England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/09/2013

Mr Justice Roth:

Introduction

1. This is the latest skirmish in protracted and bitterly contested litigation concerning a patent used in mobile phones. The patent at issue is EP (UK) 1 841 1268 ("the Patent"), and is thus the UK designation of a European patent. It essentially concerns a means of controlling access to the Random Access Channel or RACH between mobile phones and a network base station.
2. The claimant ("IPCom") is the patentee. The three defendants, between whom for present purposes it is unnecessary to distinguish and to whom I shall refer compendiously as "HTC", are sued for infringement but counterclaim alleging that the Patent is invalid. They contend that in any event they are now using 'workarounds' or variants that do not involve infringement of the Patent.
3. This judgment addresses three contested applications before the court. HTC applied to have the trial of the so-called "technical issues" of invalidity, essentiality and infringement, adjourned until the final determination of proceedings to determine the validity of the European patent currently pending before the European Patent Office ("the EPO"). IPCom applied for an "unless" order to enforce directions given by Norris J on 25 September 2012 for inspection of parts of the source codes which enable or govern access to the RACH ("the Norris Order"). The source code relates to the modifications to the chips in the products which HTC contends have been made so as to avoid infringement. Those chips are supplied to HTC by the third party applicants ("Qualcomm" and "Intel") who are responsible for the software and the relevant source codes. Qualcomm and Intel have issued applications seeking to vary or discharge this provision in the Norris Order.
4. Since the trial of the technical issues was fixed to commence in a trial window commencing on 9 December, the applications were obviously urgent. I therefore announced at the conclusion of the argument that I would not adjourn the trial, and would not discharge the obligation on HTC to give inspection of the source codes but would vary the terms of the Norris Order so as to confine disclosure to a tightly drawn confidentiality ring. This judgment sets out my reasons for those decisions.

Background

5. To understand the basis of these applications, it is necessary to summarise the rather involved procedural history of the proceedings concerning the Patent. In doing so, I draw on my previous judgment in this case determining an earlier application for a stay, to which I shall have to return. As I there observed, the issues confronting the court result largely from the problem caused by the European patent regime that permits concurrent proceedings concerning validity or revocation of a patent before the EPO and national courts.
6. The Patent, in the form subject to the existing claim, was held to be valid by Floyd J in a judgment delivered on 16 June 2011 in proceedings brought by Nokia against IPCom: [2011] EWHC 1470 (Pat). In doing so, Floyd J rejected challenges to the validity of the Patent on grounds of novelty and obviousness. However, he granted a declaration of non-infringement regarding certain types of devices: see at [204]-[207] of his judgment. By subsequent decision on 8 July 2011, Floyd J declared (and this was not really in issue), that the Patent was essential to the Universal Mobile Telecommunications System ("UMTS") standard.
7. Floyd J's decision in the Nokia proceedings was upheld by the Court of Appeal on 10 May 2012, and the Supreme Court subsequently refused permission to appeal.
8. However, Nokia had advanced also 'non-technical' defences to IPCom's claim for an injunction, contending that it was entitled to a licence on the basis of competition law or alternatively the effect of acts and agreements made by Bosch prior to assignment of the Patent to IPCom. The trial of those non-technical defences had been stayed pending the technical trial. Because of those non-technical defences, Floyd J declined to grant an injunction following his determination of validity, but gave directions for further pleadings on the non-technical issues.
9. On 18 May 2012, the Nokia case came before me on an application by IPCom to strike out or obtain summary judgment dismissing Nokia's non-technical defences to IPCom's claim for an injunction. However, it was clear from the parties' submissions that, irrespective of those arguments, IPCom was prepared to grant a licence of the Patent to Nokia on FRAND terms and Nokia was prepared to take such a licence from IPCom. But Nokia and IPCom were not in agreement as to what the terms of such a licence should be, and the rate of royalty was of course also relevant to damages for past use.
10. Therefore, the course which the court adopted was to direct a trial to determine the FRAND terms and the question of damages to be held in the summer term of 2013 ("the FRAND trial"). There would be no injunction in the meantime. By adopting that course it was not necessary to explore the various other non-technical defences, whether on that summary judgment application or, if it had been dismissed, at a substantive trial.
11. The present proceedings were commenced by IPCom against HTC on 17 June 2011, the day after Floyd J delivered his judgment upholding the Patent in the Nokia case. HTC is of course not bound by the judgment in the Nokia case, and as I observed at the outset, it has similarly contended that the Patent is invalid. A trial which it was understood was confined to the issues of validity and infringement (the 'technical trial') was fixed to commence in February 2013.
12. HTC also raised 'non-technical' defences to the claim to an injunction, similar to those advanced by Nokia. However, IPCom made clear that, as with Nokia, it was prepared to grant a licence to HTC on FRAND terms. Following the hearing regarding the non-technical defences in the Nokia case, IPCom and HTC sensibly agreed that they too should proceed to a trial as to the FRAND terms for a licence to HTC and that this trial should also encompass the principles to be applied to any award of damages. As with Nokia, it was on that basis unnecessary to have a trial of the 'non-technical' issues.
13. In parallel with these developments in the English litigation, the underlying European patent was under opposition before the EPO. On 25 April 2012, the Opposition Division held that the Patent was invalid by reason of added matter.^[1] As is customary, it therefore did not consider the other grounds of opposition. IPCom appealed to the EPO's Technical Board of Appeal (the "TBA").
14. In May 2012, I heard an application by HTC to stay the technical trial until the determination of the appeal to the TBA. In that hearing, HTC offered in support of its application an undertaking that it would thereafter in its current and future ranges use only one of the variants in respect of which Floyd J had issued a declaration of non-infringement in the Nokia case ("the approved variants"). Although there could be no guarantee that the TBA would expedite the hearing of the appeal, I agreed to write to the TBA requesting that it determine the appeal under its accelerated procedure and I granted the application for a stay.^[2]
15. Furthermore, notwithstanding the undertaking, IPCom expressed concern as to whether the devices supplied by HTC would indeed conform to the approved variants. Accordingly, while otherwise adjourning the technical trial, I ordered HTC to serve a product and process description ("PPD") pursuant to the Practice Direction to CPR Part 63, "so that IPCom will have a verified statement as to precisely what HTC say they are doing" (judgment at [38]). The order gave IPCom liberty to apply for specific disclosure on the basis that the PPD served is inadequate.
16. However, no adjournment was sought as regards a FRAND trial. The Patent at issue is of course the same as in the Nokia case and FRAND terms by definition are of general application. Since the FRAND trial in the Nokia case was due to be heard in July 2013, IPCom and HTC agreed that it was desirable for their FRAND trial to be heard together with the Nokia FRAND trial. Subsequently, an order was made in those terms.
17. HTC served PPDs pursuant to my order but IPCom did not regard them as adequate and applied for further disclosure. On 25 September 2012, Norris J, while refusing to grant the wide-ranging disclosure sought by IPCom, ordered disclosure of the relevant parts of the source codes for two of the devices used by HTC. It will be necessary to consider his reasons for doing so below. He also directed that the trial of the technical issues with a time estimate of 8 days should be within a window commencing on 3 December 2013 "[i]n order that the matter shall not drift": judgment at [37]^[3].
18. I presume that the fixing of the technical trial for December 2013 was on the basis that by then the TBA would have decided the appeal, which it had decided to accelerate. That indeed proved to be the case: the TBA heard the appeal on 7 March 2013 and as usual announced its decision at the conclusion of the hearing. It allowed an amendment to the claim, and held the Patent valid with that amended claim. It therefore remitted the case to the Opposition Division to consider the other grounds of opposition, i.e. lack of novelty and lack of inventive step. The TBA's written decision was issued on 6 May 2013.
19. It follows from the TBA decision that the Patent will not survive in the form ruled on by Floyd J, and as matters presently stand the relevant form is that approved by the TBA ("the TBA Patent"). One of the applications before the court was by IPCom for permission to amend its claims to conform to the TBA Patent. In the end it was agreed that this application should be determined at the technical trial and it is unnecessary to say more about it, save that IPCom for obvious reasons does not now seek to defend the Patent in the form ruled on by Floyd J.
20. In the light of the TBA decision, both Nokia and HTC applied in April 2013 to adjourn the FRAND trials that had been due to be heard in July 2013. Those applications were granted by Mann J following a hearing on 23 April. He held that since the FRAND trials were based on the form of the Patent ruled on by Floyd J, the legal basis of those inquiries as to the terms of a licence had gone. He found that "there are serious questions to be decided about the construction and scope of the amended claim which would make a debate about that at the FRAND inquiry very difficult to conduct at present": judgment at [44]. And he noted that the finding of infringement that created the need for a licence covered only the Patent as considered by Floyd J, which was no longer the relevant form.
21. Accordingly, the position as at the hearing of the present applications was that:

i) the opposition to the TBA Patent was (and is) pending before the Opposition Division;

ii) the listing of the FRAND trial in the present case, along with that in the Nokia case, had been vacated;

iii) the technical trial was due to commence in December 2013 pursuant to the Norris Order.

Stay of the Technical Trial

22. The stay ordered on 31 May 2012 was limited to the period up to the decision of the TBA on the appeal against the Opposition Division's revocation of the European patent. In granting that application, I emphasised that that decision did not in any way prejudge the outcome of an application by HTC for a further stay in the event that the TBA remitted the matter to the Opposition Division. That is now the situation, and the court's discretion falls to be exercised afresh in the light of all the current circumstances.
23. The leading case on the question of a stay of proceedings in this court because of parallel proceedings before the EPO is Glaxo Group Ltd v Genentech Inc [2008] EWCA Civ 23, [2008] FSR 18. It is appropriate to set out the guidance expressed by Mummery LJ at [80]-[88] in giving the judgment of the Court of Appeal:

"First, the discretion, which is very wide indeed, should be exercised to achieve the balance of justice between the parties having regard to all the relevant circumstances of the particular case.

Secondly, it is the discretion of the Patents Court, not of the Court of Appeal. The Court of Appeal would not be justified in interfering with a first instance decision that accords with legal principle and has been reached by taking into account all the relevant, and only the relevant, circumstances.

Thirdly, although neither the EPC nor the 1977 Act contains express provisions relating to automatic or discretionary stay of proceedings in national courts, they provide the context and condition the exercise of the discretion.

Fourthly, the possibility of the duplication of proceedings contesting the validity of a patent granted by the EPO is inherent in the system established by the EPC. In practice national courts exercise exclusive jurisdiction on infringement issues and they have concurrent jurisdiction with the EPO on validity issues. As Mr. Daniel Alexander QC appearing for GSK said, the Contracting States and the UK Parliament contemplated that the national Patents Courts should be able to determine the same issues of patentability as the EPO. The resultant legislation allowed the determination by the national court and the EPO to proceed at the same time. Indeed, there is nothing in the EPC or the 1977 Act to prevent the commencement of revocation proceedings in the Patents Court on the very date of the grant of the patent by the EPO.

Fifthly, this setting indicates that, in present conditions, one factor affecting the discretion will usually carry more weight than any other. That is the length of time that it will take for the respective proceedings in the national court and in the EPO to achieve some certainty on the issue of the validity of the patent in suit so that business knows where it stands. The length of the stay of proceedings, if granted, is, in general, the most significant factor in the discretion. Both the parties' legitimate interests and the public interest are in dispelling the uncertainty surrounding the validity of the monopoly rights conferred by the grant of a patent and the existence or non-existence of exclusive proprietary rights on a public register. A decision in the revocation in the Patents Court will dispel some of the uncertainty. If the likelihood is that proceedings in the Patents Court would achieve this resolution significantly sooner rather than the proceedings in the EPO, it would normally be a proper exercise of the discretion to decline to stay the Patents Court proceedings. They should be allowed to proceed to a decision that would supply some certainty in the public interest and the parties' legitimate interests.

Sixthly, there are no grounds justifying the application by the Patents Court of a presumption that the duplication of legal proceedings in it and in the EPO is, without more, a ground for a stay of the proceedings in the Patents Court, as the EPC system allows for parallel proceedings contesting the validity of the patent in both the international court (which is what the EPO in substance is) and in the national court.

Seventhly, the Patents Court judge is entitled to refuse a stay of the national proceedings where, as here, the evidence is that some commercial certainty would be achieved at a considerably earlier date in the case of the UK proceedings than in the EPO. It is true that it will not be possible to attain certainty everywhere until the EPO proceedings are finally resolved, but some certainty, sooner rather that later, and somewhere, such as in the UK, rather than nowhere, is, in general, preferable to continuing uncertainty everywhere. Thus, in this case some degree of commercial certainty could be achieved at the trial of the UK revocation action in February without unfairly prejudicing Genentech's legitimate interests in the protection of its patent.

Eighthly, much weight should be given to an assertion by a commercial party that it has a good reason for resisting a stay. Normally a party is the best judge of its interests. Contentions of a competitor that there is no commercial need for early resolution of validity should be viewed with suspicion. Detailed arguments of the sort advanced here are unlikely to carry weight and a judge would be justified in dealing with them shortly.

Finally, other considerations in the particular case may affect the balance of justice, such as the additional costs in the duplication of proceedings, the order in which the proceedings were commenced and so on, but, in general, the other factors, though relevant, are of lesser importance than achieving some commercial certainty somewhere sooner … "

24. In his submissions for HTC, Mr Abrahams suggested that the reasoning in the fifth guideline does not apply in this case because IPCom is a non-practising entity. I do not agree. The considerations set out in Glaxo were clearly intended to express general guidance on a stay in the case of parallel proceedings. Mummery LJ emphasised that they were not intended to fetter the discretion of the court, but subject to that important point I think that as a matter of approach they are binding on this court. Of course, that does not mean that the commercial circumstances of the parties, including the fact that IPCom is not engaged in the supply of goods affected by the Patent, are irrelevant: on the contrary, as held in my previous judgment, I do regard it as a pertinent factor, but it falls for consideration in the context of the fifth guideline; it does not mean that that guideline has no application.
25. Mr Abrahams strongly relied on my judgment of 31 May 2012, which he submitted was amply justified by the subsequent TBA decision. He argued that the same factors which led to the grant of a stay in May 2012 up to the TBA decision applied to support the further stay now sought by HTC.
26. However, when this issue was before the court in May 2012, the Opposition Division had issued a decision that the European patent should be revoked for added matter. If that had been upheld by the TBA, the Patent as found valid by Floyd J would have fallen away. Any trial of the technical issues conducted in the meantime, at great expense, would have been rendered irrelevant and a waste of time and money.
27. Further, although there could be no assurance that the TBA would accelerate the appeal, under the terms of the 2008 notice from Vice-President of DG 3 of the EPO there seemed a reasonable prospect that it would do so, in which case its decision would be expected within 4-16 months of the technical trial due to be heard in February 2013. As I have mentioned, the TBA indeed ordered acceleration and, as it turned out, its decision was given in early March 2013, so the delay which resulted from the stay proved to be even less. Now the matter is back before the Opposition Division, and whatever its decision HTC realistically accepts that a further appeal to the TBA is very likely. Accordingly, a further stay involves waiting for two levels of decision in the EPO. Even assuming that the EPO continues to apply an accelerated procedure, it was common ground at the hearing that it will take a further 14-20 months until the determination of such a new appeal, i.e. at least 8 months after the technical trial fixed for December 2013.
28. Nor is that necessarily the end of the matter. Under the EPO procedure, if the Opposition Division were to find the European patent invalid for prior art, it will not consider the objection of obviousness. If the TBA then reversed its decision on novelty, the case will be remitted to the Opposition Division for it to consider obviousness, with a likely further appeal against its decision. Accordingly, the potential total delay resulting from the stay now sought is much longer.
29. Mr Abrahams submitted that one should not consider the 'worst case' scenario and that the court should approach the matter on the basis of just one appeal to the TBA. But I consider that it is necessary to have regard to the total picture. In determining what is now an application for a stay until final resolution of the case in the EPO, it is not appropriate to segment the various stages in the EPO process so as to leave some possibilities out of account. The potential delay is therefore several years.
30. Further, there is an important distinction with the position when a stay was previously sought by HTC. A significant factor in the court's decision to grant a stay was HTC's undertaking to use only the approved variants which IPCom then conceded did not infringe the Patent. In other words, IPCom accepted that it would not seek a different determination as regards those variants in the trial of the present action from that found by Floyd J in the Nokia case: see para 34 of my judgment. On that basis, HTC's undertaking was in effect an undertaking that it would not infringe the Patent. This was therefore not a situation of alleged continuing infringement over the period of the stay. However, IPCom has now resiled from that position and states that it will contend that the approved variants do infringe, and it of course advances that contention as regards the TBA Patent.
31. Although HTC protested at this change of stance, it did not suggest that IPCom was not entitled to adopt this position. If it proves unfounded in the technical trial, failure on that issue may of course carry consequences in costs. But for present purposes, an extended delay of the technical trial means that, on its case, IPCom faces not only delay in recovering damages for past infringement prior to HTC's decision to use only the approved variants, but continuing infringement which it cannot prevent by injunction and for which its right to damages is similarly postponed. Of course, if the TBA Patent should ultimately be held to be invalid, IPCom has no such rights. But where a patentee's whole business is based on the exploitation of its patents, extended uncertainty over a patent's validity in circumstances where it contends that the subject-matter of the patent is being continually used is likely to be of significant consequence. In my judgment, IPCom's assertion that there is significant commercial benefit in the relative certainty offered by determination as against HTC in this court of validity of the TBA Patent is a very relevant factor.
32. As against that, I acknowledge that there is a risk that a challenge to the TBA Patent on the basis of prior art and/or obviousness may be dismissed in the English proceedings, but then prevail before the EPO. In that event, the English proceedings would have proved a waste of time and money. But in that regard, I think it is of some relevance that these issues were exhaustively considered in the Nokia case and rejected by both Floyd J and the Court of Appeal. The TBA Patent has narrowed the claims, so that does not make those challenges any more likely to succeed. The risk of inconsistent outcomes is inherent in the EPC system and is not in itself sufficient justification for a stay: see the sixth guideline in Glaxo. And there is a certain irony in HTC's position. If it is successful in the technical trial in showing that the Patent, in whatever form, is invalid, that is the end of the matter. Even if the EPO proceedings lead to a different result, that will not restore the UK patent. It is only if HTC fails in the technical trial in this court, but then succeeds before the EPO, that the English trial is rendered a waste of time. But the former is of course the opposite of what HTC contends will happen.
33. I think there is rather more force in the argument of Mr Abrahams that there may be yet further amendments by IPCom during the EPO proceedings to the claims in the TBA Patent, so that even if a form of the Patent is upheld in the EPO, that form may differ from the TBA Patent upon which IPCom now seeks to claim in the technical trial. I accept that there is such a risk. Nonetheless, since any amendment could only narrow the claims further, it would be unlikely to impact on the challenges for novelty or obviousness although it clearly could affect the position regarding infringement. This is one of the problems caused by such concurrent proceedings, to which there is no ideal solution. In the end, I consider that in this case that factor is outweighed by the risk of prolonged delay and the relative commercial certainty that would be achieved by a technical trial at the end of this year.
34. HTC raised a further argument in support of a stay on the basis of the uncertainty regarding the meaning of the wording in the TBA Patent. This depends on the correct translation of the German text. It was submitted that more certainty may be achieved in the EPO proceedings which would assist the technical trial in this court. In the evidence submitted on behalf of HTC, it was suggested that the EPO might ultimately uphold the TBA Patent but "translate it differently to the translation IPCom has submitted with its application to amend the Patent." This is a misconception. The EPO proceedings as regards this European patent are conducted in German and German remains the authentic text of the patent. The EPO does not produce an official translation. It is for IPCom as patentee to produce a translation of the claims into English, as it has done in its proposed amendment to the claims in these proceedings. It will then be for this court to determine whether the claims are wider than the claims in the TBA Patent (or if they are narrower then for the purpose of the infringement claim IPCom is confined to the narrower protection): see section 80 of the Patents Act 1977. Accordingly, any disputes regarding the translation will not be determined by the proceedings in the EPO. I do not see any weight in this point.

Inspection under the Norris Order

35. As noted above, in my order of 31 May 2012 I directed that HTC serve PPDs regarding the devices which it was supplying and which it undertook conformed to the approved variants. HTC duly served PPDs but IPCom applied under the "liberty to apply" provision of the order for specific disclosure on the ground that those PPDs were inadequate.
36. Following a hearing on 25 September 2012, Norris J held that limited specific disclosure should be made, "to enable IPCom to understand the relationship between the product as described in the PPD and what is actually produced by HTC in its devices": judgment at [34]. His order directed disclosure by 21 October 2012 of the relevant part or parts of the source code of two products (one using a source code originating from Qualcomm and the other a source code originating from Intel). He recognised that the source codes were confidential and para 6 of his order included the following provision:

"The parties shall co-operate to seek to agree appropriate terms of confidentiality between them so as to protect their own interests and those of Intel and Qualcomm. In the absence of agreement, any party may apply to the Court so as, insofar as is possible to avoid prejudice to the immediately following paragraph of this order."

The following paragraph 7 ordered inspection by 3 December 2012, no doubt to give time for the process envisaged by para 6.

37. Norris J refused HTC permission to appeal his order and no application to appeal was made to the Court of Appeal.
38. Although disclosure was granted, inspection has still not taken place. That explains IPCom's application for an "unless" order. However, as stated at the outset, Qualcomm and Intel intervened and issued applications to have this provision of the Norris Order discharged.
39. I was told that there is a confidentiality club in place by consent for the PPDs themselves and that although efforts were made, involving Qualcomm and Intel, following the Norris Order to agree the terms of a confidentiality club covering specifically the source codes, those efforts did not succeed. However, HTC has not made any application to vary the Norris Order.
40. IPCom took as a preliminary point that Qualcomm and Intel were not entitled to make this application at all since they are not parties to the proceedings and were not parties to the hearing before Norris J. The latter point is significant in the light of CPR rule 31.19, "Claim to withhold inspection or disclosure of a document", which includes the following provisions:

"(3) A person who wishes to claim that he has a right or a duty to withhold inspection of a document, or part of a document, must state in writing –

(a) that he has such a right or duty; and

(b) the grounds on which he claims that right or duty.

…

(6) For the purpose of deciding an application under … paragraph (3) (claim to withhold inspection) the court may –

……

(b) invite any person, whether or not a party, to make representations."

41. At the hearing before Norris J, HTC did not seek to resist inspection on the basis of rule 31.19(3) and Qualcomm and Intel were not invited to make representations.
42. However, Qualcomm and Intel rely on CPR rule 40.9:

"A person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside or varied."

43. Neither the third party applicants nor IPCom were able to cite any authority bearing directly on the scope of this potentially very broad provision. However, I was referred to the commentary in The White Book, where the editors state (at note 40.9.1):

"On the face of it, that is a strikingly wide proposition and the first thing to be said about it is that there is no general rule to the effect that a non-party may do what a party may not. As is the case with parties, the circumstances in which a non-party might succeed in an application to set aside or vary a judgment or order are restricted and cannot easily be stated succinctly. By stating that a "directly affected" non-party may apply to have a judgment set aside or varied, r.40.9 gives no clue as to when such an application may succeed. However there must be some circumstances in which it might, otherwise the rule would be otiose. … The circumstances in which the court gives judgments and makes orders (procedural or otherwise) are legion. The questions whether, as a matter of law, a judgment or order may be varied or revoked, and whether, on the application of a party or of a non-party, it should be varied or revoked, must be determined in the contexts in which they arise. Generally, where a non-party is likely to succeed in an application it will be in circumstances where, at least arguably, they are entitled to be made a party to the proceedings."

44. It is unnecessary on this application to determine the boundaries of rule 40.9. I am satisfied that it is broad enough to cover the case where a non-party seeks to contend that inspection of a document ordered against a party will involve disclosure of its confidential business secrets, at the very least in a case where, as here, that non-party's interest is sufficiently clear to be referred to in the order itself. I reach that view notwithstanding the express provision in CPR rule 31.19(6)(b), which it appears is only engaged in the event that the party against whom the order is sought expressly objects to inspection on a ground specified in rule 31.19(3). I consider that a non-party in whom the confidence rests should be able to apply even if the party against whom inspection is ordered does not raise an objection: indeed, the latter may not itself be particularly concerned about producing the document.
45. However, in the present case, Qualcomm and Intel sought to argue that Norris J ordered disclosure and inspection on a mistaken basis, submitting that in referring to a "puzzle" as to how HTC could use a workaround of the Patent if the Patent was essential to the UMTS standard, he misunderstood the situation and the way the standard is applied in practice. The explanation advanced by the third party applicants essentially repeated, although no doubt with greater elaboration, an argument advanced by HTC before Norris J. Norris J expressly recognised that explanation as a possibility, but considered that it was not necessarily the case and that disclosure was therefore appropriate: his judgment at [23]-[24] and [27].
46. I consider that it would be exceptional to vary an order on the basis of a re-run by a non-party of an argument already advanced before the judge who made the order, and who had evidently found it unpersuasive. It may well be that Qualcomm and Intel consider that they can put the argument better than it was put by HTC: indeed, Mr Onslow comes close to saying as much in his skeleton argument. But the party against whom the order was made chose not to appeal, and the right to apply under rule 40.9 is not a route to a re-hearing, albeit involving a new party. In my view, it is still less appropriate to entertain an application by a non-party to discharge an order for inspection on that basis when that application was not made within the period of over two months before inspection was due, but over five months after the date for inspection has expired. Nor does the fact that HTC's undertaking has now fallen away since the trial has not been adjourned materially change the position. IPCom alleges infringement, albeit now of the TBA Patent, and HTC continues to rely on the PPDs albeit that some amendment to the PPDs is likely to be required because of the amended claim sought to be advanced to reflect the TBA Patent. In my view, the PPDs are still relevant and the justification for the order remains. Accordingly, I am not prepared to discharge the order for inspection on substantive grounds.
47. However, I do take into account the concerns expressed by Qualcomm and Intel about the very high degree of commercial confidentiality that attaches to these source codes. The business of the third parties is chip manufacture and, as Mr Yafuso of Qualcomm expresses it, the source codes are among "the crown jewels" of Qualcomm's intellectual property assets (and the same of course applies to Intel). That was not really disputed by IPCom. I am therefore sympathetic to the third parties' position that a particularly tight confidentiality club should be imposed as regards these particular documents. Nor do I think that they should be disadvantaged in this regard for not having applied before the deadline for inspection given that, as I understand it, the parties (including Qualcomm and Intel) were still seeking to agree the scope of this confidentiality club over that period.
48. Having heard argument regarding the scope of the confidentiality club, I consider that it should be restricted at this stage to one or two nominated experts who each provide a written undertaking of confidentiality to the court, and to identified individuals in IPCom's external English lawyers (i.e. solicitors and counsel). Although Dr Sedlmaier, a German lawyer, is instructed on IPCom's behalf in these proceedings, and as a lawyer in practice in another EU Member State he has rights of audience in the English court pursuant to the European Communities (Service of Lawyers) Order 1978, I do not think it is appropriate to include him within the club. As a foreign lawyer he is not an officer of this court; and he works for the Frohwitter law firm of which one of the principals is Mr Frohwitter who, as I understand it, is one of the two people who run IPCom.
49. The source codes are very technical documents, and I would expect that IPCom's experts can explain with the help of the external English lawyers to their client the implications of what they have seen without disclosing what is contained in the codes themselves. If in the light of their advice IPCom wishes to extend the scope of the confidentiality club, then unless agreed by Qualcomm and Intel it should apply to the court with evidence explaining why this is necessary, and such application should be served on Qualcomm and Intel who may then appear on that application. Given the narrowness of the confidentiality club, I will not impose any further restriction by way of a patent prosecution bar.
50. Further provisions are to be incorporated setting out the timetable and regime governing inspection, as discussed at the hearing.
51. To that extent only, the Norris Order is varied.

POSTSCRIPT

52. Subsequent to announcement of my decision regarding a stay of the technical trial, and prior to the preparation of this written judgment, the Supreme Court handed down its judgment in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, where Lord Sumption (in a judgment with which Lady Hale and Lords Clarke and Carnwath agreed) stated at [38] that the Glaxo v Genentech guidelines should be reconsidered. See also the judgment of Lord Neuberger at [69]. In the light of that, and since my decision to refuse a stay was based on the application of those guidelines, I granted an application in writing by HTC for permission to appeal even before the handing down of this judgment, so as to avoid delay with regard to a trial due to commence in early December.

Note 1   The written decision setting out the full reasons was issued on 18 May 2012.    [Back]

Note 2   The order bears the date 10 August 2012 because of delay in its being drawn up for sealing, but it was made on 31 May 2012.    [Back]

Note 3   Where the year of the trial window is mis-typed.    [Back]