For the IPKat, finding a claimant called ABC was literally a piece of cake

The IPKat has seen some strange things in his time, but never a judgment quite like this. It's in the case of ABC Ltd v Y [2010] EWHC 3176 (Ch), in which Mr Justice Lewison -- one of the Patents Court judges for England and Wales -- gave judgment in the Chancery Division today.

The judgment is so heavily censored (or "redacted", as the text reads) that it's quite difficult to follow in places, and it's so full of Xs and Ys that it reads like an algebra textbook.  At the heart of the matter is an application by someone who was not a party to proceedings. As the judge put it:

"Between November 2006 and June 2008 proceedings were on foot in the Chancery Division. [X] was not a party to those proceedings. They were proceedings between five companies [redacted] and Mr [Y], in which the five companies sought injunctions against Mr [Y] restraining him from disclosing or misusing confidential information. Those proceedings resulted in at least three orders of judges of this Division, including the Chancellor, following hearings in private. During the course of the proceedings on 27 September 2007, at another hearing in private, Master Bowles made an order that, subject to further order, non-parties might not obtain documents on the court file. The proceedings were eventually compromised in June 2008. Under the terms of the compromise Mr [Y] submitted to an injunction in broad terms; and withdrew allegations made against the five companies and/or their directors, officers, members etc and in particular withdrew all allegations of improper conduct made in the High Court proceedings. Part of the compromise was a comprehensive confidentiality agreement. Following the compromise a consent order was made by Chief Master Winegarten on 25 June 2008. A redacted version of that order is in evidence. The order does not state that it was made at a hearing in private; and the body of the order does not direct that the hearing be in private. The order includes an undertaking by Mr [Y] to be bound by a permanent injunction preventing the use or disclosure of confidential information, which is defined in very wide terms. It also included an undertaking by Mr [Y] that he had deleted copies of confidential information from all electronic or reusable media (including mobile phones and handheld computer devices). The order recited that the parties had "agreed to the terms set out in the Schedule hereto (which Schedule is confidential and therefore not to be filed at court)". The operative part of the order included an order that Master Bowles' order relating to the sealing of the court file be made permanent.

[X] has now applied for permission to have copies of documents on the court file. [Redacted]
The ground of the application, according to the application notice, is that:

"… the documents are required in connection with other related ongoing proceedings [redacted].""

Lewison J refused the application with respect to all documents save Master Winegarten's order.  In the course of doing so, he reviewed the principles of open justice as well as Article 6 of the European Convention on Human Rights ("In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice"), the need to balance that provision against the entitlement to privacy under Article 8 of the same Convention and the extent to which publicity/privacy applies to interim orders.

It has been a big year for big confidentiality cases, says the Kat, who had his work cut out in trying to lick
Imerman v Tchenguiz and others [2010] EWCA Civ 908 into shape (see IPKat posting here) and is somewhat reminded of it now.  Then there was that spat over the identity of The Stig ...

ABC here and here
X factor here
Y chromosomes here

Last week, in "Stig-ment of the imagination?", the IPKat reported on the dispute between the BBC, which holds the rights to the unbelievably popular Top Gear TV series, and publisher HarperCollins over the latter's right to publish a book that reveals the secret but much-discussed identity of The Stig -- a perpetually helmeted driver.

It's a good week for sorting out confidentiality cases. Only yesterday the IPKat finally sorted out the awesome decision in Imerman v Tchenguiz (here), and now he's catching up on Robert Andrew Jones v Ricoh UK Ltd [2010] EWHC 1743 (Ch), a Chancery Division for England and Wales decision of Mr Justice Roth midway through last month.

A tricky issue relating to the protection of rights in confidentiality versus freedom of speech was the subject of a lengthy and somewhat repetitive decision of the European Court of Human Rights (Judge Garlicki presiding, Judges Bratza, Bonello, Mijovic, Bjorgvinsson, Bianku and Poalelungi, and L Early) this Tuesday in Financial Times Ltd and others v United Kingdom (App. No. 821/03).

On 30 October 2001 mega-brewery Interbrew, contemplating a possible takeover bid for South African Breweries (SAB), asked its advisers Goldman Sachs to prepare a preliminary working document. Even the existence of the document was confidential: it was market-sensitive since it disclosed a possible takeover bid. A little later, someone obtained a copy of the document and prepared copies of it, which the Financial Times newspaper (FT) claimed to be 'doctored' in that they contained a fabricated offer price and timetable for the bid. That person sent copies of the doctored document to various publishers of news.

* Even though the disclosure order had not been enforced, that had not removed the harm since, however unlikely such a course of action appeared, the order remained capable of being enforced. It followed that that order constituted an interference with the newspapers' right to freedom of expression.

* On the basis that there was such an interference, it was next necessary to examine whether the interference was justified under Article 10(2).

* The interference was one which was 'prescribed by law' within the meaning of Article 10(2). It was intended to protect the rights of others and to prevent the disclosure of information received in confidence, both of which were legitimate aims.

* Since the aims of the interference were themselves legitimate, it next had to be asked whether that interference was necessary in a democratic society.

* Freedom of expression was one of the essential foundations of a democratic society and the safeguards guaranteed to the press were particularly important. Further, protection of journalistic sources was one of the basic conditions for press freedom. Without such protection, sources might be deterred from assisting the press in informing the public on matters of public interest. As a result, the vital 'public watchdog' role of the press might be undermined and the ability of the press to provide accurate and reliable reporting might be adversely affected.

* Having regard to the importance of the protection of journalistic sources for press freedom in a democratic society and the potentially chilling effect that an order for disclosure of a source had on the exercise of that freedom, such a measure could not be compatible with Article 10 unless it was convincingly justified by an overriding requirement in the public interest.

* It was for the national authorities to assess in the first place whether there was a 'pressing social need' for the restriction and, in making their assessment, they enjoy a certain margin of appreciation. However in this case the national margin of appreciation was circumscribed by the interest of democratic society in ensuring and maintaining a free press. That interest would weigh heavily in the balance in determining whether the restriction was proportionate to the legitimate aim pursued.

* Limitations on the confidentiality of journalistic sources called for the most careful scrutiny by the Court, whose role was not to take the place of the national authorities but rather to review the case as a whole, in the light of Article 10, and consider whether the decision taken by the national authorities fell within their margin of appreciation. The Court thus had to look at the interference and determine whether the reasons adduced by the national authorities to justify it were 'relevant and sufficient'.

* Article 10 protected a journalist's right, and duty, to impart information on matters of public interest so long as he was acting in good faith in order to provide accurate and reliable information in accordance with the ethics of journalism.

* Disclosure orders had a detrimental impact not only on the source in question, whose identity might be revealed, but also on the newspaper against which the order was directed, whose reputation might be negatively affected in the eyes of future potential sources by the disclosure, and on the members of the public, who had an interest in receiving information imparted through anonymous sources and who were also potential sources themselves.

* The public perception of the principle of non-disclosure of sources might suffer no real damage where it was overridden in circumstances where a source was clearly acting in bad faith with a harmful purpose and disclosed intentionally falsified information. However, the courts should be slow to assume, in the absence of compelling evidence, that those factors were present in any particular case.

* Given the multiple interests in play, the conduct of the source could never be decisive in determining whether a disclosure order ought to be made but would merely operate as one, albeit important, factor to be taken into consideration in carrying out the balancing exercise required under Article 10(2).

The IPKat thinks this was a close call, since the facts relate to a situation in which one of two morally innocent parties has to suffer: a company whose takeover target suddenly becomes more expensive through a deceitful breach of confidence and a newspaper which in good faith seeks to report and comment on matters of immediate concern to the commercial community. Merpel doubts that orders of this nature have much of a chilling effect in the United Kingdom anywhere, where the media are so powerful and the mechanisms for law enforcement so puny.

The conflict between maintaining the confidentiality of industrial data and facilitating open competition for public contracts lay at the heart of last week's European Court of Justice ruling in Case C-450/06 Varec SA v Belgium, Diehl Remschied GmbH & Co intervening (click here for the IPKat's note on the Advocate General's Opinion in this case).

Right: for the not-so-tender -- real leopard tracks

To summarise the issue: back in December 2001 the Belgian government invited tenders for the supply of track links for Leopard tanks for which Varec and Diehl both submitted bids. Belgium didn't think Varec's bid met its technical selection criteria and also thought it unlawful. Diehl's bid, however, was unobjectionable, well priced and fitted all the criteria. Unsurprisingly the contract went to Diehl. In Belgian proceedings to annul the award of the contract, Varec wanted to see the details of Diehl's submission and was told it couldn't because that information was confidential. The trial court stayed the proceedings and asked the European Court of Justice a question for a preliminary ruling on whether the provisions of EU law relating to public tenders required the relevant authority to ensure confidentiality and observance of the business secrets contained in the files communicated to it by the parties to the case, including the contracting authority, while being entitled to appraise itself of such information and take it into account.

The European Court of Justice ruled as follows:

"[The law] must be interpreted as meaning that the body responsible ... must ensure that confidentiality and business secrecy are safeguarded in respect of information contained in files communicated to that body by the parties to an action, particularly by the contracting authority, although it may apprise itself of such information and take it into consideration.

Right: another Belgian phenomenon -- Leopold tracks

It is for that body to decide to what extent and by what process it is appropriate to safeguard the confidentiality and secrecy of that information, having regard to the requirements of effective legal protection and the rights of defence of the parties to the dispute and, in the case of judicial review or a review by another body which is a court or tribunal within the meaning of Article 234 EC, so as to ensure that the proceedings as a whole accord with the right to a fair trial".

The IPKat notes that the European Court of Justice appears to value the confidentiality of information ahead of the entitlement to disclosure in the interests of open competition and fair play, whereas Advocate General Sharpston, while recognising the need for confidentiality, appeared to give it a more subservient role as against the entitlement of bidders for a contract to see that competing offers are fairly evaluated. Merpel says, yes but where does this leave the unsuccessful bidder who has been rejected on technical grounds that it may believe are open to challenge?

How the leopard got his spots here
The IPKat's favourite Belgian tank here

The IPKat is grateful to his old, old friend Tom O'Shea for drawing his attention to the Opinion of the Advocate General in Case C-450/06 Varec v État belge. This is ostensibly a public procurement case - and the IPKat never reads those - but the Court has been asked by the Belgian Conseil d’État (Council of State) whether a body hearing an appeal concerning the award of a public contract must protect the confidentiality of business secrets while remaining entitled to take account of evidence containing them.

The Belgian Defence Ministry invited tenders for the supply of tank track links. Two bids were received, one from Varec, the other from Diehl Remscheid. The contract was awarded to Diehl and the award decision, which listed a number of technical, administrative and legal grounds for excluding Varec’s bid, stated that Diehl satisfied all the selection criteria. That decision was based on, inter alia, consideration of certain plans and samples that were annexed to Diehl’s bid and which, at Diehl’s request, were returned to it after evaluation of the bids. Varec, challenging the award of the contract, asserts that Diehl’s bid did not in fact comply with all the criteria for the award. In order to evaluate that claim, it said, Diehl's plans and samples should be examined as evidence both by the reviewing court and by Varec after it asked for that review to take place. Diehl objected to lodging those plans and samples on the ground that they embodied confidential information and business secrets to which it did not wish Varec to have access. The auditeur (a sort of Advocate General in the Conseil d’État) considered that, if the contracting authority does not lodge a complete file, it has failed in its duty to assist in ensuring proper administration of justice and fair proceedings, and the Conseil d’État has no alternative but to annul the contested award.

Advocate General Eleanor Sharpston QC has taken the side of fair play against the argument that business secrecy is paramount. She advises the court to rule that:

"Article 1(1) of Council Directive 89/665, read in conjunction with the provisions of Council Directive 93/36 relating to the protection of confidential information, requires a review body

(a) to take cognisance of the whole of the administrative file and other evidence on which the contracting authority based its award and

(b) to accord confidential information the same protection as is accorded to it at the award stage.

Those obligations must be carried out subject to the right to a fair hearing and to equality of arms, which implies in particular that the review body should take care not to use any evidence withheld from one or more principal parties in any way which could infringe those rights".

The IPKat comments that confidentiality is not the subject of any pan-European IP right; it is merely legal recognition that is given to a set of facts and it is bound to be subservient to any principle of European economic policy that encourages fair competition.

Right: the IPKat conducts his own examination of the technology in question ...

Merpel says, but won't this make some contractors wary about bidding for public contracts at all - and won't this have a knock-on effect upon third parties whose confidential and valuable know-how might have to be disclosed to a competitor or a competitor's licensee?