative media coverage about a link between HRT and cancer. Mr Ritchie told Mr McMullan that he was nonetheless still keen to pursue the project because, in his view, no clear connection had been established. However, by August or September 2003 Mr McMullan was told by both Ms McCarron and Mr Ritchie that the Premgen project had come to an end.

108 The defendants concede that Mr Ritchie devoted some company time to the Premgen project while he was an employee of GSK. They nevertheless contend that the amount involved was trivial, especially when compared with the hours he spent working for GWA or GSK in the relevant period. It caused no harm to GSK; and, given that GSK was not interested in the project, caused no loss of opportunity for it. Moreover, Mr Ritchie gained no benefit from it either.

109 Mr Ritchie's position has consistently been that he was entitled to pursue Premgen, provided he did so in his own time. That, submitted Mr Scerri, is entirely in accordance with the law. In paragraph 13 of his amended defence dated 30 April 2007, Mr Ritchie admits "an involvement" with the Premgen project during the currency of his employment. He also accepts that this was without GSK's knowledge or consent; but he otherwise denies that he breached his duty of good faith and fidelity.[76] In further particulars of his defence, prepared when he was without legal representation, he said:

Any documentation was minimal and is no longer in my possession. I question the relevance of the Estrogen extraction for the horse urine project to confidentiality concerns with opiates.[77]

As it was nearly 3 years ago and the venture was never realised, the details are few and far between. My involvement was limited to exploring the extraction of estrogen from horse urine as a business proposition. I was involved in meetings, writing of business plans and discussions. In the first instance my involvement was based on presenting the proposition to GSK's executive team, after a lack of interest was shown I pursued the venture on my own. This became an issue for the General Manager only when I raised it during a meeting to inform him that I was continuing in my own time. At which point he threatened to sack me unless I signed a modified employment contract. The project ended after the scare of cancer in hormone replacement therapies. This is completely irrelevant to the case and is being used to infer that I was breaching my employment contract which was not the case. At all times during my employment with GSK I worked beyond that which was required.[78]

110 Mr Ritchie also addressed the Premgen issue in his affidavit sworn 23 January 2006. Consistently with the evidence of Mr Gain, he says he was told by the latter that GSK was not interested in the project. In addition, he agreed during cross-examination that he did not seek, nor was he given, the permission of Mr Gain to become involved himself. However, there is a dispute about whether Mr Gain told him he could not work on it and when, if at all, Mr Ritchie informed Mr Gain of his involvement.

111 Mr Ritchie says Mr Gain is mistaken in saying that, after GSK's lack of interest in Premgen was made known, he and Mr Gain never spoke of it again. In another difference in their evidence, Mr Ritchie - when under cross-examination - denied that Mr Gain told him that he could not work on the Premgen project. Indeed, he says that during the first half of 2002 the two of them had private discussions about "doing other things",[79] although not specifically Premgen. In re-examination he said the pair "discussed in a preliminary fashion the setting up of the equivalent of a TPI".[80] When it seemed that funding for Premgen might become available, Mr Ritchie mentioned to Mr Gain that he was considering leaving GSK, something about which he wanted to give GSK ample notice; and it was that which precipitated the preparation of the confidentiality undertaking.

112 At this time, Mr Gain's principal concern was to ensure that GSK's confidential information was protected: he knew that Dr Upfal might be interested in becoming involved in the opiates area. Hence the confidentiality undertaking, which was prepared after Mr Gain realised that Mr Ritchie had never before been required to sign one. According to Mr Ritchie, he spoke to Mr Gain when they met in Port Fairy on the occasion that the undertaking was produced. During this conversation, Mr Ritchie told Mr Gain that he "intended to continue to investigate the Premgen opportunity and I could see nothing in the agreement [undertaking] that he had given me that would prevent me from doing that". According to him, Mr Gain's response was: " 'You can read it however you like. Just sign it. If you don't I will sack you' ".[81]

113 In support of Mr Gain's version of events, GSK points to the failure by Mr Ritchie's former solicitors, Clayton Utz, to mention in correspondence between solicitors any reference to Mr Gain's knowledge about Mr Ritchie's involvement with Premgen.[82]

114 In my opinion, the "undertaking" "not to engage in any work ... related activities outside of GSK" does not provide the support upon which GSK relies. If binding, it would insert a new term into Mr Ritchie's contract of employment. Yet there is no evidence that he gave any consideration for it; rather, it was simply imposed upon him. His evidence, which I believe, is that he did not accept this restriction. Even though by his signature he, on or about 16 July 2002, acknowledged the document, he disagreed with the attempt by GSK to prevent his involvement, in his own time, on a project which GSK had explicitly rejected; and he made his position known to Mr Gain.

115 During his final address Mr Collinson submitted that the undertaking does not distinguish between working and non-working hours. It might therefore be construed to refer to the former, and as such, it would be a legitimate direction from GSK. Activity on non-GSK work during working hours, provided it was not so small as to be de minimis, would therefore be contrary to a legitimate instruction from Mr Ritchie's employer. He acknowledged, however, that the issue of the work on Premgen was "at the margins of the case", which is primarily concerned with alleged misuse of confidential information.[83]

116 The defendants relied on a number of authorities which they say stand for the proposition that an employee may, while still employed, take preliminary steps to explore alternative employment opportunities.[84] In the context of the Premgen debate, however, it seems to me that Mr Ritchie need not go so far; for this is not a case where, at least in respect of Premgen, GSK says that he was seeking to compete with it or use its confidential information or trade secrets. Fundamentally, the complaint is that he was not devoting his working hours solely to his duties at GSK, and was using GSK facilities to further his own interests. I turn therefore to the evidence about the extent of Mr Ritchie's work on Premgen.

117 When Mr Ritchie telephoned Dr Upfal to tell him that GSK was not interested, he expressed some interest in becoming involved himself. He then attended several meetings with Dr Upfal and did some research into both the market and the science. Mr Ritchie deposed that the majority of this work was done after hours or on weekends. He was working a minimum of 50 hours a week at GSK and "did not at the time consider that GSK would have any objection to my involvement in this project having regard to the effort that I was making for the company".[85] Following some adverse publicity in about August 2002, Mr Ritchie said funding became a problem. Thereafter he had very little involvement with Premgen until early 2003. During cross-examination he acknowledged that he had "some involvement" in the project between July 2002 and early 2003. In particular, he reviewed the data used by the media to allege a link between HRT and cancer.[86] He did not say when that review was undertaken.

118 During a game of golf in early 2003 Mr Ritchie told Mr McMullan about the project and said it had stalled because of lack of funding. After PwC became involved, Mr Ritchie worked on a business plan to apply for a Federal Government grant. However, he insisted that all his work on the business plan and the financial documents was done in the evenings or on the weekend.[87] He remembered attending a meeting at the offices of PwC when he was in Melbourne for GSK business. This may have been during business hours, although he could not recall. Whatever work he did on Premgen did not impact on his work for GSK.[88] Premgen Pty Ltd was registered on 3 April 2003. By this time Mr Gain had left GSK Australia. When, by about August 2003, the hoped-for Federal grant had not eventuated, the Premgen project "died".

119 During Mr Ritchie's cross-examination, he was asked about a folder containing 65 emails[89] purporting to show activity by him on the Premgen project. While there is one email sent by Mr Ritchie on 26 December 2002,[90] the remainder of the emails begin from March 2003. The first of these is dated 4 March 2003, while the last is dated 23 July 2003. Mr Ritchie acknowledged that this correspondence included a number of emails that were sent or received during business hours (officially 8.00 am to 4.00 pm) on working days (Monday to Friday). Mr Ritchie also agreed that there were some emails exchanged between him and Dr Upfal between July 2002 and December 2002.[91] So far as I can ascertain, these have not been put in evidence.

120 At first glance, the size of the folder appears to be a startling refutation of the proposition put on behalf of Mr Ritchie that the work he did on Premgen during working hours was minor. However, a closer analysis of the contents of that folder reveals that the bulk consists of attachments to the emails. The evidence of Mr Ritchie was that he worked on these attachments at home, and outside work hours. And there is no evidence to the contrary: the fact that an email was sent during work hours says nothing about any time spent on an attachment. Nor is there any other reason why I should not, on this point, accept Mr Ritchie's unchallenged testimony. It follows therefore that, in relation to the email activity, GSK is not in a position to establish on the balance of probabilities that the time spent by Mr Ritchie on Premgen during working hours exceeded that required to prepare the emails themselves.

121 I turn to that correspondence. Of the 65 items in the folder, Mr Ritchie sent 43. The majority are brief - some are only one or two lines - and are inconsequential, amounting to no more than arranging for a meeting, making a comment or forwarding an attachment.[92] The longest email is just over two pages long; but it was dispatched at 5.26 pm on a Friday - outside business hours.[93] In my opinion, this evidence does not establish that Mr Ritchie engaged in any activity during working hours which resulted in a failure by him to carry out the duties of his employment. I therefore find that any time spent by him on the Premgen project was an insignificant (or de minimus) portion of his overall work activities.

122 Mr Ritchie agreed during cross-examination that whether he worked on Premgen during or outside business hours was, for him, a matter of indifference.[94] In re-examination he explained this answer further:

What I meant was that any sitting down and developing business plans or doing financials or doing work focussing on Premgen, I did do that outside of hours. But if an email appeared in the course of the day and it required a quick response I would respond to it. And that's what I meant. I wouldn't not respond to it until the end of the day, I would respond to it. ... I was very aware of how much time I was working on it and how much work I was doing for GSK.[95]

I accept this evidence. In my opinion, this is an entirely reasonable position for an employee of Mr Ritchie's seniority to adopt in the absence of any relevant constraint in his or her contract of employment.

123 There remains the extent of telephone or face to face discussions between Mr Ritchie and those involved with Premgen during business hours. Mr Ritchie agreed during cross-examination that he held such discussions; however, he maintained they were insignificant compared to his work for GSK.[96] Telephone records for Mr Ritchie's mobile telephone were tendered by GSK. I find this evidence to be of little use. Mr Ritchie prepared an analysis of it.[97] The result demonstrates, in my opinion, that the time he spent on Premgen during business hours was miniscule.

124 During his final address, Mr Collinson acknowledged that it is difficult to draw any conclusions about the amount of time Mr Ritchie spent on Premgen during 2003. However, it is GSK's position that Mr Ritchie was, contrary to an instruction not to engage in outside work, "actively doing lots of things on both [the Premgen and the TPI] projects on a regular basis during business hours".[98]

125 It is, of course, for GSK to establish that the time spent by Mr Ritchie on the Premgen project during working hours was unacceptably distracting and constituted a breach of his duty of good faith and fidelity to GSK. In my view, it has failed to establish this. There was a breach by Mr Ritchie of his obligation to devote his working hours entirely to GSK affairs. But the evidence does not sustain the conclusions that the plaintiff would have me draw. Mr Ritchie did not subvert GSK's business by his involvement, such as it was, in the Premgen project. An intention by an employee to set up, after the employment has ceased, in competition with his or her employer is not to be taken as a conflict of interest "having regard to the rules of public policy as to restraint of trade".[99] "[N]or is the taking of any preliminary steps to investigate or forward that intention so long as there is no actual competitive activity, such as, for instance, competitive tendering or actual trading, while he [or she] remains [an employee]".[100] The Premgen project involved no activity in competition with GSK's interests, and there is no suggestion that Dr Upfal gained any advantage at GSK's expense. Any work done in working hours occupied only a trivial proportion of the time Mr Ritchie devoted to his GSK duties. In those circumstances, no breach of Mr Ritchie's contract of employment occurred, and the plaintiff suffered no damage from it. In my opinion, this part of the plaintiff's case has not been made out.

126 A very large portion of this litigation has been concerned with the plaintiff's allegation that the defendants have misused confidential information about the techniques, equipment and ingredients - the technical know-how - adopted by GSK in the production of the opiate alkaloids which it sells as a major competitor in the world market for those products. An examination of the claim for misuse of GSK technical information forms the next segment of this judgment.

127 During the trial, GSK gave a detailed description of the process of extracting opiate alkaloids. It did so as part of its attempt to make good its allegation that the defendants misused information it claims to be confidential. Since much of that information is collated in the GSK manufacturing guides and research and development reports, the plaintiff had frequent recourse during the trial to those documents. Yet the FACS remains the authoritative repository of the information which the plaintiff claims is not only confidential but has been misused by the defendants. It is therefore no surprise that the case as presented by the plaintiff seemed to stray at times from the case as pleaded in the schedule. In these circumstances, the necessary examination and assessment of all the items included in the FACS (with, of course, the exception of those that were expressly abandoned)[101] has presented particular difficulties. I will, after some introductory remarks, turn to that task. In doing so, I shall adopt the same order as that of the FACS, although it reverses the two-stage sequence followed in the extraction process itself.

128 The FACS is not consistently easy to follow. One difficulty is that it designates certain documents as containing allegedly confidential information without always clearly identifying the information in question. I have necessarily, therefore, assumed for myself the task of isolating the information upon which the plaintiff relies in this aspect of its case.

129 There is another difficulty in working with the FACS. A piece of otherwise basic information might assume significance when forming part of a process: Mr Bowser has deposed in detail and at great length about how the variance of just one parameter may affect the subsequent steps in a process and, most importantly, its commercial efficacy. Where there is no ready coincidence between certain combinations of parameters used by GSK and those proposed by the defendants, it is often difficult to determine whether, assuming that confidentiality is established, the use by TPI of a particular parameter (or information about it) which is similar, but not identical, to a GSK parameter, constitutes a misuse by the defendants of confidential information. This has proven to be particularly problematic when considering the minutiae of this case. Where a coincidence of information in both GSK and the defendants' processes does exist, it is often not readily apparent whether a particular figure was derived from a GSK source. Even if it were, one must ask two further questions. First, whether it was simply a figure that any competent chemist might - given a familiarity with the industrial manufacture of opiate alkaloids - draw upon as part of his or her stock of knowledge; and secondly whether, if not, its position in the defendants' production regime gives it such a distinctively different role to that which it plays in the GSK extraction process that the two uses are not comparable.

130 Another point is relevant in the present context. There is no evidence that Mr Ritchie, after his employment with GSK ceased, had any of the documents containing the technical information which GSK alleges was misused. To the extent that the defendants gained the benefit of any of the material in the documents upon which GSK relies, they did so through the agency of Mr Ritchie's memory. GSK points to similarities in the GSK and TPI documentation and in effect invites the Court to infer that the former was used to create the latter.

Manufacture of Concentrate of Poppy Straw from Morphine Crop (MGBC1) and PFRD/98022 (FACS 1.1(a))

131 The first of the plaintiff's manufacturing guides to which the FACS refers is that known as "MGBC1" ("Manufacturing Guide Basic Chemicals 1"). It deals in the main with GSK's second (liquid to liquid) phase of the manufacture of concentrate of poppy straw from a morphine crop. The guide is 45 pages in length and contains detailed information of that process. GSK does not now claim that the defendants have misused all, or even a large portion of, its contents. As I have already noted, the FACS considerably reduced the scope of the plaintiff's claim. Item 1.1(a) of the FACS now sets out, under the above heading, five items of confidential information said to be contained in two documents. The first was MGBC1 and the second is a Port Fairy Research and Development document known as "PFRD/98022". It is alleged that the information to which item 1.1(a) refers has been misused by the Defendants. The five individual items are:

• The choice of solvent, being a [XXXX] mixture of a cyclic hydrocarbon and a water immiscible polar alcohol, in a ratio of rich extract ("A") to solvent ("O") (known as the "A:O ratio") of [XX], for the extraction of alkaloids into the solvent (item 1.1(a)(i));

• Partition coefficient data and the number of stages of extraction, being approximately [XX], for the selective extraction of alkaloids into the solvent described in item (i) at the A:O ratio of [XX] (item 1.1(a)(ii));

• The choice of aqueous caustic solution, being [XX%-XX%] NaOH, in a ratio of rich solvent ("O") to aqueous caustic solution ("A") (known as the "O:A ratio") of [XX], for extraction of alkaloids into the aqueous caustic solution (item 1.1(a)(iii));

• Partition coefficient data and the number of stages of extraction, being approximately [X], for the selective extraction of alkaloids into the aqueous caustic solution described in item (iii) at the O:A ratio of [XX] (item 1.1(a)(iv));

• The maximum rate of poppy straw milling (tonne/hr) on a [XXXXXXX] of a size comparable to the [XXXXXXXX] used by the plaintiff, being [XXXX]kg/hr (item 1.1(a)(vi)).[102]

132 I have described in paragraph 55 above the two segments or phases of the processing of opiate alkaloids. They are the primary extraction phase (concerned with the initial extraction of the alkaloids from the poppy straw into an extractant such as [XXXX], or [XXXXXXXXX], or a [XXXXXXXXXXX], or a mix of [XXXXXXXXXXXXXXXXX]); and the second phase, being the conversion of the rich extract into its relevant four constituent parts: morphine, thebaine, oripavine and codeine. Save for item 1.1(a)(vi) of the FACS, the information the subject of the five dot points above concern the second phase of extraction. As I understand it, there are two broad alternatives for this phase: liquid to liquid extraction, during which solvent is used to extract the targeted alkaloid; or [XXXXXXXXX].

133 The defendants have a short response to this aspect of the plaintiff's case. They have given evidence that, while GSK employs solvents in its liquid to liquid extraction phase, TPI has abandoned that process. It will rely on [XXXXXXXX]. I accept this evidence. I find that there is no threat of the use by TPI of solvents. The allegation of any misuse of GSK information concerning solvents is therefore of very limited if any relevance.

134 I will nevertheless examine in turn each of the five items of information now identified.

Choice of solvent in an A:O ratio of [XX] for the extraction of alkaloids into solvent (FACS 1.1(a)(i))

135 The plaintiff alleges, by item 1.1(a)(i) of the FACS that the defendants have improperly adopted the GSK choices of solvents for this aspect of the extraction process. The FACS identifies that choice as "a [XXXX] mixture of a cyclic hydrocarbon and a water immiscible polar alcohol". But paragraph 7.4.4 of MGBC1 provides that the prescribed solvent "is a [XXXXXXXXXX] mixture" and that "a rich extract: solvent ratio of [XX] is used".[103] It is therefore plain enough that the plaintiff is not at this point alleging that the defendants have adopted every detail of its allegedly confidential information. And the course of the trial established that that is indeed the position: the plaintiff contends not that TPI plans to use a [XXXXXXXXXXXXX] mixture but (to adopt the abbreviated terminology of DC4) it has decided upon the use of "Aeq/Org ratio [XX]" - that is, an organic solvent at a ratio of rich extract (or aqueous) to solvent of [XX]. [104] Then, as a counter to the riposte that this is hardly a good example of misuse of a particular item of information, GSK directs attention to JDR 29, and its reference to "[XXXXXXXXXXXXXX] [XXXXXX] l/hr" at the top of the column concerned with morphine and codeine. GSK contends that the figures "[XXXXXXX] l/hr" equate to an A:O ratio [XX]. It also asserts that, while a [XXXXXXX] and [XXXXXXXXXX] mixture is not specified in JDR 29, [XXXXXXX] is a cyclic hydrocarbon (just as is [XXXXX]) and [XXXXXXX] is a water immiscible polar alcohol (as is [XXXXXXXX]). It adds that [XXXXXX] and [XXXXXXX] are known substitutes for [XXXXXXXX] (a cyclic hydrocarbon) and [XXXXXXXX] (a water immiscible polar alcohol) respectively.

136 Mr Connolly in his affidavit describes the concept of A:O or O:A ratios in the following terms:

The A:O ratio is a ratio between the volume of the aqueous initial extract containing the alkaloids and the volume of the organic solvent into which the alkaloids are to be extracted. The ratio is a function of the concentration of the alkaloids in the aqueous extract and the solubility of the alkaloids in the organic solvent. To use a simple example, if there is 1% target product in the aqueous solution and the target product can dissolve to 2% of the volume of the organic solvent, the a:o ratio is 1:2 or 0.5. In other words in the example you need only half as much solvent to dissolve the target product.[105]

137 Mr Bowser did not address the choice of a [XXXX] mixture of a cyclic hydrocarbon and a water immiscible polar alcohol in his affidavit material. The defendants say that it is well known and widely published that such a [XXXX] mix can be used to extract alkaloids from aqueous solution at various A:O ratios. The choice of solvent could not be confidential. GSK would appear to accept this.[106] The defendants also point to references in various papers in the public domain. So, in his paper "The manufacture of alkaloids from opium" Professor Heumann notes that a procedure was developed in 1936 which used a mixture in equal volumes of butanol and benzene to extract morphine from poppy straw extract. He observes, however, that benzene is a rather volatile and hazardous solvent and therefore toluene can be used instead.[107] For his part, Dr Ross too accepted that information about "counter current extraction into a mixed solvent system of an alcohol and an aromatic (a compound of the benzene family; [XXXXX] and [XXXXXX] are members)" can be found in the public domain.[108] In these circumstances, I find that the choice of a [XXXX] mixture of a cyclic hydrocarbon and a water immiscible polar alcohol could not of itself constitute confidential information.

138 GSK however submits that it is the combination of the choice of the [XXXXXXX] mixture, together with the A:O ratio of [XX], which comprises the confidential information. Mr Bowser deposes that the A:O or O:A ratios are not calculated but are "determined as a balance between maximising the concentration of the component (such as morphine) in one phase (for example the aqueous phase or A) and minimising the number of stages required to affect a desired efficiency (yield)".[109] He says the A:O or O:A ratios used by GSK are "derived from R&D experiments conducted by GSK over many years for particular solvent mixtures and extracts".[110] While "some approximation of the O:A or A:O ratio can be made from laboratory experimentation, this could only be estimated through having established the partition coefficient of the relevant compounds in the chosen solutions under a range of potential operating conditions".[111] He is not aware of any such information being in the public domain.

139 The defendants contend that the appropriate A:O ratio "depends on a number of factors including the choice of solvents. ... Without identification of a particular solvent choice, the information claimed is non-specific and valueless".[112] Mr Ritchie deposed that JDR 29 is "not a detailed engineering design of an established process. It contains a very rough process description that contains many errors".[113] He told Mr Connolly to use a [XX] O:A ratio[114] "for the purpose of giving a rough cost estimate. It was a quick, round-figure guess intended to be conservative so that it overstated rather than understated the [A:O] ratio. When I nominated the [A:O] ratio I relied on my knowledge, skill and experience".[115] He later noted that the actual ratio to be used on plant would have to be determined by trials.

140 A considerable amount of time was spent on the issue of A:O or O:A ratios. Mr Ritchie was cross examined at length about the precise calculations and figures referred to in his affidavit material and during his oral evidence. GSK submits that I should reject his evidence because he was inconsistent about whether the ratio could be estimated or calculated. Its written submissions rely heavily on minute discrepancies in assumptions and the calculation of such things as yield. In my view the part to be played by the choice of A:O ratio of [XX] does not justify this approach. It fails to recognise that the ratio was given by Mr Ritchie to Mr Connolly for a limited purpose in a rough costing for the design of a process now abandoned, the parameters of which were being sketched out and which everyone has acknowledged would be subjected to actual trial and testing. I find that the reference in the extraction process documents to an A:O ratio of [XX] cannot be a misuse of GSK's information given that no solvent is specified; but also, and more importantly, given that it had become part of Mr Ritchie's general knowledge. I therefore accept that, when Mr Ritchie provided this ratio to Mr Connolly to prepare JDR 29, he was drawing on his knowledge and experience. And that knowledge and that experience pointed to the A:O ratio given to Mr Connolly and adopted in DC4 and JDR29 - a figure which one would not need to be a genius to remember. I therefore find that there has been no misuse of the information described in item 1.1(a)(i) of the FACS.

Partition coefficient data and the number of stages of extraction, being approximately [XX], for the selective extraction of alkaloids into the solvent at the A:O ratio of [XX] (FACS 1.1(a)(ii))

141 The partition coefficient is a measure of the relationship between particular solvents and their ability to extract particular quantities of alkaloids. Mr Bowser deposes that, in order to calculate the O:A or A:O ratios through laboratory experiments, "it is necessary to determine the partition co-efficient data of the relevant compounds for extraction (ie opiate alkaloids) in the solutions (solvent and aqueous extract) under a range of potential operating conditions (temperature, pH)".[116] He continued:

The individual alkaloid (morphine, codeine, thebaine or oripavine) partition coefficient is therefore defined as the equilibrium ratio of the concentration of alkaloid in one particular solution (eg acetic acid rich extract of poppy straw) divided by the concentration of the alkaloid in the second immiscible specific solution (eg solvent such as [XXXX] or [XXXX]) under a given set of conditions (pH, temperature, ionic strength).[117]

142 Mr Bowser added that partition co-efficient data "is virtually non-existent for the opiate alkaloids in theoretical solutions and is totally non-existent for actual poppy straw extracts". He is, he says, unaware of any public domain information for "acetic acid extract of poppy straw".

143 Consistently with this, the defendants contend that GSK does not have partition co-efficient data for the range of solvent choices over which it claims confidentiality. And indeed, GSK has not identified in the FACS the actual partition co-efficient data in MGBC1 which it claims is confidential and which it says the defendants have used. Looking at the pages which are identified in item 1.1(a)(ii) of the FACS, I am unable to ascertain what the partition co-efficient data is said to be. It may be the statement that: "The solubility of morphine in [XXXXXXXX] is around [XX]%, however, experience indicates supersaturation is possible in routine operation up to around [XX]% morphine (limiting the incoming RE morphine concentrations to around [XX]%)".[118] Or it may be derived from the three graphs appearing on page 13 of MGBC1.[119] Although he describes the concept of partition co-efficient data, and gives theoretical examples, Mr Bowser provides no assistance in his affidavit material by which one might identify the relevant data in MGBC1. Nor was I was provided with any enlightenment at trial. I also query whether MGBC1 would in any event contain any partition co-efficient data for acetic acid "extract of poppy straw", given that in the primary stage GSK uses [XXXXX] to obtain its rich extract. In my opinion, the plaintiff has failed to properly identify the relevant partition co-efficient data.

144 Nor has GSK identified the alleged misuse of any partition co-efficient data by the defendants. This is not entirely surprising. Mr Bowser, after all deposes that the partition co-efficient values vary widely depending on the compounds used and other variables such as temperature and pH. In these circumstances, it is difficult to understand how it can be said that any partition co-efficient data appearing in a manufacturing guide for a particular process (that is, one which obtains its rich extract by employing [XXXXXXX]) can be said to be improperly used for another, relevantly different, process (that is, one in which the rich extract is created by using dilute acetic acid).

145 The FACS links the partition coefficient data with the number of extraction stages, which it puts at "approximately [XX]". Yet, as Mr Bowser acknowledged in cross examination,[120] MGBC1 does not refer to [XX] stages of extraction. If there is any satisfactory explanation for this discrepancy, it is that MGBC1 specifies the use of [X] extraction columns (with [X] columns operating in series). In Mr Bowser's experience, these columns achieve approximately [XX] stages of extraction.[121] I have been unable to identify where, in the MGBC1 pages to which the FACS refers, the information about the number of columns appears. If it is the case that the figure of [XX] is the result of Mr Bowser's experience, and not a piece of information documented in MGBC1, I could not be satisfied on the balance of probabilities that Mr Ritchie misused it.

146 Indeed, the question is whether the defendants used this figure at all. GSK says that because Mr Connolly adopted [XX] stages in DC4, this is "similar" to the "approximately [XX] stages" which Mr Bowser came up with, and therefore there has been a misuse of GSK confidential information.

147 The readiness of Mr Bowser to propound the adoption of [XX] stages in the extraction process seems to me mark a departure from reality. As I understand it, it is impossible to speak sensibly of "[XX] stages" in a production process, as if [XX] could be discrete "stage". This number is a device by which Mr Bowser seeks to compare one process with another that is entirely different, and calculate an equivalent figure.

148 The defendants say because this item relies on solvent choice, the information sought to be protected is non-specific and valueless. TPI has never used or threatened to use [XX] stages of extraction with a [XXX] mixture of a cyclic hydrocarbon and a water immiscible polar alcohol, in a A:O ratio of [XX]. Neither DC4 nor DC5 specify the choice of solvent, while JDR 29 specifies [X] stages rather than [XX] or [X]. I accept these submissions. In these circumstances, I find there was no misuse of this item of information. Nor is there any threatened use.

The choice of aqueous caustic solution, being [XX% - XX%] NaOH, in a O:A ratio of rich solvent to aqueous caustic solution of [XX], for extraction of alkaloids into the aqueous caustic solution (FACS 1.1(a)(iii))

149 These items of information are concerned with the removal of morphine from the rich solvent (created from the combination of rich extract from the primary stage and an organic solvent mixture) using an aqueous caustic solution. This process is described as "back extraction". Paragraph 7.5.2.1 of MGBC1 provides that the rich solvent is counter-current extracted with aqueous sodium hydroxide ("caustic" or "NaOH") using [XXXXXXX] and with flow ratios of solvent to caustic of "[XX% - XX%]".[122] Paragraph 7.5.2.2 notes that the caustic strength is "normally [XX% - XX%] w/v".[123] Mr Bowser does not give any evidence about how [XX% - XX%] caustic was determined. However, GSK points to evidence of Dr Ross that he was unable to find any data in the public domain about the concentration of caustic and "generally ... you would do some lab work to determine concentration".[124]

150 GSK also says that this information is disclosed by a research and development report PFRD/98022.[125] This report was prepared by Mr Ritchie and dated 21 December 1998. It is entitled "Pilot Investigation into [XXXXXXX] Performance". It does not expressly state that the process uses aqueous caustic solution, being [XX% - XX%] NaOH, in an O:A ratio of rich solvent to aqueous caustic solution of [XX]. However, Mr Bowser deposes that its recommendations "indicate that the total flow of solvent is [XXX]L/h ([XXX]L/h Column C22, [XXX]L/h [sic] Column 21) and the caustic flow is [XXX]L/h representing an O:A ratio of [XX]".[126] He has deposed that the ratio of [XX] was "determined by extensive pilot trial work".

151 GSK contends that this information was used in DC4 where, under the heading "2º Extraction", there appears "solvent stripping ratio with [X]% caustic" and an O:A ratio of [XX] [sic].[127] This seems to be repeated in DC5.[128] Of course, it does not appear in DC6 which describes a process which did not use solvents. In JDR 29, in the column concerned with morphine and codeine, the references to "NaOH [XXX]L/h" and "MCMLS [XXXX]L/h" in effect gives an O:A ratio of [XX], although the percentage of caustic is not specified.[129]

152 The defendants assert that the choice of caustic, a "well known and relatively strong base used extensively to basify water to extract phenolic opiate alkaloids from organic solvents", could not be confidential to GSK. The percentage used will be that necessary to adjust the mixture to pH [XX] or higher. So much may be accepted. More difficult to justify is the proposition that, because GSK uses [X]% caustic and adopts an A:O ratio of [XX], and so does DC4 and DC5, it follows that GSK confidential information has been misused.

153 At one level, the problem disappears once it is accepted, as I do accept, that TPI will not employ this method of back extraction. The somewhat academic question remains whether the relevant information was misused in DC4 and DC5. Mr Ritchie's evidence is that it was not; he contends that, although the [XX] ratio appears in MGBC1, GSK has not in practice used it since about 1998, when the configuration of the GSK [XXXXXX] was altered in accordance with suggestions put forward by Mr Ritchie "in order to get more juice from the orange". MGBC1 was not, however, updated to reflect the change. And it was because GSK had abandoned the [XX] ratio that Mr Ritchie chose it for DC4 and DC5. That adoption was purely to enable Mr Connolly to carry out his rough costing exercise. As for Mr Ritchie, he knew that TPI was not planning to use [XXXXXXX], but disc bowl centrifuges.

154 Even if Mr Ritchie is wrong in saying that GSK had abandoned its adoption of the [XX] ratio, I accept that he thought it had. I also accept that the A:O ratio "is an expression of what happens on plant. It is not a target or end in itself".[130]

Partition coefficient data and the number of stages of extraction, being approximately [X], for the selective extraction of alkaloids into the aqueous caustic solution described in item (iii) at the O:A ratio of [XX] (FACS item 1.1(a)(iv))

155 This category of information suffers from the same kinds of problems as those which beset FACS item 1.1(a)(ii), which I discuss above. In this instance, the plaintiff has failed to identify either the partition coefficient data in question or the point in the defendants' documentation where they are said to have used it. Nor do the pages of MGBC1 to which the FACS refers state that there are [XX] steps for this process; instead, Mr Bowser once more asserts that in his experience the use of [XXXXXXXX] for this segment of the process will achieve "approximately [X] stages of extraction".[131] The number of actual extraction steps using such columns will depend on their specific configuration and on their operating parameters (for example, the packing type and agitation rate).[132] He says that there are similarly [XX] steps in the equivalent parts of, respectively, DC4 and JDR 29.[133] In his re-examination he contended that the depictions of [XX] disc bowl centrifuges in JDR 29 show [XX] steps of the process being taken at this point.[134]

156 Neither DC4 nor JDR 29 specify the use of [XXXXXX]. It is not clear to me how it can be said that the provision for [XX] disc bowl centrifuges in Mr Connolly's documents amounts to a misuse of the knowledge that GSK, employing totally different equipment, with its own particular configuration and parameters, also at this point engages in what appears to be the equivalent of a [XX]-step process. This allegation seems to me to be quite untenable.

157 The defendants submit that, in any event, this information is meaningless without identification of a number of factors. The solvent is one of them. I agree.

The maximum rate of poppy straw milling (tonne/hr) on a [XXXXXXX] of a size comparable to the [XXXXXXXX] used by the plaintiff, being **[XXX]**kg/hr (FACS item 1.1(a)(vi))

158 I have already observed that this item, unlike the others in this segment of the FACS, is concerned with one of the very first steps in the primary stage of extraction: the rate at which the pelletised straw received from the Latrobe plant is broken down by a [XXXXXXX]. It is not clear, given the reference in paragraph 7.1.2 of MGBC1 to both a [XXXXXXXX] and a [XXXXXXXX], whether this occurs before or after the raw material goes to a [XXXXXXX].[135] Although item 1.1(a)(vi) of the FACS refers to a rate of [XXX] kg/hr, paragraph 7.1.3 of MGBC1 states that "straw is milled at [XXX-XXX] kg/hour".[136] GSK says this information was used in the preparation of DC4, which assumes a straw milling rate of [XX] tonnes/hour.[137]

159 The defendants submit that this GSK information is too vague and non-specific to be confidential. Nor is there is any evidence of the size of GSK's mill, or that of any mill the defendants might employ. Accordingly, comparisons are impossible. Moreover, the information has not been used by the defendants. In none of the extraction process documents is the rate shown at [XXX]tonnes/hour. Mr Connolly deposed that the figures for milling rates are calculated by dividing the quantity of poppy straw milled per annum by the days of operation and the number of hours per day.[138] Mr Ritchie gave evidence to like effect.[139] I accept this evidence. It is in any event Mr Ritchie's evidence that TPI will not be using pellets; its poppy seed will be delivered in the form in which it is harvested.[140] This too is evidence which I accept.

160 In my opinion this claim has not been made out.

Manufacture of Concentrate of Poppy Straw from Thebaine Crop (MGBC3) and PFRD01/016 (FACS 1.1(b))

161 Manufacturing Guide Basic Chemicals 3, generally referred to as "MGBC3", which is 15 pages in length, contains detailed information about the manufacture of concentrate of poppy straw from a thebaine crop. As with MGBC1, GSK does not now claim that the defendants have misused all, or even a large portion of, this guide. Item 1.1(b) of the FACS now sets out, under the above heading, two items of confidential information said to be contained in two documents. The first is MGBC3 and the second is a Port Fairy Research and Development document known as "PFRD01/016". It is alleged that the information to which item 1.1(b) refers has been misused by the defendants. The two individual items are:

• The choice of solvent, being 100% cyclic hydrocarbon, in a ratio of rich extract ("A") to solvent ("O") of [XX - XX], and preferably [XX], for the selective extraction of thebaine into the solvent (item 1.1(b)(i)); and

• The number of stages of extraction, being [X], for the selective extraction of thebaine into the solvent to achieve an extraction efficiency of thebaine from rich extract into solvent of [XX]% (item 1.1(b)(ii)).

162 As (generally) with MGBC1, these items concern the secondary stage of extraction at the point where thebaine is being isolated. I will examine each of them in turn.

The choice of solvent, being 100% cyclic hydrocarbon, in a A:O ratio of rich extract to solvent of [XX - XX], and preferably [XX], for the selective extraction of thebaine into the solvent (FACS item 1.1(b)(i))

163 Paragraph 7.4.1 of MGBC3 refers to the use of [XXXX] at "a mixing ratio of between [XX - XX] (Rich Extract: [XXXX])".[141] I observe that, in contra-distinction to both item 1.1(a)(i) and this item (i.e. item 1.1(b)(i)) of the FACS, the guide does not use the generic description "cyclic hydrocarbon". I also observe that MGBC3 gives a range of ratios rather than identifying a specific figure. In this context, it is worth noting that an R&D report prepared by Mr Ritchie and entitled "Operating Guide for Thebaine Plant Trials" (PFRD01/016) states:

It is desirable to have a ratio of aqueous to [XXXXX] in the order of [XX]. This increases the batch size which can be processed at solvent extraction as the thebaine concentration is increased. It is however, more important to ensure adequate phase separation especially on the aqueous phase (PST) so if phase separation is being compromised at a [XX] ratio a reduction in the ratio can be changed to ensure separation.[142]

164 It is appropriate to emphasise here as elsewhere that the defendants are not proposing to use solvents in the extraction of their alkaloids. This item is therefore concerned only with the alleged use of information in the preparation of the extraction process documents. These documents, however, were concerned not to design a working model, but to enable prospective costs to be estimated. I am satisfied that the extraction process they describe has never been, and never will be, implemented. What follows must be read against this fundamental difficulty for the plaintiff.

165 GSK points to the reference to "fresh solvent ([XXXXX])" at the top of the thebaine column in JDR 29[143] and says [XXXXX] is a known substitute for [XXXXX]. However, this does not take the matter very far, for in my opinion GSK has not established that a choice of 100% cyclic hydrocarbon for this process could be confidential. Dr Ross states in his report that the "use of an aromatic solvent only for the selective extraction of thebaine from a mixed morphine, codeine, thebaine and oripavine aqueous stream at an highly alkali pH" is information to be found in the public domain.[144] I accept the defendants' submission that the use of such a cyclic hydrocarbon is well known in the industry and in any event forms that portion of Mr Ritchie's scientific and professional knowledge and experience which he is entitled to use.

166 The defendants contend that the [XX] A:O ratio referred to in PFRD01/016 is "a late attempt to find information within GSK's business that is similar to the TPI Draft Overviews".[145] Mr Bowser does not address in his affidavit material how GSK decided to adopt the range of [XX - XX], and the only explanation for specifying a ratio "in the order of [XX]" is to be found in the passage quoted above from PFRD01/016. Yet, so far as I am able to ascertain, Mr Bowser did not refer to that document except when, in cross examination, he mentioned an "operating guide"[146] which in re-examination he identified as PFRD01/016.[147] He did depose that the partition coefficient data for the solubility of actual poppy straw extracts in the case of thebaine is "totally non-existent".[148] But in my opinion this does discharge the burden on GSK. I find that GSK has not established this ratio as a trade secret.

167 GSK points to the combined effect of [XXX]L/hr of [XXXXX] and [XXXX]L/hr of "LL from Primary Processing" in the thebaine column of JDR 29 to give an A:O ratio of [XX]. In a submission that could be put in relation to its own case, it contends there is no evidence about how Mr Ritchie arrived at this ratio; it could not be calculated, and he admitted he did not refer to any public domain information. This submission places the burden of proof on Mr Ritchie, while also ignoring his general knowledge and experience of matters chemical - in other words, his "know how". The defendants say an appropriate A:O ratio "depends on a number of factors including the concentration of the alkaloids in the aqueous extract and the particular solvent used". This seems to be entirely consistent with the general evidence given by Mr Bowser about A:O ratios, and I accept it. It follows that concentrating upon similarities between GSK and TPI A:O ratios to the exclusion of similarities or differences in their alkaloid concentrations and an examination of the solvents employed is to indulge in an empty exercise. It is made even more vacuous if TPI does not use solvents at all.

The number of stages of extraction, being [X], for the selective extraction of thebaine into the solvent to achieve an extraction efficiency of thebaine from rich extract into solvent of [XX]% (FACS item 1.1(b)(ii))

168 It is said in paragraph 9.2 of MGBC3 that: "The standard extraction efficiency for thebaine in rich extract to rich [XXXXX] thebaine is [XX]%".[149] GSK, however, has not established where the [XX]% extraction efficiency has been used by the defendants. This is not surprising given that this is an outcome dependent on all the parameters peculiar to a particular process, and TPI does not operate under the same parameters.

169 Another point needs to be made about this item of the FACS. The pages there identified contain no clear statement that this part of the process is limited to "stages of extraction, being [X]". Perhaps such information would be gleaned from them by an organic chemist reading the steps outlined under the heading "7.4 Extraction of Thebaine From Thebaine (Aqueous) Rich Extract". In any event, the table which is confidential exhibit TB9 to Mr Bowser's affidavit of 17 October 2007 specifies the "number of separation stages for back-extraction of alkaloids into the aqueous phase" as [X].[150] In that same table, Mr Bowser notes that JDR 29 shows [X] stages. This would appear to be an acknowledgement that the defendants have not used this piece of information. In its written submissions, GSK says that Mr Bowser's evidence was that "[X] stage was comparable to [X] stages of extraction in this application".[151] In his cross examination, the following exchange occurred:

Q: And with thebaine extraction you're saying [X] stage is similar to [X] stages?

A: I've pointed out the difference there, but yes, it is similar, yes.[152]

In my opinion it is not sufficient in the present context for GSK to point to "similarities" between an item of confidential information and some other statement, and then assert a misuse of the confidential information simply on the basis of the so-called similarities. [X] stage is [X] stage; [X] stages are [X]. Much emphasis has been placed by GSK on the importance of the interaction of parameters. It cannot in this instance then slide from such emphasis to an airy dismissal of a patent disconformity as irrelevant.

170 In these circumstances, I find that GSK has not established that this information is confidential to it. Nor has it been established that there has been any misuse.

Manufacture of Codeine Phosphate and Thebaine Bitartrate (MGFC1)(FACS 1.1(c))

171 In October 2002, some 14 months before Mr Ritchie's resignation, the Fine Chemicals Section of the GSK Chemicals Division produced MGFC1 ("Manufacturing Guide Fine Chemicals 1"). It consists of 49 pages. The single sheet to which the FACS refers is headed "Detailed Process Description Methylation of Morphine". There follows instructions which for a lay person are impossible to understand, but which are directed to the conversion of morphine into codeine. What is alleged in the FACS to be confidential information disclosed by those instructions is described as "a method of preparation of anhydrous sodium ethoxide (described as ethanolic sodium hydroxide solution), being the use of [XXXXX] and [XXXXXXXXX]". The FACS does not, however, identify the method itself. Moreover, it would appear that the information sought to be protected by GSK, which it is said the defendants have used, is not the entire process set out in MGFC1, but merely one discrete aspect of it: the method for making sodium ethoxide. This conclusion follows, as I understand it, from the fact that MGFC1 specifies a formula that includes "ethanolic sodium hydroxide solution" as simply one of its constituent elements. Given that the formula is important in the methylation of morphine, one may assume that ethanolic sodium hydroxide solution, or sodium ethoxide, is something which must be "prepared" as part of that process; but that the totality consists of more.

172 Mr Bowser does not address this specific aspect of MGFC1 in his affidavit material. Instead, he speaks of the entire guide in broadly descriptive terms and deposes that he is not aware "of these processes ... being utilised outside GSK or communicated by GSK to anyone external to GSK" save for information shared with a customer under confidential conditions.[153] The pages to which he refers are headed "Confidential Information Table" and, while they include a reference to the page identified in the FACS (being page 22 of MGFC1)[154], that specific page, and its contents, are not included or examined. This doubtless is a consequence of the late preparation of the FACS, more than two years after Mr Bowser made his affidavit. The result is that I have no evidence before me about any work performed by GSK in the "preparation" of sodium ethoxide, or to confirm that GSK actually uses that chemical (there being some doubt about its efficacy, which I discuss below), or if there is a proper basis for any claim that the method of preparation is confidential to it. The most that can be said is that it is the subject of a manufacturing guide for which a blanket claim of confidentiality was previously made. The absence of evidence is particularly pertinent given the remark by Dr Ross that "a standard procedure for the preparation of sodium ethoxide is to use sodium hydroxide and ethanol"[155] (emphasis added). I also consider below the evidence of Mr Connolly, which is that he prepared a costing that included a process for making sodium ethoxide after consulting a chemistry textbook.

173 As I understand it, the conversion of morphine to codeine should occur in water-free conditions. According to a paper written by Professor Walter R. Heumann and entitled "The manufacture of codeine from morphine" this is because the presence of water may adversely affect the process by contributing to the "oxidative destruction of morphine and thus lower the yield of codeine", and it may also "prevent the first step of the methylation from proceeding to completion".[156] The sodium ethoxide used in the reaction to convert morphine to codeine should therefore be anhydrous (that is, water-free).

174 Mr Connolly deposed that in late 2006 he was asked by Mr Ritchie to develop a concept design of plant suitable for the manufacture of codeine phosphate. Mr Ritchie hoped that by this means an estimate could be made of the cost of that plant. Mr Connolly agreed to undertake the task. He turned for information about the appropriate chemical process to Professor Heumann's paper. But while the paper refers to the use of sodium ethoxide, the professor does not describe a method for making it. Mr Ritchie did not supply Mr Connolly with the answer, nor did the latter know what process GSK used. In relation to producing sodium ethoxide, Mr Connolly says that he looked up a chemistry book which stated that if one adds sodium hydroxide to ethanol it will form sodium ethoxide and water.[157] During cross examination he agreed that the result would be to introduce water into the process, contrary to the recommendation of Professor Heumann; but he pointed out that in the process document produced by him he emphasized this very fact.[158] Dr Bos agreed that the method set out by Mr Connolly to make sodium ethoxide would not work because of the presence of water.[159]

175 GSK contends that the process described in MGFC1 [XXXXXXXXXXX]. It relies on evidence from Dr Ross that the GSK and TPI processes are similar. Depending on one's acceptance of what GSK alleges is TPI's process, that may be so; but if (as Dr Ross says) this is a standard process, that is not surprising. Moreover, although Professor Heumann states that the aim of the exercise is the production of anhydrous sodium ethoxide, [XXXXXXXXXXX]. GSK argues that, rather than use an alternative method to produce anhydrous sodium ethoxide (using sodium metal and ethanol) or provide for it to be purchased commercially, it should therefore be inferred that Mr Ritchie told Mr Connolly "that it would be viable to [XXXXXXXXXXXXXXXXXX]..."[160]

176 During cross examination, Mr Connolly gave evidence that Mr Ritchie gave him the Heumann paper and asked him to come up with a cost estimate based on the process outlined in it.[161] The only input from Mr Ritchie was to nominate some temperatures to ensure water had been removed; but Mr Connolly had no recollection of Mr Ritchie telling him that he could use sodium hydroxide and ethanol to make sodium ethoxide.[162]

177 Mr Connolly deposed that he did not even consider the GSK-posited alternative of using sodium metal to create anhydrous sodium ethoxide. Sodium metal is "highly reactive and can explode if put in contact with water". Understandably, there are "difficulties with its storage and handling". He has never seen it used in an industrial process "whereas sodium hydroxide is ubiquitous".[163] Mr Ritchie echoed these sentiments in his affidavit material. He described the use of sodium metal as "completely impractical" given that it reacts violently with water "and poses significant safety issues" while also being expensive.[164]

178 There is no evidence that TPI proposes to adopt whatever procedure GSK employs for the preparation of sodium ethoxide or to call on any GSK information in the production of codeine phosphate. On the contrary, Dr Bos on behalf of TPI has since developed another method to manufacture codeine using [XXXXXX] rather than [XXXXXXX]. I am satisfied that TPI intends to adopt the Bos process.

179 In any event, I am not satisfied that the process said to be used by GSK to prepare anhydrous sodium ethoxide is confidential to GSK. The evidence shows, and I accept, that it can be sourced from a chemistry textbook (as it was by Mr Connolly) and is a standard process, albeit [XXXXXXXX]. Nor am I satisfied that there has been, or there will be, any misuse of any information from MGFC1 by the defendants.

Manufacture of Thebaine Alkaloid (MGFC2)(FACS 1.1(d))

180 MGFC2 deals with the manufacture of thebaine alkaloid from either concentrate of poppy straw or thebaine bitartate obtained as an output from the process described in MGBC1, MGBC3 or MGFC1. According to Mr Bowser, the subject mater of MGFC2 "represented one of the more significant areas of research and development undertaken by the Research and Development Department (Port Fairy)".[165] This guide is 36 pages in length and contains detailed information about the processes with which it is concerned. As with previous guides, GSK does not now claim that the defendants have misused all of its contents. Instead the plaintiff alleges the wrongful use of one item of confidential information - the:

choice of an aqueous acid solution ("A") in a ratio of aqueous acid solution: solvent ("O"), being 100% cyclic hydrocarbon, in a A:O ratio of [XX], for the selective extraction of thebaine from the rich solvent (item 1.1(d)(i)).

181 Mr Bowser did not in his affidavit material address either the pages identified by the FACS, or the information referred to in them. It was only in cross examination that he confirmed that it is a passage in paragraph 6.1.6 of MGFC2 which GSK says contains the relevant information.[166] That paragraph states in part: "R[everse] O[smosis] water is added to the extraction vessel at a ratio of [X]L per [XX]L [XXXXX]. Acetic acid (60%v/v) is added with stirring".[167] "RO" or "reverse osmosis" water" is "relatively clean water". I note that MGFC2 refers to [XXXXXXX] and does not use the description "aqueous acid solution".

182 GSK alleges that the defendants used this information in JDR 29 where it specifies the use of "[X-X]% [XXXX] [XX]L/hr" in the thebaine column.[168] This is a reference to the use of [XXXXXX], which Mr Bowser said was "similar" to [XXXXXX]. In combination with a [XX] ratio, he said it amounted to a comparable process.[169] Yet in re-examination he seemed to say that, although the acids would perform a similar function, the use of different acids meant the two processes were dissimilar, particularly where GSK uses a "batch manual process" while TPI proposed in this document to use a disc bowl centrifuge.[170]

183 Dr Ross gave evidence that he would expect the A:O ratio of [XX] to be determined experimentally.[171] There is, however, no evidence of how GSK arrived at it. Mr Bowser's involvement with MGFC2 was limited to reviewing some of the development reports associated with that guide.[172]

184 The defendants assert that the information is not confidential. The only way to extract thebaine from any organic solvent is to make the aqueous solution acidic so the thebaine can dissolve in it. Moreover, they say, the effect of MGFC2 is not to give an A:O ratio of [XX] at all because the washing process is repeated pursuant to paragraph 6.1.7. According to Mr Ritchie:

[Paragraph] 6.1.6, on its own, suggests that there is a [XX] to [XX] ratio of [XXXXX], which is loaded with thebaine, and it's extracted with [XX] litre, for every [XX] litres. Or at [XX] to [XX] O:A ratio. If 6.1.6 occurred on its own, that would definitely be a true statement, however, that extract goes to a separate vessel, and ... that organic solvent remains there, and the equivalent volume occurs again, and mixes with that volume, and it happens another time, so a total of [XXXX] times. So you end up having an O ratio that was mixed with [XX] litres per [XX] litres, which gives a true O:A ratio of [XX] to [XX]. And it's inaccurate - very inaccurate to say that it's [XX] to [XX].[173]

185 In my opinion GSK has failed to establish this claim.

Isolation and Purification of Oripavine (MGFC5) and PFRD02/010 (FACS 1.1(e))

186 On the basis of extracts obtained from MGBC3, Manufacturing Guide Fine Chemicals 5 ("MGFC5") deals with both the isolation and purification of oripavine and the manufacturing process for conversion of [XXXXXXX] to [XXXXX] ("[XXX]"). Mr Bowser deposes that it was only in the 1990's, when there were sufficient quantities of oripavine present in thebaine poppies, that research was undertaken by GSK into the commercial supply of oripavine and thebaine. Extensive pilot trials were undertaken by GSK over a period of about 18 months, which led to the issue of MGFC5. Although the majority of the work conducted by the research and development team at Port Fairy was concerned with a process to convert oripavine into an oripavine derivative known as [XXXXX], this was not found to be economically viable. It was for this reason that, in early 2003, GSK in conjunction with [XXXXXX] undertook work on the synthesis of another oripavine derivative, [XXX]. This work also formed part of MGFC5.[174]

187 MGFC5 is 28 pages in length. It contains detailed information about these processes. GSK does not, however, claim that the defendants have misused any information relating to the conversion of oripavine to [XXX]. Nor does it claim misuse of all, or even a large portion of, the contents of that guide in relation to the isolation and purification of oripavine. Rather, it points to four items of relevant confidential information which it says have been misused. I will deal with each in turn, but in doing so note that each specifies the misuse of information about the choice and employment of solvents in the manufacturing process. However, the evidence of the defendants, which I accept, is that solvents now play no part in their production plans. They once did, of course - in the form of the solvents [XXXX] and [XXXX]. But the defendants now propose to isolate oripavine using the selective precipitation of morphine salts.[175]

• The choice of solvent, being [XX]% [XXXXXXX]: [XX]% [XXXXXXX], for the selective extraction of oripavine over morphine into the solvent (item 1.1(e)(i));

• The ratio of rich extract ("A"): solvent ("O") of [XX], for the selective extraction of oripavine over morphine into the solvent (item 1.1(e)(ii));

• The number of stages of extraction (being [X] to, preferably, approximately [X]) for the selective extraction of oripavine over morphine into [XX]% [XXXXXXX]: [XX]% [XXXXXXXX] at the A:O ratio of [XX] (referred to as the "rich solvent") (item 1.1(e)(iii)); and

• The number of stages of extraction, being approximately [X], for the extraction of oripavine from the rich solvent into an aqueous caustic solution (item 1.1(e)(iv)).

The choice of solvent, being [XX]% [XXXXXX]: [XX]% [XXXXXX], for the selective extraction of oripavine over morphine into the solvent (FACS 1.1(e)(i))

The isolation of oripavine from ORMLS [second crop oripavine mother liquors] is based on the selectivity of extracting oripavine into the selected solvent ([XX]% [XXXXXX]) at pH [XX].[176]

Thus, in contradistinction to the FACS, MGFC5 does not describe the solvent as a mixture of "[XXXXXX]" and "[XXXXX]": it specifies [XXXXX] ([XX]%) and [XXXX] ([XX]%).

190 Yet, although MGFC5 speaks of [XX]% [XXXXX] and [XX]% [XXXX], GSK alleges that the reference in JDR 29[177] to "[s]olvent [XX]% [XXXX] [XX]% [XXXX]" in the column headed "oripavine" constitutes a misuse of GSK's information. It does this despite the obvious fact that the identified solvents and the identified percentages are different; but it relies on Dr Ross, who gave evidence that [XXXXX, XXXXX, XXXXXX, XXXXX] and [XXXX] are "very similar in terms of chemical nature".[178]

191 GSK alleges that its choice of "[XXXXXXXX]" and "[XXXXXXX]" is not in the public domain. It again relies on a statement by Dr Ross: on this occasion, the proposition in his report that "the separation/extraction of oripavine using the mix [of [XXXXX]] is in my review [sic] and opinion not public domain information".[179] The defendants nevertheless dispute that this information is confidential to the plaintiff. Mr Ritchie gave evidence that during a visit in February 2000 to a client of GSK (a company referred to in these proceedings as "[XXXXXX]", [XXXXXXX]) he and Mr Bowser discussed with the [XXXXXX] representatives the presence of small quantities of oripavine in morphine which had been supplied by GSK. The representatives "informed us that they removed oripavine from the morphine by slurrying the morphine in water and extracting the oripavine into an organic solvent comprising [XX]% [XXXXX] and [XX]% [XXXXX]. They separated the organic solvent from the undissolved morphine on a [XXXXXXXXXX]".[180] According to Mr Ritchie, this information provided the starting point for GSK's own investigations. He says that "ultimately, GSK determined that the ideal organic solvent for its process was a [XX] mix of [XXXXX] and [XXXX]".[181] Although he acknowledged that there was not a lot of publicly available information about how to separate oripavine from morphine, it was "obvious that one of the possible methods would be to use liquid-to-liquid extraction". It was likewise well known that the choice of organic solvent involved the combination of a [XXXXXXXX] and a [XXXXXXXX]. Because oripavine is more readily soluble in a [XXXXXXXXXX] (such as [XXXX]) than is morphine, it follows that the mix will be more heavily weighted towards the [XXXXXXXXX].

192 I find that the information about the means of removal of oripavine was given by [XXXXXX] in the context of informing GSK about the former's attempts to achieve that end.[182] But I find that GSK did not cover it with a blanket of confidentiality of its own. In my opinion (to adopt the relevant wording of this item in the FACS) the use of a mixture of "[XXXXXXX]" and "[XXXXXX]" as a means of removing oripavine from morphine was confidential neither to GSK nor to TPI.

193 Mr Ritchie also pointed to the reference to the use of [XX]% methanol and [XX]% chloroform in a paper published in 1983 and entitled "Oripavine - A New Opium Alkaloid".[183] That paper states, among other things:

Analytical TLC of the ether extract on silica gel with (a) chloroform - methanol (8:2) and (b) ethyl acetate - methanolcone ammonia (85:10:5) revealed reticuline, oripavine, a small amount of morphine and one unidentified alkaloid. ... Oripavine was isolated from the ether extract by preparative TLC on silica gel (0.5mm) using the same solvent systems described for analytical TLC.

While Mr Ritchie concedes that there are differences between a solvent mix of [XX] methanol/chloroform and such a mixture of [XXXXX] and [XXXXX], "the differences are no greater than the differences between [XX] [XXXX]/[XXXX] and [XX] [XXXXX]/[XXXXX]. The principle of selective extraction of oripavine by exploiting the difference in polarity between it and morphine is disclosed in the public domain and is part of my essential scientific knowledge".[184]

194 Mr Ritchie acknowledges that the optimum proportions can only be determined by laboratory testing. He gave Mr Connolly the ratio of [XX] "because I knew that GSK did not use it and it was not confidential to GSK because it originated with and was freely provided by [XXXXXX]".[185]

195 I accept the evidence of Mr Ritchie about the background to the selection of the solvent mix. It is clear from that evidence that a mix of [XX] is significantly different from a mix of [XX], and represents an optimisation of the process by GSK. It is not therefore sufficient to say that the two mixes are "similar" and the one is therefore a use of the other. To do so would be to ignore the value of the work that went into refining the figures.

196 In my opinion GSK has not established that the information identified by GSK (namely, the [XX] ratio) was used by the defendants.

The ratio of rich extract ("A"): solvent ("O") of [XX], for the selective extraction of oripavine over morphine into the solvent (FACS 1.1(e)(ii))

197 This ratio can be derived from the statement in paragraph 1.5 of MGFC5 that "[XXXX]L/hr of ORMLS is run against [XXX] L/hr solvent".[186] GSK points to the reference to "LL from primary processing [XXXX]L/hr" appearing at the left margin in JDR 29 and "Solvent [XX]% [XXXXX] [XX]% [XXXXX] [XXXX]L/hr" at the top of the oripavine column.[187] This it says gives an identical A:O ratio to that in MGFC5.

198 During cross examination Mr Ritchie gave the following evidence about how an A:O ratio of [XX] appears at this point in JDR 29:

It was a conservatively high number and again my experience with the solubility ... but that was more of a feel and a guide than a specific number. I don't know if that would actually work. Well in fact I don't know if the solvent would work but I know the pH won't work.[188]

In this respect I note that JDR 29 shows pH [X], while MGFC5 refers to a pH of [XX] and comments that "a pH closer to [X] would give a better extraction efficiency of oripavine but would result in morphine dropping out of solution". Mr Ritchie then added:

I think it's also unfair to say the ratios are ... similar in the context of oripavine isolation because there's only [X] stages and there needs to be [X], as per my original report. The one that's missing is the key one, so there will be no separation of morphine [from] oripavine at all, and the back-extraction ratio is very different, and that whole oripavine section ... won't produce any oripavine at all, and again, I was just attempting to give conservative numbers and give reasonable numbers for Mr [Connolly] to do a costing.[189]

199 This is yet another example of a parameter which GSK says was developed and optimised by it, but which has been allegedly "used" by the defendants; yet in my opinion the evidence is clear that their adoption of it was for use in a process with different parameters, thereby not only robbing it of its optimal character, but resulting in a process that is unworkable. The extensive evidence given by Mr Bowser and the other GSK experts about the need for laboratory and pilot testing to establish parameters presupposes that the parameter in question when ultimately utilised will be an efficient, and indeed an optimal, one in the TPI design. So, it would seem that GSK's criticism of the defendants, for allegedly stealing the fruits of GSK's labour rather than do their own tests, is underpinned by this assumption. But, for the reasons I have outlined, the TPI draft process simply could not work. Notwithstanding this, GSK's case is not only that it has suffered damage thereby, but also that an injunction should lie to prevent the Defendants from using this parameter. Such an argument is in my opinion without merit.

The number of stages of extraction (being [X] to, preferably, approximately [X]) for the selective extraction of oripavine over morphine into [XX]% [XXXXXX]: [XX]% [XXXXXX] at the A:O ratio of [XX] (referred to as the "rich solvent") (FACS 1.1(e)(iii))

200 Paragraph 1.2 of MGFC5 refers to "a [XX]-stage extraction in the separators".[190] The FACS also refers to a R&D report (PFRD02/010) which was written by Mr Ritchie and Mr Coleiro on 10 October 2002 and is entitled "Status Report for Oripavine Extraction".[191] Mr Bowser explained that the oripavine process initially used [X] disc bowl centrifugal separators in [X] stages because those were the only pieces of equipment available at the time. However, a new column system was being designed to increase yield which targeted "approximately [X] stages of extraction". PFRD02/010 was the report which related to this step.[192] The process described in that report was therefore proposed rather than actual. A diagrammatical summary appears on its final page. To the right of a box marked "C61" on the left hand side of the page are a list of parameters. They include "No Stages [X]", which I read as "number of stages, [XXX]".[193]

201 GSK says that the Defendants used this information in creating JDR 29, which shows [X] stages using [X] disc bowl centrifuges. Mr Ritchie has deposed that he told Mr Connolly how many centrifuges to use and gave him "a conservatively high number so that the costing was not underestimated".[194] Mr Bowser acknowledged that while GSK actually used [X] stages and proposed using [X], JDR 29 used [X].[195] However, in his cross examination he explained that, for this purpose, [X] stages is "similar" to [X] and gave the following evidence:

We know from the information in MGFC5, the only reason we were using [X] stages was because that was all that was available in terms of the extraction equipment. So our proposal was to use [X] to achieve a certain yield. You know from the data that you would need to generate to do that proposal for [X] stages that [X] or [X] stages would be close to the right number to use.[196]

It may be safely assumed, it seems to me, that the knowledge about which Mr Bowser speaks in this passage is a product of his general body of expertise acquired through the amalgam of skill and experience he gained as an employee of GSK, together with such of these qualities that he brought to the company when he commenced his employment with it. Mr Ritchie is in the same position.

202 Mr Bowser therefore thought that [X] stages was sufficiently close to constitute a use of GSK's information, whereas a process design that used [X] or more stages "would be in the grey area of whether it's a different application or not".[197] He has deposed that "in the absence of laboratory, pilot and plant trial data, the number of extraction stages could not be predicted and could have varied from as low as one ... to hundreds.[198] Yet "hundreds" of extraction stages, while theoretically possible, seems to me to be a venture into hyperbole, given that we are here concerned with the design of a commercially viable process. It also fails to take into account the fact that Mr Ritchie was (and is) not only an experienced chemist, but the joint author of the report which had investigated commercially sustainable increased oripavine production. Quite apart from the obvious point that [X] stages are more likely to be more efficacious than [X], and [X] more than [X], he therefore had knowledge of the commercial factors that would come into play.

203 The defendants submit that the process developed by GSK using [X] stages is "completely different" to that which uses [X] stages. I take that to be a reference to the use of disc bowl centrifuges for the [X] stage process and columns for the [X] stage process. Mr Ritchie deposes that centrifugal separators and [XXXXXX] are not the same: the former "provide greater separation force and more vigorous mixing than [XXXXX] at greater A:O ratios".[199] Mr Connolly also explained the difference in the operation of these pieces of equipment in his affidavit:

A packed column is a tower containing either fixed packing or agitating mixers. The two liquid phases mix in the tower and pass each other under force of gravity. As the liquids mix and pass each other, the target product passes from one liquid to the other. With disc bowl centrifuge, the liquids are separated by centrifugal force. The heavier liquid passes to the outside of the spinning bowl forcing the lighter liquid to the inside. It is a more violent separation than is the case with a packed column.[200]

204 In my opinion, the TPI plan outlined in JDR 29, which incorporated a [X]-stage process using disc bowl centrifugal separators, bears no relevant relationship to the [X]-stage GSK [XXXXXX] operation. It follows that there has been no misuse of the information to which this item of the FACS refers.

The number of stages of extraction, being approximately [X], for the extraction of oripavine from the rich solvent into an aqueous caustic solution (FACS 1.1(e)(iv))

205 This item is concerned with the back extraction of the oripavine from the rich solvent created earlier in the extraction process. Paragraph 1.5 of MGFC5 provides that "[t]he oripavine is concentrated into a caustic extract ([X] extractions with [X]% NaOH, [XX] NaOH to solvent ratio)".[201] The FACS also refers to PFRD02/010 which states under the heading "Oripavine stripping column":

• The final step in the process is to strip the oripavine from the solvent using caustic solution. This concentrates the oripavine so that it can be precipitated at pH 9 to form a crude oripavine cake. ...
• The NaOH is used at [XX]% and generates an oripavine concentrate in the order of [X]% oripavine operating at a [XX] solvent to caustic ratio.[202]

206 GSK points to the reference to "NaOH [XXX]L/hr" in the oripavine column of JDR 29 and the provision of [X] disc bowl centrifuges at this point as the alleged use by the defendants.

207 The defendants contend that this information is not confidential to GSK. There is no evidence to establish the development or use by GSK of [X] stages at this point in the process.[203] Furthermore, Mr Ritchie has deposed that the use of caustic aqueous solution to extract poppy alkaloids during back extraction is not confidential to GSK.[204]

208 I am inclined to adopt Mr Ritchie's view. In any event, in his use of the information in question, in a document created well after he left GSK's employ, I find that he drew upon his background knowledge. There is no question of a misuse of a trade secret.

209 Acetic acid is a relatively weak organic acid, being the second constituent behind water in plain vinegar. The TPI extraction process documents incorporate its use as the extractant of choice for the primary stage of extraction. The plaintiff alleges that, in so doing, TPI misused GSK confidential information.[205] And it is true that, from about September 2003, while still an employee of GSK, Mr Ritchie began investigating this method of extraction. Although the interest of TPI in acetic acid has since fallen away (as has that of GSK itself) the plaintiff contends that it continued after Mr Ritchie's departure from its employ, and indeed through to early 2006. The principal source of the information said to have been used is to be found in the following GSK documents:

• The "Thebaine Plant Study".[206] This recorded (in cryptic terms) the result of plant trials the purpose of which was to examine the feasibility of using acetic acid for the extraction of thebaine from thebaine straw.
• An email from Mr Ritchie dated 5 August 2002 concerning the Thebaine Plant Study.[207]
• A Port Fairy Research & Development report (PFRD02/0).[208]
• Laboratory notebooks of GSK employees Messrs Andrew Castles, Joe Colerio [there is some uncertainty about the spelling of the surname] and Wally Paton.[209]
• Various extraction efficiency spreadsheets and graphs.[210]
• Off-site laboratory trials conducted in 2002 with Westfalia Separator Australia Pty Ltd, a supplier of centrifugal separators.[211]
• The laboratory notebook of Mr Nick Hayes, another GSK employee.[212]
• Spreadsheets and graphs generated by Mr Hayes.[213]

210 Paragraph 1.2 of the FACS sets out to describe that portion of the "GSK technical information" which it calls "the acetic acid process" and which GSK claims to be both confidential and used by the defendants. According to the FACS, the information the subject of paragraph 1.2 consists of "Laboratory results, pilot data and empirical data disclosed by research conducted by or on behalf of the plaintiff into the extraction of alkaloids from thebaine straw using dilute acetic acid". This information is said to be found, in part, in the Thebaine Plant Study.

211 GSK investigated the use of acetic acid in its primary extraction process in the late 1980's. The work was carried out by the then R&D Manager at Port Fairy, Dr John Clarkson, under the instruction of the then factory manager, Mr Julian Phillip. The results, however, were not encouraging. According to Mr Bowser, one problem was that the acid caused the straw to swell. This in turn magnified the difficulties of filtration. Another was that acetic acid dissolved not only the alkaloids, but also large quantities of organic matter ("impurities") which were later difficult to remove. As a result, GSK concluded that the use of acetic acid was not economically viable.[214]

212 The picture changed some dozen years later. According to Mr Ritchie, he ascertained in 2001 that flawed assay analyses had resulted in the underestimation of the concentration of thebaine in thebaine poppy straw, and a consequent overstatement of the efficiency of GSK's thebaine plant. It was thought to be acceptably efficient; in reality, according to Mr Ritchie, its efficiency was "unacceptably low".[215] Improvement was therefore necessary. Mr Ritchie saw as a possible answer the use, in the primary extraction stage, of acetic acid instead of the reagents used by GSK in its thebaine plant: [XXXXXXXX]. Following laboratory tests, he received in late July 2002 permission to trial acetic acid in the thebaine plant, keeping all other variables (such as filter type, number of wash stages and the take-off ratio) constant "so that you could properly compare the efficiencies between the [XXXXXXX] process and the acetic acid process just on the extractant itself".[216] The aim was to enable GSK to form a preliminary view of the type of investment needed to implement such a process. In particular, it was thought that the acquisition of [XXXXXXX], combined with what is known as a "[XXXXXXXXX]", might be at least a partial solution to the increased levels of impurities created by the use of acetic acid. Further research into its use was conducted accordingly.

213 Following the plant trials, a document entitled "Thebaine Plant Study"[217] was prepared by Mr Ritchie and emailed to relevant persons on Sunday, 4 August 2002. In it he recorded an extraction efficiency of [XX-XX]%. This was achieved on a [XX] take-off with [X}% acetic acid and a cycle time of [XX-XX] minutes at [XXX]kg of straw per cycle; all of which promised enough "to warrant further detailed investigation". While there is no reference in the study to the number of wash stages, it is not in dispute that that number was [X] (it may be that, as a report written for in-house purposes for persons well acquainted with the existing design of the plant, this was an obvious point.) Mr Ritchie noted the finding that blockage of the separator could be alleviated by first filtering at pH [X]; but one of the recommendations he made was that samples of the extract be taken to a company called Westfalia Separator Australia Pty Ltd (to which I shall refer as "Westfalia") "to determine the best method of separation". In conclusion, he proposed a new two-stage process with initial extraction using [X]%-[X]% acetic acid and [XXXXXXXX], to be followed by a second step involving the extraction of the acetic extract into [XXXXX]. He noted that the use of a [XXXXXXXX] seemed to alleviate the earlier filtering problem created by straw that had been swollen as a consequence of its contact with acetic acid.

214 There is no direct evidence that Mr Ritchie took the Thebaine Plant Study with him when he left GSK. Nor could he recall giving the document to Mr Connolly; to do so would have been inappropriate, because it was a GSK document.[218] However, he was able to remember, from that document and other trials, that using dilute acetic acid, at [X]% to [X]%, produced acceptable efficiency rates. Indeed, he "was aware that a [X] stage counter current [XX] take-off with say [X]% or [X]% is, or would be very close to being, commercially an optimum". [219] I find that this was part of his background knowledge and experience. It was knowledge and experience that in this respect GSK never put to use, because it never adopted acetic acid as an extractant in the primary stage of the manufacturing process. As for Mr Ritchie and TPI, their use of it was limited to planning, not implementation.

215 GSK contends that, because the information contained in the Thebaine Plant Study is replicated in, or influenced the creation of the processes described in, exhibits DC4, DC5 and DC6, which Mr Connolly prepared, one can infer that Mr Ritchie misused it for TPI purposes.

216 In these circumstances, it might be helpful to recap some details of the initial contact between Messrs Ritchie and Connolly. The latter received a telephone call from Mr Ritchie in August or September 2003. He wanted a rough estimate of the cost of construction of a plant for the extraction of between 20 and 30 tonnes of morphine per year. The details provided by Mr Ritchie were sketchy (in Mr Connolly's words "the absolute minimum of information on which I would be prepared to provide a cost estimate");[220] but with what he had Mr Connolly produced a "first draft overview". This is exhibit DC4. It was sent to Mr Ritchie by letter dated 14 October 2003. No payment was sought for the work involved: it was, according to Mr Connolly, too basic.

217 By early 2004, the nature of the project had changed. Mr Ritchie now had in mind the production not of 20-30 tonnes of morphine, but of 150 tonnes of alkaloids, per annum. Details were still somewhat thin, but Mr Ritchie wanted an estimate "on the basis of a worst case scenario". In short, he saw the estimate as covering a robust plant with ample capacity. The result is exhibit DC5 to Mr Connolly's affidavit. It was produced in early June 2004.

218 A further alteration to the plans was made known to Mr Connolly late in that year. Mr Ritchie now wished to revert to a relatively small scale plant. So, early in 2005, DC6 was produced.

219 During the following exchange I had with Mr Ritchie, he gave evidence about the purpose of DC4:

Prior to ... anyone giving you money to test the venture, they want some feasibility study done which says ... how much money do you expect to make given how much of the market share you're going to get and how much is it going to cost you to build that facility. The whole point of this was for Mr Connolly to give us a very preliminary figure for the business plan for the venture capital firms to say as a very rough estimate, it will cost X million dollars to build a facility that will make, depending on the days and the hours of the week it runs, a facility that can produce a certain amount of alkaloid. And the venture capital people then say "OK, yes and how much do you expect to make in revenue?" And you say "This much amount of money". And they'll look at it and say "Well, it's not really worth trying" or "There's too much risk". So the whole point of this was just to get a very rough estimate for the business plan ... [221]

220 As I read paragraph 1.2(a) of the FACS, GSK has identified the confidential information contained in the Thebaine Plant Study to be that:

• the use of [X]% acetic acid as the primary extraction liquid, at a [XX] take off ratio, with [X] wash stages for counter-current extraction, and with a [XXXXXX] filter employed to filter the slurry, resulted in an extraction efficiency of [XX]%-[XX]%;[222]
• this extraction efficiency was greater than the "real extraction efficiency" obtained by GSK when using MGBC3;[223]
• if a [XXXXX] filter having a filter area of **[XX]**m² was loaded with **[XXX]**kg of straw per cycle and acetic acid was used "as the primary extraction liquid" in a [X] wash counter-current extraction, the result would be a cycle time of [XX-XX] minutes;[224]
• the "new" two step process involved using [X]%-[X]% acetic acid as the primary extractant with [XXXXXXX] (the first step) and then extracting the acetic extract into [XXXX] (the second step);[225]
• the concern about the difficulty of filtration when using acetic acid on a plant scale was misplaced, because poppy straw that had been subjected to acetic acid as the primary extractant could be satisfactorily filtered in a [XXXXXXX] filter;[226]
• the [XXXXXXX][227] would [XXXXXXX][228] unless, [XXXXXXXXXXXXXXXXXX];
• however, [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX];[229]
• the use of acetic acid as the primary extractant would be more economical than the continuing use of [XXXXXXXXXX] (as described in [XXXX]);[230] and
• there were advantages and disadvantages in using acetic acid as the primary extractant rather than [XXXXXXXX] (the MGBC3 process).[231]

221 None of the information set out above is described in the same words in either the Thebaine Plant Study or in the FACS. The latter has reproduced certain portions of the study verbatim, and reproduced other portions in its own words. The result, it seems to me, is less than satisfactory. The study, as it appears in documentary form, was written for internal consumption. Its audience was familiar with the relevant background. It is, understandably in these circumstances, concerned simply with a working description of the results of the thebaine plant trials sufficient to meet the needs of the particular audience to which it was directed. It was never intended to be analysed by lawyers. That very different audience requires, it seems to me, a different description of the confidential information it allegedly contained and which the defendants allegedly misused. The previous paragraph of this judgment is my attempt to supply that different description.

222 The thebaine plant trials were concerned to study the effects of using, in the plant as against the laboratory, a particular ingredient (acetic acid) in a particular sequence of chemical processes or techniques which also involved other ingredients. Laboratory tests have their benefits, but nothing can replicate experiments performed on the plant that must be used if production for commercial purposes is to be achieved. The techniques, the ingredients and the items making up the plant in the Thebaine Plant Study would have been broadly familiar to those in the industry, and to those advising them. It was what happened when those particular techniques were used, in that sequence, with those ingredients, in that plant, which GSK was anxious to discover for itself and, once known, to retain as confidential.

223 In my opinion, the results of the thebaine plant trials are entitled to the protection which the law gives to confidential information. Indeed, information of this kind may qualify as a trade secret. If it does, no employee or former employee may use it - except, of course, in the service of those whose information it is. But if it is not properly designated as a trade secret, and if at the same time it forms the background stock of knowledge of a former employee, then different considerations apply.

An extraction efficiency of [XX]%-[XX]% was achieved using [X]% acetic acid, a [XX] take-off ratio, [X] wash stages and a [XXXXXX] (FACS 1.2(a)(i))

224 I have already noted that the identification of the information alleged by GSK to be confidential was not always easy. The plaintiff at times insisted that what it sought to protect was the combination of parameters used in a sequence or a process. For example, item 1.2(a)(i) of the FACS claims confidentiality not in the individual parameters themselves, but in the result arrived at when GSK's combination of parameters is used. This is consistent with the opening words of paragraph 1.2 of the FACS: "Laboratory results, pilot data and empirical data disclosed by research conducted by or on behalf of the plaintiff into the extraction of alkaloids from thebaine straw using dilute acetic acid". Yet Mr Ritchie was cross-examined on the basis that individual parameters - ingredients, techniques, items of equipment - were confidential. Moreover, GSK in its submissions states as a general proposition that "the parameters derived from the documents identified in the FACS ... are confidential to it".[232]

225 The parameters are, of course, relevant to an understanding of the result; and, in that sense, they are intimately bound up with it. It was GSK, through its then employee Mr Ritchie, who combined the relevant parameters ([X]% acetic acid, a [XX] take-off rate, [X] wash stages and a [XXXXXXXX]) to attain an extraction efficiency of [XX]%-[XX]% during the thebaine plant trials. The extraction efficiency result thus arrived at using these parameters is therefore the product of skill and effort on the part of GSK. What is more, I am prepared to assume that knowledge of that degree of efficiency is not readily available, if available at all, to those outside that organisation. Yet it is information that one would want to possess before deciding whether a proposed process is economically viable.[233] As I have stated above, I have therefore concluded that it is confidential to GSK. However, I do not think it has the character of a trade secret.

226 The defendants submit that none of the individual elements identified in paragraph 1.2(a)(i) of the FACS is confidential. They refer by way of example to confidential exhibit "ARR 4" to the affidavit of Dr Ross of 27 August 2007. Under the heading "Commercial Scale Extraction References", Dr Ross records that "[p]ublic domain information ... references the use of [acetic] acid ... for commercial extraction", and goes on to point out that Professor Walter R. Heumann - in a paper entitled "The manufacture of alkaloids from opium"[234] - "recommends the use of 1%-2% acetic acid on commercial scale for opium extraction". Likewise, in paragraph 58 of his confidential affidavit of 23 January 2006, Mr Ritchie identifies two papers in which "the use of 5% acetic acid is referred to". Indeed, it is acknowledged by all that the use of acetic acid as an extractant is well known. Thus, Mr Bowser accepted in his affidavit of 19 October 2005 not only the fact that acetic acid "solubilises" (his word) opiate alkaloids, but also that this is publicly known.[235]

227 It is also relevant to remember at this point that GSK has chosen not to adopt the recommendation of the Thebaine Plant Study concerning the use of acetic acid, or even to further investigate its possible use (at least there is no evidence of any further investigations). It continues to employ [XXXXXXXXX]. And TPI has similarly declined to act upon its own initial indications that acetic acid was the extractant of choice at the primary stage of extraction: its methodology centres upon [XXXX].

228 The next individual element, the take-off ratio, is an essential component of, or element in, any process of counter current extraction of opiate alkaloids from poppy straw. As Dr Ross observes in confidential exhibit "ARR 4", in terms which accept the universal application of this aspect of the process of extraction of opiate alkaloids:

The take-off ratio refers to the ratio of liquid to solid used in the primary extraction process. After the initial separation of the liquid/solid slurry, the take-off ratio is expressed as the volume of liquid in litres per kilogram of solid not re-used in the next extraction step.

229 The nomination of a particular take-off ratio for a particular task was a matter within the expertise of Mr Connolly as well as Mr Ritchie (and Mr Bowser). I return to this topic a little later in this judgment.

230 There is in my opinion nothing confidential about the use of [X] stages of counter-current extraction in a [XXXXXX] filter whether used in combination with acetic acid or with some other reagent. For example, it was in the 1980's that Mr Connolly developed a [X] stage counter-current solid to liquid process for the extraction of tannins from pine bark using a [XXXXX] filter.[236] GSK, or rather GWA, called upon his expertise in 1999 or thereabouts to design and build a new thebaine plant at Port Fairy. It incorporates the [X] stage counter-current [XXXXX] filter system built by Chem Eng in accordance with the design that Mr Connolly developed some fifteen years before.[237]

231 It is now apposite to consider the extent to which, in combination, any of the GSK parameters, and the yield which results, appear in the defendants' process documents (DC4, DC5 and DC6). Extraction efficiency (otherwise referred to as "yield") is not mentioned in DC4.[238] The second process document (DC5) notes in the overview: "Assume overall yield [XX]%".[239] By this is meant that, when the manufacturing process is complete, [XX]% of the alkaloids originally contained within the raw poppy straw will be available for sale. That percentage cannot be greater than the percentage obtained at the completion of the first stage of extraction; and, of course, it may well be less, as more of the alkaloids are lost while the process of manufacture moves to its conclusion. DC5 is not, therefore, concerned with the "yield" to which the Thebaine Plant Study refers. The two figures cannot be compared.

232 I am unable to ascertain where, if at all, DC6 refers to yield, either for primary extraction or overall. In any event, Mr Bowser acknowledged during his cross-examination that the yield result in the Thebaine Plant Study was not comparable to that used in the TPI documents.[240] In terms of the parameters with which this item is concerned (acetic acid concentration, take-off ratio, wash stages and type of filter), DC4 and DC5 are identical: both use [X]% acetic acid,[241] a take-off ratio of [XX],[242] [X] wash tanks and a [XXXXX] filter.[243] The Thebaine Plant Study was based on a trial using [X]% acetic acid, with the caveat that a range of [X]%-[X]% would be workable [XXXXXXXX], and a take-off ratio of [XX]. It can be seen therefore that neither of these exhibits replicates all the parameters tested in the thebaine plant trial, and more particularly described in item 1.2(a)(i).

233 DC6 on the other hand uses [X]%-[X]% acetic acid and a take-off ratio of [XX].[244] Although it is unclear from the schematic diagrams how many wash stages are contemplated or whether a [XXXXXX] filter is proposed, Mr Ritchie deposed that at this stage TPI intended to use a [XXXXXX] filter with a [X] stage counter-current extraction process.[245] In a later affidavit he said that Mr Connolly had decided, when designing and constructing TPI's current plant, to use a [XXXXXXXX] filter instead of a [XXXXXX] filter because the former "is much cheaper and it enables a more rapid reslurry of the straw" than the latter.[246]

234 Mr Bowser has deposed that the choice of [X]%-[X]% acetic acid, being an item of critical data, could not have been established without trial.[247] In his work in the late 1980's, Dr Clarkson had found that using [X]%-[XX]% acetic acid was not feasible on the equipment then used.[248] A principal aim of the thebaine plant trials was to determine, if possible, the optimal amount, or at least the optimal range, of quantities of acetic acid to use. Mr Bowser contends that the public domain references give no indication of the effect of using acetic acid in a [XXXXXX] filter, or of the economics of such a process, and could not be a starting point for the strength of acetic acid for trial. He therefore asserts that the references to the use of [X]% acetic acid sometimes given by Mr Ritchie "are not an accurate guide to the efficiency (and feasibility) of [X]% acetic acid in a scaled-up commercialised process".[249]

235 For present purposes, there is on the evidence only one possible use of the information about acetic acid concentration appearing in the Thebaine Plant Study. It was employed by Mr Ritchie, well after he left employment with GSK, when he gave a concentration of [X]%-[X]% acetic acid to Mr Connolly in early 2006 for insertion in what became DC6. Although he conceded that he had not conducted any laboratory experiments, plant trials or pilot trials before DC6 was prepared, Mr Ritchie said he chose [X]%-[X]% acetic acid from "a combination of [the Thebaine Plant Study], my experience and a number of public domain references and a general understanding of the opiate chemistry in detail".[250] He described the use of dilute acetic acid as a "basic scientific fact" and part of the "general fundamentals of chemistry" that are "quite rudimentary".[251] I accept this evidence.

236 Mr Bowser is correct when he observes that the choice of [X]%-[X]% acetic acid could not have been established without trial. But once the results of that trial are known by someone in his or Mr Ritchie's position, it is pointless to repeat the exercise. This is true even after someone like Mr Ritchie has moved to another employer, with the results forming part of his knowledge and experience while not being a trade secret. I adopt, with respect, the point made by Scott J in the following passage:

The contention is that the defendants must carry out a series of experiments which, it must be supposed, will lead to the conclusion that "Y" per cent weight for weight is the most efficient concentration. But how can [Mr Ritchie] exclude from his mind the knowledge that "Y" per cent, or something very near to it, will constitute a satisfactory solvent concentration? Why should he experiment with "X" per cent or with "W" per cent when he knows that neither will be as satisfactory as "Z" per cent or "Y" per cent? The suggestion that a person in the position of [Mr Ritchie] should be required to carry out experiments before being allowed to use the knowledge and experience he already has is, in my view, hopelessly artificial.[252]

237 I have already referred to Dr Ross' observation that the Heumann paper[253] "recommends the use of 1%-2% acetic acid on commercial scale for opium extraction".[254] Under cross-examination, Mr Ritchie swore that he was aware of this paper and the concentration of acetic acid recommended.[255] I accept this evidence, and indeed accept that, as a qualified and experienced chemist working in this field who was concerned on a daily basis with research and development into the manufacture of opiate alkaloids, Mr Ritchie would be familiar with papers such as that by Professor Heumann; and, in general terms at least, this would include the information contained in them. Mr Ritchie did concede in cross examination, however, that Professor Heumann's reference to 2% acetic acid was in the context of a discussion about the extraction of alkaloid not from poppy straw, but from opium, which has a higher alkaloid concentration.

238 On a number of occasions during his cross examination, it was put to Mr Ritchie that he derived the percentage of acetic acid in DC6 solely from the Thebaine Plant Study. He rejected that notion,[256] although he accepted that it was not a coincidence that he "was aware that a [X] stage, counter current, [XX] take-off with say [X]%, [XX]% ... would be very close to being commercially an optimum".[257] But, in any event, Mr Ritchie was at the time DC6 was produced no longer in the employ of GSK. As a former employee, he was entitled to use for his own benefit his knowledge - which included knowledge in part derived from the Thebaine Plant Study - that dilute acetic acid would be an effective extractant. I do not accept that the use of [X]%-[X]% acetic acid is a trade secret for which GSK can seek protection.

239 The next complaint alleges a misuse of information about the plaintiff's take-off ratio. It neatly illustrates the tendency of the plaintiff's case to be more about the protection of GSK's competitive position than about protection of its secrets. There is no secret in the adoption of a ratio of this kind. It is true that there is no fixed ratio, but rather a multitude of ratios; and GSK alleges that TPI has fixed on the same ratio as has GSK. But that argument is without merit. GSK itself has a multitude of ratios. They "vary widely dependent on the application".[258] Indeed, they vary widely as between morphine and thebaine extraction, and even in relation to the same alkaloid. To quote Mr Bowser again:

For example, in the various GSK processes for primary extraction of poppy straw, the ... take-off for morphine straw extraction (MGBC1) is between [XX] - [X] (litres per kilogram), while for thebaine straw extraction (MGBC3) the ... take-off is between [X] - [X] (L/kg), although typically around [XX] L/kg. For a previous approach to thebaine straw extraction, the ... take-off was [X] L/kg. The value for ... take-off is therefore not intuitive and cannot be predicted without reference to a particular process system.

The ... take-off for poppy straw extraction is generated in a "counter-current" fashion aimed at maximising the extraction efficiency (yield) while minimising the volume of liquid generated per kilogram of poppy straw. Ideally, the lower the number, the better the process economics for downstream processing as less liquid is generated (resulting in less liquid storage and smaller equipment for later purification).

Accordingly, this parameter is determined (for a given extractant or solvent) by balancing the yield desired with the cycle time (hence plant throughput). This can only be determined by trial. With the original thebaine process GSK used a [XX] take-off.[259]

240 Given this evidence, it is in my opinion extraordinary that GSK claims confidentiality in the take-off ratio specified in DC4 and DC5 ([XX]) and DC6 ([XX]). In no case was this ratio to be used by TPI in the extraction of thebaine. DC4 and DC6 are concerned with the manufacture of morphine; DC5 with the manufacture of alkaloids generally. In no case did the defendants indicate a ratio between [XXX] and [XX], as adopted by GSK for the extraction of morphine. In no case did the defendants indicate a ratio of [XXX], GSK's "typical" or "routine" ratio for the extraction of thebaine. In no case did the defendants toy with a ratio of [XX] as once favoured by GSK. Indeed, in no case did the defendants specify a lower ratio than those presently adopted by GSK, although (as Mr Bowser has deposed) the lower the ratio, the better.

241 The defendants continue to assert that DC4, DC5 and DC6 were all part of a rough, pre-launch costing exercise, not a concerted, detailed, thorough attempt to describe TPI's operational parameters. This assertion gains credence from the static nature of the ratio as between DC4 and DC5. Given that DC4 was directed at a single alkaloid (morphine) while DC5 was concerned with them all, and given that GSK uses different ratios for each, one would think that a GSK copy-cat would adjust its rates in the same way. As it happens, TPI is so little of a copy-cat in this area that now it does not use a take-off ratio at all.

242 The defendants submit that the use of a particular take-off ratio was in any event the work not of Mr Ritchie but of Mr Connolly. Mr Ritchie gave the following evidence on the point:

... Mr Connolly ... likes the detail. ... he was pushing for an idea of take-off so he could figure out with this spreadsheet the volumes generated in a day and therefore the size of the tanks. And therefore he could determine the cost, an appropriate cost. If we had a take-off ..., to use an example we process 10 tonnes of straw a day, the take-off ratio was five to one, we'd generate 50,000 litres. However if it was two to one, we'd only generate 20,000. And as a rough guide, each tank is $1 per litre and so you can get a guide of how big things need to be and how big pumps and flow rates. So this is, whilst it on the face of it looks detailed, it's actually very minimal information for costing. And Mr Connolly I think would even agree that the best you could do from even this amount of data would be plus or minus 40 or 50 per cent. So it's very, just preliminary ...[260].

243 At paragraph 52 of his affidavit of 23 January 2006, Mr Connolly said that, as best he could remember, Mr Ritchie had provided him with the [XX] take-off ratio adopted in DC4. He nonetheless gave oral evidence that this would have been a parameter discussed between the two of them. He contended that, given his extensive experience with solid-liquid separation, primary extraction and counter current extraction ("I've probably done ... over a thousand counter-current [X] stage washing filtration extraction trials on a .1 square metre filter unit") his view "would carry some weight".[261] He deposed that "it is also a figure that I would have chosen as a reasonable mid-point for the purpose of a rough costing. It may be that pilot and plant trials reveal that the best take-off ratio is less than [X]. I will advise TPI on the best take-off ratio based on results of pilot and plant trials".[262]

244 While it is unclear who of Messrs Ritchie or Connolly initially suggested a [XX] take-off for DC6, in my opinion it does not matter. Mr Ritchie, when no longer in the employ of GSK, was entitled to use his skill and knowledge, which included knowledge that such a ratio was appropriate, in order to design a process for his own benefit. I do not accept that such a ratio is a trade secret for which GSK can seek protection. I do accept that Mr Connolly was in a position to make an informed contribution to the decision about the take-off ratio to be adopted, and that he did so contribute to the extent that it was he rather than Mr Ritchie who determined the ratio for DC4.

245 Likewise, Mr Connolly gave evidence that it was he who inserted the number of wash stages into the process documents prepared by him, again based on his extensive experience. He had run numerous trials using an automatic pilot plant which has a built-in [X] wash cycle.[263] I accept this evidence. Mr Ritchie gave evidence that [X] wash stages "is quite a standard number".[264] When conducting the thebaine plant trial the only variable changed was the extractant used on the plant. The number of wash stages, together with the take-off ratio and the use of the [XXXXXXX] filter, remained as a constant. This would suggest that, while important, that number is not dependant on a particular acetic acid input. I am not satisfied that the use of [X] wash cycles is confidential to GSK or constitutes a trade secret. Nor am I persuaded that, even if Mr Ritchie had any input to the decision to use that number, he misused GSK confidential information.

246 In the Thebaine Plant Study Mr Ritchie had noted that "[d]ata to date suggests that the main area of concern (straw extraction) is not a problem and straw will filter in a [XXXXX] filter using acetic acid".[265] He agreed that when he mentioned "a [XXXXX] filter" this was a reference to a [XXXXXX] filter.[266]

247 [XXXXXX] filters are commercially available. They are provided by third parties. Their use for poppy alkaloid extraction is known. While there may be a dispute about the optimum size of a filter for a given manufacturing process (which I discuss below), Mr Ritchie said that he already knew, from trials conducted with [XXXXX] and Mr Connolly in 1998, that a [XXXXXX] filter was more efficient than a [XXXX] filter. Even though these trials were not with acetic acid, they demonstrated the improved efficiency of using a [XXXXXXX] filter. He explained:

Counter current extraction is based on ... maximising efficiency and generating the least amount of liquid. To maximise efficiency, every time that cake is mixed ... it retains ... some of the liquid. Now, the more you can [XXXXX] that liquid out, the more efficient the process will be because there is less residual alkaloid there from the previous wash so the main, and if not sole benefit of a [XXXXX] filter, is that it minimises the residual alkaloid due to the retention of water from the previous wash.

Q: And that's the advantage of the [XXXXXX] filter over the [XXXX] filter?

248 I therefore do not accept that the use of a [XXXXXX] filter is confidential to GSK.

249 I turn now to the extraction efficiency rate. There is a difficulty here for the plaintiff. It would appear that none of the process documents created by the defendants picks up the precise combination of parameters in question: [X]% acetic acid, a [XX] take off ratio, [X] wash stages and the use of a [XXXX] filter. The closest is DC6, which differs in its adoption of [X]%-[X]% acetic acid. It cannot therefore be said that Mr Ritchie, knowing that the combination adopted for the Thebaine Plant Study would result in a [XX]-[XX]% extraction rate for thebaine, decided to replicate that information in his own design. On the contrary, his evidence was that he went out of his way not to use those parameters and in particular, at least in respect of DC4 and DC5, he deliberately used a level of acetic acid that was higher than that used in the Thebaine Plant Study. He gave the following evidence:

The take off ratio for ... the thebaine plant study ... was [X]. So [that is] a different take off [to that in DC4 and DC5]. The ... thebaine plant study clearly demonstrates that a lower acetic acid concentration of [X]%-[XX]% or [X]% and a take off ratio of [X] was more efficient than using a very expensive acid such as acetic acid at a [X]%-[XX]% concentration at a take off ratio of [X].[268]

250 I do not accept that the defendants have misused the extraction efficiency rate produced by the Thebaine Plant Study. Mr Ritchie knew what it was, of course, and doubtless had it at the back of his mind at relevant times; but its use as a general guide with which to inform his thinking and decision-making processes was no more than the call upon it which anyone in his position would find unavoidable. Here, in my opinion, is a classic example of the second category of information described by Goulding J in the Faccenda Chicken case: information which, while in the possession of the employee, must be treated as confidential because from its character it is obviously so; but which, once learnt, remains in the employee's head, and becomes part of his or her inherent body of skill and knowledge, upon which - as an ex-employee - he or she cannot help but call when performing a task the successful accomplishment of which necessarily invokes its exercise.

The extraction efficiency was greater than the "real extraction efficiency" obtained by GSK when using MGBC3 (FACS 1.2(a)(ii))

251 As I read the FACS, the claim here is that, as established by the thebaine plant trial, acetic acid is more efficient at extracting thebaine than is the use of [XXXXXXXX] in accordance with MGBC3. No claim is made for a particular differential; it is limited to the general proposition.

252 The Thebaine Plant Study does not expressly state that the acetic acid trial resulted in a greater efficiency that that which, in reality, had been produced using MGBC3. However, it is implicit in some of the factors noted by Mr Ritchie (real extraction efficiency on the thebaine plant had been [XX-XX]%[269] whereas the [X]% acetic acid trial had produced a [XX-XX]% efficiency[270]) and in his conclusion that the acetic acid process was worth pursuing. This would appear to be an unremarkable piece of information, especially given that GSK seems to be saying that it put it to one side by not using it in MGBC3. Indeed, GSK's position is that if the use of acetic acid carries with it an "efficiency" dividend, that dividend is outweighed by the disadvantages which accompany its use. It is therefore difficult to see how the information in question could be claimed by GSK to be confidential. And there is another point to be made about it. While it might be said that Mr Ritchie used it when he decided to adopt acetic acid as his primary extractant (a decision since reversed), he was then drawing upon his general body of knowledge as the R&D Manager of GSK.

If one loaded a [XXXXX] filter having a filter area of **[XX]**m² with **[XXX]**kg of straw per cycle and used acetic acid in a [X] wash counter-current extraction the result would be a cycle time of [XX-XX] minutes (FACS 1.2(a)(iii))

253 Although the Defendants criticise this item as being too vague and uncertain to be capable of protection, again, as I read the FACS, the item of information claimed to be confidential is the cycle time that would be required, or at least optimum, given a certain combination of parameters. I do not read it as a claim by GSK that the individual parameters are confidential to it. While this item in the FACS does not mention the concentration of acetic acid necessary to produce this cycle time, the context was the Thebaine Plant Study, which used [X]%.[271]

254 Mr Bowser deposed that the cycle time was "a key operating parameter" evaluated in the Thebaine Plant Study. It could only be ascertained by pilot or plant trial.[272] Cycle time is determined by a number of factors, including the size of the filter and its manner of operating, the filtration rate (which depends on such things as particle size and the nature of the liquid used), the volume of extract being processed (determined by the RE take-off rate and required extraction efficiency) and the number of counter-current wash stages.[273] Filters and the infrastructure surrounding them are expensive both to purchase and install; the decision about the size of the filter "is therefore an essential design factor in determining capital cost (for a given amount of product per annum) as well as future operating costs".[274] Mr Bowser was not aware of any data in the public domain which addressed the interdependent values for cycles per hour, RE take-off rate and the number of wash stages, which "can vary by a very wide range".[275]

255 The question of cycle time and filtration rate is of particular interest where acetic acid is used, because it tends to cause swelling of the poppy straw. As Mr Bowser said in his confidential affidavit of 5 September 2006:

Without trial, it was expected that the filtration rate could easily have been [X] or [X] times slower and/or the number of wash stages required to obtain a target extraction efficiency (yield) may have increased the cycle time (less poppy straw processed per hour). A key aspect of the trial was to evaluate the extraction efficiency (yield) at low acetic acid concentrations in the hope that this would reduce the probable slow filtration rates due to the poppy straw swelling that is observed when attempting to extract poppy straw with acetic acid. This might thereby have required [XXX] filter than GSK owned at the time in order to utilise the process or may have required a slowing of production rates to uneconomic levels.[276]

256 Mr Bowser maintained that the information was used in DC5.[277] It is there said that the filtration rate is [XX] tonnes/m²; and the cycle time noted is [X] per hour: that is, [XX] minutes per cycle. Mr Bowser describes these as "the exact values" set out in the Thebaine Plant Study.[278] GSK further says the information was used in DC6, which proposes [XX] minute cycles with a filter loading of [XXX]/tonnes/m² and [X]%-[X]% acetic acid concentration.[279]

257 GSK submits that "it is apparent" that the parameters, including the cycle times, were derived by Mr Ritchie from the Thebaine Plant Study and provided to Mr Connolly.[280] According to the plaintiff, the factors supporting this proposition include the fact that (a) Mr Connolly made notes recording parameters which referred to "[XX]kg/m² @ [XX] m[inute] cycle + [X] washes";[281] (b) he had unsuccessfully attempted to use a [XXXXXX] filter with acetic acid when filtering for [XXXXXXXX]; (c) he had no experience of the extraction of morphine straw using acetic acid on a [XXXXXX] filter; (d) when he raised with Mr Ritchie concerns about high pressure drops and problems with the filter, the latter assured him that he had tried it on plant and he was not worried about such things; (e) Mr Connolly's experience was that cycle times were [XX] minutes, not [XX] minutes; and (f) the number of wash stages is determined by conducting pilot and plant trials.

258 It is difficult, if not impossible, to reconcile this argument with the evidence that the cycle time will be determined by, among other things, the concentration of acetic acid. GSK has stated that the range of acetic acid used in the Thebaine Plant Study was "[X]%-[X]%", but the plant trial was conducted using only [X]%, and the reported cycle time relates to that trial.[282] The DC4 and DC5 process designs contemplated [X]% acetic acid concentration, a factor which Mr Bowser has deposed would cause him to question the filtration rate. How then could it be said that the defendants have used the fact that [X]% acetic acid extract can be filtered in [XX] minutes (using the parameters recorded in the Thebaine Plant Study) for a process using a different variable? Even DC6 used [X]%-[X]% acetic acid, again higher than the thebaine plant trial.

259 The defendants submit that this information is not confidential to GSK. Mr Connolly deposed that it was he who chose [X] cycles per hour based on his experience, which is that the cycle varies between [X] and [X] per hour. I accept this evidence. He agreed that the "actual number" of cycles will depend on the number of wash stages of counter-current extraction and the RE take-off ratio.[283] During cross examination he initially rejected the suggestion that it was Mr Ritchie who gave him the figures for filter loading, cycle time and the number of washes and gave the following evidence:

I suggest that I produced them because of my previous experience. I'd been running [XXXXX] type filter trials since the early 1990s ... I'd done extensive trials at [XXXXXXX], I've done extensive trials at [XXXX] using my automatic pilot plant and it so happens that all of those tests gave the same sort of filter loading and my pilot plant has [X] washes built into it as part of the automatic cycle, and it normally gave a [XX] minute cycle, but we've chosen a [XX] minute cycle to be conservative, is my guess.[284]

260 Mr Connolly later conceded, however, that it was possible that Mr Ritchie "suggested" some of the data to him, although his experience would have had "some weight" in decisions made following any discussions between them.[285] He agreed that the cycle time might vary depending on the extractant used and the take-off ratio. To accurately estimate a cycle time for a process design "it would be very helpful" to do trial work with the filter envisaged. While he did not have such trial work when he designed DC4, he "did have numerous results and experience on a [XXXXXX] filter with counter-current extraction on tannins and on morphine straw". None of these exercises, however, involved acetic acid.[286]

261 In his confidential affidavit of 23 January 2006, Mr Ritchie deposed that he did not provide the cycle times to Mr Connolly.[287] In cross-examination, he also denied providing the DC6 filter-loading figures to Mr Connolly using the Thebaine Plant Study.[288] "Mr Connolly", he said, "picked the filter loadings". I accept this evidence.

262 The defendants also point out that GSK does not have a filter loading of [XX] tonnes/m²; its filter loading for the acetic acid trials was [XX]kg/m² ([XXX]kg straw ÷ [XX]m² aggregate filter area = [XXX]).[289] In cross examination Mr Bowser conceded that being able to process [XX]kg/m² was "not precisely the same" as processing [XX]kg/m²; but he was not sure that the difference was significant in the context of determining whether a process was economic or not. He agreed that when comparing this aspect of the GSK and TPI processes, he rounded up the figure. He did so, he said, because DC4 and DC5 rounded up their filtration rates to two decimal points.[290]

263 I do not accept Mr Bowser's reasoning. Given that the thebaine plant trial used [X]% acetic acid, while both DC4 and DC5 contemplate [X]% acetic acid, it seems to me that the difference is a very real one, and that the figures are therefore not comparable. It is also entirely consistent with the conservative approach taken by Messrs Connolly and Ritchie to the extraction process documents for them to provide for [X] cycles per hour, particularly given the higher level of acetic acid.

The "new" two step process involved using [X]%-[X]% acetic acid and then extracting into [XXXX] (FACS 1.2(a)(v))

264 Although the word "new" is used in the Thebaine Plant Study to describe the process proposed by Mr Ritchie, it should be noted that the process was not implemented by GSK, nor indeed by the defendants. It should also be noted that, while Mr Ritchie referred to a range of [X]%-[X]% when recording the results of the Study, the plant trial itself was conducted using only [X]%-[X]% acetic acid.

265 The defendants submit that it is not clear what it is that GSK seeks to protect in this item; indeed, they contend that the "alleged information in each of [items] 1.2(a)(iv)-(vii) is meaningless".[291] For my part, ascertaining the role of the "new" process in the scheme of this litigation has been impossible, given that the defendants never, in the extraction process documents or elsewhere, contemplated the use of [X]%-[X]% acetic acid and then extracting into [XXXXX]. Still less did they give effect to any such contemplation. In these circumstances, I am of the opinion that there is no substance to this complaint about the misuse of information.

Data showed the concern about straw extraction when using acetic acid on a plant scale was not a problem because poppy straw could be filtered in a [XXXXX] filter (FACS 1.2(a)(vi))

266 I have already noted that the use of acetic acid as a primary extractant of opiate alkaloids has been in the public domain for decades. The problem, as Dr Clarkson appreciated after his trials in the late 1980's, was that - at least when used under plant conditions - the straw swelled to the point that it could not be readily filtered. According to Mr Bowser, nothing in the public domain addressed this issue.[292] But the Thebaine Plant study did, and demonstrated that the problem could be overcome if the acid were diluted to [X]%. In that proportion, the acetic acid was less efficient as an extractant than it was when the proportion was higher; on the other hand, filtration with a [XXXXX] filter was possible.

267 Mr Ritchie spoke about this in his evidence. According to him, the problem with swelling of the straw, and the consequent problems with filtering, resulted from the use of [X]%-[XX]% acetic acid. The dilute level of acetic acid used in the plant trial meant that these problems became manageable.[293] Laboratory tests had shown that, using a dilute concentration of acetic acid, the poppy straw could be filtered. This was confirmed on the plant trial.[294] Mr Ritchie agreed that, until the thebaine plant trial was conducted, he had not confirmed that the straw would filter at [X]% acetic acid; but he was "99 per cent confident it would"[295] because:

the principle's quite obvious. It had been tested in the laboratory. There's a lot of literature about it. We were confident that it would work, and the [XXXXX] filter is probably more efficient than the data you generate in a laboratory, so I was very confident.[296]

268 On the other hand, Mr Connolly acknowledged that he had had misgivings. He discussed these with Mr Ritchie. Mr Connolly told Mr Ritchie of his experience of pressure reductions when using acetic acid. The latter, however, responded that he was not concerned: he had tried acetic acid on plant.[297] But it is clear that this observation about the efficacy of the [XXXXXX] filter relates to the use of [X]% acetic acid. Neither DC4 nor DC5 adopts such a low percentage of the extractant. It could not be said, then, that Mr Ritchie drew upon the Thebaine Plant Study in order to give instructions to Mr Connolly about these two documents. Whether there would have been problems with the actual operation of a system built in accordance with either DC4 or DC5 is another matter. But that is not relevant to the present issue.

269 Exhibit DC6 is a different case. Here, the percentage of acetic acid is not as low as that adopted by Mr Ritchie for the Thebaine Plant trial, but is low nevertheless: [X]%-[X]%. In my opinion, Mr Ritchie was entitled, when no longer in the employ of GSK, to use his skill and knowledge. This included knowledge that a [XXXXXX] filter could filter poppy straw treated with dilute acetic acid. With that knowledge, Mr Ritchie was entitled to design a process for his own or TPI's benefit. I do not accept that this information is a trade secret for which GSK can seek protection.

[XXXXXXXXXXXXXXXXXXXXXX] (FACS 1.2(a)(vii))

270 The references in the Thebaine Plant Study to "separator trials"[298] are not references to the tests run with Westfalia. I discuss these below. Rather, the tests in question were performed on the existing separator in the thebaine plant, which was not [XXXXXXXXX] (or, in other words, [XXXXXXX]).[299] It was causing difficulties in the "next stage of processing described in MGBC3". Mr Ritchie explained the problem in the following terms:

Impurities collected on the plates in the separator and from time to time the plates had to be removed to be cleaned. [XXXXXXXXXXXX]. If acetic acid were to be used in the extraction process, the concentration of impurities would be even higher and the separator would have to be cleaned more often. I knew that Westfalia [the supplier of centrifugal separators mentioned above] manufactured a self cleaning disc stack centrifugal separator that could potentially be used to overcome the problems with the existing separator. It was my firm opinion that even if GSK decided not to change to acetic acid, it would still need to buy a self cleaning disc stack centrifugal separator for its thebaine plant.[300]

271 GSK says that having ascertained that [XXXXXXXXXXX], Mr Ritchie decided to incorporate these steps into his design. Mr Bowser deposed that DC6 provided for an adjustment of the pH of the rich extract to pH [X] using caustic (NaOH) consistent with the conclusion in the Thebaine Plant Study.[301] I note that neither DC4 nor DC5 specify this pH.

272 It is not clear what Mr Ritchie's position is in relation to the selection of pH [X] and whether that is known to be a level at which impurities will precipitate. He does depose that it is known that adjusting the pH of the rich extract to pH [X] will cause tannins in an aqueous solution to precipitate out. This is the first step in filtering out impurities used in MGBC1.[302] And he does observe that it is well known that using acetic acid extracts a lot of organic impurities and "at pH [X] or [X] many of the impurities will be dissolved. It is therefore essential to increase the pH prior to filtration to cause at least some of the impurities to come out of solution".[303]

273 Professor Heumann discusses the adjustment of pH to remove impurities in the following passage in his paper:

The opium extract is neutralized by the addition of sodium hydroxide solution and the pH adjusted to 7.0. The resulting crystalline precipitation of narcotine is easily filtered off by centrifuging and washed with water until free from other alkaloids. Sometimes this raw narcotine may contain small amounts of papaverine. In such cases the precipitation should be tried at a slightly lower pH.[304]

274 I am not persuaded that adjusting the pH of an extractant to [X] as part of pre-filtering is either confidential to GSK or a trade secret.

275 GSK points to the use of a [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. Mr Bowser says that while the use of this kind of filter "is a known approach for dealing with the filtration of solids from solution that may be difficult to filter", the suitability and the sizing for a particular application "cannot be chosen without trial work and evaluation of the other elements of the process ..."[305] In this context, it is worthy of note that the FACS does not include any claim that a particular size of [XXXXXXXXXXXXXX] is required. Nor is anything there said about the cost of such a filter, or that confidential information concerning these matters has been misused.

276 Dr Ross states in his report that, while the use of a [XXXXXXXXXXXXX] "seems to be common", nevertheless:

... the placement and choice of this specific filter and the operating range at this point ... are similar to the use and placement in the GSK process information. ... Information in the public domain ... does not strongly indicate that this is the most suitable location for this processing step to ensure the solids removal and thus improve secondary extraction process. ... In my opinion laboratory experimentation would be need[ed] to confirm the location of this filter in the processing sequence.[306]

277 Mr Ritchie deposed that such a filter "is well known in the industry"[307] and would be a "logical choice ... whichever method of initial extraction is used" and that he had found it to be:

very efficient at filtering organic impurities from RE. That knowledge was not gained from any information that is confidential to GSK. GSK itself was advised by Connolly to use a [XXXXXXXXXXXX] in this stage of its process. TPI has also been advised by Connolly to use this type of filter.[308]

During cross-examination, Mr Ritchie reiterated that it would make good sense to have such a filter, and he could not think of an application that did not use one prior to the extract going to a mixed solvent. Although GSK is correct when it points out that [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].[309] This seems to be consistent with Mr Bowser's observation that GSK [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].[310]

278 Mr Connolly deposed that a [XXXXXXXXXXXXXXXX] filter "is the obvious choice when filtering an initial plant extract that contains 'gummy' material".[311] This kind of filter comprises a [XXXXXXXXXXXXXXXXXXXXXXXXX]. He notes that because of [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].[312] He states:

Whenever I design a plant for the extraction of a plant based product, I suspect that a [XXXXXXXXXXXXXXXXX] filter may be needed to filter the initial extract.

Mr Connolly then refers to two designs prepared by him using such a filter - one to filter glucose, the other wine - and continues:

I used [XXXXXXXXXXXXXXXXXXX] filters in my designs for [XXX] in their initial extraction stage. Based on this experience, I have also recommended that TPI use a [XXXXXXXXXXXXXXXXXX] filter. The use of a [XXXXXXXXXXXXXXX] filter is referred to in [DC4 and DC5].[313]

279 In my opinion the use and placement of the [XXXXXXXXX] filter is not confidential to GSK.

Acetic acid would cost less per day than [XXXXXXXXXXX] (FACS 1.2(a)(ix))

280 The Thebaine Plant Study included a table of comparative costings for the existing MGBC3 process and the proposed acetic acid process.[314] That table breaks the costs down into component parts and also shows that the total cost for the former to be $[XXXX]/day (excluding straw) while the latter was estimated to be $[XXXX]/day (again excluding straw). The FACS does not identify the actual figures appearing in the document as GSK confidential information that has been used by the defendants; rather, I take it that the information is said to be the fact that the one process costs less than the other. Nor, given that even DC6 does not precisely replicate the thebaine plant trial, could GSK reasonably claim misuse of the exact figures. In my opinion, the fact that the acetic acid process would, as a general proposition, cost less than the MGBC3 process, is an unremarkable piece of information. GSK did not use it to switch extractants. And it would not be difficult to work out, once one knew the cost of the ingredients - something which would be in the public domain. What is more, Mr Ritchie could not avoid incorporating this information in his general know-how. In my opinion, no breach of confidentiality is made out under this head.

There are advantages and disadvantages in using acetic acid rather than [XXXXXXXXXX] (FACS 1.2(a)(x))

281 This item is broad and vague and, to anyone familiar with the relevant art, obvious. In my opinion, GSK cannot seek to restrain the defendants from using it.

282 Mr Ritchie gave the Thebaine Plant Study to Mr Bowser. The email pleaded by GSK forms part of a subsequent exchange between the two men. The description in the FACS suggests that it is the content of paragraph 3 which is in controversy. In that paragraph, Mr Ritchie sets out extraction rate data for acetic acid at concentrations of [X]% ([XX-XX]%), [X]% ([XX-XX]%) and [X]% ([XX-XX]%). He also states, however, that "initial plant trials confirm [XX-XX]% for approx [XX]%-[XX]% acetic acid".[315] This represents a lower extraction rate (maximum [XX]%, using [XX]% acetic acid) than the equivalent (maximum [XX]% using [X]% acetic acid) - the opposite of what is to be expected, given that the greater the percentage of acetic acid, the greater the rate of extraction of the target alkaloids. The explanation may be that extraction rates for [X]%, [X]% and [X]% acetic acid are the result of laboratory tests and not of the plant trial. The email does not specify what kind of straw was used; but given that these were tests designed to maximise output for the thebaine plant, I have assumed that they were conducted on thebaine straw.

283 Although Mr Bowser describes and produces the sequence of emails in his affidavit,[316] he does not descend into any detail about the confidential GSK information said to be contained in them, or how GSK says the defendants used this information. The rates of extraction in issue are, I take it, for thebaine, not morphine. Is it being said that in specifying [X]% acetic acid in DC4[317] and DC5,[318] Mr Ritchie drew upon the results of laboratory experiments which suggested that [X]% acetic acid would extract around [XX-XX]% of the thebaine in thebaine straw? Is it being said that this data enabled Mr Ritchie to know that the less acetic acid was used, the less efficient the extraction of morphine would be? If it is, I reject the submission. Mr Ritchie would have accepted that basic fact as a statement of the obvious. I also have regard to Mr Bowser's observation, with which I find Mr Ritchie would have agreed, that a higher extraction rate does not necessarily translate to an optimum rate for economic purposes:

... whilst higher concentration of acetic acid increases yield, higher concentration also increases costs (including costs of the raw material and environmental disposal costs) and the amount of solids produced during secondary processing steps ... to the extent that the process might be found to be ultimately commercially unfeasible.[319]

284 In these circumstances I find that GSK has not established its case in respect of this item of alleged confidential information.

285 A report designated by GSK as "PFRD02/0" and entitled "Acetic Extraction of Thebaine Straw" provides the extraction efficiency results of ten "runs" for each of [X]%, [X]% and [X]% acetic acid in wash tank [X] and for [X]% acetic acid in wash tank [X].[320] Mr Bowser deposes that this report was prepared by Lucy Waddell, a member of the R&D team in late 2002. He describes the report as disclosing "tests and processes developed in relation to the contemplated acetic acid process at the time".[321]

286 Again, it is not clear how it is said that the defendants used this information about the rates of extraction of thebaine from thebaine straw. The report in question says nothing about the extraction of morphine from either morphine straw or thebaine straw. At trial, it was only referred to when it was put to Mr Ritchie that he needed to obtain the results of the Hayes experiments because the Waddell data only related to thebaine. Mr Collinson submitted that while it is possible to have a "general conception" about how these results for thebaine straw might translate to morphine straw, Mr Ritchie needed to confirm that similar extractions would be achieved for morphine straw.

287 In my opinion, this submission merely strengthens the conclusion that the Waddell data was, of itself, irrelevant for the purposes of the defendants. Mr Ritchie had no need to confirm any of that data, and did not. Nor is there any other evidence of its use by the defendants. In these circumstances I find that GSK has not established its case in respect of this item of alleged confidential information.

Laboratory Notebooks of Andrew Castles, Joe Colerio and Wally Paton (FACS items 1.2(d)(i) to (iii))

288 The documents, identified in items 1.2(d)(i)-(iii) of the FACS, are all extracts from handwritten notes.[322] In his affidavit, Mr Bowser states that "these extracts show work being undertaken on acetic acid extraction of straw in 2002 and 2003, as well as trials on solvents for extract purification in 2003 that were not then used (nor, to my knowledge, planned to be used) by the GSK Chemicals Division business".[323]

289 Although most of these notes were included in the Opening Book, no attempt was made to explain them to me,[324] or establish how any information contained in them was said to be used by the defendants. No reference was made to these items of alleged confidential information in any of the tables and overviews prepared to assist me. None of Messrs Castles, Colerio or Paton was called to give evidence.

290 When Mr Colerio's notes were put to Mr Ritchie in cross-examination, he was unsure to what they related.[325] The notes of Messrs Castles and Paton were not put to him at all.

291 The defendants complain that the FACS merely refers to the documents without identifying the information said to be confidential. There is, I think, substance in this criticism. Moreover, Mr Ritchie deposed that, save for a short period when he attempted to check and sign off on laboratory notebooks (which he characterised as "impossible"), he did not read any of them except for his own. He denied taking any laboratory notebooks with him after he left GSK.[326] At the conclusion of the trial, therefore, GSK had established neither the identity of the information said to be confidential, nor the fact of its use by the defendants.

292 In these circumstances I put the notebooks aside as not assisting GSK's case.

Various extraction efficiency spreadsheets and graphs (FACS items 1.2(e)(i) & (ii))

293 The Defendants contend that the information said to be identified here is broad, vague and non-specific. It merely describes documents, rather than identifying any confidential information contained in them.[327]

294 According to a sheet immediately preceding the documents identified in item 1.2(e)(i),[328] those documents comprise:

• an extract from Andrew Castles ... computer records supporting laboratory notebook data;
• data on trials on varying acetic acid strengths in the wash tanks of the [XXXXXXXXX];
• data calculating the amount of acetic acid required for a given take-off ratio; and
• laboratory trials on a variety of extractants including acetic acid.

295 The document identified in item 1.2(e)(ii)[329] consists of a page with two tables apparently showing filtration rates and observations for acid extraction trials conducted on, respectively, 15 and 3 July 2002.

296 Mr Bowser notes that the documents identified in items 1.2(e)(i) and (ii) were discovered after Mr Ritchie left GSK and "correspond to the laboratory book data contained in [Andrews Castles'] Laboratory Notebook and [Nick Hayes'] Laboratory Notebook".[330]

297 I accept the defendants' characterisation of this item. It is not sufficient for the plaintiff to refer to documents unless that reference clearly identifies the information said to be misused. Such identification, is in this instance, absent. It is therefore impossible for me to ascertain whether any misuse has occurred.

Westfalia Test Data (FACS items 1.3 (i) to (iii))

298 According to Mr Bowser, off-site laboratory scale tests were conducted by the R&D team in conjunction with a centrifugal separator supplier, Westfalia, as part of the 2002 acetic acid trials. These tests were "a critical trial to determine the viability of the acetic acid process for GSK ... because the nature of the acetic acid extracts was to contain an unusually high solids content. There was no obvious separation equipment known to GSK for this application. For applications involving natural plant extracts ... it is usual for trials to be conducted on the proposed equipment, using samples of the extracts in question, before equipment sizing can be established and a substantial investment made".[331] The tests were conducted "to establish whether [XXXXXXXXXXXXXXXXXXXXXXXXXXX]". Given the significant capital cost of such a piece of equipment, GSK would not have been able to "establish the feasibility of this approach or the size (and number) of the required equipment" without previous laboratory and plant trials.[332]

299 GSK alleges that the defendants used the results of these tests, which have been reproduced in an email sent on 17 February 2005 (well after the event) to Mr Bowser by Mr Goran Erdevicki, the Business Development Manager of Westfalia.[333] That email refers to a spin test conducted by Mr Ritchie and "Chris Chan" on two sets of samples, one labelled "[XX]% [XXXX], pH [XX], not filtered" and the other labelled "[XX]% [XXXXX], pH [XX], filtered". The GSK confidential information is said to be the results from the two sets of samples, which, it was submitted, show the beneficial effect of [XXXXXXXXXXXXXXXXXXX], and the viability of using such a [XXXXXXX] for acetic acid extracts where those steps have been taken. The tests show that the filtered samples at pH [X] gave a solids content of approximately [X] to [X]% v/v, while the unfiltered samples at pH [XX] had a loading of [X]% v/v.

300 No one was called from Westfalia about these tests. There is no evidence identifying Mr Chan who is, presumably, an employee of Westfalia. While Mr Bowser appears to have assumed that both of the samples referred to in the email were from an acetic acid process, there is some doubt about the identity of those samples, and more particularly, whether they both involved acetic acid as the extractant. The email does not assist. When the document was put to him, Mr Ritchie thought that this trial work was done "well after the plant trials"[334] at a time when GSK was investigating the purchase of a [XXXXXXXXX] regardless of the acetic acid trials[335] and that the samples tested with Westfalia included [XXXXXXXXXXXX] as extractants, as well as acetic acid.[336] So, the samples at pH [XX] would be consistent with the use of [XXXXXXXXXXXXXX] for this purpose, or they might be samples from an acetic acid process with the pH adjusted up from between pH [XX]-pH [X] (the pH range for acetic acid samples) to pH [XX]. The email did not allow Mr Ritchie to ascertain which of those two possibilities had been tested in the first set of samples.[337]

301 Mr Bowser's evidence is that in 2003 GSK did purchase a [XXXXXXXXXXXXXXX]. This was for use in the current MGBC3 manufacturing process, which does not employ acetic acid.[338] It is therefore likely that the earlier Westfalia tests included experiments using [XXXXXXXXXX]. On the other hand, Mr Bowser also deposed that a solids loading of [X]% is "significantly higher that the solids loading generated by GSK's current processes and is a high solids range for alkaloid extraction (even in light of knowledge that acetic acid extracts contain higher impurities)".[339] Mr Bowser added that the current GSK process (described in MGBC1 and MGBC3) results in relatively low amounts of solids ("less than [X]% grams of solid per 100ml of extract").[340]

302 GSK alleges that Mr Ritchie used the information about the relevant solids loadings for filtered/pH adjusted and unfiltered extracts when he instructed Mr Connolly to prepare DC6, which shows both adjustment of the pH to [X] and the use of a [XXXXXXXXXXXXXXXXXX].[341] It also points to remarks contained in a Chem Eng Contracts document dated 13 August 2004 and entitled "Request for Information". This sought information from Mr Ritchie about, among other things, solids loading and the use of [XXXXXXXX]. A query was raised in that document about the suitability of a "[XXXXXXXXXXXX]" where there is a solids loading of [XX]%. The document notes Mr Ritchie's response as: "Solids content is volume based. The [XX]% is at the [XXXXXXXX] filters and it is expected that the solids content ex [XXXXXXXX] filters will be around [X]%. ... JR has discussed the solid content with Westfalia in the past and is of the opinion that the [XXXXXXXXX] will perform adequately".[342] GSK contends that in this response Mr Ritchie impermissibly drew on the results of the tests conducted with Westfalia.

303 Mr Ritchie's version is different to a small but significant extent. According to him, he discussed with Mr Connolly the latter's reservations about the use of acetic acid and the level of impurities that would be generated. Having been involved in the design of the GSK thebaine plant, Mr Connolly knew from attempts to use acetic acid that it created too many impurities. Mr Ritchie gave Mr Connolly a conservative range of the impurities to be expected in the rich extract. In doing so, Mr Ritchie deposed that he used his knowledge and experience, although he acknowledged that "the tests conducted by Westfalia on the GSK acetic acid plant trial samples formed part of my knowledge and experience", as did his reading of the relevant public domain literature. He claims that he did not refer to any GSK documents or consciously think back to those tests.[343] In cross-examination he acknowledged that trials performed with Westfalia, which included some acetic acid extracts, would have formed part of the basis for him using the figure of [X]% for the solids loading [XXXXXXXX]. But before a factory would be built, he insisted that he would have to conduct trials with the manufacturer of the equipment.[344] The evidence, of course, is that any such factory would not now be processing acetic acid extract. I accept this evidence.

304 GSK also argues that, as a result of the Westfalia trials, Mr Ritchie knew it would be necessary to [XXXXXXXXXXXXXXXXXXXXXXXXXX] into DC4 (although I note that DC4 does not adjust the pH to [X] but rather to pH [XX]-pH [XX]). It says that it is not inevitable that a process for the extraction of opiate alkaloids would use such a filter; the Westfalia tests were used by Mr Ritchie to decide whether or not the filtration step could be skipped.

305 On this point, Mr Ritchie strongly disagreed. His evidence is that:

TPI's placement of the [XXXXXXXX] filter after the initial extraction stage is for a different purpose than GSK's placement [XXXXXXXXXXXX] in MGBC1. The reason why TPI filters after the initial extraction stage is to remove any breakthrough poppy straw that may cause the [XXXXXXX] to block in the secondary extraction stage. This is necessary because [XXXXXXXXX] causes more breakthrough of poppy straw particles than washing in the filter. The reason why GSK filters after the initial extraction stage is, firstly, to remove organic impurities that [XXXXXXXXXXXXXXXXXXXXXXXXX].[345]

306 It seems to me that the issues which arise under this item are two-fold. First, whether the knowledge on which Mr Ritchie drew was part of his know-how; and, secondly, whether in any event that knowledge was incorporated into the processes actually adopted by TPI. The answer to the first issue is, in my opinion, in the affirmative. The opposite answer should be given to the second. It follows that there has been no misuse of the relevant information.

Hayes Experiment Data (FACS items 1.4(i)-(v) and 1.5(i)-(xvi))

307 GSK alleges that Mr Ritchie in or about the period August to October 2003 instructed one or more employees of GSK, including Mr Nick Hayes, to perform laboratory tests and plant trials in order to generate data and information for use in the second defendant's opiates project. The data so generated included GSK confidential information, which is further identified as comprising, inter alia, laboratory results and data contained in notebooks maintained by Mr Hayes. At the relevant time, he was a Development Chemist in the Research & Development ("R&D") group at Port Fairy. He is now the Morphine Production Manager there.

308 Mr Hayes commenced employment with GSK as a Development Chemist, under the supervision and management of Mr Ritchie, in about March 2003. He had recently graduated from RMIT University with a Bachelor of Science with Honours. GSK gave him his first professional job. He deposes that, initially, his work "was all part of a learning curve ... As I was new ... I required some guidance in performing my role".[346] It was common for members of the R&D group to provide weekly updates to each other to discuss the results of current trials and testing. In 2003 the two main developmental activities were work on a new product (the "[XXX] project") and optimisation of current processes, including thebaine purification.

309 A review of his personal laboratory notebook for August/September 2003 reveals that Mr Hayes conducted some work on morphine straw over several days on "the acetic acid extraction process" to mimic "extraction from poppies".[347] Compared with the work on the [XXX] process, this was, he says, "quite menial". The experiments were "repetitive and time-consuming, although the ultimate outcomes were important as they produced results that could only be known through spending time conducting these experiments". Yet with hindsight, he could not see why he had been asked to undertake this exercise "as GSK Port Fairy Operation does not have the equipment or facilities to implement this process". He also described the work (that is, experimenting with different concentrations of acetic acid and with different take off ratios to arrive at optimal figures)[348] as trying to optimise the process rather than prove it.[349]

310 Mr Hayes tabulated his results in the form of Excel spreadsheets. These were provided to Mr Ritchie on 1 and 12 September 2003 and on 6 October that year. So far as Mr Hayes can remember, they were not the subject of any discussion at the R&D group's weekly meetings. Nor was he requested to write them up into a formal R&D report, as was generally the practice for "significant trials and testing".[350] It would not be uncommon for data from experiments to be tabulated or written down as an interim report. This would then be given an internal R&D number. A copy of the report would be sent to the R&D Manager and recorded on a site database.[351]

311 In its final submission the plaintiff made the point that, on the morning of 6 October 2003, Mr Ritchie asked a member of the Chemicals Division (Lucy Waddell) to email to him data concerning the extraction of thebaine from thebaine straw. In particular, Mr Ritchie sought from Ms Waddell the results of tests using acetic acid at different concentrations. GSK described the information as "being the data from the Thebaine Plant Study and the laboratory data associated with that trial".[352]

312 The Waddell document is not referred to in the FACS. This being so I am not, strictly speaking, bound to concern myself with it. It was, however, tendered as an exhibit,[353] albeit late in the trial. Having considered the evidence in relation to it I am not satisfied that Mr Ritchie either sought or used the information contained in the document for any purpose of the defendants.

313 GSK alleges that the work performed by Mr Hayes was used by Mr Ritchie to provide instructions to Mr Connelly for the preparation of DC4, the first of the extraction process documents, in October 2003. At that time, Mr Ritchie was contemplating the use of acetic acid in the primary extraction stage for the production of morphine. GSK says that while he had access to data from the Thebaine Plant Study relating to the use of acetic acid for thebaine straw, he did not have such data for morphine straw. Hence the need for Mr Haye's experiments to confirm such things as extraction rates. GSK argues that it is not possible to infer an extraction rate or degree of efficiency from the data relating to thebaine straw. According to GSK, the Hayes results allowed Mr Ritchie to fix the acetic acid concentration at [X]% and the take off ratio at [X] when using morphine straw as the source of the alkaloids to be extracted.[354] The same data was used later in the second draft process flow document, DC5, which (it will be remembered) was prepared in June 2004.[355]

314 The defendants submit that GSK has failed to adduce any evidence to support the premise that there is any difference in the rate of efficiency in extracting morphine from morphine straw to extracting morphine from thebaine straw.[356] This submission was supported by the evidence of Mr Ritchie, who said in cross examination[357] that he knew there was no difference in the rates of efficiency. He referred to data for the rates of extraction efficiency for all four alkaloids. This data showed similar results where morphine straw was used to those forming part of the "acetic acid process" information identified by GSK in it's the FACS.[358] He also pointed out that whenever extraction rates were tested for thebaine straw, GSK would also test for morphine because [XXXXXXXXXXXXXXXXXXXXXXXX].[359]

315 GSK in reply relied upon evidence from Dr Ross. This was to the effect that a chemist who had access to extraction yields for the use of acetic acid on thebaine straw, and who was preparing a plant process for extraction from morphine straw, would normally carry out some laboratory experiments on morphine straw.[360] It seems to me, however, that this evidence does not meet the criticism made by the defendants. Dr Ross did not say that there was a difference between the extraction rates for the two straws. Moreover, Mr Ritchie already knew the results would be similar.

316 The defendants contend that the Hayes data has been built up into something it was not. Mr Ritchie could not recall asking Mr Hayes to do the experiments. Having looked at the laboratory notes forming part of the material exhibited to Mr Bowser's affidavit, he thought Mr Hayes might have been (to use a phrase adopted in the industry) "having a play". According to the defendants, this was not Mr Ritchie supplementing the Thebaine Plant Study material for his own purposes; rather, a junior chemist was merely being requested to perform experiments in order to familiarise himself with the way the extraction processes worked. This, according to the defendants, becomes apparent when the information described in items 1.4 and 1.5 of the FACS is considered not in isolation but in the context of all the experiments performed by Mr Hayes at this time. Nor is it accurate to characterise the work as "optimisation" given that the Thebaine Plant Study had shown that a range of [X-X]% acetic acid, not [X-XX]%, was optimum. Moreover, jumps of [X]% in the concentration of acetic acid for each set of experiments are too broad and do not conform to the tight parameters that one would expect for optimisation work.

317 During cross-examination, Mr Hayes agreed, unsurprisingly, that the extraction of opiate alkaloids from poppy straw, together with counter current extraction and solvent extraction, were key processes used on the GSK plant in its core business.[361] He also accepted that, in August 2003, he had not yet conducted experiments involving any of them. He further agreed that it was important for all members of the R&D group to be familiar with the chemical processes used at the GSK plant and that it was part of Mr Ritchie's role to ensure that the chemists in his charge were properly educated.

318 Mr Hayes was taken to his original handwritten extracts from his laboratory notebook. All the experiments recorded there were done by him at the direction of Mr Ritchie. In the following exchange, he conceded two mistakes in his notes of the experiments performed on 25 August 2003:

Q: Do you agree with me that by adding [XXX] mils of H2O and then **[XX]**mils of glacial acetic acid, you're not in fact adding [X] per cent acetic acid?[362]

Q: Can we put that down to the inexperience that you had in August 2003, in relation to conducting these sorts of experiments?

Q: If you see down the right hand side of the page, you've made various notations along the way as you've conducted the experiments?

Q: You see there, ... at about Run Number 5 on the far right hand side, it says, "Took [XXX] by accident". See that?

Q: ... Is that a reference to another small mistake that you had made in conducting ... this experiment?

A: It certainly looks that way, yes.[363]

319 Mr Hayes conducted his counter-current extraction experiments using, first, acetic acid at [X]% concentration with a take off ratio of [XX] and then [XX][364]; next, using a [XX]% acetic acid concentration with a [XX] take off[365]; and later using [XX]% acetic acid concentration, again with a [XX] take off.[366] He also conducted counter-current extraction experiments using [X]% [XXXXXXX] with water at [XX] and [XX] take offs[367] with [XXX] tanks, then with [XXX] tanks and moving the [XXXXXX] to the [XXX] tank,[368] and then with [XXXXXX].[369] While the experiments were tedious and took a long time, by the end he knew a lot more about counter current extraction than he did before he began.[370]

320 I note at this point a question to which I have no answer. I do not know whether Mr Hayes, who began his trials in August, performed experiments with [X]% acetic acid using [XXX] wash tanks. If he did not, GSK could not contend that Mr Ritchie used the results of such experiments in DC4. But it was only on 1 September 2003 that Mr Ritchie directed that a [XXX] wash tank be introduced (for the purpose of experiments with [XXXXX]).

321 The next set of experiments, conducted on 11 September 2003, involved the adjustment of the pH of some of the rich extract created the previous day. The rich extract in question had been obtained by using [XX]% acetic acid.[371] Its pH was then adjusted from [XX] to [X], then to [X] and finally to [X].[372] Increasing the pH of the rich extract enables impurities to be removed by filtration. These, as has been seen, would otherwise cause processing difficulties when extracting the alkaloids from the rich extract into an organic solvent. The pH adjustment was done by using sodium hydroxide ("caustic" or "NaOH") at a concentration of [XX]%, which was the concentration used by GSK on its plant at the time. The results showed that [XX]ml of NaOH was needed to adjust the pH from [XX] to [X], a further [XX]ml was needed to lift it to pH [X], and another [XX]ml was needed to reach pH [X], giving a total of [XXX]ml.[373]

322 GSK submits that the quantity of NaOH determined in these pH adjustment experiments was used by Mr Ritchie when he provided assumptions for DC4, DC5 and DC6.[374] The quantities provided by Mr Ritchie were very specific and could not have been calculated from a theoretical basis; normally they would be calculated from the results of laboratory tests, such as those performed by Mr Hayes.[375] So, in DC4 it was assumed that [XXX] litres of [XX]% caustic (NaOH) will be used per [XXXX] litres of rich extract or [XX] litre for litre,[376] while Mr Hayes' experiments showed that the quantity of [XX]% NaOH needed to adjust from pH [X] to pH [X] was [XX]ml for [XXX]ml, the equivalent of [XX] litre for litre.[377] The assumptions were carried over into DC5 and DC6.

323 Mr Ritchie deposed that when he gave the quantity of [XX]% NaOH to Mr Connolly it "was a very conservative guess as to the amount of sodium hydroxide necessary to increase the pH of the RE to about pH [XX-XX]. In hindsight the concentration is far too high. It would almost certainly raise the pH to above [XX] and cause the morphine to precipitate as solid sodium morphinate".[378] When GSK's calculations about the equivalent quantity of NaOH were put to Mr Ritchie in cross examination, he said the following:

... the inference from this I do recall with quite some clarity is that because I was using [X] to [XX] ... per cent acetic acid, which would be in the vicinity of [pH] [XX] to [X], that I had used a similar number. But in fact the amount required is almost four times, or nearly between three and four times, that amount. So there's no similarity at all between Mr Hayes' data and that number of [XX].[379]

324 Mr Bowser acknowledged that the extract used by Mr Hayes was a different one to that used in DC4 and DC5[380], but he insisted that laboratory experiments would be necessary to determine the amount of NaOH needed.[381] Because DC4 contemplated the use of [X]% acetic acid, the pH would be higher than the [XX] pH in the Hayes experiment (which used rich extract from a [XX]% acetic acid extraction), with the result that DC4 would require less NaOH to be used to reach a pH of [X] or higher. Moreover, while DC4 and DC5 had specified adjusting the rich extract to pH [XX-XX], this had been changed in DC6 to pH [X], while the amount of NaOH remained constant.[382]

325 Mr Hayes did not give any evidence that he provided Mr Ritchie with the quantities of NaOH he used. The only data provided by him appears to have been a number of spreadsheets emailed on 1 and 12 September and 6 October. So far as I can ascertain, none of them disclose any information about pH adjustment, or more particularly, that Mr Hayes used [XX]ml of NaOH to adjust the pH of the rich extract from pH [X] to pH [X]. As I have noted above, Mr Ritchie deposed that he did not read laboratory notebooks (save his own). However, when asked during re-examination about the quality of Mr Hayes's work, he gave the following evidence:

Q: What did you mean by the results from Mr Hayes are poor at best?

A: Well, I had a look at his notebooks, and where he's actually meant to do [X] per cent acetic acid, he hasn't added enough acetic acid to make it [X] per cent. He's made a number of mistakes during his laboratory note tests, that I believe I've made some corrections and explained how he should do things.[383]

This suggests that Mr Ritchie may have looked at Mr Hayes's laboratory notebook at some stage - certainly at the time he started to do his experiments in late August. It might also suggest the possibility that, of all the figures produced by Mr Hayes, Mr Ritchie recalled or made a note that **[XX]**ml of NaOH would adjust the pH from pH [X] to pH [X]. But I think this an unlikely conclusion.

326 On 12 September 2003 Mr Hayes conducted experiments to extract morphine using different organic solvent combinations at various O:A ratios.[384] The pH of the cleaned rich extract was first adjusted to [X], which is the pH at which morphine is less soluble and will therefore be likely to move into a solvent combination mixed with the rich extract. Five different combinations of solvents were used: [XXXXXXXX], [XXXXXXX], [XXXXXXXX], [XXXXXXX], and [XXXXXXX]. The different combinations varied in their effectiveness: the best was the [XXXXXXXX] mixture, while the worst (which emulsified) was the [XXXXXXXXX]. Mr Hayes agreed that [XXXXX], a [XXXXXXXX], is not a solvent that a responsible company would use on a large industrial scale. It became obvious from these experiments what worked and what did not.[385]

327 Next, Mr Hayes extracted the alkaloids from the solvent into another aqueous solution by first removing the rich extract, leaving the now alkaloid rich solvent and then adding another aqueous solution with a suitable pH to target particular alkaloids. To achieve the required pH in the aqueous solution, Mr Hayes added [X]% sodium hydroxide.[386]

328 Mr Hayes conceded that the phrase "acetic acid process" used by him in his affidavit to describe these experiments was not his. Indeed, he agreed that he did not use that expression in any of his notebooks or in the spreadsheets containing the results that he emailed to Mr Ritchie. The spreadsheets, which included not only the acetic acid experiments[387] but also those using [XXXXXX][388] and [XXXXX],[389] used "CC" for "counter current" in their descriptions. He agreed that it would not be accurate to describe the sum of those experiments as the "acetic acid process"; they would be counter-current experiments.[390] Although he agreed there would be cases where experiments are conducted purely for observing results for the benefit of the chemist only, he did not believe that these experiments were such a case. Accordingly, he would have thought it appropriate for the results to be recorded in a R&D report.[391]

329 As against all this, Mr Ritchie denied using the data prepared by Mr Hayes to settle upon the appropriate percentage of acetic acid in the draft extraction process documents (DC4 and DC5).[392] Indeed, his response to the suggestion that he passed on the data for the acetic acid experiments to Mr Connolly on 1 September 2003 was dismissive: "... I'm sorry, I find it hard to agree that I've generated results from Nick Hayes that are poor at best and I've passed them on to Mr Connolly".[393] He later said that if this was such a critical parameter, as GSK suggests, he would not have asked a very junior chemist to do the tests for him.[394] Accepting for the purposes of his answers that he did direct Mr Hayes to perform these experiments, including ones that used "extreme proportions" or combinations[395] that would produce inefficient results (such as using [XX]% [XXXXXXXXXXXXXX] wash tank), he explained his reasoning in the following terms:

... the point of these experiments was getting him to understand those factors [ie the inefficiency of moving ammonia to the second tank] and get him to do these trials. And the only way to learn counter-current I believe efficiently is to actually unfortunately sit down and do two to three days of those tiresome extractions and see the effect of moving things differently. And so it wasn't for any data that I required, it was as I believe I said in my affidavit it was to teach him counter-current principles. What the effect of moving the addition of the reagent in different tanks, the different number of wash stages and different take off ratios et cetera.[396]

... we would use Mr Hayes on and off as a stop gap but around that time the emphasis on [XXX] had decreased. We had an impurity issue but Nick didn't have the skills to add ... significant contribution to an impurity issue. And I was trying to prepare him for the upcoming work which was what they ended up doing.[397]

330 One of the issues facing the R&D department in 2003 was how to meet a substantial thebaine order for 2004 from one of its customers while minimising the need for new plant - as Mr Ritchie expressed it, how to "squeeze more juice out of the orange without buying a bigger orange"[398] - as well as balancing the production needs for other products such as morphine. Mr Ritchie thought that using acetic acid in the primary stage on the thebaine plant might be the answer. In his affidavit he deposed that he "firmly believed that with further trials I could demonstrate [acetic acid] to be the most efficient method of thebaine extraction" and that "[i]t was necessary and appropriate for me to have Hayes familiarise himself with its use."[399]

331 GSK submits that this explanation should be rejected. During his primary extraction experiments using acetic acid Mr Hayes was using morphine straw, not thebaine straw. It was also submitted by Mr Collinson that it would be "drawing a long bow" to accept that GSK would "implement an entirely new extraction process" to meet a demand problem for thebaine.

332 I do not place particular weight on the fact that Mr Hayes did his work on morphine straw. As I understand Mr Ritchie's evidence, his prime object was to provide Mr Hayes with the opportunity to conduct and become familiar with counter-current extraction. This was an integral part of the GSK production regime, and Mr Hayes needed to be expert in it. This being so, morphine straw was at least as logical a choice as thebaine straw.

333 Nor do I think that this was a question of GSK implementing "an entirely new extraction process". The Thebaine Plant Study was able to use [X]% acetic acid instead of [XXXXXXXXXX] in the thebaine plant. This would suggest that it may not have been that difficult to change over, especially if the change were to result in increased production.

334 In my opinion, GSK has not discharged the burden of proof on the Hayes issue. I do not find that Mr Ritchie improperly instructed Mr Hayes to carry out his acetic acid trials on morphine straw. Nor do I find that the results of the Hayes work were improperly used by either defendant. I repeat, in this context, that in any event TPI does not employ acetic acid as a primary extractant.

Port Fairy Research and Development Reports (FACS 1.6)

335 Items 1.6(i) and (ii) were not pressed at trial.[400]

PFRD/94005 "Extraction of Morphine from Unmilled Pellets" (FACS 1.6(iii))

336 Item 1.6(iii) describes this report as disclosing "morphine efficiency when using [XXXX] at [sic] the primary extraction liquid". The report in question takes the form of a one page document to Mr N. Howlett from Mr T. Paton, with a copy to Mr Bowser. It was prepared on 1 February 1994. It states that a sample of unmilled straw pellets was separated into two groups: one part was milled through the laboratory mill, while the other half was broken by hand. Both samples were slurried with [XXXX] in a ratio of [XXX]g straw: [XXX]ml [XXXX]. [XX]ml of each sample was filtered, while [XX]g of [XXXX] was added to the remaining [XX]ml slurry and then filtered. Assays were then taken of the four samples (hand broken straw/[XXXX] and straw/[XXXX] + [XXXX]; milled straw/[XXXX] and straw/[XXXX] + [XXXX]). The results are then set out.

337 Dr Ross considered this report when he looked at what he termed "the Second TPI process", namely the current process being developed by the defendants which uses [XXXX] only as the primary extractant. He remarks that "the use of an [XXXX] system to extract the alkaloids from the poppy straw is similar in both processes". More specifically, "the GSK process information [in PFRD/94005] indicates an improved extraction efficiency with milled poppy straw when compared to non-milled straw when using only [XXX] as the extraction media ..."[401] During cross examination Dr Ross conceded that this GSK report showed only "a very slight improvement in extraction efficiency between hand-broken and lab-milled straw when extracting with [XXXX]"[402] (that is, [XXX]% compared to [XXX]%). He further agreed that the most significant result was that [XXXXXX] was a more efficient extractant than [XXXXX], and that "the report itself provides no basis for the choice of [XXXXX] as an extracting media [sic] in a process".[403]

338 The defendants say that they have never used this information. The previous paragraph might explain why, and perhaps also points up the dangers, in a case such as this, of simply seizing upon similarities and concluded from them alone that misuse of information has occurred.

339 Mr Ritchie adds to the defendants' denial of use that the experiment reported in PFRD/94005 was "very rudimentary" with no data given about the particle size. He has no recollection of ever having read the report, nor would he rely on it for any purpose: it contains, he said, insufficient data to confirm the reliability of any result. He also observed that the report tends to suggest that [XXXXX] is about [XX]% less efficient than [XXXXX], and it extracts more impurities.[404]

340 The defendants argue that the decision to use [XXXX] as the primary extracting liquid was the result of experiments conducted by Mr Ritchie. He deposes that he decided to investigate the use of [XXXXX] after a conversation he had with a Tasmanian poppy farmer in September 2006. While discussing the [XXXXXXXXXXX], the farmer said words to the effect "[XXXXXXXXXXXX]". According to the evidence given by Mr Ritchie in his confidential affidavit of 11 October 2007, "[XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]". He continued: "[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]?" He then conducted a series of experiments with [XXXX] at various temperatures and found that, at the right temperature, [XXXX] could be very effective at extracting alkaloids. A particular finding was that the natural plant acids in [XXXXXXXXXXXXXXXXXXX]. Mr Ritchie therefore decided to use [XXXXX]. I accept this evidence.[405]

341 In my opinion, GSK has failed to establish that this information is confidential (let alone a trade secret) or that the defendants used it.

PFRD/96005 "Sieve Testing of Plant Milled Straw and PFRD/99013 "Investigations into Change Particle Size Distribution Due to Replacement of Hammers in Straw Mill" (FACS 1.6(iv))

342 The two reports referred to in item 1.6(iv) are concerned with the particle size of milled poppy straw. The first report PFRD/96005 was prepared by Mr T Paton on 27 February 1996.[406] Tests were conducted using five sieves of different mesh sizes. The results show the proportions of different particle sizes in the samples.

343 The second report (PFRD/99013) was prepared by Mr Peter McCaffrey on 28 September 1999. It was sent to both Messrs Bowser and Ritchie. It reported on the effect that a change in the [XXXXX] used in the straw mill had on the particle size. Mr McCaffrey reported an increase in the percentage of milled straw under [XXX]µm (microns) in diameter and a decrease in the particles greater than [XXX] µm.[407] He referred to an investigation conducted by Dr Clarkson in 1987 into the factors affecting the efficiency of the [XXX] filter, which suggested:

... [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. The optimal particle size distribution was found to be between **[XXX]**µm and **[XX]**µm ... At this size extraction efficiencies were around [XX]% on plant, compared with [XX]% under laboratory conditions for the [XXXXXX] particle size.[408]

344 GSK submits that the optimal particle size referred to by Dr Clarkson, and quoted in PFRD/99013, is "the very particle size that is claimed in claim 57 of the TPI Patent Application".[409] Although Mr Ritchie claimed to have carried out experiments using poppy straw milled by a company known as Micropowders to less than [XXX]µm, GSK says that that milled straw was not measured until 27 November 2006, only two days before the patent application was filed by TPI on 29 November 2006. Dr Ross gave unchallenged evidence that he would expect "extensive and detailed lab experiments to be required in order to determine [the specific range of optimum particle sizes]".[410] GSK therefore says that it is apparent from the time line that the particle size data was in fact derived from PFRD/99013.[411]

345 The Defendants say they have never used this information. No information about particle size is to be found in the draft process documents. The reference in the TPI patent application to a mean particle size of less than [XXX]µm and less than [XXX]µm[412] is based on experiments conducted by TPI using straw milled both in its laboratory and on its behalf by Micropowders.[413]

346 Mr Ritchie deposes that he developed the new TPI process, which is described in the patent application, between September and November 2006.[414] During that time he personally conducted and also supervised TPI's chemists to conduct a number of experiments, including controlled experiments to determine the optimal particle size for primary stage extraction. Those experiments disclosed that there was "[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]" and showed that [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX], while "[XXXXXXXXXXXXXXXXX]".[415] This would appear to be a different conclusion to that recorded by GSK. During cross examination Mr Ritchie denied obtaining the particle size range used in the TPI patent from a reference by Mr Bowser in his affidavit sworn 5 September 2006 to the comments in the report of Dr Clarkson.[416]

347 There seems to me to be another point worth noting. None of the GSK tests appear to have been conducted using [XXXXXX]; as I understand it, all the GSK experimental work was carried out on plant using a different extractant, namely [XXXXXXXXXXXXXXX]. If, as I accept, TPI is to use [XXXXXX], GSK would not be a fertile source of information about particle sizes.

348 Mr Ritchie was cross examined on this issue. He gave the following evidence about the experiments conducted by him and by TPI:

The [XXXXXXXXXXXX] and [XXXXXXXXX]. The problem with that is that the {XXXXXXXXXXXXXXXX]. And I think that's the difference between the lab results given from GSK that said [XXXXXXXXXXXXXX]. Hence [XXXXXXXXXXXXXX].[417]

349 Mr Ritchie's evidence was that the Micropowder results, provided on 27 November 2006, related to experiments on powder below [XXX]µm, while experiments on [XXXXXX] straw had already been carried out.[418] Although claim 57 of the TPI patent application states: "A method according to any one of claims 51 to 56 wherein the material has a particle size of less than [XXX] micron",[419] Mr Ritchie pointed out that the patent application gives the optimum range as [XXX-XXX]µm.[420]

350 It is clear that the Defendants performed their own experiments in order to establish the optimal range of particle size for the new TPI process. In my opinion, GSK has failed to establish that the Defendants misused any confidential information under this item of the FACS.

Crop Details as Disclosed by 2002, 2003 and 2004 Chemicals Division Budget (FACS 1.7)

351 The FACS at this point makes broad reference to "[c]rop details, being % straw (and seed) ratio, % alkaloid content (assay) and crop yield (tonnes/ha) and straw cost disclosed by the pages of the 2002, 2003 and 2004 [GSK] Chemicals Division Budget attached hereto". No attempt has been made to identify with specificity the confidential information said to have been used by the defendants.

352 This is most unsatisfactory. Moreover, while pages from the final version of the 2004 Budget Book, including those containing details of the 2004 crop, have been attached, the evidence of Ms Hampton is that she photocopied for Mr Ritchie only select pages from the draft 2004 Budget Book. These she identified in Exhibit "Confidential CH1".[421] The pages that make up that exhibit do not include any 2004 crop details. Moreover, the 2004 Budget Book was distributed after Mr Ritchie left GSK's employ. There is therefore no evidence that he ever had that information. I shall put those pages to one side.

353 This ratio compares the amount of straw and the amount of poppy seed to be found in a given crop. The figures appearing in the Budget Book are forecasts, not actual figures, based upon GSK's historical crop productivity information and research.[422] According to Mr Bowser, this involved "reviewing average values from over 25 years of poppy growing experience and from extrapolation of GSK horticultural R&D trials on the specific GSK seed chosen for planting. In practice, when the crop would be harvested, these values would vary from farm to farm and vary from year to year due to seasonal factors".[423] This ratio is expressed as a percentage of straw: in 2002 it was estimated to be [XXX],[424] while in 2003 it was predicted to be [XXX].[425]

354 It is not readily apparent how knowledge of forecasted, not actual, figures for 2002 and 2003 might have been used by the defendants when designing a process that would not come into being until well outside the GSK budget period. And indeed, the defendants point out that the figures used in their process documents are not the same as those recorded in the GSK 2002 and 2003 crop details. Mr Connolly assumed [XX]% straw in the documents prepared by him.[426] Mr Ritchie deposed that, for the purposes of his rough costings, what he gave Mr Connolly as the proportion of seed to straw was the reverse of the GSK proportions: [XX]% seed to [XX]% straw. Clearly there is no relevant use of any GSK information.

355 The defendants also say that this information is published by GSK in the public domain. Mr Ritchie deposed that GSK publishes its proportions in a newsletter, Poppy Patter, which is sent to poppy farmers.[427] So in the October 2002 edition, the following question is asked: "Did you know ... [that] around [XX]% of the weight of a normal crop is seed?"[428] GSK says this is average data from crop assays, not the confidential forecasted figure.[429] I do not accept that there is any meaningful distinction.

356 GSK points to a reference by Mr Ritchie to [XX]% straw in a document emailed by him to Mr McMullan on 12 January 2004 setting out financial assumptions and explanations.[430] He was asked about this in cross examination:

Q: I suggest to you that you got the [XX] per cent straw from GSK's crop details document?

A: Well, I would've known it, yes, and ... it was well known in the industry. They published it, I believe.[431]

He admitted that he did not get that specific number from Poppy Patter; rather, he knew the actual figure.

357 GSK has submitted that this email was sent while Mr Ritchie was still employed by it. I have already noted above that Mr Ritchie resigned from GSK on 18 December 2003 and, by agreement with Mr Zippel, his leave arrangements for the following four weeks would stand as the required four week's notice. Mr Ritchie calculated that this arrangement would expire on 17 January 2004.[432] Notwithstanding that he was still being paid by GSK, in my opinion Mr Ritchie's email to Mr McMullan did not breach any relevant duty.

358 Nor do I accept that a forecasted figure for the 2002 crop, which differs from the published actual figure by only [X]%, could be said to have been a misuse of GSK confidential information. In any event, even if it were misuse, no damage could possibly flow. If GSK publishes to the world a figure that is no more than the average proportion of seed to straw, and which is accurate at the time of publication in October 2002, but which will vary from time to time, there is no possibility of the plaintiff being damaged by the use of a figure for a different period and which is likewise subject to change according to different circumstances at different times.

359 I do accept the Defendants submission[433] that an argument that [XX]% is confidential, while [XX]% is not, cannot be sustained.

360 The next item of allegedly confidential crop detail information is the percentage alkaloid content or assay for a given quantity of straw. It is also known as "straw loading". So, as an example, for 500kg of poppy straw a 1.5% morphine assay will yield 7.5kg of morphine, assuming 100% extraction efficiency. In reality the extraction efficiency will not be 100%, so the actual amount of morphine would be less.

361 This information is projected, so the assay results are the anticipated percentage of alkaloid for the straw. They will vary from year to year due to seasonal factors. Again, the FACS does not identify the actual information; instead, pages of the Budget Book are annexed. During his opening Mr Scerri directed me to page 52 of the 2002 Budget Book[434] which shows a table headed "Assays" in which it was predicted that the morphine crop (having 11% moisture) would have [XXX]% morphine, [XXX]% codeine and [XXX]% thebaine (giving a total alkaloid content of [XX]%). The 2003 Budget Book shows the morphine crop (again having 11% moisture) would have [XXX]% morphine, [XXX]% codeine and [XXX]% thebaine (giving a total alkaloid content of [XXX]%).[435]

362 The alleged use of this information was by Mr Connolly, on instructions from Mr Ritchie,[436] who used an assumption of [XXX]% "straw loading" in DC5.[437]

363 Mr Ritchie deposes that "it is very well known in the industry that the morphine concentration of Tasmanian poppy crops ranges from about [X]% to [X]%".[438] He says that GSK has never regarded crop assay as being confidential. Thus, in the October 2002 edition of Poppy Patter, it published a graph with its crop assays for the morphine crop at 11% moisture for the previous 36 years.[439] When this graph was put to Mr Bowser during cross examination he conceded that the information disclosed in it was not confidential.[440] He maintained, nonetheless, that the actual assay values achieved after processing were confidential.[441] GSK says that the forecasted figures used in the Budget Book, compared to the average actual historical figures, were confidential.

364 Mr Ritchie denied using the Budget Book information.[442] This is entirely consistent with the fact that neither the 2002 nor the 2003 figures come out at [XX]%. Mr Bowser conceded that starting with an assumption of [XX]% assay did not constitute a misuse of confidential information.[443]

365 GSK submits that Mr Ritchie has not satisfactorily explained how he arrived at a [XX]% assay assumption. It relies on his concession during cross examination that he did not resort to the public domain literature to ascertain the figure.[444] This approach fails to acknowledge that GSK must prove that the information was both confidential to it and was used by the Defendants. In my opinion, it has failed to do this.

366 This information has not been identified in the FACS, nor - so far as I can ascertain -was it addressed in either the plaintiff's opening or submissions or in the evidence. The Defendants say that they have not used this information. GSK has not pointed to any alleged use. In these circumstances, I find that this claim has not been established.

367 This information also has not been identified in the FACS and again it was not addressed in the plaintiff's opening or submissions or in the evidence. It too has not been established.

368 For the reasons set out in this judgment, I have been unable to find that any of the claims made by the plaintiff have been proved. In these circumstances, there must be judgment for the defendants. I will hear counsel on any necessary consequential orders.

[1] Affidavit of Geoffrey Donald Zippel affirmed 24 October 2005, paragraph 2 (CB.7.B.005330).

[2] Paragraph 6 of confidential exhibit "ARR 4" to the affidavit of Andrew Robertson Ross dated 27 August 2007 (CB.8.B.005804).

[3] Affidavit of Jarrod David Ritchie sworn 30 October 2006, paragraph 9 (CB.14.C.001501).

[4] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraphs 65 &66.

[7] For example, paragraph 37 of his report refers to "Further Documents" provided to him for comment by GSK's solicitors on 31 July 2007 (CB.8.B.005824).

[8] Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 at 732.

[9] Confidential exhibit "ARR4" to his affidavit affirmed 27 August 2007 (CB.8.B.005802).

[10] Confidential exhibit "ARR4" to his affidavit affirmed 27 August 2007, paragraph 15 (CB.8.B.005812).

[11] I attempt a definition of the expression "trade secret" at paragraph 50 below.

[12] Plaintiff's closing submissions - legal submissions, paragraph 38.

[13] Respectively, exhibits D4, D5, D6 to the affidavit of David Connolly sworn 23 January 2006 (CB.10 C.000001) and JDR 29 to the confidential affidavit of Jarrod David Ritchie also sworn 23 January 2006 (CB. 13. 000983).

[14] Affidavit of David Connolly sworn 23 January 2006, paragraphs 19-23 (CB.10 C.000007-8).

[16] Deta Nominess Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VicRp 17; [1979] VR 167 at 193.

[17] [1997] RPC 289 at 360.

[18] [1973] UKPC 1; [1974] AC 391 at 400.

[19] Butterworths Australian Legal Dictionary (1997).

[20] The Law of Trade Secrets and Personal Secrets (2nd edition, Law Book Co, 2002) p.16.

[21] Printers & Finishers Ltd v Holloway (No. 2) [1965] RPC 239 at 255 per Lord Cross.

[22] Affidavit of David Connolly sworn 23 January 2006, paragraph 46 (CB.10.000013).

[23] The counter-current procedure is described by Mr Connolly at paragraph 51 of his affidavit sworn 23 January 2006 (CB.10.C.000015).

[24] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 12 (CB. 13. C.000986).

[25] [1946] Ch 169 at 174.

[26] PD Finn Fiduciary Obligations (1977) The Law Book Company Ltd, at paragraph 614.

[27] Deta Nominess Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VicRp 17; [1979] VR 167 at 193.

[28] Balston Ltd & anor v Headline Filters Ltd & anor [1987] FSR 330, esp at 340.

[29] Affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 59 (CB.10.C.000142)

[30] Ibid, paragraphs 50 and 52 (CB.10.C.000140).

[31] I have read this to mean projected information for the next (budget) year plus one, not for the budget year and then for another two (eg. 2004, 2005 and 2006)

[32] Affidavit of Claire Hampton affirmed 14 October 2005, paragraph 4 (CB.2.B.000002)

[34] See affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 196 (CB.2.B.000090)

[35] Affidavit of Claire Hampton affirmed 14 October 2005, paragraph 5 (CB.2.B.000002)

[36] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 196 (CB.2.B.000092)

[37] Affidavit of Claire Hampton affirmed 14 October 2005, paragraph 4(b) (CB.2.B.000002)

[38] FACS, paragraph 2.1 and Attachment 2.

[39] Second Further Amended Statement of Claim filed 18 October 2007, particulars to paragraph 13.

[40] Exhibit D20 (Additional exhibits folder, Volume 1, tab 2).

[41] Hampton op cit, paragraphs 8 to 13.

[42] Exhibit "Confidential CH1" (CB.2.B.000005 to B.000010).

[43] Affidavit of Timothy Bowser sworn 19 October 2005, paragraph 225 (CB.2.B.000098).

[45] T.453, 456; email from J Ritchie to C Hampton 7 November 2003 (Exhibit D20, Additional Exhibits folder Vol. 1, tab 2).

[46] Defendants' final submissions, paragraph 29.

[47] Exhibit D17 (Additional exhibits folder, Volume 1, tab 40).

[48] Affidavit of Jarrod Ritchie sworn 23 January 2003, paragraph 64 (CB.10.C000144).

[49] Additional Exhibits folder Vol. 1, item 12.

[50] Defendants' final submissions, paragraph 28.

[51] The records show he did not leave Port Fairy until the evening of Saturday 13 December.

[60] Affidavit of Geoffrey Donald Zippel affirmed 24 October 2005, paragraph 61(1) (CB.7.B005345).

[61] Ibid, paragraph 61(2) (CB.7.B005346).

[64] See 2004 Sales Budget figures, Product Code [XXXX], CPS MFS at CB.2.B.000009.

[67] Second Further Amended Statement of Claim filed 18 October 2007, particulars to paragraph 13.

[68] Affidavit of Rick Gain affirmed 17 October 2005, paragraph 5 (CB.2.B.000038).

[73] Affidavit of Paul McMullan affirmed 26 September 2007, paragraph 25 (CB.9. B.006185).

[75] Mr McMullan agreed during cross examination that the document being exhibit "PM 2" to his affidavit did not show any attached business plan (T.493-494). However, during re-examination he was shown a further copy of the email (a single page bearing markings "SUB.033.001" and "SUB.033.002") which showed that he forwarded to Ms McCarron the email from Dr Upfal which had the attachment (see T.501). I accept that the business plan was forwarded to Ms McCarron on 5 February 2003.

[76] The first defendant's amended defence to the further amended statement of claim filed 30 April 2007, paragraph 13(a).

[77] Response to request for further and better particulars of the defence by the plaintiff dated 14 January 2005.

[78] Document prepared by Mr Ritchie dated 10 March 2005 containing further particulars and erroneously headed "Request for Further and Better Particulars of the Defence and Counterclaim by the Plaintiff".

[81] Affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraphs 43 & 44 (CB. 10. C.000137-8); T.1019-1020.

[82] Letter from Clayton Utz dated 30 September 2004 (CB. Vol 7, B.005489 at B.005490).

[84] Balston Ltd & anor v Headline Filters Ltd & anor [1987] FSR 330; Robb v Green [1895] 2 QB 1.

[85] Affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 41 (CB.10. C.000137).

[89] Some items include chains of emails but are identified as a single item.

[92] See for example items #14, 20, 21, 25, 26, 34, 35, 43, 45, 46, 47, 48, 49, 51, 52, 54 and 55.

[99] Balston Ltd v Headline Filters Ltd [1990] FSR 385 at 412 (Falconer J).

[101] Items 1.6(i) and (ii) (see T.1753).

[102] I note there is no item 1.1(a)(v).

[105] Affidavit of David Connolly sworn 23 January 2006, paragraph 61 (CB.10.C.000018).

[109] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 218 (CB.9.B.006136).

[110] Ibid, paragraph 220 (CB.9.B.006136).

[111] Ibid, paragraph 221 (CB.9.B.006137).

[112] Defendants' final submissions, paragraph 153.

[113] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 84 (CB.15.C.001875).

[114] I take this to be the same as an A:O ratio of [XX]. For the purpose of consistency I will use A:O.

[115] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 103(2) (CB.13.C.001016).

[116] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 223 (CB.9.B.006137).

[121] Affidavit of Timothy Allan Bowser sworn 17 October 2007, paragraph 8 (CB.9.B.006303).

[126] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 245 (CB.9.B.006141).

[130] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 110 (CB.13. 001021).

[131] Confidential affidavit of Timothy Allan Bowser sworn 19 October 2007, paragraph 8 (CB.9.B.006303).

[132] Ibid, paragraph 7 (CB.9.B.006303).

[133] See table being "Confidential Exhibit TB9" (CB.9.006310).

[138] Affidavit of David Connolly sworn 23 January 2006, paragraph 41 (CB.10.C.000012).

[139] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 35 (CB.13.C.000993).

[140] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 18 (CB.15.C.001856).

[144] Item 7 in the table at paragraph 20 of exhibit "Confidential ARR4" (CB.8.B.005816).

[145] Defendants' final written submissions, paragraph 161.

[148] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 225 (CB.9.B.006137).

[150] Exhibit "Confidential TB9" (CB.9.B.006309-10).

[151] GSK Technical submissions, paragraph 75.

[153] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraphs 51 to 55 (CB.2.B.000058-9).

[155] Report of Dr Ross dated 23 August 2007, page 10 (CB.8.B.005812).

[156] "The manufacture of codeine from morphine" by Walter R. Heumann, page 2 (CB.12.C.000741).

[157] Confidential affidavit of David Connolly, paragraphs 30 to 33 (CB.15.C.001710).

[160] GSK Technical submissions, paragraph 104.

[163] Confidential affidavit of David Connolly sworn 8 October 2007, paragraph 33 (CB.15.C.001711).

[164] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 55 (CB.15.C.001867).

[165] Confidential affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 59 (CB.2.B.000060).

[174] Confidential affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraphs 70-76 (CB.2.B.000063-4).

[175] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 165 (CB.13.C.001035)

[180] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 166 (CB.13.C.001035).

[181] Ibid, paragraph 167 (CB.13.C.001035).

[182] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 258 (CB.9.B.006143).

[183] "Oripavine - A New Opium Alkaloid" by B. Nielsen, J. Roe and E. Brochmann-Hanssen, 1983 Journal of Medicinal Plant Research, pp. 205-206 (CB.15.C.002024 at 2025).

[184] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 87(CB.15.C.001876).

[185] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 169 (CB.13.C.001036).

[186] CB.3.B.000474; see evidence of Dr Ross at T. 901.

[192] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 254 (CB.9.B.006142-3).

[194] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 81(CB.15.C.001875).

[195] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 261 (CB.9.B.006144); Exhibit "Confidential TB9" (CB.9.B.006310).

[198] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 264 (CB.9.B.006144).

[199] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 110 (CB.13.C.001021).

[200] Affidavit of David Connolly sworn 23 January 2006, paragraph 64(CB.10.C.000019).

[203] Defendants' written submissions, paragraph 169.

[204] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 105 (CB.13.C.001019).

[205] Second Further Amended Statement of Claim filed 18 October 2007, particulars to paragraph 13.

[206] Further Amended Confidential Schedule filed 19 October 2007, paragraph 1.2(a).

[214] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 227 and 228 (CB.2.B.000099).

[215] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 52 (CB.13.C.000999).

[220] Affidavit of David Connolly sworn 23 January 2006, paragraph 23 (CB.10.C.000008).

[227] As I understand it, these trials referred to in the Thebaine Plant Study were conducted on the existing separator and not a [XXXXXXXXX].

[228] Further Amended Confidential Schedule filed 19 October 2007, paragraph 1.2(a)(vi).

[229] Further Amended Confidential Schedule filed 19 October 2007, paragraph 1.2(a)(vii). I note that there is no item 1.2(a)(viii).

[230] Further Amended Confidential Schedule filed 19 October 2007, paragraph 1.2(a)(ix).

[231] Further Amended Confidential Schedule filed 19 October 2007, paragraph 1.2(a)(x).

[232] GSK final legal submissions, paragraph 33.

[235] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 226 (CB.2.B.000098).

[236] Confidential affidavit of David Connolly sworn 23 January 2006, paragraph 10 (CB.10.C.00004).

[237] Ibid, paragraph 17 (CB.10.C.00006-7).

[238] This was confirmed by Mr Bowser during cross examination (see T.729).

[241] CB.10.C.000049 and CB.10.C.000063.

[242] CB.10.C.000049 and CB.10.C.000063.

[243] CB.10.C000054 and CB.10.C.000069.

[245] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 70 (CB.13.C.001006).

[246] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 31 (CB.15.C.001860).

[247] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 120 (CB.9.B.006116).

[248] Ibid, paragraph 115 (CB.9.B.006115).

[249] Ibid, paragraph 128 (CB.9.B.006118).

[252] Balston Ltd v Headline Filters Ltd [1987] FSR330 at 344.

[253] "The manufacture of alkaloids from opium" by Walter R. Heumann (CB.11.C.000659).

[254] Confidential exhibit "ARR4" to his affidavit affirmed 27 August 2007, paragraph 21 at page 15 (CB.8.B.005817).

[255] T.1090. The reference to 2% acetic acid appears at CB.11.C000662.

[258] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 170 (CB.9.B.006126).

[259] Ibid, paragraph 171 (CB.9.B.006126).

[262] Confidential affidavit of David Connolly sworn 23 January 2006, paragraph 52 (CB.10.C.000015).

[271] I note that in the table contained in GSK's Technical Submissions (paragraph 31, p.11) it is said the % acetic acid in the Thebaine Plant Study was [X]%-[X]%; but the result of the trial as specified in the thebaine plant study was an extraction efficiency based on a trial conducted at [X]% acetic acid only.

[272] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraphs 160 and 161 (CB.9.B.006124).

[273] Ibid, paragraph 155 (CB.9.B.006123).

[274] Ibid, paragraph 159 (CB.9.B.006124).

[275] Ibid, paragraph 157-8 (CB.9.B.006124).

[276] Ibid, paragraph 165 (CB.9.B.006125).

[278] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 164 (CB.9.B.006125). Mr Bowser does not address the information used in DC4 or DC6.

[279] GSK Technical Submissions, paragraph 32(b).

[282] A range of [X-X]% acetic acid appears in that document only in the context of a proposed new process. While laboratory tests were conducted on [X]% acetic acid, so far as I can ascertain there were no plant trials at that concentration which could have confirmed any cycle times on the actual [XXXXX].

[283] Affidavit of David Connolly sworn 23 January 2006, paragraph 44 (CB.10.C000013).

[287] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 72 (CB.13.C.001007).

[289] GSK Technical Overview, tab 1, paragraph 1.3(i); T. 179.

[291] Defendants' final written submissions, paragraph 129.

[292] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 128 (CB.9.B.006118).

[298] CB.6.B.005139, items 4 and 5 under "Summary" and also the last sentence under "Proposed Process".

[300] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 54 (CB.13.C.000999).

[301] Affidavit of Timothy Allan Bowser sworn 17 October 2007, paragraphs 11 and 12 (CB.9.B.006304).

[302] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 80 (CB.13.C001009).

[303] Ibid, paragraph 89 (CB.13.C001011).

[304] "The manufacture of alkaloids from opium" by Walter R. Heumann (1957) (CB.11.C.000659 at 662).

[305] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 206 (CB.9.B.006134).

[306] Confidential exhibit "ARR4" to the affidavit of Dr Andrew Robertson Ross affirmed 27 August 2007, pp 15 and 16 (CB.8.B.005817-8).

[307] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 44 (CB.15.C.001864).

[308] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 93 (CB.13.C001012).

[309] T.1294; see also Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 87 (CB.13.C001011).

[310] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 208 (CB.9.B.006134).

[311] Affidavit of David Connolly sworn 23 January 2006, paragraph 56 (CB.10.C.000016).

[312] Ibid, paragraph 57 (CB.10.C.000017).

[313] Ibid, paragraph 58 (CB.10.C.000017).

[316] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 231 (CB.2.B.000100).

[319] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 129 (CB.9.B.006118).

[321] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 237 (CB.2.B.000102).

[322] CB.5.B.002992 (Castles); CB.5.B.003644 to B.003646 (Colerio); CB.5.B.003746 to B.003748 (Paton).

[323] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 238 (CB.2.B.000102).

[324] This part of the Opening Book was skipped over (T.96).

[326] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 194 (CB.13.C.001043).

[327] Defendants' final written submissions, paragraph 134.

[329] CB.5.B.003052. Note that the document at CB.5.B.003051 does not form part of the information identified the Further Amended Confidential Schedule.

[330] Affidavit of Timothy Allan Bowser sworn 19 October 2005, paragraph 240 (CB.2.B.000102).

[331] Ibid, paragraph 234 (CB.2.B.000100).

[332] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 204 (CB.9.B.006133).

[338] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 204 (CB.9.B.006133).

[339] Ibid, paragraph 201 (CB.9.B.006133).

[340] Ibid, paragraph 198 (CB.9.B.006132).

[343] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 58 (CB.13.C001003).

[345] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 45 (CB.15.C001864).

[346] Confidential Affidavit of Nicholas Hayes sworn 30 June 2006, paragraph 6 (CB.7.B.005649 at B.005650).

[347] Ibid, paragraph 13 (CB.7.B.005649 at B.005651).

[348] Explanation given by Mr Collinson in his opening at T.116.

[352] GSK closing submission, Overview, paragraph 14.

[353] Exhibit P15 (Additional Exhibits Folder, Volume 1, tab 16)

[354] The De-Seeding, Milling and Primary Extraction table (OB.1.tab 38 at 38.4) contains items "HAc concentration %" of [X] and "RE take off" of [X].

[355] Confidential Exhibit DC5 to the affidavit of David Connolly sworn 23 January 2006 (CB.10.C000058) at C.000063. I note that DC5 uses "LL take off" (Loaded Liquor) rather than "RE take off" used in DC4. I have not been told whether these amount to the same thing.

[356] Defendants' final written submissions, paragraph 22; T. 1595.

[358] Mr Ritchie was being cross examined about the data at OB.1.Part 2. Tab 5 (B.003049) which is also to be found at CB.5.B003049.

[362] The purpose of the experiment being to test the use of [X]% acetic acid.

[364] CB.5.B004119 (tab 88) conducted on 25 August 2003.

[365] CB.5.B004120 (tab 88) conducted on 27 August 2003.

[366] CB.5.B004125 (tab 88) conducted on 10 September 2003.

[367] CB.5.B004121 (tab 88) conducted on 28 August 2003.

[368] CB.5.B004122 (tab 88) conducted on 1 September 2003.

[369] CB.5.B004123 (tab 88) conducted on 1 September 2003.

[371] CB.5.B.004125 and T. 424, lines 6-19.

[374] Note that item 1.4(iv) of the Further Amended Confidential Schedule was amended to refer to the volume of NaOH required to raise the pH from pH [X] to pH [X], not pH [XX] to pH [X] (see T. 1753).

[375] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 266-8 (CB.9.B.006145).

[377] Mr Hayes used **[XX]**ml of [XX]% NaOH which is equivalent to **[XX]**ml of [XX]% NaOH. **[XX]ml/[XXX]**ml = **[XX]**ml/1ml = [XX] litre/litre (see affidavit of Timothy Allan Bowser sworn 17 October 2007, paragraph 14 (CB.9.B.006304) and GSK technical overview, tab 6).

[378] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 90 (CB.13.C.001011).

[387] CB.7.B.005676, B.005677 and B.005682.

[395] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraphs 75 & 76 (CB.15.C.001872).

[399] Confidential affidavit of Jarrod Ritchie sworn 23 January 2006, paragraph 57 (C.001001).

[401] Confidential exhibit "ARR4" to the affidavit of Dr Andrew Robertson Ross affirmed 27 August 2007, paragraph 22, observation 2 (CB.8.B.005819).

[404] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraphs 28 and 29 (CB.15.C.001859).

[405] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraphs 21 to 23 (CB.15.C.001857-8).

[409] GSK Technical submissions, paragraph 92(b).

[410] Report dated 18 October 2007, paragraph 14 (CB.9.B.006440).

[411] GSK Technical submissions, paragraphs 94 and 95.

[412] TPI patent application at CB.15.C.001906.

[413] Defendants' final written submissions, paragraph 106.

[414] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraph 7 (CB.15.C.001854).

[415] Confidential affidavit of Jarrod David Ritchie sworn 11 October 2007, paragraphs 11 to 15 (CB.15.C.001855-6).

[421] Affidavit of Claire Hampton, paragraphs 10 and 13 (CB.2.B.000003) and Exhibit "Confidential CH1" (CB.2.B.000005).

[422] Confidential affidavit of Timothy Allan Bowser sworn 5 September 2006, paragraph 63 (CB.9.B.006105).

[423] Ibid, paragraph 65 (CB.9.B.006106).

[424] CB.1.A.000037, top figure in the fourth column of the first table.

[425] CB.1.A.000041, top figure in the fourth column of the first table.

[426] CB.10.C.000048 (DC4), CB.10.C.000061 (DC5) and CB.10.C.000083 (DC6).

[427] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 18 (CB.13.B.000987).

[429] GSK Technical submissions, paragraph 9.

[432] Affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 76 (CB.10.C.000148).

[436] Affidavit of David Connolly sworn 23m January 2006, paragraph 36 (CB.10.C.000011).

[438] Confidential affidavit of Jarrod David Ritchie sworn 23 January 2006, paragraph 23 (CB.13.C.000989).