The Cloak of Confidentiality Over the Ericsson Patent Litigation Before the Delhi High Court

As discussed in my previous post, a lot of strange things have taken place in the patent litigation initiated by Ericsson against companies like Micromax, Gionee, Lava etc. For whatever reason, the judges of the Delhi High Court have thought it completely okay to cast aside the procedural safeguards in the law to grant Ericsson remedies that the company is simply not entitled to in law.

A related issue, which in my opinion is of serious concern is the ease with which Ericsson has procured gag orders from the Delhi High Court making confidential, key documents and pleadings.

One of the sacrosanct principles of the Indian judicial system is that all judicial proceedings will be open to the public and by implication all court records will be open to public view. It is only in certain exceptional circumstances that a judge can bar the public from a courtroom. This principle is embodied in Section 153B of the Code of Civil Procedure, 1908. I reproduce it as follows:

153B. Place of trial to be deemed to be open Court— The place in which any Civil Court is held for the purpose of trying any suit shall be deemed to be an open Court, to which the public generally may have access so far as the same can conveniently contain them :

Provided that the presiding Judge may, if he thinks fit, order at any stage of any inquiry into or trial of any particular case, that the public generally or any particular person, shall not have access to, or be or remain in, the room or building used by Court.

This is such a fundamental principle of law that it should not require any repeating but since the bar and the bench of the Delhi High Court appear to have forgotten this fundamental principle of law I would like to direct their attention towards the following important holding of the Supreme Court in Mirajkar v. State of Maharashtra:

It is well-settled that in general, all cases brought before the Courts, whether civil, criminal, or others, must be heard in open Court. Public trial in open court is undoubtedly essential for the healthy, objective and fair administration of justice. Trial held subject to the public scrutiny and gaze naturally acts as a check against judicial caprice or vagaries, and serves as a powerful instrument for creating confidence of the public in the fairness, objectivity, and impartiality of the administration of justice. Public confidence in the administration of justice is of such great significance that there can be no two opinions on the broad proposition that in discharging their functions as judicial Tribunals, courts must generally hear causes in open and must permit the public admission to the court-room.

The same judgment also concedes that there will be cases where the purpose of justice will be defeated if proceedings are held in open court. Recognizing the need for this exception the court held as follows:

If the principle that all trials before courts must be held in public was treated as inflexible and universal and it is held that it admits of no exceptions whatever, cases may arise where by following the principle, justice itself may be defeated. That is why we feel no hesitation in holding that the High Court has inherent jurisdiction to hold a trial in camera if the ends of justice clearly and necessarily require the adoption of such a course. Er It is hardly necessary to emphasise that this inherent power must be exercised with great caution and it is only if the court is satisfied beyond a doubt that the ends of justice themselves would be defeated if a case is tried in open court that it can pass an order to hold the trial in camera; but to deny the existence of such inherent power to the court would be to ignore the primary object of adjudication itself.

Thus, any request that pleadings or proceedings not be open to the public is an exception to the rule that needs to be reasoned in gory detail. A prime example of cases that need to excluded from the general principles of an open court are those dealing with breach of confidence i.e. where trade secrets are involved. To reveal confidential material in an open court room would destroy the very purpose of conducting the proceedings. In the past, the Delhi High Court has authorized the creation of a ‘confidentiality club’ in the Vestergaarden Frandsen trade secret litigation that was filed before the Delhi High Court a decade ago with no successful resolution limiting access to key documents to only certain lawyers and litigants authorized by the High Court.

Confidential claim charts?

The first such order was passed in December 6, 2013 by Justice Muralidhar while adjudicating on an application filed by Ericsson asking the court to take on the record certain additional affidavits which contained claim chart mapping i.e. mapping the claims of the patent versus the different elements of the defendant’s phones that were allegedly infringing the patent claims. The key point of dispute as recorded in the order was whether the court could allow the affidavits on record because as argued by Amit Sibal on behalf of Micromax, the claim mapping should have been contained in the plaint itself and the affidavits amounted to indirectly amending the plaint. In any event the court allowed the affidavits to be taken on record as we had reported back in 2013. In addition to taking the claim charts on the record, Justice Muralidhar also allowed Ericsson to place the affidavits in a sealed cover making them confidential. Either Amit Sibal didn’t object or the judge hasn’t recorded his reasoning because the order is silent on any legal arguments regarding the demand to place the affidavits in a sealed cover.

Of all the pleadings in a patent infringement lawsuit a claim chart is the last possible pleading that should be declared confidential. The patent claims themselves are public as is the infringing product which could be purchased from any mobile store. If the two main elements which are being matched in the chart are public why is the claim chart itself confidential? The only additional component that may exist in the claim chart are the plaintiff’s interpretation of the claims. But there is no reason that this interpretation which is a mixed issue of fact and law should be declared confidential. The onus to establish the need for confidentiality lies with the plaintiff and going per the extract reproduced in Justice Muralidhar’s judgment there is simply no valid reasoning. I reproduce the relevant para below of Ericsson’s application below:

“3. Furthermore, an exemplary and illustrative claim chart mapping, correlating the claims of suit patents with the relevant standards of ETSI, is being filled along with the affidavit of Mr. Max Olofsson. It is submitted that the details of these standards and the matching patents are already contained in the plaint. The present chart is meant to merely reiterate the essentiality of the suit patents. It is most respectfully submitted that the aforesaid mapping chart is extremely technical in nature and has been provided by Ericsson’s technical team and contains information which is confidential in nature.”

Justice Muralidhar of course did not think it necessary to provide any reasoning while passing the sealing order.

Whether or not the defendant opposes such a prayer for sealing pleadings, a judge is expected to apply his mind while granting a request for confidentiality because such sealing orders are an exception that directly affects the right of the public. Thus, whether or not proceedings/pleadings should be confidential is not an issue that can be left to the parties of the dispute. Public interest is involved and a judge is expected to protect this public interest.

Ericsson v. Lava – Confidentiality clubs and more

In an order dated March 1, 2016 Justice Manmohan Singh also allowed an application by Ericsson to allow for the creation of a confidentiality club in its litigation with Lava. A confidentiality club basically consists of only certain persons, usually the lawyers and some key witnesses to view the documents in question. In its application Ericsson stated the following:

“It is contended by the plaintiff that in order to discharge its onus as required by this Court’s order and in order to fully assist this Court in determining both the aforesaid issues, the plaintiff would be producing various patent licensing agreements with similarly placed parties, including competitors of the defendant.

5. It is claimed that these agreements are confidential in nature and contain, apart from licensing rates, business sensitive information, relating to such similarly placed parties. It is most respectfully submitted that in light of the facts of the present case and allegations made by the defendant against the plaintiff. The aforesaid licensing agreements of similarly placed parties are necessary to determine the issues framed in the present case.”

The order records the fact that the defendants strongly opposed this proposal but ultimately Justice Manmohan Singh allowed the application citing the precedents in the Vertergaarden Fradnsen case that I mentioned above. His reliance on this case is patently wrong because the VF series of cases dealt with trade secrets not patents.

It is common knowledge that all licensing and NDA agreements contain clauses that allow either parties to breach confidence if required to do so by a court and not suffer any liability. Ericsson would not have been liable for damages to any of the other parties if the High Court denied the request to seal the documents.

 There is simply no reason for the court to keep Ericsson’s licensing agreements confidential – by initiating patent litigation in an Indian court Ericsson opened itself to the risk that its documents would be summoned in open court.

This order to create a confidentiality club caused problems later in the trial when some witnesses were not allowed access to certain confidential documents. The matter went up till the Supreme Court before Ericsson made some concessions and agreed to share certain redacted documents with the witnesses.

A similar order was passed by Justice Manmohan Singh on May 16, 2016 in the litigation between Ericsson and Lava International. Apparently, Ericsson made a similar request “to file certain documents including the correspondence exchanged between the parties, which is covered by a Non- Disclosure Agreement as well as claim charts which contain the plaintiff’s proprietary information, in a sealed envelope”. For whatsoever reason Lava International did not even file a reply! Given that these Indian defendants are arguing that Ericsson is not being transparent in their dealings you would expect them to at least put up a fight but that clearly did not happen. Justice Manmohan Singh of course granted the prayer without really delving into the issue.

As mentioned in my last post, I am simply amazeballs with the manner in which this litigation has proceeded. More specifically, I am amazed that the defendants did not make more noise when Ericsson repeatedly sought a sealing and confidentiality order. The issue of transparency is key to establishing whether Ericsson has complied with its FRAND requirements and if Ericsson was denied these confidentiality orders by the Court this litigation would have taken a very different turn.