“For Your Eyes Only”: Preserving Confidentiality in Intellectual Property Disputes

Eugene Ee explores the role of protective orders in maintaining the confidentiality of proprietary information amidst the rigours of IP litigation.

In the intricate landscape of IP disputes, litigants often find themselves grappling with a perplexing dilemma: how do they safeguard their trade secrets or confidential information while engaging in legal proceedings that necessitate disclosure to the opposing party?

Consider, for instance, a case where a technology company asserts patent infringement against a competitor. The plaintiff may be required to divulge sensitive details about certain aspects of their patented technology which are not disclosed in the patent specifications to the defendant. On the other hand, a losing defendant may be compelled at the post-trial discovery stage to divulge information pertaining to the sales, revenue and costs incurred in relation to the infringing product for the court to assess the profits accrued from their unlawful conduct. In both examples, the disclosing parties are faced with the potential misuse or exploitation of the confidential information by the counterparty or the public at large.

The above scenarios underscore the importance of protective orders, also known as sealing orders in certain jurisdictions, as an indispensable tool for maintaining the confidentiality and integrity of the litigants’ proprietary information throughout legal proceedings.

What are protective orders?

Protective orders, in essence, is a legal mechanism at the courts’ disposal to regulate the disclosure and handling of confidential or proprietary information exchanged during litigation. They serve as injunctions which impose strict guidelines and obligations on the parties involved in the proceedings to ensure that sensitive information remains shielded from unwarranted disclosure or misuse. They typically entail provisions that restrict access to designated confidential materials solely to authorised individuals directly involved in the case and the redaction of sensitive information in publicly filed documents. Moreover, protective orders often mandate stringent protocols for the handling, storage, and destruction of confidential documents, thereby mitigating the risk of unauthorised dissemination or exploitation.

What are the relevant considerations in the grant of a protective order?

Protective orders are granted by the courts pursuant to their inherent jurisdiction or power and/or Order 92 rule 4 of the Rules of Court 2012 (“ROC”) which empowers the courts to make any necessary order to prevent injustice or an abuse of the process of the court by ensuring that confidential information is disclosed to enable the court to decide justly the case at hand while preserving the confidentiality of the information in question.[1]

The application for a protective order would ordinarily be filed by the party which will be disclosing the confidential information. Assuming the parties are agreeable to the terms of the order, the court may grant the protective order by the consent of the parties.[2] Otherwise, the court would fix a hearing to determine the merits of the application.

In deciding whether a protective order should be granted, the court would consider the following competing considerations:[3]

• public interest in requiring all relevant evidence to be disclosed to the court to decide justly the case at hand;
• the parties’ right to be furnished with all relevant documents for them to know the case they have to meet; and
• the need to protect the disclosing party’s proprietary interest in the confidential information in question.

At the hearing of the application, the court may inspect the document in question to ensure that the application is made in good faith and that the protective order is necessary so that the confidential information contained therein is not disclosed to the detriment of the disclosing party. If parts of the confidential information are not relevant to the case in question, the court may order them to be redacted.

What is the scope of a protective order?

Depending on the nature of the confidential information in question, a protective order may contain the following terms:

• the specific purpose for which the protected information (“PI”) is to be used;
• the information that is not relevant to the dispute or issue at hand that may be redacted;
• the recipients of the PI, for example, the judge, the court’s personnel who is assisting with the matter, the parties’ lawyers and nominated representatives, the expert witnesses (usually in patent disputes), the transcriber of the court’s proceedings and any other person permitted by the court;
• an undertaking from the recipients (a) not to disclose the PI to any other person who is not permitted to receive the PI (“unauthorised persons”) even after the conclusion of the matter and any ensuing appeal so long as the PI remains confidential and not in the public domain; and (b) to maintain the PI in such a manner to prevent any unauthorised access to, use or disclosure of the same;
• a recipient who breaches the undertaking shall indemnify the disclosing party for any harm or loss arising therefrom;
• the PI shall be exempted from e-filing pursuant to Order 63A rule 7(1) and (4) ROC to prevent access by unauthorised persons;
• the PI shall only be filed or submitted to the court if it is necessary to do so and if so required, the PI shall (a) be segregated from other documents which have been filed or submitted to court; and (b) be sealed with a note briefly stating the salient terms of the order and the obligation of its recipient to maintain its confidentiality;
• the proceedings be heard in private and any unauthorised person will not be allowed to attend such proceedings;
• the transcript of the proceedings be treated as PI and be subjected to the terms of the protective order;
• within a certain period after the conclusion of the hearing and the exhaustion of all ensuing appeals, the PI is to be completely and permanently deleted, or handed over to the disclosing party;
• the terms of the order will continue to be in force for so long as the PI remains confidential and secret; and
• a penal notice to inform any person on whom the protective order is served that if the protective order is disobeyed by the person, they will be liable to imprisonment.

What is the consequence of redacting a document without leave from the court?

A party which adduces a document that has been unilaterally redacted by it as evidence in the proceedings runs the risk of the court drawing an adverse inference against it pursuant to section 114(g) of the Evidence Act 1950 in respect of the redacted material. The court may presume that had the said material not been redacted and was disclosed in the proceedings, it would have been unfavourable to the disclosing party. It is therefore advisable for the disclosing party to obtain leave from the court to redact parts of the document prior to it being adduced as evidence it court.

[1] Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd [2020] 11 MLJ 141.

[2] OAG Engineering Sdn Bhd & Ors v Ng Hoe Keong & Ors [2021] MLJU 158.

[3] Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd [2020] 11 MLJ 141.

Eugene is a Partner at Wong Jin Nee & Teo. His practice principally focuses on contentious IP and commercial matters. Outside the courtroom, he assists clients in the enforcement of their IP rights and also advises on regulatory compliance, consumer laws and data protection matters.