Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

While the Northern District has made clear that it is not transforming itself into a rocket docket like the Eastern District of Virginia or the Western District of Wisconsin, the newly enacted Local Patent Rules (“Rules” or “LPR”)* are going to have a significant impact on patent litigation filings in Chicago. The cases will not proceed to trial faster than the Northern District's average for all cases of slightly more than two years, but the path to trial will be significantly different. The changes are even-handed, benefiting both patentholders and accused infringers.  One might expect even-handed Rules to have little impact on filings, but in this case patentholders will likely decide that the Rules provide enough value to overcome the portions of the Rules that benefit accused infringers.  The Rules, therefore, will draw patent cases to the Northern District. Here are the particular elements of the Rules that will attract patent plaintiffs to the Northern District:

1.      Substantive Initial Disclosures & Document Production.

LPR 2.1 requires both parties to exchange substantive, non-evasive Rule 26(a) Initial Disclosures. Furthermore, LPR 2.1(b) requires that along with its Initial Disclosures, an accused infringer produce: 1) documents sufficient to show the operation and construction of each element of any product or process specifically accused in the Complaint; and 2) copies of all known prior art. This early document production, which is generally contemplated by Rule 26 but almost never done in practice, will be a major draw for patentholders. The ability to get immediate technical information in discovery, without the expense of serving document requests, is significant. It allows patentholders to have information before preparing their Initial Infringement Contentions. It also allows patentholders to evaluate the strength of their cases early using the technical information produced by the accused infringers, before incurring significant discovery expenses.

But while LPR 2.1 will attract patent plaintiffs, it also benefits accused infringers. LPR 2.1 also requires patentholders to make an initial document production, and patentholders have a more significant obligation. They must produce not just documents sufficient to show, but all documents regarding: 1) any sale, offer for sale or use of the patented invention before filing; 2) design, reduction to practice or invention of the patented technology generally; 3) all communications with the PTO (the prosecution history) for the patents in suit and any patents from which they claim priority; and 4) ownership of the patent. Additionally, as with accused infringers, patentholders must identify which documents correspond to each of the four categories. Having this early information will allow accused infringers to evaluate their defenses early in the case and prepare for early dispositive motions such as motions challenging ownership or validity based upon a bar date. And the documents will allow accused infringers to update affirmative defenses or add counterclaims before there could be any prejudice.

Finally, the accused infringers' production obligation regarding its products is only triggered if the patentholder specifically identifies the accused products in its complaint. This will strongly encourage plaintiffs to identify the accused products in the complaint. A standard which comports with the Twombly/Iqbal pleading standards – click here to read my article on the uneven application of the Twombly standard between patentholders and accused infringers.

2.      Defendant opens and closes Markman briefing.

Most Districts either have two rounds of concurrent claim construction briefing or a traditional opening-response-reply schedule with the patentholder opening and replying. Significantly, the Rules provide for a single set of briefs with the accused infringer—not the patent holder—submitting the initial and final briefs. Writing first and last benefits the accused infringer. But economically, the patentholder saves money by only writing one brief and can make any follow up arguments during a hearing or seek a sur-reply if the Court does not hold a hearing.

3.      Late Claim Construction briefing.

The final major draw for patentholders is the late claim construction proceedings. In addition to cost savings in the briefing process, the claim construction is scheduled during the later portion of a discovery period that is scheduled to end forty-five days after the Court rules on claim construction. Maintaining pre-claim construction uncertainty through most of discovery benefits patentholders. Furthermore, the Rules make clear that a judge can disregard early dispositive motions that would require claim construction before the claim construction contemplated by the Rules. So, patentholders may face fewer early summary judgment motions.

Conclusion

The Rules are evenhanded, benefiting both patentholders and accused infringers. But the specific benefits afforded patentholders will still drive patentholders to file in the Northern District of Illinois over other courts, some that may have faster times to trial, with different rules.

* Click here for my post analyzing the Rules and here for my post analyzing the differences between the Rules and the Proposed Rules.

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Yesterday, October 1, 2009, the Northern District of Illinois adopted Local Patent Rules ("LPR" or "Rules"), effective immediately -- click here for a copy of the Rules.  According to LPR 1.1, the Rules apply to all cases filed in or transferred to the District after October 1, 2009.  Judges are also free to apply all or part of the Rules to currently pending cases.  Late yesterday, I analyzed the schedule contemplated by the Rules -- click here to read that post. 

In this post, I am going to focus on the handful of substantive changes between the new Rules and proposed local patent rules ("Proposed Rules") first issued earlier this year for the benefit of those members of the Northern District Bar that have closely followed the enactment of these Rules.*   As a side note, the Rules show that the Court seriously considered the comments made during the public session to discuss the Proposed Rules earlier this year.  The overall schedule set out by the Rules is also almost identical to that created by the Proposed Rules, with a few additions additions and a lengthening of about two weeks.

Over the next several weeks, I will break down each LPR in more detail.  I will also post a schedule of the timing contemplated by the Rules in a table format, but for now here are highlights of the significant changes between the Proposed Rules and the Rules as enacted yesterday:

Some of the more significant changes the Court made from the Proposed Rules to the LPR as enacted:

• Early Dispositive Motions (LPR 1.1 & 6.1):  A statement was added in LPR 1.1 that the Court may defer any motion filed before the LPR Section 5 claim construction process until after the Claim Construction Proceedings.  A new comment to LPR 6.1 explains that the Court has discretion in determining whether to consider "early" summary judgment motions;
  
• Protective Order (LPR 1.4):  The Proposed Rules requirement that the parties file an agreed Protective Order in the form of LPR Appendix B -- click here for the form Protective Order -- seven days before exchanging LPR 2.1 Initial Disclosures was removed.  Instead, the Appendix B Protective Order will be deemed to be in effect from the date of the Initial Disclosures and either party can seek to modify it;
  
• Meaningful Initial Disclosures (LPR 2):  The initial comment requires that the LPR 2.1 Initial Disclosures be "meaning - as opposed to boilerplate - and non-evasive.  This is not a change from the Proposed Rules, but is worth an additional mention;
  
• Initial Disclosures (LPR 2.1):  The Initial Disclosures deadline remains fourteen days after defendant files its answer, but in the event that defendant files counterclaims the deadline is now extended to fourteen days after plaintiff answers the counterclaims.  It is also worth mentioning again although it is not an addition to the Proposed Rules, that all parties have affirmative production requirements, outlined in LPR 2.1(a) & (b), along with the preparation and exchange of Initial Disclosures;**

• Initial Infringement Contentions (LPR 2.2(e)):  In addition to identifying direct and indirect infringement in Initial Infringement Contentions, where a direct infringement is based upon joint acts of multiple parties, each party's direct infringement role must be described;
  
• Final Infringement, Unenforceability and Invalidity Contentions (LPR 3.1):  The Rules require that the party claiming infringement serve its Final Infringement Contentions twenty-one weeks after serving Initial Infringement Contentions.  And the Rules require the accused infringer to serve its Final Unenforceability and Invalidity Contentions at the same time.  The Proposed Rules originally required just Final Invalidity Contentions and gave the accused infringer twenty-eight days after the Final Infringement Contentions to serve them;
  
• Final Non-infringement, Enforceability and Validity Contentions (LPR 3.2):  The Rules require that the accused infringer serve its Final Non-infringement Contentions twenty-eight days after service of the Final Infringement Contentions.  And the Rules require that the party claiming infringement serve at the same time its Final Contentions in Response to any Final Unenforceability and Invalidity Contentions;
  
• Amendment of Final Contentions (LPR 3.4):  The Rules add the following example of good cause for amending Final Contentions -- the Court adopting a construction different from the construction proposed by the party seeking to amend;
  
• Discovery Concerning Opinions of Counsel (LR 3.6):  The Rules add a deadline -- thirty-five days before the close of fact discovery, also seven days after the Court enters its claim constructions -- for an accused infringer to disclose whether it will rely upon an opinion of counsel and outlines the categories of information that must be produced at that deadline should the party rely upon an opinion;
  
• Claim Construction Briefs (LPR 4.2(a) & Comment):  The opening brief deadline was extended from one week from twenty-eight to thirty-five days after the LPR 4.1 exchange of claim terms.  The Comment to LPR 4.2 explains that the Rules only contemplate three briefs because of the expected hearing, but that a judge may choose not to have a hearing, which could be grounds for allowing a sur-reply.  The Comment also explains that a judge can choose not to have a Reply Brief;
  
• Claim Construction Declarations (LPR 4.2(a) & (c)):  Any party that offers witness testimony in its briefing must include a sworn declaration and make the witness promptly available for deposition.  If the Responsive Brief includes such a declaration, the Reply Brief deadline is extended seven days from fourteen to twenty-one days; and
  
• Claim Construction Hearing (LPR 4.3):  Hearing exhibits, including demonstratives, must be exchanged at least three days before a claim construction hearing.

*  Click here and here for the Blog's earlier analysis of the Proposed Rules.

**  This is one of the major changes that set the Northern District's LPR's apart from those of other districts and that will have a significant impact upon the discovery process.  I will focus more on this set of requirements in an upcoming post.

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Today, October 1, 2009, the Northern District of Illinois adopted Local Patent Rules ("LPR" or "Rules"), effective immediately -- click here for a copy of the Rules.  According to LPR 1.1, the Rules apply to all cases filed in or transferred to the District after October 1, 2009.  Judges are also free to apply all or part of the Rules to currently pending cases.  The new Rules are substantively very similar to the proposed local patent rules ("Proposed Rules"),* with a series of modifications that shows that the Court seriously considered the comments made during the public session to discuss the Proposed Rules earlier this year.  The overall schedule is also almost identical, with additions and a lengthening of about two weeks.

Over the next several weeks, I will break down each LPR in more detail.  I will also post a schedule of the timing contemplated by the Rules in a table format, but for now here are highlights of the new Rules:

• Protective Order:  A standard protective order is deemed entered as of the exchange of Initial Disclosures with any party free to seek modifications, to avoid discovery delays being blamed upon entry of a protective order (LPR 1.4);
   
• Initial Disclosures & Production:  Automatic document production requirements of both parties claiming patent infringement and accused infringers when Initial Disclosures are served and of accused infringers when Initial Non-infringement and Invalidity Contentions are served;**
   
• Initial Contentions:  Fourteen days after Initial Disclosures, parties claiming patent infringement serve Initial Infringement Contentions.  Fourteen days after Initial Infringement Contentions are served, accused infringers serve Initial Non-infringement, Unenforceability and Invalidity Contentions.  Fourteen days later, parties claiming patent infringement parties claiming patent infringement serve an Initial Response to Invalidity Contentions;
   
• Final Contentions:  Twenty-one weeks after Initial Infringement Contentions, parties claiming infringement serve Final Infringement Contentions, and accused infringers serve Final Unenforceability and Invalidity Contentions at the same time.  Twenty-eight days later, accused infringers serve Final Non-infringement Contentions and parties claiming patent infringement serve Final Enforceability and Validity Contentions (after the final contentions, leave of Court is required for any amendments);

• Post-Final Contention Amendments:  Amendments to Final Contentions are not allowed absent Court order upon a showing of good cause and an absence of unfair prejudice to the opposing party;
   
• Deadline for Stays Pending Reexamination:  No party can seek a stay pending reexam after serving its Final Contentions;
   
• Claim Construction:  The claim construction process begins two weeks after defendant's final invalidity contentions are served with an extension of terms and proposed constructions;
   
• Claim Construction Briefing:  Thirty-five days after exchanging terms, accused infringers file opening claim construction briefs along with a joint appendix by all parties including the patents in suit and their prosecution histories consecutively paginated.  Parties claiming patent infringement have twenty-eight days to file response briefs.  Accused infringers have fourteen days to file a reply.  Any party offering witness testimony must include a sworn declaration and promptly make the witness available for deposition.  If such testimony is included in a response brief, the reply deadline is extended by seven days;
   
• Claim Construction Hearing:  The Rules contemplate a claim construction hearing twenty-eight days after the reply brief, but the judge can decline a hearing.  The lack of a hearing may be a reason to allow a sur-reply brief.  A judge also may decide not to accept a reply brief.  The parties must exchange all exhibits, including demonstratives, at least three days before a claim construction hearing;
   
• Fact Discovery Close:  Fact discovery closes forty two days after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline; and
   
• Trial:  A trial is contemplated approximately two years after the filing of the complaint.

*  Click here and here for the Blog's earlier analysis of the Proposed Rules.  And click here for my explanation of the significant differences between the Proposed Rules and the final Rules.

**  This is one of the major changes that set the Northern District's LPR's apart from those of other districts and that will have a significant impact upon the discovery process.  I will focus more on this set of requirements in an upcoming post.

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Bajer Design & Marketing Inc. v. Ware Mfg. Inc., No. 09 C 1425, Min. Order (N.D. Ill. Jun 11, 2009) (Kendall, J.).

Judge Kendall denied plaintiff Bajer's motion to reassign its second filed patent infringement suit pending before Judge Zagel asserting the patent in suit to Judge Kendall pursuant to Fed. R. Civ. P. 42 and Local Rule 40.4. The cases met two of the four Rule 40.4(b) requirements for reassignment because both cases were pending in the Northern District and because both cases were at similar stages with defendants having just answered, such that reassignment would not slow progress of the first case. The Court also noted that a single Markman proceeding and set of claim constructions was a benefit of reassignment. But the potential for a uniform claim construction was outweighed by the fact that defendants' accused products and, therefore, noninfringement positions were significantly different. Based upon the differing noninfringement positions and other possible differences in the parties defenses, the Court held that reassignment would not achieve the required substantial savings of judicial time and effort.

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