Nokia Corp v Interdigital Technology Corp

MR JUSTICE PUMFREY: The application before me today is an application by Nokia Corporation for an order that I direct that documents exhibited as JMM5 and JMM6 to the second witness statement of Jane Mary Mutimear shall be used in this action. This rather bald statement conceals a problem of some complexity, which has exercised two judges in the US District Court for the southern district of New York, me, and potentially an ICC arbitration panel. It is necessary to explain in a little detail how I find myself giving the most recent judgment in this dispute. The underlying action is a action brought by Nokia Corporation, the well known manufacturer of mobile telephone systems, seeking a declaration that:

“The importation into England and Wales, manufacture, sale, supply, offer for supply or supply, keeping or use of (1) mobile telephones and (2) system infrastructure equipment, or either of them, compliant with the FDD mode of operations set out in the 3GPP standard TS41.101 release 5, or any other revisions to this or any other releases, as at the date hereof, without licence of the defendant, does not require the infringement of the patents listed in the attached schedule or any of them. Such that, the patents and each of them are not essential IPR for the FDD mode of operation as set out in that standard, or do not remain or have not become essential IPR for any revisions to this or any later releases as of the date hereof.”

The underlying dispute is between Nokia and the holder of a series of patents, 31 million all, belonging to InterDigital Technology Corporation. InterDigital say, in summary, that the use of these patents is essential for third generation mobile telephony, according to the standards which are specified in the declaration. Nokia challenge that conclusion and say that they have a complaint against InterDigital which is susceptible of decision by the English court, either as a matter of the exercise of the court's inherent jurisdiction to grant declaratory relief, or, alternatively, pursuant to the court's special jurisdiction to grant declarations of non-infringement of patents. The dispute is, no doubt, mainly about money. You pay more if a patent is essential, than if it is not. If the patent is said by one party to be essential and by the other not to be essential, perhaps the underlying question is should that question be resolved by the court?

InterDigital's view is that that is not a fit question for resolution by the court. They seek to have the claim summarily dismissed on a number of grounds. The first is it that the court has no jurisdiction or will not exercise its jurisdiction in relation to the whole of the claimant's claim. This is said to be an objection pursuant to part 11 of the civil procedure rules. It is accompanied by an alternative request for either to have the claim struck out pursuant to rule 3.4(2)(a) or (b) of the Civil Procedure Rules. That is to say that the statement of case discloses no reasonable grounds for bringing the claim or an abuse of the process of the court.

Thirdly, they seek summary judgment under part 24 of the Civil Procedure Rules. Summary judgment will be granted where on the facts as they appear, the claim has no real prospect of success. As one might expect between two large litigants concerned with a problem upon which substantial sums of money may depend, there has been considerable evidence and exhibits filed by both parties on this application, which is presently listed for hearing before me next Monday. One of the issues which has been identified in the evidence is the question of how InterDigital understand a declaration of essentiality of a patent to the standards body, ETSI, and how that declaration is understood by others. InterDigital says that when a declaration of essentiality is made to ETSI, it only means that a particular patent has claims that are or may be relevant to a particular standard, and not that it is essential at all. A claim by claim analysis is not performed, and they say that the question of essentiality of a particular patent or a particular claim in a particular patent is a matter for the licensees to consider, and not the licensor when the licensor makes its declaration of essentiality. Perhaps one may summarise those contentions as saying that a declaration of essentiality is a warning to licensees, or intending licensees, that essentiality is one of the things they are going to have to consider.

InterDigital says also, and this is a more technical point, that it has made no claim of right by making a declaration of essentiality and a claim of right is what is normally taken to establish the court's jurisdiction to grant a declaration according to its inherent jurisdiction. In any event, InterDigital says that the declaration of essentiality is of peripheral importance in the negotiations which in fact take place with individual licensees for the purpose of licensing InterDigital's patent portfolio.

There is a challenge to the actual factual basis for InterDigital's assertions. It is important to bear in mind that InterDigital's applications for hearing before me on Monday, are summary in the true sense. If a triable issue fact emerges which is relevant on an application for summary judgment, then the application for summary judgment must fail, unless it can affirmatively demonstrated that the resolution of the triable issue has no effect upon the cause of action asserted.

Nokia wish to employ documents which have been communicated to them by InterDigital, to suggest that InterDigital's story as to the meaning and effect of a declaration of essentiality is inaccurate and is not the view which InterDigital in fact takes of the significance of the declaration of essentiality. For this purpose, Miss Jane Mutimear, who is a solicitor acting on behalf of Nokia, sought to deploy as exhibits to a witness statement these documents with a view, as she puts it, of demonstrating:

“that InterDigital carries out a comprehensive analysis of its patents in comparison to various standards.”

In paragraph 22 of her second witness statement she says this:

“In fact, it would appear that InterDigital carries out its analysis of its patents in comparison of various standards in some detail. Mr Boles mentions in paragraph 34 of his first statement that InterDigital gave a presentation to Nokia in relation to some of its patent portfolio. Mr Boles states that this took place in April 2003. Nokia has power point slides from two presentations given to Nokia by InterDigital; JMM5 and JMM6, which illustrate that, contrary to Mr Boles' statement, InterDigital do a claim against standard analysis.”

InterDigital's response to that deployment of those two documents was to complain that they were the subject of an agreement between InterDigital and Nokia which precluded their deployment in this way. The agreement in question is referred to as the Master Agreement. I do not need to refer to any part of it except, first, an arbitration clause contained in article 4.1 and, second, in relation to the confidentiality clause. Article 5.1 of the Master Agreement is accepted by Nokia as being capable of applying to JMM5 and JMM6. They have reserved their right to contend that in point of fact it does not do so, but for the purposes of today I proceed upon the basis that it does. Article 5.1 provides:

“Protection of Confidential Information

“Except as otherwise provided in this agreement ... InterDigital and Nokia each agree not to disclose or make available the other's confidential information ... or the contents of this agreement...”

The party receiving confidential information shall use such confidential information only as necessary to exercise its right or perform its obligations under this agreement, and shall not circulate confidential information within its own organisation except to employees with a specific need to know such confidential information for such purposes.

Then a series of specific exceptions are provided in relation to technical confidential information with which I am not concerned. I can turn immediately to Article 5.5, which is concerned with permitted disclosure. Under the heading disclosures permitted, it says this:

There is then a specific exception with which I am not concerned.

Now, if an issue arises as to the disclosability or the use of any document which is disputed, then there is no dissent before me about the arbitration clause 4.1 is capable of applying to it. After an exchange of correspondence with the various lawyers acting on Nokia's behalf, InterDigital have invoked the arbitration clause.

By a letter of 24th March 2006, InterDigital have referred the following dispute to arbitration. As they put it in their letter:

“Nokia seeks to use and disclose information which constitutes confidential information under article five with the master agreement for impermissible purposes in the action styled Nokia Corporation and InterDigital Technology Corporation, number HC05C02026, pending in England in the High Court of Justice, Chancery Division, Patents Court. [That is this action]. Nokia's exhibits, designated as exhibit JMM5 and exhibit JMM6, which are referred to as confidential exhibits submitted in the UK proceeding, contain such confidential information. InterDigital has repeatedly demanded that Nokia withdraw the confidential exhibits, because Nokia's intended use and disclosure would violate the master agreement and no consent has been given permitting such use and or disclosure. Nokia has persisted in refusing to withdraw the confidential exhibits. Accordingly, InterDigital hereby declares a dispute regarding the foregoing threatened use and/or disclosure of confidential information. Under section 4.1 of the master agreement, the parties are required to attempt to amicably resolve those disputes within 30 days of receipt of this notice. Towards that end, I propose that senior representatives of the parties meet and confer to discuss these issues. We will follow it with an email within the next few days proposing dates. At your earliest convenience, please let us know Nokia's senior representative's availability.”

The question which is referred is the question whether Nokia can disclose the documents in question. InterDigital say they may not and have sought interim relief from the District Court accordingly. I have been shown a copy of an interim order made by Judge Daniel Mukasey on 24th March 2006. I understand this order to have been made in aid of the arbitration, a similar jurisdiction to that which this court possesses in aid of arbitrations. The order made by Judge Mukasey was that the defendant does:

“Not disclose or circulate JMM5 and JMM6 to anyone other than those explicitly permitted by a document denominated the master agreement to see such details, including without limitation, the High Court of Justice, Chancery Division Patents Court in the United Kingdom domestic, the London court, unless and until (i) the London court shall have issued an order directing such disclosure, and then only to the extent of such order, or (ii) another judge of this court shall have issued an order amending or dissolving this order. It is further ordered that the defendant show cause why the order should not continue.”

There has been a further hearing before the District Court of which I have been shown a transcript in which Judge Daniels has continued the order with a variation. I think it is perhaps easiest to take what he has done from the transcript in his own words, because I have not been shown a copy of a completed order:

“Unless both sides believe that the limited disclosure to the court on that basis, the appropriate disclosure to make the court at that point in time, I am not going to allow disclosure of the confidential information or anything that is included in that confidential information. If the court believes that that is the only way the court can make a determination with regard to that then unfortunately you will have to come back here first. If the court over there says, 'Look, I am not going to do anything until the court in the US tells me what to do'. Then I will be happy to do that. But I am not going to allow any disclosure until I am told what the court's position is with regards to this. Or I am told that the court says I cannot proceed this way. Tell the US court to make a decision, and whatever decision the US court makes I will either abide by it, and or I will consider what my decision is going to be after if I hear what the US court says. But you know, I am willing to accommodate the British court in any way possible. But I am not going to let you slip in the back door what you cannot get in through the front door.

“So this is an issue of disclosure. I am going to order that disclosure is not to be made of any confidential information, any information received in confidence, unless you have an order from that court saying it wants the information disclosed to it, and to the extent it wants the information disclosed to it, and under what circumstances, and two that this court orders that the disclosure on that basis is appropriate.”

It is most unfortunate that both the District Judges and myself have been placed in this position. I cannot believe it was really necessary to do so, since our jurisdictions to protect the subject matter of the arbitration are concurrent. We both have it, we can both exercise it. As it is we are now, as Judge Daniels makes clear, having to accommodate each other in the orders which we make. For my part, I am most grateful to Judge Daniels for the care with which he has approached the interests of justice as it is pursued in this jurisdiction. What then am I to do? It seems to me that that the position is as follows. First, I should not at this stage see the documents and I have not do done so. Second, I should decide whether, in all the circumstances, I should require their disclosure for purpose of being deployed by Nokia as respondents to InterDigital's application. Third, I should attempt to assess the affect of the invocation of the arbitration clause. Since InterDigital have invoked the arbitration clause and have not withdrawn the reference, there is here a reference to arbitration which I must accommodate. Fourth, in the light of the foregoing, what should I do as far as the pending application is concerned?

Taking these matters in order, I have first to decide whether what has been described by Mr Birss, who appears on behalf of InterDigital as the threshold issue. That is to say should I, all other things being equal, make an order for disclosure, such an order falling within, or potentially within, Article 5.5 of the Master Agreement, the true meaning of which has been referred by InterDigital to arbitration. Mr Birss submits that this application does not get past first base because there is no reason whatever to make the disclosure that Miss Mutimear considers appropriate. It seems to me that evidence relating to the manner in which the declaration of essentiality is in fact deployed in licensing negotiations is highly material to the strike out and summary judgment applications. Indeed, regardless of the declaration of essentiality, it is quite conceivable that an assertion during licensing negotiations themselves that a use of a particular claim of a particular patent was essential to the practice of third generation mobile telephony would found an action for declaration on its own. Of course, all the circumstances would have to be taken into account. The overall affect of the various assertions made by InterDigital would have to be ascertained in the round. But in my judgment, it is not possible at the present stage to say that such material is not capable of affecting the application which is before me next week. Of course, I have not seen the documents in question. I have the say so, implicitly, of Miss Mutimear and explicitly of counsel that the document does indeed contain such material. This is not a matter upon which I am placed in a position to adjudicate. I must act upon the best material which is available to me. In those circumstances I must take those statements at face value. These are relevant documents. Accordingly, I would think it was appropriate to make this document available for use at the forthcoming application. I would do this even if it were not an exhibit to a witness statement but by way of an application for disclosure. The court has the wide jurisdiction to make orders for disclosure which can be deployed whenever the interests of justice require it. The court is frequently sensitive to the possibility that applications to strike out are advancing upon a false basis. But we have not got to that stage. We have the documents, I am told they contain relevant material. Such material is, in principle, capable of being relevant, and in those circumstances I would anyway make an order for its disclosure.

Second, having come to that conclusion, the question is what I do to accommodate the reference to arbitration. This is going to be a problem which confronts the American judge as much as it confronts me. Mr Birss submits that he has an application to stay Nokia's application to use the documents, but he has no other such application. His client has invoked the arbitration clause and so the questions of breach, and whether my order falls within Article 5.5 of the agreement are questions for the arbitrators if they cannot be resolved by agreement of the parties. Of course, if my order does not satisfy Article 5.5 in the view the arbitrators, the question becomes a difficult one, but I shall leave that until they decide that that is the position, a possibility that I consider remote. Nonetheless the matter goes to arbitration. What do I do in the meantime? The effect of the reference is that we do not yet know whether these documents can be deployed in this court. The result therefore must be that if I permit the application by made by InterDigital to proceed upon Monday, it will proceed in the absence of documents which I am told I am told in good faith by Nokia's representatives are relevant. That seems to me in an application to strike out particularly, but in any case in general, to be inherently undesirable. The only fair thing, it seems to me, and however unsatisfactory this may be from the point of view of getting this action moving, is to stay the application to strike out until the arbitrators have pronounced.

I have considered with some anxiety what I should do with the action while this application is hanging fire. The potential timescale for the arbitration is extremely long. It is an ICC arbitration and of course all the times can be abridged by agreement but nobody has indicated any particular desire to abridge the times by agreement. I think what I shall have to do is allow the underlying action to proceed. That will not be stayed. The application to deploy the documents made by Nokia must equally be stayed until the outcome of the arbitration is known.

In the result therefore, I deal with what I view as an entirely Alice in Wonderland problem by an Alice in Wonderland solution. That solution is to make the order for disclosure, because I think it is an appropriate order, send it off to the arbitrators to decide whether it is within the agreement or not (a matter which I would hope would not detain them long), and while awaiting their response stay both the application to strike out and the application to deploy the documents. The underlying action will proceed, subject of course to any agreement which the parties may wish to make to hold it up. I shall deal with the matter in that way.

I should not leave this application, without expressing my gratitude to the US district court for the care it has taken to enable me to come to a conclusion, which absent the reference to arbitration, could have resolved the whole issue today, but in the event has sent it of to whenever the arbitrators pronounced.

MR HENDERSON: My Lord, may I just go back to one sentence that you uttered five minutes ago. It was under your point two. I believe these were your exact words, and there was then quite a pause, because I think you might have been wondering whether or not they quite covered what you intended and I think my Lord's words were these:

“However I shall leave that until they, the arbitrators, decide that that is the position (inaudible) I believe that my order does not comply with the terms of the ... “

MR JUSTICE PUMFREY: You are quite right. There is a patent ambiguity in what I actually said. I will have to go back over that passage. There are too many theys.

MR HENDERSON: If what my Lord had in mind was this; however I shall leave that theoretical problem unless and until they decide --

MR JUSTICE PUMFREY: It is all right. You are quite right I was not anticipating an adverse conclusion from the arbitrators.

MR HENDERSON: But it might --

MR JUSTICE PUMFREY: It might read like that, and when I correct the judgment I will correct that.

MR HENDERSON: The other matter could I draw to your attention is this, at page 33 --

MR JUSTICE PUMFREY: Yes of.

MR HENDERSON: -- of the judgment of Judge Daniels. He intimated at lines --

MR JUSTICE PUMFREY: I must admit I took what he said to Miss Mutimear as being really the dispositive part, but it is so difficult to know until you get the US judge's judgment. His order, 33?

MR HENDERSON: Page 33, if we begin it with the sentence at line 12:

“So this is an issue of disclosure. I am going to order that disclosure is not to be made of any confidential information, any information received in confidence, unless you have an order from that court saying that it wants the information disclosed to it and [I am coming to the vital words] to the extent that it wants the information disclosed to it and under what circumstances.”

MR JUSTICE PUMFREY: What I am proposing to do, Mr Henderson reminds me of a need to make clear the steps that I shall take to preserve confidentiality --

MR HENDERSON: Absolutely, my Lord.

MR JUSTICE PUMFREY: -- in the documents.

MR HENDERSON: Therefore, if you could just add a few words about 31 and sealing.

MR JUSTICE PUMFREY: I should make it quite clear that this court is accustomed to taking such steps as may be necessary for the preservation of that which is asserted to be confidential. Customarily this court goes about a problem in this way. Where there is a agreement between the parties to keep certain matters confidential, the court has an independent duty in the interests of justice to insure that that agreement is a reasonable one, but the court habitually keeps such material confidential. It does not cause or allow such information to be disclosed unless it is satisfied that there is no element of confidence to be protected. If it is not so satisfied, then it will not cause that information to be disclosed to the public arena. Not only do we preserve the confidentiality in documents themselves, but of course, like any other court, we will go in to camera, with a view to protecting the contents of confidential documents. It is not in general the court's task to subvert agreements arrived at reasonably between parties by substituting its own view of that which is or is not confidential.

Accordingly, when or if the documents in this case are deployed, they will be deployed in circumstances in which their contents will be protected against onward disclosure. The steps will involve an order, at the very minimum, under CPR31.22 and also perhaps by going inter camera. We have a battery up of expedient which may be deployed in the purpose of keeping documents confidential and they will no doubt be deployed in this case.

You have won, Mr Birss, on your application.