Ipcom GMBH & Company KG v Htc Europe Company Ltd and Others
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Floyd,Mr Justice Floyd |
| Judgment Date | 24 January 2013 |
| Neutral Citation | [2013] EWHC 52 (Pat) |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: HC11 C02064 |
| Date | 24 January 2013 |
The Hon Mr Justice Floyd
Case No: HC11 C02064
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Rolls Building
London EC4A1NL
James Flynn QC, Iain Purvis QC and Kassie Smith (instructed by Bristows) for IPCom
Adrian Speck QC and Josh Holmes (instructed by SJ Berwin LLP) for HTC
James Abrahams instructed by Bird & Bird LLP for Nokia
Mark Chacksfield instructed by Taylor Wessing LLP for Ericsson a first interested party
Joe Delaney instructed by Allen & Overy LLP for Research in Motion Limited a second interested party
Hearing date: 16th January 2013
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 two sets of proceedings in which this application is made are concerned, amongst other things, with the determination by the court of the appropriate royalty to be paid by Nokia and HTC, and other FRAND 1 terms, for a licence under IPCom's standard essential patent EP(UK) 1 841 268 ("the FRAND issues"). That patent has been determined to be valid and infringed in proceedings against Nokia in a first action, HC 10 C01233 ("the 233 proceedings"). HTC have also been sued by IPCom in another action, HC11 C02064 ("the 064 proceedings") for infringement of that patent, although the questions of validity and infringement as between HTC and IPCom have yet to be decided. The application before the court is concerned with whether particular individuals on IPCom's side should be permitted to inspect confidential licensing documents disclosed in the action by HTC and Nokia pursuant to orders of the court.
Shortly before the application was due to be heard, Nokia and IPCom announced that they were close to a settlement of the disputes between them, including the 233 proceedings. They invited the court to delay determining the issue of terms of inspection as between IPCom and Nokia for a period of four weeks, as that determination might turn out to be unnecessary. For the reasons I gave in an extempore judgment, I did not consider it appropriate to accede to that invitation. Accordingly the regime which I am called upon to decide is the regime applying to all parties to these actions.
Procedural background
On 18 and 31 May 2012, Roth J made orders in the 233 and 064 proceedings for the determination of the FRAND issues. These orders required Nokia and HTC to file statements of case, setting out in particular the method by which they contended that a FRAND royalty rate is to be calculated. At the same time as serving these statements of case those parties were required to provide IPCom with copies of any comparable licences then available to them on which they rely. On 27 July and 10 August 2012 Nokia and HTC served their statements of case. Nokia's statement of case included the contention that the licences granted under the Bosch portfolio were the most relevant comparators. At paragraph 62 onwards Nokia pleaded that its own out-licences (i.e. licences of its own as opposed to others' technology) were less relevant than licences under the Bosch portfolio. The statement of case nevertheless annexed a schedule of these licences and went on to maintain that the rates in its own licences needed to be revised downwards to take account of various factors.
Paragraph 10 of the order in the 064 proceedings (involving HTC) provided that the parties were to agree on a confidentiality club " to include as a minimum: external counsel, experts and one other person elected by each of the parties". There was no corresponding provision concerning Nokia.
The parties were not able to agree on the individuals entitled to see the disclosure material, although an interim arrangement was arrived at under which the parties' UK solicitors, counsel and (upon provision of signed undertakings) independent licensing and economics experts, were permitted to inspect the material. On 30 July 2012
IPCom issued this application, seeking an order that the court impose a confidentiality regime in which inspection should be by, and only by:i) legal advisers and counsel;
ii) named experts subject to confidentiality undertakings in the agreed form;
iii) up to two named individuals subject to confidentiality undertakings in the agreed form.
Prior to the hearing of its application, IPCom indicated that it intended to include Dr Roman Sedlmaier, Dr Wolfgang Kellenter and Mr Philipp Kahlenberg as members of the confidentiality club. By a letter dated 17 th September 2012 IPCom's solicitors informed the other parties that it was instructing Dr Sedlmaier and Dr Kellenter as counsel to conduct the proceedings. Dr Sedlmaier is a member of the German law firm Frohwitter and Dr Kellenter is a member of the German law firm Hengeler Mueller. As matters stood before me, the application to include Dr Kellenter was no longer pressed.
IPCom's application came before Arnold J on 20 September 2012. Representatives of Interdigital appeared on that application. Although Interdigital were not party to the proceedings, they were concerned to make representations that if a licence agreement to which they were party was ordered to be disclosed, then its confidentiality should be protected. Arnold J considered that the interim arrangement was sufficient to enable IPCom to plead its case. As to the remainder he considered that it was premature to settle the terms of a confidentiality regime until the scope of the disclosure was known. He adjourned further consideration of those matters to the case management conference, which was to be held in November when the scope of any disclosure to be given would be known.
IPCom accordingly served its FRAND statement of Case on 2 October 2012. At paragraph 44 onwards IPCom place reliance on "comparator licences" generally, and go on to plead no less than 21 different factors which they contended might affect the comparability of royalty terms.
Subsequently, on 16 th October 2012, Arnold J ordered, at Nokia's suggestion, that consideration of the outstanding issues be divided into two hearings: a disclosure hearing and an inspection hearing. That was because third parties (such as Interdigital and others) had indicated an intention to apply to be heard in relation to inspection. This proved advantageous in one respect, that, in the event, no Interdigital licence falls to be disclosed, and they have not appeared on this application.
The scope of the disclosure to be given was considered at a hearing before me on 22 November 2012. The order which I made on that application required Nokia and HTC each to produce a list of all licences entered into since January 2007. The order then allowed IPCom to make a selection of up to 7 HTC and 10 Nokia licences from the lists. IPCom ultimately identified 5 Nokia and 3 HTC licences from the lists.
In disposing of the disclosure application I said this:
"1. What I am proposing to do is to order a proportionate measure of disclosure according to the [scheme above]. Any further application in relation to disclosure about licences would have to be supported by expert evidence as to why that measure of disclosure had proved to be insufficient.
2. It should be borne in mind that I do not, at the moment, regard the disclosure of these licences as inherently likely to be of great assistance to the court for the two reasons that have been identified. First, they do not relate to the patent in suit; secondly, many of them may include special features which will be extremely difficult to assess the importance of and will be likely to give rise to satellite issues which are unlikely to throw light on the ultimate royalties to be fixed. But, nevertheless, I have thought it appropriate to order that measure of disclosure in order to dispel any suspicion that IPCom may have that there is helpful material there, and to allow their expert the opportunity of making good what at the moment I regard as rather speculative statements that there is assistance to be gained from an examination of licences of this kind."
In his third witness statement on behalf of IPCom, Mr Boon, who is one of the team at Bristows advising IPCom, set out IPCom's position as to the individuals entitled to see the confidential documents. This was
i) As a primary position, one member of its internal management team i.e. either Mr Frohwitter or Mr Schoeller. In addition it would wish the documents to go to Dr Sedlmaier as an external lawyer instructed in the case.
ii) As a "compromise" IPCom says it would be prepared to have Mr Kahlenberg admitted instead of one of the members of the internal management team. Mr Kahlenberg is an external commercial adviser to IPCom. Mr Boon describes this arrangement as far from ideal.
Mr Boon explains that IPCom is a very small company consisting of only two people, Mr Frohwitter and Mr Schoeller. In his third witness statement Mr Boon explains that both IPCom and Bristows consider that " it is imperative that individuals identified by each of the parties should be able to review all the materials in the proceedings on the basis that the confidential materials may have a bearing on a party's case". He considers that he will be placed in difficulty in complying with his duty to his client under the Solicitors' Code of Conduct if his client cannot give him " fully informed instructions on all the information in the case".
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