Milan - Local Division
UPC_CFI_240/2023
Procedural Order
of the Court of First Instance of the Unified Patent Court delivered on 23/07/2024
Order no. ORD_40568/2024

APPLICANT
1) Oerlikon Textile GmbH & CO KG
(Applicant) - Leverkuser Strasse 65 - 42897 - Remscheid - DE
Represented by STEFANIA BERGIA

RESPONDENT
1) Himson Engineering Private Limited
(Respondent) - Survey n. 352, Hiratal Colony,
Represented by
FABRIZIO JACOBACCI
Ashwanikumar Road - 395008 - Surat, Gujarat - IN

PATENT AT ISSUE
Patent no. Proprietor/s
EP2145848 Oerlikon Textile GmbH & CO KG

DECIDING JUDGE
Judge-rapporteur Alima Zana

COMPOSITION OF PANEL – FULL PANEL
Presiding judge Pierluigi Perrotti
Judge-rapporteur Alima Zana Legally qualified judge Carine Gillet Technically qualified judge Michel Abello

LANGUAGE OF PROCEEDINGS: Italian

ORDER DETAILS
Order no. ORD_40568/2024 in ACTION NUMBER: ACT_549550/2023
UPC number: UPC_CFI_240/2023 Action type: Infringement Action
Related proceeding no. Application No.: 28655/2024 Application Type: APPLICATION_ROP262A
Headnote: Application pursuant to Rule 262A RoP by the applicants for a confidentiality order regarding the financial information provided in their response to an application under Rule 158 RoP.
Keywords: Rule 262A RoP – confidentiality. License agreement with a third party. Right to withdraw the document. Limited access to a club, which includes a natural person representing the defendant.
Applicant

PANEL
The present order has been issued by the judge-rapporteur.

LANGUAGE OF THE PROCEEDINGS: Italian

SUBJECT OF THE APPLICATION
1. The application for the protection of confidential information pursuant to Article 262A of the RoP was submitted on 20 May 2024 by the applicant Oerlikon's counsel in conjunction with the filing of the Rejoinder to the Reply and Reply to the Defence to the application to amend the patent. The application pertains to two documents (Nos. 37 and 38).
The applicant requests that the information contained therein be treated as confidential, in accordance with the confidentiality regime specified in the application, establishing a restricted access group (club) composed solely of Himson's counsel, excluding the party in person.
The applicant has provided both “redacted” and “unredacted” versions of the documents containing such information.
The “redacted” confidential information concerns:
- the specific provisions contained in a Settlement Agreement with a Chinese operator, following infringement proceedings, in which the third party acknowledged having infringed the corresponding Chinese patent (see doc. 37 of the applicant);
- the commercial data of the applicant (see doc. 38 of the applicant).
On 21 May 2024, the judge-rapporteur invited Himson to take a position on the application, in compliance with the right to adversarial proceedings, as specifically provided for in paragraph 4 of Rule 262A of the RoP.
On 3 June 2024, Himson's counsel submitted its observations, objecting to the opposing party's application on the grounds that, firstly, it lacked sufficient justification regarding the nature of the information, and second, it was unreasonably broad in scope, extending to the entire content of the documents.
They concluded by requesting the dismissal of the application and, in the alternative, that the application be granted only to the extent that it concerns genuinely sensitive information.
The judge-rapporteur deemed it necessary:
I. to hold initial discussions with the parties, granting both parties an additional deadline until 17 June 2024 for the submission of any further comments and until 27 June 2024 for any responses concerning:
a. the confidential nature of the documents subject to the application;
b. the potential composition of the restricted access group (club), which Oerlikon has proposed to be limited to the parties' counsel only.
With regard to point (a), the parties maintained their respective positions regarding the contested confidential nature of the documents, while with regard to point (b), the defendant did not withdraw its request for access to be granted to a natural person from its own side, whereas the applicant objected.
II. A second round of discussions was initiated on 9 July 2024 through a further preliminary order, in which the judge-rapporteur:
a. Reminded the parties that document no. 37 is a license agreement concluded by Oerlikon with a third party, subject to a confidentiality obligation;
b. Referred to a recent ruling issued by the Unified Patent Court regarding the protection of confidential information;
c. Invited Oerlikon to declare whether it intended, in any case, to submit document no. 37 to the Court and the opposing party or to withdraw it, thereby excluding it from the evidentiary scope of the dispute, with the consequence that the Court would not be able to consider it, nor could it be made available to the opposing party.
Oerlikon subsequently declared its decision to withdraw document no. 37.
Himson's counsel did not submit any further observations.

GROUNDS FOR THE ORDER
2. General aspects
2.1. This preliminary order is issued in accordance with:
- the principles of flexibility, proportionality, and equity as set out in item 2 of the preamble to the RoP, and the necessity to protect confidential information;
- Article 58 UPCA, Rule 262A RoP, and Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets);
- the interpretative solutions adopted by the UPC regarding the protection of confidential information contained in license agreements concluded by third parties, which include confidentiality clauses.
2.2. This order pertains exclusively to the issue of confidentiality. The redacted information has been deemed relevant by the applicant:
- with regard to document no. 37, for the purpose of assessing the validity of the patent;
- with regard to document no. 38, for the purpose of assessing commercial success (or validity).
Oerlikon's application for confidentiality is structured to restrict access solely to Himson's counsel.
In contrast, Himson’s counsel has requested that, in the event that the application is granted, the restricted access group (club) be extended to two of its technical consultants and one natural person from the substantive party.
2.3. The examination conducted in this order pertains strictly to the application for confidentiality protection raised by the applicant. It does not assess the relevance of the documents submitted in relation to the purpose for which they were filed, an issue raised by Himson's counsel, which, however, cannot be addressed at this stage.
3. - With regard to document no. 37 submitted by Oerlikon
3.1. The Court, in its preliminary order of 9 July 2024, has already indicated that this document is of a confidential nature, in light of Article 58 UPCA, which extends protection not only to trade secrets in the strict sense but also to confidential information.
In particular, this document pertains to a contractual relationship between the applicant and a third market operator, specifically a Settlement Agreement containing confidential information, as it:
- is protected by a confidentiality obligation between the parties, explicitly stated in the document itself;
- concerns inherently sensitive data, such as the name of the operator involved in the infringement action, the amount that the third-party company has agreed to pay Oerlikon in settlement, the royalties agreed to be paid to the rights holder, and the terms and conditions of the license agreed upon between the parties.
Therefore, the document is granted protection under Rule262A RoP.
3.2. With regard to the access arrangements and the composition of the "club" authorised to examine the confidential information, reference is made to the considerations expressed in the preliminary order of 9 July 2024.

“Except in cases where the other party consents or where specific exceptions under antitrust regulations apply – none of which are found here – the general rule is that a natural person representing the party should be included in the restricted access group (“club”).

This principle is in compliance with the wording of Rule 262A.6 RoP, and Article 9(2), final paragraph, of Directive (EU) 2016/943, both of which have been cited above.
The importance of this provision has already been noted in practical application by other Local Divisions of the UPC, including the decision of the Local Division Düsseldorf of 4 April 20241 , also cited by Himson's counsel. In that case, the Court emphasised that allowing a party’s representative to examine confidential information is instrumental and necessary to ensure the full exercise of the right of defence and the principle of adversarial proceedings.
In the case at hand, the defendant:
a. has not withdrawn the request for access by a natural person from its side;
b. is not in a situation where antitrust regulations would prevent such access.
Access must therefore be granted to a natural person representing Himson, in accordance with Rule 262A(6) RoP and Article 9(2), final paragraph, of Directive (EU) 2016/943, as cited above.” (see Order of 9 July 2024)
3.3. Given that this is a license agreement concluded with a third party and is subject to a confidentiality clause, as mentioned, covered by a confidentiality obligation, the applicant was granted the option to include the documents under examination within the evidentiary scope of the dispute – subject to access being granted to a restricted access group (club) that also includes a natural person from the defendant’s side, or to decide to exclude such documents from the case file.
The applicant was notified that, in the latter case, the documents could not be used by the defendant (who, up to that point, had access to them only through their counsel bound by confidentiality obligations, and solely to discuss whether the documents are confidential and the composition of the restricted access group (club)) either in these proceedings or in any other proceedings.
This option was granted to the applicant in accordance with the UPC's approach to the protection of confidential information, particularly with regard to license agreements containing confidentiality obligations towards third parties, whose consent should, where necessary, be obtained beforehand (UPC 210/2023, 14 February 2024, Local Division Mannheim). According to this precedent, when the Court does not fully or partially grant an application for confidentiality –

1 Proceedings no. CFI_355/2023: “As the Local Division has already explained in detail in its Order of 27 March 2024, R. 262A RoP establishes as a ground rule of paramount importance that at least one natural person from each party and their respective lawyers or other representatives must be granted access in order to ensure a fair trial (UPC_CFI_355/2024 (LD Düsseldorf), Order of 27 March 2024, p. 10). This is true in general, but even more so where, as here, the (allegedly) confidential information relates to the prior use as a key defence of the defendants which may be decisive for the outcome of the case. The only way to ensure that the party concerned can exchange information with its representatives, develop a strategy taking into account the arguments of the other party and, where necessary, provide technical and/or economic input, is to grant access to the information in question to the party's employees with the relevant knowledge”

as in the present case, with respect to the restricted access group (club) – the party that has submitted the contested documents must be given the opportunity to exclude them from the dispute (although they are included in the case files), meaning:
- the Court will not take them into account;
- the opposing party may not use them, either in the current proceedings or in any other proceedings.
Following this discussion, the applicant declared its intention to withdraw document no. 37. Himson did not submit any further comments.
The Court therefore determines that document no. 37 is excluded from the evidentiary scope of the case and that Himson’s counsel – having accessed the document solely for the purpose of assessing its confidential nature – is strictly prohibited from disclosing its content by any means, either in the present proceedings or in any other proceedings.
4. With regard to document no. 38
4.1. Document no. 38 also, in principle, contains confidential information. Specifically:
a. it includes sales-related commercial data, which pertains to Oerlikon's business activities;
b. it does not constitute publicly available information;
c. the applicant has a legitimate interest in maintaining confidentiality, as the document discloses sales data and market demand for its machinery over a specific period; d. there is a clear intention to keep this information confidential.
The disclosure of such information to a competitor – which the defendant must generally be considered to be – could have a negative impact on the applicant, going beyond the risks associated with litigation and potentially distorting market competition by providing the competitor with information on the market appeal of the applicant's machinery.
4.2. As document no. 38 does not fall within the specific category of license agreements with third parties, for which the considerations set out in point 3 apply, its confidentiality must be assessed in the light of the principles of flexibility and proportionality. Accordingly, granting access to a restricted access group (club) allows Himson to protect its procedural positions while fully exercising its right of defence.
4.3. As previously mentioned, regarding the composition of the restricted access group (club), Oerlikon requested that access be restricted solely to Himson’s counsel.
In contrast, Himson's counsel, has requested that, in the event the request is granted, the restricted access group (club) be extended to include the two technical consultants and the substantive party.
Oerlikon's counsel opposed this latest request, given the commercial nature of the documents and the fact that, additionally, one of the two technical consultants—Upendra Patel—has never been designated as a technical consultant.
4.4. Given the above, the Court notes that:
➢ In this regard, the general rule is set out in Rule 262A(6) RoP2 , which mirrors the wording used in Article 9(2), last paragraph, of Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets);
This specific provision stipulates that:
• The number of persons referred to in paragraph 1 shall be no greater than necessary in order to ensure compliance with the right of the parties to the legal proceedings to an effective remedy and to a fair trial;
• shall include, at least, one natural person from each party and the respective lawyers or other representatives of those parties to the legal proceedings.
➢ As regards the exclusion of access for individual natural persons, the Court observes that this solution appears possible only in the following cases:
I. By mutual agreement of the parties;
II. If the concerned party waives the right of access for a natural person;
III. In specific cases provided for under antitrust law3 .
Provided that this approach is consistent with the Unitary Patent system and, in practice, ensures a fair trial and the right of defence, in light of the principles of proportionality and flexibility, and following a case-by-case assessment.
The Court has already deemed these conditions sufficient to restrict access to a restricted access group (club) that does not include a natural person from the opposing party, provided that the right to a fair trial is not compromised (case UPC CFI 239/2023, App. 589842/2023, Local Division The Hague).
In the case at hand, however:
I. There is no agreement between the parties;
II. The defendant has not withdrawn its request for access by a natural person from its side;
III. There is no question of a clash with antitrust regulations.
A natural person representing Himson must therefore be included in the restricted access group (club), in accordance with Rule 262A(6) RoP and Article 9(2), final paragraph, of Directive (EU) 2016/943, as cited above.
As previously mentioned, the importance of this provision has already been recognised in practical application by other Local Divisions of the UPC (decision of the Local Division Düsseldorf of 4 April 2024, as previously cited), where the Court emphasised that allowing a representative of the party

2 Subject to Article 60(1) of the UPCA and Rules 190.1, 194.5, 196.1, 197.4, 199.1, 207.7, 209.4, 315.2, and 365.2 RoP, a party may submit an application to the Court requesting an order to restrict or prohibit certain information contained in its pleadings or the collection and use of evidence in the proceedings, or to limit access to such information or evidence to specific persons. (...) 6. The number of persons referred to in paragraph 1 shall be no greater than necessary in order to ensure compliance with the right of the parties to the legal proceedings to an effective remedy and a fair trial and shall include, at least, one natural person from each party and the respective lawyers or other representatives of those parties to the legal proceedings.

3 see EUROPEAN COMMISSION, COMMUNICATION FROM THE COMMISSION
“Communication on the protection of confidential information by national courts in proceedings for the private enforcement of EU competition law” (2020/C 242/01, point no. 613);

to examine confidential information is instrumental in ensuring compliance with the principle of adversarial proceedings.
4.5. Regarding the inclusion of Himson’s technical consultants in the restricted access group (club), a request opposed by the opposing party, the Court considers that this request should be granted.
It should not be overlooked that the role of a technical consultant is to assist legal counsel in specialized matters requiring specific expertise. Therefore, allowing access to a consultant is a necessary measure to ensure the effective exercise of the right to adversarial proceedings.
At the same time, considering that access should not be extended to more individuals than necessary to exercise the right of defence, only one consultant from Himson shall be admitted to the restricted access group (club). Moreover, since the document contains a very limited amount of data, the Court finds that granting access to multiple experts is unnecessary.
4.6. Finally, the right of access must, of course, be guaranteed to the legal counsel of both parties, and in particular to the delegated counsel, attorney-at-law Fabrizio Jacobacci. For the reasons stated in point 4.5, it is not appropriate to include additional legal counsel in the restricted access group (club).
5. Leave to appeal
5.1. The importance of a correct interpretation of Rule 262(a) RoP, in light of the underlying rationale of the provision, as outlined above, suggests that the appeal should be permitted. This is further supported by the need for a coherent interpretation within the system, as expressly stated in item 8 of the preamble to the RoP.
Therefore, leave to appeal against this decision is granted.
5.2. Suspensive effect
Pursuant to Rule 354 RoP, decisions and orders of the Court are directly enforceable from their date of service, and an appeal, pursuant to Article 74 of the UPCA, does not have suspensive effect unless the Court of Appeal decides otherwise. However, these provisions do not prevent the Court of First Instance from determining that a specific action should be carried out at a future date.
If the present order were to take immediate effect and Himson were granted access to document no. 38 at the same time as the issuance of the order, Oerlikon's potential appeal would be rendered ineffective. Therefore, the Court deems it appropriate to postpone the enforceability of this order to 4 September 2024, from which date this order will take effect, unless Oerlikon provides evidence that it has filed an appeal request with suspensive effect.
This ensures that Oerlikon has sufficient time to file an appeal and lodge an application for suspensive effect, in accordance with Article 223 RoP.

THE COURT ORDERS THAT
1. with regard to document no. 37 submitted by Oerlikon:
- said document shall be excluded from the evidentiary material in this proceeding and cannot be used by either party, thereby being removed from the scope of evidence under the Court's review;
- the defendant’s counsel, attorney-at-law Fabrizio Jacobacci, is bound to maintain confidentiality regarding document no. 37, and is prohibited from disclosing or communicating and/or sharing its contents in any form with any party, including the substantive party Himson, other counsel, or consultants, whether for the present proceedings or any other proceedings.
2. with regard to document no. 38 submitted by Oerlikon:
- the redacted information shall be classified as confidential information pursuant to Article 58 UPCA and Rule 262A RoP;
- access to the redacted information shall be granted only to the following individuals:
a. the delegated counsel for Himson:
attorney-at-law Fabrizio Jacobacci;
b. the party-appointed technical consultant engaged by Himson:
Eng. Steffen Leinkauf, domiciled at Jacobacci & Partners S.p.A., Milan
c. a natural person representing the substantive party:
Darshan Himson;
3. The "redacted" information contained in document no. 38 may be used by Himson’s counsel exclusively for the present case and for no other purpose. None of the individuals mentioned in points (a), (b), and (c) may disclose the information to any other party;
GIVES NOTICE THAT
in the event of a breach of the provisions set out in points 1, 2, and 3, the Court may impose a penalty pursuant to Rule 354(3) RoP.
GRANTS
leave to appeal against this ruling.
SUSPENDS
the enforceability of the present ruling until 4 September 2024, as further specified in the grounds for the decision,
ACKNOWLEDGES
that the costs related to the application under Rule 262A RoP shall be determined together with the costs of the main proceedings.

Milan, 23 July 2024 Judge-Rapporteur Alima Zana

ORDER DETAILS
Order no. ORD_40568/2024 in ACTION NUMBER: ACT_549550/2023
UPC number: UPC_CFI_240/2023 Action type: Infringement Action
Related proceeding no. Application No.: 28655/2024 Application Type: APPLICATION_ROP262A