“Examining proposed legislation to reduce the discovery burden in patent cases”
Inside Counsel 04/02/14 By Josephine K. Benkers
This is the third of three articles addressing proposed legislation to curb abusive patent litigation. The previous articles addressed a proposed change to the language allowing for shifting attorneys fees to prevailing parties and proposed changes to the pleading standards. Again, while there are other bills proposed, this article will again reference H.R. 3309 (the “Innovation Act,” originally introduced by Rep. Goodlatte).
While full-blown trials can be obscenely expensive, it is often the cost of discovery —which stretches on for many months and frequently involves several disputed motions — that dwarfs all other costs in a patent case. Naturally, then, efforts aimed at controlling those costs are included in proposed patent litigation reform legislation.
Courts have long had the ability to control, limit, and phase discovery under Rule 26 of the Federal Rules of Civil Procedure. However, historically many courts have taken a less active role in managing discovery, choosing to let the parties negotiate the bounds themselves and only bring discovery disputes before the court that cannot be resolved. If a party simply says “no” to an unduly burdensome demand, rarely does the opposing party just drop the request, leading to a negotiation which still might afford more discovery than is appropriate in a given case, or costly motion practice.
Moreover, with the possible exception of some damages-related information, discovery on every conceivable issue generally occurs simultaneously. In patent cases, this often results in large discovery burdens on issues the court may never need to reach. For example, a plaintiff in a patent case — maybe a patent troll — might ask for many thousands of emails, in search of some smoking-gun email mentioning the patent-in-suit, which may be relevant to a question of willful infringement. Such emails very rarely exist, and often a defendant is justified enough in its defenses to avoid a finding of willfulness. So often the real effect of such discovery, particularly in a troll suit, is to drive up a defendant’s costs.
Legislation proposed in Congress, such as H.R. 3309, would change the discovery rules in patent cases in a number of ways targeted to delay the discovery of all but core documents until a stage in the case during which the Court or parties can assess whether the case has sufficient merit to warrant additional discovery. Included in H.R. 3309 are the following concepts:
- Limiting discovery prior to claim construction to only that which is relevant to claim construction;
- Introducing the concept of “core documentary evidence,” which includes documents related to the conception and reduction to practice; documents showing how the accused products work; information related to any pre-suit knowledge; information related to profits, licensing, and any commitments to standards setting organizations; and information related to patent marking; and
- Directing the courts to determine whether any additional discovery beyond the above, including but not limited to e-discovery and computer code, should occur.
These measures have the potential to make patent litigation vastly more efficient, but whether they work will depend on how they are implemented by the individual courts. It will be important for courts to take an active role in really “sizing up” a case early as to the merits and potential damages so that, in the words of Chief Judge Rader, a “billion-dollar case gets a ‘billion-dollar’ process and a thousand-dollar case gets its due as well.”
These provisions may also cause individual district courts to change their claim construction procedures, as those can vary vastly among the different courts and from judge to judge or even from case to case. Sometimes there are very few terms that need to be construed in a patent case, and sometimes there are dozens of terms in dispute. Sometimes early claim construction makes sense, and sometimes it make sense to do it later in the case. Some courts hold formal claim construction hearings, and some simply construe patent claims in conjunction with summary judgment. The proposed provisions seem to contemplate that claim construction occur sooner than later.
As with many of the other proposed patent litigation reform measures, the courts have been taking their own actions to attempt to reduce the burden and cost of discovery for parties in patent cases. For example, the Federal Circuit has formulated a model e-discovery order, and many individual district courts have also implemented rules to control such costs. Moreover, the judiciary is in the process of amending the Federal Rules of Civil Procedure to make discovery less burdensome in all types of litigation, not just patent cases. It remains to be seen which avenue will result in changes to discovery in patent cases first, but hopefully some efficiencies will be gained as a result.
Originally published on Inside Counsel, April 2, 2014