#13 UPC series: Confidentiality clubs in UPC litigation

This article is part of the UPC series. It focuses on the provisions of the Rules of Procedure of the Unified Patent Court (“RoP”) dealing with the protection of confidential information during proceedings before the UPC.

Commentary on two Paris Local Division procedural orders (December 19, 2023 and January 30, 2024) on confidentiality applications

The risk that the confidentiality of commercially or technically sensitive information may be compromised during the course of legal proceedings is a well-known deterrent against instituting legal proceedings in the first place. The issue was specifically addressed by the EU Trade Secrets Directive, which brought “confidentiality clubs” under civil law jurisdiction (including in Italy). This issue is also pertinent to the Unified Patent Court (UPC). The Rules of Procedure of the Unified Patent Court (hereinafter the “RoP”) specifically set forth measures for parties to UPC litigation to protect their confidential information, including forming confidentiality clubs.

The rules on confidentiality are Rules 262A and 262.2 RoP, as follows:

  • Rule 262A RoP: Under this rule, a party can shield confidential information from opposing parties:[…] a party may make an Application to the Court for an order that certain information contained in its pleadings or the collection and use of evidence in proceedings may be restricted or prohibited or that access to such information or evidence be restricted to specific persons.” This provision covers forming a “confidentiality club.” Parties should apply upon filing the document containing the confidential information: an unredacted copy must be filed and made available to the court. Parties shall discuss this request via exchange of written pleadings, and then an order shall be issued.
  • Rule 262.2 RoP: Under this rule, a party can shield confidential information from the public requesting access to the register:A party may request that certain information of written pleadings or evidence be kept confidential and provide specific reasons for such confidentiality. To this end content of the register is made publicly available according to paragraph 1 (b) only 14 days after it has been available to all recipients. […]” This application can be challenged, with grounds, by a third party seeking access to such information.

This article focuses on an interesting case from the Paris Local Division on this issue. The case reveals that when forming confidentiality clubs and imposing penalties under Rule 262A RoP, UPC courts take into account the following:

  • pending parallel UPC litigation on the same product, led by different attorneys;
  • prior disclosure of information in other national proceedings.

In the case Abbott Diabetes Care + 9 v. DexCom Inc. before the Paris Local Division, both 262A RoP and 262.2 RoP were invoked by the defendant (Abbott) to protect certain information in the statement of defense, namely “highly sensitive internal information available neither to the public nor to individual persons outside the organization.” Specifically, the defendant sought formation of a very limited confidentiality club of the plaintiff’s lawyers and members of the plaintiff’s organization and asked that a fine of 250,000 Euro be imposed for each breach.

The claimant did not object to the request per se but—as is common in cases of cross-border litigation—countered that (i) the club suggested by the defendant was too narrow to allow access to the global team involved in the litigation in the EU, United States, and UK and (ii) the penalty was too high, since some of the information had already been disclosed in parallel German national proceedings without any confidentiality obligation.

The Paris Local Division cited the principles of the EU Trade Secrets Directive (i.e., that a balance should be struck between a fair trial and the potential harm of disclosing or not disclosing information) and stated the following:

  • Information regarding “sales figures and revenues” was sensitive but restricted access could be granted;
  • Access could be granted to all legal teams involved in parallel UPC litigation involving the same product—as designated in the CMS (further to their signing an NDA to comply with the Paris Local Division order)—but not to attorneys involved in national proceedings in Europe and the United States, in order not to weaken the confidentiality measure;
  • The number of representatives for each party was disproportionate (2 representative attorneys versus 11 representative attorneys on the defendant’s side);
  • The UPC requires assistance from employees, administration, and IT and therefore it would be necessary and appropriate to authorize access for such people.

On December 19, 2023, the court issued an order that formed a broader confidentiality club, albeit one limited to legal teams designated in the CMS in charge of parallel UPC proceedings. As for the amount of the fine in case of breach, the division agreed that the fact that some information had already been disclosed was a good reason to reduce the fine to 50,000 Euro.

More was added to this confidentiality order on January 30 of this year, when during the course of one of the parallel UPC proceedings (before the Munich Local Division) another confidentiality order between the same parties was issued, this time with a penalty of 250,000 Euro. Abbott, the defendant, went back on the offensive and demanded a review of the 50,000 Euro penalty established by the Paris Local Division. Abbott argued that the penalty there should be the same as the penalty imposed by the Munich Local Division (250,000 Euro) since the confidential information at stake was the same. The claimant objected to this request and also suggested that the orders be coordinated in order to avoid duplicate fines (i.e., it sought to amend the Paris Local Division order to avoid paying a fine already paid to the Munich Local Division). The Paris Local Division determined the following:

  • There was no need to harmonize the penalty: although the orders relate to the same protected confidential information, the two orders were issued by two divisions in two different proceedings concerning different patents. In these circumstances, one division could not be bound by a decision made by the other division, despite the fact that both belong to the same unified court;
  • There was no need to coordinate the orders: there were no grounds to bind the Paris Local Division, in case of breach, in cases where the Munich Local Division had already levied a fine.

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