Australia: Spooks in the Courthouse: Third Party Access to Information in Patent Litigation

Pharmaceutical companies are becoming increasingly sophisticated in their use of publicly available records generated in litigation as a source of commercially useful information. Documentation generated in the course of legal proceedings can give rise to the potential for a third party, with no involvement in the proceedings, to obtain information about a competitor's activities which would not otherwise be available.

Patent litigation, by its nature, is an area in which such issues may arise. The subject matter of patent litigation often involves disclosure of commercially sensitive information relating, for example, to research and development and corporate strategies. This is particularly true in the pharmaceutical industry.

This type of information is almost always confidential and protective court orders are commonly made securing the confidentiality of documents and information. However, in doing so, courts will attempt to strike a balance between the well established basic principle that legal proceedings take place in open court, and the need to protect parties from unduly adverse commercial consequences as a result of the unnecessary disclosure of genuinely confidential material. Further, confidentiality orders can only go so far in limiting access to confidential information.

The discussion below centres on the potential for non-parties to access court records in the Federal Court of Australia (where most patent litigation is conducted in Australia), and explores some of the consequences for patent litigation in the Federal Court and the measures which may be taken to protect confidentiality.

Certain documents on a Federal Court file may be inspected by any person, and these may broadly be divided into three categories. The first category consists of essentially procedural documents which indicate the progress of the case, including originating process and notices of appeal; notices of appearance and of solicitors ceasing to act; notices of motion and notices of discontinuance. In some rare cases, it will be appropriate to suppress the identity of a party.

The second category is documents which are more substantive, consisting of pleadings or particulars, judgments and reasons for judgment, and orders. From these documents, a third party will be able to discern something of the detail of the parties' positions in the case, and the court's findings.

While it would be difficult to argue that such documents should not be generally available, inspection by a non-party of some of these documents may result in unforeseen disclosures. By way of example, a subpoena to produce documents may be issued, directed to person who is not a party to proceedings. As will be mentioned below, a subpoena cannot be inspected on the court record by a person who is not a party to the proceedings. Accordingly, a member of the public would not be aware from the court record of the involvement of the subpoenaed person at the time the subpoena was issued. However, if the subpoenaed person filed an appearance and challenged the subpoena or sought orders in relation to the matter (including as to the confidentiality of documents subpoenaed), the involvement of the subpoenaed party would then become apparent from the publicly searchable documents on the court record. The subpoenaed person's involvement in the proceedings (and therefore, one might presume, in the underlying commercial transaction) will then become available to the public, including competitors.

Thirdly, a member of the public may access written submissions filed in Federal Court proceedings. These are likely to be the most substantive documents available to a member of the public. They may well include detailed reference to affidavits filed in the proceedings and not yet admitted into evidence (which, as discussed below, are not otherwise available to a non-party except by order of the court), and to this extent their public availability under this rule gives rise to a potential inconsistency.

Disclosure of submissions may well be of concern to parties in patent cases, where the submissions may deal in detail with technical information of at least one of the parties (typically the alleged infringer). To address this issue, orders made by consent in specific proceedings often enable parties to mark submissions "confidential" and therefore protect them from disclosure. However, if that is not specifically done, the submissions will be available. To some extent this problem may be able to overcome by careful drafting of submissions. However, there is a degree to which parties to litigation may need to accept that their general position or strategy in relation to issues central to the litigation is likely to become a matter of public record.

Documents which cannot be inspected by a non-party to the proceedings without leave of the court include affidavits; unsworn proofs of evidence and deposition evidence; interrogatories and answers to interrogatories and admissions; lists of discovered documents and subpoenas; and transcripts of proceedings.

The rule does not confer on any person a right to inspect such documents. Where a non-party seeks leave for access to these documents, the parties to the proceedings will be given the opportunity to be heard (either formally or informally) on the question of whether access is appropriate. However, the court will ordinarily take the view that non-parties should be granted leave to inspect all non-confidential documents which have been admitted into evidence.

Affidavit material which has been filed in proceedings but not yet relied on in court is accorded a certain degree of protection from disclosure to third parties. Consistently with this position, an affidavit filed but not yet relied on in proceedings is treated as being subject to an "implied undertaking" that it is to be used by the other party to the proceedings only for the purposes of that proceeding and not for "ulterior purposes". However, once material is received into evidence, it appears that, subject to any other applicable restraints on confidentiality, the implied undertaking is at an end.

Parties to litigation must, therefore, proceed on the basis that once an affidavit becomes part of the evidence relied upon in open court, it will be treated as forming part of the public record of the proceedings and may well be made available to non-parties.

In most cases the difficulties identified above, particularly in relation to affidavit material, may be addressed by the making of appropriate orders governing the use of confidential material in the legal proceedings. Such orders generally apply to any document designated by either party as confidential in the proceedings, although they usually provide for a party to seek orders from the court permitting disclosure if it considers that the relevant information is not properly to be regarded as confidential.

Confidentiality orders typically deal with a wide range of aspects of the treatment of confidential information, which are not traversed in detail here, and need to be very carefully drafted. They often include an order to the effect that the court may be closed for discussion or submission on the contents of a confidential document. If that occurs, consequential limitations will be placed on public access to the relevant transcript. There have been instances where large tranches of patent litigation proceedings have been conducted in confidence. However, in some cases judges may be reluctant, in the event, to close the court unless they are convinced that the material to be discussed is truly of a highly sensitive nature. This sometimes results in counsel preferring to make oblique references to confidential material without disclosing it. That circumstance is perhaps best avoided by limiting the designation of "confidential" to material the commercial sensitivity of which can be conclusively established. Experience suggests that detailed technical data and financial information are the easiest categories to protect in this way.

Parties to litigation need to be aware of the possibility of third party access to material which is filed with the court. The recourse to this material to obtain information about the activities of competitors is an increasingly common commercial practice, and, to some degree, it is an inevitable consequence of the principle of open justice. The best strategy for minimising the risk of unwanted disclosure of information is to determine as early as possible in the course of legal proceedings the nature of the information and documents over which it is likely that confidentiality will be able to be maintained, and to put in place a court-ordered regime to protect that information as far as possible.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.