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February 06, 2012 Articles

A Model Order Regarding E-Discovery in Patent (and Other?) Cases

The model order from the Federal Circuit Advisory Council regarding e-discovery in patent cases includes proposals that are dramatically different from the majority of present e-discovery practices.

By Steven R. Trybus and Sara Tonnies Horton

“In the electronic age, discovery procedures designed for the 19th and 20th centuries just do not work for complex patent litigation,” noted Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit in a recent speech entitled “The State of Patent Litigation” at the Eastern District of Texas Judicial Conference. Chief Judge Rader went on to declare that “[c]ourts must control the cost and efficiency of electronic discovery.” In an attempt to provide “a helpful starting point for district courts to enforce responsible, targeted use of e-discovery,” Chief Judge Rader introduced a “Model Order Regarding E-Discovery in Patent Cases.” The model order was the work of a special subcommittee that was created by the Advisory Council of the Federal Circuit.

As noted in Chief Judge Rader’s remarks, the advisory council decided to address the issue of e-discovery because of the ever-increasing cost of litigation and the belief that discovery excesses—especially current e-discovery practices—are among the prime driving factors for the high cost of litigation. The Federal Circuit, which hears appeals from all patent-infringement cases, was especially interested in this area because, as Chief Judge Rader reported, patent cases seem to have significantly higher costs than other cases; one report indicated that patent cases had almost 62 percent higher costs.

Chief Judge Rader is certainly not the only speaker who has suggested that problems exist in litigation today, especially in the area of e-discovery. Indeed, there are any number of articles and speeches on the current state of litigation that include the idea that the discovery process is broken. Many of those articles and speeches propose possible fixes—some very narrowly tailored and some much more dramatic.

The model order from the Federal Circuit Advisory Council regarding e-discovery in patent cases includes proposals that are dramatically different from the majority of present e-discovery practices. The model order is intended to be a starting point to allow parties and district courts to tailor discovery plans as appropriate for particular cases. Chief Judge Rader noted the hope that the concepts of the model order will “require litigants to focus on the proper purpose of discovery—the gathering of material information—rather than on unlimited fishing expeditions.”

Although the model order was drafted for patent cases, it may have much broader applicability. Indeed, of the major provisions in the model order, only one is drafted to apply very specifically to patent cases. Several of the new and unique provisions of the model order are discussed below.

  1. Timing of email requests. “Email production requests shall be phased to occur after the parties have exchanged initial disclosures and basic documentation about the patents, the prior art, the accused instrumentalities, and the relevant finances. While this provision does not require the production of such information, the Court encourages prompt and early production of this information to promote efficient and economical streamlining of the case.”

    Under the model order, in a patent case, document discovery begins with the exchange of initial disclosures and basic documents that are material information to be disclosed during the discovery process. While this part of the model order specifically refers to core documents that are relevant in patent cases, it does not take much imagination to apply the reasoning behind this provision, namely, staging requests for email production after the exchange of more basic documents, to non-patent cases. Of course, different types of documents will be a priority in non-patent cases; but it is likely that almost all cases will have some basic documentation other than email that might be exchanged early in discovery. For example, in a contract case, discovery might begin with the exchange of the contract itself, the documents related to the negotiation of the contract and course of performance, documents related to the alleged breach, and financial documents. Similarly, applying this concept to an insurance-coverage case, discovery might begin with the exchange of the relevant policies, information about the insured, and documents related to the loss at issue.

    The general concept of staged discovery is not new. However, the model order very specifically targets the early production of “basic documentation.” And the key idea is that these basic documents are exchanged before the parties can serve requests for production of email. In his speech, Chief Judge Rader explained that at least one reason for this particular targeted approach was that the burden and expense of producing email often outweighed the benefits of production. He noted a study concluding that, in general, less than 1 document in 10,000 produced documents made it onto a trial exhibit list, and he indicated that “for all the thousands of appeals I’ve evaluated, email appears even more rarely as relevant evidence.”

    The model order’s approach to discovery that includes delaying requests for email production seems to have a number of potential benefits. Of course, only time will tell if such an approach actually works in practice to reduce the burden on parties to an appropriate level compared with the potential benefits from the production of email. There inevitably will be disagreement about whether any given case would benefit from this approach, especially in cases where one party has little or no relevant email. For example, this might be the case in patent litigation brought by a “patent troll” that had just acquired the patent for the sole purpose of asserting it in litigation. Also, certainly there are cases in which email may be very probative, including cases dominated by intent-based issues, such as bad faith, fraud, or inequitable conduct, or if a party has few stand-alone documents other than email, as might be the case for individuals or very small new companies.

    For this approach to work in patent-infringement litigation or in other cases that may be amenable to this type of staged production, parties and the courts will need to work together to define “basic documentation.” Early guidance by courts will be critical especially in cases where the opposing parties have divergent views on what constitutes “basic documentation.”  Moreover, courts will have to help litigants to define “prompt and early production.” It remains to be seen if this scheme can in fact result in “efficient and economical” discovery. Of course, practical considerations will affect whether the potential benefits of this staged production are realized. If, for example, email and documents are stored in a certain way by a party so that documents must be collected twice under this system, any savings in cost may disappear and there may be additional disruption to the client’s business caused by a separate collection of email.
  2. Cost shifting. “Costs will be shifted for disproportionate ESI production requests … a party’s nonresponsive or dilatory discovery tactics [and/or] meaningful compliance with this Order and efforts to promote efficiency and reduce costs will be considered in cost-shifting determinations.”

    The cost-shifting provisions of the model order are not patent case-specific and so will be able to be applied to other types of litigation in the same way as they would apply to patent-infringement litigation. The general concepts of the cost-shifting provisions include letting a party propound broader discovery requests than ordinarily permitted as long as that party is willing to pay for the costs of those requests—rather than having broad discovery increase the opponent’s costs. Also, in making cost-shifting determinations, the model order makes clear that the parties’ behavior in the discovery process will be taken into account.

    On a practical level, it is very likely that different parties, as well as various courts, will have divergent views on the meaning of terms such as “disproportionate,” “dilatory,” and “meaningful compliance” in the cost-shifting provisions. If the cost-shifting concepts in the model order gain significant favor, that may lead to precedential opinions that set clear guideposts on the meanings of the terms used in these provisions. Once that happens, this portion of the model order should provide at least some relief from inappropriate behavior in the discovery process, whether that behavior is based on overly broad requests or on nonresponsive answers to appropriate requests, behaviors that are all too common today. On the other hand, if the reality is that costs are rarely shifted, or parties cannot readily determine what does or does not trigger cost-shifting awards, there is little likelihood of meaningful change.
  3. No metadata. “General ESI production requests . . . shall not include metadata absent a showing of good cause. However, fields showing the date and time that the document was sent and received, as well as the complete distribution list, shall generally be included in the production.”

    The effectiveness of the no-metadata provision of the model order most likely will depend on the specifics of how such information is stored, captured, and produced. The default provision is that, aside from basic information about timing and custodians, metadata cannot be requested absent “good cause.” In many cases parties already agree to some system regarding the production of metadata when establishing an e-discovery plan. The default provision of the model order is a reasonable starting point, although many veteran litigators likely will have additional fields that they will want included in initial productions based on experience of what has been helpful in past matters.

    Additionally, because there is always the possibility that “good cause” will exist for the production of more metadata, the metadata will still need to be preserved. Finally, it may well be easier, and avoid the possibility of multiple electronically stored information (ESI) collections, to collect documents in a way so that all metadata is also collected up front even if it is never produced or if it is only produced later in the case.
  4. Specific email requests required. “General ESI production requests . . . shall not include email. . . . To obtain email parties must propound specific email production requests . . . . Email production requests shall only be propounded for specific issues, rather than general discovery of a product or business.”

    The requirement that email requests be separate from other ESI requests appears to be in the model order as a prerequisite to the other portions of the model order that limit the scope of such email requests.
  5. Email custodian and search-term limits, and cost shifting. “Email production requests shall identify the custodian, search terms, and time frame. The parties shall cooperate to identify the proper custodians, proper search terms and proper timeframe.”

    “Each requesting party shall limit its email production requests to a total of five custodians. . . .”

     “Each requesting party shall limit its email production requests to a total of five search terms per custodian per party. * * * The search terms shall be narrowly tailored to particular issues. * * * Use of narrowing search criteria (e.g., “and,” “but not,” “w/x”) is encouraged to limit the production and shall be considered when determining whether to shift costs for disproportionate discovery.”

    The limits on email custodians and search terms are perhaps the most dramatic limitations in the model order. The model order provides default limits of five custodians and five search terms—and those search terms must be narrowly tailored. For each of those limits, the order provides that the parties may agree to modify the limits or request additional discovery from the court “upon showing a distinct need based on the size, complexity, and issues of this specific case.” For any excess requests, “the requesting party shall bear all reasonable costs caused by such additional discovery.”

    Initial reactions to this proposal generally have tended toward the belief that the proposed limits are too severe in many, if not most, cases. One concern is that the limits will not prevent excessive and unnecessary discovery, but rather frustrate discovery of important information. Indeed, the appropriateness of the default limits will vary based on many factors including the size of the parties and the corporate structures. Selecting five custodians from a smaller company that may have only five employees obviously differs from selecting five custodians from a company that has thousands of employees.

    At first blush, coming from the present system where there are no default limits on the number of custodians or the number of search terms, any specific limits, let alone the model order’s fairly severe limits, may seem unworkable. However, as noted by Chief Judge Rader in his speech:

    Federal Rule of Civil Procedure 30 presumptively limits cases to ten depositions and seven hours per deposition . . . .When the default numbers with limits on depositions were first included in the Federal Rules, veteran lawyers panicked that these limits were arbitrary and would prevent the discovery of critical information. But after two decades of experience, few question the wisdom of these limits. And the era of the endless deposition is fortunately over.

    Whether the era of unlimited requests for the production of ESI (including email) is over, soon to be over, or not, and whether that is fortunate or unfortunate, all remain to be seen. Also unknown is whether after two decades of experience with such limits and their benefits and potential problems, litigators and commentators will look back to the model order as a turning point in the constant effort to improve the discovery process. Certainly, if there is to be discovery reform, it must start somewhere and five custodians and five search terms is as good a place to start as any.

Using the Model Order
At least one district court judge has taken the model order to heart and decided to test its utility. In patent-infringement litigation styled DCG Systems, Inc. v. Checkpoint Technologies, LLC, No. 5:11-cv-03792-PSG, pending in the District Court for the Northern District of California, the Honorable Paul S. Grewal entered an e-discovery order based on the model order. In DCG, the court did relax the email limitations to 10 custodians and 20 search terms for a first set of email production requests with the ability to make additional requests that are limited to 5 custodians and 5 search terms. Experiences such as these will be necessary to determine the proper default limits that walk the line between allowing appropriate discovery and eliminating, or at least reducing, unnecessary discovery.

If more courts begin to adopt—in letter or in spirit—the various limits proposed in the model order, the system as a whole can begin to gain the experience needed to determine if the default limits should be 5, 10, or 15, or maybe just 2 or 3. Only experience gained by using the system over time will help define the most appropriate default limits.

Keywords: litigation, pretrial practice and discovery, Chief Judge Rader, Federal Circuit Advisory Council, model order, cost shifting, metadata, custodians

Steven R. Trybus is a partner and Sara Tonnies Horton is an associate with Jenner & Block in Chicago, IL.

Copyright © 2012, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).