Nokia Oyj (Nokia Corporation) v Ipcom GmbH & Co Kg & Anor

I have to decide whether Ericsson or IPCom should pay the costs of the application insofar as Ericsson were brought in. The basis of the presence of Ericsson at the hearing was that they were here to emphasise the confidentiality of the document and to seek protection for it. The documents had been disclosed in the proceedings between the parties, which are IPCom on the one hand and HTC and Nokia on the other. Ericsson could, at least in principle, have simply relied on the submissions of Nokia and HTC but, as Mr. Chacksfield submits, it is their interests in particular and the importance of the document to them which they came along to protect.

The order was that was made was not an order for third party disclosure but the analogies of the position of the respondent to an application for third party disclosure are plain. CPR 48.1 provides that the starting position in relation to applications for third party disclosure is that the third party against whom the application is made should normally receive their costs from the applicant but the court may make a different order.

In SES Contracting v UK Coal Plc [2007] EWCA Civ 791, the Court of Appeal explained as follows:

“By laying down a general rule that the respondent will be awarded his costs, therefore, I think the Rules implicitly recognise that it will not usually be unreasonable for him to require the applicant to satisfy the court that he ought to be granted the relief which he seeks. The reason for that (if it be necessary to find one) lies, I think, in a recognition that a private person who is not a party to existing litigation which brings with it an obligation of disclosure is entitled to maintain the privacy of his papers unless sufficient grounds can be shown for overriding it and that it is for the person seeking to invade that privacy to justify doing so.”

Of course, not all of that applies in the present case. Once it is accepted that Ericsson were entitled to intervene to protect the confidentiality of their document, I think the analogy is a reasonably close one.

In my view, in coming along to defend the confidentiality of the document Ericsson were doing no more than doing its best to maintain, so far as possible, the privacy of its licence agreement and has been entirely reasonable in the approach it has thus far taken.

On that basis, the right order is for IPCom to pay the costs of Ericsson's intervention.

There are two further issues which I have to decide which concern the form of the undertaking which Dr Sedlmaier and Mr. Stasik would be required to give and whether those undertakings as to confidentiality should be given directly to the intervening interested parties, including Ericsson and Alcatel.

On the first point the suggested additional undertaking is in the following form. “For three years from the latest of the conclusion of the actions, if not concluded together, not to be involved in the negotiation of or any consideration of the commercial terms of any licence or settlement agreement relating to the patent in suit and the portfolio of patents owned by IPCom relating to mobile telecommunications other than licenses entered into by IPCom or Bosch as at the date of these undertakings.”

That clause was not discussed at the hearing before me but is suggested by Nokia, HTC and Ericsson to be a desirable further bolstering of the undertaking as to confidentiality. Clause 1.2 of the undertaking which it is agreed that Dr Sedlmaier and Mr. Stasik should give is that they are: “Not at any time to be use the confidential documents or the information contained therein or any part of them other for the purposes of the actions.”

That undertaking is unqualified and I make clear in my judgment that to be aware of the confidential information and to use it to influence one's stance in negotiations would, in my view, be a plain use of the information.

At paragraph 35 of my judgment I dealt with the specific question of whether Dr Sedlmaier should give an express confidentiality undertaking. I took the view that although he was an external lawyer, and for that reason would not normally be expected to do so, I would require him to do so in the present case. That was because, first of all, he had indicated a preparedness to do so at an earlier stage, and also, secondly, because the concerns expressed by HTC and Nokia about his closeness to IPCom and his involvement in negotiations outside the context of the action made it desirable that he should give an undertaking. I made it clear that that requirement did not impugn in any way the integrity of Dr Sedlmaier or indeed Mr. Stasik.

If Dr Sedlmaier becomes involved in the negotiation of or consideration of the commercial terms of any licence or settlement agreement, as specified in the proposed clause, he will have to consider very carefully whether he is able to do so, notwithstanding the terms of his undertaking. It is not possible for me in advance to say that he could never be involved in such negotiations or that he will be able to be involved in any particular type of negotiation or consideration of any commercial terms. It must be a matter for Dr Sedlmaier, having considered the terms of his undertaking in clause 1.2, to decide whether it is possible for him to do so. He may decide, perhaps wisely, to take the cautious approach of excluding himself from negotiations or consideration of terms under particular circumstances. However, it does not seem to me to be right for me to lay down in advance that he should not be involved in any such negotiations or consideration.

It will be for Dr Sedlmaier, relying on his professional obligations and relying on the terms of his undertaking, to decide whether he is able to comply with his undertaking in the terms that it has been given and continue with whatever activity he is requested by IPCom to perform.

I understand the concern of Ericsson, HTC and Nokia, that it would be more convenient to have a concrete form of undertaking which it would be more straightforward for them to enforce. Given the overall background, Dr Sedlmaier's position as an external lawyer and the fact that he would not normally be required to give any such undertaking, I think it is inappropriate to do so in the present case.

I should also deal with an argument advanced by both Nokia and HTC, and supported by Ericsson, that to give the undertaking would not be inconvenient to Dr. Sedlmaier in the light of the way in which he described his activities in the evidence which was before me on the application. That evidence explained that he worked as a trial advocate, he co-ordinated IPCom's litigation strategy across the world and that he also worked as a legal adviser to IPCom in negotiation situations. It seems to me that in all those activities, Dr. Sedlmaier will have to have very careful regard to the undertaking that he has given, but I cannot accept that the giving of an undertaking in the form suggested by HTC and Nokia and Ericsson would not interfere with a perfectly legitimate activity in each of those categories, although there may be many aspects of those activities on which the confidential information has no bearing whatsoever.

I therefore accept Ms. Smith's submission, for IPCom, that the undertakings proposed are both unnecessary and excessive. I therefore do not need to deal with her alternative submission that it is not open to the parties to raise this suggestion at this stage. I simply decide the matter on the basis of her first submission.

The second question is whether the undertaking should be given to the intervening counterparties, such as Ericsson. Ms. Smith submits that the disclosure obligation is not owed to the counterparties and the disclosure was not given by the counterparties, but given by the parties to the action. One is therefore not putting into writing the usual obligation, which is the quid pro quo for the disclosure of documents.

Mr. Chacksfield, on behalf of Ericsson, submits that from the point of view of enforcement, given that it is a contractual obligation, it is unfair to make him rely on undertakings given to non-parties. It seems to me that given that the intervening parties are amongst the class of persons who have an interest in the confidential information which is protected by the undertakings given by the parties, it would be logical to make it express that it is given in favour of the intervening parties as well. It may even be that as a third parties for whom the benefit of a contract is made, Ericsson would have the right to enforce it directly even if I did not make such an order. Even if that were not the case, it seems to me that they should be protected directly by the undertakings being given in their favour. Although only Ericsson have specifically appeared before me to ask for such an undertaking, I understand that Alcatel have written and, in principle, any interested party who wishes to be made a direct counterparty to these undertakings should be entitled to be such.