HomeInsightsHigh Court considers confidentiality designations applied to disclosure documents in patent infringement proceedings

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In a case involving the potential infringement of three Standard Essential Patents (SEPs) relating to 3G and 4G telecommunications standards, which were owned by the claimants and which were part of a portfolio of SEPs licensed to various licensees on FRAND terms, the claimants were ordered to disclose “copies of licences where the rights licenced include any of the patents in the [portfolio] (other than on the terms of the [portfolio] Licence)…”. This was so that the defendants could plead positive cases as to what they considered FRAND terms would be, since they denied that the licence offered by the claimants was FRAND.

Confidentiality designations were applied to the disclosure as follows:

  1. Attorney’s Eyes Only (AEO), which could be seen by only the lawyers and experts in the AEO Club;
  2. Highly Confidential Material (HCM) which could only be disclosed to those in the HCM Club; and
  • Ordinary Disclosure Materials (ODM) governed simply by the CPR disclosure rules.

One group of defendants then sought the redesignation of six AEO documents (with four different counterparties) as HCM, and the inclusion within the HCM Club of three individuals to whom the claimants objected.

A second group of defendants sought the wholesale redesignation of all AEO documents as HCM.


Sir Alastair Norris held that the redesignation of the six AEO documents should be made. He gave various reasons, including the fact that the defendants were being required to plead their case with the degree of particularity that would be relied upon at trial, and that the actual request for redesignation was considered, targeted and focused upon licences that were likely to be necessary to consider in order to plead a case.

However, Sir Alastair said, the redesignation should be conditional upon each member of the defendants’ confidentiality clubs (other than the legal team and experts) providing various undertakings to the counterparty to the disclosed licence not to become involved in any related licensing negotiations or litigation.

Sir Alastair rejected the second group of defendants’ application, finding that the validation of the categorisation had to be approached on a document-by-document basis and the claimants were entitled to make an initial judgment and to decide what should be kept as AEO material and what could be disclosed to the defendants’ employees. In Sir Alastair’s view, the defendants should have made their application in relation to particular documents rather than to the whole category of AEO documents.

Sir Alastair also rejected the argument that, because some of the AEO documents had previously been disclosed in Dutch proceedings, there was no legitimate basis for maintaining the AEO designation in the UK. Sir Alastair said that he had to decide the case on English law and control disclosure accordingly and the application of Dutch law might well produce a different result.

The defendants also argued that since their nominated representatives in relation to HCM disclosure were two in-house counsel who were not involved in licensing, each of whom would sign the HCM confidentiality undertaking, neither of whom had any current involvement with mobile telecommunications SEP licensing, and who would each leave the confidentiality club and give further undertakings in the event that they did become involved in licensing, there was no point in retaining a distinction between AEO and HCM.

Sir Alastair said that, although this was a strong point, he was not convinced that it warranted the wholesale redesignation of the AEO documents. The content of the SEP licences was of immense commercial sensitivity, he said, and there were already risks in disclosing them on an AEO basis; to disclose to Xiaomi employees as well, thereby transferring the information to the defendants’ organisation itself, introduced risks of a different order.

As for the application to change the HCM Club, the question was whether the claimants had unreasonably withheld consent in refusing to admit three of the four nominees put forward by the defendants.

Sir Alastair found that the nominees had been put forward precisely because they were intimately involved with licensing negotiations, in particular with the claimants. Having failed to agree a licence in arm’s length negotiations with the claimants or certain other counterparties they would now be provided with a wide range of highly sensitive confidential information about the claimants’ and those other parties’ pricing structures. This created a perverse disincentive to reach an arm’s length settlement and a perverse encouragement of FRAND litigation, he said.

Sir Alastair was not persuaded that it was necessary (because of the absence of other suitable personnel) to convey a broad range and significant volume of confidential information to key commercial personnel directly involved in negotiating SEP licences, when the information could not be unlearned and when such personnel would not be able to avoid it influencing the course of other negotiations (particularly with counterparties to disclosed agreements). To do so would create an unnecessary risk to the counterparties.

Sir Alastair said that the defendants should instead put forward someone who was not so involved and not likely to become involved. In the event that the nominee did become so involved there should be an undertaking to leave the HCM Club and to destroy documents. (Mitsubishi Electric Corporation v Archos SA [2020] EWHC 2641 (Pat) (9 October 2020) — to read the judgment in full, click here).