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March 2, 2008

New Rules

While not to date considered a rocket docket, the patent litigation rulebook crafted in the Northern District of California has been an inspiration for other districts: the Eastern District of Texas and Southern District of New York included. Effective March 1, 2008, North California has a revised rulebook in play. The change is focus on groundwork early in litigation, into claim construction.

Northern California initially adopted its patent litigation rules in 2000. With seven years under the belt, the changes are intended to further streamline the pretrial process.

Two major conceptual changes informed the revisions: (1) identifying the most significant claim terms, and (2) a single round of contentions, rather than one before and one after claim construction -

The first conceptual change is a requirement that litigants identify in their joint claim construction statement the 10 most significant claim construction disputes for the efficacious resolution of the case, including those disputes which may be outcome-dispositive... By requiring the 10 most significant terms to be identified, priorities can be identified and resources can most efficiently be deployed to particular claim terms - without resort to a fixed cutoff altogether of the number of terms to be construed. It is important to note that the selection of 10 terms to be identified by the litigants is a default rule. As with all provisions of the local rules, adjustments to that number - upwards or downwards - may be warranted by the circumstances of a particular case.

The second conceptual change is the elimination of the concept of "preliminary" contentions in favor of a single round of contentions which can be modified only for good cause... Under the current rules, the litigants disclose preliminary contentions before claim construction and then, as a matter of right, may have an opportunity to reformulate those disclosures as final contentions after claim construction. This is viewed by many as not tying litigants sufficiently to their positions... To better rationalize the amendment process, the Committee has proposed the elimination of the unregulated right to amend contentions, with amendments instead being regulated by the well-established "good cause" test.

Within 10 days of the initial case management conference, the plaintiff must nail down, claim limitation-by-limitation, the infringement assertion.

Likewise, all plaintiff-known prior art must be disclosed.

Documents (e.g., contracts, purchase orders, invoices, advertisements, marketing materials, offer letters, beta site testing agreements, and third party or joint development agreements) sufficient to evidence each discussion with, disclosure to, or other manner of providing to a third party, or sale of or offer to sell, or any public use of, the claimed invention prior to the date of application for the patent in suit.

Full patent disclosure, including file history, priority date, and ownership, must also be produced by the plaintiff.

Defendants have 45 days after the plaintiff rolls out its case to reply with "invalidity contentions" - the full Monte, down to the knickers of claim charts. For a declaratory judgment motion, invalidity contention is first up.

Within 10 days after the defendant squealing "bad, patent, bad," or 45 days from the plaintiff loading its gun with ammo, a claim construction conference convenes. Extrinsic evidence is exchanged. That spawns winnowing to ten the terms that form the core of contention, and joint claim construction to the degree possible. Discovery, including depositions and expert witnesses, ends within a month after the joint claim construction.

Opening claim construction briefs are due within 45 days of the joint claim construction; two week turnaround on reply; one week rebuttal. Two weeks later, the claim construction hearing.

The upshot of the new rules is to force the parties to develop their theory of the case prior to hammering away in the claim construction process.

The "good cause" test for revisions is nothing new.

Non-exhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include: (a) a claim construction by the Court different from that proposed by the party seeking amendment; (b) recent discovery of material, prior art despite earlier diligent search; and (c) recent discovery of nonpublic information about the Accused Instrumentality which was not discovered, despite diligent efforts, before the service of the Infringement Contentions. The duty to supplement discovery responses does not excuse the need to obtain leave of court to amend contentions.

These good cause examples serve more of a caution than comfort. The CAFC has backed district court discretion in excluding evidence as sanction for failing to comply with deadline rules.

Other districts will be watching closely to see how Northern California fares with the new rules, flattering with imitation given a smell of success.

Posted by Patent Hawk at March 2, 2008 1:25 AM | Litigation