One Test, Not Two: Court of Appeal clarifies redactions in FRAND judgments and protects both lump‑sum and per‑unit pricing data

One Test, Not Two: Court of Appeal clarifies redactions in FRAND judgments and protects both lump‑sum and per‑unit pricing data

Introduction

In InterDigital Inc & Ors, In the Matter Of (Re Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors) [2025] EWCA Civ 1263, the England and Wales Court of Appeal (Birss and Zacaroli LJJ; Sir Julian Flaux C) revisited the principles governing redactions of non‑parties’ confidential information in public versions of FRAND judgments.

The judgment stems from the FRAND determination by Marcus Smith J dated 10 May 2023 ([2023] EWHC 1095 (Ch)), in Optis v Apple, later appealed on the merits and addressed by the Court of Appeal in May 2025 ([2025] EWCA Civ 552). After the trial judgment, an extensive confidentiality exercise culminated in a February 2024 consequential judgment ([2024] EWHC 197 (Ch)) which proposed a “less‑redacted” public version. Several non‑party licensors and licensees—InterDigital, Qualcomm, Nokia, Google, Huawei and LG Electronics—challenged the scope of disclosure. Apple also filed an appellant’s notice to cover data relating to non‑appealing third parties exposed by aggregation in the judge’s tables.

The core issue was whether the High Court had applied the wrong legal test when deciding to disclose (a) per‑unit royalty rates “unpacked” from lump‑sum licences (including percentages and DPU), and (b) totals and averages derived from those rates, while continuing to redact the underlying lump sums. More broadly, the case presented an occasion to harmonise the post‑JC Bamford v Manitou landscape with prior FRAND confidentiality authorities.

Summary of the Judgment

  • There is no “new test” arising from JC Bamford Excavators Ltd v Manitou UK Ltd [2023] EWCA Civ 840 under the Trade Secrets (Enforcement, etc) Regulations 2018; the overarching approach remains the Scott v Scott [1913] AC 417 open‑justice balance assessed in the interest of justice.
  • Technical trade secrets will almost always justify redaction. Lower‑grade commercial confidential information (such as pricing in licences) can also be redacted where the balance justifies it; the Trade Secrets Directive and Regulations are permissive and do not mandate automatic redaction of all information that meets the Directive’s broad definition of a “trade secret.”
  • The High Court’s distinction between lump sums (redacted) and unpacked per‑unit rates (disclosed) was flawed. Both types of financial data are capable of causing the same commercial harm and should be treated consistently: both must be redacted.
  • Aggregated totals and averages in tables (e.g. Tables 10 and 13), if published, would undermine redactions by enabling inference of confidential figures. They must be redacted too.
  • The Court clarified that even approximate “re‑packing” (reverse engineering) can cause harm, and unpacked rates have independent market value irrespective of how accurately they reveal underlying lump sums.
  • Two factual errors in Annex 3 (about sub‑licensing in the InterDigital licence and cross‑licensing in the LG Electronics licence) are correctable under the CPR 40.12 “slip rule.” The rule is not confined to immaterial errors, does not require consensus, and can be invoked by non‑parties. The corrected statements should be published; there was no specific evidence justifying redaction of such non‑financial terms.
  • Non‑party appellants have standing to appeal orders affecting their confidentiality (citing George Wimpey UK v Tewkesbury BC [2008] EWCA Civ 12 and In Re W [2016] EWCA Civ 1140).
  • Appeals allowed save for the attempt to redact the corrected non‑financial statements in Annex 3. Consequentials are to be agreed; redactions in the main appeal judgment also to be addressed.

Analysis

Precedents Cited and Their Influence

  • Scott v Scott [1913] AC 417:
    • The foundational authority: open justice is the norm, but yields where justice itself requires confidentiality—for example, to protect a secret process. The Court framed this as an interest‑of‑justice inquiry rather than a categorical carve‑out.
    • The Court of Appeal situates all later reasoning within Scott’s single, overarching test.
  • R (Mohamed) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2010] EWCA Civ 65:
    • Establishes a “very strong presumption indeed” that judgments are fully public; redactions must be rare and require powerful reasons.
    • Supports the “balancing exercise” approach, explicitly referenced by Birss LJ.
  • Unwired Planet International Ltd v Huawei Technologies Co Ltd [2017] EWHC 3083 (Pat) (confidentiality):
    • Birss J articulated the working principles for redaction in FRAND judgments: a fact‑sensitive, evidence‑based balance, attentive to the competitive harm of disclosing licence terms.
    • Redactions were allowed for specific financial terms; generalities or mere discomfort with disclosure were insufficient.
  • InterDigital v Lenovo [2023] EWHC 1577 (Pat) (confidentiality):
    • Mellor J endorsed Unwired Planet’s approach, again balancing open justice against commercial harm in FRAND cases. He noted the forensic sensitivity of even limited disclosures (parties will draw inferences across the judgment).
  • JC Bamford Excavators Ltd v Manitou UK Ltd [2023] EWCA Civ 840:
    • Concerned a technical trade secret (criterion X) in a patent judgment annex. The Court of Appeal held that protecting trade secrets can require redacting reasoning even at the cost of public comprehension.
    • Crucially, Birss LJ clarifies that JC Bamford did not create a “new test” displacing the balancing framework; it exemplifies Scott v Scott applied to technical trade secrets. References to the Trade Secrets Directive (2016/943) and the UK Regulations (SI 2018/597) are permissive, not mandatory.
    • The case distinguished Lilly ICOS v Pfizer (No 2) [2002] 1 WLR 2253, which protected lower‑grade commercial information (not necessarily a trade secret) where publication was unnecessary to open justice.
  • Lilly ICOS v Pfizer (No 2) [2002] 1 WLR 2253:
    • Confirms that even non‑trade‑secret commercial information may warrant protection where open justice does not require publication.
  • FRAND merits authorities cited for context:
    • Unwired Planet v Huawei [2020] UKSC 37; InterDigital v Lenovo [2024] EWCA Civ 743; and the linked main appeal in this case [2025] EWCA Civ 552 (which endorsed the utility of unpacking evidence, undermining the High Court’s scepticism about unpacking).
  • Standing of non‑parties:
  • CPR 40.12 (slip rule):
    • The Court emphasises its breadth: corrections may be made “at any time”; not limited to triviality or consensus; accessible to non‑parties; but cannot be used to re‑argue the merits.

Legal Reasoning

1) One test, not two

The Court rejects the High Court’s bifurcation into an “old test” (a balancing exercise) and a “new test” (automatic redaction where information falls within the Trade Secrets Regulations’ definition). JC Bamford does not displace Scott v Scott or R (Mohamed); it illustrates that, where necessary to protect a technical trade secret, open justice must yield. But necessity is still assessed through the same overarching test—what justice requires on the facts—rather than a categorical rule triggered by a statutory definition. Articles 9 of the Trade Secrets Directive and Regulation 10 of the 2018 Regulations are permissive: courts “may” take protective measures; nothing compels automatic redaction whenever information qualifies as a “trade secret” under the Directive’s broad, non‑technical definition.

2) Applying the test to FRAND financial data

The financial data in issue is, in substance, price information: what parties agreed to pay or accept under various licences. That category of information attracted protection in Unwired Planet (2017) and InterDigital v Lenovo (2023) because disclosure would materially weaken licensors’ competitive position during negotiations. The Court held that the same reasoning applies with full force here.

The High Court’s reasons for minimising harm were rejected:

  • “Outdated” data: FRAND licences commonly run for five years; even older licences can be probative and commercially salient. Many licences were recent or ongoing (e.g., Qualcomm’s extension).
  • Lack of specific evidence: Apple’s counterparty evidence directly supported harm; demanding separate evidence from every third‑party licensee was an illogical distinction given the nature of the data and the counterparty’s vantage point.
  • “Minor” commercial disadvantage: the Court accepted cogent evidence (e.g., from InterDigital) showing substantial revenue exposure and negotiation harm; dismissing this as minor was untenable.
  • FRAND policy and transparency: while greater transparency might be desirable, ETSI has not mandated it; courts should not manufacture transparency via judgment publication contrary to parties’ legitimate confidentiality interests.

3) No valid distinction between lump sums and per‑unit rates

The High Court treated lump sums as confidential (to be redacted) but allowed disclosure of unpacked per‑unit rates (percentages and DPU). The Court of Appeal found this distinction unsustainable:

  • Even approximate reverse engineering (“re‑packing”) can cause commercial harm; precision is not the standard. Readily available market data can improve accuracy, and, practically, licensors are pressured to rebut inferences only by revealing more confidential information.
  • Unpacked per‑unit rates have independent value in negotiations, even if they cannot perfectly reveal the underlying lump sum. Published expert‑derived rates would carry a judicial imprimatur that market actors will exploit.
  • Two per‑unit figures for Qualcomm in Annex 3 were not derived but were actual rates in the licence. There is no rational basis to treat those differently from the licence’s lump sum.

Conclusion: either both categories are redacted or neither is; the Court held that both must be redacted.

4) Totals and averages undermine confidentiality

Aggregates in Tables 10 and 13 (totals and averages by cohort) would enable inference of individual confidential entries, especially where some non‑party entries go unappealed or where headings, dates, or stack shares are revealed. Aggregates therefore must also be redacted to avoid defeating the purpose of redacting line‑item data.

5) Corrections under the slip rule and publication of corrected non‑financial terms

The Court corrected two objective errors in Annex 3 (sub‑licensing in the InterDigital licence and cross‑licensing in the LG licence). It clarified CPR r.40.12:

  • Non‑parties can raise slips; consensus is not required; corrections can be material and may involve rewriting; the key limits are that the rule cannot substitute for an appeal or reconsideration.

On whether to publish the corrected non‑financial terms, the Court held there was no specific, cogent evidence justifying redaction of such features (e.g., whether a licence permits sub‑licensing). Those corrected statements should therefore be included in the less‑redacted judgment.

Impact

Immediate procedural and practical effects

  • FRAND confidentiality: Both lump‑sum figures and per‑unit rates (including unpacked percentages and DPUs) should ordinarily be redacted in public judgments. Averages and totals that could permit back‑calculation should be redacted as well.
  • Drafting judgments: Judges and parties will need to structure reasoning to explain methodology without exposing specific financial entries, and to avoid using aggregates that nullify redactions.
  • Evidence strategy: Parties seeking redaction must produce cogent, specific evidence of harm, but courts recognise the inherent sensitivity and negotiation harm of pricing data in SEP licensing markets.
  • Non‑financial terms: Absent specific evidence of harm, high‑level, non‑price terms (e.g., whether sub‑licensing is permitted) may not warrant redaction.
  • Slip rule practice: Non‑parties can and should raise objective errors affecting them; courts are not confined to trivial corrections, enhancing accuracy in public judgments.
  • Non‑party rights: Confirmed standing to appeal orders affecting their confidential information. Courts should ensure affected non‑parties are heard before publication decisions.

Doctrinal clarification

  • The “single test” reaffirmed: JC Bamford did not create a rigid, automatic redaction regime for all Directive‑defined “trade secrets.” The Scott v Scott balance remains the governing framework across categories of confidential information.
  • Technical trade secrets vs commercial confidentiality: Technical secrets will almost always require redaction; commercial pricing information may also be protected where the balance justifies it, especially in FRAND where negotiation harm is acute.
  • Directive and Regulations: Article 9 and Regulation 10 are permissive enabling tools; they do not supplant the court’s balancing task or compel a results‑driven “new test.”

Market and policy implications

  • Negotiation dynamics: Prospective licensees cannot rely on published unpacked per‑unit rates as a bargaining benchmark; licensors retain confidentiality of both headline prices and unpacked equivalents, insulating bargaining positions.
  • Transparency debate: The Court acknowledges the systemic appeal of transparency but defers to ETSI’s policy choices; absent policy reform, confidentiality will continue to prevail over public dissemination of SEP pricing terms via judgments.
  • Litigation cost and predictability: With a clear, unified standard, parties can better predict redaction outcomes, potentially reducing satellite disputes over confidentiality in FRAND cases.

Complex Concepts Simplified

  • SEPs and FRAND:
    • Standard‑Essential Patents (SEPs) protect technology that must be used to comply with a standard (e.g., 4G/5G). FRAND means licences must be Fair, Reasonable and Non‑Discriminatory.
  • Bottom‑up and top‑down:
    • Bottom‑up starts from comparable licences to infer a reasonable rate. Top‑down starts from an overall aggregate royalty “stack” for the standard and allocates a share to the licensor.
  • Unpacking and re‑packing:
    • “Unpacking” converts a lump‑sum licence into a per‑unit (e.g., percentage of device price, or a fixed dollar per unit) estimate using sales volumes, mix, and other variables. “Re‑packing” is the reverse—using a per‑unit rate to estimate the underlying lump sum.
  • Stack share:
    • An estimate of the proportion of all essential patents (the “stack”) attributable to a particular licensor, used to normalise or compare rates across licensors.
  • Trade secrets vs confidential information:
    • “Technical” trade secrets (e.g., a secret formula or algorithm) usually demand protection to preserve the subject matter. Commercially confidential information (e.g., prices, discounts) can also be protected when justice requires it, but not automatically.
  • Slip rule (CPR 40.12):
    • Allows courts to correct accidental slips or omissions in judgments at any time; non‑parties can raise them; not limited to minor points; cannot be used to re‑argue the case.

Conclusion

This decision restores coherence to the law governing publication of confidential material in FRAND judgments. It confirms a single, principled framework rooted in Scott v Scott: open justice yields only where justice requires it, assessed on the facts. JC Bamford is harmonised within that framework as an instance of protecting technical trade secrets, not as a new, automatic regime tied to the Trade Secrets Regulations.

On the merits, the Court holds that both lump‑sum and per‑unit pricing data (including unpacked rates and DPUs) can—and on these facts should—be redacted because disclosure would inflict real negotiation harm on non‑parties. Aggregated totals and averages must be redacted to prevent circumvention. Conversely, high‑level non‑financial features like whether a licence permits sub‑licensing are publishable absent specific evidence of harm.

Procedurally, the Court underscores non‑parties’ rights: they have standing to appeal confidentiality orders and may invoke the slip rule to correct errors affecting them. Substantively, the judgment offers clear guidance to courts and litigants on structuring FRAND judgments that are as open as possible while protecting legitimately confidential commercial information. The upshot is a stable, predictable platform for future FRAND cases, preserving both public accountability of judicial reasoning and the integrity of SEP licensing negotiations.

Case Details

Comments