FEDERAL COURT OF AUSTRALIA Unilever Australia Ltd v Revlon Australia Pty Ltd (No 3) [2014] FCA 1005 Citation: Unilever Australia Ltd v Revlon Australia Pty Ltd (No 3) [2014] FCA 1005 Parties: UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) v REVLON AUSTRALIA PTY LTD (ACN 095 360 731) File number: NSD 508 of 2014 Judge: GLEESON J Date of judgment: 16 September 2014 Catchwords: PRACTICE AND PROCEDURE – confidentiality orders – whether confidential exhibits to respondent's affidavit may be disclosed to applicant's in house counsel – whether exhibits may be disclosed to other persons for purposes of the proceedings – where parties are trade rivals – where documents would be subject to usual implied undertaking Legislation: Federal Court of Australia Act 1976 (Cth) s 50 Cases cited: Autodata Ltd v Boyce's Automotive Data Pty Ltd [2007] FCA 1517 ICAP Australia Pty Ltd v Moebes [2010] NSWSC 738 Cyclopet Pty Ltd v Australian Nuclear Science and Technology Org [2012] FCA 1326 Forty Two International Pty Ltd v Barnes (No 4) [2012] FCA 1059 Date of hearing: 11 September 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr Richard Cobden SC Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: Mr Michael Hall with Ms Edwina Whitby Solicitor for the Respondent: King + Wood Mallesons IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 508 of 2014 BETWEEN: UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) Applicant AND: REVLON AUSTRALIA PTY LTD (ACN 095 360 731) Respondent JUDGE: GLEESON J DATE OF ORDER: 16 SEPTEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Despite any confidentiality undertaking concerning documents including exhibits MDT-27, MDT-28 (as redacted), MDT-30 and MDT-32 referred to in the third affidavit of Dr Michael David Traudt sworn 3 September 2014, each of those documents may be disclosed to any person for the purpose of these proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 508 of 2014 BETWEEN: UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) Applicant AND: REVLON AUSTRALIA PTY LTD (ACN 095 360 731) Respondent JUDGE: GLEESON J DATE: 16 SEPTEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant/cross-respondent ("Unilever") applies for an order that, in substance, authorises the use of four documents received from the respondent/cross-claimant ("Revlon") pursuant to confidentiality undertakings. The terms of the undertakings are: 1. Subject to any Order of or authorisation by the Court, or without the written consent of the Respondent through its solicitors to the contrary, and further subject to paragraph 2 below: (a) I will keep the documents and information confidential at all times and will not disclose them (either in whole or in part) either directly or indirectly to any person including the parties to these proceedings, their in-house counsel, any company within the Unilever group of companies or the respective employees and agents of such parties and entities; (b) I will not use the documents and information other than for the sole purpose of the conduct of these proceedings or any appeal therefrom. 2. The documents and the information may be disclosed by me to the Court; or under compulsion of law; and also to the extent documents or information have already been disclosed publicly, or to me otherwise than by the Respondent otherwise than in contravention of this or a similar confidentiality undertaking; and also to: (a) Any partner, solicitor or employee of Baker &McKenzie Sydney; (b) Barristers briefed in these proceedings; and (c) Any other person designated by agreement between the Applicant and the Respondent or by Order of the Court; who has signed a confidentiality undertaking in similar form to this confidentiality undertaking. 3. I will, upon the conclusion of these proceedings including any appeal whether by judgment, settlement or otherwise, ensure that: (a) All documents or copies of documents held by me; and (b) Any notes made by me or given to me recording or referring to the information, are returned to Andrew Salgo to be dealt with in accordance with his confidentiality undertaking in the proceeding. 4. Nothing in this Undertaking is an acceptance on my or the Applicant's part that the documents are in fact confidential, or restricts me or the Applicant from seeking to have the Court authorise or order a release of documents and information for use or disclosure beyond the restrictions that are set out herein. I give this undertaking on the basis that if there is any contest or application before the Court as to the use or disclosure of documents or information beyond the restrictions set out herein, the burden of establishing confidentiality and the need for any particular restrictions on use or disclosure will remain on the entity claiming confidentiality to the same extent as if this undertaking had not been given. 2 Unilever submits that the documents are not confidential, on the basis that the asserted basis of the confidentiality is "without foundation". Unilever wishes to disclose the documents to employees of Unilever for the purpose of preparing its evidence in reply to the evidence served by Revlon. In particular, Unilever wishes to disclose the documents to Mr Jonathon Friedrich, in-house counsel for Unilever and Ms Anne Marie Carvell, a deodorancy testing unit manager employed by Unilever. 3 Revlon submits that the documents are confidential and that the confidentiality regime permits Unilever to show the documents to independent experts. It argues that this is sufficient for Unilever's legitimate purposes. The documents 4 The documents concern clinical evaluations of deodorant efficacy conducted for Revlon in 2011 and 2012, namely: a. Report of a clinical evaluation conducted in 2011 ("the 2011 clinical evaluation") of the deodorant efficacy of a Mitchum Aqueous Roll-On antiperspirant deodorant ("Original Roll-On") ("MDT-27"); b. A redacted copy report of a clinical evaluation conducted in 2012 of the deodorant efficacy of a Mitchum Aqueous Roll-On antiperspirant deodorant containing hydrogen peroxide ("Original Roll-On with hydrogen peroxide") ("redacted MDT-28"); c. Revised report of the 2011 clinical evaluation of the deodorant efficacy of the Original Roll-On ("MDT-30"); d. A statistical analysis comparing the results of the two clinical evaluations ("MDT-32"). 5 In his affidavit of 3 September 2014, Dr Michael David Traudt gives evidence that, when he reviewed the results of the 2012 study, he formed the opinion that the Original Roll-On with hydrogen peroxide (which he refers to as the "Oxygen Roll-On") was more effective than the Original Roll-On. He says: This opinion was based on the fact that the same testing protocol had been used, the baseline for both the studies was the same and that it was evident to me on the face of the reports, and based on my experience in deodorant efficacy studies, that the difference between the results for the Original Roll-On at 24 hours and the results for the Oxygen Roll-On at 48 hours would be significant. 6 Dr Traudt says that he gave instructions for a statistical comparative analysis of the results of the 2011 and 2012 clinical evaluations. He says that the results, shown in MDT-32, confirmed his initial opinion that the difference between the results would be significant. 7 Dr Traudt also expresses the opinion that the results of the 2011 and 2012 clinical evaluations are able to be compared because: [t]he two studies used the same testing facility, the same odour evaluation scale, the same assessor calibration and the same testing protocol in all relevant respects. 8 Dr Traudt concludes that the results of the 2012 clinical evaluation, when compared to the 2011 clinical evaluation, demonstrated to him that the addition of hydrogen peroxide to the formulation was clinically meaningful or measureable. He considered in 2012, and still considers, that the results show that hydrogen peroxide has an odour benefit. Dr Traudt says that his opinion is strengthened by the statistical comparative analysis in MDT-32. Revlon's evidence of confidentiality 9 Dr Traudt's 3 September 2014 affidavit contains the following evidence (additional to the descriptions of the documents) relied upon in support of the confidentiality claim: a. the testing processes and methods used by Revlon are kept confidential from trade rivals; b. whilst the methodology itself is not necessarily a confidential methodology, the knowledge of which methodology is used for which products and when is confidential information about the trade and testing processes undertaken by Revlon; c. this information could be used by a competitor to the disadvantage of Revlon. 10 In oral submissions, Mr Hall, counsel for the respondent, argued that the nature of the reports was itself relevant to a determination of their confidentiality because they are revealed to be commercial research conducted by Revlon for internal purposes, independently of the litigation, to assess the efficacy of products that it is considering offering to the market or offering to the market. Mr Hall said that Dr Traudt's evidence should be read as a statement about the practice and policy of Revlon to preserve secrecy as to which methodology is used for which products and when. Matters relied on by Unilever 11 Unilever relies on the following propositions to contend that the documents are not confidential: a. The methodology which is claimed to be confidential is disclosed in overview terms in Dr Traudt's affidavit. In oral submissions, Mr Cobden SC, senior counsel for the applicant, said that paragraph 6 of Dr Traudt's affidavit revealed that the 2011 clinical evaluation was a test of the relevant product (the Original Roll-On) against untreated armpits. Mr Hall did not dispute this interpretation of Dr Traudt's evidence. b. The relevant methodology is disclosed in the redacted version of exhibit MDT-10, which is a document that the Court has previously permitted (by order made on 19 June 2014) to be disclosed to Jonathon Friedrich, Unilever's in house counsel, and any person to be called as a witness by Unilever in the proceedings. c. MDT-10 is a report of a clinical evaluation of the deodorant efficacy of the Original Roll-On with hydrogen peroxide conducted in 2013. It appears from the Court's 19 June 2014 order that redactions were made only to prevent disclosure of references to a second product the subject of the clinical evaluation, being a product not the subject of the proceedings. d. I was informed from the Bar table that Ms Carvell has seen the redacted version of MDT-10. e. There is no evidence as to how knowledge of which methodology may be used for which product and when could be used by a commercial rival. f. The proposition (e) gains force because the tests were conducted 2 and 3 years ago. 12 As to the need to access the documents, Unilever made the following submissions: a. The conclusions drawn by Dr Traudt on the basis of the material in the four documents are "absolutely central" to the reasonable belief case in respect of which his affidavit is put forward; b. Unilever wishes to show the documents to Mr Friedrich, Ms Carvell, and to one or more other potential witnesses who are employees of Unilever, and any others who might assist Unilever in the review of the documents; c. As to Ms Carvell, she has given an affidavit in the proceedings dealing with comparative product testing of the same nature as the tests which are the subject of exhibits MDT-28 and 30 (without any claims for confidentiality by Unilever other than as to product formulation); d. Unilever needs to take the steps in (b) above in order to prepare its evidence in reply. Consideration 13 I have examined the four disputed documents, as well as MDT-10. That examination revealed the following: a. the information in the documents is not solely concerned with Revlon's testing processes and methods. For example, MDT-27, MDT-28 and MDT-30 also contain the results of the various clinical evaluations. Those results are disclosed at paragraph 24 of Dr Traudt's affidavit; b. to the extent that the format of the report might be said to disclose confidential information about Revlon's testing processes and methods, that format has been disclosed by exhibit MDT-10; c. there are some differences between the information about Revlon's testing processes ad methods in the four disputed documents and MDT-10. The degree to which those differences are commercially sensitive is not obvious. 14 The evidence is not that the methodology disclosed in the documents is confidential per se, but rather that the use of the particular methodology for the relevant products at the relevant time is confidential information which is entitled to protection. 15 In the absence of more detailed evidence, and having reviewed the documents, I am unable to determine how the documents could be used by a competitor to the disadvantage of Revlon, and whether any disadvantage might be significant. 16 When considering a claim of confidentiality, it is relevant to consider whether the documents the subject of the claim possess "the necessary quality of confidence" about them, and whether the preservation of the documents' confidentiality is of substantial concern to the person making the claim: cf Autodata Ltd v Boyce's Automotive Data Pty Ltd [2007] FCA 1517 at [10]. I can readily accept that the documents contain information about Revlon's testing processes and methods that are, in fact, kept confidential and may satisfy the tests for confidentiality. 17 It is next necessary to consider whether the documents warrant the protection currently afforded to them by the confidentiality undertakings: cf ICAP Australia Pty Ltd v Moebes [2010] NSWSC 738 at [8] ("ICAP"); Cyclopet Pty Ltd v Australian Nuclear Science and Technology Org [2012] FCA 1326 at [6] ("Cyclopet") 18 Revlon cited Cyclopet as authority for the significance to be attributed to the fact that parties are trade rivals in determining whether to forbid or restrict the publication of particular evidence. Although that is a different context, at [6], Jacobson J observed that the mere facts of trade rivalry and commercially sensitive information were not sufficient to warrant the making of an order forbidding or restricting the publication of evidence under former s 50 of the Federal Court of Australia Act 1976 (Cth). At [10], Jacobson J said: Authorities in this Court tend to view that question through the prism of the ordinary requirements for open justice and any prejudice that may flow to a party in the preparation of conduct of a trial as a consequence of a court order: see Betfair Pty Limited v Racing New South Wales (No 9) [2009] FCA 1349 at [8] (Perram J); Sportsbet Pty Limited v Harness Racing Victoria (No 3) [2010] FCA 1420 at [9] (Mansfield J). 19 In ICAP at [11], Ball J observed that a confidentiality regime which limits access to external solicitors and counsel will rarely meet the requirements of reasonableness, because solicitors and counsel must act on instructions of a person who is in a position to give proper instructions. That observation has been quoted with approval in Cyclopet and Forty Two International Pty Ltd v Barnes (No 4) [2012] FCA 1059. 20 I am not satisfied that the information claimed to be confidential (which is only a subset of the information in the reports) is particularly sensitive, or that its disclosure upon the terms of the usual implied undertaking could confer any material advantage upon Unilever, or cause Revlon any material disadvantage. On the other hand, I accept Unilever's submission that the opinions expressed by Dr Traudt upon the basis of the four documents is central to one aspect of the dispute between the parties, namely the reasonableness of Revlon's representations as to the efficacy of the Mitchum Clinical Strength "Oxygen Roll-On". I do not accept Revlon's contention that it would be reasonable for Unilever to be restricted to addressing this evidence through independent experts without the benefit of instructions concerning the document, or the opportunity to obtain evidence in reply from one or more Unilever employees. Conclusion 21 Disclosure and use of MDT-27, MDT-28 (as redacted), MDT-30 and MDT-32 should be permitted subject only to the usual implied undertaking that they be used only for the purposes of the proceedings. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 16 September 2014