In previous installments of this series, we’ve explored various aspects of the Innovation Act introduced in October by Rep. Bob Goodlatte (R-Va.), legislation that changes some of the procedures and standards in patent litigation to weed out so-called “patent trolls.”
Recently, the bill easily passed (0) the House of Representatives by a 325-91 vote and now moves on to the Senate, where Judiciary Committee Chairman Patrick Leahy (D-Vt.) will consider the issue.
In addition to modifications to the pleading requirements and the standards for awarding attorney’s fees to the winning party, the Innovation Act aims to adjust how “discovery” is conducted in patent cases.
Discovery refers to the period before trial when the parties to a litigation gather information about their respective cases, including collecting and reviewing documents, taking depositions, and presenting and responding to formal “interrogatories” about the various issues in the case.
Patent litigation entails an important and unique process within the discovery period known as “claim construction,” in which the parties and the court work together to “construe,” or render into the plain English, the technical terms in the patent claims at issue. This complex, time-consuming process can often have a determinative effect on the case: most often, when the court narrowly defines the patent claims in such a way as to differentiate them from the product the patent-holder believes infringes them.
The Goodlatte bill gives this claim construction a certain priority within the discovery process, dictating that:
“discovery shall be limited, until such [claim construction] ruling is issued, to information necessary for the court to determine the meaning of the terms used in the patent claim, including any interpretation of those terms used to support the claim of infringement.”
In other words, essentially no discovery – document production, depositions, or written requests – would take place prior to the court’s issuance of a claim construction ruling; the case would be put virtually on hold until the claims are construed. The only exceptions would involve cases, like those in the pharmaceutical context, where speedy resolution is mandated by federal law, or if the parties file motions that require limited discovery.
In his remarks during a speech at AEI (1), Goodlatte himself asserted that his bill “provides for more clarity surrounding initial discovery, case management,” and other areas, and believes that it “not only reduces litigation expenses but saves the court’s time and resources.”
With respect to discovery, Goodlatte is mostly correct. Because claim construction so often single-handedly decides a case, there is merit to the concept of front-loading litigation to construe the claims early on – a decision that will likely shape if not outright resolve the dispute going forward.
However, unfortunately, nothing in the Innovation Act requires the court to entertain claim construction briefing and oral argument at the beginning of the case, and given a busy schedule, the judge would have little incentive to do so, which means the case would simply gather dust for months or even years. In other words, patent holders could file a lawsuit that would simply sit around without any action on discovery or claim construction, thus creating uncertainty and an overhang above the defendant’s head.
Furthermore, coupled with the requirement (discussed in our first installment) that the patent-holder present its infringement contentions along with its initial complaint without access to confidential information, the discovery provision of the Goodlatte bill could result in the unnecessary construction of claims that wind up irrelevant to the case – or, worse, the failure to construe claims later discovered to be pertinent.
To resolve these problems, it makes sense for the legislation to require – or at least encourage the procedural committee that draws up the implementing rules to require – courts to engage in the claim construction process within a few months of the filing of the case. It should also build in a further exception to the discovery freeze, particularly in software cases, which would enable the patent-holder to seek further limited discovery into confidential information about the accused products sufficient to enable it to more precisely identify the claims it believes are infringed.
Hopefully the Senate will consider some of these changes while weighing the pros and cons of the Goodlatte legislation.
In the next installment, we’ll examine the bill’s provisions concerning the “real party in interest” to the suit.