When may in-house counsel have access to the confidential information of another party to litigation, where in-house counsel is giving instructions at trial? This question is examined in Merial, Inc. v Intervet International B.V.  FCA 1047 (30 August 2016).
The proceeding was an appeal by Merial from a decision of the Commissioner of Patents regarding a patent application by Intervet in respect of an invention.
Merial sought an order that Dr Judy Jarecki-Black, its Global Head of Intellectual Property, be permitted to have access to certain product development reports proposed to be relied upon by Intervet at the hearing.
Intervet claimed confidentiality in the reports, and was only prepared to allow Dr Jarecki-Black to have access to redacted copies of the reports.
There was no issue as to Merial’s external lawyers having access to the unredacted reports, subject to signing a confidentiality undertaking.
The issue was whether Dr Jarecki-Black should have access to unredacted copies of the reports, subject to signing a confidentiality undertaking (which she was prepared to do).
His Honour restated the relevant legal principles as summarised by Besanko J in AstraZeneca AB v Medis Pharma Pty Ltd  FCA 549 at :
1. The onus of establishing a claim for confidentiality is on the party making the claim: Alphapharm Pty Ltd v Lundbeck Australia Pty Ltd  FCA 1358 (“Alphapharm v Lundbeck Australia”), at  per Lindgren J.
2. The question of whether a claim for confidentiality should be upheld or refused involves a balancing exercise in which the competing considerations are the risk of inadvertent or accidental disclosure on the one hand, and the benefits of a party having access to relevant information so that appropriate advice can be given to the client and informed instructions received from the client, on the other: Conor Medsystems, Inc v The University of British Columbia (No 4)  FCA 324] at  per Finkelstein J, referring to WarnerLambert Co. v Glaxo Laboratories Limited  RPC 354, at 356 per Buckley LJ.
3. In determining where the balance lies in a particular case, a number of matters are relevant, including the following:
(a) the nature and content of the confidential information: Mobil Oil Australia Ltd and Another v Guina Developments Pty Ltd and Another (1996) 33 IPR 82, at 87-88 per Hayne JA (as his Honour then was);
(b) the extent to which, if the confidential information is disclosed to a particular person, that person will have occasion to use the information to further a party’s commercial interests: Conor Medsystems, at ; Alphapharm Pty Ltd v Lundbeck Australia, at . In this context, involvement or lack of involvement in competitive decision-making will be relevant. It will also be relevant to consider whether the person to whom it is proposed to disclose the information owes or may owe contractual, statutory or fiduciary duties to their principal in relation to competitive decisions: Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd (No 3)  FCA 793, at  per Perram J;
(c) the professional attributes of the persons to whom it is proposed to disclose the information and the extent to which they have participated in confidentiality clubs in the past: Conor Medsystems at ; Interpharma Pty Ltd v Commissioner of Patents  FCA 1422 (“Interpharma v Commissioner of Patents”), at - per Sundburg J;
(d) the extent to which the Court can be satisfied that, if confidential information is released to a person, that person, or the organisation for which the person works, has in place a security system that will protect the confidentiality of the information: Interpharma v Commissioner of Patents, at -;
(e) undertakings given by the proposed recipient of the confidential information or the party seeking disclosure to meet any loss caused by inadvertent or accidental disclosure: Conor Medsystems at ; Interpharma v Commissioner of Patents, at ;
(f) although the above five matters are directed, primarily at least, to the risk of inadvertent or accidental disclosure of the confidential information and the likely loss if that occurs, on the other side of the equation, it is relevant to consider the extent to which a party’s ability to seek advice and provide instructions may be hampered if a claim for confidentiality is upheld. In this context, it is worth noting that a claim for confidentiality in relation to certain persons is not necessarily to be upheld because there is already one person able to seek advice and provide instructions. It may be appropriate for a number of people from within an organisation to have access to confidential information in order to seek appropriate advice and provide informed instructions, particularly in the case of a large organisation and complex litigation. Whether that is so or not depends on the outcome of weighing the relevant factors.
The above principles were applied in Vringo Infrastructure Inc v ZTE (Australia) Pty Ltd (No 3)  FCA 983 at  and Gram Engineering Pty Limited v BlueScope Steel Pty Limited (No 2)  FCA 452 at -, .
Evidence and result
Merial gave evidence that Dr Jarecki-Black:
- was a member in good standing of the state bars of Georgia and South Carolina;
- as an attorney-at-law, was subject to professional obligations including those of confidentiality;
- had been held in other patent ligation between Merial and its competitors, including between Merial and Intervet, not to be a competitive decision-maker at Merial, in part because she was not involved in pricing decisions, product design, selection of vendors, purchasing decisions, marketing or overall corporate decision-making at Merial, further that she did not personally prosecute patents or patent applications or interact with inventors for that purpose. As a consequence Dr Jarecki-Black had been permitted by various Courts to see “attorney eyes only” material;
- had never been accused of misusing confidential information or “attorney eyes only” information;
- intended to travel to Australia to attend the appeal hearing in person, in order to provide instructions to Merial’s solicitors and counsel;
- had only ever held legal roles with Merial and had never held competitive decision-making, patent drafting or product development roles;
- had no plans, and did not expect to go into any competitive decision-making, patent drafting or product development roles at Merial in the future;
- was the person responsible for making decisions on behalf of Merial regarding the conduct of the litigation, and was very concerned that her ability to do so would be prejudiced if she was not given access to the reports.
The Court held on the basis of the above evidence, applying the above legal principles, that it was appropriate for Dr Jarecki-Black to have access to the unredacted reports, subject to the execution of deeds of undertaking of confidentiality by herself and Merial.
Moshinsky J was prepared to infer from Dr Jarecki-Black’s execution of a deed of undertaking, that she did not owe any inconsistent contractual, statutory or fiduciary duties to Merial.
Whilst the evidence did not address the security systems in place at Merial, Moshinsky J was also prepared to infer from the evidence generally that Dr Jarecki-Black would take appropriate steps to ensure that no-one else at Merial was able to access the reports. His Honour suggested that the safest way for that to occur was for Dr Jacecki-Black to receive only hard copies (rather than electronic copies) and for them to be stored in a secure place (for example in a safe) which no-one else had access to. Further that the documents should be destroyed at the conclusion of the proceeding.