The issue of confidentiality in Intellectual Property litigation

Preserving the confidentiality of documents in litigation is often troublesome, and controversial. This is especially so in IP cases - and particularly those on patents - and in competition cases. Others may have experienced similar difficulties in other branches of commercial dispute. There is often a lot at stake: otherwise the parties would not be in the High Court in the first place. Clients are understandably anxious to preserve confidentiality in commercially sensitive materials, and especially so where the opposing party is a competitor. On the other hand, as practitioners know, the parties and their legal advisers, are under a duty to ensure that all documents (a term now interpreted much more widely than printed paper) that are relevant to the issue between the parties are disclosed to the other side, whether they help the disclosing party’s case or that of the other side. A balance can often be struck and wrangles resolved by having a Confidentiality Club or Confidentiality Ring. There is however a further area for dispute. That is about who should be admitted to these Clubs or Rings. There are two categories of member which cause controversy: the executives within the opposing company particularly when it is small; and “independent” outside experts.

Mr Justice Roth has been brooding on this following an application made to him and heard on 13 November 2019 and recently reported. The case is Infederation Limited v three Google companies [2020] EWHC 657(Ch). It is all about search engines and in particular search penalty discrimination. The claimants complain that Google has abused a dominant position contrary to Article 102 and to section 18, Competition Act 1998. There are separate proceedings going on in the EU General Court and these may go as far as the CJEU. These proceedings have impacted upon the English ones. Indeed the English trial may not take place until the EU proceedings have finished. The English action was started in 2012. It promises to run for some time yet. Charles Dickens would not have been surprised.

Amongst the various interlocutory spats going on, the present one before Roth J related to the claimant’s application to introduce an independent expert into both the inner and outer Confidentiality Rings (there are in fact three Rings, the third being comprised of lawyers only). Google’s objection was based on the not unfamiliar concern that this expert would disclose highly sensitive information to other clients of his in the industry, not on purpose but because he would unavoidably and unconsciously rely on that information in his work for those others.

The hearing took a day and a half and had silks on both sides. The judge said he deduced from this that the issue in contention was significant and strongly contested.

The judge reviewed the underlying principles, starting with those stated by Lord Dyson in the Supreme Court in Al Rawi v Security Services [2011] UKSC 34. Our system of justice of course requires full disclosure of the evidence, including the documents, on which allegations are based. However, he recognised a limited qualification to this in IP cases: where full disclosure threatens to render the proceedings futile. That has been applied for instance to patent cases by two respected patent judges (Aldous and Floyd LJ). Roth J considered that competition cases required similar treatment.

Of course, whatever arrangements may be cooked up between the parties, they still need the approval of the court. This is so the principle of open justice is respected. I can interject here that this was reaffirmed just last summer by the Supreme Court in Cape Intermediate Holdings v Dring [2019] UKSC UKS 38, a case about asbestos claims. Lady Hale gave the lead judgment saying, amongst other things,

“It was held in Guardian News and Media that the default position is that the public should be allowed access, not only to the parties’ written submissions and arguments, but also to the documents which have been placed before the court and referred to during the hearing. It follows that it should not be limited to those which the judge has been asked to read or has said that he has read.“.

In the case before Roth J, he observed at the end, in what he described as a “Postscript”, that he had found there was:

“an increasing tendency for excessive confidentiality claims to be asserted over documents and information in competition law proceedings, only for those claims to be curtailed or renounced in response to protests from the other side or intervention by the court. It is my understanding that the same is the case in intellectual property proceedings. This is wasteful of time and costs, and it is not the way modern litigation should be conducted”.

The trend may be emerging for the courts to exercise closer control over these confidentiality clubs or rings in court litigation and to rein them in.

In arbitration proceedings, the parties experience similar nervousness about allowing opposing executives seeing highly confidential documents and this can also extend to independent experts. However one major advantage that arbitration has over court litigation is that the tribunals do not have to adhere to the full application of the principle of open justice, third parties having no access to the hearings or to any of the documents in the proceedings. This is indeed often why the parties had agreed to resolve disputes between them by arbitration.

This divergence between the practices in the courts and in arbitration tribunals has in recent years become itself controversial with some commentators urging more transparency from the latter. That however is another subject, and perhaps for another day.