The High Court decision in Koger Inc & Anor v O’Donnell & Ors examines the delicate balance between the protection of confidential information and the obligations on disputing parties in the discovery process. The court in this case, held that a limited discovery of the defendant’s confidential information to an expert witness was not sufficient, given that the information was crucial to the plaintiff’s case. The decision will have wider implications for future intellectual property disputes which involve confidential information.

The plaintiff alleged that the defendant’s software incorporated confidential information and copyright materials belonging to it. The defendants were past employees and contractors for the plaintiff and the plaintiff alleged that the defendants had used the confidential information in question in order to create a similar product and launch themselves on the market in competition with the plaintiff. The issue arising in this preliminary hearing was whether the confidential information relating to the defendant’s new product, once discovered to the plaintiff’s expert, should also be made available to a specified officer or officers of the plaintiff company.

The plaintiff’s expert took the view that he needed access to more of the defendant’s system design documentation and metadata. The defendants were willing to disclose this to the plaintiff’s expert but not to the plaintiff’s officers. The plaintiff argued that this would leave it on an unequal footing in the main proceedings if it did not have direct access to the information, given that the defendants had had full access to the plaintiff’s confidential information (during employment). Furthermore, the plaintiff’s officers had an intimate knowledge of the plaintiff’s product and could give meaningful input to the expert’s examination of the defendant’s competing product.

The Court held that a restriction on discovery could apply only where there was exceptional circumstances to justify it. In the confidentiality agreement for discovery between the parties the parties agreed that the plaintiff’s expert was entitled to refer certain elements of the confidential information to the plaintiff’s legal advisors who could, in turn, disclose that information to the plaintiff. The defendant argued that this agreed procedure would ensure that all the relevant information was disclosed to the plaintiff’s officers. The plaintiff’s argued that they could not obtain a fair trial without direct access to the relevant information and that in order to properly prepare for trial the plaintiff’s nominated officers must have access to the defendant’s materials.

The court acknowledged that the case was finely balanced but held that, in the interests of justice, the defendant’s materials were discoverable to the plaintiff’s officers in this case. The court imposed a number of strict conditions on the disclosure which included:

  1. the plaintiff’s nominated officer has to provide an undertaking on oath that the material disclosed would not be used for any purpose other than conduct of the litigation;
  2. the documentation at all times has to remain in the custody of the plaintiff’s solicitors who must give an undertaking to the court that they will not part company with the materials or allow it to be copied without the defendant’s consent or leave of court. The solicitor must also undertake on oath that the material will not be used for any purpose other than the conduct of the litigation; and
  3. access to the materials was also only permitted in the presence of the plaintiff’s solicitor.

The Court seemed to be persuaded by the fact that only a limited number of the plaintiff’s employees understood the functionality, and knew what metadata was comprised in, the plaintiff’s software. The Court held that the plaintiff’s expert would not have the same unique understanding from a separate examination of the plaintiff’s and defendant’s competing technology and confidential information. without guidance from the plaintiff’s employees in that examination.

The decision does not necessarily point to a position whereby confidential information in all future cases will be discoverable to the other side. The Court’s decision was clearly influenced by the complex nature of the technology and the corresponding complexity of the confidential information.