Confidentiality Clubs - Illumina v TDI Genetics
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| Jane Lambert |
Patents Court (Mr Justice Mann) Illumina, Inc. and Another v TDL Genetics Ltd and Others [2019] EWHC 79 (Pat) (22 Jan 2019)
CPR 31.6 requires a party to litigation to disclose to his or her opponent not only the documents on which he or she relies but also the documents which adversely affect his or her own case or that of another party, support the case of another party or any document that he or she is obliged to disclose by a relevant practice direction.
Sometimes such a document contains a trade secret or other confidential information. When that happens the court is presented with what Lord Justice Buckley called in Warner-Lambert Co. v Glaxo Laboratories Ltd. [1975] RPC 354, 356 "a balance or conflict of expedients." In that case, the defendant asserted that the documents that the claimant sought to inspect contained "secrets of considerable commercial value". The learned lord justice continued:
"The [claimant] is entitled to be protected against infringements of its monopolies under the two patents in suit. If the defendant is in fact infringing, it should not be permitted to shelter behind a plea of secrecy. If, however, the defendant is not infringing, it is entitled to have the secrets associated with its process maintained intact. The parties are competitors in a highly competitive market. How can justice be done and at the same time effect be given to the rights of each party to the greatest possible extent?"
One solution is to limit disclosure to a small number of representatives of each side such as counsel, solicitors, experts and perhaps in-house legal advisors. Such representatives are sometimes called a "confidentiality club" or "external eyes only". Often they are agreed by the parties but sometimes they are ordered by the court. That is usually enough to resolve the problem but occasionally a party wishes to impose additional restrictions or object to the admission of a member of a confidentiality club.
"1. There be a confidentiality club (the "Confidentiality Club") for the protection of confidential information and confidential documents… in these Proceedings, as so designated by the disclosing party when the documents or information are disclosed."
The members of the club included the claimants' in-house legal advisors as well as its solicitors and counsel. Paragraph 6 (a) of the order governed the admission of experts:
"6. The Confidentiality Club to further include each of the following members upon the provision to the respective Solicitors of Record of an undertaking in the form of the Draft Confidentiality Undertaking attached at Schedule 1:
(a) any person external to a party who has been retained by that party with a view to giving expert evidence in the Proceedings, subject to written approval being obtained from each other party (such approval not to be unreasonably withheld);"
After the formation of the confidentiality club, the first claimant brought proceedings against the third defendant in the US District Court for the Northern District of California for infringement of corresponding US patents. When the defendants served a product and process description ("PDD") pursuant to paragraph 6.1 of the Part 63 Practice Direction, their solicitors wrote:
"Please note that the enclosed PPD contains the Defendants' confidential information in Confidential Annexes B to J inclusive, which are being disclosed for the eyes of Powell Gilbert LLP and UK counsel instructed in these Proceedings only.
While the consent order of Mr Justice Arnold dated 4 May 2018 (Confidentiality Club Order) names certain individuals from your client as designated to receive confidential information, we note that since the establishment of the confidentiality club, your clients have issued infringement proceedings against the Third Defendant in the Northern District of California based on two US patents that claim priority from the application for the Patent and which appear to have substantially similar claims. The individuals named as in-house counsel for the First Claimant in the Confidentiality Club Order have been involved in US litigation against Ariosa since 2014 and we are concerned about them participating in litigation concerning non-UK counterparts of the Patent whilst being privy to the Confidential Annexes and Exhibits.
Accordingly, should you wish for permission to show the Confidential Annexes and Exhibits to the individuals named in the Confidentiality Club Order, please confirm that these individuals will not be involved in any non-UK litigation concerning Harmony and similar subject matter to the patent."
The defendants also refused to admit one of the claimants' expert witnesses into the confidentiality club unless the claimants agreed that he would not assist in any foreign proceedings relating to equivalent patents.
The claimants refused to accept those restrictions. They applied for an order that they are entitled to receive confidential information via an already constituted confidentiality club of 3 representatives of the claimants without having to submit to, or engraft, further restrictions on the use that the club members can make of the information. They also applied for the removal of restrictions on the admission of their witness to the confidentiality club. The application came on before Mr Justice Mann who heard it on 18 Dec 2018 and delivered judgment on 23 Jan 2019.
His lordship granted the claimants' application.
While accepting that the court had power to vary a consent order in certain circumstances where an order had been based on a mistake or misstatement or where there had been a change of circumstances, Mr Justice Mann could see no basis for doing so in this case. It could not be alleged that there had been a mistake or misstatement. The launch of proceedings for the infringement of a corresponding foreign patent was neither unusual nor unexpected. There was nothing in the PDD that justified a different confidentiality regime. The claimants' in-house legal advisors were qualified attorneys and if it was appropriate for them to join the confidentiality club there was no reason to restrict their access to the PDD. It was not unreasonable for the lawyers who would oversee all litigation connected with their employers' patents to have access to that document.
The judge described the case against the claimants' expert as "thin to the point of contrivance." There was no reason why he should act otherwise than conscientiously. The learned judge found that the defendants had unreasonably withheld their consent to his joining the confidentiality club and held that he should be admitted without any restrictions on his participation in foreign proceedings.
The action in which this application was made came on for trial before Mr Justice Arnold who delivered judgment on 17 June 2019 (see llumina, Inc and another v TDL Genetics Ltd and others [2019] EWHC 1497 (Pat) (17 June 2019). The expert whose participation in this litigation the defendants tried to restrict gave evidence. At paragraph 247 of his judgment, Mr Justice Arnold found the patent to have been valid and infringed.
Anyone wishing to discuss this case or confidentiality in general should call me on 020 7404 5252 during office hours or send me a message through my contact form.
The judge described the case against the claimants' expert as "thin to the point of contrivance." There was no reason why he should act otherwise than conscientiously. The learned judge found that the defendants had unreasonably withheld their consent to his joining the confidentiality club and held that he should be admitted without any restrictions on his participation in foreign proceedings.
The action in which this application was made came on for trial before Mr Justice Arnold who delivered judgment on 17 June 2019 (see llumina, Inc and another v TDL Genetics Ltd and others [2019] EWHC 1497 (Pat) (17 June 2019). The expert whose participation in this litigation the defendants tried to restrict gave evidence. At paragraph 247 of his judgment, Mr Justice Arnold found the patent to have been valid and infringed.
Anyone wishing to discuss this case or confidentiality in general should call me on 020 7404 5252 during office hours or send me a message through my contact form.
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