Post-Grant Patent Proceedings: The Limited Scope of Additional Discovery
By Alan W. Kowalchyk and John Vaubel, Merchant & Gould
Now that the America Invents Act has been fully implemented, patent office trial proceedings to challenge the validity of issued patents have commenced. As of Sept. 16, 2012, inter partes review (IPR), which replaced the old inter partes reexamination procedure and covered business method patent review (CBMR) have been initiated in meaningful numbers.1
One aspect of these new patent challenge procedures is the provision of limited discovery regarding the publications and patents raised as grounds to invalidate a patent. As the Patent Trial and Appeal Board proceeds, decisions have begun to be issued to shape post-grant review processes including discovery in IPRs and CBMRs. In a normal federal civil trial, Fed. R. Civ. P. 26 governs discovery. However, the PTAB rules governing post-grant procedures are much more specific and designed to address the abbreviated length of post-grant proceedings and avoid the lengthy amount of time spent on discovery in a federal civil trial. Consequently, petitioners and patent holders in the new patent office proceedings require guidance to determine the scope of discovery in this administrative setting.
Focusing on IPR, the proceeding is limited in normal circumstances to a year. Thus, use of written discovery litigation tools such as document requests and interrogatories must be focused, specific, and justified. 37 C.F.R. §42.51 sets forth the limited scope of discovery in IPR proceedings. Section 42.51(b)(1) provides for “routine discovery” in IPR, which is defined as exhibits cited in a paper or testimony and “relevant information that is inconsistent with a position advanced by the party during the proceeding.” If the parties disagree about discovery, Section 42.51(b)(2) also lets a party request “additional discovery” by board order if the party shows it is in the “interest of justice.” A standard much higher than the “reasonably calculated to lead to the discovery of admissible evidence” employed in judicial proceedings. Not surprisingly, the extent additional discovery can be compelled based on the standard of “interest of justice” has been a subject for clarification in early PTAB decisions.
The first case to provide guidance on what constitutes grounds for additional discovery in an IPR is Garmin v. Cuozzo.2 In Garmin, the PTAB IPR referenced that proceedings were intended to speed the process and reduce the costs in reviewing a patent, and are required to be completed in one year. To do so, the amount of discovery must be limited. The PTAB in Garmin then specified five factors that control whether additional discovery will be granted:
- More Than A Possibility And Mere Allegation—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.
- Litigation Positions And Underlying Basis—Asking for the other party’s litigation positions and the underlying basis for those positions is not necessary in the interest of justice. The Board has established rules for the presentation of arguments and evidence. There is a proper time and place for each party to make its presentation. A party may not attempt to alter the Board’s trial procedures under the pretext of discovery.
- Ability To Generate Equivalent Information By Other Means—Information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice to have produced by the other party. In that connection, the Board would want to know the ability of the requesting party to generate the requested information without need of discovery.
- Easily Understandable Instructions—The questions should be easily understandable. For example, ten pages of complex instructions for answering questions is prima facie unclear. Such instructions are counter-productive and tend to undermine the responder’s ability to answer efficiently, accurately, and confidently.
- Requests Not Overly Burdensome To Answer—The requests must not be overly burdensome to answer, given the expedited nature of Inter Partes Review. The burden includes financial burden, burden on human resources, and burden on meeting the time schedule of Inter Partes Review. Requests should be sensible and responsibly tailored according to a genuine need.
While providing a framework for evaluating requests for additional discovery, the circumstances to allow additional discovery will need to be developed through future case-specific circumstances.
For example, in Garmin, concerning factor 1, the PTAB stated that the requester should already have evidence or reasoning that shows such additional discovery will produce something “useful,” which the PTAB stated meant “favorable in substantive value to a contention” of the requester. Although Garmin helped define what “interest of justice” meant, it raised its own issues as to what situations would meet the “useful” definition of “favorable in substantive value to a contention” of the requester and the four other factors set forth in the case.3
Several decisions subsequent to Garmin provide insight into whether additional discovery is warranted. InInnolux v. Semiconductor Energy Laboratories, the PTAB denied a request for additional discovery concerning the “real parties-in-interest” in connection with the lawsuit.4 The PTAB stated that Semiconductor Energy Laboratory Co. had failed to show that it would discover useful information when requesting information concerning Innolux Corp.’s lawyer, who represented co-defendants in related litigation. SEL argued that “statements and admissions” made during the proceedings indicated something “useful” would be discovered, but the PTAB found them ambiguous. It did not allow discovery based on “mere speculation” that something useful would be produced, which is all that it could glean from the ambiguous statements.
In Avaya v. Network-1, where the petitioners moved for additional discovery of documents showing inconsistency with claim interpretations and statements made by the patent owner’s CEO,5 the PTAB rejected the motion because the requester did not present evidence that the opposing party had failed to disclose anything and did not identify any specific materials that it thought were not produced but should have been. The PTAB further noted that the requester did not analyze the five Garmin factors. Both the Innolux and Avayacases show that a requester must point out with particularity what pieces of evidence it wants in additional discovery and state specifically why they will be useful.
Corning v. DSM is an example of when some additional discovery was granted. There, DSM IP Assets B.V. requested laboratory notebooks and documents that contained the data relied on by an expert, samples prepared by that expert, and any inconsistent testing results the expert obtained.6 The PTAB ruled that the laboratory notebooks and documents met the interest-of-justice standard and the five factors used to weigh the standard. Specifically, the PTAB found that additional discovery would likely yield useful information because the opposing party used an expert that relied on that information to argue against patentability of DSM’s claims. Therefore, the PTAB found them per se useful. This case differed from the previous cases because the requester both identified particular documents that it wanted in additional discovery and adequately showed that those particular documents met the PTAB standard for “useful.”7
With respect to the samples DSM requested, the PTAB stated that DSM failed as to factor 4 because it did not state the quantity of sample it needed; failed as to factor 3 because it did not state why it could not gather the information on cross examination and inspection of documents; and failed as to factor 5 because it did not explain why it would not be overly burdensome. Finally, the PTAB rejected DSM’s request for information contrary to the opposing party’s expert. It noted that the opposing party stated that it had already released such information. DSM further requested a log of any information claimed to be under privilege, but the PTAB rejected this because DSM provided no argument that this information would be “useful” and not merely speculative. Although the PTAB granted the request for additional discovery concerning the laboratory notebooks and documents, it found the requester had not met the high standards for producing the other evidence.
One takeaway from these cases when asking for additional discovery is that the PTAB standards are high and require particularity. This is not surprising given that IPR discovery is abbreviated, and the PTAB requires a higher burden to justify granting time-consuming additional discovery. An IPR is normally a one year limited-focus procedure. Thus, the PTAB has made it clear that it will not allow fishing expeditions based on speculation, hunches, or even reasonable conjecture.
As demonstrated in the Corning opinion, the PTAB requires that a party point out with particularity why something will be useful. There, the PTAB found laboratory notebooks and documents relied on by an expert to make an opinion concerning the validity of the patent were useful. Consequently, when seeking additional discovery, the example in Corning is instructive: Request particular documents and articulate a specific reason for why such documents will be useful.
For More Information
The case records and documents referenced above are available to subscribers of this journal through Bloomberg BNA’s “PTAB Challenge Navigator” at http://news.bna.com/ptln/display/ptab_tqb.adp.
Alan W. Kowalchyk, a partner in Merchant & Gould‘s Minneapolis office, practices all aspects of intellectual property law with an emphasis on patent litigation, client counseling, and alternative dispute resolution. Co-author John Vaubel was a summer law clerk at Merchant & Gould.
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