Godo Kaisha IP Bridge 1 (a company incorporated under the laws of Japan) v Huawei Technologies Company, Ltd (a company incorporated under the laws of the People's Republic of China)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mellor |
| Judgment Date | 22 October 2021 |
| Neutral Citation | [2021] EWHC 2826 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: HP-2021-000004 |
[2021] EWHC 2826 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Rolls Building
7 Rolls Buildings, Fetter Lane
London, EC4A 1NL
THE HON Mr Justice Mellor
Case No: HP-2021-000004
Nicholas Saunders QC and Stephen Innes (instructed by EIP Europe LLP) for the Claimant
Iain Purvis QC and Kyra Nezami (instructed by Allen & Overy LLP) for the Third Defendant
Stuart Baran (instructed by Bristows LLP) for Counterparty C
Hearing date: 18th October 2021
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
THE HON Mr Justice Mellor
Introduction
At the hearing of the FRAND CMC on 18 th October 2021, I dealt with various points arising on directions which were embodied in my Order of that date. In this judgment I deal with two substantive applications argued at that hearing.
Although I have reached clear conclusions on both applications, each involved some intricate issues, the resolution of which may be of wider interest, which is why I reserved my judgment for a short time.
The second application can be readily identified: it is an application by the Third Defendant (currently the only Defendant which has been served, which I shall call simply Huawei) for security for costs against the Claimant (IPB). The first concerns an important confidentiality issue.
Confidentiality re Comparable Licences A & C
The first application concerns what terms as to confidentiality should attach to two out of three licences (A, B & C) relied upon by IPB in its FRAND Statement of Case as being comparable for the purposes of establishing, in this case, what are FRAND terms for the licensing of the so-called Nozomi portfolio of patents. At the moment the two licences in dispute (A & C) are subject to an External Eyes Only (EEO) regime. Huawei seeks re-designation down to the lower confidentiality level of ‘Confidential Between Parties Information’, as defined in my earlier Confidentiality Order of 20 July 2021. No issue arises regarding Licence B. The application engages not just the interests of the parties to this case, but also the counterparties to Comparable Licences A and C.
Counterparty C was represented before me by Mr Stuart Baran of Counsel and he provided me with a useful Skeleton Argument and oral submissions. This was the second time in a week when a third party addressed submissions to me concerning confidentiality of a document in which it had a distinct interest. When writing this judgment, I received representations from a counterparty in a third case. In common with the earlier case, Mr Baran and his clients did not have access to the evidence which was before me and so his submissions had to cover a wide ground.
For its part, Counterparty A was content, as I understand it, simply to register its resistance and leave the matter in the hands of the Court. IPB took an essentially neutral stance save in so far as any re-designation (or lack of it) might impact on the steps in the litigation already ordered. IPB was excluded from a good part of the argument made by Counterparty C and Huawei because of one feature (referred to as the Sensitive Fact) which Huawei insisted was not revealed to IPB. Mr Baran drew attention to the apparent conflict between Huawei's attitude on that point and its desire to have Comparable Licence C dealt with on a more relaxed basis.
The applicable principles were not in dispute. Reference was made to Oneplus v Mitsubishi [2020] EWCA Civ 1562 especially the summary of Floyd LJ at [39] but I also have in mind the various citations in his [19]–[38] which underpin his summary. Of particular importance to the current application is [39](ii):
‘An arrangement under which an officer or employee of the receiving party gains no access at all to documents of importance at trial will be exceptionally rare, if indeed it can happen at all.’
I was also reminded that Henry Carr J considered the question of EEO designation for comparable licences in TQ Delta v Zyxel [2018] EWHC 1515 (Ch), [2018] FSR 34. At [34], he said this:
‘I have concluded that disclosure of the licence agreements should not be limited to external eyes only, but that the third parties should be given the opportunity to vary or set aside that order before disclosure is made. In my view, the onus must be on those who wish to limit access to key documents to external eyes only to justify that limitation, rather than on the party who is, prima facie, entitled to see the documents, to justify its entitlement to access.’
Counterparty C's (very much) preferred option was that the EEO designation should be maintained throughout this case, and it put forward a series of persuasive submissions explaining why the information in Licence C deserved a significant degree of protection and why the circumstances were truly exceptional. Realistically recognising that I might disagree with that course, its second option was to maintain EEO for the moment and adjourn the question to a later date, suggesting until the conclusion of Trial B, or alternatively only when Huawei comes forward with a concrete reason as to why a relaxation from EEO was necessary e.g. for the formulation of a settlement offer. Counterparty C also put forward a series of suggestions by which more stringent protection would be given to Licence C than provided for in the undertakings presently involved in the Confidential Between Parties Information arrangements.
I am unable in a public judgment to discuss the arguments in detail because to do so would disclose confidential information. Mr Baran made an argument based on a high degree of symmetry between two situations, but I was persuaded by Mr Purvis' counterargument that the degree of symmetry was nowhere near as significant as Mr Baran made out. More generally, Mr Purvis accused Mr Baran and his clients of adopting an extreme position, perhaps hoping to shift the Overton window further towards that position than would otherwise be in the case, and there was some force in that submission.
In the directions I gave in the last part of the hearing, I directed Huawei to file its Reply Statement of Case on FRAND by 17 January 2022, this being in response to IPB's FRAND Statement of Case which was served on 1 st October 2021. There was some debate between the parties as to whether the direction should include a requirement that Huawei plead any positive case it has on FRAND, the purpose being, according to IPB, to ensure that Huawei pleaded any case it wished to run involving competition law, but in the result I declined to add any requirement, leaving it to the usual rules in CPR16.5(2)(b) and the Aldi guidelines. The transcript records the discussion which took place, to which reference can be made should Huawei attempt to hold some positive case back until later.
However, one of the reasons for giving Huawei this generous time in which to prepare and file their FRAND SoC is so that the issues are properly and fully pleaded. This consideration impacts on this confidentiality issue.
It is clear that IPB regards Comparable Licence C as the most powerful comparable licence. Having reviewed the three comparables, I can see why IPB wishes to place significant weight on it. Mr Baran submitted that Huawei's very experienced lawyers would be able to plead and run Huawei's case perfectly adequately without any input from personnel at Huawei. In my view in the circumstances, this submission is untenable so far as it is contemplated that Trial D should take place without anyone at Huawei ever seeing Comparable Licence C. In the particular circumstances of this case, I also think it would place an undue burden on the running of Huawei's case on the FRAND part of this litigation if I postpone relaxation of the EEO regime until the conclusion of Trial B (around 5 months before Trial D). Accordingly, I have come to the conclusion that, notwithstanding the sensitivity of the document (which I entirely accept), if appropriate protections can be put in place, a limited number of personnel at Huawei should have access to Comparable Licence C so that (a) Huawei can plead fully and properly in its FRAND SoC to the allegations relying on that document and (b) Huawei's legal and experts teams are able to progress Huawei's case down to Trial D.
In terms of appropriate persons, Huawei have four persons in the Confidential Between Parties Information designation. Two of these four are currently involved in licensing negotiations and two are not (with no intention of being so involved in the future). I am in no doubt that I should exclude the two persons who are currently involved in licensing negotiations on behalf of Huawei, at least until after the Sensitive Fact no longer applies. I realise that the two I have excluded may be best placed to comment on Comparable Licence C, but I am sure the two who will have access will be able to provide satisfactory input and instructions.
I will require the two persons who are not involved in licensing negotiations (who are both Legal Counsel) to...
To continue reading
Request your trial
-
Interdigital Technology Corporation v Lenovo Group Ltd
...fair to say that these points largely derive from the regime which I established recently in Godo IP Bridge 1 v Huawei Technologies [2021] EWHC 2826 Pat (“ IP Bridge”). There are a number of significant differences between the circumstances I had to consider in IP Bridge and those in this ......