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Friday, January 11, 2013

Suppression orders in IP cases – will the new law change anything?

By Clare Young, Senior Associate

In the lifts and corridors of Sydney's Federal Court before Christmas, there were rumours that section 50 of the Federal Court of Australia Act 1976 (Cth) (the FCAA) had been repealed and some confusion about what had replaced it. Section 50 provided for the court to make an order prohibiting access to, or the publication of, particular evidence or the name of a party or witness, in two circumstances: (i) to prevent prejudice to the administration of justice; or (ii) for the security of the Commonwealth, State or Territory.

In one court, on 12 December, the trial judge was minded to grant a suppression order over part of the transcript to protect the confidential information of one of the parties, but was unable to specify the terms of the order because it was unclear what the new law was. (The relevant amending Act was published on ComLaw on 13 December 2012, the day after s50 had been repealed.)

Known as ‘section 50 orders’, these orders were commonly sought, particularly in IP proceedings, to protect confidential and highly sensitive or commercially valuable information. For example, in a breach of confidential information case, the applicant will usually have to put its confidential information into evidence, and witnesses may need to describe that confidential information during examination. If a non-party were able to gain access to the documentary evidence or the witness's evidence recorded in the transcript, that would likely defeat the purpose of the applicant litigating to protect its confidential information. The reasoning goes that it is in the interests of justice that the processes for determination of the proceedings do not destroy or seriously depreciate the value of that subject matter (Hogan v Australian Crime Commission [2010] HCA 21).

The Access to Justice (Federal Jurisdiction) Amendment Act 2012 (Cth) provides a replacement for s50, in the form of a new Part VAA in the FCAA. (Note that the version of the FCAA that still appears on Austlii and ComLaw at the time of posting contains s50, as that version is the last consolidated version of the Act. In time, these new amendments will be incorporated into a further consolidated version of the FCAA.)

In the circumstances of protection of commercial confidential information, the new Part VAA does not make any substantive changes to the old s50 but it is more prescriptive in terms of what the court must consider and what must be specified in the order. In particular, the order must now specify the duration of the period over which it operates (s37AJ), which may be by reference to a fixed period or to a specified future event. It is unclear how that period should be determined in the context of confidential information, which is likely to be confidential for an unknown period.

So, why the change?

According to the Explanatory Memorandum, the new Part VAA is intended to harmonise the law in relation to non-publication and suppression orders across the four Federal Courts and incorporate (with minor amendments) the model legislation of the Standing Committee of Attorney-Generals, which was tasked with drafting legislation to rein in the volume and breadth of suppression orders granted by some state courts. In particular, s37AE expressly refers to the primary objective of the administration of justice being to safeguard the public interest in open justice. In the context of protection of commercial confidential information (such as trade secrets), it is difficult to see how there could be a public interest in disclosure, so it seems unlikely that the new Part VAA will reduce the number of suppression orders granted in confidential information (and other IP) cases.

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