The Northern District of New York Enacts New Local Patent Rules

June 4, 2012

The U.S. District Court for the Northern District of New York recently became the latest court to enact local patent rules.  Effective as of January 1, 2012, the new local patent rules apply to all new patent cases filed in, transferred to, or removed to the court on or after that date.  For all patent cases pending on that date, the court will confer with the parties and apply the rules as the court “deems practicable.” The new rules were developed by an ad hoc committee impaneled by Magistrate Judge David E. Peebles.  In addition to J. Peebles, the committee featured local patent practitioners and included George McGuire, chairman of Bond’s intellectual property practice group. Among the more salient points in the new rules is the speed in which the court brings the case from filing through to claim construction.  As is discussed in greater detail below, the rules propose a schedule that rivals those found in other patent forums. Other significant aspects of the new local patent rules are highlighted below.

1. Arduous Contentions: rules call for substantial mandatory production of contentions, documents, and information early in the case

The NDNY rules call for a swift progression of the case following its commencement.  For example, the patent claimant’s Infringement Contentions are due within 14 days after the Rule 16 conference, which means that the patentee will make their infringement contentions without the benefit of discovery from the accused infringer, unless a later date for infringement contentions is stipulated to or ordered. The NDNY rules also provide for mandatory disclosure of documents and information early in the proceedings.  Accordingly, both the patent claimant’s contentions and the accused infringer’s contentions are accompanied by substantial document production. Infringement Contentions Under L. Pat. R. 3.1, the patent claimant provides Infringement Contentions for the asserted claims just 14 days after the Rule 16 conference.  As is standard in most districts with local patent rules, the NDNY rules require a chart identifying specifically where each limitation of each asserted claim is found within each Accused Instrumentality.  Interestingly, the Infringement Contentions must also include a claim-by-claim analysis of the applicable priority date if the patent claims priority to an earlier application, as well as a description of the role of each party if direct infringement is based on joint acts of multiple parties. The NDNY rules also require the production of the following documents with the patentee’s Infringement Contentions, including: (1) all documents evidencing disclosure, sale, or public use of the claimed invention prior to the application for the patent(s)-in-suit; (2) all documents evidencing the conception, reduction to practice, design, and development of each claimed invention; (3) a copy of the file history for each patent-in-suit; and (4) all documents evidencing ownership and maintenance of the patent rights by the party asserting patent infringement. Non-Infringement, Invalidity and Unenforceability Contentions One month after receiving the Infringement Contentions, the accused infringer must provide Non-Infringement, Invalidity and Unenforceability Contentions.  Included with these contentions are two charts that have become standard in many districts, including one demonstrating whether each element of the asserted claims is present in the Accused Instrumentality, and a denial with explanation if it is not, and another identifying where specifically in each item of prior art each limitation or view of each asserted claim is found. Unlike many other districts, however, L. Pat. R. 3.3(c) calls for the accused infringer to set forth in detail each ground that it will use to assert that the patent(s)-in-suit is unenforceable.  For inequitable conduct claims, the accused infringer must: (1) describe each omission or misrepresentation made to the PTO; and (2) state all grounds on which it plans to argue at trial that those prosecuting the patent intended to deceive the PTO.  This includes the identification of any prior art references not disclosed to the PTO during the prosecution of the patent(s)-in-suit, any facts suggesting that one or more persons substantially involved in the prosecution of the patent(s)-in-suit, were aware of such prior art reference prior to the issuance of the patent in suit, and any facts relevant to the element of intent to deceive.  Although the unenforceability contentions are subject to amendment in the event of later discovered facts, the rules set forth a substantial initial burden on the accused infringer considering unenforceability allegations. The accused infringer must also supply certain documents when providing Non-Infringement, Invalidity and Unenforceability Contentions.  Among the documents that must be provided are: (1) source code, specifications, schematics, flow charts, artwork, drawings, photographs, video or other images from every available view or other documentation sufficient to show the operation, composition, design, or structure of any aspects or elements of the accused instrumentality identified by the patent claimant; and (2) a copy of any prior art that doesn’t appear in the file history of the patent-in-suit.

2. Prioritized and Limited Claim Construction: the parties must prioritize the disputed terms, which can number no more than ten

Similar to the local patent rules for the Northern District of Illinois, for example, the parties may only present a total of ten patent terms or phrases to the court for construction.  Exceptions can be made in cases where multiple non-related patents are asserted.  If the parties are unable to agree on ten terms or phrases, the plaintiff(s) can elect five and the defendant(s) can elect five. After exchanging lists of disputed terms, the parties have three weeks to exchange preliminary proposed constructions in which they not only construe the claim terms, but also identify all intrinsic evidence found in the specification and the prosecution history and produce copies of any extrinsic evidence. The parties then create a Joint Claim Construction and Prehearing Statement which is largely similar to the preliminary proposed constructions.  Interestingly, however, the Joint Claim Construction includes a prioritization of the disputed terms.  The prioritization is based on the claim terms’ “significance to the resolution of the case and the court’s construction of those terms and whether they will be case or claim dispositive or substantially conducive to promoting settlement, together with a statement of the significance of each term to the claims and defenses in the case.” This rule forces patent claimants and accused infringers to work together to create a prioritized list of claim terms.  Although the requirement for a statement regarding the significance of each term to the party’s claims or defenses may disclose a party’s strategy, parties typically have a strong grasp of their opponents’ claim construction strategy by the time a Joint Claim Construction chart is created.

3. Deadlines for Discovery: the rules include automatic close of both claim construction and fact discovery

Within thirty days of the Joint Claim Construction and Prehearing Statement, the parties must complete all discovery relating to claim construction, including any depositions with respect to claim construction of any fact and expert witnesses previously identified.  Further, all fact discovery in the case – including expert depositions – must be completed within 120 days after the court issues its claim construction ruling.

4. Speedy Docket: schedule leads to full Markman briefing within 10 months

Under the new rules, the case is scheduled to be fully briefed for a claim construction hearing within about 10 and a half months after filing the complaint.  For comparison, the local patent rules for the Northern District of Illinois call for full claim construction briefing within about 12 months after filing the complaint.

5. Confidentiality by Default: a protective order is entered by the court if the parties are unable to agree on one

At least two weeks prior to the initial Rule 16 conference, the parties may submit a stipulated protective order pursuant to Fed. R. Civ. P. 26(c).  If the parties are unable to agree on a protective order they may each submit a counter proposed protective order that highlights any areas of disagreement.  If no one requests a confidentiality order at or prior to the Rule 16 scheduling conference, the court will itself enter a protective order. Conclusion The adoption of patent rules in the Northern District of New York reflects the court’s interest in patent cases and will likely be a strong consideration for parties looking for swift and timely resolution of patent disputes.