Insights High Court declines to override confidentiality provisions in third party licence so that it could be inspected for purposes of determining FRAND rate



In this ongoing FRAND case, in which the court is being asked to determine the FRAND terms on which the defendant, Apple Retail UK Ltd, will have to licence various Standard Essential Patents (SEPs), owned by the claimant, Optis Cellular Technology LLC, Apple applied for an order to disclose into the confidentiality ring a particular licence between Apple and an anonymous third party so that the court could consider the price agreed in that licence when determining the FRAND rate of Apple’s new licence from Optis.

Apple applied for: (i) an order that the licence between Apple and the third party be provided for inspection to Optis in accordance with the terms of the applicable confidentiality ring; and (ii) an anonymity order for the preservation of confidentiality of the confidential aspects of the application, including the identity of the third party.

The third party opposed both aspects of Apple’s application. It said that the release for inspection of the licence should be refused and that there was no justification for an anonymity order in any event. It said that Apple was seeking it out of its own interests and concerns, rather than for protection of the third party.


Mr Justice Marcus Smith carried out a balancing exercise to work out whether the interests of relevance and proper process outweighed the interests of confidence. He said that it was important to note that Apple was not seeking disclosure so that Optis could see the licence with the third party. In fact, Optis had chosen not to be involved in this application. Rather, Apple was seeking to have the third party’s interests of confidence, as set out in the licence, overridden so that it could show the licence to its own experts, which was forbidden by the confidentiality provisions of the licence, in order to advance its case on FRAND rates. Optis’ lack of interest in the application and the third party’s objection to it were material factors to consider.

Smith J found that the existence and broad nature of the licence should be formally disclosed to Optis so that it at least knew of it. Optis could then seek inspection of the licence if it wished.

The main question therefore concerned inspection and whether Apple should be entitled to show the licence to its experts. Smith J noted that allowing Apple’s application would mean that Apple was released from obligations of confidentiality that it had willingly entered into in a licence that post-dated the disclosure regime in this litigation. In Smith J’s view, significant weight had to be attached to the fact that the licence was voluntarily entered into on certain terms that Apple was now seeking to escape. He said that there was nothing wrong with Apple trying to have validated, by the court, something that would otherwise be a breach, as it was obvious that in order to advance its case a party might need to use documents in its possession or power or control that were subject to third party rights of confidentiality.

However, the third party pointed to an earlier agreement between it and Apple dated 2014, arguing that that agreement was the proper comparator for determining FRAND rates. Apple rejected this, but Smith J found that Apple could deploy multiple comparator licences, including this earlier licence between it and the third party. Apple’s application did not concern multiple licences that were being withheld by third parties relying on confidentiality rights, but rather a single licence that might or might not be relevant. There was nothing to satisfy the court that the licence was as relevant and as important as Apple said it was.

Accordingly, Smith J refused Apple’s application. In Smith J’s view, Apple had to provide far more justification in order for him to override the clear and strict provisions of confidentiality in the licence and which the third party was asserting. However, Smith J said that whilst he was “shutting the door pretty firmly”, he was “not absolutely closing it” and he was prepared to entertain in the future an application from Apple seeking permission to deploy the licence. This application would have to contain an expert statement, supported by undertakings, setting out why this particular licence was so important such that Apple should, in effect, be released form the confidentiality provisions in it.

Smith J also declined to make an order for anonymity: whilst the court was prepared to take certain steps to protect matters of confidence, such as confidentiality rings, a positive order requiring third parties to the litigation not to say a particular name or use particular information required justification that went well beyond the mere question of commercial confidentiality. In Smith J’s view, an anonymity order would be a grave potential inconvenience to the parties, third parties, and to the court. Accordingly, the second aspect of the application was also refused. (Optis Cellular Technology LLC v Apple Retail UK Ltd [2021] EWHC 2080 (Pat) (1 July 2021) — to read the judgment in full, click here).