Background
A confidentiality club was first formed in India by the Delhi High Court in August, 2012, in a matter involving breach of confidentiality, and illegal use of trade secrets [MVF 3 APS & Ors. vs. M. Sivasamy and Ors]. Inspired by similar practices in UK courts, confidentiality clubs have been constituted in India aimed at protecting sensitive information, typically in IP disputes. The purpose of the confidentiality club is to offer a neutral and controlled way of providing sensitive information (such as trade secrets, licensing agreements, or technical data) to allow for fair litigation.
Later added as part of the Delhi High Court (Original Side) Rules, 2018, it has now become a routine way to deal with sensitive documents in patent litigations.
Clarity provided by DHC
In an order dated 22nd September 2025, in the ongoing patent dispute between Nokia and companies Asus, Acer, and Hisense, the DHC underscored the key points on how confidential information is to be handled in cases involving Standard Essential Patents (SEPs).
- Constitution of the confidentiality club: The Court ruled that the defendants’ in-house representatives (including technical teams) must be permitted to join, granting them access to essential sensitive information for defence preparation, without arbitrary or unreasonable restrictions.
- Permitted Redactions under specific conditions: Redactions are allowed only if they do not affect FRAND (Fair, Reasonable, and Non-Discriminatory) royalty fee calculations. The redacting party cannot rely on redacted portions as evidence subsequently, and full unredacted versions must be accessible to defendants’ external counsel and the judge for verification.
- No cherry-picking FRAND agreements that favour one’s position: Patent holders cannot selectively disclose only favourable licenses. All comparable agreements must be shared to ensure transparency and prevent informational imbalance.
This ruling encourages greater transparency and fairness in India’s SEP litigation by addressing informational imbalances that disadvantage defendants during negotiation of FRAND terms. Mandatory, inclusive access to confidentiality clubs and full FRAND agreement disclosures, enable robust defence and potentially cut dispute time, costs and presents a better opportunity for defendants.
Nokia vs Asus, Acer & Hisense [CS(COMM) 643/2025 & I.A. 15135/2025 + CS(COMM) 644/2025 & I.A. 15143/2025 + CS(COMM) 645/2025, I.A. 15150/2025 & I.A. 21050/2025]