Higher Regional Court Düsseldorf provides frame-work for confidentiality in SEP actions

In its latest decision the 2nd Civil Senate of the Higher Regional Court of Düsseldorf has provided a frame-work for confidentiality in SEP infringement proceedings. The Court adopted a two-step approach as will be explained below.

The background to this decision is that – according to the view of the Düsseldorf courts – the patentee bears the burden of proof for the fact that its offer is non-discriminatory. To provide the required level of substantiation the patentee is obliged to disclose reference license agreements that have been concluded with industry players comparable to the Defendant. Such license agreements are, however, in practice protected by a non-disclosure clause. To maintain confidentiality during German infringement proceedings the Senate had to find a new approach as court proceedings are generally public in Germany (i.e. no attorneys’ eyes only or confidentiality clubs).

The Court provides a two-step approach:

In principle, Defendant must not be obliged to waive its constitutional right to assess all documents disclosed in the litigation (Art. 103.1 of the German Constitution). As Plaintiff’s business secrets must also be protected, Defendant may be obliged, on a first level, to conclude an NDA with Plaintiff. The decision gives guidance on how such NDA can be construed (order II. of the decision). Especially the high contractual penalty for illegal disclosure is meant to safeguard Plaintiff’s secrets. The Defendant is bound to conclude such NDA. Presiding Judge Voß stated in the course of a speech one week ago that a Defendant that is unwilling to conclude such NDA could be “considered unwilling to take a FRAND license” resulting in the rejection of the FRAND defense.

On a second level, if Defendant does not want to conclude an NDA, he can also decide to waive his constitutional right. In this case only Defendant’s attorneys can access the confidential documents and must  remain silent about their content even with regard to their own client (order I. of the decision in relation to the intervener supporting Plaintiff). The result is a scenario that is comparable to the attorneys’ eyes only approach taken in the US.

The decision shows a way to resolve a common issue in SEP proceedings under German law and can be considered as another step forward on the way to a complete method to resolve SEP actions.

The decision can be downloaded in English translation here.

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