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IP: A stake deep in the heart of the Texas patent troll

Chief Judge Rader’s remarks to the Texas Patent Bar highlighted the growing inefficiencies in patent litigation.

When historians write about the rise and fall of patent troll litigation, a chapter or two should be dedicated to the Eastern District of Texas. A preferred forum for plaintiffs, the district has been associated—fairly or unfairly—with liberal discovery and joinder rules, skepticism toward motions for transfer and summary judgment, and, until recently, a rocket docket that exacerbated the inherent asymmetries between trolls and real companies with respect to the burdens and costs of patent litigation.  

So imagine how jaws must have dropped two weeks ago when Chief Judge Randall Rader of the Federal Circuit delivered his “State of Patent Litigation” address to the Eastern District of Texas Judicial Conference and cautioned that growing inefficiencies and asymmetries in patent litigation risk killing the goose that’s been laying the golden eggs:

[I]f we cannot control the cost, complexity, and complications of patent litigation, the litigants that we serve will simply find a better way, or a better place, to resolve their disputes. Unchecked and uncontrolled inflation of litigation costs can potentially kill our golden goose and leave us empty handed…If the U.S. system requires a litigant to ‘feed the goose’ ten ounces of gold only to get a golden egg of five ounces in return, obviously geese from other counties that don’t require such an investment, such as Germany or Japan or China, become more appealing. We must be careful not to drive away our golden goose by self-imposed encumbrances.

This may have been the very watershed moment for which the defense bar has long been waiting. Chief Judge Rader’s comments centered on a number of excellent proposals for patent litigation reform. If adopted in particular cases, these proposals would do much to reduce the costs and burdens of patent litigation and, as a result, restore a fairer balance between plaintiffs and defendants.

Among the Chief Judge’s proposals were the following:

  1. More summary judgments. Chief Judge Rader endorsed a more “aggressive summary judgment practice” and encouraged both the bench and bar to “present, if at all possible, a summary judgment motion, or maybe two, that can end litigation or narrow the case to dimensions more amendable to settlement.” In an age where summary judgments have become increasingly rare, Judge Rader’s comments are enormously important and might be just the ticket for persuading judges to revisit this important defense weapon early in cases.
  2. E-discovery limitations. The discovery of e-mail should be deferred until after core discovery about the patent, the accused products and financial issues, and even then e-mail should be limited to five custodians and five search terms. As an example, Chief Judge Rader endorsed the new Model Order on E-Discovery in Patent Cases unanimously adopted by the Advisory Council of the Federal Circuit. These remarks, together with the model order, can be used as powerful authority for persuading judges to adopt a discovery order that strips trolls of one of their most important weapons: asymmetrical e-discovery costs.
  3. Fee shifting. Chief Judge Rader strongly encouraged the “full-scale reversal of attorney fees and costs” in cases of litigation abuse. Here’s a remedy that has real teeth for a defendant and, if widely adopted, would dramatically affect the dynamics of troll litigation.
  4. Docket speed relief. One size does not fit all when it comes time to trial, a fact worth noting the next time you are in Alexandria, Va., for example. Chief Judge Rader agrees, encouraging courts to engage in early assessment of the value of a case so “the court may adjust timing and procedures … to make sure a billion-dollar case gets a ‘billion dollars’ worth’ of process—adequate time, witnesses, confidential information protections and more—and a thousand-dollar case gets … well, less.”

Chief Judge’s Rader’s remarks occur at an important time in the struggle against patent troll litigation. It was appropriate that those remarks were delivered in Texas, where much of that struggle has played out over the last two decades. If his Honor’s proposals become widely accepted—and the defense bar enjoys a powerful incentive to make that happen—it will be one big stake in the heart of the patent troll, coming fittingly from deep in the heart of Texas.

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Jeffrey Dean

Jeffrey Dean is a partner of Marshall, Gerstein & Borun LLP, and concentrates on the defense of patent infringement claims on behalf of corporations....

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