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Core Wireless v LG, Court of Appeal of Paris

9 October 2018 - Case No. RG 15/17037

http://caselaw.4ipcouncil.com/french-court-decisions/court-appeal-paris/core-wireless-v-lg-court-appeal-cour-d-appel-paris
Comparable agreements Confidentiality

A. Facts

The Claimant, Core Wireless Licensing S.à.r.l., holds a portfolio of patents declared essential to the GSM, UMTS and LTE wireless telecommunication standards (Standard Essential Patents or SEPs). The Defendants, LG Electronics France S.A.S. and LG Electronics Inc., manufacture and sell – among others – mobile devices complying with the above standards.

The Claimant acquired its portfolio of SEPs from Nokia by a ‘Purchase and Sale Agreement’ concluded in 2011 [1] . The Claimant, Nokia and Microsoft also concluded a so-called ‘Royalty Participating Agreement’, referring to encumbrances [2] .

The parties failed to reach an agreement on a licence for Claimant’s SEP portfolio. Consequently, the Claimant brought an infringement action against the Defendants before the District Court (Tribunal de Grande Instance) of Paris, based on five French patents of its portfolio. The District Court of Paris dis-missed Claimant’s action [3] .

In the ongoing appeal proceedings before the Court of Appeal (Cour d’ Appel) of Paris (Court), the Defendants requested the Court to order the Claimant to produce the ‘Purchase and Sale Agreement’, the ‘Royalty Participating Agreement’, as well as all licensing agreements concluded by the Claimant with third parties, covering the patents in suit [1] . A few days prior to the oral hearing, the Claimant requested, in turn, that the Defendants produce four license agreements which they had entered with third parties [4] .

With the present decision, the Court dismissed Claimant’s request; it held that it was delayed and that the Claimant failed to explain the relevance of the requested licensing agreements to the present pro-ceedings [2] .

On the other hand, the Court granted the Defendants’ request [2] under the following conditions: First, the relevant documents will be made available (unredacted) only to the parties’ counsels, within a deadline of one month after the Court’s order [5] . The parties’ counsels will then be given the opportunity to argue by written submissions which parts or elements of these documents may affect business secrets [5] . On this basis, the Court will decide whether further measures (as set-forth in paragraphs 2, 3 or 4 of Article L. 153-1 of the French Commercial Code) are required for the protection of potential confidential information, or not [5] .


B. Court’s reasoning

The Court made use of the procedural possibilities for the protection of business secrets in court pro-ceedings recently introduced to the French Commercial Code by Law No. 2018-670 dated 30 July 2018 [6] .

In particular, the Court referred to paragraph 1 of Article L. 153-1 of the French Commercial Code, which reads as follows:

‘Where, in the course of civil or commercial proceedings aimed at obtaining a pre-trial order for investiga¬tive measures before any proceedings on the merits, or in the course of proceedings on the merits, the communication or production of a document is requested, which has been deemed to infringe or alleged by a party to the proceedings or a third party to be capable of infringing a trade secret, the court may take any of the following steps on its own motion or at the request of a party to the proceedings or a third party, if the trade secret cannot be otherwise protected, without prejudice to the rights of defence:

(1°) The court alone will review the document and, if deemed necessary, order an expert valuation and request the opinion, for each of the parties, of a person authorized to assist or represent the party, in order to decide whether to apply the protective measures set out in this Article.’

According to the paragraphs 2-4 of Article L. 153-1 of the French Commercial Code, the Court can order the following protective measures:

  • (2°) Decide to limit the disclosure or production of the document to certain parts thereof, order disclo¬sure or production of a summary of the document only, or restrict access to the document, for each of the parties, to a single individual person and a person authorized to assist or represent that party;
  • (3°) Decide that hearings will be held and the decision will be issued in chambers;
  • (4°) Adapt the grounds of the decision and the mode of publication thereof to the needs of protecting the trade secret.’

  • [1] Court of Appeal (Cour d’ Appel) of Paris, judgment dated 9 October 2018, page 5.
  • [2] Ibid, page 5.
  • [3] District Court (Tribunal de Grande Instance) of Paris, judgment dated 17 April 2015, Case No. 14/14124.
  • [4] Ibid, page 2.
  • [5] Ibid. page 6.
  • [6] Ibid, page 5 et seq.