INTERDIGITAL VC HOLDINGS INC & ORS. vs GUANGDONG OPPO MOBILE TELECOMMUNICATIONS CORP. LTD & ORS.

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 692/2021 & I.A. 32108/2024
INTERDIGITAL TECHNOLOGY CORPORATION & ORS.
…..Plaintiffs
Through: Mr.Pravin Anand, Ms.Vaishali MIttal, Mr.Siddhant Chamola, Ms.Pallavi Bhatnagar and Ms.Gitanjali Sharma, Advocates.

versus

GUANGDONG OPPO MOBILE TELECOMMUNICATIONS CORP. LTD. & ORS. …..Defendants
Through: Mr.Rajiv Nayar, Sr. Advocate with Mr.Shankh Sengupta, Mr.Aubert Sebastian and Mr.Vedant Kumar, Advocates for applicant.
Mr. Saikrishna Rajagopal, Ms.Julien George, Mr.Aniruddh Bhatia, Mr.Arjun Gadhoke, Mr.Vivek Ayyagari, Ms.Anu Paarcha, Mr.Avijit Kumar, Ms.N.Parvati, Ms.Subhoshree Sil, Advocates.

+ CS(COMM) 707/2021 & I.A. 32107/2024
INTERDIGITAL VC HOLDINGS INC & ORS. …..Plaintiffs
Through: Mr.Pravin Anand, Ms.Vaishali MIttal, Mr.Siddhant Chamola, Ms.Pallavi Bhatnagar and Ms.Gitanjali Sharma, Advocates.

versus

GUANGDONG OPPO MOBILE TELECOMMUNICATIONS CORP. LTD & ORS. …..Defendants
Through: Mr.Shankh Sengupta, Mr.Aubert Sebastian and Mr.Vedant Kumar, Advocates for applicant.

CORAM:
HON’BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
% 14.10.2024

I.A. 32108/2024 in CS(COMM) 692/2021
I.A. 32107/2024 in CS(COMM) 707/2021

1. The present applications have been filed by Samsung Electronics Co. Ltd. (“Applicant”) to seek intervention in the present suits in order to circumvent the disclosure of the Patent License Agreement (“PLA”) dated 1st June, 2014 between the applicant and plaintiff no. 1 and other InterDigital Group Companies, to in-house representatives/employees of the defendants.
2. On behalf of the applicant, following submissions have been made:
2.1 Disclosure of the PLA by the plaintiffs would not only be detrimental to the rights and commercial interests of the applicant, but would also be in breach of the confidentiality obligations of plaintiff no. 1 under Clause 12 of PLA.
2.2 The parties to the PLA are under an obligation to maintain confidentiality with respect to the terms of the PLA. In this regard, Clause 12 of the PLA specifically requires each of the parties to the PLA to maintain strict confidentiality of the terms of the PLA, and any disclosure of the PLA would violate Clause 12.
2.3 Recently, the applicant was notified by the counsel for the plaintiffs by way of letter dated 7th June, 2024 that this Court vide order dated 5th April, 2024, had ordered the plaintiffs to provide copies of seven comparable agreements, that were referred to during the trial of the proceedings between plaintiffs and some of the defendants in the parallel proceedings between them in the United Kingdom (“UK”) Courts. Upon receipt of the said letter, counsel for applicant vide Email dated 17th June, 2024 issued a holding response and informed that the applicant objects to the disclosure of the PLA.
2.4 The interest of third parties, such as the applicant, cannot be compromised by the parties to the present suits and the disclosure of any third party agreement may reveal sensitive business related information pertaining to these third parties.
2.5 Order dated 5th April, 2024, which according to the plaintiffs mandated the disclosure of the PLA, indicates that the parties to the present suit have consented to disclose certain agreements, which have already been shared with the defendants in the English proceedings. However the order dated 5th April, 2024, does not specify whether the PLA of the applicant is one of the seven agreements.
2.6 Parties in the English proceedings and in the present suit are not common. Therefore, it would be unfair to draw a comparison between the present suit and the English proceedings.
2.7 There is no finding or observation of this Court regarding the relevancy of the PLA in the present suit.
2.8 Restriction placed on the in-house representatives of the confidentiality club constituted in the present suit will not suitably and effectively, safeguard the interest of the applicant.
2.9 The confidentiality clause in the PLA does not authorise the plaintiffs to consent to the disclosure of the PLA to any third parties.
2.10 Disclosure of the PLA within the mechanism of the confidentiality club constituted in the present suit, would undermine the interest of the applicant, and would result in an undue commercial advantage to the defendants, since the defendants’ representatives are members of the confidentiality club. Such disclosure would be detrimental to the applicant’s interest.
2.11 Access to the confidential information as contained in the PLA, will result in the defendants’ being in an advantageous position as against its competitors, including the applicant.
2.12 The confidentiality club does not ensure the confidentiality of the PLA, nor does it safeguard the applicant’s interest.
2.13 In the order dated 5th April, 2024, this Court has directed that the in-house representative of the defendants undertake not to become involved in any negotiations with the counter party, whose agreement is placed under aegis of the confidentiality club, for a period of two years. Such restriction of two years is not adequate to protect the business interest of the applicant, since the license negotiations ordinarily continue for more than two years.
2.14 From a bare perusal of the order dated 5th April, 2024, it is clear that the said order was passed based on the consent of the parties to the suit, and on the premise that the disclosure was done in the English proceedings. However, the parties in the present suit are not parties to the English proceedings, and thus, a parallel cannot be drawn between the two proceedings.
2.15 The plaintiffs in the present suit have not acted in the best interests of the applicant. The plaintiffs, contrary to their obligation under the PLA, have consented to the disclosure of the PLA, without prior intimation, knowledge or approval of the applicant. The conduct of the plaintiffs in providing consent for disclosure is not in accordance with Clause 12(g) of the PLA, which requires prior notice to be provided to the applicant. The plaintiffs have not acted in accordance with the mechanism governing the conduct of the parties, including, the disclosure of the PLA.
2.17 The judgment dated 21st February, 2024 passed in the present proceedings clearly acknowledged that the interest of the third parties, such as the applicant cannot be compromised by the parties to the present suit, and the disclosure of any third party agreement may reveal sensitive business related information pertaining to these third parties.
2.18 The Rules governing the present proceedings, i.e., High Court of Delhi Rules Governing Patent Suits, 2022, allow for redaction of confidential documents, particularly, Rule 11, provides that the Court may, upon a request made by way of an application, direct the redaction of such information, it deems to be confidential.
2.19 Further, Chapter VII Rule 17 of the Delhi High Court (Original Side) Rules, 2018, provides that the Court may in its discretion and in appropriate case, permit copies of the confidential documents to be given to the opposite party after redacting confidential information therefrom.
2.20 The Delhi High Court Intellectual Property Rights Division Rules, 2022, also provide that the Court may, upon a request made by way of an application, direct the redaction of such information, including, documents, it deems to be confidential.
2.21 This Court in the judgment dated 16th December, 2020 in CS(COMM) 295/2020, InterDigital Technology Corporation and Others Versus Xiaomi Corporation and Others, has granted liberty to the parties in the said case to rely on redacted particulars. In case the opposite party pleads that disclosure of redacted material is necessary for its defence, in such a case, the court would decide, on a document to document basis, whether redacting of the confidential details in the document, should or should not be allowed.
2.22 In Lava International Ltd. Versus Telefonktiebolaget L.M.Ericsson, vide order dated 1st April, 2016 in Special Leave to Appeal (C) 7533/2016, Supreme Court had allowed sharing of the redacted copies of the document.
3. On behalf of the defendants, following submissions have been made:
3.1 Samsung’s objection to disclosure of the 2014 agreement is absolutely unjustified, and unlawful. The very same agreement appears to have already been disclosed in two proceedings before the UK Court, wherein, the disclosure of the said agreement was never objected by Samsung. In one of the proceedings before the UK Court, the in-house representatives of Lenovo were in fact given complete access to the said agreement.
3.2 Even otherwise, Samsung themselves admit that there is an exception to the confidentiality clause described in the said agreement, if the disclosure is required pursuant to an order of a Court or arbitral tribunal, which has been precipitated by a third party request.
3.3 Samsung’s objection relates to an already expired agreement. Therefore, their concerns about disclosure and already expired agreement to a limited number of individuals who are part of a confidentiality club, is without any justifiable concern.
3.4 Samsung has made vague averments about some commercial advantage being gained by the defendants, if they are allowed to access the said agreement. The said request to deny disclosure to the defendants is unlawful as defendants had every right to be made aware of more favourable Fair, Reasonable and Non-Discriminatory (“FRAND”) terms.
3.5 Samsung has failed to specify any particular clauses of the said agreement, which it wishes to protect, and what possible harm could be caused to it, if the said clauses were provided to the members of the confidentiality club. Vague claims about there being certain clauses which contain business sensitive information or trade secrets, is not sufficient in itself to disallow the disclosure of the said agreement.
3.6 Samsung’s claims are without any basis whatsoever, and are solely being made to disrupt the present proceedings to the detriment of the defendants.
3.7 Present application is not maintainable, since order dated 5th April, 2024 is binding on the parties and has attained finality. If Samsung is aggrieved by the said order, the correct course of action would have been to prefer an appeal against the said order dated 5th April, 2024. It is settled law that any order by consent of both parties, can only be modified by consent of both parties.
3.8 Due to nature of the disputes in the present suits, pertaining to Standard Essential Patents (“SEPs”) and FRAND, comparable license agreements are integral for adjudication of the disputes. The relevance of reviewing comparable agreements, to determine a FRAND rate of the plaintiff, has also been previously established by this Court vide judgment dated 16th December, 2020 in CS(COMM) 295/2020, InterDigital Technology Corporation and Others Versus Xiaomi Corporation and Others.
3.9 The plaintiffs have not violated the terms of the PLA, as the plaintiffs followed the due procedure by writing a letter to Samsung, thereby putting Samsung to due notice.
4. On behalf of plaintiffs, the following submissions have been made:
4.1 Plaintiffs have not breached the terms of the PLA. The plaintiffs did not consent to showing full agreement and stated that summaries will be disclosed.
4.2 The plaintiffs gave due notice to Samsung in terms of the PLA. The plaintiffs have not disclosed the PLA to the defendants till date, though, redacted version of the same has been disclosed by learned counsel appearing for Samsung to learned counsel appearing for the defendants.
5. Having heard learned counsels for the parties and having perused the record, this Court at the outset notes that the present suits have been filed by the plaintiffs claiming infringement of five of their patents, i.e., IN 262910, IN 295912, IN 313036, IN 320182 and IN 319673, by the devices of the defendants. The said patents are stated to be SEPs by the plaintiffs, covering 3G, 4G and 5G standardized technology.
6. The issues in the present suits were framed vide order dated 8th August, 2024, in CS(COMM) 692/2021, wherein, issue no. vi, is as follows:
“xxx xxx xxx
vi. Whether the Plaintiffs are entitled to an order declaring that the Plaintiffs have complied with its FRAND obligations as prayed for in para 147 (ii) and the Defendants are unwilling licensees due to their conduct of hold out and delay? OPP

xxx xxx xxx”

7. Similarly, vide order dated 8th August, 2024, in CS(COMM) 707/2021, issue nos. vi and vii, were framed, as follows:
“xxx xxx xxx
vi. Whether the Plaintiffs are entitled to a declaration that the rate of USD 0.10/unit as listed on the Plaintiffs’ website is consistent with RAND requirements? OPP

vii. Whether the Plaintiffs are entitled to an order declaring that the Plaintiffs have complied with its F/RAND obligations and the Defendants are unwilling licensees due to their conduct of hold-out and delay? OPP

xxx xxx xxx”

8. Thus, aspect relating to FRAND rates is a material issue in the present suits. This Court notes the submission made by the defendants that the most preferred method for calculation of FRAND rates, is to compute the same, by comparing the plaintiffs’ license agreements with comparable PLAs. Accordingly, the defendants had sought disclosure of the plaintiffs’ comparable PLAs, as also, the constitution of the confidentiality club, vide I.A Nos. 11484/2022 and 11485/2022.
9. It is to be noted that vide order dated 5th April, 2024, the parties had agreed that the plaintiffs would disclose the seven agreements, which it had already disclosed to the defendants in parallel proceedings, in the UK Courts. Relevant portion of order dated 5th April, 2024, is extracted hereinbelow:
“xxx xxx xxx
2. It transpires, that seven 7 third-party agreements, entered into by
plaintiff, have already been shared with defendant in a proceeding before the U.K. Courts.

3. It is agreed between the parties that these 7 agreements will be made part of the Confidentiality Club, already instituted by this Court.

xxx xxx xxx”
(Emphasis Supplied)

10. It is further to be noted that an application, being IA. 35037/2024, seeking clarifications on the disclosure of third party PLAs to in-house employees of the defendants, was filed by the plaintiffs. Vide judgment dated 19th September, 2024, this Court had held that in order to verify plaintiffs’ FRAND claims and whether the defendants’ conduct is that of an ‘unwilling licensee’, the plaintiffs’ third party license agreements are crucial. Thus, directions were issued to the plaintiffs to show the seven PLAs of the plaintiffs with third party entities, in full, to all the members of the confidentiality club, including, the in-house counsels/employees of the defendants, who are members of the confidentiality club. The relevant extracts from the judgment dated 19th September, 2024, are reproduced as follows:
“xxx xxx xxx

19. Considering the submissions of the parties in the pleadings, in order to verify plaintiffs’ FRAND claims and whether the defendants’ conduct is that of an ‘unwilling licensee’, the plaintiffs’ third party licence agreements are crucial. In the present proceedings, this Court is required to adjudicate on the issue of infringement of specified patents by the defendants and to confirm/verify the royalty rates offered by the plaintiffs to other claimed third party licence holders. Therefore, it is imperative that defendants’ in-house representatives, who are members of the Confidentiality Club, are not precluded from seeing the agreements, which form subject matter of the present proceedings.

20. As noticed above, by order dated 05th April, 2024, a condition was imposed on the in-house representatives in the Confidentiality Club, in order to protect the sensitive information present in the third party agreements. The said condition prevents the in-house representatives from getting involved in any negotiations with the counterparty, without the counterparty’s consent, for a period of two years from the date of disclosure of the third party agreements. The object of the condition imposed upon the in-house representatives, is to prevent them from taking advantage of the information disclosed in the Confidentiality Club. Thus, the in-house representatives cannot use the information disclosed in the Confidentiality Club to take a competitive advantage in future negotiations.

xxx xxx xxx

25…….
25.1 The plaintiffs shall show the seven PLAs of the plaintiffs with third party entities, which are subject matter of the present proceedings, in full, to all the members of the Confidentiality Club, including, the in-house counsels/employees of the defendants, who are members of the Confidentiality Club.

25.2 The defendants shall show its full agreement with Qualcomm to the members of the Confidentiality Club, including in-house counsels/employees of the plaintiffs, who are members of the Confidentiality Club.

25.3 The in-house counsels/employees, who are members of the Confidentiality Club, shall not be involved in any negotiations with the counterparty (without the counterparty’s consent), whose agreement is placed under the aegis of the Confidentiality Club, for a period of two years, from the date of being provided access to the counterparty’s agreement.

xxx xxx xxx”
(Emphasis Supplied)

11. Since the present applications qua the Samsung Agreements were pending, no directions were made with respect thereto vide the aforesaid judgment.
12. Thus, it is manifest that the PLAs pertaining to other third party entities with the plaintiffs, have already been directed to be shown to the defendants. Similarly, the defendants have also been directed to show their agreement with a third party entity, i.e., Qualcomm, to the in-house representatives/counsels of the plaintiffs. Therefore, when directions have already been given by this Court for full disclosure of the third party PLAs by both the plaintiffs and the defendants to the in-house representatives/counsels of each other, who are members of the confidentiality club, there is no justifiable ground for non-disclosure of the full Samsung Agreement of the plaintiffs, with the defendants.
13. It is also to be noted that Samsung’s own agreement allows for its disclosure under the protective orders of the Court. Relevant extract of Clause 12 of the Samsung Agreement is reproduced as hereunder:
“xxx xxx xxx
 “12. Disclosure. Each of the Parties shall maintain as strictly confidential the terms of this Agreement and any proprietary information (e.g., reports, materials or other documents submitted in accordance with the terms of this Agreement) disclosed to a Party or any Related Party by the other Party or any of its Related Parties, under, or as a result of or during the negotiation of, this Agreement, except as follows:

…

g. as required by court or arbitral order which has been precipitated by a third party request, or a governmental order, with notice to the other Party as soon as any proceeding that may lead to such order is known, and to permit the other Party an opportunity to intervene to prevent disclosure. In the case of a possible ordered disclosure, the Party that would be subject to the order shall give the other Party reasonable prior notice of such intended disclosure and use its best efforts to ensure such disclosure is protected by a protective order and seek confidential treatment or other confidentiality obligation;

o. such other disclosures as may be required by law, regulation, or court, arbitral or governmental order.
(Emphasis Supplied)”

14. Reading of the aforesaid Clause displays that parties shall maintain confidentiality about the terms of the agreement, except, where the same is required by an order of a Court or arbitral tribunal, which has been precipitated by a third party request. Thus, Clause 12 of the Samsung Agreement allows for disclosure, when it is by way of a Court order, upon request by a third party, which in the present cases, are the defendants. Even the applicant-Samsung itself has admitted that there is an exception to the confidentiality clause prescribed in the agreement. Thus, Para 5 of the applications, read as under:
“xxx xxx xxx
5. The Applicant entered into the PLA with Plaintiff No.1 and other InterDigital group companies. That Parties to the PLA are under an obligation to maintain confidentiality with respect to the terms of the PLA. In this regard, Clause 12 of the PLA specifically requires each of the parties to the PLA to maintain strict confidentiality of the terms of the PLA disclosed under, or as a result of or during the negotiation of, the PLA. However, an exception to this confidentiality requirement is if the disclosure is required pursuant to a court or arbitral tribunal which has been precipitated by a third party request, or a governmental order, as long as a notice is provided to the other party as soon as any proceeding that may lead to such order is known, so as to permit the other party to intervene to prevent disclosure of the PLA. Further, in case of a possible ordered disclosure, the PLA requires the party that would be subject to such order to give the other party a reasonable prior notice of such intended disclosure and use its best efforts to ensure such disclosure is prevented by a protective order and seek confidential treatment of the PLA.

xxx xxx xxx”
(Emphasis Supplied)

15. It is further to be noted that since the agreement is to be disclosed under the aegis of the confidentiality club to specific individuals who are members of the said club, no prejudice will be caused to the applicant.
16. Samsung has contended that it was only through the affidavits filed by the in-house representatives of the defendants on 3rd July, 2024, that it was revealed that the said in-house representatives are ‘Senior IP Counsel’, involved in Patent Licensing Matters. However, this contention has been vehemently opposed by learned counsel for the defendants. Attention of this Court was drawn to the proceedings in the UK Court, to submit that the names of the in-house representatives of the defendants are mentioned in the UK proceedings, wherein, their position and role, has been divulged.
17. This Court also rejects the contention of the Samsung that the confidentiality clause of its PLA with the plaintiffs, has been breached by the plaintiffs. After passing of the order dated 5th April, 2024, by this Court, wherein, it was agreed that the seven PLAs, including, the Samsung PLA will be filed as evidence in the trial in the present proceedings, the plaintiffs’ counsels in the UK notified Samsung vide letter dated 7th June, 2024, in accordance with the plaintiffs’ obligations under Clause 12 of the PLA, that they intended to disclose the Samsung PLA. By letter dated 17th June, 2024, Samsung conveyed its objection to the disclosure and vide subsequent letter dated 21st June, 2024, communicated its reasons for the objection. Thereafter, the present application was preferred by Samsung. This Court records the submission of learned counsel appearing for the plaintiffs that the Samsung PLA has not been disclosed by the plaintiffs to the defendants, till date. Thus, it is apparent that the plaintiffs have fully complied with their disclosure obligations under the Samsung PLA, as per Clause 12 therein. Therefore, it cannot be said that the plaintiffs have breached their disclosure obligations under the Samsung PLA.
18. It is also to be noted that the in-house representatives/counsels of the defendants are bound by strict confidentiality to not disclose any information given under the confidentiality club. Further, there is a restriction of two years imposed upon the said in-house representatives/counsels of the defendants, from engaging in any negotiations with the third parties, whose PLAs are disclosed to the members of the confidentiality club.
19. The contention of the applicant that providing access of the agreement to the in-house representatives of the defendants, will give competitive advantage to the defendants, is totally misplaced. This Court notes the submissions on behalf of defendants in this regard that comparable license agreements are integral to the adjudication of SEPs/ FRAND dispute. Even otherwise, various orders have been passed by this Court regarding disclosure of the PLAs. Specifically, this Court notes the order dated 5th April, 2024, wherein, this Court noted that seven third party agreements entered into by the plaintiffs, have already been shared with defendant in proceedings before the UK Court. While noting the restrictions imposed upon the in-house representatives of the defendants, this Court vide order dated 5th April, 2024, noted that the seven agreements will be made part of the confidentiality club instituted by this Court.
20. This Court also notes that the agreement in question has already been disclosed in proceedings before the UK Court, in terms of the documents placed before this Court.
21. Considering the detailed discussion hereinabove, it is directed as follows:
21.1 The plaintiffs shall show the complete Patent License Agreement (“PLA”) dated 1st June, 2014 between the applicant and plaintiff no. 1 and other InterDigital Group Companies, to in-house representatives/employees of the defendants.
21.2 The in-house representatives/counsels of the defendants, members of the confidentiality club, shall not be involved in any negotiations with the Samsung, without Samsung’s consent, for a period of two years, from the date of being provided access to the Samsung PLA.
22. The present application is disposed of, in terms of the aforesaid directions.
CS(COMM) 692/2021
CS(COMM) 707/2021

23. List on 20th January, 2025.

MINI PUSHKARNA, J
OCTOBER 14, 2024
ak

CS(COMM) 692/2021 & CS(COMM) 707/2021 Page 16 of 16