The general counsel of a technology company has received a complaint alleging patent infringement by the company’s highest-grossing product. The potential amount of damages is not yet calculated, and the general counsel wants to minimize the costs of preserving, collecting, reviewing and producing electronically stored information (ESI) as part of the investigation and discovery process.
Factors Impacting eDiscovery Costs in Patent Litigation
The number of patent lawsuits filed nationwide is increasing yearly. The complexity of the substantive issues with regard to the patents and technologies involved, as well as the related damages issues, are ever increasing.
Patent litigation is particularly high cost litigation. This is in part due to extensive costs associated with the discovery process and, in particular, the time and effort involved in searching, reviewing and producing large quantities of electronically stored information. Patent litigation costs are driven by the complexity of the technology at issue, the prevalence of prior art, the number of claims asserted, whether the companies are competitors, the products at issue, damages exposure, the assigned judge’s standing orders, and the extent to which the parties cooperate in discovery.
Two Proposed Approaches to Patent Reform
1. The Federal Circuit Model Order Limiting E-Discovery in Patent Cases
In September 2011, Chief Judge Rader and the Federal Circuit Advisory Counsel released the Model Order Limiting E-Discovery in Patent Cases. The model order included the following key provisions intended to promote just, speedy and inexpensive determination of eDiscovery in patent cases:
2. The Sedona Conference – Commentary on Patent Litigation Best Practices
In August 2014, the Sedona Conference issued its Commentary on Patent Litigation Best Practices. This commentary included four principles with respect to discovery:
There is an ongoing tension between the Sedona Conference’s approach focusing on cooperation between the parties and the Model Order’s approach which places strict limits on discovery so that costs can be limited.
The Federal Circuit ceased providing the Model Order on its website in late 2013 on the basis that the court neither sponsored nor endorsed the order and has generally pulled back on encouraging courts to endorse this approach. However, despite this removal and the release of the Sedona Conference commentary, the Model Order continues to influence district courts. The District of Oregon adopted the Model Order wholesale in June 2013 while other District Courts, including the Northern District of California and Federal Courts in Texas, New York and Delaware, have adopted the Model Order with limited modifications.
Best Practices for eDiscovery in Patent Litigation
The key features of both suggested methodologies for patent reform can be effective tools for limiting expensive and unnecessary eDiscovery. Even if you are litigating outside of the jurisdictions that have adopted a model order for eDiscovery in patent cases, you should consider employing a custom Rule 26(f) discovery plan applying some or all of the following themes:
While neither of these conflicting approaches to limiting the costs of eDiscovery has eclipsed the other or been universally adopted, it is clear that the topic of increasing costs of eDiscovery is a focus of attorneys, legislators, clients and the courts. Practitioners and the various district courts have begun to implement measures intended to promote efficiency in eDiscovery in patent litigation. While Congress has yet to act in this space, applying these principles to litigation in the interim will be appealing to judges and can substantially decrease litigation costs.
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