7 August 2018
Traditionally in the Netherlands, the aim of criminal proceedings is to determine the truth, while civil proceedings are more aimed at the resolution of a legal dispute. Gradually this distinction has diluted and following the Dutch Code of Civil Procedure (CCP) reform in 2002, the aim of establishing the truth is also more legally enshrined in civil proceedings. Recently some changes of the CCP have been introduced, in order to give more procedural options to secure the confidentiality of sensitive (business) information.
In principle virtually every hearing and delivery of judgements in civil proceedings are public. This also holds true for FRAND cases. It is only in the event of compelling reasons (for instance in the interest of the public order or respect of privacy) that court sessions are held behind closed doors.
Under Dutch law no general discovery of documents applies or is mandatory in civil proceedings. Therefore requesting disclosure of comparable licenses in FRAND cases is not easy. But there are some options. One of these is use of article 22 CCP. Pursuant to this article, the presiding judge can order a party to submit particular documents that are relevant to the pending case. A party can only refuse to hand over the documents when there are compelling reasons not to do so. If a party refuses to submit the requested documents to the court, the court will decide whether the refusal is justified or not, and will draw adverse inferences where it considers appropriate.
The new legislative regime of article 22 CCP, that very recently came into effect as the result of the Quality and Innovation Programme that was implemented on 1 September 2017, grants the court the ability to determine whether information has to remain confidential and at the same time the judge will be able to examine in depth whether confidentiality needs to be upheld.
If a party believes that, certain information (such as comparable licenses) is confidential inter alia because business/trade secrets are at stake, the judge is unable to determine whether the reliance on confidentiality is justified without seeing the relevant documents. The handling judge can now decide that only the judge will have full access to said information. The judge will be able to decide, without hearing the arguments of the counter party, whether genuine reasons of confidentiality apply. If the court thinks confidentiality is justified, the party is not obliged to disclose the information. Only with explicit consent of both parties, the court may base its decision on the inspected and confidential information. If both parties do not explicitly agree with the approach that the court can base one party’s arguments and its resulting decision on the confidential information, the case will be referred to another court.
If the court decides the compelling reasons are not justified, it will draw its conclusion from the refusal of full disclosure of documents and information as it deems fit.
We expect that there will be a tendency for Dutch courts to increasingly ask for disclosure of documents and information for substantiation of claims. Due to new in camera proceedings of article 22 CCP, parties will be more hesitant to put up a smokescreen regarding the alleged confidential nature of information in an attempt to prevent its disclosure. Because of the new regime, courts are now able to rule on the substance of such complaints and give guidance to parties on how to proceed. The new regime will be useful for cases which deal with business/trade secrets in general, and more specifically for FRAND cases (where the court is trying to determine whether the licenses for standard essential patents (SEP) are concluded on FRAND terms, which often requires review of possible confidential information on, for instance, the (different) amounts of agreed license fees and information on the contracting parties).