Nice post on ethics of docketing software

It’s available here.

Of course, most of you are using good docketing software.  Please do.  And use redundant systems and verification of data entry.  Missing a deadline is one of those “easy targets” that will get you sued.

Although I understand why it is so, I often joke that patent prosecutors seem to miss only deadlines for the very valuable patents….

Another Case Implying Joint-Attorney-Client Relationships in Prosecution

It is common for different entities to have input into prosecution, as where a licensee has input into prosecution of pending applications.  In such circumstances, the parties likely can assert a “common interest” privilege so that third parties cannot access their communications.  However, courts continue to conflate the existence of a common interest with implied joint attorney client relationships.

In the most recent example (others are in our book), DePuy Orthopaedics, Inc. (“DePuy”) entered into a research agreement with Orthopaedic Hospital (“OH”).  OH would develop products and DePuy would pay a royalty if any were commercialized. Some patent applications were filed. OH later contended that DePuy had developed products that required it pay OH a royalty; DePuy refused, and OH brought a declaratory judgment.  See DePuy Orthopaedics, Inc. v. Orthopaedic Hosp., 2016 WL 7030400 (Dec. 1, 2016).

In the course of the lawsuit, OH moved to compel all documents from DePuy related to prosecution of the patent applications.  DePuy refused to provide the documents. In doing so, it conceded that the parties shared a common interest with respect to the patent applications, but contended that DePuy’s in-house attorney did not jointly represent both OH and DePuy when doing so.

The court held that as a matter of law DePuy’s in-house lawyer represented both it and OH.  In doing so, it applied the test for determining whether a lawyer represents a client.  Thus, because the lawyer jointly represented both OH and DePuy, nothing was privileged between them in this dispute.

As I’ve written, this is legally incorrect.  The issue isn’t whether DePuy’s in-house lawyer represented one client, but whether she represented two.  When that is the issue, courts that appropriately analyze this issue recognize that a different analysis is required.  For example, implying a joint-client relationship can create conflicts of interest.  Further still, with respect to in-house counsel, this could create the unauthorized practice of law (for example, if she were not licensed in the state where the activities occurred, but registered by the state, and the “representation” went beyond that necessary to practice before the USPTO.  It could also result in liability by in-house counsel to third parties, and in-house counsel typically don’t have malpractice insurance.

This same fact pattern has bitten several outside firms and in-house counsel before.  Any time a lawyer is prosecuting patents where there is some agreement where a “non-client” has input — a joint venture agreement, a license, a joint development agreement — the lawyer should be extremely careful to ensure that the “non-client” knows it is not a client.

ABA: If moving to withdraw for non-payment of fees, try to say as little as possible to the court.

This is probably obvious, but while nonpayment of fees (or expenses) may under some circumstances permit a lawyer to withdraw from a case, it does not permit the lawyer to reveal confidential information.  What does a lawyer do if (as sometimes happens) the client objects to withdrawal?

The ABA in ABA Formal Ethics Op. 476 (Dec. 19, 2016) (here), said that the lawyer should (a) in the initial motion say nothing more than “professional considerations” or the like; (b) if pressed by the court, point out that the court should rule without requiring disclosure; and (c) only if pressed or in the alternative, offer to provide the information for in camera review.

E.D. Texas imposes 285 Liability on Lawyer, Client, Others, Jointly.

I’d written about the potential for 285 to be used to shift fees, not onto the losing party, but onto the losing party’s lawyer, here.  Ya’ll told me I was nuts.

In an unusual order dated January 25, 2017 in Iris Connex v. Dell (E.D. Tex 2:15-cv-1915-JRGJ) (here), after finding no infringement, Judge Gilstrap allowed post-judgment discovery and concluded that the case was exceptional. Stripping it way down, because the infringement contention was frivolous (and other things), Judge Gilstrap imposed joint and several liability among the corporate plaintiff, its parent company and the plaintiff’s sole officer (a lawyer) (in effective, piercing the corporate veil) for the fees awarded under 285.

The case may, as a result, be useful tool to combat shell patentees run by lawyers to shake down legitimate businesses through nuisance settlements.  This is of course, when claims are frivolous, in need of policing. Then-Chief Judge Rader, Professor Chien and I, wrote about that a while back, and I wrote about the need to police this, and also to watch out for strategic behavior by defense lawyers, well before then!

There are a lot of questions I have about this order that are to the side of the primary issue, but nonetheless may mean it is wrong. For example,  why on earth joinder of the lawyer was required by Rule 19 is a  mystery to me. But, with any luck, at least we’ll know whether this is a viable strategy.


E.D. Magistrate Love Orders Disclosure of Whether Mock Trial Done, Other Info In Camera

This is interesting and the case name (wait for it) sort of ironic.  The district judge ordered the parties to disclose to each other whether they had done a mock trial, to keep a list of participants, and to cross-check participants against potential jurors and notify the other side if there was a match.  In addition, the judge ordered the parties to disclose in camera a list of participants.

Obviously, I think, a lawyer who knows that a potential juror participated in a mock trial has to disclose that fact, but this goes beyond that and is not something I’d seen before.

The case is 3rd Eye Surveillance, LLC v. City of Ft. Worth (E.D. Tex. Jan. 12, 2017), here.

A Resource for In-House Lawyers

Patent lawyers who are not licensed should register or should be extremely careful to limit their practice to “practice before the patent office” or various unauthorized practice of law issues, privilege waiver, and other problems can result.  In-house lawyers have to be really careful to ensure the state registration includes advice to affiliates, and not just the corporate employers, and any kind of charge by the employer for the lawyer’s services can raise lots of issues.  (Fun times.)

So, I’m writing a paper on privilege (patent agent, and patent lawyers who are in-house but not licensed in the state they practice in). In the course of doing so , I’ve been reading these state statutes and also thinking about them.  I compiled a list and thought I’d share it. The ABA’s first, since it compiles them, but many links are broken and so the correct ones follow.  So, if you don’t see your state, go to the ABA site.  If you see your state, use this link.

If you haven’t thought through the privilege issues, you should give  your in-house friends a heads up. You can also use lack of authority to attack many things, like opinions of counsel, privilege…

  • AL:
  • CA:
  • DE: RULE 55.2
  • ID: RULE 225
  • IA: RULE 31.16
  • KS: RULE 712
  • KY:
  • MI: RULE 5
  • MN:
  • NE:
  • RI: RULE 9
  • TN: SECTION 10.01
  • VA:

New Decision Addressing How to Handle Discovery Adverse to Current or Former Client

Suppose you’re representing a party to a lawsuit, and you have no conflicts, but you need to take discovery of a client, or a former client and the lawsuit is related to your work for your former client.  While your representation of the party in the suit isn’t adverse, some courts hold that taking discovery is adverse, and so if it’s taken from a current client, that’s a conflict, and if taken from a former client, that’s adverse and can’t be done if the matter for the former client is “substantially related” to the discovery requests.

A solution is to use separate counsel to take the discovery.  What limits are there on replacement counsel?  A recent case amplified on the sparse case law that there is on that point.  After discussing the case law limiting what “conflicts counsel” — replacement counsel for discovery — can do, the court wrote:

In light of these decisions, and my prior opinion, I think conflicts counsel in this case should be walled off from the McAndrews firm. Conflicts counsel need not be walled off from local counsel. Conflicts counsel may be provided with any and all (unredacted) filings on the docket. They may be further provided with any discovery served or received to date, including any infringement or validity contentions. Further, to the extent Plaintiff has any relevant written expert (including consulting expert) opinions, they may be provided to conflicts counsel. On the other hand, conflicts counsel does not get any tutorial from McAndrews, and does not get any draft Broadcom discovery. Conflicts counsel, if it needs expert advice beyond that identified above, will need to obtain its own expert(s). Conflicts counsel will need to formulate its own discovery requests to Broadcom, but is not prohibited from copying discovery requests already made to the parties or to other third parties. Conflicts counsel will need to serve any Broadcom subpoenas, deal with any Broadcom counsel, take any Broadcom depositions, and collect any Broadcom documents. Any discovery obtained by conflicts counsel may be provided to local counsel, and local counsel may provide the discovery to McAndrews. McAndrews may decide which discovery to provide to its experts, and which discovery to use at trial. The wall will continue at least through the close of discovery, but, it seems to me, it will have to be relaxed at some point before trial, since McAndrews will need to be in charge of trying Plaintiffs case. If any Broadcom witnesses appear at trial, however, any examination (or, more likely, cross examination) will need to be done by conflicts counsel.

TQ Delta LLC v. Pace PLC (D. Del. Civil Action No. 13-1835-RGA Jan. 5, 2017).

Federal Circuit Affirms District Court’s Sanctions; Enters its Own for Frivolous Appeal

The case — Walker v. Health Int’l. Corp. (CAFC Jan. 6, 2017)  (here) — isn’t written very well, and doesn’t seem to break a lot of new ground, but it’s rare for the CAFC to enter sanctions on its own, so it’s worth a read.  From what I can tell, the lawyer was sanctioned by the district court because he settled a case, but then consistently asserted that he hadn’t; he was sanctioned on appeal for making some unsupported arguments and falsely attacking opposing counsel, it seems.

My Letter to the USPTO About Duty of Candor Amendments



Dear Mr. Sked:

I write solely in my personal capacity as someone who advises patent practitioners on ethical issues and litigates patent cases.  These views are not those of my employer or my clients.

I have one broad concern and several more specific ones.

The USPTO Should Interpret the Patent Act Correctly and not Give False Security to Practitioners. 

            At a broad level, I agree uniformity is a good thing.  However, there will not be uniformity because of the different claim constructions given in litigation than in proceedings before the Office. I also agree with the USPTO that it need not follow the Federal Circuit’s definition of materiality (or anything else) from Therasense. However, it seems incongruous for the agency, as the entity charged by Congress with implementing the Patent Act, to adopt a definition that it rejected. Given than uniformity will not exist, what does the USPTO believe is required by the Patent Act of applicants?

More troublesome, however, is the real likelihood that the narrow definitions from Therasense will be rejected by the Supreme Court.  The Supreme Court has in recent years routinely rejected the Federal Circuit’s rigid, cabined interpretations of the Patent Act.  While no one knows what the future holds, today’s practitioner’s conduct may be judged by a more stringent standard than suggested in Therasense and proposed here. That has happened with eligibility, obviously.  Given that the Supreme Court could hold that the Patent Act requires more than avoiding intentionally obtaining a patent that you know you shouldn’t get, and given that that interpretation will likely be applied to all issued patents, and given the USPTO’s statement that it hopes that the new definition will result in less disclosure, one can see a trap for the unwary practitioner.  This may give practitioners a false sense of security.

My more specific comments relate primarily to “who” is covered by these rules.  They don’t make sense.

Rule 1.56 Makes Sense as to Who is Covered; Rule 1.555 Does Not.

As written, Rule 1.56 applies to “[e]ach individual associated with the filing and prosecution of a patent application,” and is further narrowed by subsection (c) which requires “substantive involvement.”  The rule ties the individual to substantive involvement in prosecution or filing.

Rule 1.555, in contrast, is (I think) unintentionally broad.  It states that the duty is owed by “the patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved on behalf of the patent owner.”  The way this is worded, every attorney and other person “associated with” the patent owner must disclose material information, even if the person has no involvement whatsoever in the reexamination. I believe if the sentence were written much like 1.56(c) is, this would clear this up: “The persons who owe a duty to disclose to the Office all information known to them to be material to patentability in a reexamination proceeding are every person who is substantively involved in the reexamination and who is associated with the patent owner, including each attorney or agent who represents the patent owner in the proceeding.”

            Who, in Both Rules, can Commit “Affirmative Egregious Misconduct?”

             The amendment to Rule 1.555 seems to limit who can commit “affirmative egregious misconduct” to the patent owner and those who act “on behalf of” the patent owner.  Rule 1.56 is not so limited, and is also written in the passive voice.

These differences and wordings raise three questions.

First, as noted above, the definition for reexamination would seem to allow for a patent to be held unenforceable due to conduct by every person “associated with” a patent owner, whether that person was involved in the reexamination, or not.  Granted, it likely won’t be affirmative egregious misconduct if the person wasn’t involved, but having a clear definition may help.

Second, under Rule 1.555, can someone other than “the patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved on behalf of the patent owner” in a reexamination commit affirmative egregious misconduct?  Presumably so; but is that the intent of the Office? Again, the comment in the prior paragraph may make this an academic point, but the way the rule is worded the person doesn’t need to be substantively involved in prosecution (and, as noted above, presumably substantive involvement is what was intended).

Third, when read in pari materia, Rule 1.56 is broader than Rule 1.555, since Rule 1.56’s “affirmative egregious misconduct” prong is not limited in the same way as Rule 1.555.  When read together, under Rule 1.56 a person’s conduct can result in non-issuance of a patent even if that person was not acting on behalf of the patent owner.  This seems harsh and unintended.  My suggestion would be to make the two provisions in the different rules have the same scope, and affirmative egregious conduct “by or on behalf of the patent owner” probably is reasonably clear and meaningfully limited in scope.

A Closing Thought:  Uniformity.

In closing, as noted at the outset, uniformity can be a good thing.  To that end, the USPTO has rules that relate to the same general concept – candor and disclosure – but which cover different groups of people. While there may be a policy basis to make the distinctions the rules make, I am not able to guess them.

For example, in addition to the differences discussed above, I note that Section 42.11 – the “rule 11” of IPR — applies to “parties and individuals involved” in an IPR.  Section 42.11 does not require “substantive involvement,” just “involvement.”  Further, because it includes “parties,” it creates the same problem discussed above with respect to Rule 1.555:  everyone who works for a “party” apparently is covered by 42.11, even if that person has nothing to do with the IPR.  As a final example of the varying coverage of these somewhat related rules, Section 42.51(b)(1)(iii) – the obligation in IPR to disclose inconsistent information — requires disclosure by “inventors, corporate officers, and persons involved in the preparation or filing of the documents or things.” Again, substantive involvement is not required, merely “involvement,” but “parties” are not subject to this rule.

It may be helpful to strive toward a single definition in these different rules is my point in closing.  These create practical problems and potential traps and needless litigation.

Glad to provide further information if I can.

Very truly yours,


David Hricik



Peace and Happy Holidays.

As a lot of you know, this past year was quite a challenge for me.  Here is to putting that year behind me, and to blessed times for you, yours, our country, and our planet.  The year ahead is not going to be like the year behind.

AIPLA comes out in favor of USPTO rule for patent agent-client privilege

The AIPLA letter to director Lee is here.

First, I’m not sure the USPTO has power to do this.  Whether or not there is privilege turns, under Fed. R. Evid. 501, on federal common law, federal statutes, or the Constitution, not agency rule-making.

Second, the scope of the privilege is a quagmire.  The problem is that the scope of privilege, at least so far as the Federal Circuit in a 2-1 panel decision in Queen’s University (and other courts) has said, turns on the scope of authority of patent agents.  So, a patent agent who, for example, emails after a patent has issued about, say, its potential infringement: no privilege.

And don’t get me started about the incomprehensible approach of the USPTO on whether patent agents can write assignments.  (“Drafting an assignment or causing an assignment to be executed for the patent owner in contemplation of filing or prosecution of a patent application for the patent owner, where the practitioner represents the patent owner after a patent issues in a proceeding before the Office, and when drafting the assignment the practitioner does no more than replicate the terms of a previously existing oral or written obligation of assignment from one person or party to another person or party.”).  Why on earth would it be competent for a patent agent to simply “replicate” an agreement, without first determining what it does?  And how does one “replicate” an oral agreement?  And why — in order to draft the assignment before filing — must the patent agent represent the patent owner “after a patent issues”?  More fundamentally, how does a patent agent write an assignment before a case is filed, but also is representing the owner after the patent issues? I like time travel movies, but…

But I digress.

For now, and I would say even after/if the USPTO adopts a rule, be very careful if you have patent agents communicating directly with clients, without supervision of a lawyer, because there’s also the possibility that a court won’t follow the Queen’s University case and hold there is no privilege, anyway. That’s already happened in Texas.

Stay tuned.

ABA Issues Opinion Addressing Disputes over Fee Division

The ABA today issued Formal Opinion 475, entitled “Safeguarding Fees That Are Subject to Division With Other Counsel.”  The abstract provides:

A lawyer may divide a fee with another lawyer who is not in the same firm if the arrangement meets the requirements of Model Rule 1.5(e). When one lawyer receives an earned fee that is subject to such an arrangement and both lawyers have an interest in that earned fee, Model Rules 1.15(a) and 1.15(d) require that the receiving lawyer hold the funds in an account separate from the lawyer’s own property, appropriately safeguard the funds, promptly notify the other lawyer who holds an interest in the fee of receipt of the funds, promptly deliver to the other lawyer the agreed upon portion of the fee, and, if requested by the other lawyer, provide a full accounting.

The opinion is available here.  I’ve dealt with lawyers fighting over fees a few times, and the opinion in my view is pretty straightforward… however, always be sure to check the particular state rules, since not all states follow the Model Rule, either by adopting different text or by interpretation.

Effective December 1: No more 3 additional days in federal court to respond for papers served by e-mail

Federal Rule of Civil Procedure 6 has, since it first allowed for service by electronic means, treated it like other means of service, adding 3 days to the deadline to respond (under some circumstances).  It’s now been deleted from the types of service that give the extra there days.  A link is here to this and other rule changes.

Enter the possibility of making life miserable for opposing counsel by serving on the weekend, etc.  A reviser’s note states:

“Electronic service after business hours, or just before or during a weekend or holiday, may result in a practical reduction in the time available to respond. Extensions of time may be warranted to prevent prejudice.”

I can only imagine judges, already in Rule 12 hell because of 101 jurisprudence, now dealing with this.

More Pressure on Texas Supreme Court to Enforce Ethical Rules Despite Arbitration Clauses

Dennis wrote about this case involving Jenner & Block and Parallel Networks on the main page, and I was an expert in the underlying case for the client.  Boiled down, Jenner agreed to represent Parallel Networks on a contingent fee.  The firm got upset when the client fell behind on expenses, and the client paid up.  Then the firm lost  on summary judgment, and dumped the client.

The law in Texas is pretty clear that there’s a big distinction between whether you can quit a case — withdrawal — and whether you can quit a case and be paid.  The former is pretty narrowly circumscribed but the latter is severely so:  without “just cause” you lose any right to any money.  Makes sense, otherwise a contingent fee is illusory:  I get in a case, and it’s a loser, I withdraw but still get paid.  Undermines the entire notion of contingent fees.

Although Jenner gave up on its client’s case, the client didn’t.  But the client had to pay another firm hourly fees to handle the appeal and get the case out of the ditch into which Jenner had put it, and left it.

Then that firm (my old firm, Baker Botts), turned the case around on appeal,  resulting in settlement money.

Believe it or not, Jenner then demanded that — even though it had left its own client in the ditch to fend for itself — because of the contingent fee agreement, it was entitled to its fully hourly fees. Yes, full hourly fees because supposedly that’s what the agreement provided.  The arbitrator awarded the firm some money, but not full hourly fees.  The agreement is quite something to read and Jenner pointed out that the client had used it in another case (long story), and so, presumably, was the cause of any unethical provisions in it.  (Think on that.)

The Texas courts have, so far, refused to even examine the merits  of the award because, supposedly, the Federal Arbitration Act precludes review unless the award was fraudulent, etc.

As you can imagine, the prevailing notion in Texas that we’ve outsourced ethics to arbitrators (aka, lawyers), and as a result insulated their decisions from review by the judiciary — supposedly independent and constitutionally charged in many states with enforcing ethics —  has caused some people to wonder about what is wrong in Texas courts.  If anything, the Texas Supreme Court should say, clearly:  “if there’s an arbitration clause it will be enforced even if the conduct is unethical because that’s what the FAA requires,” so the Supreme Court can take corrective action.

The latest amicus brief is here.  Dennis’ post which links to my earlier one, is here.

I don’t mean to be flippant but, the way things stand, suppose you hire a hit man and, being the good lawyer you are, you include an arbitration clause in your written agreement. He then decides it’s not right to murder someone. So you bring an arbitration proceeding for damages. Hooray for you.  That arbitrator is free to ignore public policy saying that contract is no good, and make then hitman pay, and a Texas court will enforce the award.  Yes, a silly example and obviously extreme, but that’s where Texas now is. It’s obviously wrong, seriously misguided, and needs to be corrected by that court or the one above it.

Prosecution Bars, Experts, and IPR

I’ve written a lot about so-called prosecution bars (buy some of the books for Christmas gifts here!  They make great stocking stuffers for toddlers), and this case is in many ways not that unusual but it does raise one interesting issue and serves as a reminder to both check your side and the other’s for folks who may need to be subjected to a bar, and its scope.

The opinion is not online that I can find but is Emerson Electric Co. v. Sipco, LLC, 2016 WL 6833741 (N.D. Cal. Case No.16-mc-80164-DMR, Nov. 21, 2016).  A third party, Linear Technologies Corporation (“LTC”) was served with a subpoena that included a request for its source code.  LTC sought to ensure that one of the party’s experts, Ameroth, would not have access to it because he was participating in IPRs.  LTC had not instituted the IPRs and was not a party to the litigation.

Everyone agreed to amend to include a prosecution bar in the protective order (apparently it did not, before the subpoena, contain one), but the dispute was over whether Ameroth could view LTC’s source code and still participate in the IPR.

The magistrate granted a prosecution bar that precluded the accused party’s expert from participating in an IPR if the expert gained access to source code from the patentee.  In that sense, the case doesn’t add a whole lot to the mix.  But in its plain reasoning are three hidden lessons.

First, two lessons arise out of the way that courts (and the parties) define the “activities” that courts (and lawyers) focus on to determine whether someone should be barred, or not.  The typical court focuses on patent prosecution, and whether a particular practitioner is doing rote prosecution or is instead in position to be doing “competitive decision making” in terms of prosecution bars.  This court wrote:

[C]ompetitive decisionmaking may be a regular part of representation for counsel or experts who are engaged in work such as: obtaining disclosure materials for new inventions and inventions under development, investigating prior art relating to those inventions, making strategic decisions on the type and scope of patent protection that might be available or worth pursuing for such inventions, writing, reviewing, or approving new applications or continuations-in-part of applications to cover those inventions, or strategically amending or surrendering claim scope during prosecution.

That definition raises the first two lessons.

The first lesson is don’t use a form that simply says “prosecution.”  Even when applying this definition to practice before the USPTO, courts continue to split on whether IPRs (reeexam, reissue, etc.) are “prosecution.”  Some courts formalistically say “prosecution isn’t IPR” and so a protective order may not prevent someone from receiving highly confidential information but being involved in IPR.  (Or, it might:  therein is the issue). Other courts, even if they go beyond formalistically reading the protective order, hold that IPR does not create the same risk as prosecution, and so is not covered. Given the initial differences between the realistic probability of the PTAB in allowing claim amendments, you can understand why some courts had held that IPR did not present the risk of “shaping” claims that ordinary prosecution did.  (Given the slightly more moderate view of the PTAB in allowing amendments, maybe the reason for the split is dissipating?)

The take away on this first lesson?  If your prosecution bar does not specifically address IPR you may want to amend it.  Without clarity, you may be violating it, or the other side may be doing things you “think” they’re not supposed to do but which may be proper.  Many “forms” out there are not very good if you want clarity.

The second lesson is:  don’t stop at patent prosecution when figuring out what activities need to be covered, and as a result who needs to be covered.  Instead, imagine who else besides the lawyers on the other side who are prosecuting patent applications might need to be barred, and who on your side may need to be barred.  A good protective order will go beyond “prosecution” and cover other activities that present risk for misuse. Those could include IPR, reissue, reexam, or licensing activities, patent acquisition, or a host of other things).  Those activities may mean that people far beyond patent prosecutors will be covered, including experts, inventors, owners of NPEs, and so on.  Folks besides patent practitioners can misuse information.  Again, you need to be sure you know who is covered, and be sure you look at the other side’s folks, too.

The third lesson is procedural.  In this case, the magistrate imposed a burden on the party receiving information to establish that an individual is “exempt” from the bar.  This makes sense, since there (often) will be no way for Party A to know what Party B’s lawyers, and so on, are doing.  But, some courts require the party seeking a bar to show that a person working for the other side should be included. That can be awkward, to say the least.  But that also reiterates lessons one and two above, and the need for diligence — for protecting your client’s information and protecting your side from being accused of misusing information when the bar was not clear.


Sedona Conference Guidance on Parallel Litigation and PTAB Proceedings

The pithily named publication, “Commentary on Patent Litigation Best Practices: Parallel USPTO Proceedings Chapter (“Stage One”),” lays out 33 “best practices” and is available here. Those practices contain several that relate to competency and so I thought they’d be of interest:

  • Parties should be familiar with the limited categories of discovery available in postgrant proceedings.
  • Parties seeking additional discovery in a post-grant proceeding should identify the material sought with particularity and make a required showing why additional discovery should be granted.
  • Parties seeking additional discovery should explore whether each side might want and benefit from certain discovery beyond what is normally permitted by the PTAB; and, if so, then the parties should consider voluntarily exchanging such discovery.
  • Litigation counsel should not be barred from litigating patentability in the PTAB.
  • Parties seeking a litigation stay during post-grant proceedings should promptly provide the district court with complete information about: the patents-in-suit; the parties; the claims; the defenses; any other existing cases involving any of the patents-in-suit or the same parties; the instituted, pending, or forthcoming PTAB review petitions involving the patents-in-suit; and any timing or jurisdictional issues that may arise.
  • The district court should consider asking key questions relevant to stays for all patent cases at the earliest possible stage of the litigation. .
  • If a PTAB review petition has been or is likely to be filed, parties should confer with opposing counsel as early as possible regarding possible joint stipulations for a stay of district court litigation.
  • The patentee should disclose as early as possible to the district court any intent to amend asserted claims in post-grant proceedings.
  • Parties to a litigation who avail themselves of the PTAB should be required to disclose as early as possible to the district court all real parties-in-interest to the PTAB proceedings, and make an effort to disclose any parties in privity.
  • Parties to joint defense groups should confer as early as possible about which defendants, if any, will petition for an IPR proceeding; and, if moving for a stay of the district court litigation, the parties should agree to be estopped on any ground that is raised or that could reasonably be raised before the PTAB to maximize the chances of obtaining a stay.
  • Parties seeking a litigation stay should demonstrate to the district court how potential estoppel may simplify the issues.
  • If a party requests a litigation stay, the district court should determine whether a post-grant proceeding will simplify the issues with respect to the asserted claims and the prior art. .
  • If a party requests a litigation stay, the district court should inquire whether all codefendants, including those not participating in the post-grant proceedings at the PTAB, will agree to a limited estoppel on any ground actually raised and adjudicated in exchange for granting the stay.
  • If a petitioner files an IPR or a PGR concurrently with a declaratory judgment action, the district court should strongly consider maintaining the automatic stay pursuant to statute.
  •  If PTAB review has been instituted before the filing of a district court infringement action on the claims, the court may consider this as weighing in favor of a stay. .
  • A litigation stay request after a CBM proceeding has been instituted may weigh in favor of a stay.
  • A litigation stay request filed before the institution of a post-grant proceeding may weigh against a stay, but the district court may instead deny without prejudice so that the party can refile its request if and when institution occurs.
  • If a post-grant proceeding would likely result in cancellation of all claims at issue in the district court before a final judgment, this may weigh heavily in favor of a stay.
  •  If a party requests a litigation stay, the district court should consider ruling on the motion as soon as possible, and to the extent that the defendant unreasonably delays in filing the motion, that should weigh against a stay.
  • If a party requests a litigation stay, the district court should consider denying the stay if Markman proceedings are substantially complete, or if discovery is already closed.
  • A potential of a loss of evidence over time may weigh against a stay, but the risk must be demonstrated, serious, and not otherwise preventable.
  • If the lack of full and complete discovery may unduly prejudice a party before the PTAB on critical issues, this may weigh against a stay.
  • If the parties are direct competitors, this may weigh against a stay due to potential prejudice to the patentee.
  • A post-grant proceeding that will likely require additional time to fully resolve the issues may weigh against a stay.
  • Throughout any post-grant proceeding, and especially at its conclusion, the parties to a stayed litigation should meet and confer to reassess settlement positions, the terms for having the stay lifted, and the means to streamline the case going forward.
  • Upon lifting a stay, the district court may consider a conference with the parties to evaluate the case going forward. .
  • The district court should consider issuing a detailed written decision on any stay motion, and seek to have opinions published such that they are available to the public as this area of law develops.
  • Parties considering post-grant proceedings should consider the extent of the estoppel created by each type of post-grant proceeding.
  • Parties should consider, where appropriate, forgoing PGR and IPR proceedings to avoid the risk of being estopped from raising unasserted invalidity theories that they “reasonably could have raised” in the PGR or IPR.
  • Potential estoppels arising from PGR, CBM, and IPR proceedings should be considered claim-by-claim.
  • Those with a potential interest in the outcome of a post-grant proceeding should evaluate if they would likely be considered to be a real party-in-interest or in privity with the petitioner.
  • Parties to a joint defense group or an indemnitor-indemnitee relationship should consider the possibility that estoppel (whether legal or practical) will apply notwithstanding their lack of direct participation in the post-grant proceeding.
  • The potential for remand should be considered before lifting a stay to apply PGR, CBM, and IPR estoppels where the Final Written Decision of the PTAB has been appealed to the Federal Circuit.

USPTO Proposed to Revise Rule 56

by David Hricik [Originally published on Nov 1]

The announcement is here.  I will be submitting comments before the 12/27 deadline, and so if you have any ideas or thoughts, please post away.  The proposed amendment include responses to comments made back in 2011 when the USPTO was initially pondering this, and the proposed rule now reads:

(a) A patent by its very nature is affected with a public interest. The public interest is best served, and the most effective patent examination occurs when, at the time an application is being examined, the Office is aware of and evaluates the teachings of all information material to patentability. Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability under the but-for materiality standard as defined in paragraph (b) of this section. The duty to disclose information exists with respect to each pending claim until the claim is cancelled or withdrawn from consideration or the application becomes abandoned. Information material to the patentability of a claim that is cancelled or withdrawn from consideration need not be submitted if the information is not material to the patentability of any claim remaining under consideration in the application. There is no duty to submit information which is not material to the patentability of any existing claim. The duty to disclose all information known to be material to patentability is deemed to be satisfied if all information known to be material to patentability of any claim issued in a patent was cited by the Office or submitted to the Office in the manner prescribed by §§ 1.97(b) through (d) and 1.98. However, no patent will be granted on an application in connection with which affirmative egregious misconduct was engaged in, fraud on the Office was practiced or attempted, or the duty of disclosure was violated through bad faith or intentional misconduct. The Office encourages applicants to carefully examine:

(1) Prior art cited in search reports of a foreign patent office in a counterpart application, and

(2) The closest information over which individuals associated with the filing or prosecution of a patent application believe any pending claim patentably defines, to make sure that any material information contained therein is disclosed to the Office.

(b) Information is but-for material to patentability if the Office would not allow a claim if the Office were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction consistent with the specification.

* * * * *
■ 3. Section 1.555 is amended by revising paragraphs (a) and (b) to read as follows:

§ 1.555 Information material to patentability in ex parte reexamination and inter partes reexamination proceedings.

(a) A patent by its very nature is affected with a public interest. The public interest is best served, and the most effective reexamination occurs when, at the time a reexamination proceeding is being conducted, the Office is aware of and evaluates the teachings of all information material to patentability in a reexamination proceeding. Each individual associated with the patent owner in a reexamination proceeding has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability in a reexamination proceeding under the but-for materiality standard as defined in paragraph (b) of this section. The individuals who have a duty to disclose to the Office all information known to them to be material to patentability in a reexamination proceeding are the patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved on behalf of the patent owner in a reexamination proceeding. The duty to disclose the information exists with respect to each claim pending in the reexamination proceeding until the claim is cancelled. Information material to the patentability of a cancelled claim need not be submitted if the information is not material to patentability of any claim remaining under consideration in the reexamination proceeding. The duty to disclose all information known to be material to patentability in a reexamination proceeding is deemed to be satisfied if all information known to be material to patentability of any claim in the patent after issuance of the reexamination certificate was cited by the Office or submitted to the Office in an information disclosure statement. However, the duties of candor, good faith, and disclosure have not been complied with if affirmative egregious misconduct was engaged in, any fraud on the Office was practiced or attempted, or the duty of disclosure was violated through bad faith or intentional misconduct by, or on behalf of, the patent owner in the reexamination proceeding. Any information disclosure statement must be filed with the items listed in § 1.98(a) as applied to individuals associated with the patent owner in a reexamination proceeding and should be filed within two months of the date of the order for reexamination or as soon thereafter as possible.

(b) Information is but-for material to patentability if, for any matter proper for consideration in reexamination, the Office would not find a claim patentable if the Office were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction consistent with the specification.

No Common Interest Privilege in NY Without Anticipated Litigation

This case is going to cause some problems.

Normally, if Client A and Lawyer A have a confidential communication, disclosure of it to a third party waives any privilege.  However, if Client A and the third party have a “common interest,” there is no waiver.  So, for example, if a licensor communicates with patent prosecution counsel for the licensee about prosecution of a foreign counterpart of the licensed patent, there might be a privilege.

But not under New York law.  The Court of Appeals, inaptly named highest court of New York, held that only if there is pending or anticipated litigation is the common interest exception to waiver available.  Ambac Assurance Corp. v. Countrywide Home Loans, Inc., (June 9, 2016).

9th Circuit en banc follows others and adopts Octane for Trademark Fee Shifting

In SunEarth, Inc. v . Sun Earth Solar Power Co., (9th Cir. Oct. 24, 2016), the court held that the same interpretation given to the patent act’s fee shifting statute, 35 U.S.C. § 285, applies to the trademark statute, 15 U.S.C. § 1117(a).  The court noted:

Following [Octane], the Third, Fourth, Fifth, and Sixth Circuits have recognized that Octane Fitness changed the standard for fee-shifting under the Lanham Act. Baker v. DeShong, 821 F.3d 620, 621–25 (5th Cir. 2016); Georgia- Pacific Consumer Prods., 781 F.3d at 720–21; Slep-Tone Entm’t Corp. v. Karaoke Kandy Store, Inc., 782 F.3d 313, 317–18 (6th Cir. 2015); Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 313–15 (3d Cir. 2014). Only the Second and Seventh Circuits have applied earlier case law to Lanham Act fee disputes, and both did so without mentioning Octane Fitness or Highmark. Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247, 265–66 (2d Cir. 2014); Burford v. Accounting Practice Sales, Inc., 786 F.3d 582, 588 (7th Cir. 2015).

My guess is that pretty soon those latter circuits will flip, too.