[UPCKat] Access to confidential information by parties and the public in the UPC

The UPCKat trying to keep confidential
information confidential in the UPC

As part of our UPCKat reporting on the latest UPC developments, the IPKat brings readers a roundup of how the UPC is treating confidentiality and third party access to court documents.  With our guest UPCKat team in the form of guest UPCKats Agathe Michel-de Cazotte and Hiske Roos and members from the team at Carpmaels, this post will examine the topsy turvy world of confidentiality in the UPC.  

Over to the team: 

"Introduction: the UPC shapes its confidentiality regime

Confidentiality can be a sensitive topic for parties involved in legal proceedings. With different approaches to confidentiality within Europe (and the world), these UPCKats are interested to see how confidentiality rules are already crystallising at the UPC just less than a year after the court opening. 

In the UPC the weighing of interests between the fundamental right to be heard (which includes the right to unlimited access to the information on file) on one side, and the right to protect confidential information on the other, appears key when assessing what confidentiality regime should apply.

Depending on the local division and on the attitude of the parties towards confidentiality, some decisions have restricted access to the information to a very limited number of attorneys only (see Local Divisions of Paris and The Hague, as explained below in Part C).  Others, applying the provisions literally, have given access to several individuals within the parties thereby taking a softer approach on protecting confidentiality (see the Local Division in Dusseldorf below in Part C). On top of the question of protecting (confidential) information within the proceedings, the UPC has dealt with requests to access documents by third parties, as was the case in the already famous Ocado Court of Appeal decision (see Part D, below).

This post dives into how confidentiality is dealt with in the UPC by discussing the relevant provisions first (Part A) and then some recent guidance from the case law (Parts B and C).

A. Relevant provisions on protecting confidential information in the UPC between the parties in the proceedings (Article 58 Unified Patent Court Agreement (UPCA) and Rule 262A Rules of Procedure (RoP))

Article 58 UPCA sets out the ground principles for the protection of confidential information in the UPC:

“To protect the trade secrets, personal data or other confidential information of a party to the proceedings or of a third party, or to prevent an abuse of evidence, the Court may order that the collection and use of evidence in proceedings before it be restricted or prohibited or that access to such evidence be restricted to specific persons.”

Further guidance on protecting confidential information is set out in Rule 262A RoP. Both provisions mirror Articles 9(1) and (2)(a) of the EU Trade Secrets Directive (EU 2016/943).

Before delving further, these UPCKats have some observations on what Rule 262A RoP seems to mean on timing and discretion from the Court before diving into the case law.

Timing

Rule 262A.3 RoP states that “The Application shall be made at the same time as lodging a document containing the information or evidence and shall provide a copy of the unredacted relevant document and, if applicable, a copy of the redacted document.”

 
The timing of the application can be problematic because the confidentiality request must be made at the same time as lodging the documents containing the confidential information. However, when lodging the confidential information parties will not know whether the Court will consider that interests to protect the confidentiality significantly outweigh the fundamental rights of the other party has to have unlimited access to all information in the case. These UPCKats have heard that the UPC does not accept provisional applications for confidentiality before lodging the confidential information, as this is not in line with Rule 262A.3RoP.  Alternatively, a party could decide to file the least sensitive information included in the confidential information in case access is not restricted as much as it would like it to be. The downside is that by using this strategy some important information will not be brought to the attention of the judge and the judge may also think that the confidential information that is disclosed is not sensitive enough to be protected by a confidentiality order.  This is a lot for the parties and their representatives to consider!

When documents have been lodged, and until a final decision on confidentiality is reached, the Court can issue (and has in several cases) a preliminary confidentiality order which applies in the meantime. That may give parties (at least some) comfort when relying on confidential information in written statements. These steps are outlined in the case law, including that in practical terms, the filing of the confidentiality request cannot be done “at the same time as lodging” the document with the confidential information since the CMS does not allow it.

Discretion of the Court

The Court is not required to grant a confidentiality order. It has discretion in deciding (i) whether the grounds mentioned in the confidentiality application outweigh the interest of the other party to have full access to information following Rule 262A.5 RoP; and (ii) how much access should be restricted by defining the boundaries of the confidentiality club, having heard both parties submissions Rule 262A.6 RoP.

“5. The Court may allow the Application considering in particular whether the grounds relied upon by the applicant for the order significantly outweigh the interest of the other party to have full access to the information and evidence in question.

6. The number of persons referred to in paragraph 1 shall be no greater than necessary in order to ensure compliance with the right of the parties to the legal proceedings to an effective remedy and to a fair trial, and shall include, at least, one natural person from each party and the respective lawyers or other representatives of those parties to the legal proceedings.”

The Court discretion could of course lead to different approaches by different divisions but this UPCKat has seen quite a consistent approach so far.  It appears that divisions may also be discussing their approaches amongst each other given that they cite each other’s decisions that are issued in the same week or even on the same day.

B. General guidance on confidentiality: the Fujifilm v Kodak decision, LD Düsseldorf, UPC_CFI_355/2023, 27 March 2024

In these proceedings, the defence to infringement was based on a prior use argument deriving from an acquisition in 2017. For this argument, the defendant, Kodak, was relying on know-how which it considered confidential information. They requested that access to this information be limited and excluded, in particular, access by Fujifilm's R&D staff, sales staff and staff involved in prosecution of patent applications in the next 5 years. They also requested that the number of people with access be limited to 3 staff members. Fujifilm contested, raising arguments relating to the (lacking) confidential nature of the information and proportionality (i.e. limiting access to 3 employees should be considered disproportionate). Instead, Fujifilm argued that 9 people should have access to confidential information so that they could “comment with sufficient substance to the submissions of the defendant regarding its prior use right defence” and insisted that R&D staff members should be involved.

In its order, the Court explained it must weigh the rights of the parties between the fundamental right to be heard and the right to protect confidential information. For these purposes, it asks parties to substantiate their request for each redacted part of the submission:

“It is therefore necessary to substantiate with regard to each redacted part of the written submissions, why this explicit part of the submission amounts to confidential information.”

The Court said that parties should bring forward sufficiently substantiated arguments on why the information must be protected, otherwise the request for confidentiality will be denied.

Step 1: confidential nature of the information

Key in this step is establishing whether the information is in fact worthy of being kept confidential:

“For the Court to be able to assess whether it may limit a party’s access to the file, it has to be furnished with concrete arguments which make it sufficiently plausible that the facts which are sought to be protected are confidential in nature.”

The Court explained that the bar that applies for convincing the Court that the information is confidential may be different depending on the substance of the dispute. Interestingly, it said that in patent infringement cases, “it will in principle – except for situations of exceptional character – be sufficient for the Court to arrive at an ample degree of certainty that the information is confidential.”

While the Court was at first not convinced that Kodak’s interests outweighed the interests of Fujifilm’s interest to access the information, Kodak was able to fix this by further substantiating their argument on why the information related to merely internal circumstances, which had not been shared with the public or competitors in the respective industry sector and must therefore be protected. The interests of Kodak were significantly outweighing the interests of Fujifilm and it was decided that the information should be protected by a confidentiality order.

Step 2: restricted access

As a further step, the Court then had to decide who access would be restricted to. It started with emphasising the need for access to at least one natural party to ensure a fair trial, while also pointing to the EU Trade Secrets Directive which Rule 262A.6 RoP echoes. Reference was made to Dutch national practice by Kodak to argue that this should be different.  The Court however disregarded this argument:

“The provision [Rule 262 (A)(6)] therefore reflects the spirit of the trade secret directive, which also demands for access of at least one natural person from each of the parties and their respective representatives in order to guarantee the fundamental right to a fair trial (see recital 25 and Art. 9 (2) of the trade secrets directive). This has been an express decision by the Member States of the European Union which is to be respected by the UPC (Art. 20, 24(1)(a) UPCA).”

The Court will consider all circumstances of the case when deciding on the access restriction. Considering the facts of these proceedings the Court agreed with Fujifilm that Kodak’s request to restrict access to anyone involved in R&D, sale and prosecution of patent applications was disproportionate (even “manifestly” disproportionate), including:

• The information was considered historic know-how (2017), and the product was not sold anymore; and
• The dispute involved technical aspects which requires technically qualified technical employees to have access unless cutting-edge technical improvements are at stake.

Access was finally restricted to 3 employees and provisionally to 6 additional employees awaiting an appeal / application for suspension.

C. Access to at least not one natural person: the C-Kore v Novawell decision, LD Paris, UPC_CFI_397/2023, 26 March 2024

As discussed above, in principle, at least one person from each party will be granted access in addition to the lawyers to ensure a fair trial. This follows from Rule 262.A.6 RoP and its literal interpretation is confirmed in multiple UPC orders (such as the Fujifilm v Kodak decision).

However, as the UPC is shaping its approach to confidentiality, the C-Kore v Novawell decision proves to be an interesting deviation from that principle. In these proceedings an ex parte order granting measures to secure evidence of infringement was granted and some confidential evidence was seized. Novawell swiftly requested that their confidential information remain confidential and by order of 12 December 2023, a confidentiality club was established to examine all the information gathered in the saisie written report. Parties were not in dispute on which information included trade secrets and should be protected as such, and who should be part of the confidentiality club. They had agreed that parties would be excluded from the club and access would be limited to the representatives of C-Kore.

During the infringement action on the merits, the Paris Local Division assessed this agreement between parties by citing Art. 9.3 of the Trade Secrets Directive, as well as Art. 58 UPCA and rule 262A.6 RoP, but then pointed to the fact that C-Kore agreed that the confidentiality club was limited to representatives. Accordingly, the Court found that if both parties agree then there is no need to have members of the parties in the confidentiality club despite the explicit wording of RoP 262A and the trade secret directive:

“In view of all these facts, the Court notes that there is an agreement between the parties on the composition of the confidentiality club and that this proposal by the parties is in accordance with the principle of a fair trial. Even though Rule 262A RoP provides that the confidentiality club shall include at least one natural person from each party, the Court considers that it is possible for the parties to exclude access by a natural person by mutual agreement, provided that the principle of a fair trial is not affected. (UPC-CFI-239/2023, The Hague LD, Order of 4 March 2024 on confidentiality).”

This approach, which is also taken in the Plant-e v Bioo case where parties were agreeing to restrict access to attorneys’ eyes only, is in line with (some) Dutch  practice but seems in direct contradiction with the spirit of Directive as explained in the Fujifilm v Kodak decision. It shows that the UPC is open to accepting that agreements from parties is an indication that the principle of a fair trial is respected.

D. Confidentiality against third parties vs transparency in the UPC: the Ocado decision, UPC Court of Appeal, UPC_CoA_404/2023, 10 April 2024

Whereas Rule 262A RoP regulates the protection of confidential information between the parties in proceedings, Rule 262 RoP protects (confidential in 262.2 and 262.6) information from access by third parties. Rule 262.6 RoP reads:

“The Court shall allow the Application [to access the register] unless legitimate reasons given by the party concerned for the confidentiality of the information outweigh the interest of the applicant to access such information.”

The much-discussed Ocado test case has helped shine some light on that side of the potential exposure of confidential information. The Court explained that as a general principle, the register is public and the proceedings are open to the public. However, there is an exception if the balance of interest requires information to be kept confidential, considering the general interests of justice:

43. When a request to make written pleadings and evidence available to a member of the public is made pursuant to R.262.1(b) RoP, the interests of a member of the public of getting access to the written pleadings and evidence must be weighed against the interests mentioned in Art. 45 UPCA. These interests include the protection of confidential information and personal data (’the interest of one of the parties or other affected persons’) but are not limited thereto. The general interest of justice and public order also have to be taken into account. The general interest of justice includes the protection of the integrity of proceedings. Public order is at stake e.g. when a request is abusive or security interests are at stake.

From the decision, it appears that getting access to the public register pending proceedings is not likely to be allowed (which for many parties who are trying to protect their confidential information will be a relief). The chances of getting access after proceedings have ended seem higher; after a final decision the likelihood that granting access would result in allowing parties to interfere or influence the judicial process would then be low:

48. The protection of the integrity of proceedings ensures that the parties are able to bring forward their arguments and evidence and that this is decided upon by the Court in an impartial and independent manner, without influence and interference from external parties in the public domain. The interest of integrity of proceedings usually only plays a role during the course of the proceedings.

49. This means that these interests – the general interest referred to above and the protection of integrity of proceedings – are usually properly balanced and duly weighed against each other, if access to written pleadings and evidence is given to a member of the public after the proceedings have come to an end by a decision of the Court.

However, when a member of the public has a more specific interest in getting access to the case documents, rather than a general interest, for example, when “he has a direct interest in the subject matter of the proceedings, such as the validity of a patent that he is also concerned with as a competitor or licensee, or where a party in that case is accused of infringing a patent by a product which is the same or similar to a product (to be) brought on the market by such member of the public” (para 53), that member may be granted access during the proceedings after all.

In these proceedings, the Court of Appeal commented that the member of the public trying to get access had not made a specific request.  However, the access request had been made after the proceedings had come to an end (by a settlement) and Ocado had not requested that the requested information must be excluded from public access. Therefore, the balance of interest was in favour of allowing access and the appeal filed by Ocado against that access was denied."