Crowell & Moring

So what kind of impact has the Federal Circuit Model Order had on the cost of patent litigation in the year since its adoption?

The hottest topic in patent e-discovery one year ago was Federal Circuit Chief Judge Rader’s remarks to the Eastern District of Texas Judicial Conference on the judiciary’s role in curbing discovery excesses. There, he unveiled the Federal Circuit’s “Model Order Regarding E-Discovery in Patent Cases,” the first formal effort to address e-discovery costs in patent litigation. The most prominent features of the Model Order were:

  • Exclusion of email from general production requests.
  • Phasing email production requests until after the parties have exchanged initial disclosures and basic patent documentation.
  • Propounding email production requests only for specific issues rather than general discovery.
  • Limiting email production requests to five custodians and five search terms per custodian.
  • Cost shifting for disproportionate ESI production requests.
  • Exclusion of metadata other than sent/received dates and distribution list.

Judge Rader’s goal was to introduce specific actions that the judiciary could take to contain the increasing costs of patent litigation. This blog has previously discussed how “merely proclaiming cooperation is not enough” to reduce e-discovery costs in cases involving intractably adversarial parties: the courts must get involved.

We are now more than a year removed from Judge Rader’s remarks and both the Federal Circuit’s Model Order and its underlying goal of promoting judicial involvement in containing discovery costs have been gaining traction in the most popular venues for patent litigation. This is happening on two levels: (1) individual district court judges have been issuing discovery orders directly implementing or adapting the Model Order, and (2) district courts and administrative agencies are taking steps to address the rising cost of patent e-discovery.

Just over a month after the Federal Circuit Advisory Council unanimously adopted the Model Order, Judge Paul Grewal in the N.D. Cal. issued an order implementing a version of the Model Order in a patent litigation. DCG Sys., Inc. v. Checkpoint Technologies, LLC, C-11-03792 PSG, 2011 WL 5244356 (N.D. Cal. Nov. 2, 2011 ). Judge Grewal dismissed the plaintiff’s argument that the Model Order should only apply to cases brought by non-practicing entities, noting that “there is no reason to believe that competitor cases present less compelling circumstances in which to impose reasonable restrictions on the timing and scope of email discovery.” The court appeared more than willing to be a test case for the efficacy of the Model Order: “only through experimentation of at least the modest sort urged by the Chief Judge will courts and parties come to better understand what steps might be taken to address what has to date been a largely unchecked problem.”

A month later, Judge Grewal applied portions of the Model Order to narrow the scope of a third-party document subpoena, limiting the requesting party to five search terms. In re Google Litig., C 08-03172 RMW PSG, 2011 WL 6113000 (N.D. Cal. Dec . 7, 2011). The court even went so far as to expressly discourage broad search terms and encourage conjunctive phrases and other limiting criteria.

Perhaps motivated by Judge Rader’s remarks, as well as its status as one of the most popular venues for patent litigation, the Eastern District of Texas adopted its own Order Regarding E-Discovery in Patent Cases in March 2012. The core of this Model Order is founded on the Federal Circuit version, and has similar limitations on e-mail custodians and search terms. Versions of the Texas Model Order have been implemented in several patent litigations and it has also been adapted for a copyright infringement case. Rogue Satellite Comics v. DreamWorks Animation SKG, C.A. No. 6:11-cv-00253-LED (Apr. 16, 2012 ).

The concern with patent discovery costs has not been limited to Article III courts. In October 2012, the International Trade Commission proposed amendments to the rules governing Section 337 investigations. Among the amendments is a provision specifically limiting the production of ESI, stating that a party “need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost.”

Litigants would be advised to take note that within the span of a year, the Federal Circuit and some of the most significant forums for patent litigation have taken steps toward addressing increasing e-discovery costs. Although it is too soon to proclaim that the era of unbridled “all document” requests for email is over, litigants should be aware of the increasing role of the judiciary as a willing and active participant in constraining the scope of discovery requests involving ESI. And with fourteen district courts participating in the federal Patent Pilot Program designed to increase judicial expertise in patent cases, the likelihood increases that similar patent-specific e-discovery rules and model orders may continue to be adopted around the country.