The judge's order had been a sensible and appropriate approach.
The Court of Appeal has given its ruling in the case of InterDigital Technology Corporation & Ors v OnePlus Technology (Shenzen) Co & Ors  EWCA Civ 166.
The appeal related to a term in a confidentiality regime directed by the court which applied to its documents produced in disclosure in a patent infringement case about the FRAND terms of a licence.
Confidentiality regimes or "clubs" are used to maintain the confidentiality of sensitive information and trade secrets that are shared during litigation. The establishment of a confidentiality regime seeks to prevent the unauthorised use or disclosure of sensitive information and to provide a secure environment for the exchange of confidential information between the parties.
The claimant InterDigital has a portfolio of patents declared essential to various telecommunications standards (Standard Essential Patents or SEPs). InterDigital had undertaken to offer licences under these parents on terms which are FRAND (Fair, Reasonable and Non-Discriminatory).
As part of the patent case, the judge settled the terms of a confidentiality regime to govern the disclosure of certain licences by InterDigital. As is now commonly done in cases of this nature the confidentiality regime has two tiers or rings. There is an inner tier called External Eyes Only (EEO) and an outer tier called Highly Confidential (HCONF). This arrangement allows a staged approach to disclosure to take place.
The parties disputed the terms of the undertaking to be given by a OnePlus employee as part of the arrangements for the HCONF tier. The issue related to a particular clause in the undertaking. This provided that the individual undertook not to be involved in SEP licensing while they have access to the documents and for a period of two years afterwards. The sort of SEP licensing negotiations which it is conceivable OnePlus will engage in could be discussions in which OnePlus is a putative licensee implementer - as in this case, or as a putative licensor - because OnePlus also has its own SEP portfolio. The undertaking is subject to an exception relating to discussions to settle FRAND litigation.
The dispute was about the scope of the SEP licensing prohibition and the question was whether it should be in a wide or narrow form. The wide form contended for by InterDigital applied to any SEP licencing. The narrow form contended for by OnePlus was that it should be limited only to licencing discussions with the particular counterparty to the particular InterDigital licence contract in question.
On appeal, OnePlus's primary argument was that the wide form of undertaking is wrong in principle because the only material unfairness which could occur would be if the relevant in-house individual with knowledge of the terms of given InterDigital licence became involved in licensing negotiations with the counterparty to that licence. To the extent that it might be unfair for the counterparty to the comparator licence to have to negotiate with the same individual who has had sight of that counterparty's licences with the SEP holder InterDigital, that situation was covered by the narrower targeted undertaking offered by OnePlus.
In contrast, InterDigital argued that the order was a proper exercise of the courts' powers at that stage of the proceedings, as well as arguing that no point of principle was at stake in the appeal.
The Court of Appeal said it could reject immediately any suggestion that the order the judge made was, as a matter of law or in principle, outside the scope of orders which a court could make in regulating the terms of a confidentiality regime at any stage of proceedings. This was due to the nature of the risks of unfairness involved. Both forms of undertaking are attempts to mitigate genuine concerns, and risks of similar sorts of unfairness, in subsequent licensing negotiations. The court said that the degree of risk - and the degree of unfairness - addressed by the narrow form of undertaking is more direct than the one addressed by the wider form, but those are differences of degree, not important differences in kind. Either form may justify a restriction of the relevant sort and one could not say that the judge's order ought never to have been made there. Therefore, OnePlus's key argument on which its grounds of appeal were based, that the only material unfairness which can arise was in negotiation with the same counterparty as the one in the disclosed licence, was wrong.
Therefore, the question was whether the order could be made in this case. The court said that imposing a wider form of order at an early stage is a more cautious approach. In general, it is more straightforward to relax confidentiality restrictions over the course of proceedings, as and when appropriate, than it would be to try impose tighter restrictions after starting with a more liberal regime.
Another factor is the structure and organisation of the receiving party and the evidence about it. A wide restriction applied to certain individuals within OnePlus might well, as a result of the size of the organisation, be of no real inconvenience at all. OnePlus may well have staff who could give instructions in the action without a prohibition on their being involved in future licencing negotiations amounting to a significant or any difficulty. Such licencing may be handled by others anyway or at least could be handled by others for the relevant period. Another option, particular for a large organisation could be to put in place an information barrier or ethical wall, between the litigation and licensing terms.
As a result, the Court of Appeal said that the judge's order was a sensible and appropriate approach.
The Court of Appeal therefore dismissed the appeal.