Patent Working PIL: Ericsson claims “Club Confidentiality”

Continuing from our last post on the Delhi high court hearing on the patent working PIL, here goes:

A bench comprising Justices Gita Mittal and Hari Shankar took up the matter as the first item around 10.30 or so. The court was packed, owing to the presence of a number of senior counsels. Gopal Subramanium, Sandeep Sethi and Rajiv Nayyar appeared for Ericsson (as noted earlier, Ericsson and Natco had filed applications to intervene in the matter).

Whew! 3 of the top counsels for Ericsson alone in this matter? Going by conservative estimates (I spoke to a bunch of lawyers from the Delhi high court to gather this intelligence), Ericsson is likely  to have dished out around half a crore (Rs 50 lakhs) to get these super star counsels before the court on these different dates. Who would have thought that patent working would finally be taken this seriously!

Leading IP counsels, Pravin Anand and Chander Lall also showed up. Though I’m not sure which party/client they were representing. Hopefully the order of the court today (which is likely to be uploaded in a day or two) will tell us as to who they were representing.

Unfortunately, the government counsel Amit Mahajan informed the court that they were not yet ready with a time bound plan for creating a robust enforcement framework. As I’d mentioned in the last post, in order that the patent working disclosure mandate be enforced against errant patentees, rules have to be framed. Mahajan therefore requested the court to pass an order in this regard, so that it would be easier for the patent office/govt to comply.

The court therefore passed an order, which as I understand, agrees broadly with our contentions in the petition and asks that the patent working disclosure provisions and Form 27 be enforced strictly.

The court also specifically directed the government to file an affidavit by the 20th of Feb outlining a time bound plan for putting in place an enforcement mechanism. And has now listed the matter for March 1st.

The court’s order, as I understand, also contains some observations/clarifications on licenses that are protected through confidentiality etc. This was the key point raised by Ericsson in its intervention application (a copy of which is available on our resource page here, as are all other documents pertaining to this petition).

In order to contextualise Ericsson’s contention, let me take you back to an interesting round of exchanges at the last set of hearings when Ericsson and Natco sought to intervene (on 18th Jan). I will deal with the Natco intervention in a separate post. For now, let me deal with the Ericsson intervention.

Reputed senior counsel Gopal Subramanium (someone I have great regard for) contended quite forcefully that Ericsson’s licensing information couldn’t be submitted, owing to certain “club confidentiality” orders passed by the Delhi high court in the SEP patent litigations. We’d blogged on these litigations here. TOI also carried a report on this here.

The judges however stated (and rightly so) that Form 27 did not mean that all of the licensing terms had to be submitted. Rather, only the details that were specifically called for in Form 27 needed be disclosed. Form 27 is fairly open ended and simply asks “Details licenses/sublicenses if any”. All that one is required to demonstrate is how his/her patent has been worked through a set of licenses.

Ericsson argued that it had a court order (the so called “club confidentiality” orders) protecting it from even disclosing the mere existence of a license and licensee name. But how does one square this court ruling with the statutory mandate under Section 146 (2) which obligates even “licensees” to file Form 27 submissions. I reproduce the provision in full

Section 146 (2): “….every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India.”

If a licensee has to file a Form 27 on its own (quite apart from the patentees filing), then it has to disclose its identity as a licensee. How can a court order effectively override a statutory provision?

It bears noting that licensees are not only to be disclosed for Form 27 purposes, but also are to be registered with the patent office under section 67-69 of the Patents Act (the Controller of Patents has the discretion to redact confidential portions of the licence). So I’m really not sure what the controversy is. Disclose the basic licensing information to show/buttress how you’ve worked the patent. And be done with it!

But, just to be clear, one cannot merely self certify that one has “worked” the patent without more. There must be some data/information to back this claim. Else Form 27 becomes a meaningless form and our patent working disclosure norms will be rendered redundant!

One must bear in mind that at the time that we filed this writ petition in 2015, there were no such “club confidentiality” orders in favour of Ericsson. To reiterate (and I sound like a broken record now), we’d been tracking the Form 27 non-compliance issue since 2011. Even as far back as 2012, Ericsson refused to divulge any details of its licensees, despite Form 27 expressly calling for it. And despite Section 69 clearly stating that every patentee/licensee must ensure that licenses are registered and recorded with the patent office. It must be noted that such licensing information is open to inspection by the public under Section 72. We’ve documented all of this in our writ petition (available on our resource page here).

I must say though that Ericsson’s counsel Gopal Subramanium (a senior counsel of great repute) was gracious enough to admit that he was keenly conscious of the larger public interest being sought to be advanced through the petition. His limited point was on how Ericsson was a beneficiary of a favourable “club confidentiality” order that made it difficult to disclose the entirety of the licensing transactions/details. Quite unlike Natco’s counsel, Rajeshwari Hariharan, who mounted a vicious personal attack against me. But on this, I will do a separate  post.

ps: Since the publication of the post, we’ve received information that Mr Pravin Anand was representing Nokia. In order to ensure against potential delays, Nokia decided to merely observe the proceedings (and assist the court, where needed) and not file a formal intervention application.

pps: The argument of Ericsson that licensee names cannot be disclosed owing to club confidentiality orders is wrong in law. Owing to section 146(2): a point brought to my notice by my counsel Sai Vinod. So I’ve amended the post to reflect this.