Fast Track Patent Litigation in Pennsylvania Western District Court: Toward More Procedural Certainty and Cost Control

By: Henry M. Sneath and Robert O. Lindefjeld

In 2005, the United States Patent and Trademark Office (USPTO) received a record 406,302 patent applications. The office issued 165,485 patents in 2005, of which over 3400 were to Pennsylvania inventors. There were also a record number of Trademark applications. These statistics signal that litigation over Intellectual Property rights will continue to constitute a significant portion of the litigation filed in our Federal Courts in the next decade. Early last year, the United States District Court for the Western District of Pennsylvania adopted new Local Patent Rules which govern all Patent cases filed in the district and which may draw, over time, a larger share of the regional and national patent litigation claims than would otherwise have been filed in this state. It is perhaps too early to determine whether there will be more patent lawsuits filed in Western Pennsylvania, but it is easy to report on the intent, application and practical effect of these rules. The rules can be found at the court's website http://www.pawd.uscourts.gov/.

In adopting new Local Patent Rules, the Federal Court in Pittsburgh joins the Federal Courts in Northern California, Eastern Texas and Northern Georgia in recognizing that patent cases are often very complex and require unique procedures to facilitate cost-effective, just and speedy resolution of such disputes. Patent holders and those seeking by Declaratory Judgment to invalidate patents may find Western Pennsylvania an attractive place to file claims due to the relative procedural certainty that these new rules apply to all cases, and they should perceive a real benefit in how that certainty can help moderate the litigation costs.

The rules are designed to provide a level procedural playing field for all parties, and to facilitate a swift resolution of the dispute. The litigation schedule which is applied by these rules imposes deadlines fast and furious by most litigation standards and the production of detailed infringement or invalidation information is required very early in the process. Federal Rule 26 disclosures, production of infringement, non-infringement and invalidity contentions, and document production can all be accomplished within 3-4 months of initial service of process. Claim construction (Markman) disclosures and the hearing itself are scheduled within several months of the initial scheduling/status conference, the timing of which conference is still within the discretion of each Federal Judge. Most of the local scheduling rules are established by a date relationship to that initial scheduling/status conference (ie: "Not later than 30 calendar days after the initial Scheduling Conference..."). The rules impose additional requirements on the parties beyond those traditionally set forth in the Rule 26 process to allow and insure a comprehensive initial status conference and the setting of a tight and detailed litigation calendar.

Generally, these new rules (1) reduce the length to trial, (2) improve the process and timing for construing patent claims, (3) set the timing of expert witness reports and depositions, (4) delineate the scope and content of initial disclosures regarding patent infringement and validity, (5) provide a default protective order for the parties, and (6) incorporate a model scheduling order. It is contemplated that cases can be fully litigated in one year's time. Experience by your authors herein with cases filed under the new rules can attest to the swiftness with which these cases can be litigated. In order to facilitate these fast track proceedings, the Western District Judges are making use of near mandatory early mediation procedures and the appointment of special masters to preside over Markman proceedings. Mediations are being scheduled prior to claim construction proceedings due to the major impact that claim construction can have on the overall outcome and the likelihood of summary judgment. Of those cases filed in early to mid 2005 under the new rules, a considerable number were already off the docket by years end due to settlement, withdrawal or dismissal.

Development of these new rules began as a joint venture of patent practitioners and the court. At the urging of former Federal Judge Robert J. Cindrich, your co-author Robert O. Lindefjeld, along with John McIlvaine of the Webb Law Firm (Co-Chairs of the Court's Local Patent Rules Committee), a team of representatives from a variety of law firms, corporations, and academia prepared and drafted a proposed set of rules for patent cases in the Western District of Pennsylvania. These rules were adopted by the Court and were effective January 1, 2005. The rules in the Western District of Pennsylvania incorporate several features of the rules that have generally been in effect in the Northern District of California and employed by various individual judges around the country. Specifically, the new Western District of Pennsylvania local patent rules provide:

  • A framework for the initial production of documents and other evidence by all parties bearing on the validity of the patent(s) at issue in the dispute.
  • A framework for the initial production of documents and other evidence by the party accused of infringement bearing on technical information related to the structure, composition, and/or operation of its alleged infringing products (or methods of achieving a given result, such as procedures used in the manufacture of a product or the implementation of software on a computer).
  • Procedures for when parties must assert their respective positions with regard to the products or methods accused of infringement and invalidity contentions.
  • Procedures for construing the meaning of the claims in the patent(s) at issue in the dispute, including a pre-determined briefing schedule.

In contrast to the rules of the Northern District of California, however, the local patent rules for the Western District of Pennsylvania contain provisions that encourage an even swifter and more comprehensive approach to patent litigation. To accomplish these objectives, the new Pennsylvania rules further provide:

  • Default Protective Order. The rules provide a default protective order of the kind commonly seen in patent cases. The purpose of this protective order is to ensure that a party's confidential information remains protected. This should also substantially reduce the costs associated with the litigation because it virtually eliminates the months of negotiation often experienced in patent litigation in framing a protective order that all parties can agree on. It is unfortunately a too common occurrence that one or more parties do not negotiate in good faith and, instead, use the period as an excuse to slow down the pace of the litigation, thereby needlessly increasing costs for all parties concerned and undermining the central purpose of the Federal Rules of Civil Procedure.
  • Infringement Contention Timetable. Under the new rules, there is no requirement that the party asserting infringement state its contentions with respect to accused products or methods until it has had an opportunity to review the accused infringer's confidential technical documentation, which is information not publicly available and thus solely in the possession of the accused infringer. This seemingly minor distinction is important because it vests both parties with the same access to information before formal legal positions are taken in a particular litigation. Depending upon the technology at issue, it might be virtually impossible to reverse engineer a particular product or method accused of infringement, or at the very least, it can be exceedingly expensive or unreasonably time intensive for the party asserting infringement to do so. Although parties remain obligated to perform a reasonable investigation before asserting a patent infringement lawsuit under the Federal Rules of Civil Procedure, there is no requirement that each and every potential accused product or method be reverse engineered before a suit can be initiated - in cases where the convention is to employ the same design across a multitude of product lines. Such a pre-filing investigation might cost millions of dollars and would serve to deny access to the courts by small-entity patent owners or patent owners with limited means to undertake such action.
  • Model Chart for Disputed Claim Terms. The Western Pennsylvania rules provide a model for the identification of all claim terms that the parties believe must be construed to properly adjudicate the dispute. The model chart requires the parties to list the terms at issue, their respective proposed construction of such terms, and the intrinsic evidence supporting the proposed construction. The model chart further specifies that it is not to contain legal argument.
  • Expert Discovery. The rules provide a schedule for when expert witness disclosures are to occur and when expert depositions will take place. The triggering date for when expert discovery activities commence is the date on which the court issues a ruling on claim construction. This avoids the situation that an expert report might require modification in light of an unexpected claim construction ruling, thus saving the parties time and money to avoid having to submit duplicate expert reports and to undergo multiple depositions.
  • Model Scheduling Order. Finally, the Western District of Pennsylvania local patent rules provide a model scheduling order that incorporates all of the timetables specified in the preceding rules. This provides for greater certainty in knowing when certain events will occur and when the trial will be held. A model order further reduces inconsequential disputes between the parties over the form of order, which can needlessly add additional costs to the litigation and potentially delay the case.

These are some of the principal improvements that have been made to help reduce the cost of patent litigation and to provide a swift resolution of the dispute at hand. The Local Patent Rules Committee will continue to monitor the implementation of these new rules and to make adjustments where necessary. Pennsylvania lawyers should become familiar with these new rules to assist clients and non-Pennsylvania law firms in handling Western Pennsylvania patent disputes and to encourage companies to view this jurisdiction as an important venue for such litigation.

Henry M. Sneath is a principal shareholder in the Pittsburgh litigation law firm Picadio Sneath Miller & Norton, P.C. where his trial practice focuses on business and intellectual property disputes, construction and products liability lawsuits and insurance coverage matters. He is a National Board Member of the Defense Research Institute (DRI) and is the editor of the Pennsylvania Bar Association Civil Litigation Update, where this article was originally published. Mr. Sneath is currently representing a patent holder in the Western District under the new Local Patent Rules.

Robert O. Lindefjeld is a partner in the Intellectual Property Practice of Jones Day. He is a past chair of the Pennsylvania Bar Association Section of Intellectual Property and former member of the House of Delegates. He is presently a council member for the American Bar Association Intellectual Property Law Section, a board member for the National Inventor's Hall of Fame, and Immediate Past President for the Pittsburgh Intellectual Property Law Association. He is currently representing clients pursuant to the new Local Patent Rules.