PGR Order Offers Insight Into Successful and Unsuccessful Discovery Requests

iStock_000013492145XSmallParties to inter partes review and post grant review proceedings have continued to struggle to find the right formula in successfully navigating the PTAB’s requirements for a motion for additional discovery. In American Simmental Assoc. v. Leachman Cattle of CO, LLC, PGR2015-00003, the Board addressed a number of discovery requests in considerable detail, including addressing the Garmin factors. The following provides examples of document requests and interrogatories that were successful…and unsuccessful.

 

 

Discovery requests that were granted by the Board:

Relating to Real-Party-In-Interest Issues:

Request for Production No. 2: A copy of any invoice, requests for reimbursement, or the like received or provided by or on behalf of Petitioner or either Petitioner Principal requesting payment of or reimbursement for the post-grant review filing (including request fees and post-institution fees) paid in the PGR Proceedings.

Request for Production No. 3: A copy of the email(s) sent by Petitioner to “ASA membership and the industry” referenced in Exhibit 2011 and a copy of each “response” received by Petitioner.

Request for Production No. 5: Agreements and proposals for agreements, and documents reflecting discussions of either, to which Petitioner is or was a party, that concern the PGR Proceedings or the Challenged Patents.

Request for Production No. 6: Documents constituting or relating to communications (e.g., calendar entries, transcripts, notes, invoices, summaries) involving, on the one hand, Petitioner or either Petitioner Principal and, on the other hand, an Interested Party that concern the PGR Proceedings, including (a) communications relating to an Interested Party’s funding of or involvement (including the preparation or filing of the petition) in the PGR Proceedings and (b) communications relating to the retention or destruction of documents or communications concerning an Interested Party’s funding of or control or direction over any aspect of the PGR Proceedings.

Interrogatory No. 2: Identify all Person(s) to whom Petitioner Counsel-of-Record submits its invoices or bills to, other than to Petitioner but including, without limitation, IGS.

Interrogatory No. 3: Identify all Person(s) (excluding Petitioner and Petitioner Counsel-of Record) that have provided support in the form of drafting or reviewing and commenting on the petitions filed in the PGR Proceedings. For each such Person, identify the Person by name and last known address and the date(s) and description(s) of any such assistance such Person provided.

Interrogatory No. 4: Identify any communication between Petitioner and an Interested Party not reduced to a tangible form and not otherwise identified in any document produced in response to Request for Production No. 6, in which such Interested Party discusses with Petitioner the funding, preparation, or filing of the PGR Proceedings. For any such communication, describe the topic, the individuals between whom the communications occurred, and the approximate date of communication.

Relating to Secondary Considerations:

Request for Production No. 9: Documents constituting or relating to (a) evaluations of Reputation Feeder Cattle (including its benefits) by Petitioner or any Interested Party or (b) communications between Petitioner and any Interested Party describing or discussing the benefits of or otherwise evaluating Reputation Feeder Cattle.

Request for Production No. 11: Documents constituting or relating to (a) comparisons of Feeder Profit Calculator to Reputation Feeder Cattle (including their respective benefits) and (b) communications between Petitioner and any Interested Party concerning how Feeder Profit Calculator improves upon existing calculators.

Interrogatory No. 5: Identify any communication between Petitioner and an Interested Party not reduced to a tangible form and not otherwise identified in any document produced in response to Request for Production No. 9 or 11 relating to any comparison between Feeder Profit Calculator and Reputation Feeder Cattle. For any such communication, describe the topic, the individuals between whom the communications occurred, and the approximate date of communication.

Relating to Bias of Petitioner’s Expert:

Request for Production No. 14: A copy of the 2013 Membership Directory identified by Mr. Schafer in Paragraph 3 of Exhibit 2005.

Interrogatory No. 6: Identify the total compensation received by Dr. Spangler from Petitioner, on an annual, agreement-by-agreement basis, since January 1, 2010.

Interrogatory No. 7: Identify whether Dr. Spangler is a member of Petitioner, the approximate date he became a member, any roles and capacities he has served or acted in while a member of Petitioner (e.g., treasurer, board member), and the approximate date of each such role or capacity.

Discovery requests that were NOT granted by the Board:

Request for Production No. 1: Documents (e.g., invoices, requests for reimbursement) sufficient to show all “support” received by Petitioner in the form of (a) funds, reimbursements, and other consideration in relation to the funding of the PGR Proceedings (including for payment of attorneys’ fees) or (b) drafting or reviewing and commenting on the petitions filed in the PGR Proceedings.

Request for Production No. 4: Documents relating to the deliberations leading to and reasons why Petitioner filed the petitions in the PGR Proceedings. Excluded from the scope of this request are privileged communications and drafts between Petitioner and Petitioner Counsel-of-Record found in such counsel’s files, except insofar as they reflect communications involving a Person other than Petitioner.

Request for Production No. 7: Documents identifying and describing any feeder profit calculator or similar system that Petitioner had developed or otherwise worked on before May 10, 2013, including the feeder profit calculator or similar system that Wade Schafer represented to Patent Owner on or around May 10, 2013, had been “shelved” by Petitioner.

Request for Production No. 8: Documents describing the deliberations leading to and reasons why Petitioner stopped work on or “shelved” any feeder profit calculator or similar system identified in Request for Production No. 7.

Request for Production No. 10: Documents describing the deliberations leading to and reasons why Petitioner started work on Feeder Profit Calculator on or around May 10, 2013.

Request for Production No. 12: Documents describing the expected financial benefit to Petitioner or Petitioner’s members from the Feeder Profit Calculator, including documents describing the monetary subsidies offered to users of the Feeder Profit Calculator and the amount of such monetary subsidies.

Request for Production No. 13: Agreements and proposals for agreements, and documents reflecting discussions of either, to which Petitioner, on the one hand, and Dr. Spangler, on the other hand, are or were parties pursuant to which Dr. Spangler received or expects to receive compensation or other consideration, including (a) any employee, contractor, or consulting agreements with Dr. Spangler and (b) any expert retention agreement with Dr. Spangler relating to the PGR Proceedings.

Interrogatory No. 1: Identify all Person(s) (excluding Petitioner) that have provided support in the form of funds, reimbursements, or other consideration to Petitioner or Petitioner Counsel-of-Record in connection with the PGR Proceedings. For each such Person, identify the Person by name and last known address and the date(s) and amount(s) of any such funds, reimbursements, or other consideration such Person provided.

Looking for more examples of successful discovery requests, check out these cases:

Parkervision, IPR2014-00946, Paper 25; Medtronic, Inc., IPR2014-00488, Paper 25.

 

 

PTAB Designates New “Informative Opinion”

InformativeWhen the PTAB considers one of its own decisions to be “informative,” it is always worth taking note. On Friday, July 17th, the Board designated its opinion in Arris Group, Inc. v. C-Cation Techs., IPR2015-00635 as informative, and we discuss its content below.

The Arris decision was a rare grant of a Motion for Additional Discovery relating to a the issue of privity between Petitioner and a third party who is barred from filing an IPR petition pursuant to 35 USC § 315(b). As a preliminary issue, the Board addressed Petitioner’s argument that the motion for additional discovery, which sought evidence relative to the 1-year bar of § 315(b), was barred because the privity issue had been resolved as part of an adverse judgment in a previous IPR between the parties. The Board disagreed, finding that the PTAB rules do not dictate that decisions in one proceeding have preclusive effect in subsequent proceedings. Order at 4. Further, res judicata did not apply because the previous IPR dealt with different claims than were at issue in the present IPR. Id. 

Turning to the discovery actually requested, the Board found that it was narrowly tailored and in the interest of justice. Specifically, Patent Owner only sought indemnification agreements referencing Petitioner’s ability to control co-pending litigation with the third party who would be barred from bringing an IPR. Given the narrowly-tailored request, the Board found that production of those agreements was in the interests of justice. The Board’s notification regarding the decision indicated that it was informative because of the narrowly-tailored request from Patent Owner. Given that guidance, we also reproduce the granted request below, for reference:

“Agreement(s) between [Petitioner] and [Third Party] under which [Third Party] requested indemnification for the claims brought against [Third Party] in the Texas Litigation that reference (or are contingent on) [Petitioner’s] ability to control the litigation.”

 

Motion for Additional Discovery Seeking Details of Kyle Bass-led Coalition Partially Succeeds

14029319_sWe continue to monitor the various strategies and tactics being employed by pharma companies that have been targeted by the “Coalition for Affordable Drugs” – a group led by hedge fund manager Kyle Bass. In a recent decision, the PTAB granted-in-part a pharma company’s attempts to dig into the background of the Bass-led coalition. Coalition for Affordable Drugs II LLC v. NPS Pharma., Inc., IPR2015-00990.

Motions for Additional Discovery have been difficult to win before the PTAB given the Board’s mandate to ensure that IPR proceedings are quick and cost-effective. To achieve that goal, of course, the discovery allowed much be far less than what is normally allowed in district court litigation.

In the NPS Pharma case, Patent Owner sought broad categories of information (in the form of 7 document requests and 2 interrogatories) relating to the entities that are funding Bass’ coalition. The Board rejected these broad discovery efforts, finding them overly broad and, therefore, not in the interest of justice. Order at 6. The Board did, however, agree that a threshold amount of evidence was presented that made some of the discovery necessary. Specifically, the Board allowed discovery into the agreements in the possession of Petitioner that relate to the control or ability to control any aspect of the IPR proceeding by a party that is not designated as a Petitioner or real party-in-interest in the Petition.

It seems likely that, if any such agreements exist, they will be put under seal in the IPR proceeding. However, we will keep a look out for them to see if we can learn more about this Bass-led group that has shaken the pharma industry.

A Successful Motion for Additional Discovery in an Inter Partes Review

iStock_000013492145XSmallCountless parties to inter partes review can tell you how to lose a Motion for Additional Discovery. This is especially so for discovery motions seeking evidence to prove privity between the Petitioner and a third party in an attempt to have a Petition denied as time-barred. More valuable is an analysis of the motions that were successful….because they are so rare. In Arris Group, Inc. v. C-Cation Technologies, LLC & Level 3 Communications, IPR2014-00746, the Board granted Patent Owner’s Motion for Additional Discovery relating to an indemnification agreement sought by Patent Owner to bolster a claim that the petition was time-barred.

As is the case in any decision relating to additional discovery, the analysis began with a consideration of factors laid out in seminal case of Garmin Int’l, Inc. et al. v. Cuozzo Speed Techs LLC, Case IPR2012-00001, Paper 20, at 2-3 (PTAB Feb. 14, 2013). Here, some of the factors were undisputed, but the Board was required to determine whether something useful would be found relative to the limited discovery request made by Patent Owner. To that end, Petitioner argued that, for Patent Owner to show it is entitled to the indemnification agreement, it must first prove that Petitioner exercised control over the third party for it to be deemed in privity with Petitioner. The Board determined, however, that Patent Owner was not required to prove the underlying legal point (privity) to be granted the discovery. That would be putting the cart before the horse.

Instead, the Board determined that, under Garmin, sufficient threshold evidence had been provided that supported a finding of allowing additional discovery, including:

(1)    Evidence that the indemnification agreement existed;

(2)    Evidence that the third party had made indemnification claims against Petitioner;

(3)    Evidence that Petitioner had contractual rights with the third party regarding exercising sole control of the litigation; and

(4)    Evidence that Petitioner had resolved the indemnification claims with the third party.

Of course, this type of evidence is not present in most cases (and that is why most motions for additional discovery on the privity issue fail). It is, however, worth noting what type of evidence will be successful in these motions.

PTAB Grants Rare IPR “Motion to Compel”

14086935_sMany parties to inter partes review proceedings continue to have their guns pointed directly at their feet, taking erroneous actions that are consistently called out by the PTAB. In the midst of one such error, we explore the Board’s regulations relative to “compelled discovery.” In IPR2014-00041, -43, -51, -54, and -55 (styled as Geo Process Engineering, Inc. v. Steuben Foods, Inc.), an issue arose regarding an omnibus declaration by Patent Owner’s declarant that was not filed. The declarant signed an “omnibus” declaration which pertained to all five inter partes review proceedings pending between the parties. Counsel for Patent Owner then created five separate declarations that were specific to each IPR proceeding.

Oddly, though, counsel did not provide Declarant the opportunity to review the individual declarations before filing. Declarant had to acknowledge in deposition that each individual declaration was different from the others and that each declaration was different than the omnibus declaration (including some red-line edits that remained in the omnibus declaration).  Declarant did testified that the five individual declarations did not contain substantively different testimony than the testimony which Declarant authorized.

In view of these facts, Patent Challenger filed a request to compel the production of the omnibus declaration and allow for cross-examination on that declaration. Both Patent Owner and Declarant himself opposed the request, claiming the omnibus declaration was a draft and subject to work-product protection.

The Board sided with Patent Challenger, finding that the omnibus declaration was not subject to work-product protection under these facts.  The Board stated several factors which persuaded it to grant Patent Challenger’s request, including: (1) Patent Challenger has a strong interest in understanding the differences between the omnibus declaration and each of the five individual declarations in order to evaluate credibility of the declarations; (2) It’s inconsistent for Patent Owner to argue that the omnibus declaration is privileged while simultaneously allowing Declarant to review it for differences between the omnibus declaration and the individual declarations; (3) Declarant’s testimony that there is no substantive difference between the testimony of the omnibus declaration and the five declarations actually filed should not go unchallenged. In the end, the Board granted Patent Challenger’s request to compel the production of the omnibus declaration.

An interesting facet of this decision is that the Board characterized it as a motion to compel, versus the more common motion for additional discovery. The Board did not cite to, for example, 37 CFR 42.52 (“Compelling Testimony and Production”). Further, the production of a document that is in dispute between the parties has, in the past, been considered under the rubric for “additional discovery.” The general belief from commentators to date has been that “compelled discovery” relates to non-parties but there is nothing in Rule 42.52 that specifically limits compelled discovery to third partes. We will have to stay tuned and see if this is merely a vague choice of terminology by the Board, or a trend.

Quick Look at a Granted Motion for Additional Discovery in IPR

iStock_000013492145XSmallMotions for Additional Discovery in inter partes review proceedings remain difficult to win. Our latest statistics indicate that such motions are only granted at a rate of about 28%. As such, it is worth noting the grant of such a motion in Scott Gemtron Corp. v. SSW Holding Co., Inc., IPR2013-00358.  In that case, Petitioner was granted discovery regarding an otherwise undisclosed document, relied upon by Patent Owner’s expert witness, that supported Patent Owner’s assertions of commercial success. Paper 78 at 3.

As has become clear in IPR practice, discovery in an inter partes review proceeding is far less than what is available in district court patent litigation, as Congress intended inter partes review to be a quick and cost effective alternative to litigation. Id. at 2. A party seeking beyond routine discovery (i.e., deposition of an expert) must do so by motion and must show that it is “necessary in the interest of justice.” 35 U.S.C. § 316(a)(5). Id. at 2.

The Board considers various factors in determining whether additional discovery in an inter partes review proceeding is necessary in the interest of justice, including the fact that, the mere possibility of finding something useful, and mere allegation that something useful will be found, are insufficient to demonstrate that the requested discovery is necessary in the interest of justice. The party requesting discovery should already be in possession of evidence tending to show beyond speculation that in fact something useful will be uncovered. Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 20.

Here, as mentioned, Petitioner sought an undisclosed document, relied upon by Patent Owner’s expert witness, that purported to support Patent Owner’s assertions of commercial success. Paper 78 at 3. In deposition, Petitioner was able to learn about the document from Patent Owner’s expert and that testimony supported a conclusion that it was more than a mere possibility or mere speculation that something useful will be uncovered by producing the document. Paper 78 at 4. Also, because the request was tailored to a single document and, therefore, would not be overly burdensome for Patent Owner to produce, bolstered Petitioner’s motion. Id. at 4. The Board additionally stated, “Determining the factual basis for a declarant’s opinions is a proper inquiry during discovery…” Id. at 4.  Therefore, the Motion for Additional Discovery was granted. Id. at 6.

PTAB Offers Guidance Regarding Discovery in Inter Partes Reviews

iStock_000013492145XSmallStill confused about how much discovery you will be able to obtain in an IPR? Fear not, as two of the PTAB’s Administrative Patent Judges have weighed in with a primer on inter partes review discovery. The PTAB blog entry provides a nice overview of “routine” and “additional” discovery, including some insights into the reasons why the Board believes it is constrained in its grant of additional discovery in IPR proceedings.

To that end, as our statistics have made clear, only 28% of Motions for Additional Discovery have been granted through the 2nd year anniversary of IPR practice. Of note in the PTAB’s blog posting is that this low percentage is due to several key constraining forces on the Board. First, the AIA legislative history makes clear that additional discovery is confined to “particular limited situations, such as minor discovery that PTO finds to be routinely useful, or to discovery that is justified by special circumstances of the case.” Second, statutory deadlines for completing IPR proceedings require a much more streamlined procedure than the broad discovery allowed in litigation. Third, the Board notes the fact that discovery is only allowed when in the “interests of justice.” Because this standard is slightly higher than the “good cause” standard, the Board is more constrained on this issue than on other issues it is called on to decide.

Lastly, the article provides a helpful synopsis of a number of other PTAB decisions relating to additional discovery that can be a helpful reference.

Board Allows Rare Motion for Additional Discovery

iStock_000010577451SmallIn a relatively rare grant of a Motion For Additional Discovery, in Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. (IPR2013-00453,, Paper 40), Patent Owner sought additional discovery pertaining to its contention that the real parties-in-interest were not properly identified in the petition, by propounding three requests for production and one interrogatory.

A proponent of additional discovery bears the burden of demonstrating that additional discovery is “in the interest of justice.” Consistent with Congressional intent that inter partes review be a quick and cost-effective alternative to litigation, discovery is less expansive than that typically available in district-court patent litigation.

Citing the seminal discovery decision of Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, (IPR2012-00001, Paper 20), the Board discussed the factors important in determining whether a discovery request meets statutory and regulatory stands of being “in the interest of justice.” The mere possibility of something useful and a mere allegation that something useful will be found are insufficient. Additionally, information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice.

The Board granted Patent Owner’s request for additional discovery, in part, because Patent Owner identified “evidence tending to show beyond speculation that in fact something useful will be uncovered.” More specifically, in an affidavit submitted in the proceeding, a principal of Petitioner stated that there was a dispute regarding indemnification between Petitioner and a potential real party-in-interest. By limiting Request No. 1 to just documents “regarding the dispute referred to by [Declarant] in paragraph 3 of his declaration…,” Patent Owner’s request provided more than a mere possibility of finding something useful. Order at 6.

Patent Owner’s other discovery requests were, however, denied because Patent Owner was not able to demonstrate that such discovery was unattainable from other means and/or that it was not mere speculation that useful information could be discovered. As such, Patent Owner’s motion was only granted-in-part.

Communications Between Experts Discoverable in Inter Partes Review

AchievementGiven the rarity of a granted Motion for Additional Discovery, it is worth noting the circumstances of the Board’s decision in Apple Inc. v. Achates Reference Pub., Inc., IPR2013-00080; -00081 (Paper 58), wherein an exchange of email correspondence between the experts hired by Patent Owner was ordered to be produced.

More specifically, Patent Owner filed with its Response the declaration testimony of two expert witnesses.  During depositions of the two witnesses, Petitioner elicited testimony from the witnesses that indicated that the two had exchanged emails regarding the substance of their testimony.  As previously discussed, Petitioner initially sought a ruling from the Board that such email communications constituted “routine discovery.”  The Board denied that request, but authorized a motion for additional discovery.

In its later ruling on the motion for additional discovery, the Board undertook a detailed review of the Garmin factors before deciding that Petitioner had met its burden of obtaining the requested email communications as additional discovery.  We caution that this should not be seen as a trend toward more liberal use of discovery in IPR proceedings.  The Board’s decision was exhaustive on the merits and it is clear that a party seeking discovery in inter partes review proceedings still faces an uphill battle.

 

Communications Between Experts not “Routine” Discovery in Inter Partes Review Proceedings

iStock_000013492145XSmallThe Board’s views on the metes and bounds of discovery in inter partes review proceedings continue to take shape with each new decision.  In Apple, Inc. v. Achates Reference Publishing, Inc., IPR2013-00080 and 00081 (Paper 49) (December 23, 2013), the Board considered the issue of whether emails exchanged between two expert witnesses for a party are “routine” discovery.

More specifically, in the depositions of Patent Owner’s two expert witnesses, testimony came to light that suggested that the experts each relied upon communications from the other in forming their opinions submitted in the proceeding.  As such, Petitioner called for a conference call with the Board to seek production of the emails as “routine” discovery pursuant to 37 CFR § 42.51(b)(1).  To further consider the issue, the Board instructed the parties to submit the relevant deposition testimony.

Upon consideration of that testimony, and the parties’ arguments, the Board declined to consider the email exchange “routine” discovery. It did, however, grant Petitioner authorization to file a motion for additional discovery, directing Petitioner to the now ubiquitous Garmin decision, that governs motions for additional discovery.