Directed for Constitution of Confidentiality Club for obtaining Patent Licensing Agreements

Delhi High Court

Delhi High Court: In a matter arising out of a suit for permanent injunction to restrain violation and infringement of the plaintiff’s patent rights, a Single Bench of Singh J. ordered the constitution of a Confidentiality Club comprising five persons from each side entitled to see the confidential patent license agreements of the plaintiff.

The plaintiff had filed a suit against the defendants for permanent injunction seeking to restrain violation and infringement of its rights in its patent being. One of the issues involved in the matter required the determination as to whether the plaintiff was entitled to a decree declaring that the rates offered by the plaintiff qua its portfolio of Standard Essential Patents were fair, reasonable and non-discriminatory in nature. In a move to establish this, the plaintiff represented by C.S. Vaidyanathan argued that they were willing to produce various patent licensing agreements with similarly placed parties. But since those agreements are confidential in nature and contain business sensitive information, the plaintiff sought the constitution of a confidentiality club by filing an application. The defendant represented by A.S. Chandiok argued that the plaintiff had refused to disclose those agreements during FRAND negotiations despite repeated requests and had thence maintained that those agreements were not necessary. Arguing further the defendants posited that the plaintiff could not be permitted to improve its case at the current stage since the stage for the production of agreements had passed and the application was belated.

Refusing to accept the defendants’ arguments, the Court referred to a similar precedent when an order for confidentiality had been passed by the Court on similar grounds. Further observing that such documents could not have been filed unless the order about the confidentiality was passed, the Court directed the plaintiff to file the confidential agreements in a sealed cover with the Registrar General. Also the Court directed both parties to provide an affidavit – a list of three lawyers and two external expert witnesses to form the confidentiality club, who shall be entitled to record the evidence from those agreements. [Telefonktiebolaget LM Ericsson (Publ) v. Lava International Ltd., 2016 SCC OnLine Del 1354 decided on 01/03/2016]

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