Unilever Plc v The Procter & Gamble Company
Citation: [1999] EWCA Civ 3027
Background Facts
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P&G owned a European patent (UK) for a laundry washing process. Unilever planned to sell "Persil Performance Tablets" and was concerned about potential infringement.
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Ongoing disputes over the patent existed in the EU, including opposition proceedings in the European Patent Office (EPO) and litigation in France.
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A high-level meeting was held on 20 May 1998 in Frankfurt between Unilever and P&G to discuss settling multiple issues, conducted on a "without prejudice" basis.
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Unilever claimed that, during this meeting, P&G threatened to bring infringement proceedings in the UK.
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Unilever then issued proceedings in the UK seeking a declaration of non-infringement, motivated in part to gain standing to intervene in EPO proceedings.
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P&G applied to strike out Unilever’s action as an abuse of process, arguing that the alleged threat arose from protected "without prejudice" discussions.
​Judgment
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Decision:
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The Court of Appeal upheld the High Court's decision to strike out Unilever’s claim.
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It ruled that statements made during the Frankfurt meeting were protected by the "without prejudice" rule and could not be used to establish a threat under section 70 of the Patents Act 1977.
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Key findings:
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The "without prejudice" rule protects negotiations genuinely aimed at settlement to encourage open discussion without fear of admissions being used later in litigation.
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Threats made in such discussions do not fall within any exception to the rule unless there is evidence of unambiguous impropriety or abuse of the privileged occasion, which was not present here.
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The meeting was clearly intended to resolve disputes, and there was no suggestion of dishonesty or oppression by P&G.
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​
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Outcome:
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Appeal dismissed.
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Unilever's action for a declaration of non-infringement was struck out as an abuse of process.
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General Principles Developed
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Strengthening the "without prejudice" rule:
The case reaffirmed that communications made in good faith during "without prejudice" negotiations are generally inadmissible as evidence, even if they include threats of litigation.
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Exceptions narrowly applied:
Exceptions to the "without prejudice" rule (e.g., for fraud, perjury, or unambiguous impropriety) are limited and will not be extended lightly.
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Condition for declaratory relief:
A declaration of non-infringement under general jurisdiction requires an actual "claim of right" asserted against the party seeking the declaration. Where a statement is protected, it cannot establish such a claim.
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Public policy emphasis:
Courts favour encouraging settlement discussions without fear of admissions or threats later being used to undermine those negotiations.