New Discovery Rules: Act Now?

I’m headed to speak at the Eastern District of Texas Bench & Bar Conference and then at the AIPLA meeting in DC. One result of this (and of teaching civil procedure this year) is becoming very concerned about the new discovery rules, coming into effect in December. If you haven’t read them, do so. If you file a case after December 1, they will control; they also will control, to the extent practicable and just, to cases filed before then.

Apart from doing away with all forms except the one relating to waiver of service of process, the key change is with respect to the scope of discovery.  Here is the old rule:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Here is the new:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

There are a lot of changes.

First, discovery has to be — not just relevant to an existing claim or defense — but also proportional to several factors or considerations.  The answer to whether an issue is important is quite subjective, and, no doubt, turns on viewpoint.  Does it bring in a subjective element?  How do we determine whether the cost will exceed the likely benefit without knowing what the discovery would reveal?

But the key concern I have is the elimination of any ability to allow discovery beyond relevancy to a claim or defense.  Given that there must be a rule 11 basis to plead something, how can certain affirmative defenses (especially inventorship and inequitable conduct) ever be pled?  Because of this change, if it can’t be pled, there won’t be discovery.  Local rules, of course, can’t be inconsistent with the FRCP.

The amendments are here.

5 thoughts on “New Discovery Rules: Act Now?

  1. Hi David,

    Yes, thanks for elaborating. Do you know if there’s any information out there on how often judges were ordering “good cause” discovery into claims/defenses that were not pled? That is, how often were parties seeking discovery on non-pleaded issues (on either side)? The committee notes seem to think that it was “rarely invoked” — is the thought that this is not true?

    Anecdotally, I’m having a hard time off-hand thinking of many cases that have turned on inventorship or inequitable conduct claims — do you think these things occur often during prosecution? If so, that’s a significant problem, larger than an inability to get discovery. Or is it perhaps that the inability to get discovery now has prevented these claims? (I also wonder if it is the high standards the Federal Circuit has set for these claims that make it difficult that results in these defenses not being widely asserted, but that’s another discussion).

    1. Vera,

      Although I only have anecdotal evidence, I think it is safe to say that Inventorship issues are not major because there is usually little percentage in getting that wrong. Before the 2011 Therasense case, the inequitable conduct situation was a summed up by the CAFC on page 1289 as follows:

      “With these far-reaching consequences [bad for the patentee and their prosecuting attorney], it is no wonder that charging inequitable conduct has become a common litigation tactic. One study estimated that eighty percent of patent infringement cases included allegations of inequitable conduct.”

      Even so, I remember a panel of district court judges, before Therasense, agreeing that there was rarely a smoking gun.

      That is because it would not be unusual to have a patent where the applicants submitted several dozen relevant prior art patents and publications to the Examiner and there were no affidavits with information solely within the knowledge of the applicant (e.g., test results in their lab). Nonetheless, defendants would find some more related patents and assert that these are material and ask for discovery to find if applicants withheld them to be able to go on a fishing expedition. Of course, the prosecuting attorney would be asked to explain in minute detail the justification for every sentence submitted to the examiner in hopes something could be made of it.

      Inequitable conduct is watered down version of outright knowing and willful fraud on the Patent Office. After the Supreme Court’s Walker Process case, asserting a patent obtained with this this degree of fraud can lead to prosecution under anti-trust laws which can lead, not only to treble damages, but substantial criminal penalties. As a litigation tactic, pleading this is rare but it has happened. Every few years, it is proven.

      Recently, Rule 11 has apparently acquired some teeth, so maybe defendants will be more careful.

      1. Let’s not forget the lack of “downside” on advancing any and all tactics to weaken patent rights…

        The “patents are bad” mantra seems to have an all-too-eager audience.

  2. Hi David,

    The committee notes to these rule changes are actually pretty thorough and seem to indicate that they aren’t actually changing the rules at all, but rather making them clearer. Here’s a quote:
    The relationship between Rule 26(b)(1) and (2) was further addressed by an amendment made in 2000 that added a new sentence at the end of (b)(1): “All discovery is subject to the limitations imposed by Rule 26(b)(2)(i), (ii), and (iii)[now Rule 26(b)(2)(C)].” The Committee Note recognized that “[t]hese limitations apply to discovery that is otherwise within the scope of subdivision (b)(1).” It explained that the Committee had been told repeatedly that courts were not using these limitations as originally intended. “This otherwise redundant cross-reference has been added to emphasize the need for active judicial use of subdivision (b)(2) to control excessive discovery.”

    The present amendment restores the proportionality factors to their original place in defining the scope of discovery. This change reinforces the Rule 26(g) obligation of the parties to consider these factors in making discovery requests, responses, or objections.

    Restoring the proportionality calculation to Rule 26(b)(1) does not change the existing responsibilities of the court and the parties to consider proportionality, and the change does not place on the party seeking discovery the burden of addressing all proportionality considerations

    It seems that the reference to Rule 26(b)(2)(C) in the current rule already included these limitations, it is that they were perhaps not being enforced.

    As to your point about needing a Rule 11 basis to plead things, I’m not sure I understand how the change to discovery rules affects this? (In particular with inequitable conduct, for which most courts already say the pleading must meet the requirements of Rule 9) Could you elaborate a little more?

    1. In some respects, I agree that moving the concept of reasonableness doesn’t change much, but the specific factors are problematic. For example, how do we know if something is proportional without pre-trying the case? Today at the conference I was at we had several district judges from all over the country each very concerned about the mountain of motions to come. Also, one judge pointed out that the text is different, so no matter what the advisory committee notes say, the text is different so must be the meaning, under basic statutory construction principles.

      But to me the more important point is the inability to obtain discovery except for a claim or defense. So, for the inequitable conduct point: under current rules, I can go to the court and say, “9(b) doesn’t let me plead inequitable conduct unless I have the facts, but for good cause I’d like to take discovery because here’s some evidence of wrong-doing and I want to flesh it out.” Some district courts have rules (I’ve been told) that say that you can get discovery into inequitable conduct without pleading it.

      Under the new rules, if it’s not a claim or defense, you can never get discovery. Good cause is gone. Any local rule to the contrary is not enforceable. So, how can I plead inequitable conduct unless the facts are known, somehow, without discovery? How can I figure out there’s a mis- or non-joined inventor without discovery?

      Today we talked about it some. Some guess there will be more pleading stuff on information and belief, or generic pleadings of “invalidity” and “unenforceability” with hopes of going further.

      Does that make more sense?

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