R. Parrish Freeman
Shareholder at Workman Nydegger
posted on 6 April 2012 | 0 Comments
On March 28, 2012, I had the honor and pleasure of moderating a roundtable discussion featuring Chief Judge Randall R. Rader of the Federal Circuit on the subject of the Federal Circuit Advisory Council’s recently-adopted Model Order Regarding Electronic Discovery in Patent Cases. The discussion took place before a standing-room-only crowd at the ABA’s 27th Annual Intellectual Property Law Conference in Arlington, Virginia. As is always the case with the Chief Judge, the discussion was lively and entertaining, featuring not only points to philosophically ponder but also clear and resolute directives on a number of issues.
The Model Order is the product of a special subcommittee of the Federal Circuit Advisory Council—a statutorily created body consisting of judges and lawyers charged with reviewing, studying, and making recommendations regarding the rules of practice and internal operating procedures of the court. The Model Order generally does for certain electronic discovery what the 1993 amendments to the Federal Rules of Civil Procedure did for deposition discovery; it sets limits. Among other things, the Model Order carves out email from the rest of discovery and proposes that email discovery will be limited to five custodians each running five key-word searches.
I first asked the Chief Judge what inspired him to become involved in something like electronic discovery, a subject not typically associated with practice at the appellate level. The Federal Circuit is unique, he responded, in that it was specifically created as a court with an agenda—the agenda being that of unifying, strengthening and undergirding the patent system in this country. Electronic discovery has become excessively expensive and burdensome. This slows down the enforcement system and prevents it from running efficiently. In a global economy, this could result in the U.S. patent system as a whole becoming a less-favored venue for companies looking to protect and enforce their patent rights. Placing limitations on electronic discovery is a good starting point for reducing the financial impact of patent litigation and for keeping the court and the parties focused on the merits of the case. The Chief Judge went on to note that the Model Order can and should be adapted for use in non-patent cases and custom-tailored in all cases so as to best advance these goals of reduced expense and enhanced efficiency. What the Eastern District of Texas has recently done in adopting a modified version of the Model Order is but one example of how courts can use it, he said, adding that litigants can use some or all of it by way of agreement regardless of whether their court has formally adopted it.
The Chief Judge also commented on a number of subjects not specifically related to electronic discovery, but affecting litigation expense and efficiency nonetheless. On the subject of litigation commenced by non-practicing entities, known also as patent trolls, Chief Judge Rader first noted that a party’s status does not matter as far as the merits of a case. He emphasized, however, that where a plaintiff seeks to, in his words, “perpetrate some kind of litigation blackmail” by stretching its claims far beyond their reasonable limit in hopes the defendant will settle rather than face massive discovery expenses with no real hope of early substantive disposition, that case is exceptional under 35 U.S.C § 285 and the losing plaintiff should be required to pay the prevailing defendant’s reasonably-incurred attorney fees. As he did in his comments in September 2011 accompanying the original unveiling of the Model Order, the Chief Judge called on the bar to make these motions, where appropriate, and called on the bench to have the confidence to grant them, again, where appropriate, noting that the abuse of discretion standard of review does not easily allow for reversal.
Following up on the issue of the general unavailability of early substantive disposition in patent cases, I asked whether Iqbal and Twombly might require a higher pleading standard in some patent cases where, for example, the method accused of infringement remains unclear despite the identification of a product that might practice it. The Chief Judge agreed that Iqbal expressly holds that the level of detail required to state a claim is context-specific and that a Rule 12(b)(6) motion may in appropriate circumstances be an effective means of exiting a case early, especially where the plaintiff is unable to add the missing detail by way of amendment.
Asked by the audience to comment on his favorite provisions of the recently-passed America Invents Act, Chief Judge Rader identified the new “first-inventor-to-file” requirement as well as the updated and modified definition prior art. Both provisions enhance the compatibility of the U.S. patent system with operation in a global economy.
Finally, I asked the Chief Judge to comment on the Supreme Court’s recent decision in Mayo v. Prometheus, which held that a blood test method was an unpatentable law of nature. He declined to speak about it in any detail, citing the fact that a separate case is being sent back to him to decide in light of the Court’s holding. He did say, however, that the decision is “resounding with all of us,” adding, “We’ll have to read it again and think about what it means for us and the economy as a whole. With that in mind, we’ll revisit it in whatever forms we can.”