Court of Appeal finds disclosure to party's US lawyers breached embargo on draft judgment, but no further steps taken

The Court of Appeal has held that, where a judgment was provided in draft to parties and their legal representatives under embargo in advance of being handed down in public, neither the judgment nor the outcome could be disclosed to foreign lawyers, even though they had been involved to some extent in the proceedings. Such disclosure was a breach of the embargo, potentially punishable by contempt proceedings: InterDigital Technology Corporation v Lenovo Group Ltd [2023] EWCA Civ 57.

The court also considered, although it did not have to decide, that strict liability may apply to a breach of the embargo, so that there may be a contempt even where there has been no intention to flout the embargo.

On the facts of this case, however, including that the party in breach accepted responsibility and apologised to the court, the court considered that further proceedings would be disproportionate to any need to uphold the court's authority. This is in contrast to the decision in Wright v McCormack [2022] EWHC 3343, considered in this post, where the High Court decided on its own initiative to issue contempt proceedings.

In some cases, there may be uncertainty as to who can be sent a draft judgment. In those circumstances, it would be advisable to apply to court under para 2.7 of Practice Direction (PD) 40E, which provides that if the parties or their legal representatives are in any doubt about the persons to whom copies of the draft judgment may be distributed, they should enquire of the judge.

Background

The underlying case concerned a patent belonging to InterDigital. The judge at first instance held the patent to be valid and essential and Lenovo appealed. The Court of Appeal circulated its judgment in draft to the parties' counsel, counsel's clerks and one representative of each of the solicitors' firms involved, following the practice set out in PD 40E.

The standard rubric at the top of the draft explained that the purpose was "to enable the parties to make suggestions for the correction of errors, prepare submissions on consequential matters and draft orders and to prepare themselves for the publication of the judgment". It also explained that the draft was "confidential to the parties and their legal representatives", that "neither the draft itself nor it's substance may be disclosed to any other person or made public in any way", and that "a breach of any of these obligations may be treated as a contempt of court."

After receiving the draft judgment from the court, InterDigital's solicitors, Gowling WLG, sent it to four key contacts at their client. The covering email was marked privileged and confidential to the four addressees, and the body of the email drew attention to the terms of the embargo, emphasising that the recipients must not share the judgment, the outcome, or any details about it with any other person who was not directly involved in one of the three legitimate activities specified in the embargo wording. The judgment itself was password encrypted, with the password following by separate email.

One of the recipients, A, the Deputy General Counsel and Head of Intellectual Property and Litigation, was out of the office on vacation. After quickly reading the judgment, he disclosed the outcome by email to InterDigital's external counsel, L, a partner in Wilson Sonsini Goodrich & Rosati, a US international law firm, telling him that he could tell the core team at Wilson Sonsini, but the information was confidential and must not be shared publicly. A did not appreciate that he was violating the embargo. He had not read the covering email and had thought that it was possible to disclose the outcome to the US firm as they were involved in the global dispute with Lenovo and he viewed them as "co-counsel" with Gowling. L forwarded A's email to five members of his "senior, core team" on confidential terms which were adhered to.

Gowling became aware that L knew the outcome of the appeal. They investigated what had happened and brought it to the attention of the court. A letter from A, accepting responsibility and apologising, was included in their evidence, and at the court's request, A later confirmed the contents of the letter in a witness statement.

Decision

The Court of Appeal (Warby, Falk and Birss LJJ) accepted A's apology and concluded that, in the circumstances of this case, further proceedings would be disproportionate to any need to uphold the court's authority.

The court noted that Lenovo had not sought to make any representations on the issue, but this was a matter that concerned the court itself.

The legitimacy of the embargo and the importance of adhering to it were recently re-emphasised in R (Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWCA Civ 181 (considered in this post on Practical Law's Dispute Resolution blog). Following that case, it has become standard practice at the end of an appeal hearing for the Court of Appeal to underline the importance of complying with the embargo and to remind parties that a breach may be treated as a contempt of court.

A had been right to concede that what he did was in breach of the embargo. Wilson Sonsini were not parties to the appeal nor were they the "legal representatives" of Interdigital for that purpose. A was also right to accept full responsibility and no criticism could be levelled at Gowling.

Contempt proceedings for breach of the embargo can be brought by the Attorney General and the court can refer a case to the Attorney for consideration. Alternatively, the court can act of its own initiative pursuant to CPR 81.6(1).

The first step is for the court to decide whether a contempt may have been committed. Here there was no intention to flout the embargo. A did not realise that is what he was doing. There was, however, an argument that liability for contempt of this kind is strict. The court therefore considered that there may have been a contempt. However, there was no good reason to explore the questions of law that might arise or to proceed further with the case. The illegitimate disclosures were relatively limited and did not include the draft judgment itself. The disclosure was made to people with a close professional interest in the outcome on express terms as to confidentiality. There was no public disclosure and the facts of the disclosure were investigated and disclosed to the court by the wrongdoer itself without prompting.