Trade secrets and the recently launched Unified Patent Court (UPC)
Monday 29 April 2024
Francine Le Péchon-Joubert
De Gaulle Fleurance, Paris
flepechonjoubert@dgfla.com
Adeline Planckaert
De Gaulle Fleurance, Paris
aplanckaert@dgfla.com
On 1 June 2023, the long-awaited Unified Patent Court (the UPC) opened its doors to address disputes relating to European and Unitary Patents encompassing up to 17 European states in one proceeding. An entire new set of procedural rules regarding evidence has been set in motion and it is interesting to examine how trade secret issues have been handled so far.
Chapter 3 and 4 of UPC’s Rules of Procedure are dedicated to evidence: order to produce, to communicate or to inspect. Those rules have been inspired by various procedural mechanisms which exist in the member states’ national proceedings but the rules are completely autonomous from the national case law and existing practices.
After nine months, UPC judges have already rendered a little less than ten orders relative to evidence in general and five are dedicated to preserving evidence. The order to preserve evidence,[1] called ‘saisie’ even in the English version of the UPC Rules of Procedure, and had clearly been inspired by the ‘saisie-contrefaçon’ in French law. The claimant can lodge an application for an order to preserve evidence and in particular access to elements useful in resolving the dispute and proving infringement, which are in the possession of the alleged infringer or even a third party.
Bearing in mind that discovery mechanisms such of those used in the US do not exist in France, saisie-contrefaçon are used widely in France. From De Gaulle’s Fleurance patent case law analysis tool, Litipat, 68 per cent of French infringement cases do include a saisie-contrefaçon. Until recently, one could even say that a saisie was sort of compulsory. There is currently a clear shift because of the conflicting trade secret right in the EU Trade Secret Directive 2016/943 of 8 June 2016 which has been transposed into the French Commercial Code.
Litipat also shows that the issue of trade secret is raised in a third of French preliminary rulings (rulings by the pre-trial judge or interim injunctions, which may in particular concern the revocation of infringement seizures), and in 14 per cent of these preliminary rulings, a confidentiality club is set up. As a matter of fact, trade secret defence claim clearly renders the French saisie-contrefaçon procedural tool much less attractive and the claimant may opt for a less invasive method to evidence infringement and smoothen or speed-up the case.
The principles of protection of confidential information and trade secrets are also particularly relevant in front of the UPC. Indeed, Article 58 of the UPC Agreement,[2] and Article 262A of the UPC Rules of Procedure provide for the protection of confidential information and the conditions under which access to such information may be restricted.[3]
It is therefore interesting to examine how the UPC is handling trade secrets issues and a saisie order considering that one of many UPC’s objectives is to render decision on infringement and validity within a year.
It is noteworthy that in three out of the five orders to preserve evidence issued by the UPC to date, the measures took place at a trade fair or similar exhibition. This feature reflects the highly international aspect of the UPC, which makes it possible to apprehend companies from outside the EU when they attend a trade fair in UPC territory of effect. However, this also particularity complicates the application of the principles of trade secret, since it may be easier to consider that information accessible to the public, or at least to the visitors to the trade fair in question, is not confidential and should therefore not benefit from any particular protection. Conversely, protection is more easily admissible when the information is located at the company’s headquarters and is only accessible to a limited number of employees.
Indeed, this is what was held in the OrthoApnea v Mr X case of 21 September 2023,[4] where the court considered that if the expert does not have confidential documents at his disposal and seizes documents accessible to the public during a symposium, there is no reason to impose a confidentiality regime and the report can be sent directly to the parties. The decision summarily states that, if this is not the case, the defendant or expert should make an application to the court on this point.
The position taken is therefore the opposite of that adopted by French courts, which are increasingly protective of trade secrets.
Therefore, it is particularly interesting to note that the decision handed down by Paris UPC local division on 14 November 2023,[5] in relation to infringement seizures, deals precisely with the issue of confidential information, and is particularly protective on this point.
Indeed, in this case, the local division ordered that access to any information and document gathered by the expert in charge of carrying out the measure is limited to the representatives of the parties. The order that also provided for the creation of a confidentiality club be set, to identify the relevant information for the case as well as the information considered to be ‘trade secret’ (as defined by EU Directive No 943/2016 on the protection of trade secrets) to be kept confidential so that access will be restricted to specific persons.
Another order to preserve evidence, issued by the Milan local division on 25 September 2023,[6] also ruled on the issue of protecting confidential information and therefore prohibited access to the expert’s report, in the context of a seizure, to all persons, including the parties, until a new specific court order was issued. The applicant’s representatives, who were authorised to attend the execution of the measures, were also required to keep confidential any information that came to their knowledge during the proceedings, including from the applicant himself and his employees.
These two orders demonstrate that the UPC can also be protective regarding the disclosure of confidential information. However, we do not yet have sufficient hindsight to be able to draw any clear trends, particularly in view of the diversity of the circumstances of each case, but also of national practices in this area, which are likely to influence the judges sitting on the UPC’s local divisions.
Furthermore, the question of confidentiality is likely to arise in new ways, unknown to French law and many other national legislations, due to the possibility of access to court documents by third parties under Article 262.1(b) of the Rules of Procedure. This provides that ‘written pleadings and evidence, lodged at the Court and recorded by the Registry shall be available to the public upon reasoned request to the Registry; the decision is taken by the judge-rapporteur after consulting the parties’.
This provision is likely to raise new issues of confidentiality, and has already been the subject of several decisions, in particular on the determination of what is likely to constitute a ‘reasoned request’ and the reasons that could be put forward in order to gain access to these documents.
UPC will therefore have to strike a new balance of interests between confidentiality and the legitimate interest in gaining access to the information in question.
Notes
[1] Art 192, UPC Rules of Procedure.
[2] Art 58 of the Agreement on the UPC: ‘To protect the trade secrets, personal data or other confidential information of a party to the proceedings or of a third party, or to prevent an abuse of evidence, the Court may order that the collection and use of evidence in proceedings before it be restricted or prohibited or that access to such evidence be restricted to specific persons.’
[3] Rule 262A of the Rules of procedure: ‘(1). Without prejudice to Art 60(1) of the Agreement and Rules 190.1, 194.5, 196.1, 197.4, 199.1, 207.7, 209.4, 315.2 and 365.2 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. (2). The Application shall contain the grounds upon which the applicant believes the information or evidence in question should be restricted in accordance with Art 58 of the Agreement. (3). The Application shall be made at the same time as lodging a document containing the information or evidence and shall provide a copy of the unredacted relevant document and, if applicable, a copy of the redacted document. (4). The Court shall invite written comments from the representatives of the other parties prior to making any order. (5). The Court may allow the Application considering in particular whether the grounds relied upon by the applicant for the order significantly outweigh the interest of the other party to have full access to the information and evidence in question. (6). The number of persons referred to in para 1 shall be no greater than necessary in order to ensure compliance with the right of the parties to the legal proceedings to an effective remedy and to a fair trial, and shall include, at least, one natural person from each party and the respective lawyers or other representatives of those parties to the legal proceedings. (7). The Registrar shall as soon as practicable take all such steps with regard to access to the evidence as may be necessary to give effect to the order of the Court under this Rule.’
[4] Order of the Bruxelles local division, 21 September 2023, OrthoApnea c/ Monsieur X, on patent EP2331036.
[5] Order of the Paris local division, 14 November 2023, C-Kore Systems Ltd c/ Novawell, on patent EP2265793.
[6] Order of the Milan local division, 25 September 2023, PMA c/ AWM et Schnell, on patent EP2726230.