Godo Kaisha IP Bridge 1 v Huawei Technologies Co, Limited & Ors.

The court may manage confidentiality applications in stages where the material is commercially sensitive and the parties’ positions are developing. The prudent course is to proceed cautiously, while ensuring that the application is determined sufficiently early to assist the parties’ preparation.

Where foreign law is relied upon in a distinct issue, the parties should ordinarily plead its applicable principles. Evidence alone may leave the dispute insufficiently defined and permit new points to emerge at trial. Costs of an abandoned issue may be determined immediately where the work was self-contained, but any payment on account should reflect proportionality and caution.

This was a case management hearing in FRAND proceedings concerning confidential licence comparables, alleged patent exhaustion, disclosure, an abandoned technical trial, and associated costs. The claimant sought earlier determination of the confidentiality status of certain comparables. The defendants sought to defer the issue and were also required to explain which licences they presently considered important.

The court also considered whether principles of Delaware and Chinese law concerning exhaustion should be pleaded, whether disclosure concerning communications with Panasonic was adequate, and who should bear the costs of Trial E after its abandonment.

Mr Justice Meade made the following rulings.

1. Confidential comparables. Following the guidance in OnePlus v Mitsubishi [2020] EWCA Civ 1562, the court adopted a cautious and staged approach. The de-designation application should be heard sooner rather than later, but after the claimant’s first-round FRAND evidence. The defendants, as the party driving the request, were required to provide a witness statement identifying which licences they presently considered likely to be important, and which they did not, with appropriate recognition that their position might change.
2. Foreign law and exhaustion. The defendants were required to plead the principles of Delaware and Chinese law applicable to the alleged exhaustion. Pleading was necessary to discipline the issues, promote agreement, and prevent new points of foreign law being raised at trial through evidence alone. The defendants also had to plead the acts relied upon and their locations. The quantitative extent of exhaustion was to be identified earlier than the defendants’ proposed fact evidence in January; the claimant and its expert were not required to guess at that extent without a proper basis.
3. Disclosure. Disclosure of communications with Panasonic was ordered. A search limited to one relevant person’s Gmail account was too narrow and did not establish that a reasonable and proportionate search had been undertaken.
4. Trial E costs. Huawei was ordered to pay the costs of Trial E. The work was self-contained, had been undertaken at Huawei’s conscious choice to investigate the essentiality and validity of patents on the claimant’s “Proud List”, and had almost certainly fallen out of the case. The possibility that the claimant might later amend its case did not justify deferring the costs decision, since repayment could be made a condition of amendment.
5. Payment on account. Given the unusually high pleading costs and the need for caution, the interim payment was limited to one-third of the total. Detailed assessment was not to begin without Huawei’s agreement or a further court order.