Interdigital Technology Corporation v Lenovo Group Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mellor |
| Judgment Date | 26 November 2021 |
| Neutral Citation | [2021] EWHC 3192 (Pat) |
| Docket Number | Case No: HP-2019-000032 |
| Court | Chancery Division (Patents Court) |
[2021] EWHC 3192 (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-2019-000032
Mark Chacksfield QC, Thomas Jones and Edmund Eustace (instructed by Gowling WLG) for the Claimants
Daniel Alexander QC, James Segan QC, Ravi Mehta and William Duncan (instructed by Kirkland & Ellis International LLP) for the Defendants
Hearing date: 25 th November 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
The Claimants (“IDC”) are members of a group which owns a substantial portfolio of patents covering 3G, 4G and 5G technologies in the mobile device sphere. By this litigation it seeks to make the Defendant companies (who I will call Lenovo, but which cover the Lenovo and Motorola brands) enter into a global FRAND licence.
Technical trials A and B have taken place. In Trial A the IDC patent in question was found valid, essential and infringed by HHJ Hacon. Judgment in Trial B is still awaited (from me). The Non-Technical (FRAND) trial is set to start at the beginning of term in January 2022. Very broadly, the trial will examine whether a licence offer (or offers) made by IDC is FRAND and if not, what terms are FRAND. In the usual way, the parties will seek to establish what they say are the FRAND terms through two routes: one is by examining what are alleged to be comparable licences and the second (often used as a cross-check) is via what is known as a top-down analysis.
This judgment arises from argument at the PTR ahead of the FRAND trial and it concerns the confidentiality of certain patent licence agreements and information derived from them which will be used in the comparables part of the case. When it comes to the detail, there are three distinct parts to the application.
These confidentiality issues matter to the parties but also to the counterparties to the various agreements. For this reason I did not give judgment immediately. As I said during argument, I wished to give further consideration to the contentions put forward by certain counterparties, and to reflect on the arguments I received from the parties.
As a well-established licensor, IDC disclosed some 70 Patent Licence Agreements (‘PLAs’) as part of its disclosure for the FRAND trial. Of those, 26 are relied upon by the parties as comparables and 8 others are referred to in the evidence. It is not in dispute that the terms of the PLAs (and in particular the financial terms) are highly confidential, not just to IDC but also to each of the counterparties to those agreements.
In July 2020, Birss J made an Order by consent (“the July CRO”) which established a three-tier confidentiality regime comprising (1) a general confidentiality tier to protect ‘General Confidential Information’ or ‘GCI’ (2) an Approved Persons only tier (‘AP’) and (3) what is called Lawyers Eyes Only (‘LEO’) but which includes external non-legal experts. The LEO tier excludes any in-house employees of the parties but such persons can be included in the Approved Persons tier. As matters currently stand, IDC have 2 AP representatives and Lenovo have 4, but these include personnel involved in licensing negotiations.
All the PLAs disclosed by IDC include information currently designated LEO, although there is also a specific fourth tier for a recently signed PLA. I am told there is a very limited amount of Lenovo LEO material in the case.
Thus far, the parties and their advisers have managed to progress the litigation under the terms of the July 2020 CRO and, indeed, the evidence for trial is very nearly complete. Under the current LEO regime, not only can no-one at Lenovo see an unredacted copy of any of the PLAs relied on as comparables, substantial redaction of the expert reports has been required to provide copies for Lenovo personnel to read. The redactions are such that Lenovo personnel do not currently have access to the evidence on comparables which will form an important, if not critical part of the case at trial. Furthermore, Lenovo has recently served a statement of case in draft as to the lump sum which it wishes to say should be paid under a FRAND licence. The document remains in draft because Lenovo is not at present able to give instructions as to what the figure for the lump sum should be, because certain inputs which will be used to calculate that lump sum figure cannot presently be disclosed to any Lenovo personnel.
At a short CMC on 25 October 2021 I was invited to make an Order by consent which inter alia required IDC to serve redesignated (in terms of confidentiality) versions of its evidence and pleadings. It did so on 19 November 2021. Lenovo estimate that IDC served over 1300 pages of redesignated material, significant parts of which contain information alleged to be confidential at the various tiers I have outlined.
In the meantime, on 4 November 2021, and anticipating that the redesignation exercise would not achieve what Lenovo required, its solicitors wrote suggesting that the LEO tier should simply be removed. After further correspondence, the proposal has been honed somewhat and the parties have made significant progress in seeking to agree a new confidentiality tier, intermediate between LEO and Approved Persons. This is embodied in a proposed new Confidentiality Protocol in which the parties have agreed (in broad outline):
10.1. There should be a limited number of disclosees, so called Specified Persons, who should be named with the counterparties having the right to object to them;
10.2. There should be a licensing bar in place i.e. the disclosees should not be involved in any licensing negotiations for a specified period.
There remain a series of points in dispute as to the details of the Protocol, and it is 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 case, not least that the litigation in IP Bridge was still at a relatively early stage and this case is very close to the FRAND trial. Nonetheless, it almost goes without saying that each case turns on its own facts.
One of the consequences of Lenovo's suggestion on 4 th November 2021 to dispense with the LEO tier altogether was that IDC had to give notice of the proposed change to all the counterparties to the PLAs which had been disclosed. Shortly before the PTR hearing commenced I received representations in varying levels of detail from a total of 14 such counterparties. Some made their representations via a solicitors' letter. Other representations were summarised in a letter to me from IDC's solicitors. Of the 14, 2 raised no objection, 1 expressed no positive view but the remainder made strong representations that the confidentiality of their agreements should be preserved. I will have to return to discuss some of these representations below.
Applicable principles
The applicable principles are not in dispute. Lenovo reminded me in their skeleton of a number of the seminal cases in this area, ( Al-Rawi v Security Service Al-Rawi [2012] 1 AC 531) in particular. Mr Segan QC (who argued these issues for Lenovo) rightly emphasises the two features of a common law trial which the Supreme Court identified as fundamental to our system of justice – the open justice principle and the principle of natural justice. All the cases cited by Lenovo were reviewed by the Court of Appeal relatively recently in Oneplus v Mitsubishi [2020] EWCA 1562, [2021] FSR 13. Floyd LJ summarised the principles at [39] as follows:
‘39 Drawing all this together, I would identify the following non-exhaustive list of points of importance from the authorities:
(i) In managing the disclosure of highly confidential information in intellectual property litigation, the court must balance the interests of the receiving party in having the fullest possible access to relevant documents against the interests of the disclosing party, or third parties, in the preservation of their confidential commercial and technical information: Warner-Lambert [1975] R.P.C. 354 at p.356; Roussel [1990] R.P.C. 45 at p.49.
(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: Warner-Lambert [1975] R.P.C. 354 at p.360; Al-Rawi [2011] UKSC 34 at [64].
(iii) There is no universal form of order suitable for use in every case, or even at every stage of the same case: Warner-Lambert [1975] R.P.C. 354 at p.358; Al-Rawi [2011] UKSC 34 at [64]; IPCom 1 at [31(ii)].
(iv) The court must be alert to the fact that restricting disclosure to external eyes only at any stage is exceptional: Roussel [1990] R.P.C. 45, p.49; Infederation at [42].
(v) If an external eyes only tier is created for initial disclosure, the...
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...I referred directly to these two principles in a judgment I delivered the working day before this hearing: see Interdigital v Lenovo [2021] EWHC 3192 (Pat) at [15]. Interdigital is a case where the financial terms contained in various comparable patent licence agreements are highly confide......