The following short statement was written by Prof. Bernard Chao (Denver) and then joined by 20+ additional professors whose names are listed below. Chao was a patent attorney and patent litigator for 20 years before becoming a professor and I have long valued his insight. You’ll note that I also signed below – DC.
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Judge Alan Albright’s court in the Western District of Texas is rapidly becoming the latest hot spot for patent litigation. While only a total of two patent cases were filed in 2016 and 2017 in Judge Albright’s Waco federal courthouse, the number of patent filings rose to seven hundred and ninety-three (793) in 2020. See J. Jonas Anderson & Paul R. Gugliuzza, Federal Judge Seeks Patent Cases, (forthcoming Duke L. J 2021). Professors Anderson and Gugliuzza provide a thorough explanation (and critique) of this sudden ascent. I have a smaller, but nonetheless important, point to make. If the Western District of Texas is going to hear some of patent law’s most important cases, it should not do so in secret. Unfortunately, that appears to have just what happened in one the highest dollar value patent trials in recent history.
The patent world has been abuzz about the $2.18 billion verdict that the Waco jury handed down on March 2, 2021 in VLSI Technology v. Intel. The public debate in patent law has often focused on whether courts and juries are getting patent damages right. Looking at relevant filings on damages provides critical information for this important discussion. In high stakes cases, parties typically file summary judgment motions on damages and Daubert motions attempting to exclude certain theories. These motions often attach expert reports and deposition testimony as exhibits. Together these documents illustrate how patent doctrine shapes damage awards. For example, filings often explain how the parties seek to apportion damages between the value of the infringing features and the product as a whole. This is not an easy task and parties have taken many approaches to apportionment with varying levels of success.
However, these documents cannot be retrieved from the VLSI Technology v. Intel docket. To be clear, sealing is appropriate in some instances. Companies should be able to keep their confidential technical and financial information under wraps. But at least as of March 15, 2021, the following docket entries were wholly unavailable (i.e. not even redacted copies were available).
| Docket No. | Date | Title (some abbreviated) |
| 252 | 10/8/2020 | DEFENDANT INTEL CORPORATIONS SEALED MOTION FOR SUMMARY JUDGMENT OF NO PRE-SUIT INDIRECT INFRINGEMENT OR WILLFULNESS AND OF NO POSTSUITWILLFULNESS OR ENHANCED DAMAGES |
| 258 | 10/08/2020 | DEFENDANT INTEL CORPORATION’S SEALED MOTION FOR SUMMARY JUDGMENT OF NO PRE-COMPLAINT DAMAGES UNDER 35 U.S.C. § 287. |
| 260 | 10/08/2020 | DEFENDANT INTEL CORPORATION’S SEALED MOTION FOR SUMMARY JUDGMENT OF NO INFRINGEMENT AND/OR NO DAMAGES FOR CLAIMS 1, 2, 4, 17, 19, AND 20 OF U.S. PATENT NO. 7,793,025. |
| 276 | 10/08/2020 | VLSI’S DAUBERT SEALED MOTIONS TO EXCLUDE DAMAGES-RELATED TESTIMONY OF DEFENDANT INTEL’S EXPERTS |
| 431 | 2/18/2021 | Sealed Document filed: Defendant’s Response to Plaintiff’s Daubert Motions to EXCLUDE DAMAGES-RELATED TESTIMONY OF INTELS EXPERTS |
| 443 | 2/18/2021 | Sealed Document filed: VLSI’S OPPOSITION TO INTEL’S MOTION FOR SUMMARY JUDGMENT OF NO PRE-COMPLAINT DAMAGES UNDER 35 U.S.C. §§ 287 258 |
| 445 | 2/18/2021 | Sealed Document filed: VLSI’S OPPOSITION TO INTEL’S MOTION FOR SUMMARY JUDGMENT OF NO INFRINGEMENT AND/OR NO DAMAGES FOR CLAIMS 1, 2, 4, 17, 19, AND 20 OF U.S. PATENT NO. 7,793,025 260 |
| 446 | 2/18/2021 | Sealed Document filed: VLSI’S OPPOSITION TO INTEL’S MOTION FOR SUMMARY JUDGMENT OF NO PRE-SUIT INDIRECT INFRINGEMENT OR WILLFULNESS AND OF NO POST-SUIT WILLFULNESS OR ENHANCED DAMAGES 252 |
Two short orders granted motions to seal these filings. However, the sealed filings appear to go far beyond damages. The first order (dated October 8, 2020) granted roughly thirty motions (Docket Entries 214-244) and the second order (dated February 18, 2021) granted even more (Docket Entries 287-89, 293-319, 321-345, 374-381, 398, 404, 405, 410, 416. 418, 420, 424, 425). Many of the sealed motions are motions in limine that do not have a descriptive title. They are simply numbered (e.g. Motion In Limine #3). So, there is no way to even know what subjects they cover.
Judge Albright did give a small nod to transparency in his February 18, 2021 order which required “[t]he filing party shall file a publicly available, redacted version of any motion or pleading filed under seal within seven days.” Unfortunately, the redacted versions do not appear to have been filed. A few days earlier, Judge Albright also issued a February 12, 2021, standing order that requires parties to do the same in all cases pending in his court.
But these orders are inadequate in several ways. First, they explicitly permit parties to file purportedly confidential information under seal without a motion. But the parties have no incentive to be transparent. It is the court’s job to protect the public interest, and this order abdicates that duty. Second, there also appears to be no safeguard for parties that redact too much information in their filings, a problem we have seen before. See In re Violation of Rule 28(D) (Fed Cir. 2011)(sanctions for redacting information that was not confidential including case citations). Third, the order does not require parties to redact exhibits. But some of the most critical information like deposition testimony and expert reports are exhibits. Finally, the order is not retroactive allowing most of the VLSI v. Intel case to remain in the dark.
This is not the first time that patent litigation has suffered from transparency problems. Other district courts have allowed too many documents to be sealed in previous high stakes cases like Broadcom v. Qualcomm (S.D. CA) and Monsanto v. Dupont (E.D. MO). See, Bernard Chao, Not so Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent L.J. 6 & Bernard Chao & Derigan Silver, A Case Study in Patent Litigation Transparency, 2014 Journal of Dispute Resolution 83.
While these stories appear to paint a bleak picture for transparency in patent litigation, some courts are making an effort to keep their dockets accessible to the public. There have been notable decisions to ensure that filings are accessible. For example, in 2016 the Electronic Fronter Foundation successfully intervened and obtained an order from the E.D. of Texas to unseal records in a patent case, Blue Spike LLC, v Audible Magic Corp. Earlier this month, the Federal Circuit, affirmed a lower decision rejecting attempts to seal specific filings in another patent dispute. See DePuy Synthes Products Inc. v. Veterinary Orthopedic Implants (Fed. Cir. Mar. 12 2021).
Moreover, individual court rules are now requiring greater transparency. The Federal Circuit’s latest rules clearly seek to maximize public disclosure. In each filing, Rule 25.1(d) only allows parties to mark “up to fifteen (15) unique words (including numbers)” as confidential. A party seeking to exceed that limit must file a motion. As Silicon Valley’s home venue, the Northern District of California entertains numerous patent cases. The court’s local rules say that material may only be sealed when a request “establishes that the the document, or portions thereof, are privileged, protectable as a trade secret or otherwise entitled to protection under the law.” Moreover, the request must “must be narrowly tailored to seek sealing only of sealable material.” Ironically, even Texas state courts, which obviously do not hear patent cases, treat requests to seal far more seriously than the W.D. of Texas. Specifically, Texas Rule of Civil Procedure 76a states that court records are “presumed to be open to the general public”, and only allows records to be sealed upon a showing that “a specific, serious and substantial interest which clearly outweighs” various interests in openness.
In short, the Western District of Texas should join these other courts and take its duty to ensure transparency seriously. As the Fifth Circuit recently put it , “[w]hen it comes to protecting the right of access, the judge is the public interest’s principal champion.” Binh Hoa Le v. Exeter Finance Corp. (5th Cir. Mar. 5, 2021). Accordingly, we make a few basic recommendations. First, parties should not be able to file material under seal without judicial scrutiny. They should be required to file motions and justify their requests. Of course, a court also cannot rubber stamp these requests. If resources are a problem, the court can appoint a special master in larger cases. Second, parties should have to redact exhibits too. There can be valuable non-confidential information in those exhibits. Finally, a quick aside, even though judges bear the primary responsibility for making their dockets transparent, that does not mean the parties should not show more restraint. To the extent that either side is a repeat player, and thinks the patent system needs reform, they should be careful not to over seal. Their filings might end up being important contributions to the public debate.
Signatories
Professor Bernard Chao
Sturm College of Law
University of Denver
Jeremy W. Bock
Charles E. Lugenbuhl Associate Professor of Law
Tulane University Law School
Colleen V. Chien
Professor of Law
Santa Clara University School of Law
Thomas F. Cotter
Taft Stettinius & Hollister Professor of Law
University of Minnesota Law School
Jorge L. Contreras
Presidential Scholar and Professor of Law
S.J. Quinney College of Law
University of Utah
Dennis D. Crouch
Associate Professor of Law
University of Missouri Law School
Brian L. Frye
Spears-Gilbert Professor of Law
University of Kentucky College of Law
William T. Gallagher
Professor of Law
Golden Gate University School of Law
Shubha Ghosh
Crandall Melvin Professor of Law
Director, IP & Technology Commercialization Law Curricular Program
Syracuse Intellectual Property Law Institute (SIPLI)
Syracuse University College of Law
Professor Amy Landers
Director of the Intellectual Property Concentration
Drexel University
Thomas R. Kline School of Law
Mark Lemley
William H. Neukom Professor
Stanford Law School
Jake Linford
Loula Fuller & Dan Myers Professor
Florida State University College of Law
Brian J. Love
Associate Professor of Law and Co-director of the High Tech Law Institute
Santa Clara University School of Law
Professor Phil Malone
Stanford Law School
Professor Michael J. Meurer
Boston University School of Law
Professor Viva Moffat
Sturm College of Law
University of Denver
Christopher Morten
Deputy Director, Technology Law & Policy Clinic
NYU Law
Professor Lucas S. Osborn
Norman Adrian Wiggins School of Law
Campbell University
Keith Robinson
Altshuler Distinguished Teaching Professor
Co-Director, Tsai Center for Law, Science and Innovation
Associate Professor of Law
Southern Methodist University
Andres Sawicki
Professor of Law
University of Miami School of Law
Christopher B. Seaman
Associate Professor of Law
Director, Frances Lewis Law Center
Washington and Lee University School of Law
Rebecca Tushnet
Frank Stanton Professor of First Amendment Law
Harvard Law School
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Disclosure Note: Guest posters and Patently-O Law Journal authors are asked to disclose conflicts of interest. This is a bit different because there are a wide array of signatories. Prof. Chao indicated that he has no ongoing conflicts of interest, but that he did once receive a grant from Intel used to fund empirical research, but has had no relationship with the company since then.
Oh brother. A pro-patent judge is harassed by Lemley and Chien (give me them there Trade Secrets so the tech workers’s salaries can be lowered and their mobility reduced to nothing). What a surprise.
No kidding.
The increased drive for “transparency” has nothing to do with fairness or justice. It has everything to do with the fact that the outside efficient infringement lobby (represented by Mark Lemley and most of the “esteemed” academics in this letter) cannot adequately frame their 3rd party amici legal theories for Intel’s sake if they don’t know the particulars. (Of course the fact that Intel’s legal counsel might actually leak the particulars out somehow against their ethical code doesn’t enter into this argument.)
God forbid…in this day and age…if Intel (one of the biggest tech corporations in the world) is forced to rely ONLY on ITS OWN highly expensive and 1000+ lawyer legal outside counsel (Wilmer Hale)(in addition to its 300+ lawyer internal legal staff) against VLSI’s legal counsel (which probably represents less than 10 lawyers and staff) to combat a suit in which Intel was deemed to infringe on a patent…whatever are we supposed to do??? Surely this $259B cap company needs more help from every crackpot (spaghetti-flinging) patent efficient infringement theory-advancing academic whose poison has infected patent law students for over a decade….
PS – Yes…this is very sarcastic hyperbole…
+1
“Transparency” does cut both ways – as an objective item.
However, it’s lack of in relation to weaponization against an established property right does NOT cut both ways.
The fact is that the CAFC is so broken that its precedent should no longer be considered binding. The CAFC should be classified as a private court filled with purchased people. The CAFC has pretty much no credibility at the dist. ct. level nor from the lawyers that practice before it.
I hear what you are saying, but there is some serious structural issues with a necessary (and necessarily) Proper Means to be found and employed.
Merely disbanding the CAFC is no answer – as the problems that generated the call for its formation very much still exist, and would make themselves rapidly visible.
There is the path that I have suggested: Congress employ its Constitutional Authority of jurisdiction stripping of the Supreme Court from the non-original jurisdiction of patent case, and reformulating a new Article III court (to preserve Marbury) while dispensing with the taint of “Fire-hosed Simians in a Cage.”
This also relates to the question I have been asking. Out of the large docket of patent cases now pending in Waco EDTX [some assert 2000?] have more than two had a trial and final decision so far? To see if this is a standard practice or not.
This relates to another important question – what now is the realistic anticipated time-t0-trial there, as opposed to what some APJs have been using in Fintiv IPR institution denial decisions?
2 thoughts on this.
1. The pace of litigation and volume of confidential material are different in district court than on appeal. I think that part of the thought process behind the Federal Circuit confidentiality rules is that the court isn’t asking too much of the parties because of the ways appeals are different. The joint appendix is mostly limited to the material cited in the 3 or 4 briefs, the briefs are prepared over the course of a few months, and it’s not entirely unreasonable to ask the parties to pick through that discrete subset of the trial record to figure out what needs to be redacted and explain why. I don’t think one should assume that the same is true for district courts.
2. The practical effect of a demand for greater transparency will mostly fall on defendants, I think. Upon being sued, the Intels of the world have to open their technical and financial files to NPE lawyers and trust that the threat of sanctions for violating a protective order will sufficiently protect their information. Things that were previously no one else’s business become presumptively public because someone has sued you. I think the things this post asks to unseal will probably consist mostly of defendants’ technical and financial information, plus perhaps some of the NPE’s prior licensing demands.
Maybe I’m wrong about one or both of these things, or maybe they don’t matter. I appreciate Dennis pointing out that Prof. Chao has substantial litigation experience.
dcl, those are good points. When the plaintiff in a patent suit is a PAE as here, about the only things the PAE might want to keep secret are how much it paid for the patents it purchased to sue on, who is secretly funding their lawsuits, what they have been paid by others in pre-trial settlements or licenses, and who, if anyone, is secretly getting a percentage of their suit recoveries? [Since they did not invent, patent, or make anything themselves.]
On the other hand, the kind of unrestricted discovery in many patent suits exposes much more extensive and valuable secrets of defendants about their technology, manufacturing, pricing, marketing, competition, etc.
Some of this discovery expense and desire for secrecy orders in patent suits can of course be reduced by separating the damages part of patent trials until after infringement and validity trial determinations in all those cases in which the latter renders all damages issues moot.
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