Introduction
The Düsseldorf Local Division of the Unified Patent Court (UPC) has recently (22nd July 2024) issued an order in the ongoing dispute between Dolby International AB (Dolby) and subsidiaries of Hewlett Packard (HP) considering the protection of confidential information when there is an intervener in proceedings.
The order emphasises that an intervener is treated as a party to proceedings, and therefore at least one natural person, in addition to the intervener’s legal representation, should have access to the confidential information. The order provides us with an insight into the UPC’s approach (or at least the LD Düsseldorf’s approach) in dealing with confidential information when there is an intervention in proceedings.
Background to the case
The dispute concerns EP 3 490 258 B1 (the patent), which is a standard essential patent (SEP) within a patent pool[1] directed to the High Efficiency Video Coding (HEVC) standard. HEVC is a video compression standard for improving video quality and is used in mobile devices, laptops, computers and various other technologies.
Dolby has contributed its HEVC-essential patent portfolio, including the patent under consideration, to a patent pool that is managed by Access Advance LLC (Access Advance). This patent pool licenses patents essential to the HEVC standard. As Access Advance is entrusted with licensing the HEVC-patent portfolio of Dolby, it also takes care of the obligations that the licence terms and conditions are FRAND.
Dolby filed an infringement action based on the patent against HP in relation to computers and other electronic end devices that are capable of decoding and reproducing HEVC files.
When filing its statement of defence, HP also filed an application for the protection of confidential information (under R. 262A.1[2]). In the statement of defence, HP made comprehensive submissions about its licence negotiations with Access Advance and had suggested that the FRAND obligations had not been fulfilled. HP therefore requested that the statements regarding the licence negotiations between HP and Access Advance remain confidential.
Although Dolby did not oppose HP’s request for protection of confidential information per se, it stated that the request could only be agreed if Access Advance, as the patent pool administrator, was also included in the group of persons entitled to review the confidential information.
As part of its reply to the statement of defence, Dolby would need to respond to the objections raised by HP in relation to the licence negotiations with Access Advance and its FRAND obligations, but due to the request for protection of confidential information by HP, Dolby would not be able to exchange this information with Access Advance in order to develop its arguments in its reply.
The Düsseldorf Local Division notified the parties of its intention to allow Access Advance to be part of the group entitled to have access to the confidential information. However, HP objected to the inclusion of Access Advance because it is not part of the proceedings as an intervener or party.
Following this, Access Advance successfully filed an application to intervene in proceedings under R. 313.1[3]. In particular, Access Advance was deemed to have a sufficient legal interest in the outcome of the proceedings, especially in order to address HP’s objections regarding the fulfilment of the FRAND obligations in the offers for a licence. However, although Access Advance intervened in proceedings, it has not been able to review the confidential information in the statement of defence because a final decision on HP’s application for protection of confidential information had not been issued.
The present order concerns the UPC’s final decision regarding HP’s application for protection of confidential information.
The Order
Requests of the parties
HP put the following requests forward in relation to the intervener having access to the confidential information in the statement of defence:
- As a main request – that the confidential information is restricted solely to the intervener’s legal representatives; and
- As an auxiliary request – that the confidential information is restricted to the intervener’s legal representatives and a reliable employee of the intervener.
Interestingly, the parts of the statement of defence requested to be confidential for the intervener, Access Advance, differ slightly to the parts of the statement of defence requested to remain confidential for Dolby. However, it is unclear at this stage the extent to which this will affect proceedings.
The Düsseldorf Local Division confirmed that there is no basis for HP’s main request that the confidential information is solely restricted to the intervener’s legal representatives.
In particular, under R.262A.6[4] although the number of persons authorised to access the confidential information may not be greater than is necessary, a natural person of each party is entitled to access the confidential information (in addition to the legal representatives). As Access Advance has intervened in the proceedings, it has its own procedural role as an intervener and is treated as a party to proceedings (under R.315.4[5]).
Accordingly, the Düsseldorf Local Division confirmed that a natural person on behalf of Access Advance should have access to the confidential information in the statement of defence put forward by HP, in addition to its legal representatives.
The Düsseldorf Local Division also confirmed that parts of the statement of defence that have not been explicitly requested to be confidential in relation to the intervener, Access Advance, are not subject to protection.
Conclusions
The order emphasises the approach the UPC may take regarding confidential information when there is an intervention in proceedings, and in particular highlights that an intervener will be treated as a party to the proceedings. Therefore, a natural person associated with the intervener (in addition to its legal representatives) may be granted access to review confidential information. Now that both Dolby and Access Advance will be able to review the confidential information in HP’s statement of defence, it will be interesting to see how this will affect proceedings going forward, especially in relation to Dolby’s reply to the statement of defence.
The UPC rule on confidentiality was taken from the Trade Secrets Directive. In the case of trade secrets, it makes sense that at least one natural person of each party has access to information that is at the heart of the issue of what has been misappropriated. The LD Düsseldorf has consistently ruled more generally that at least one natural person must have access (UPC_CFI_463/2023, 23 February 2024 and 11 March 2024). A different approach has been taken in the LD Paris (UPC_CFI_397/2023, 26 March 2024) and the LD The Hague (UPC_CFI_239/2023, 4 March 2024) which allowed confidentiality clubs limited to attorneys, albeit with the agreement of the parties. Beyond first instance, there has been no Court of appeal decision on the question of confidentiality regimes to date.
One could wonder whether the obligation to give access to a natural person in a patent litigation should be identical in all cases independent of the nature of the confidential information. In particular, in the context of the case law on comparable licenses that has developed after ZTE v Huawei, this could mean that some SEP holders may prefer to go to national courts that allow a different confidentiality regime, such as attorneys’ eyes only.