Regulatory: Understanding discovery in administrative post-grant proceedings at the Patent & Trademark Office

The Patent Trial and Appeal Board has adhered carefully to its charge that discovery be limited.

Litigating the validity of patent claims can be very costly in terms of time and money. The various post-grant patent challenge mechanisms introduced at the Patent and Trademark Office (PTO) through the Leahy-Smith America Invents Act (AIA) have promised an efficient administrative alternative to high-cost district court litigation. In a series of decisions over the past year, the PTO’s Patent Trial and Appeal Board has offered guidance that can better inform decision makers as to both whether to pursue PTO post-grant proceedings and what discovery to expect. In considering and limiting the scope of discovery available, the Board has stressed, both in its orders and in telephonic hearings, the role of these new proceedings as an efficient alternative to District Court litigation — and one that must be completed within the one-year (or, if extended, 18-month) period mandated by statute.

Routine discovery

Absent a contrary order from the Board, all parties to inter partes review and post-grant proceedings are subject to three types of “routine discovery”: (i) any exhibit cited in a paper or in testimony; (ii) deposition of affiants; and (iii) relevant information that is inconsistent with a position advanced by the party.

Despite early concerns that routine discovery category (iii) would be subject to abuse, the Board has taken a strict approach (Garmin Int’l, Inc. v. Cuozzo Speed Techs.):

Routine discovery under [category (iii)] is narrowly directed to specific information known to the responding party to be inconsistent with a position advanced by that party in the proceeding, and not broadly directed to any subject area in general within which the requesting party hopes to discover such inconsistent information.

Additional discovery

The AIA provides for additional discovery in both inter partes review and post-grant proceedings. Additional discovery in inter partes review proceedings is limited to the deposition of witnesses who submit declarations or affidavits and to what is otherwise necessary “in the interests of justice.” Through rulemaking, the PTO has established that a “good cause” standard is employed in post-grant reviews and that discovery is limited to evidence “directly related to factual assertions” made by either party.

“Good cause and interests-of-justice,” the PTO has explained, “are closely related standards, but on balance, the interests-of-justice standard is a slightly higher standard than good cause.” Indeed, the Board looks to the same five factors in determining whether to grant requests for additional discovery in inter partes review and post-grant review proceedings:

(1) More than a possibility and mere allegation – The moving party must have a sound basis for expecting something useful will be uncovered by the requested discovery.

(2) Litigation positions and underlying basis – The moving party cannot use the pretext of discovery to alter the Board’s procedures regarding the presentation of arguments and evidence.

(3) Ability to generate equivalent information by other means – The moving party should not seek information that can reasonably be figured out or assembled independently.

(4) Easily understandable instructions – Instructions and requests must be clear.

(5) Requests not overly burdensome to answer – The requests cannot be overly burdensome in view of the expedited nature of the Board’s proceedings.

With these factors in mind, the Board has granted requests for additional discovery sparingly (Bloomberg Inc. v. Markets-Alert Pty Ltd.):

It is recognized that limited discovery lowers the cost, minimizes the complexity, and shortens the period required for dispute resolution. Consistent with the statutory provisions and legislative intent of the AIA, there is a strong public policy to limit discovery in administrative trial proceedings, as opposed to the practice in district court patent litigations that have broad discovery.

Protecting confidentiality

Finally, decision makers should, as always, be wary of the challenges of maintaining confidentiality in PTAB proceedings (Garmin Int’l, Inc. v. Cuozzo Speed Techs):

There is a strong public policy for making all information filed in [PTO patent challenge proceedings] in support of a substantive argument open to the public so that a complete and understandable file history is maintained.

Consistent with this stated policy goal, the Board has required parties to affirmatively establish good cause for maintaining confidentiality of relevant information.

But, to date, the Board has routinely granted requests for protective orders, as provided for at 35 U.S.C. §§ 316(a)(7) and 326(a)(7). And the Board has authorized redaction of non-relevant, confidential information (such as personal financial information) from documents.

Conclusion

In the first year of post-AIA patent challenge proceedings, the Patent Trial and Appeal Board has adhered carefully to its charge that discovery be limited. Although decision makers can expect that Board proceedings will require at least some “routine discovery” and agreed-upon “additional discovery,” patent challenges at the PTO will likely remain an attractive and efficient alternative (or adjunct) to District Court practice.

Contributing Author

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J. Steven Baughman

J. Steven Baughman is an intellectual property litigation partner in the Washington, D.C., office of Ropes & Gray LLP and highly regarded as a leading...

Additional Contributors: Paul M. Schoenhard

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