10.6 Judicial patent proceedings and case management
Prior to the mid-1990s, U.S. patent case management practices varied significantly across federal district courts. Busy federal judges improvised patent case management, leading to confusing and costly proceedings. In many respects, federal district judges operated as silos across a wide landscape.134
Moreover, the growing use of juries complicated both patent trials and appellate review. In most jury trials, the district judges did not construe the patents themselves but rather instructed the juries to resolve claim construction disputes as part of their deliberations. Since juries did not explain their claim construction in rendering their verdicts, this practice shrouded the jury’s claim construction determinations, making jury patent decisions especially difficult to review. This problem precipitated major changes in patent case management.
Figures 10.6 and 10.7 show the total number of patent cases filed across all U.S. district courts from 2008 to 2022, and the number of patent cases filed in certain U.S. district courts with a significant number of patent cases during this same time period (Northern District of California (N.D. Cal.), Central District of California (C.D. Cal.), Delaware (D. Del.), Eastern District of Texas (E.D. Tex.), and Western District of Texas (W.D. Tex.)).135 These statistics reflect the growth of patent case filings nationwide during this time period, as well as the concentration of a large number of these cases in the jurisdictions shown.
10.6.1 Key features in patent proceedings
In 1996, the Supreme Court held that “the construction of a patent, including terms of art within its claim, is exclusively within the province of the court.”136 This decision ushered in a new patent case management era, elevating claim construction to a critical and central role in patent litigation. In the aftermath of this decision, Judge Ronald Whyte promulgated “patent local rules” (PLRs) in collaboration with patent litigators for the Northern District of California in 1998. These voluntary case management schedules structured discovery, specified deadlines for infringement and invalidity contentions, and prioritized claim construction. Many other district courts adopted these or similar patent case management rules, leading to more streamlined and consistent practices. The following sections explain these and other district court patent case management practices in nonpharmaceutical patent cases. Section 10.13.2 discusses patent case management in pharmaceutical patent cases.
A patent case is, in many ways, like other civil cases. In most patent cases, the plaintiff files a complaint alleging infringement. The defendant answers the complaint, alleging noninfringement and asserting various defenses, and potentially makes counterclaims of its own. The parties proceed to fact and expert discovery, motion practice, pre-trial briefing, and trial.
As in any litigation, the time necessary for each pre-trial phase varies with the complexity and potential consequences of the issues presented. There are, however, various unique aspects of patent litigation for which case characteristics and management approaches significantly affect the pre-trial timeline. Key among these are the complexity of the legal issues, the intricacy of the technology at issue, and the volume of highly sensitive technical documents, source code and other information exchanged during discovery.
Due to the many challenges posed by patent cases, many district courts and district judges have developed specialized PLRs to streamline discovery, require parties to disclose and narrow contentions, and facilitate claim construction. These rules produce joint, sequenced, staged, and timely disclosure of critical information without the need for significant judicial oversight.
10.6.3 Venue, jurisdiction and case assignment rules
Many patent litigants place tremendous significance on the choice of venue due to the range of patent case management practices, judicial assignment procedures, speed of case processing, geographical convenience for evidence and witnesses, and composition of jury pools. Most district courts assign cases randomly to judges within the district, but a few district courts allow cases to be filed in a particular courthouse. Where only one district judge sits in that courthouse, plaintiffs can effectively select not only a particular district but also a particular judge. This has led to controversy over the large number of cases brought in just a few district courts outside of the defendants’ state of incorporation and principal locations of operations.
Federal law provides “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”137 Regarding the first prong of the venue statute, the Supreme Court has clarified that a corporation “resides” only in its state of incorporation.138 The Federal Circuit interprets the second prong of the venue statute to require three elements: (1) there must be a physical place in the district, (2) it must be a regular and established place of business, and (3) it must be the place of the defendant.139
Even where venue is authorized, defendants can seek a change in venue by filing a motion early in the litigation process based on “the convenience of parties and witnesses, in the interest of justice.”140 FRCP 72(a) requires that district courts “promptly conduct” venue transfer proceedings.141 In determining whether to transfer venue, courts balance the convenience of the litigants and the public interest in the fair and efficient administration of justice. The convenience factors include (1) the relative ease of access to sources of proof, (2) the availability of the compulsory process to secure witnesses’ attendance, (3) the willing witnesses’ cost of attendance and (4) all other practical problems that may interfere with the litigation being relatively easy, expeditious and inexpensive.142 The public factors include (1) the administrative difficulties flowing from court congestion, (2) the local interest in having local issues decided at home, (3) the forum’s familiarity with the governing law, and (4) the avoidance of unnecessary conflict-of-law problems involving the application of foreign law.143 The Federal Circuit may grant a writ of mandamus ordering a district court to transfer a case to a different venue to correct “a patently erroneous denial of transfer.”144
10.6.4 Alternative dispute resolution
The vast majority of patent cases (about 95 percent) settle prior to trial, but often not until late in the case. In the meantime, the litigation can be extremely expensive for the parties. Each side can expect to spend several million dollars in fees through the close of discovery, and between double or triple that amount in total through trial.145
Most parties to patent litigation recognize the high economic stakes, uncertainty, and legal costs involved. Nevertheless, various impediments to settlement – ranging from the relationships between the particular parties to institutional issues arising out of the nature of some patent litigation – often prevent parties from settling cases without some outside assistance. Consequently, district judges seek to motivate the parties to settle patent cases. Early judicial intervention, usually at the initial case management conference, can be a critical factor in bringing about settlement. Such initiative by the court emphasizes to the parties that the court wants them to actively consider settlement strategies as well as litigation strategies throughout the case.
Effective judicial encouragement of settlement involves several considerations: (1) appropriate initiation of mediation, (2) selection of the mediator, (3) scheduling of mediation, (4) delineating the powers of the mediator, (5) confidentiality of the mediation process, and (6) the relationship between mediation and litigation activities. Additional considerations come into play in multiparty and multijurisdictional cases.146
Many courts require, either by local rules or standardized order, that counsel for the parties discuss how they will attempt to mediate the case before the initial first case management conference and that they report either their agreed plan or differing positions to the court at the conference. District judges can order the parties to participate in mediation.147 By requiring this early discussion, the court eliminates any concern that the party first raising the possibility of settlement appears weak. This can be particularly important at the outset of a case when attitudes may be especially rigid, posturing can be most severe, and counsel may know little about the merits of their clients’ positions.
Courts can identify successful mediators for patent cases from a variety of sources: other judges and magistrate judges, retired judges, professional mediators and practicing lawyers. In some courts, the trial judge serves as mediator, but this requires the express consent of the parties.148 Many judges decline to act in this role for their own cases because they believe that it is difficult to have the requisite candid discussion with parties and their counsel and later objectively rule on the many issues the court must decide. In some district courts, magistrate judges serve as mediators.
To maximize open communication and candor, most district courts treat everything submitted, said, or done during the mediation as confidential and not available for use for any other purpose. Confidentiality is usually required by agreement of the parties or by court order or rule.149 Generally, the confidentiality requirements go beyond the evidentiary exclusion of FRE 408 to ensure that the parties, their counsel, and the mediator can candidly discuss the facts and merits of the litigation without concern that statements might be used in the litigation or publicized. This same concern for confidentiality usually precludes reports to the trial judge of anything other than procedural details about the mediation, such as the dates of mediation sessions, or a party’s violation of court rules or orders requiring participation. In addition to being confidential, briefing and communications relating to mediation may be privileged against discovery in future litigation.
10.6.5 Statements of case (pleading)
Under the liberal federal pleading rules in the United States, patent infringement complaints typically provide a statement of ownership of the asserted patent(s), identify the accused infringer(s), provide a brief statement of alleged infringing acts, and (if applicable) provide a statement regarding the patent owner’s marking of a product with the patent number under 35 U.S.C. § 287 (which affects potential monetary damages). The fleshing out of the allegations typically occurs as fact discovery unfolds and PLRs dictate.150 After that early disclosure, the asserted claims and accused products may not be amended without leave of court for good cause.151
Like the plaintiff’s allegations of infringement, the defendant’s allegations of invalidity need not be pled with particularity. Defendants typically recite only that the patent is invalid and may identify sections of the Patent Act related to their invalidity allegations. Although this sort of notice-pleading has usually been held to satisfy the FRCP, in practice, it gives little notice to a patent holder about what grounds for invalidity a defendant will actually assert. Consequently, some district judges require that defendants disclose the specific grounds on which they assert invalidity early in a case, just as they require specific infringement contentions from a patent owner. Courts can require defendants to identify specific prior art references they intend to assert as invalidating and to disclose invalidity claims based on written description, indefiniteness or enablement.152 Following a specified period for making these disclosures, they may be amended only upon a showing of good cause.153
With the exception of inequitable conduct, unenforceability allegations need not be pled with particularity. By contrast, inequitable conduct is seen as a species of fraud and must therefore be pled with particularity.154 Inequitable conduct must rest on specific allegations of intentional, material omissions or misrepresentations by the patentee during the application process for a patent.
The defendant typically asserts an array of counterclaims. In nearly every case, it seeks a declaratory judgment that the asserted patents are not infringed, invalid, and/or unenforceable. The defendant may also assert infringement of its own patents in a counterclaim. Under FRCP 13(a), a counterclaim is compulsory if it arises out of the same transaction or occurrence as the opposing party’s claim. A counterclaim for infringement is compulsory in an action for declaration of noninfringement. Similarly, counterclaims for declaratory judgment of noninfringement or invalidity are compulsory with respect to a claim of infringement.
10.6.6 Early case management
After the complaint is served and the case is assigned to a district judge, the parties and the court prepare for the initial case management conference.155 Since patent cases typically involve proprietary information, the court typically issues a protective order if the parties have not already agreed to one.156 Pursuant to FRCP 26(f), the parties must confer as soon as practicable – and, in any event, at least 21 days before a scheduling conference – to discuss:
- the nature and basis of their claims and defenses and the possibilities for promptly settling or resolving the case;
- making or arranging for mandatory initial disclosures (contact information for individuals with discoverable information, a copy of or description by category and location of all documents that support claims or defenses, a computation of each category of damages, and any insurance agreements covering possible judgment)157 and
- a discovery plan.
Based on these discussions, the parties prepare and submit a Joint Case Management Statement to the court within 14 days of their meeting.
At the initial case management conference, the court and parties identify issues relating to the substance of the case and any business considerations that influence the dispute. In many districts, the conference is held off the record, with only counsel in attendance. Informality can promote more productive discussion and compromise. In particularly complex or contentious cases, some judges conduct the proceeding on the record.
In advance of the initial conference, many courts will issue a form of standing order that applies to patent cases, addressing the matters to be covered in the joint case management statement, the agenda for the initial case management conference, PLRs and attendant disclosures, and presumptive limitations on discovery. Some courts have found it helpful in patent cases to distribute a very brief “advisory” document to address some of the special aspects of patent litigation, as well as expectations for the conduct of the case, beyond what might be found in a typical standing order or in local rules. This advisory document may be distributed at, or in advance of, the initial case management conference.
Table 10.2 identifies subjects for initial and subsequent case management conferences that guide preparations for discussing the case. Exploring these issues provides insight into how counsel might be expected to conduct the litigation and whether the case is amenable to early settlement or summary judgment.
|Technological, market, and litigation background
|Alternative dispute resolution
|Electronic discovery and limitations on discovery
|Contention disclosures and schedule
|Timing and procedures for claim construction and dispositive motions
|Limits on prior art references
|Expert witness and in limine (limiting evidence) motions
Following the initial case management conference, the court issues a scheduling order setting time limits for joining other parties, amending the pleadings, carrying out discovery, and filing motions.
10.6.6.1 Patent local rules
Early case management focuses on the winnowing of patent claims, the revelation of invalidity contentions, and the timing of claim construction. The Northern District of California developed a set of PLRs in the late 1990s to streamline the process for focusing the litigation. Although the rules were initially intended as guidelines, patent litigants and judges came to appreciate having default rules and the PLRs came to set case management into motion without objection in many patent cases. Many other courts have adopted these procedures. As a result, most U.S. patent cases are guided, if not governed, by a specialized set of procedural rules that supplement the FRCP.
PLRs require parties to crystallize their theories of the case early in the litigation and to adhere to those theories once they have been disclosed. Neither litigant can engage in a strategic game of saying it will not disclose its contentions until the other side reveals its arguments. By requiring parties to disclose contentions in an orderly, sequenced manner, PLRs counter the “shifting sands” tendencies of patent litigation, and provide more certainty for litigants and the court. In discussing the Northern District of California’s PLRs, the Federal Circuit explained:
[T]hey are designed to require both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions, and to proceed with diligence in amending those contentions when new information comes to light in the course of discovery. The rules thus seek to balance the right to develop new information in discovery with the need for certainty as to the legal theories.158
PLRs focus on framing the court’s claim construction decision. As reflected in Table 10.3, the Northern District of California’s PLRs set forth a detailed timetable structuring the disclosure of asserted claims and infringement contentions, invalidity contentions, disputed claim terms, and damages contentions.159 These disclosures are made in conjunction with a concise claim construction discovery period and followed by a claim construction briefing schedule. These PLRs are designed to enable the court to conduct a claim construction hearing (often called a “Markman” hearing)160 seven months after the initial case management conference.
|Stage||Patent local rule||Action||Timing|
|1||Federal Rule of Civil Procedure 26(a) case management conference||Set by the court|
|2||3–1, 3–2||Disclosure of asserted claims and infringement contentions||Within 14 days of Stage 1|
|3||3–3, 3–4||Invalidity contentions||Within 45 days of Stage 2|
|4||4–1||Identify claim terms to be construed||Within 14 days of Stage 3|
|5||4–2||Preliminary claim constructions||Within 21 days of Stage 4|
|6||3–8||Damages contentions||Within 50 days of Stage 3|
|7||3–9||Responsive damages contentions||Within 30 days of Stage 6|
|8||4–3||Joint claim construction and prehearing statement||Within 60 days of Stage 3|
|9||4–4||Close of claim construction discovery||Within 30 days of Stage 8|
|10||4–5(a)||Opening claim construction brief||Within 45 days of Stage 8|
|11||4–5(b)||Responsive claim construction brief||Within 14 days of Stage 10|
|12||4–5(c)||Reply claim construction brief||Within 7 days of Stage 11|
|13||4–6||Claim construction hearing||Subject to convenience of court, 14 days after Stage 12|
|14||Claim construction order||Determined by the court|
|15||3–7||Produce advice of counsel, if any||Within 30 days of Stage 14|
An accelerated timeline may be appropriate for less complex cases: for example, where the technology is simple or where there is little dispute as to the structure, function, or operation of accused devices. Under a particularly streamlined plan, the parties would not make patent-specific initial disclosures or file joint claim construction statements.
District courts have wide discretion to limit the number of claim terms at issue, at least provisionally. Restricting the scope of the claim construction hearing focuses the court’s attention on the key issues (which may dispose of the case) and allows a more prompt and well-reasoned ruling on the central matters in the case. Allowing the parties wide discretion to brief all claim terms that are potentially at issue invites false or inconsequential disputes. Parties reflexively seek to avoid the risk of a waiver finding if they refrain from raising all potential disputes.
10.6.6.1.1 Winnowing claim terms
To focus patent litigation on the most salient issues, many courts have established a presumptive limit on the number of claim terms – typically 10 – that can be presented at the claim construction hearing.161 The default 10-term limit can be increased or decreased depending on the circumstances of the case. In addition, some courts require parties to explain why particular terms are case-dispositive or otherwise significant so as to provide the court with context for the claim construction dispute as well as the basis for deciding whether early construction of particular claim terms is warranted. The 10-term limit does not fix the total number of terms that can be construed before trial; parties can seek to construe additional terms at later phases in the case. However, for purposes of the principal claim construction hearing, selecting the most significant terms allows courts to resolve the key disputes in the case most efficiently.
10.6.6.1.2 Winnowing prior art references
Just as the assertion of myriad patent claims unduly complicates patent litigation for the defense, the assertion of myriad prior art references – many of which will not be pursued – can impose undue costs on the patentee and the court. A court can, within its discretion, propose a phased process for winnowing the number of asserted prior art references in a matter.
10.6.6.2 Claim construction
Most courts conduct a half-day or full-day claim construction hearing at which the attorneys present tutorials and their proposed constructions and the judge can question them. Some judges will issue a tentative ruling prior to the hearing to signal their inclination and to focus the argument. Such tentative rulings are less feasible where the patented invention involves complex science and technology.
The Supreme Court’s ruling in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.162 established that district courts may conduct evidentiary fact-finding to support their claim construction rulings. There is no requirement, however, for district courts to do so; they may base their rulings on evidence intrinsic to the patent, in which case the claim construction process is a question of law. District courts may also base their rulings on extrinsic evidence – such as documentary evidence that is not part of the patent file history; inventor or expert testimony; dictionaries; or treatises – in which case the subsidiary basis or bases are entitled to deference on appeal.
Most courts conduct claim construction hearings in an informal manner, applying the FRE loosely. Courts are generally circumspect about hearsay and allow the use of depositions instead of live testimony (so long as there has been an opportunity for cross-examination) and freer use of documents without a foundational witness (so long as there is no dispute about the document’s authenticity). This approach reduces the cost and burden of the hearing. District judges should, however, apply more careful procedures to the extent they intend to make factual findings so that their determination rests on a sound evidentiary record.
District judges must construe claim terms from the perspective of a person having ordinary skill in the art as of the time the invention was made. Since few, if any, district judges have such training and experience, the parties need to educate the court about the science and technology, and the perspective of a person having ordinary skill in the art as of the time of the invention. The most common vehicle for accomplishing this task is the use of technology tutorials either preceding or in connection with a claim construction hearing. Most claim construction hearings proceed with lawyer argument on a term-by-term basis. This can be presented by the attorneys or technical experts hired by the parties.
Some judges take a significant further step and appoint a technical advisor, special master, or expert for the court. The Federal Circuit expressly approved appointing a technical advisor for claim construction proceedings in TechSearch LLP v. Intel Corp.,163 although the court emphasized the need to establish “safeguards to prevent the technical advisor from introducing new evidence and to assure that the technical advisor does not influence the district court’s review of the factual disputes.”164 The technical advisor’s proper role is that of a sounding board or tutor who aids the judge’s understanding of the technology. This includes explaining the jargon used in the field, the underlying theory or science of the invention, or other technical aspects of the evidence being presented by the parties.
Some courts, pursuant to FRCP 53, have delegated initial consideration of claim construction to a special master. Such special masters often have general legal training as well as experience with patent law. They might also be familiar with the technical field in question. The special master will typically conduct a claim construction process with briefing and argument. The special master will then prepare a formal report with recommendations regarding the construction of disputed claim terms. After the parties have had an opportunity to object to that report, the court will often conduct a hearing at which the court may receive additional evidence and then adopt, reject, or modify the recommended claim constructions.
10.6.6.2.1 The claim construction ruling
The claim construction ruling becomes the basis for the court’s jury instructions and ultimate appellate review. In view of the jury’s lack of scientific and technical expertise, judges should require the parties to propose constructions in language that can be readily understood by juries. Courts should draft their claim construction rulings with an eye toward making the claim terms understandable to the jury. Moreover, the court is free to devise its own construction of claim terms rather than adopt a construction proposed by either of the parties. However, the consequence of the court issuing its own construction is that it may upset the foundations of the parties’ expert reports and any pending motions before the court. This problem may be particularly acute in late-stage claim construction hearings where the parties’ experts have already rendered reports based on the particular wording of the parties’ proposed constructions. In such circumstances, departing from the parties’ proposed constructions may throw a case off track by requiring new expert reports and a redrafting of case-dispositive motions.
There is no requirement that a court construe a claim term when there is no genuine dispute about its meaning.165 Claim construction aims to define the proper scope of the invention and to give meaning to claim language when the jury might otherwise misunderstand a claim term in the context of the patent and its file history. If a claim term is nontechnical, is in plain English, and derives no special meaning from the patent or its prosecution history, then the court need not function as a thesaurus. The “ordinary” meaning of such terms speaks for itself, and the court should avoid merely paraphrasing claim language with less accurate terminology.
10.6.6.3 Early case management motion practice
The FRCP authorize district courts to dismiss lawsuits for lack of personal jurisdiction166 or failure to state a claim on which relief can be granted.167 The district court may also grant judgment on the pleadings.168 In the aftermath of the Supreme Court’s decisions tightening patent eligibility (35 U.S.C. § 101) standards,169 some district courts have dismissed patent cases based on a pre-trial finding that the claims at issue were too abstract or lacked sufficient inventive application of laws of nature or natural phenomena. Two key questions in deciding whether to dismiss a patent case for failing to satisfy § 101 are (1) whether the determination that a claim element or combination of elements is well understood, routine and conventional to a skilled artisan in the relevant field is a question of fact, and (2) whether the patent eligibility determination requires claim construction.170
District courts can also dismiss patent lawsuits or requests for enhanced damages early in the litigation process where a critical element of the patent cause of action is absent. Indirect infringement and willful infringement (a key issue in damage enhancement) both require that the accused infringer knew of the asserted patents prior to the litigation. Indirect infringement is also predicated on an act of direct infringement. Therefore, claims of indirect infringement and willfulness are susceptible to early determination.
Indirect infringement claims frequently arise in cases involving patents with method claims. In these cases, a patentee’s only practical cause of action will often be for indirect infringement against the manufacturer of a product alleged to practice the method claim. In these circumstances, there are numerous ways in which a court can surface early case-dispositive weaknesses. For example, if no single entity is responsible for the performance of each step of the claim, it may be fatal to the patentee’s case.171 Alternatively, if the accused product is capable of many noninfringing uses and the manufacturer exerts no control over its customers, the claim will likely fail.172
10.6.7 Preliminary relief
Patentees may seek preliminary relief early in the litigation, although the burden is high. Section 283 of the Patent Act provides that courts “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” Such preliminary relief can come in two forms: (1) a preliminary injunction, or (2) a temporary restraining order (TRO).
Preliminary injunction applications in patent matters present special challenges. Proving the likelihood of success on the merits typically calls for analysis of nearly every substantive issue that ultimately will be presented at trial. To address the merits, the court must at least preliminarily construe patent claim terms, and invalidity, infringement, and enforceability must be addressed based on those constructions. The patent holder has the burden of proof to demonstrate the predicates for a preliminary injunction. This includes the burden of showing that the asserted patents are likely infringed and the absence of any substantial question that the asserted patent claims are valid or that the patent is enforceable. The validity and enforceability determinations are made in light of the presumption of patent validity and that the accused infringer has the ultimate burden of proof on these issues at trial. To address harm, the parties often present complicated market analyses. These issues typically require both fact and expert discovery, undertaken on a compressed preliminary injunction schedule.
FRCP 65 sets forth the procedures governing preliminary injunction motions, and Federal Circuit law governs the analysis. While:
the grant of a preliminary injunction [is] a matter of procedural law not unique to the exclusive jurisdiction of the Federal Circuit, and on appellate review […] procedural law of the regional circuit in which the case was brought [applies], […] the general considerations underlying the grant or denial of a preliminary injunction do not vary significantly among the circuits.173
Consequently, the Federal Circuit has “built a body of precedent applying these general considerations to a large number of factually variant patent cases, and [it] give[s] dominant effect to Federal Circuit precedent insofar as it reflects considerations specific to patent issues.”174
While a preliminary injunction application places a weighty burden on a court’s limited resources, it also presents opportunities for prioritizing case management. Aggressive use of expedited discovery strategies enhances these opportunities. Effectively managing the parties’ expedited discovery demands can put the court in a good position to promote early settlement, summary judgment through revelation of case-dispositive issues, and possibly a consolidated trial under FRCP 65(a)(2).
10.6.7.1 Preliminary injunction
To evaluate a preliminary injunction application, the court uses the traditional four-factor test: the court weighs the applicant’s likelihood of success on the merits, the likelihood of irreparable harm to the applicant, the balance of harm between the parties, and the public interest.175 This standard is essentially the same as that for a permanent injunction, except that the applicant must prove a likelihood of success on the merits rather than actual success.176
After the Supreme Court’s eBay decision, patent owners who demonstrate a likelihood of success on the merits no longer enjoy a presumption of irreparable injury if the preliminary injunction is not granted.177 Nonetheless, even though the usual economic consequences of competition – price and market erosion – would likely be calculable and thus “reparable” through a damages award, courts might still conclude that a preliminary injunction is warranted.178
The grant or denial of a preliminary injunction is within the sound discretion of the district court.179 Abuse of discretion in granting or denying a preliminary injunction requires a “showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.”180 The trial court must provide sufficient factual findings to enable a meaningful review of the merits of its order. This requirement does not, however, extend to the denial of a preliminary injunction, which may be based on a party’s failure to make a showing on any one of the four factors, particularly the first two – likelihood of success on the merits and of irreparable harm.
Discovery relating to a preliminary injunction application can touch on nearly every substantive issue in a patent case. Claim construction is usually required, which may in turn require expert discovery if certain terms have special meaning in the art. The plaintiff may require fact and expert testimony as to the defendant’s products, including their development, structure, and operation. The plaintiff’s irreparable harm allegations may require fact and expert discovery as to market conditions and the defendant’s financial condition. The defendant’s invalidity and unenforceability allegations may require discovery into the prosecution of the plaintiff’s patents (especially where the defendant asserts inequitable conduct) and sales by the plaintiff of products covered by the patent (as relevant to a potential on-sale bar argument). The defendant might also seek financial data relevant to the amount of bond necessary should a TRO or preliminary injunction issue.
The initial challenge for a court confronting a preliminary injunction application in a patent case is balancing (1) the need to resolve the application based on a reasonably full record against (2) the twin considerations that (a) a preliminary injunction proceeding needs to be resolved expeditiously, and (b) the parties need to conduct their business in the interim. Where a preliminary injunction application is filed prior to the initiation of discovery, the court can order expedited discovery upon motion or stipulation. Because much of the business information in a patent case is highly confidential, it will likely be necessary for the court to enter a protective order before preliminary injunction discovery can proceed (see Section 10.6.12). In view of these considerations, courts should consider strictly limiting the number of patent claims and prior art references that may be asserted, the number of claim terms that will be construed, the number of depositions that may be taken, the number and nature of document requests, and the issues to be considered.
10.6.7.1.2 Hearing or trial
A court has considerable discretion as to the handling of a hearing for a TRO or preliminary injunction application. FRCP 65 is not explicit about whether the court must have a hearing to consider a preliminary injunction. Given the complexity of patent TRO and preliminary injunction applications, however, courts generally hear arguments. Evidence received on a preliminary injunction motion that would be admissible at trial “becomes part of the trial record and need not be repeated at trial.”181
Since the bulk of the substance of a patent case will be in play in deciding a preliminary injunction, one or more issues may be ripe for final disposition, even at this early stage. For example, a defendant might argue that its product is noninfringing because it is clear that a particular claim element is not in its revised product and that the plaintiff is using patent litigation as a tactic to disrupt or destroy the defendant’s business. In such a case, FRCP 65 presents the court and the litigation “victim” with an opportunity to resolve the issue efficiently in the form of an early trial on the merits, through consolidation with the preliminary injunction hearing.182 A district court may order advancement of trial and consolidation with a preliminary injunction hearing on its own motion.183 Of course, the decision to do so must be tempered by due process considerations.
As a result of the potential hardship of a preliminary relief on a defendant, FRCP 65(c) requires the patentee to post a security bond “in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.” Because the amount of the security bond is a procedural issue not unique to patent law, the amount is determined according to the law of the district court’s regional circuit. The amount of a bond rests within the sound discretion of a trial court.
FRCP 65(d)(1)(A) requires that the court address the factors considered in granting or denying the injunction. It must also specifically describe the infringing actions enjoined with reference to particular products.184 An order granting an injunction must explain how the court assessed the four factors, providing the court’s reasoning and conclusion. The order should also address the technology at issue as well as the scope of the injunction and the amount of the bond. Depending on the facts of the case, the court may also need to address the persons bound by the order. Denial of an injunction may be based on a finding that the movant has failed to demonstrate the likelihood of success on the merits or of irreparable harm.
10.6.7.1.5 Appellate review
A district court’s decision on a motion for preliminary injunction is usually immediately appealable, whether it has decided to grant or deny the injunction.185 “A decision to grant or deny a preliminary injunction pursuant to 35 U.S.C. § 283 is within the sound discretion of the district court,” reviewed for abuse of discretion.186 “[A] decision granting a preliminary injunction will be overturned on appeal only if it is established ‘that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.”’187 However, to the extent a district court’s decision is based upon an issue of law, that issue is reviewed de novo.188
Instead of appealing, a party may seek a writ of mandamus from the Federal Circuit ordering imposition or dissolution of a preliminary injunction:
The remedy of mandamus is available only in extraordinary situations to correct a clear abuse of discretion or usurpation of judicial power. A party seeking a writ bears the burden of proving that it has no other means of attaining the relief desired, and that the right to issuance of the writ is clear and indisputable.189
Accordingly, a party dissatisfied with the outcome of a motion for preliminary injunction should first seek to stay the result and file a notice of appeal.190
A party subjected to a preliminary injunction may ask the district court to stay the injunction pending appeal: “While an appeal is pending […] from an order […] that grants, dissolves or denies an injunction, the court may suspend, [or] modify” the injunction.191 Whether to issue a stay of enforcement of a preliminary injunction is within the sound discretion of the district court.192
10.6.7.2 Temporary restraining order
A TRO “is available under [FRCP] 65 to a [patent] litigant facing a threat of irreparable harm before a preliminary injunction hearing can be held.”193 Courts assess the same four factors as for a preliminary injunction in evaluating an ex parte TRO application.
The Supreme Court has explained that “[e]x parte temporary restraining orders are no doubt necessary in certain circumstances, but under federal law they should be restricted to serving their underlying purpose of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer.”194 Consequently, TROs are exceedingly rare in patent cases. Entering a TRO enjoining the practice of a given technology can have extreme consequences, including the complete shutdown of a competitor’s business. Further, the factual and legal complexity of patent cases makes it difficult – if not impossible – for a court to make the sort of hair-trigger decisions necessary to grant a TRO application.
While a preliminary injunction may be issued only on notice to the adverse party, a TRO may issue without such notice.195 Nonetheless, where an adverse party has adequate notice of an application for a TRO such that a meaningful adversarial hearing on the issues may be held, the court may treat an application for TRO as a motion for a preliminary injunction. Courts have discretion to handle the hearing, scheduling, and expedited discovery associated with TRO applications in a manner that best suits the circumstances of the case. The court may grant or deny the ex parte application without a hearing. Alternatively, the court may decline to rule on the TRO application until the adverse party has had an opportunity to respond.
A decision to grant or deny a TRO is not usually appealable.196
The FRCP provide the overarching framework for pre-trial discovery. These rules authorize broad and extensive pre-trial discovery in civil cases.197 The goal of discovery is to enable the parties to obtain full knowledge of the critical facts and issues bearing on the litigation. By reducing asymmetric information, discovery ideally reduces the range of dispute and facilitates settlement.
The breadth of U.S. civil discovery, in conjunction with the wide range of claims and defenses, high stakes, trade secret sensitivity, and extensive use of electronic record-keeping by technology companies, makes discovery in patent cases especially complex. As a result, discovery can become a strategic battlefield, with better-skilled and -financed parties able to use discovery maneuvers to influence the litigation process. Thus, district judges are often called upon to supervise and balance the discovery process.
Discovery typically commences after the complaint has been filed and the parties have met and conferred. FRCP 26(f) requires the parties to confer as soon as practicable – and, in any event, at least 21 days before a Rule 16 scheduling conference. Due to the fact that many parties and counsel in patent litigation are repeat players, and patent cases are typically filed in a limited set of districts, many aspects of pre-trial patent discovery have been routinized, at least in the early stages of litigation. As noted in Section 10.6.6.1, many district courts and district judges have augmented those rules with PLRs and standing orders that provide detailed disclosure timetables.
FRCP 26(b) provides that, unless otherwise limited by court order:
[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.
The “proportionality” requirement aims to focus courts and litigants on the expected contribution of discovery to the resolution of the case. This requirement provides district judges with a framework for moderating the extent and costs of discovery based on the nature and scope of the case, the amount of any damages sought and how the case compares to other patent cases.
10.6.8.1 Initial disclosures
Although FRCP 26(a)(1) requires early disclosure of “all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses,” and “a computation of each category of damages claimed,” a patentee will rarely have access to this information in advance of discovery. Patent damages are based on profits lost by the patentee or, at a minimum, the reasonable royalty that the infringer would have paid to license the patented technology, both of which depend on the sales and offers made by the accused infringer. Thus, much of the evidence as to the patentee’s damages resides in the hands of the accused infringer. Accordingly, initial disclosures as to damages typically only describe the types of damages sought (rather than providing a rough computation of the amount of damages sought) and necessarily defer disclosure of documents and other evidence to a date after discovery has been completed.
10.6.8.2 Document production
Reflecting the broad scope of activities relevant to patent cases, it is common for litigants to propound 100 or more document requests. Document requests typically reach into nearly every facet of a party’s business, including product research and development, customer service and support, sales, marketing, accounting, and legal affairs. The documents must be collected in hard copy from custodians in nearly every department and in electronic form from both the company’s active computer files and all readily accessible archives.
In addition, patent litigation often requires the production of technical information that is highly sensitive and difficult to reproduce for production. Some technical information, such as semiconductor schematics, can only be reviewed in native format using proprietary software that is itself valuable and sensitive. Such information may need to be reviewed on-site on the producing parties’ computers. Computer source code is also highly sensitive and may need to be reviewed in native format. Often, it is produced on a stand-alone computer, unconnected to the internet and in a secure location, and with limitations imposed on the number of pages that may be printed.
Financial information related to damages is also viewed as highly sensitive and can be difficult to produce. Often, in lieu of the underlying financial documents (such as numerous invoices), companies produce reports from their financial databases. They must agree on which categories of information will be produced from these databases or come to terms with the fact that some categories of information cannot be generated by such systems.
Third-party confidential documents, such as patent licenses, are also usually relevant to the damages case, and third-party technical documents can be relevant to the liability case (e.g., if a third party makes the accused chip). The production of these documents often requires permission from third parties, the negotiation of protective orders, or even compulsory process and motions practice.
Document requests in patent cases usually generate multiple motions to compel, motions for protective orders or both. Courts can facilitate more effective document collection and production processes by:
- reviewing the parties’ electronic discovery plan at the case management conference, as required by FRCP 26;
- requiring the parties to meet and confer to narrow document requests and to document their efforts in any motion to compel;
- requiring the parties to file a letter brief seeking permission to file a motion to compel or requiring a pre-motion telephonic conference with the Court, a magistrate or a special master prior to the filing of a motion to compel; and
- placing a limitation on the number of document requests permitted per side.
FRCP 33(a) has a default limit of 25 interrogatories per party. In their joint case management statement, parties often make a joint request for additional interrogatories. These requests are typically granted because the scope of subject matter in patent litigation is quite broad. Because patent litigation often includes multiple plaintiffs and defendants, however, courts should consider imposing an interrogatory limit per side, rather than per party.
FRCP 30(a)(2)(A) limits to 10 the number of depositions that may be taken by a party without leave of court. As a result of the breadth of discovery in patent cases, and in spite of the more extensive mandatory disclosure requirements imposed by PLRs, litigants often seek to take in excess of 20 depositions to develop their case, and may legitimately need more than the presumptive 10 depositions. The court should strongly encourage parties to reach mutual agreement in their Rule 26(f) proposed discovery plan regarding the number of depositions or cumulative hours that will be allowed without court order. Absent agreement, a limit should be set to promote the parties’ efficient use of the depositions. A limit of 15 to 20 depositions per side, or about 100 hours, typically provides parties with plenty of opportunity to cover the major issues in a case. Many judges set significantly lower presumptive limits (e.g., 40 hours per side), allowing the parties to petition for more time where justified. The most common practice is to apply these limits to fact discovery, since expert depositions tend to be self-regulating and do not involve inconvenience to the parties themselves.
FRCP 30(d)(1) imposes a one-day (7 hour) limitation on the deposition of fact deponents that should presumptively apply in the absence of a showing of a real need for more time (e.g., if an inventor also has a role in the business). The 30(b)(6) depositions of parties’ organizational officers in patent litigation are, however, often critical to the case. Typically, these depositions can encompass highly technical or detailed information spanning the course of years or even decades. It is often effective to allow 30(b)(6) depositions to continue for more than a single day. However, to prevent runaway 30(b)(6) depositions, the court can also require that each day of a 30(b)(6) deposition counts as a separate deposition for the purposes of the per-side deposition limit. Alternatively, a limit on the total number of deposition hours also helps avoid disputes over how many “depositions” a 30(b)(6) deposition constitutes, when it encompasses more than one topic.
10.6.8.5 Electronic records
A significant portion of discovery in patent litigation is electronic discovery. Although electronic discovery in patent litigation presents similar issues as electronic discovery in other complex litigation, certain challenges arise more frequently in patent cases.
Pursuant to FRCP 26(f)(2), the parties must “discuss any issues about preserving discoverable information; and develop a proposed discovery plan.” The discovery plan produced under Rule 26 must address “any issues about disclosure or discovery of electronically stored information, including the form or forms in which it should be produced.”198 Additionally, each party’s initial disclosures under Rule 26(a) must identify any electronically stored information (ESI) that it intends to use to support its case.
The nature of ESI is such that some types of documents are more accessible than others, ranging from active, online data to nearline data, offline storage and archives, backup tapes, and erased, fragmented, or damaged data.199 Inasmuch as the last two categories contain “inaccessible” data, classification of data can be important in cost-shifting analysis. Under the federal rules, ESI is presumptively not discoverable if it comes from a source that is “not reasonably accessible because of undue burden or cost.” To raise the presumption, the responding party to a discovery request must identify the sources that are “not reasonably accessible” that it will not search or produce. In response, the requesting party may challenge the designation by moving to compel, whereupon the burden shifts to the responding party to show that the information is not reasonably accessible. The court may then hold that the information is not reasonably accessible and so is presumptively not discoverable. Even if the requesting party shows “good cause” to obtain production, the court may specify conditions on the production, such as cost-shifting.
Although there is much wisdom in this effort to reduce the costs of e-discovery, there is no one-size-fits-all solution, and greater experience in managing the scope of electronic discovery will likely result in further evolution and explication of the various guidelines. For example, in many cases, the most expensive ESI to collect is not email, which is often stored on relatively accessible central servers, but rather the contents of the computer hard drives of individual users, which must be individually copied or “imaged” to collect and produce the users’ working documents. Parties often look to their FRCP 26(a) initial disclosures to determine whose computers should be imaged.
10.6.8.6 Management of discovery disputes
District judges vary in how they deal with discovery disputes. Some judges refer discovery management to magistrate judges so as to reduce their need to deal with what can be frequent skirmishes. By contrast, some judges find that handling discovery disputes keeps them abreast of developments in the case and enables them to coordinate discovery and scheduling issues. Moreover, there can be an in terrorem effect at work when the district judge hears discovery disputes – litigants may be less likely to raise as many disputes and will likely be more conciliatory if the judge deciding the case has a greater opportunity to assess whether counsel have been unreasonable. Where referral is the common practice, experienced counsel soon learn the tendencies of the magistrate judges on particular issues, resulting in fewer motions. If this does not happen, or if the case otherwise appears likely to generate a disproportionate level of discovery controversy, courts can require the parties to engage a special master under FRCP 53. When the special master possesses substantial experience with patent litigation, the resulting process, although sometimes costly, can be substantially more efficient and effective.
10.6.9 Summary proceedings
District courts “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”200 Effective utilization of the summary judgment process is especially important in patent cases because such cases present so many complex issues. Summary judgment can play a critical role in resolving the case or narrowing or simplifying the issues, thereby promoting settlement or simplifying the trial. Conversely, the summary judgment process in a patent case can put a significant burden on the court, particularly if the parties file numerous, voluminous motions.
Effective management of the summary judgment process in patent cases requires an understanding of the types of issues that drive most patent cases, how they typically unfold over the life of a case, and if and when they are amenable for summary adjudication. The timing of summary judgment motions can be critical: if summary judgment proceedings are held too early for a given case, questions of fact that would have been resolved at a later stage preclude summary judgment. However, deferring summary judgment too long risks wasting the time and resources of the parties and the court on issues that limited discovery could have resolved.
10.6.9.1 Distinguishing questions of law from questions of fact
FRCP 56(a) authorizes summary adjudication of issues of law, where there is no disputed question of fact. That is, a court may only entertain summary judgment of pure questions of law, mixed questions of law and fact on which there is no genuine dispute as to any material fact, and undisputed questions of fact. These distinctions are especially subtle in patent litigation, reflecting the complex interplay of fact and law. Furthermore, even though the ultimate claim construction determination is a question of law potentially based on subsidiary questions of fact, the subsidiary facts are within the province of the court, thereby expanding the range of issues that can be resolved on summary judgment. The common issues in most patent litigation – novelty, nonobviousness, and adequacy of written description – involve factual questions or are questions of law based on underlying questions of fact.
The issues least amenable to summary judgment are typically those that have the following characteristics: (1) require a high burden of proof, (2) are questions of fact, (3) are broad issues requiring the movant to establish a wide range of facts, and (4) involve subjects about which the underlying facts are typically disputed. One of the most vexing questions in U.S. patent law today is the extent to which patent eligibility can be resolved at the motion to dismiss or summary judgment stage of litigation.201
10.6.9.2 Multi-track approach
The information necessary for assessing summary judgment emerges during discovery, case management conferences, claim construction, and other pre-trial processes. It is useful, therefore, to approach summary judgment case management as a multi-track process: (1) claim construction-related, (2) non-claim construction-related, and (3) off-track. Notwithstanding the caution about diverting judicial resources from claim construction, there may be an issue that arises early in the litigation that does not require claim construction and that can either resolve the entirety of the case or substantially streamline the case.
For example, Section 271(a) of the Patent Act imposes infringement liability on persons who “without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent.” Whether an allegedly infringing act occurred within, or outside of, the United States is a question of law, whereas whether an act occurring within the United States is sufficient to constitute a sale, offer to sell, use, manufacture, or importation is a question of fact. Typically, the parties agree that a certain set of events took place in certain locations, but dispute the conclusions to be drawn from these events as they relate to infringement. As a result, both questions – the locus and the characterization of the acts – are often amenable to summary judgment. Such a decision does not implicate claim construction and, therefore, might usefully be addressed early in the litigation process.
10.6.9.3 The summary judgment process and hearing
Notwithstanding the usefulness of summary adjudication in streamlining and resolving some patent cases, the potential exists for parties to inundate the court with summary judgment motions that can disrupt orderly and efficient case management. Consequently, courts have developed a variety of case management techniques for streamlining the summary judgment process, including (1) pre-screening – requiring the parties to file concise letter briefs requesting permission to file summary judgment followed by a telephone hearing to discuss the strengths and weaknesses of the proposed motion(s); (2) quantitative limitations, such as restricting the number of summary judgment motions and the total number of briefing pages, or consolidating motions into a single briefing; and (3) multiple rounds of summary judgment motions. These approaches are not mutually exclusive, and each has advantages and disadvantages based on the nature of the case and contentiousness of the parties. The first approach enables the judge to screen cases more efficiently: competent counsel can usually convey enough information to the court in two to three pages and five minutes of oral argument to enable the court to evaluate whether the substance of a proposed motion justifies a full briefing. The second approach motivates the parties to prioritize their motions. The third approach promotes efficient staging.
Most judges opt for an oral hearing on summary judgment motions. There is rarely any need for live testimony because the court cannot resolve factual disputes through summary adjudication. Live testimony can, however, be useful where declarations submitted by the parties do not squarely address each other and create the perception of a question of material fact when, in reality, one might not exist. The court might want to have a technology tutorial focused on the particular issues presented by the summary judgment motion(s), especially if the claim construction technology tutorial did not cover these areas. The length of time needed for a summary judgment motion varies widely depending on the court’s preferences and the scope and nature of the issues at stake.
Patent cases are characterized by motions – often many – directed at excluding or limiting the use of evidence, including motions attacking expert opinions.202 It is common practice to resolve such issues substantially in advance of trial so that the parties return with their presentations appropriately honed in accordance with the court’s limiting orders.
10.6.10.1 Technical and economic expert witnesses
Daubert sets forth a nonexclusive checklist for trial courts to use in assessing the reliability of scientific expert testimony: (1) whether the expert’s technique or theory can be or has been tested – that is, whether the expert’s theory can be challenged in some objective sense, or whether it is instead simply a subjective, conclusory approach that cannot reasonably be assessed for reliability; (2) whether the technique or theory has been subject to peer review and publication; (3) the known or potential rate of error of the technique or theory when applied; (4) the existence and maintenance of standards and controls; and (5) whether the technique or theory has been generally accepted in the scientific community.
Apart from the subject matter distinction between scientific or technical and economic (damages) experts, patent cases involve two distinct types of expert testimony. The first, common to most other types of litigation, involves applying an accepted technical, scientific, or economic methodology to facts established during the trial to reach conclusions about factual issues. An expert might testify, for example, about the results of their analysis to determine the chemical composition of the accused product. Because this type of testimony is directed to an analysis that the expert regularly performs outside of a litigation context, it falls squarely within the FRE 702 and Daubert frameworks. Consequently, it presents few novel issues.
The second type of testimony presents more challenges. In patent cases, an expert is often asked to use their scientific, technical, or specialized knowledge to evaluate a hypothetical legal construct. Examples include:
- Who is a “person having ordinary skill in the art”?
- Would a “person having ordinary skill in the art” believe at the time of alleged infringement that differences between the patent claim and the accused product are “insubstantial”?
- At the time the patent application was originally filed, would a “person having ordinary skill in the art” have had a motivation to combine known ideas to create the claimed invention?
- What royalty rate would the patentee and the infringer have agreed upon had they participated in a negotiation at the time of first infringement knowing that the patent was valid and infringed?
The court’s gatekeeping function is more nuanced in these areas. Because it reflects a hypothetical legal construct, it necessarily departs from the type of generally accepted, peer-reviewed methodology contemplated by FRE 702 and Daubert.
Courts have wide discretion to determine the process and timing for resolving the admissibility of expert testimony. Although they can address Daubert challenges in conjunction with summary judgment or motions in limine, these approaches tend to give short shrift to the Daubert inquiry. Thus, many judges consider the admissibility of expert testimony through a specific Daubert briefing or hearing schedule for Daubert motions in the case management order.
The optimal time for scheduling such motions is after experts are deposed on their reports, but well before the pre-trial conference. Timing the briefing and hearing this way will ensure that a full record is available, but also give the court adequate time to consider the merits of each challenge. In addition, early consideration of Daubert challenges prevents the risk of a party being denied any expert at trial, which in some circumstances can be a harsh sanction for a correctable error. For example, a common Daubert challenge to a damages expert is based on an alleged incorrect date for the hypothetical negotiation for the determination of a reasonable royalty. Determining this date can be challenging: not only because it depends on technical information related to infringement that is usually beyond the purview of damages experts, but also because the trial court’s summary judgment rulings can affect that date. In this circumstance, even if a damages expert’s methodology is adequate, the factual basis for the analysis may be incorrect as a matter of law. Once informed by the court’s summary judgment rulings, the expert can revise their analysis to include the correct information – so if the question is raised through an in limine motion on the eve of trial, it would be unjust to grant the motion and strike the expert. Consequently, many courts hear Daubert challenges at the same time as, but separate from, summary judgment motions.
10.6.10.2 Patent law expert witnesses
Parties sometimes propose presenting expert testimony regarding patent law, procedures of the USPTO, patent terminology, prosecution history, or specific substantive (e.g., anticipation) and procedural (e.g., what a “reasonable patent examiner” would find material) issues through a patent attorney or former USPTO employee. In support of this testimony, parties often point out that the evidence rules specifically permit opinions on ultimate issues203 and the presentation of testimony without first specifying underlying facts or data.204
Testimony on issues of law by a patent law expert – as contrasted with a general description of how the patent process works – is usually inadmissible. Just as in any other field, it is exclusively for the court, not an expert, to instruct the jury regarding the underlying law. Conversely, testimony regarding the procedures and terminology used in patents and file histories, on the other hand, is often allowed. In many cases, however, this testimony might be redundant in light of a preliminary jury instruction explaining those procedures. Because a jury instruction is likely to be more neutral, it will usually be a preferable means of providing this information to the jury. A jury instruction, however, may lack sufficient specificity to explain a USPTO procedural event relevant in a particular case, and in that circumstance, expert testimony is more likely to be appropriate and helpful to the jury.
The admissibility of proffered patent expert testimony on ultimate issues will often depend on whether the expert is doing anything more than applying patent law to a presumed set of facts, essentially making the jury’s determination. This is particularly true if the proffered patent expert has no relevant technical expertise. Thus, a patent expert’s opinion regarding matters such as infringement, obviousness, and anticipation based on technical conclusions that are assumed or provided by a different expert is usually improper. Similarly, testimony applying patent law to issues intertwined with patent procedure, but dependent on technical conclusions supplied by others, such as the appropriate priority date of a claim in a continuation application, is usually inappropriate. Conversely, if the patent expert also has relevant technical expertise, she should be equally able to provide expert testimony within that expertise as would be any nonlegal expert with similar technical expertise.
In trials to the court, when there is no concern regarding jurors’ overreliance on expert testimony, courts more freely admit the testimony of patent law experts. This includes, for example, testimony regarding whether a reasonable patent examiner would deem particular prior art or statements important in an inequitable conduct determination. Courts have found such testimony helpful and allowed it.205
Testimony is sometimes offered regarding the abilities of patent examiners, their workloads, time spent on applications, or similar matters. This testimony, which is meant to bolster or undermine the statutory presumption of validity, is improper.206 The deference the jury should give to the actions of the patent examiners is an issue of law like any other.
10.6.10.3 Inventor and technical employee witnesses
Inventors and other technical employee witnesses often testify at trial regarding the invention and other technical matters. These witnesses frequently would qualify as experts and, if properly disclosed as testifying experts, appropriately may provide expert testimony. Because their duties likely do not “regularly involve giving expert testimony,” no expert report is required by such employees absent special order; however, ordering such a report usually is appropriate and is a provision that might be included in the case management conference order.207
If inventors and other technical employees are not disclosed as experts, difficult line-drawing questions can arise regarding their testimony. For example, when an inventor or co-employee testifies regarding the invention to a jury, it is usually necessary to accompany the testimony regarding historical acts with an explanation of the technology involved. These explanations are sometimes challenged as undisclosed expert testimony. Other testimony that often draws a challenge is inventor or employee testimony regarding the nature of the prior art at the time the invention was made. While testimony about the invention and prior art may be highly technical, it may involve the description of historical facts without the expression of opinion. In that event, the non-opinion testimony is proper without expert disclosure. Such testimony, however, is sometimes employed in an attempt to introduce undisclosed opinion into evidence. Courts have discretion to admit into evidence demonstratives that summarize admissible evidence.208
10.6.10.4 Motions in limine
Motions in limine provide the court with an opportunity to establish procedures and substantive limitations that will streamline the evidence, shorten the trial, and reduce jury confusion. Although substantive to some degree, these motions largely implicate procedural requirements and the evidentiary basis for expert testimony. For this reason, some courts choose to hear motions in limine at the outset of a trial so that they are better acquainted with the disputes that are likely to arise, and then continue some portion of them until the issues are fleshed out during the course of the proceeding. Deferring these issues to trial can extend and interrupt the proceedings.
Motions in limine can cover a broad range of issues of concerns. Examples include:
- a motion to bar a comparison between the accused product and an embodying product sold by the patentee (out of concern that the jury will focus on the patentee’s product as opposed to the claimed invention);
- a motion to preclude undisclosed prior art (35 U.S.C. § 282(c) requires such disclosure at least 30 days before trial);
- a motion to preclude a claim or defense based on a failure of proof;
- a motion to preclude an expert from testifying about issues that were not identified in the expert’s report;
- a motion to bar reference to related proceedings in the Patent Office; and
- a motion to preclude the use of “patent troll” or other pejorative terms in referring to nonpracticing entities.
The resolution of these motions can involve legal questions as well as the facts and litigation process of the particular case.
The range of potential in limine motions can inundate judges as they are preparing for trial. In addition, some in limine motions might be disguised summary judgment or Daubert motions. Consequently, several judges implement rules to consolidate, streamline, and prioritize such motions, including requiring that:
- all motions in limine and responses shall be filed together in the proposed pre-trial order;
- each side shall be limited to three in limine requests, unless otherwise permitted by the court;
- the in limine request and any response shall contain the authorities relied upon; and
- each in limine request may be supported by a maximum of three pages of argument and may be opposed by a maximum of three pages of argument, and that the side making the in limine request may add a maximum of one additional page in reply in support of its request.
- Additionally, if more than one party is supporting or opposing an in limine request, such support or opposition shall be combined in a single three-page submission (and, if the moving party, a single one-page reply), unless otherwise ordered by the court.
10.6.11 Technology tutorials
As noted earlier, courts have inherent discretionary authority as well as authority under FRCP 53 and FRE 706 to use technical advisors, special masters, and court-appointed experts to aid the court in understanding complex technology at the claim construction stage. When it comes to trial, the judge has the option of appointing an expert pursuant to FRE 706. After completing an analysis, the expert provides findings to the parties and the court, much like any expert’s report. Any party may then depose the expert. Finally, the expert provides the court and, if present, the jury with the results in the form of expert testimony, subject to the same cross-examination as for party experts.
The Federal Circuit affirmed a district court’s use of a court-appointed expert pursuant to FRE 706 in Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd.209 The Federal Circuit noted, however, that the “predicament inherent in court appointment of an independent expert and revelations to the jury about the expert’s neutral status trouble [the] court to some extent,” and admonished that the use of court-appointed experts should be limited to rare and exceptional cases. For similar reasons, parties usually will not favor allowing a court-appointed expert to testify to a jury and, if the expert does testify, will not favor identifying the expert as “court-appointed” or “neutral.”
A technical advisor advises the judge on technical matters in a manner often analogized to a law clerk, although case law views the analogy as imperfect. The advisor is appointed pursuant to the court’s inherent power. This is a power to be used “sparingly,” but appointment is proper in any highly technical case where the science or technology is well beyond the experience of the judge. Importantly, if the advisor provides no evidence to the court, FRE 706 does not apply, and, as a result, the parties have no right to a deposition or other disclosure of the advisor’s opinions or communications with the court. Alternatively, a person can be appointed as both a court expert and an advisor, in which case FRE 706 applies.
Best practices for the use of technical advisors are set out in several appellate court cases: FTC v. Enforma Natural Products, Inc.;210 TechSearch LLC v. Intel Corp.;211 Association of Mexican-American Educators v. California;212 and Reilly v. United States.213 These cases focus on several procedural aspects of the technical advisor process aimed at ensuring that the technical advisor does not improperly introduce new evidence unknown to the parties or influence the court’s resolution of factual disputes. First, the court should assure a fair and open procedure for appointing a neutral advisor. Second, the advisor should explicitly be given a clearly defined, proper role that ensures there is no impingement on the court’s role as fact finder. Third, the court should provide some assurance that the advisor remains within that proper role. The use of these procedures also facilitates appellate review of the propriety of the technical advisor’s role.
To ensure fairness in the appointment, the court should identify the proposed advisor to the parties in advance of the appointment. This process can involve inviting the parties to propose advisors, either separately or together, after consultation. If the parties are asked to provide potential advisors, the court should establish, in advance, limits on the contact the parties may have with prospective advisors. Alternatively, the court can identify a proposed advisor to the parties – potentially, an advisor the judge worked with previously – without prior consultation. In either case, the parties should be allowed to challenge the advisor’s bias, partiality, or lack of qualification. If any challenge is raised, the court should address it on the record.
The proper role of the advisor is to be a sounding board or tutor who aids the judge’s understanding of the technology. This includes an explanation of the jargon used in the field, the underlying theory or science of the invention, or other technical aspects of the evidence presented by the parties. The advisor can also assist the judge’s analysis by helping think through critical technical problems. In this latter function, case law admonishes that the court must be careful to assure that the decision-making is not delegated to the advisor. Although in form, and much like the interaction between a judge and law clerk, the situation is different in that, because of a judge’s knowledge of law, a clerk cannot usurp the judicial role; in contrast, a technical advisor in an area of science unfamiliar to the judge potentially could.
Within these parameters, the advisor can properly aid the judge’s understanding and analysis throughout a patent case. This can include helping the judge understand the patent specification and claims, expert affidavits and testimony provided by the parties, and scientific articles that may be offered as prior art. Proper subjects for consultation with the advisor include whether technical facts are in dispute in a summary judgment motion, claim interpretation, validity and infringement questions, the proper articulation of technical issues for jury instructions, and the admissibility of proffered scientific evidence under Daubert. The advisor, however, may not provide evidence, either documentary or testimony, without compliance with FRE 706. The advisor’s advice, therefore, cannot be based on extra-record information (except the use of technology-specific knowledge and background used to educate the judge), and the advisor cannot conduct any independent investigation. Particularly in situations in which the advisor assists the judge’s efforts to resolve factual conflicts, the judge and advisor should be vigilant to avoid the advisor unduly influencing the judge’s decision-making. In no circumstance, of course, should the advisor become an advocate for any party or position.
The court or advisor should confirm that the advisor’s work is done within the proper parameters for the benefit of both the parties and appellate review. There is no fixed requirement for how this should be accomplished. Proper parameters can include supplying a transcript of the advisor’s communications with the judge, providing a report by the advisor of the work performed and any communications had with the judge, or obtaining an affidavit from the advisor at the outset of the work committing to perform within a description of a proper scope of work and procedures (as outlined above) and obtaining a second affidavit at the conclusion attesting to compliance with the job description in the initial affidavit.
Due to the sensitive nature of information relevant to patent litigation, one of the first orders of business following the filing of a patent complaint is establishing a protective order. Many patent-heavy district courts have developed default protective orders that go into effect immediately upon the filing of a patent case or soon thereafter upon a motion of a party. These rules enable the discovery process to begin promptly. Most sophisticated parties will typically want to customize the protective order and will generally agree relatively quickly on an order best tailored to their particular circumstances. The expectation that the court will enter a default protective order often facilitates consensus among the parties.
Protective orders need to serve two opposing purposes. First, they must enable the litigators to access information needed to resolve the issues posed by the case, such as product engineering, internal communications, and strategic plans that are often trade secrets. Second, they must prevent disclosure of highly sensitive technical, financial, licensing, or business strategy information both to the public and to the parties’ competitive decision-makers.
The Northern District of California’s multi-tiered default protective order illustrates how courts have approached the task of balancing these clashing objectives. It distinguishes three tiers: (1) “confidential” information (information that qualifies for protection under FRCP 26(c)), (2) “highly confidential – attorneys’ eyes only” information (information that is “extremely sensitive,” disclosure of which “would create a substantial risk of serious harm that could not be avoided by less restrictive means”), and (3) “highly confidential – source code” information (“extremely sensitive” information “representing source code and associated comments and revision histories, formulas, engineering specifications, or schematics that define or otherwise describe in detail the algorithms or structure of software or hardware designs”).214 While “confidential” information may be disclosed to parties and their representatives who sign an acknowledgment of the protective order, so long as it is used only for the purposes of litigation, “highly confidential – attorneys’ eyes only” information may be disclosed only to in-house attorneys who are not involved in competitive decision-making and whose identities are disclosed in advance. “Highly confidential – source code” information is made available for inspection pursuant to a strict set of guidelines – rather than produced – and is restricted to the same two in-house attorneys, as well as outside counsel and approved experts.
In situations where an attorney represents a party both in litigation and in front of the Patent Office in prosecution or PTAB proceedings, the parties or the court will typically include a “prosecution bar” in the protective order. This provision limits the ability of those who have seen designated material to engage in prosecution activities for a certain amount of time.
In view of the large volume of discoverable materials in patent litigation, courts may be called upon to resolve disputes regarding over-designation of confidential information. Many district judges refer discovery matters to magistrate judges. In extreme cases, a party’s overzealous confidentiality designations may warrant sanctions.
Courts may also have to deal with clawing back privileged documents that were inadvertently produced. FRCP 26(b)(5)(B) addresses this situation, providing that a party that believes it has unintentionally produced privileged information may give notice to the receiving party, who must then “promptly return, sequester, or destroy the specified information and any copies it has” and “take reasonable steps to retrieve” any information it has already distributed or disclosed to others. The producing party is required to preserve the information, and the receiving party may not use or disclose it. Many protective orders include clawback provisions, which provide a process for retrieving documents that were inadvertently produced.
Although parties can consent to a bench trial of patent cases, which was the norm half a century ago, a substantial majority of patent owners today opt for jury trials. So long as they seek monetary damages, the U.S. Constitution secures them a jury trial. As previous sections have illustrated, the prospect of a jury trial greatly influences patent case management. The claim construction process, as well as many of the pre-trial processes, are designed with the jury trial in mind. The inherent complexity of patent law and technology can result in unsupportable or inconsistent findings of fact by a confused jury. For this reason, judges devote substantial time and effort to avoiding such a result. And, if unsupportable or inconsistent findings of fact occur, the court must devote substantial additional time and effort to unravel and remedy such findings. Thus, trial, like all other phases of a patent case, benefits from early and close judicial management to assist the fact finder in evaluating the merits.
As the Federal Circuit has remarked, a court’s “discretion is at its broadest on matters of trial management.”215 Various procedural and substantive considerations factor into the exercise of the court’s discretion in facilitating the jury’s and the court’s fact-finding role.
10.6.13.1 Procedural issues
District judges have a range of options for setting the scope of trial and the ground rules, including bifurcation and trial logistics.
10.6.13.1.1 Separate trials (bifurcation)
FRCP 42(b) provides:
[f]or convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any federal right to a jury trial.
The district judge’s discretion, however, is not without limits. Section 299 of the Patent Act, relating to the joinder of parties, provides that, even if multiple actions involving the same or similar issues, such as infringement of the same patent, have been consolidated for pre-trial purposes, they nevertheless must be separately tried unless:
(1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and
(2) questions of fact common to all defendants or counterclaim defendants will arise in the action.
More generally, when deciding whether issues should be separately tried, trial courts must ensure that a litigant’s constitutional right to a jury is preserved.216
In exercising discretion to structure trials, judges typically find it more efficient to have one trial and one appeal. Thus, bifurcation in patent cases is the exception, not the rule, and it is appropriate only if it will promote judicial economy and not be inconvenient or prejudicial to the parties.217
Patent cases are often complex, however, and sometimes involve different technologies, non-patent claims with overlapping facts, various legal and equitable claims and defenses, complex damages issues, and multiple causes of action, including antitrust, trade secret, copyright, and trademark claims. Whether all these issues should be resolved in a single trial depends on the facts and circumstances of the particular case. Factors to be considered when deciding whether to bifurcate include whether the issues, and the evidence required for each issue, are significantly different; whether they are triable by jury or the court; whether discovery has been directed to a single trial of all issues; whether a party would be prejudiced by a single or by separate trials; and whether a single trial would create the potential for jury confusion.
Ultimately, considerations regarding the manageability and comprehensibility (particularly for jurors) of the various issues presented in the case govern the decision to bifurcate and hold separate trials. From a case management standpoint, bifurcation can assist the court in segregating from juror consideration evidence that may be integral for one issue in the case but irrelevant and prejudicial for another. Bifurcation can also assist jurors by focusing attention on one issue at a time, thereby avoiding overwhelming jurors with multiple complex issues at once. At the same time, there are efficiencies that result from resolving all issues in one proceeding that should not be disregarded when deciding whether to bifurcate or even trifurcate patent cases.
10.6.13.2 Pre-trial case management
The complexity of patent cases creates a particular need for pre-trial preparation to minimize jury downtime and promote jury comprehension. The pre-trial conference represents the final opportunity to anticipate and resolve problems that would otherwise interrupt and delay trial proceedings.
10.6.13.2.1 Pre-trial conference
The pre-trial conference should be held sufficiently in advance of trial, but long enough after claim construction and dispositive motion practice so that the court and counsel have a good idea of the boundaries of the trial and the interplay of issues that may need to be tried. Usually, the conference is set six to eight weeks before trial.
The objective of the pre-trial conference is to generate an order that will govern the issues for trial and establish the ground rules for the conduct of the trial. Many judges provide counsel with a draft form of order that leaves blanks where appropriate, effectively providing a checklist of issues to consider. The form reflects the court’s typical view on many aspects of the trial. Judges afford counsel some leeway to tailor the case to the particular circumstances.
A typical pre-trial order for patent cases includes the following topics:
- trial counsel for the parties;
- nature of the action;
- the parties’ contentions;
- uncontested facts and stipulations;
- contested legal and factual issues;
- jury and non-jury issues;
- list of witnesses;
- objections to expert testimony;
- list of exhibits;
- bifurcated trial (indicating whether the parties desire a bifurcated trial and, if so, why);
- motions in limine;
- motions for judgment as a matter of law (indicating how the parties will make motions for judgment as a matter of law, whether it be immediately at the appropriate point during trial or at a subsequent break);
- amendments to the pleadings (including a statement of whether the proposed amendment is objected to and, if objected to, the grounds for the objection);
- jury instructions (indicating, where the parties disagree, whether the instruction was proposed by the plaintiff or defendant and a brief explanation of why the instruction should be adopted, including citations to relevant authorities);
- verdict form;
- trial length and logistics; and
- additional matters (including whether the parties anticipate requesting the courtroom be closed to the public for a portion of any specified witness’ testimony).
10.6.13.2.2 Jury instructions
The court works with the parties in the lead-up to the trial to develop jury instructions. Since relatively few jurors called to service have much prior experience with or understanding of trial practice, the legal system or patent law, it is common to develop two sets of instructions – a preliminary set of instructions for the start of the trial and the final instructions given at the close of evidence.
10.6.13.2.2.1 Preliminary instructions
Preliminary instructions typically cover basic aspects of civil adjudication – the duty of the jury, what constitutes evidence, the varying burdens of proof in a civil trial, and the trial proceedings – as well as an overview of the patent system and a nonargumentative description of the technology involved, the accused products, and the patents. Some judges present a video developed by the Federal Judicial Center providing a basic primer on the patent system. This video, together with a sample mock patent, provides background information on what patents are, why they are needed, how inventors obtain them, the role of the USPTO, and why disputes over patents arise. The Center updated this video in 2013 to address changes in patent law, including the enactment and implementation of the AIA.218 Preliminary instructions should set forth the court’s construction of patent claim terms and explain that jurors must accept the court’s constructions and are not allowed to construe terms on their own.
10.6.13.2.2.2 Final instructions
Several judicial and patent bar organizations have prepared model patent jury instructions, which typically serve as the starting point for parties in compiling proposed instructions. The parties will often seek to redline these instructions to reflect new developments in patent law and jurisprudence.
While the court has discretion to instruct the jury before or after closing arguments, it is usually preferred to give instructions beforehand.219 This is especially true in a patent case: jurors are usually more focused and in a better position to listen to instructions before closing arguments. Jurors better understand the arguments advanced during the closings when they have been instructed on the law applicable to the case. Instructing the jury before closing arguments can also lead to more effective arguments by the parties. Closing arguments can be tailored to meet the specific language of the instructions, enabling the parties to highlight the significance of particular evidence.
10.6.13.2.3 Trial logistics
Effective management of patent trials includes establishing reasonable time limits, maintaining a daily trial schedule, and outlining the order of the parties’ presentations. With an established protocol, the parties are better able to structure and streamline their presentations to fit the court’s schedule, resulting in a more understandable and efficient dispute resolution process.
10.6.13.2.3.1 Time limits and trial length
A trial court’s inherent power to control cases includes the broad authority to impose reasonable time limits during trial to focus the parties’ presentation of evidence and prevent undue delay, waste of time, or needless presentation of cumulative evidence.220 Time limits have been recognized as a trial technique that enhances the quality of justice and improves the administrative aspects of any civil trial. These limits force the parties to evaluate what is and is not important to their case. Time limits are particularly appropriate in patent cases, where the issues are complex, and an unduly long trial would unnecessarily burden jurors and the court.
What constitutes a reasonable time for trial depends on the particulars of a case, including the number of patents and patent claims at issue, the complexity of the technology, the nature and number of any associated non-patent claims, and whether issues are being bifurcated. To account for all these factors, a court’s limits on the length of trial should be set after an informed analysis based on a review of the parties’ proposed witness lists and proffered testimony, as well as their estimates of trial time. Time limits that are reasonable are (1) established in consultation with the parties, (2) allocated evenhandedly, (3) allotted to whatever evidence the parties deem appropriate; and (4) applied flexibly.
Whatever the specifics of the case, a limit on the total amount of time for trial is advisable in almost every patent case. An open-ended case schedule can quickly become unmanageable in the face of so many complex issues, and it imposes an unnecessary and unreasonable burden on the jury impaneled to hear the case. Most patent cases can be fully tried within two weeks, allocating approximately 20 hours to each side, beginning with opening statements and continuing through closing arguments. Procedures conducted by the court, mainly voir dire and instructions, are typically not clocked.
10.6.13.2.3.2 Order of trial presentations
In typical cases, the plaintiffs go first because they bear the burden of proof. In patent cases, however, the burden of proof is shared by the parties. While plaintiffs bear the burden of proof on infringement, for example, defendants bear the burden of proof on invalidity.
In view of these burdens, most patent trials begin with the patentee’s infringement case. If damages are not bifurcated or staged, the patentee would also present its damages case. The defendant then responds to the infringement evidence, presents its invalidity evidence, and responds to the damages evidence. The patentee then offers its rebuttal on infringement and damages and its response to the invalidity challenge. The defendant then has an opportunity to rebut the plaintiff’s response to that invalidity challenge.
10.6.13.2.3.3 Jury selection and management
Like any other civil trial, patent jury trials are governed by the FRCP, which require that a jury be impaneled with a minimum of 6 and a maximum of 12 jurors.221 As patent trials can take longer than other civil trials and are often more complex, it may prove difficult to find jurors able to commit the necessary time and attention. Such considerations weigh against impaneling a 12-member jury. Nonetheless, judges typically impanel more than the minimum 6 jurors to ensure a verdict can be taken if one or two jurors become unable to serve during trial.
The voir dire process in a patent trial is largely similar to that in other civil cases. Given the specialized nature of patent cases, however, it is appropriate to question prospective jurors on their experience with the technology underlying the patents, experience with the patent system, and their feelings regarding patent protection. Because both parties are likely to be interested in eliciting such information, the voir dire process can be streamlined by having the prospective jurors complete questionnaires ahead of time.
10.6.13.3 Motion for judgment as a matter of law
Once a party has completed its case-in-chief as to an issue, the party’s opponent can move for judgment as a matter of law as to the issue.222 The usual standard of decision is that judgment will be denied if, “viewing the evidence in the light most favorable to the non-moving party, and giving the non-movant the benefit of all reasonable inferences, there is sufficient evidence of record to support a jury verdict in favor of the non-movant.”223 These motions and their appellate implications, however, take on special significance in patent cases where each side has important claims and defenses for which it bears the burden of proof, and where claim construction issues often play a pivotal role.
Absent an FRCP 50 motion before the case is submitted to the jury, specifically addressed to an issue, no argument can be made in post-trial motions or on appeal that the evidence is insufficient to support the jury’s verdict as to that issue.224 In the patent law context, this may require, for example, that a Rule 50 motion by an accused infringer specify the particular claim or claims as to which it asserts no infringement has been proven or the particular prior art references it contends render the patent obvious or anticipated, and that a motion by a patent owner specify the particular invalidity bases it asserts have not been proven.225 Circumstances in particular cases, however, may make much more cryptic motions sufficient if, in context, it is clear that the court and opposing party understood what was intended.226
10.6.13.4 Verdict forms
Due to the complexity of many determinations in a patent trial, many trials use special verdict forms and special interrogatories rather than simple general verdict forms. Special verdicts require a jury to make specific findings of fact from which the court applies the applicable law. A court can also use a general verdict form with special interrogatories.227 The use of special interrogatories differs from the use of special verdicts only in that the jury, rather than the court, makes the ultimate decision when general verdicts with special interrogatories are used. There is still a risk that the jury will make a decision inconsistent with its findings. In such cases, the federal rules permit the court to enter judgment consistent with the jury’s findings notwithstanding the verdict.228 Where the findings are inconsistent and do not support the verdict, the court can recall the jury for further consideration or order a new trial.
10.6.13.5 Bench trials
A court may try a patent case without a jury where the parties have waived the right to a jury trial or when equitable issues have been bifurcated for the court’s consideration. However, such waivers are rare. Most often, bench trials are held to try equitable defenses such as inequitable conduct and estoppel.
As the court is the fact finder in bench trials, there is less of a need for extensive judicial management. The court must make specific findings of facts and conclusions of law when rendering its decision.229 It can, however, be less stringent with issues of admissibility and evidentiary objections because it is both the arbiter of those issues and the ultimate fact finder. There is less of a concern that the court will be prejudiced by certain evidence.
Bench trials are the standard method for trying cases involving pharmaceutical patents under the Hatch-Waxman Act (ANDA cases) and the Biologics Price Competition and Innovation Act (BPCIA), where issues of damages are not implicated (see Section 10.13.2).
Patent trials, as with most trials, are usually followed by a series of post-trial motions. Where there is a finding of infringement, patent owners almost always seek a permanent injunction. In cases of willful infringement, the patent owner will also typically move for enhanced damages. Because the patent statute authorizes the award of attorneys’ fees in exceptional cases, post-trial motions often seek attorneys’ fees. In addition, parties will likely bring motions for judgment as a matter of law, new trial motions on the liability issues or both.
10.6.13.6.1 Motion for a new trial
Within 28 days after entry of judgment in a jury or court trial, with or without a motion for judgment as a matter of law, a party can move for a new trial.230 As with FRCP 50(b) motions, the time limit is jurisdictional and may not be extended.231 The motion is judged under the law of the regional circuit court of appeals and, in a patent case, the motion can be based on the same grounds as any trial. These grounds include (1) that the judgment is contrary to the weight of the evidence; (2) misconduct by an attorney or witness that denies an opponent fair consideration; (3) jury misconduct; (4) erroneous rulings regarding evidence, jury instructions, or trial conduct issues; (5) excessive (with or without a remittitur) or inadequate (with or without an additur) damages; and (6) new evidence that could not have been discovered during trial. To merit granting a new trial, the subject of the motion must have caused substantial prejudice and, in virtually all cases, have been the subject of a timely objection. In patent cases, a motion for a new trial is often used to challenge the claim construction provided in jury instructions.
10.6.13.6.2 Renewed motion for judgment as a matter of law
Provided that a motion for judgment as a matter of law was made at the close of presentation of all the evidence at trial, a party may renew that motion within 28 days after entry of judgment.232 The rule’s time limit for making the motion is jurisdictional and cannot be extended.233 A renewed motion must be based on the same claimed failure of proof as the initial motion and, in judging it, the court should apply the same standard. The motion may be, and often is, joined with a motion for a new trial.234 A joint motion permits the court to grant the new trial motion as an alternative, should the order granting judgment be reversed on appeal.235
10.6.13.6.3 Motion to vacate judgment in connection with settlement
Following the entry of final judgment, parties are sometimes able to settle before any appellate disposition. As part of the settlement agreement, the patentee and the accused infringer may agree to jointly ask the district court to vacate its judgment finding the patent invalid, not infringed, or unenforceable, as well as certain subsidiary rulings such as claim construction orders that limit the patent’s scope. In some cases, the parties will even make the settlement contingent upon the grant of vacatur. The motivation of the patentee in seeking vacatur is to strip any potential preclusive effect (for collateral estoppel purposes) associated with an adverse ruling regarding the patent’s validity, scope, or enforceability. For the accused infringer, conversely, this cost-free concession presumably helps it obtain monetary or other consideration from the patentee as part of the settlement. Vacatur allows it to share the anticompetitive benefits resulting from the deterrent effect of the restored patent, which could be asserted against its competitors.
Notwithstanding the fact that both parties to the litigation agree that a vacatur motion should be granted, the public interest and considerations of judicial economy often weigh against this outcome.236 The alleged benefit of approving the vacatur request is that it will buy peace and reduce the costs of further judicial proceedings, such as appeal. These benefits, however, are speculative at best and more likely illusory. Vacating any judgment based on the parties’ settlement is an “extraordinary remedy” that should be granted only in “exceptional circumstances” that go beyond the parties’ desire to include such a remedy in their settlement.237 Indeed, FRCP 60(b)(6), under which a settlement-related motion for vacatur is typically brought, requires a showing of such “extraordinary circumstances.”