Allan M. Soobert

36 Pages·2006·0.13 MB·English

DISCOVERY ISSUES IN PATENT LITIGATION
Copyright © 2005 Allan M. Soobert. All rights reserved.

Allan M. Soobert
Skadden, Arps, Slate, Meagher & Flom, LLP
Washington, DC
TABLE OF CONTENTS
I. INTRODUCTION......................................................................................................1
II. MAPPING THE LANDSCAPE: PRE-DISCOVERY PLANNING.........................1
A. DEFINING CASE OBJECTIVES.......................................................................1
B. DEVELOPING A DISCOVERY PLAN.............................................................2
C. UNDERSTANDING THE SCOPE OF DISCOVERY AND ITS LIMITS........2
III. GETTING STARTED: INITIAL PHASE OF DISCOVERY...................................3
A. RULE 26(F) CONFERENCE..............................................................................3
1. Timing.............................................................................................................3
2 Requirements...................................................................................................4
B. MANDATORY DISCLOSURES........................................................................4
1. Timing.............................................................................................................4
2 Requirements...................................................................................................5
C. STIPULATED PROTECTIVE ORDER..............................................................6
1. In-House Counsel and Other Party Employees..............................................6
2. Patent Prosecution Restrictions.......................................................................7
3. Procedures for Designations...........................................................................8
4 Procedures for Experts and Consultants..........................................................9
IV. DRILLING DOWN: USING THE DISCOVERY TOOLS......................................9
A. INTERROGATORIES........................................................................................9
1. Overview.........................................................................................................9
2. Effective Use of Interrogatories......................................................................9
3. Responding to Interrogatories.......................................................................10
(a) Answers and Objections........................................................................10
(b) Postponing Responses Under Rule 33(c)..............................................11
(c) Producing Business Records Under Rule 33(b)....................................11
(d) Other Issues...........................................................................................12
B. REQUESTS FOR PRODUCTION, INSPECTION AND ENTRY...................12
1. Overview.......................................................................................................12
2. Effective Use of Rule 34 Requests...............................................................13
3. Responding to Rule 34 Requests..................................................................14
(a) Responses and Objections.....................................................................14
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(b) Documents in the Possession of a Nonparty, But Related Entity........14
(c) Electronically-Stored Information.........................................................15
(d) Document Retention Obligations..........................................................15
(e) Costs of Production...............................................................................16
C. REQUESTS FOR ADMISSION.......................................................................17
1. Overview.......................................................................................................17
2. Effective Use of Requests for Admissions...................................................17
3. Responding to Requests for Admissions......................................................18
D. DEPOSITIONS..................................................................................................18
1. Overview.......................................................................................................18
2. Effective Depositions of Fact Witnesses......................................................18
3. Effective Depositions of Rule 30(b)(6) Witnesses.......................................19
4. Effective Depositions of Experts..................................................................20
E. THIRD-PARTY DISCOVERY.........................................................................21
F. FOREIGN DISCOVERY METHODS...............................................................22
G. RULE 56(F).......................................................................................................22
V. HITTING IMPEDIMENTS: POTENTIAL DISCOVERY
OBSTACLES (AND OPENINGS)..........................................................................24
A. ATTORNEY-CLIENT PRIVILEGE.................................................................24
1 Privilege Defined...........................................................................................24
2. Privilege Issues in Patent Litigation.............................................................24
(a) Patent Prosecution-Related Issues.........................................................24
(b) Opinions................................................................................................27
(c) Draft License Agreements.....................................................................27
B. ATTORNEY WORK PRODUCT IMMUNITY...............................................28
1. Attorney Work Product Immunity Defined..................................................28
2. Work Product Issues In Patent Litigation.....................................................28
(a) Documents Prepared in “Anticipation” of “Litigation”........................28
(b) Patent Prosecution Documents..............................................................29
(c) Pre-Filing Investigations.......................................................................29
(d) Opinions................................................................................................29
(e) Draft License Agreements.....................................................................29
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C. WAIVER............................................................................................................29
1. Inadvertent Waiver........................................................................................30
2. Intentional Waiver........................................................................................30
VI. DEALING WITH DISCOVERY DISPUTES..........................................................31
A. MOTIONS TO COMPEL..................................................................................31
B. MOTIONS FOR PROTECTIVE ORDER.........................................................31
C. LOCAL PRACTICE..........................................................................................32
VII. CONCLUSION.........................................................................................................32

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I. INTRODUCTION
As startling as it may sound, ninety percent of all patent infringement cases, if not
more, never reach trial. The vast majority of patent cases, instead, go on for months, if
not years, with the parties focusing their efforts on discovery. While the Federal Rules of
Civil Procedure provide numerous tools for conducting discovery, these tools can be
difficult and challenging in application, and often, litigants struggle to overcome
recurrent discovery issues. In the end, the difference between winning and losing may
come down to how well the discovery process is handled—or not handled.
This paper summarizes the discovery tools available to patent litigants,
highlighting examples of discovery issues arising in patent cases, and discussing
techniques for using the discovery tools efficiently, economically and effectively. Using
the discovery tools in the suggested ways will not only help you achieve your case
objectives, but will, ideally, place your client in a better position, regardless of whether
the case ever gets to trial.
II. MAPPING THE LANDSCAPE: PRE-DISCOVERY PLANNING
A. DEFINING CASE OBJECTIVES
At the start of any patent litigation, and before the discovery process begins, it is
important to consider the big picture and define the client’s case objectives. Although
that may seem obvious, knowing your client’s objectives and goals (as well as those of
your opponent) is essential, before one proceeds with a discovery process that may
otherwise be all encompassing.
In most cases, the basic legal objectives will be straightforward on one level, and
complex on others. For example, in virtually every case, the patentee must prove
infringement and damages, and the accused infringer must defend itself, usually by
arguing that it does not infringe, or by attempting to prove that the patent at issue is
invalid or unenforceable, among other defenses.
Beneath these broad objectives, however, lie a much more complex set of issues
and subplots, which will vary from case to case. For instance, if you suspect that the
accused infringer may have designed the accused infringing product as a substitute for
the patentee’s own product, the infringement theories may involve intricate twists, such
as an allegation the accused infringer knew of the patent in suit, but nevertheless sought
to copy the patentee’s design (e.g., relevant to nonobviousness, equivalents and
willfulness). Conversely, the accused infringer may allege that the patentee itself
disclosed the claimed invention at a trade show long before filing for the patent, or
derived the claimed subject matter from another (e.g., relevant to anticipation,
obviousness, and damages, among others). While the various issues and subplots will, of
course, differ in each case, understanding the client’s legal theories and objectives, as
well as what must be proven, is essential in as the case proceeds through discovery.
In addition to the legal objectives, it is likewise important to consider the client’s
business objectives and understand what it hopes to achieve through the case. If the
client is bringing an infringement action, is the client merely seeking to license its patent
on reasonable terms? Or, is the client intent on “doing whatever it takes” to put a
competitor out of business with a permanent injunction? In contrast, if the client finds
itself defending against infringement allegations, is the client hoping to co-exist with the
patentee in the marketplace by paying a running royalty on competing products? Or, is
the client willing to “bet the company?”
While the client’s legal and business objectives, taken together, will provide the
ultimate goals for the case, everything that is done in discovery should ideally be geared
towards achieving those goals. One of the most difficult challenges, however, is how to
manage the process of using the discovery tools to get there in an efficient and effective
manner.
B. DEVELOPING A DISCOVERY PLAN
One of the best ways to efficiently and effectively manage the discovery process
is to prepare a discovery plan, which will provide the attorneys and clients alike with a
roadmap for achieving the ultimate objectives. It is too often the case that discovery
spirals out of control—unmanaged and unfocused—only to leave a party to learn on the
eve of trial that it spent 90% of the case focusing on one or two elements of an asserted
claim, while ignoring others altogether.
It is therefore useful and advised to lay out your client’s objectives, at the start of
the case, and plan the strategy and steps that you will need to take, in order to achieve
those objectives. For example, one approach may involve identifying all of the points
that you will need to prove at trial, and how you intend to prove them, whether through
witnesses, documents or discovery responses. The various discovery tools may then be
mapped and cross-referenced to each point, to determine the most effective and efficient
way to develop a given point.
This will not only give you an organized and systematic way of managing the
discovery process, it will likely give the client reassurance that the process is proceeding
in an efficient manner, regardless of whether the case involves relatively small stakes or
is a bet-the-company matter, where the client wishes to leave no stone unturned. The
discovery plan is an effective way of achieving the client’s goals and objectives in a
patent case, and should be revisited and updated as the case develops.
C. UNDERSTANDING THE SCOPE (AND LIMITS) OF DISCOVERY
With your case objectives defined, and a discovery plan in hand, it is likewise
important to remain mindful of the scope of discovery and its limits, in order to
effectively implement your plan. In patent litigation, as with any other case in federal
court, discovery is governed by Rules 26-37 of the Federal Rules of Civil Procedure.
Within these rules, Rule 26(b)(1) defines the scope of discovery. Rule 26(b)(1)
provides that, unless otherwise limited by the court, parties may obtain discovery relating
to any matter, not privileged, which is relevant to the claim or defense of any party,
including the existence, description, nature, custody, condition, and location of persons
having knowledge of any discoverable matter. The information sought need not be
admissible at trial if the discovery appears reasonably calculated to lead to the discovery
of admissible evidence.
All discovery is subject to the limitations imposed by Rule 26(b)(2)(i)-(iii).
Under these limitations, a court may limit discovery if: (i) the discovery sought is
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unreasonably cumulative or duplicative, or is obtainable from some other source that is
more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has
had ample opportunity by discovery in the action to obtain the information sought; or (iii)
the burden or expense of the proposed discovery outweighs its likely benefit, taking into
account the needs of the case, the amount in controversy, the parties’ resources, the
importance of the issues at stake in the litigation, and the importance of the proposed
discovery in resolving the issues. FED. R. CIV. P. 26(b). The court may act upon its own
initiative after reasonable notice or pursuant to a motion for a protective order under
Rule 26(c).
As with all federal court litigation, it is important to consult local rules for the
venue where your case is pending as there are often significant limitations or additional
requirements imposed on the parties and their counsel. In some instances, the judge
presiding over the case will have his or her own practice and procedures for handling
discovery issues. See infra section V.C.
Rule 26(e) requires the parties to supplement and seasonably amend its
disclosures and discovery responses upon learning that the information disclosed is
incomplete or otherwise no longer correct. FED. R. CIV. P. 26(e). Rule 29 provides that
the parties may stipulate in writing to modify any of the discovery rules. If, however,
such a stipulation would interfere with any time set for completion of discovery, or for
hearing of a motion or for trial, court approval is required. FED. R. CIV. P. 29.
III. GETTING STARTED: INITIAL PHASE OF DISCOVERY
A. RULE 26(F) CONFERENCE
1. Timing
In addition to setting forth the general scope and limits of discovery, Rule 26
requires a conference between counsel that, in essence, kicks off the discovery process.
Under Rule 26(f), the parties must conduct this so-called Rule 26(f) conference “as soon
as practicable and in any event at least 21 days before a scheduling conference is held or
a scheduling order is due under Rule 16(b).”
Parties are not permitted to serve or conduct any discovery, unless otherwise
authorized by the federal rules, court order or agreement, until the Rule 26(f) conference
takes place. However, to ease the burden, the Rule 26(f) conference may be conducted
over the telephone, rather than in person, and in patent cases, this has become the norm.
While courts were permitted to adopt local rules or an order “opting out” of the
Rule 26(f) conference requirement, the December 1, 2000 amendments to Rule 26
removed the “opt-out” provision. The requirements, therefore, apply in all federal district
court cases, except in certain (non-patent related) categories of proceedings exempted
from initial disclosure under Rule 26(a)(1)(E), or when otherwise ordered. As a result,
Rule 26(f) conferences are mandatory in patent litigation, and are generally the first
major discovery event.
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2. Requirements
During the Rule 26(f) conference, the parties must consider the nature and basis
of their claims and defenses and the possibilities for a prompt settlement or resolution of
the case, to make or arrange for the disclosures required by Rule 26(a)(1) and to develop
a proposed discovery plan.” The discovery plan must address: (1) the timing of the
mandatory disclosures under Rule 26(a); (2) the subjects on which discovery will be
needed, when discovery should be completed, and whether discovery should be
conducted in phases or be limited to or focused upon particular issues; (3) what changes
should be made in the limitations on discovery, and what other limitations should be
imposed; and (4) any other orders that should be entered under Rule 26(c) (regarding
protective orders) and Rule 16(b) (regarding scheduling).
In addition to these points, patent litigants should confer and incorporate into their
joint discovery plan the following, in fulfilling their obligations under Rule 26(f):
• The Markman process, including a schedule for exchange of claim construction
positions, a briefing schedule, timing of the hearing, whether witnesses and/or
experts will be permitted, timing of expert disclosures and depositions (if any) on
claim construction issues
• The expert disclosure process, including the timing, order and subject matter for
expert reports
• Potential bifurcation of liability, willfulness and/or damages issues
• Timing for decision on the reliance of the opinion of counsel and disclosure (if
any) of any opinions
• Timing for exchange and submission of a protective order governing confidential
disclosures
Once the parties agree on a joint discovery plan, the plan is submitted to the court for
approval and entry. If the parties cannot agree on certain issues, competing proposals are
typically submitted, and the court will decide the disputed issues.
B. MANDATORY DISCLOSURES
1. Timing
Once the parties have completed the Rule 26(f) conference, the parties are required to
provide their “initial disclosures,” which must be made at or within 14 days after the Rule
26(f) conference, unless a different time is set by stipulation or court, or a party otherwise
objects. The disclosures must typically be made in all federal district court cases, except
in certain (non-patent related) categories of proceedings exempted from initial disclosure
under Rule 26(a)(1)(E), or when otherwise ordered. As a result, the Rule 26(a)(1)
disclosures are mandatory in patent infringement cases, unless they have been modified
by local rule or other order.
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2. Requirements
Rule 26(a)(1) generally sets forth the requirements for these mandatory disclosures.
Under Rule 26(a)(1), the parties must exchange the following information, without
awaiting a discovery request:
• The name and, if known, the address and phone number of each witness;
• A copy of, or a description by category and location, of all documents;
• A computation of any damages;
• Make available for inspection and copying all documents on which such damage
computation is based; and
• A copy of any insurance agreement.
In patent infringement cases, some courts impose additional disclosure requirements.
For example, the U.S. District Court for the Northern District of California has rules
tailored for patent cases that specify the timing and sequence of discovery disclosures and
substantive positions on each party’s case-in-chief.
Under these rules, substantive disclosures are required relatively early in the case,
requiring the patentee to serve its “Disclosure of Asserted Claims and Preliminary
Infringement Contentions” within 10 days of the Rule 16(b) scheduling conference. See
N.D.Cal. Patent L.R. 3-1. In these disclosures, the patentee must identify, for each
asserted claim, the accused infringing products or methods (“accused instrumentalities”)
with specificity, such as product numbers, and must include a claim chart showing where
each element of each asserted claim is found in each instrumentality. Id., Patent L.R. 3-
1(a)-(c). The patentee must also identify, if applicable, any earlier patent applications for
which it is claiming priority, as well as identify any of its own products or methods that
are covered by the patent(s) in suit. Id., Patent L.R. 3-1(e),(f). Along with this
information, the patentee must produce for inspection and copying: (i) documents
sufficient to evidence each offer to sell the claimed invention prior to the date of the
application; (ii) all documents evidencing the conception, reduction to practice, design
and development of the claimed invention; and (iii) a copy of the file history for each
patent in suit. Id., Patent L.R. 3-2.
In turn, the accused infringer must disclose, within 45 days of service of the
patentee’s infringement contentions, the identity of each item of prior art that anticipates
or renders obvious each asserted claim. Id., Patent L.R. 3-3. Where invalidity is based
on the prior knowledge, use or invention of others, the disclosure must specify relevant
information, such as names of persons or entities involved and underlying circumstances.
Id., Patent L.R. 3-3(a). If an invalidity contention is based on combinations of prior art
references, the disclosure must specifically identify each combination and the motivation
to combine such combinations. Id., Patent L.R. 3-3(b). The accused infringer must also
provide a chart showing where specifically in each prior art item each element of each
asserted claim is found. Id., Patent L.R. 3-3(c). Finally, the accused infringer must also
set forth its contentions of whether the claims are invalid for indefiniteness, enablement
or written description. Id., Patent L.R. 3-3(d). Along with its disclosures, the accused
infringer must make available for inspection and copying documents sufficient to show
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the operation of the accused instrumentality and a copy of each prior art item identified.
Id., Patent L.R. 3-4.
Other courts have begun adopting similar procedures. For example, several judges in
the U.S. District Court for the Eastern District of Virginia, Alexandria Division, require
litigants to adopt these same disclosures into their Rule 26(f) discovery plan.
C. STIPULATED PROTECTIVE ORDER
Rule 26(c) of the Federal Rules of Civil Procedure governs protective orders. A
protective order is an effective tool for placing bounds on the discovery process, and
courts have broad discretion in granting relief in response to motions for a protective
order. While the need for a protective order may arise during discovery, where, for
example, one party wishes to limit another party’s discovery requests, see infra Section
V.B., the parties in virtually all patent cases will negotiate a “stipulated protective order”
prior to any discovery taking place, in order to protect against the dissemination of the
parties’ trade secrets and other confidential or proprietary information.
Issues, such as who may have access to confidential information under the protective
order, may significantly affect a party’s ability to engage in competitive decision-making.
Thus, these and other issues, discussed below, must be carefully negotiated.
1. In-House Counsel and Other Party Employees
In negotiating a stipulated protective order, one issue that commonly arises is who
will have access to confidential information under the order. For example, a party may
desire that its in-house counsel be permitted to have access to the opposing party’s
confidential information, in order to assist outside counsel in making strategic decisions
during the litigation. Similarly, the party may wish to have its technical employees
access the opposing party’s confidential information, in order to assist outside counsel in
understanding the technical issues in the case. The opposing party, however, may object
to having employees of its opponent review any of its confidential information,
particularly where the parties are direct competitors.
To address this issue, the parties may agree to limit the number of in-house counsel
and other employees that will be permitted access to the opposing party’s confidential
information. For instance, the parties may agree that only one in-house counsel or two
employees may have access to the confidential information. The parties may also
consider adopting a two-tiered protective order, which allows the parties to designate two
levels of confidentiality, e.g., “confidential” as an initial level, and “attorneys’ eyes only”
as a second, more-restrictive level for highly-sensitive documents and trade secrets. In
this way, the parties may agree that in-house counsel and other employees have access
under the first level, and only counsel have access to the more-restrictive second level. In
some cases, where a party insists that its in-house counsel have access to even the more-
restrictive, attorneys’ eyes only level, access by such in-house counsel is typically denied
if the counsel is involved in competitive decision making and would have difficulty in
compartmentalizing his knowledge. See, e.g., United States v. Dentsply Int’l, 187 F.R.D.
152, 159-60 (D. Del. 1999); Brown Bag Software v. Symantec Corp., 960 F.2d 1465,
1470 (9th Cir. 1992) (discussed below).
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