Context: Panasonic is suing OPPO (and Xiaomi) over standard-essential patents (SEPs) in the Unified Patent Court (UPC) (June 27, 2024 ip fray article), German national courts and the UK.
What’s new: Today, the UPC’s Mannheim Local Division (LD) entered a protective order in a Panasonic v. OPPO case (PDF (in German)) that deliberately goes beyond a protective order by the Munich LD of July 4, 2024 (not publicly accessible by the time the Mannheim order came down).
Direct impact: The stricter Mannheim order will now effectively govern OPPO’s (and its lawyers’) treatment of confidential business information relating to licensing negotiations. The order makes it clear that OPPO and its counsel must comply with the stricter Mannheim order regardless of a slightly more permissive Munich counterpart.
Wider ramifications: At some point the UPC’s Court of Appeal will resolve this kind of split in favor of one approach or the other. Apart from the open Munich-Mannheim split the order also gives guidance that counsel in other UPC proceedings should heed: UPC representatives must not share with their clients documents that contain someone else’s confidential information and are filed by the inadvertently-disclosing party without the necessary safeguards, at least not in cases where counsel can be expected to figure out at first sight that an accidental disclosure was made.
When litigation deals with the question of whether any particular licensing terms are fair, reasonable and non-discriminatory (FRAND), comparable license agreements are discussed. Those contracts inevitably involve confidential business information (CBI; a term that like “protective order” is more commonly used in U.S. than UPC litigation) that must be protected, also in the interest of third parties. Furthermore, even the negotiations between the two sides to a given litigation must be protected.
The standard approach is a “confidentiality club” that consists of outside counsel and designated in-house lawyers and licensing executives who may receive and (amongst them) discuss the CBI. In cross-jurisdictional disputes, restrictions can result in “deadlocks” where different protective orders make certain coordination impossible as person A may be restricted due to a protective order in venue #1 and person B due to a protective order in venue #2. The net effect of all those protective orders is cumulative: a prohibition in one place potentially affects communication in all others.
The Mannheim LD’s Presiding Judge (and Panasonic v. OPPO judge-rapporteur) Dr. Peter Tochtermann is on the rather restrictive side, and particularly doesn’t want to trust professional secrecy obligations in foreign jurisdictions (such as the UK) where UPC orders cannot be enforced, meaning that non-disclosure agreements would be the only (and in his opinion, an insufficient) layer of protection.
But parts of the safeguards Panasonic was seeking went too far even in Judge Dr. Tochtermann’s opinion. For instance, he was not prepared to limit access to the relevant CBI to a single OPPO employee, given the complexity of the matter.
Two parts of the order are noteworthy:
First, OPPO argued that various persons were already lawfully in possession of certain CBI. But that was so because Panasonic made a filing error. Sanctions are not looming large, but the order clarifies that this was not a lawful way of obtaining the information and serves as a pretty clear warning to UPC counsel that if someone accidentally files CBI in an unprotected form (such as by using the wrong workflow), counsel must not go ahead and share such documents with clients, at least not in situations where the oversight is obvious.
Second, the order addresses the question of an exchange of information with counsel in other jurisdictions. Another UPC venue is not considered a different jurisdiction. Therefore, Judge Dr. Tochtermann has no problem with OPPO’s representatives before the Mannheim LD (Vossius) talking to OPPO’s Munich representatives (Clifford Chance). Whatever happens there is under the jurisdiction of the UPC.
But Judge Dr. Tochtermann is concerned that an exchange of CBI with counsel representing a party in other national courts, even more so if they are in non-UPC countries such as the UK, “dilutes” the protection of CBI and makes it difficult to control what will happen. In that context, the Mannheim order reveals that a July 4, 2024 Munich order was a bit more permissive. What today’s Mannheim order clarifies is that even though OPPO’s Munich and Mannheim counsel may communicate, counsel in Munich will then have to abide by the stricter Mannheim protective order with a view to communication with counsel in other jurisdictions.
This may be the first situation in the UPC’s history of only about 400 calendar days in which there is a dispute taking place in two UPC venues and one LD explicitly and deliberately decides to impose different rules than its counterpart. But there is nothing wrong with that. Judge Dr. Tochtermann’s order is principled and well-reasoned. Maybe the Munich LD will consider that reasoning persuasive and adopt it in its own future decisions on protective orders. Otherwise, it is just a question of time until the Court of Appeal will resolve the venue split. All of that is part and parcel of how the case law evolves. It works the same way in other jurisdictions. And it’s always fascinating to watch.