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Posted in patents Julie Gemptel

France – Trade secrets protection optimized with new procedural measures before Courts

The FRAND patent litigation case between Conversant Wireless Licensing SARL and LG Electronics Inc. and LG Electronics France offers a first and exemplary illustration of an extensive use of the procedural arrangements provided by the French Law of July 30, 2018 regarding the protection of trade secrets.

The Paris Court of Appeal recently handed down the first decision on the merits implementing the new provisions transposing the European Union Directive.

Besides defining the trade secret and infringement sanctions, the French Law July 30, 2018 aims at efficiently protecting secrecy in the course of trial. In that respect, Article L. 153-1 of the Code of commerce now offers multiple tools to judges including, notably, the possibility to limit the disclosure of exhibits to some parts thereof or to order disclosure of a summary of the same only, and to organize “confidentiality clubs“.

In Conversant vs. LG, further to the claimant’s request to set up a worldwide royalty rate and an exhaustion argument raised by the defendant, the Paris Court was invited to review sensitive documents such as third parties’ license agreements, and therefore was given a remarkable opportunity to take various steps to preserve confidentiality.

In October 2018, the pre-trial judge had already ordered that the communication of the non-redacted documents be limited to the parties’ lawyers and himself, as a first step. The parties’ counsels then sent their written observations to discuss the documents’ parts that could potentially jeopardize trade secrets, following which the judge handed down a new Order, acknowledging the parties’ agreement on the following measures:

  • The non-redacted documents would only be communicated to the parties’ lawyers, the judge, personnel of the Court and persons having signed confidentiality agreements (interprets, and economists experts).
  • The Court would be provided with two versions of the parties’ written briefs : one non-redacted (the officially binding version) in which confidential information would have to be highlighted in order to draw the Court’s attention onto the parts that should not be mentioned within its decision, and one redacted version, deprived of the confidential parts.
    The hearing before the Paris Court was scheduled over three days, during which the sensitive discussions occurred on camera to avoid public disclosure.

On 16 April 2019, the Court finally dismissed the claimant’s allegations, ruling that the patents asserted by Conversant were non-essential, and therefore the Court did not set a worldwide FRAND license rate. Importantly, had the decision included secret information, the Law of 30 July 2018 would have enabled the judge to accordingly adjust the statement of reasons of the decision and its mode of publication.

This promising case is hopefully the first of a long series, which should make Paris an advantageous forum to efficiently access trade secrets without compromising confidentiality.