InterDigital Technology Corporation & Ors v OnePlus Technology (Shenzen) Co & Ors

When managing disclosure of highly confidential material in intellectual property litigation, the court must balance effective access to relevant documents against the protection of commercially sensitive information. The appropriate regime depends on the documents, the stage of proceedings and the receiving party’s organisation.

A restriction preventing an employee who sees confidential patent licences from participating temporarily in any standards-essential patent licensing may be justified. Confidential terms may confer an unfair advantage in negotiations with parties other than the licensees concerned. At an early stage, the court may adopt a cautious regime where the receiving party has provided insufficient evidence about the proposed recipients and the practical effect of the restriction. Restrictions should remain capable of relaxation as the proceedings and evidence develop.

InterDigital alleged infringement of patents declared essential to telecommunications standards and sought determination of fair, reasonable and non-discriminatory licence terms. Its licences with other implementers were potentially relevant comparables for the FRAND trial.

At a case management conference, Mellor J established a two-tier confidentiality regime. Employees admitted to the outer tier were required to refrain from all standards-essential patent licensing while they had access to highly confidential material and for two years afterwards. The judge preferred that wide restriction to OnePlus’s proposal limiting the prohibition to negotiations with the counterparty to each disclosed licence: [2022] EWHC 2121 (Pat).

OnePlus appealed, contending that confidential information could create material unfairness only in negotiations with the same counterparty. The central issues were whether the wide undertaking was permissible in principle and whether it was open to the judge on the evidence then available.

1. Appeal dismissed. The wide undertaking was within the court’s powers and was a proper case management decision. Birss LJ gave the judgment, with which Peter Jackson and Bean LJJ agreed.

2. The principles summarised in Mitsubishi v One Plus (Shenzhen) [2020] EWCA Civ 1562 governed the issue. The court must balance the receiving party’s need for the fullest practicable access against the interests of the disclosing party and third parties in protecting confidential commercial information. No universal confidentiality order is suitable for every case or every stage of the same case. Relevant considerations include the information’s nature and potential for misuse, its role in the litigation, practical difficulties in policing misuse and the receiving party’s structure.

3. A disclosed licence between a patent owner and one implementer may provide a useful commercial advantage in licensing negotiations with another party. Its utility is less direct than in negotiations with the same licensee, but the difference is one of degree rather than kind. Information about comparable licences may inform arguments concerning the aggregate royalty burden and a party’s appropriate share of it. Both the narrow and wide undertakings therefore addressed genuine risks of unfairness. Either could be justified in a proper case.

4. The wide restriction was justified in the circumstances. The proceedings were at an early stage, when a cautious and staged approach was appropriate. Confidentiality restrictions can more readily be relaxed as the case develops than imposed retrospectively after sensitive information has been disclosed.

5. The evidence about OnePlus’s organisation and proposed recipients was very limited. Only one individual had been identified in any detail. There was no convincing evidence that the restriction would cause practical difficulty within a large organisation. Licensing work might be performed by other staff, or an information barrier might separate litigation and licensing teams. The judge retained liberty to apply, permitting reconsideration when fuller evidence became available.

6. The narrower undertaking made in Mitsubishi did not establish that only such an order was permissible. That order had been made by consent, without deciding whether a party was entitled to insist upon it.

• Court of Appeal (Civil Division): The appeal was dismissed: [2023] EWCA Civ 166. The wide restriction was within the court’s powers and was open to the judge on the evidence.
• High Court, Patents Court: At a FRAND case management conference, Mellor J imposed the wide form of confidentiality undertaking, subject to liberty to apply: [2022] EWHC 2121 (Pat).