More Limitations on Patent Litigation

November 8, 2013, 2:10 PM

As this blog has noted in the past, there is a move afoot to limit the abuses of expensive patent litigation. From the Federal Rules of Civil Procedure (Amendments effective this December) and various District Court Local Rules that limit discovery to proactive judges that currently use Rule 16 Pretrial Conferences to shape the course of discovery, efforts are being made to reduce the expense and burden of these lawsuits. Now, the Senate can be named among those bodies championing this cause. According to his website, Senator John Cornyn of Texas has proposed a bill to amend Title 35 to provide:

Pleading Requirements

Initial complaints have to provide more detail, including specific information about the plaintiff's claims, including listing the patents, asserted claims, accused devices, and other issues regarding the ownership of the patents and persons interested in their enforcement. The provision would also direct the Supreme Court to review and amend Form 18 of the FRCPs to conform with the new section. These changes are aimed at codifying recent legal rulings that require, in spirit, more than mere notice pleadings sanctioned for the ordinary garden variety cases under Rule 8 of the Federal Rules of Civil Procedure.

Joinder

Section 299 would be amended to permit defendants to join most persons with an interest in the asserted patents. This change seeks to combat the strategy of selling litigation interests in patents to groups that seek to litigate the patents without joining the patentees or the companies that hld substantial interests in the patents.

Discovery Limitations

Discovery in patent infringement cases on issues other than claim construction would be delayed until the claim construction ruling. The court would have discretion to permit discovery necessary to resolve motions filed before the Claims Construction, Markman ruling.

The bill would also define "core" discovery (which excludes computer code or electronic communications unless the court finds it should be included) and provide that for any discovery beyond core discovery costs are automatically shifted to the requesting party, including attorneys fees, and the requesting party must either pay for the discovery when requested, or post a bond to cover the expenses. Courts can still determine that discovery should not be had, even if the costs are paid/posted.

Aimed at curbing the abuses of electronic discovery, this section is in line with the views of many progressive judges that believe that discovery in these cases can take on an abusive live of its own that serves very little purpose in and greatly increases the costs of the litigation.

Costs and Expenses

The bill would make costs more likely in abusive cases. Courts "shall" award reasonable costs and expenses, including attorneys fees, to the prevailing party unless: (1) the loser's position and conduct was "objectively reasonable and substantially justified"; or (2) "exceptional circumstances" would make such an award unjust. In determining whether one of the exceptions applies the court shall not consider as evidence any settlement licenses. If the losing party cannot pay the expenses, the court may make the costs and expenses recoverable against any interested party.

The bill has been assigned to committee; sadly, as worthy as these changes may seem, the website, assigns only a 7% chance of [the bill] getting past committeeand a 3% chance of [the bill] being enacted [into law]. - Stephen E. Noona

Stephen E. Noona is the head of Kaufman & Canoles Trial Section and Co-chair of its Intellectual Property Law and Franchising Practice Group. He has been counsel in over ninety (90) patent cases in the Eastern District, is Fellow in the American College of Trial Lawyers and has appeared before the judges in all four Divisions of the Eastern District on patent and intellectual property matters.