Oppo & Xiaomi v Mitsubishi Electric Corp & Sisvel International

19 November 2020

Among the counsel teams,  Daniel Alexander QC appeared for Xiaomi (the sixth to ninth appellants) and Michael Conway appeared for the respondents in this appeal against a case management order in patent litigation in which the Claimants were seeking determination of a FRAND licence under various declared SEPs.

The issue of confidentiality of potentially important documents in such cases, who can see them and at what stage, creates potential difficulties in the management of this kind of litigation. These Appeals concerned the application of a confidentiality regime to a large number of confidential licences and assignment agreements relating to parts of the patent proprietors’ portfolio that the Claimants had been ordered to disclose. The regime provided for an “Attorney’s Eyes Only” (“AEO”) tier of documents that could be seen by external lawyers and experts only, and a “Highly Confidential” (“HCM”) tier, within which documents could be seen by named representatives of the Defendants within a confidentiality club.

On the earlier applications which gave rise to the present appeals, the Judge had re-designated six AEO documents to HCM, but refused to re-designate all 36 AEO agreements. The Judge had also refused Oppo’s application to allow 3 individuals into the HCM club to whom the Claimants objected, and in respect of the six re-designated agreements, had required both parties’ representatives to enter undertakings directly with the counterparty not at any time to participate in licensing negotiations or litigation between Oppo and the counterparty.  The judge gave permission to appeal on the basis that the approach in this area merited consideration by the Court of Appeal.

Oppo appealed the HMC club membership application.  Xiaomi appealed the Judge’s refusal to re-designate all of the AEO documents. Both parties also appealed the conditions the Judge had imposed in respect of the 6 agreements that had been re-designated.

The Court of Appeal discussed the approach to confidentiality designations in such cases, referring to the case law from other areas.

On the specific issues, it dismissed Oppo’s appeal on the basis that as advanced before the Judge, its application would have allowed individuals intimately involved in licensing to see all of its HCM licenses, and there was no basis to interfere with the Judge’s evaluative judgment that this would result in unacceptable prejudice to the Claimants. On appeal, Oppo had argued that it only wished its nominees to access the six re-designated agreements and one other HCM agreement, but that was to frame the application for the purposes of the appeal in a different way to that which had been presented to the judge, and so the judge could not be criticised for having dealt with it in the way that he had.

Xiaomi appealed on the grounds that the judge had applied the wrong test and the wrong burden of proof in determining whether the AEO designation was justified in the first place and had erred in allowing a confidentiality designation to be maintained over documents which had been ordered to be disclosed abroad.  It also contended that the terms for the individuals seeing the documents were too strict and had erred when imposing conditions on Xiaomi’s access to specified confidential documents.  The Court of Appeal held that there had been nothing erroneous in the judge’s approach: he had not reversed the burden of proof by taking account of the likely relevance of the AEO documents in refusing Xiaomi’s request for a blanket de-designation.  Accordingly the Xiaomi appeal on the wider basis was also dismissed. However, the Court of Appeal allowed the narrow appeal relating to the undertakings required by the judge in respect of the six re-designated AEO agreements and that these should be replaced by revised terms somewhat modifying those offered by the Claimants/Respondents shortly before the Appeal.

The decision provides useful guidance as to how confidentiality rings of this kind should be addressed.

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