The High Court of Delhi has shaped the confidentiality framework for standard‑essential patent (SEP) litigation in an order dated September 22 2025. In Nokia v Asustek, Nokia v Acer, and Nokia v Hisense (CS(COMM) 643–645/2025), the court directed the patent owner to disclose all its patent licence agreements (PLAs) and allowed the defendants’ employees in the licensing team to review those PLAs within a confidentiality club.
The court reasoned that the arrangement was necessary for transparency and to ensure consistency in the disclosure regime between the parties in the Indian litigation and in foreign proceedings in Germany.
This article examines two key aspects of the decision:
Whether a direction to file all the PLAs, instead of comparable PLAs, is appropriate; and
Whether including licensing employees in the confidentiality club sufficiently protects third parties’ commercial information.
Disclosure of all PLAs is not required for a comparability assessment
Requiring disclosure of every PLA risks diluting the focus of a fair, reasonable, and non‑discriminatory (FRAND) analysis. Courts usually determine a FRAND rate by examining comparable licences, not every licence in a portfolio. A comparable agreement involves a licensee that is similarly situated to the defendant in market position, geographical presence, product type, and scope. One need not see the detailed terms of each agreement to decide if it is comparable; the identity of the licensee, its market position, and the scope of the licence often suffice.
Assessment of a PLA’s relevance must precede a disclosure order
By compelling disclosure first and deciding relevance later, the order reverses the normal sequence of assessing relevance and materiality of a document first, before it is ordered to be produced for inspection by the opposite party. One ought not place the cart before the horse, by disclosing everything under confidentiality and only then deciding what was pertinent. This could burden the court and parties with reviewing many irrelevant contracts and slow the case.
Need for consistency in PLA disclosure between Indian and foreign courts
It is clear that one of the core rationales for the court to pass this order was to ensure parity with the arrangement existing in the German litigation between parties. However, if the plaintiff was not ordered to disclose all its PLAs in Germany, then it would appear uneven and asymmetrical for the plaintiff to be compelled to produce all its PLAs in India, and only relevant comparable PLAs in Germany.
Procedural burden and delay
The disclosure of all PLAs opens up the possibility of tactical misuse and delay by implementers. SEP litigation is usually filed after some delay in licence negotiations and after a certain degree of frustration on being unable to reach an agreement. Litigation is meant to help the parties arrive quickly at a decision on FRAND issues.
Instead of this, a calibrated approach, requiring disclosure of licences that the court or experts deem comparable, would better align with FRAND principles. Analysing numerous PLAs will add time and expense. A determined defendant will now demand access to all PLAs, and will seek more time to analyse all PLAs before being ready to go to trial on FRAND issues.
Usually, a request for discovery of all documents, and not the relevant or material ones, is denied by courts as constituting a fishing expedition, which will burden the court and consume precious judicial time, which could be utilised elsewhere.
Finally, broad disclosure hands the implementer sensitive information beyond what is needed for the case. Licence agreements can reveal pricing structures, projected volumes, and technology plans of unrelated licensees. If a smartphone maker learns through litigation that a rival will soon launch a virtual reality (VR) headset, it could pre‑empt that launch. Such knowledge goes beyond the narrow question of determining a FRAND rate.
Composition of the confidentiality club
The court allowed a defendant’s licensing executive to view confidential PLAs, subject to informing each third‑party licensee of Nokia. Under the scheme devised by the court, if the third party agrees to proceed with licence negotiations with the defendant after being informed that a certain employee of the defendant’s licensing team has already accessed its PLA with Nokia, then it does so willingly.
However, this scheme may not fully address the prejudice caused to a third-party licensee as a result of the disclosure of its information to individuals who have the capability of causing significant changes through possessing such information.
The third-party licensee stands to lose market advantage
Licensing employees negotiate commercial terms and set royalty strategies. Licence agreements contain detailed information about royalties, payment structures, and sometimes future product plans, launch dates, and/or anticipated sales volumes. When licensing employees access these secrets, the knowledge can unconsciously influence negotiations with competitors.
Courts have recognised that information once known cannot be unlearned. Even with undertakings, there is a risk that the recipient will act upon knowledge of competitors’ rates or future projects, even if this is done without a conscious desire to do so, or without disclosing the terms of the PLA that it has accessed.
How can this happen? In one hypothetical example, imagine Licensee X’s agreement reveals it is preparing to launch a VR headset or an autonomous vehicle next year, which required a licence for certain SEPs. If Company Y (the defendant) learns this through the confidentiality club, Company Y could accelerate its own plans to launch a similar product first, or adjust its pricing strategy, thereby stealing a march on Licensee X – all based on information that Licensee X assumed would remain sealed. This undermines the level playing field in the market. This can be done without actively discussing the terms of the PLA that Company Y’s licensing employee has accessed.
Global practices favour at least a narrow restriction
Global practice tends to limit access to non‑licensing individuals. In the UK, the courts debated the appropriateness of a narrow versus wide form of an undertaking in InterDigital v Oppo and, subsequently, in Nokia v Oppo.
A wide-form undertaking is the traditional undertaking from a person who accesses third-party PLAs, confirming that the person would refrain from any licensing activities for, say, two or more years. A narrow undertaking requires a commitment that the person would refrain from negotiating with only the specific counterparties whose agreements that person saw.
Based on the unique circumstances of each case, the court may require a wide-form undertaking or a narrow-form undertaking. However, at the very least, courts have recognised that persons who access PLAs must refrain from engaging in licence negotiations with a counterparty whose PLA they have seen. This way, at least the counterparty does not go into negotiations with a handicap.
Is the ‘paragraph 32 scheme’ the perfect balance of interests?
The ‘paragraph 32 scheme’, as detailed in the above ruling, attempts to mitigate risks by requiring that if the defendant’s licensing representative accesses a third party’s PLA, that third party must be informed of this fact.
In practice, this condition may offer cold comfort to the affected third parties. Unlike a stricter ‘two-year embargo’ (which some confidentiality club orders have imposed) that temporarily bars the viewing individual from engaging in negotiations with certain counterparties, the court’s solution here imposes no actual restraint on the defendant’s employee; it merely notifies the third party (counterparty) and leaves the ball in their court.
The idea is that the third party, forewarned that the negotiator knows their secrets, might choose whether to engage with that person in licensing discussions. This, however, could lead to problematic outcomes:
If the third-party licensee is uncomfortable negotiating with the defendant’s representative who has seen its confidential licence terms, it will lead to a stalemate in licensing discussions, and will stall the conclusion of a FRAND licence agreement.
Even if the third party does proceed with negotiations after being notified, it does so at a distinct disadvantage. The defendant’s negotiator comes to the table armed with intimate knowledge of what that third party paid, what terms it accepted, and possibly strategic intelligence (such as the third party’s product plans or pricing sensitivities) gleaned from the earlier agreement. The third party’s bargaining power is undermined from the outset. This kind of one-sided transparency can skew outcomes in future licensing talks.
A more balanced standard of confidentiality should exclude licensing personnel from accessing confidential PLAs unless the patent owner voluntarily consents. If inclusion of licensing personnel is necessary, the narrow form of undertaking is appropriate to balance all parties’ interests sufficiently.
