An International Guide to
Patent Case Management for Judges

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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.

Table 10.2 Case management conference checklist
Technological, market, and litigation background
  • Informal description of the technology
  • Identity of the accused products
  • Whether the primary basis for asserted liability is direct or indirect infringement
  • Whether there are any third parties from which the parties expect to obtain substantial discovery
  • Scope of accused products relative to the defendant’s business
  • Scope of the patented/embodying technology relative to the patentee’s business
  • Whether the parties are competitors
  • Whether the patent(s)-in-suit have been, or are likely to be, the subject of reexamination proceedings
  • Potential for parallel litigation and/or inter partes review

    • Will a party seek a stay, consolidation, coordination or transfer?
  • Identify patent eligibility (35 U.S.C. § 101) issues and discuss when they should be addressed
  • What type of relief is being sought?

    • What damage theory(ies) will be pursued? How will they be proven?
    • Will injunctive relief be sought, and what kind?
    • What are the estimated damages?

      • What do the parties contend is the “smallest saleable patent practicing unit”? (relevant to damages)
    • Is the patentee licensing the technology and when will it produce licensing information?
    • Are any technology standards implicated? (relevant to standard-essential patents (SEP) and fair, reasonable and nondiscriminatory agreements (FRAND))
Protective order
  • Is a protective order needed?
  • Will a standard protective order suffice, or will any party seek special requirements?
  • Discuss known points of contention (e.g., prosecution bar, levels of confidentiality, and access by in-house lawyers) and, if applicable, convey the court’s general perspective on such issues
  • Does the patentee intend to assert willful patent infringement? (relevant to enhanced damages)
  • Timing of the assertion of the claim
  • Timing of the reliance on any opinion of counsel
  • Possibility of bifurcation
  • Possibility of disqualification of counsel
Alternative dispute resolution
  • Usefulness
  • Timing
  • Mediation, arbitration, or other form
Electronic discovery and limitations on discovery
  • Format(s) for production of electronic discovery
  • Limits on the scope of electronic discovery
  • Source code – how will it be produced?
  • Limits on the number of custodians
  • Number of total hours for fact witnesses or number of depositions
Contention disclosures and schedule
  • In patent local rule jurisdictions, discuss whether variance from the standard disclosure timelines is appropriate
  • In jurisdictions without patent local rules, discuss whether the parties should exchange infringement, invalidity, unenforceability, and damages contentions and the appropriate schedule for such disclosures
Timing and procedures for claim construction and dispositive motions
  • Determine the timing of summary judgment relative to claim construction
  • If not addressed by local rule(s), set a schedule for exchanges of claim terms, proposed constructions, and supporting evidence
  • Discuss whether a tutorial would be appropriate
  • How is it conducted: by counsel? by experts? submissions (e.g., videos)?

    • Number of patents and patent claims that would be tried and possible ways of winnowing (reducing number of claims)
    • Limits on the number of claim terms submitted for construction

      • Require an explanation of the significance of the term (e.g., effect on infringement/validity)
      • Ask parties to rank the disputed claim terms based on their significance for resolving the case
  • Logistics

    • Identify disputed subsidiary factual issues
    • Whether live witnesses should be called
    • Use of graphics, animations or other visual displays to aid in understanding the technology and disputed claim terms
    • Schedule a pre-claim construction conference to finalize the logistics for the hearing (held after the parties’ positions on claim construction have crystallized)
  • Whether any summary judgment issues depend on claim construction or can otherwise be resolved with little or no discovery, including

    • Is there a dispute about the structure and/or function of the accused products?
    • Is there any claim term or claim construction issue that, once decided, will compel infringement or noninfringement?
    • Are there territorial issues (e.g., location of allegedly infringing acts) that affect infringement?
    • Are there any claims or defenses that are purely legal in nature?
Summary judgment
  • Whether any limits on the number of summary judgment motions (or number of pages of briefing) should be imposed or modified
Limits on prior art references
  • Whether any limits on the number of prior art references (per patent or overall) proffered by the defendant(s) should be imposed
  • Timing for any planned reduction of the number of prior art references in the case
Expert witness and in limine (limiting evidence) motions
  • Schedule expert witness exclusion (Daubert) motions well in advance of the pre-trial conference
  • Scope of in limine motion practice
  • Damages

    • Whether it would be appropriate to require damages contentions, an expedited damages discovery schedule, and/or both, or to take other steps to facilitate the early resolution of challenges to damages-related theories or expert testimony

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. 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.

Table 10.3 Northern District of California’s patent local rules timetable1
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. 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. 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. 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. 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. 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