Protection of confidential information in UPC court proceedings
It often appears in court proceedings that evidence need to be produced by one of the parties, but that said evidence could contain confidential information, such as business information. Production of the evidence may therefore adversely affect the party. Should the court agree with the party that the evidence need to be kept confidential, the court may provide for reasonable measures to protect the confidentiality thereof.
This question came forth again in a recent case, regarding a patent infringement dispute between Huawei and Netgear. In this case in the Unified Patent Court (“UPC”) evidence had to be produced whilst protecting the confidentiality thereof.
The case
In this case, Huawei brought an action against Netgear for infringement of their Standard Essential Patent (“SEP”) EP 3611989 (“EP’989”), entitled “Method and apparatus for transmitting wireless local area network information”. Huawei claims that this patent is essential for compliance with the Wi-Fi 6 standard.
In response thereto, Netgear relied on exhaustion of rights of EP’989. (See blog on exhaustion of patent rights here). The exhaustion of rights was based on a license agreement concluded between Netgear’s supplier, Qualcomm Corp, and Huawei. According to Netgear the potentially infringing products include chips which are supplied to them by Qualcomm. These chips use Huawei’s Wi-Fi 6 standard patents, for which a license fee has already been paid for in accordance with the licensing agreement. Thus, since a licensing fee have already been paid by Qualcomm, Huawei cannot request a second payment from Netgear.
The license agreement
This license agreement was used as evidence in a parallel discovery proceeding in the United States (“U.S.”), and thus available to Netgear. However, Netgear was prevented by orders from the U.S. court from presenting it to the UPC or from providing details thereon. In response to a request to permit the submission of the licensing agreement in these proceedings, the U.S. court advised Netgear to file a submission request in the UPC proceedings.
The UPC decision
In response to the submission request, the UPC held that since Netgear already had access to the agreement via the U.S. proceedings, it would only be fair for them to also be able to use the agreement before the UPC. The confidentiality interests of Huawei and Qualcomm in not presenting the agreement were also outweighed by the fact that Netgear is already in possession of the agreement. Huawai was thus ordered to request production of the license agreement from the U.S. court.
The UPC further held that due to the legitimate confidentiality interests of Huawei and Qualcomm, protective measures must be implemented. These measures included that the content of the licensing agreement must be classified as requiring confidentiality. Furthermore, the content of the licensing agreement may only be disclosed to Netgear's legal representatives, their assistants and the vice president of legal of Netgear. The information contained in the agreement must be treated as strictly confidential, even after conclusion of the proceedings in suit. Also, the public will be excluded from attendance for the part of the proceeding where the agreement will be revealed. The confidential information will also be redacted in the judgment and not be available for third party inspection. Furthermore, the licensing agreement could only be used as evidence in the UPC proceedings and not in other proceedings.
Application of UPC Rules of Procedure
This decision illustrates the implementation of the mechanisms provided in the UPC’s Rules of Procedure’s (“RoP”) rule 190; order for production of evidence, and rule 262A; protection of confidential information. In terms of rule 190 the UPC may order the production of evidence in a party’s possession. Furthermore, and of importance here, rule 262A RoP provides for the possibility of measures to protect legitimate confidential interests.
Application to practice
This decision confirms that the UPC will weigh the interests of parties in production of evidence. On the one hand the importance of evidence will be evaluated, and on the other hand, the confidentiality of said evidence will be evaluated. If the evidence is of importance to the proceedings and the evidence does contain confidential information, the UPC will provide for implementation of reasonable measures to protect the confidential information. However, it is important for the parties to notify the UPC that the submitted evidence contains confidential information and publication thereof would place the confidentiality at risk.
