One aspect of the new “litigation” at the US Patent Office (or PTO) that will be interesting to watch is the culture shock that is sure to occur when concepts that are very familiar to patent litigation in Federal court are introduced for the first time to Inter Partes Review (IPR) and Post Grant Review (PGR) proceedings. Discovery is one such key litigation task that will soon be making its debut at the PTO. While some of the facets of discovery in IPR and PGR proceedings will be familiar to patent litigators, the Patent Office clearly sought to fashion its own style of discovery and it is worth digging further into this important and new aspect of patent practice.
From a philosophical perspective, the comments to the new Rules of Practice (that guide IPR and PGR proceedings) make clear that the PTO struggled with the concept of ensuring discovery did not become a slog that led to increased cost and burden on the parties, as is common in district court litigation. It is also clear that the Patent Office viewed flexibility as a key priority; the Patent Office believing that a more flexible discovery process will lead to a more efficient, less expensive process. Only time will tell if they were successful, but the PTO should be applauded for the apparent consideration it gave to the very important issue of allowing some discovery to improve contested Patent Office proceedings, but not at such a level as to let costs run rampant.
At the most general level, the PTO chose to implement three types of discovery: (1) “Mandatory Initial Disclosures”; (2) “Routine” Discovery; and (3) “Additional” Discovery. 37 C.F.R. §42.51. This article will focus on the Mandatory Initial Disclosures, with a detailed discussion of the other two discovery types to follow in subsequent posts.
What are Mandatory Initial Disclosures? The Mandatory Initial Disclosures can take one of two forms. “Option 1” is modeled on Rule 26(a)(1) of the Federal Rules of Civil Procedure and generally seek to have the parties exchange basic information early in the trial. For example, the name and contact information for individuals likely to have discoverable information, as well as a copy or description of documents and other information that may be used to support a party’s claims or defenses. “Option 2” comprises the information from “Option 1,” plus two additional categories of information. First, if the petition seeks cancellation of any claim based on the existence of an alleged prior non-published public disclosure, further information about the individuals with such information must be provided. Second, if the petition seeks cancellation of any claim based upon the alleged obviousness of the claim(s), further information about any objective secondary considerations is exchanged.
But just how “mandatory” are these Mandatory Initial Disclosures? The rule that promulgates these disclosures states that the initial disclosures can be done by agreement or by motion to the Board. If a motion is required, are the rules really “mandatory”? The short answer seems to be no. In the comments section of the Rules of Practice, the Patent Office states that “…providing for mandatory initial disclosures in all cases, including those where the parties do not consent to such disclosures, is not consistent with the statute, or with the legislative intent in enacting the AIA as a less expensive and more efficient alternative to infringement litigation in Federal court.” (Response to Comment 112) (emphasis added). Thus, the parties can either agree to make initial disclosures or, in the absence of such an agreement, the onus is on the party seeking mandatory initial disclosures to make a motion requesting such disclosure. In such an instance, the moving party must meet the “motion” standard for each proceeding – “in the interest of justice” for IPR and “for good cause” for PGR.
When are Mandatory Initial Disclosures served? If the parties agree to submit initial disclosures, such agreement must be filed with the Patent Trial and Appeal Board (PTAB) no later than the filing of the patent owner’s preliminary response, or the expiration of the time period for filing such a response. The initial disclosures should be filed as exhibits to that agreement. That sets up an interesting dynamic in that the parties are exchanging information (at least witness names and contact information and categories of relevant documents, if not the documents themselves) before the PTAB even decides whether to institute an IPR/PGR. Upon institution of a trial, “parties may automatically take discovery of the information identified in the initial disclosures.” This would include taking the deposition(s) of the listed witnesses and marking as exhibits and producing any documents identified. One issue that is somewhat vague is whether the patent challenger can begin depositions immediately, as the plain language of this rule seems to indicate, or whether the patent challenger must wait until after the patent owner response is filed and the 3-month patent challenger discovery period begins. Efficiency seems to dictate that the patent challenger must wait, or else multiple depositions of the same witness may be required. Further, other commentary from the Patent Office suggests that discovery has been intentionally sequenced to render a more efficient proceeding.
What is the most efficient way to make a motion to the PTAB to require a party to provide Initial Disclosures? Consistent with the Patent Office’s stated desire to make the discovery process flexible, efficient, and cost-effective, the best way to have this issue brought before the PTAB is to arrange for a conference call with the PTAB. On such a call, the moving party should be prepared to identify the sought-after discovery and explain the need for the disclosures. In a PGR, the party will be required to meet a “good cause” standard. In an IPR, the party will be required to meet the slightly higher “in the interests of justice” standard. In making its decision, the PTAB will take into account the nature of the information requested, the moving party’s access to that information, and the burden on the disclosing party.
So there you have (somewhat) Mandatory Initial Disclosures…the first “litigation” step of our new IPR and PGR proceedings.