Guest post: US patent litigation tactics

Several of you may be familiar with the Upaid vs Satyam case that I've been following for some time on this blog. The last reported news was on the filing of a third amended complaint in a federal court in Texas. A fallout of tracking this story has been trying to understand the nuances of US litigation in such cases. Which is where the following guest post comes in by Siddharth Fernandes, who is a law clerk for a US Federal Court Judge, and focuses almost entirely on patent litigation.

Siddharth and I had a brief email discussion on some of the finer aspects of such litigation, and I invited him to do a guest post on the issue, in context of the Satyam/Upaid case. What follows is a post that I found very engaging to read, which I hope will enlighten participants on this blog, who may be unfamiliar with such detail.

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The views and opinions expressed by the author are solely his own.

While we were discussing her recent post on the Upaid v. Satyam case, Sumathi presented me with some interesting questions regarding procedural norms and tactics in American litigation. I hope to present short and practical answers to those questions, which include:

(1) What if any is the significance of the fact that some of the filings in this case are sealed?

(2) Why has Upaid’s complaint been amended?

(3) Are there any limits or criterion associated with amended complaints?

(4) Are jury trials customary?

(5) Can there be an extension of the June 2009 trial date? and

(6) Will the discovery period be extended if the trial date is postponed?

Prior to answering these questions, it is best to inform the reader of one overarching principle of American patent litigation: discovery is extensive, time consuming, expensive and meant to help avoid any surprises during trial. Generally, discovery in American civil actions is governed by Rules 26 to 37 of the Federal Rules of Civil Procedure. Accordingly, unless limited by the trial court, discovery can cover “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.” Fed. R. Civ. P. 26(b)(1). Notably, one party can even examine items on discovery which may not be admissible at trial. But I digress, onto Sumathi’s questions.

Overall, one need not attach a great deal of significance to the fact that some of the filings in the Upaid case are sealed or that their complaint has been amended. Indeed, this is common practice in American litigation.

As per the sealed documents, it is likely that some if not most of them will be eventually be unsealed since it is rare in the U.S. for documents to remain sealed unless they contain sensitive trade secrets. In those instances the court will usually issue "redacted" versions of filings which hide confidential information. However, there was at least one recent patent case in the Western District of Wisconsin in which many of the filings were sealed. Needless to say, the trial judge, the highly regarded Barbra Crabb, was heavily criticized by certain commentators. See for example this reporter's take on the judge:

“[I]t's incredibly dismaying that Judge Crabb has allowed nearly every document filed in the case since trial to be filed under seal. This lawsuit is, in one sense, about online shopping technology. That affects everyone in this country. For three months now Crabb has operated a secret, closed court; I've read through hundreds of patent dockets and I've never seen anything like it. This should stop. I don't know if it's legal, but I know it ain't right.”

Like sealed documents, amended complaints are part and parcel to American litigation. The fact that Upaid’s complaint has been amended might just mean that its attorneys found something in discovery that could lead to a new claim or defense. This is because quite often when a complaint is initially filed, certain claims or arguments are left out because discovery has yet to be conducted and the parties involved have no way of knowing that they can be raised. Thus, as discovery proceeds, parties may add claims, counterclaims, defenses, etc. based on new evidence. As a corollary, parties could amend their complaints to drop certain claims or defenses as a result of some evidence unearthed during discovery.

As per whether there are any restrictions or criterion for filing amended complaints, unfortunately the answer is: "it depends." If a party has gone too far afield then clearly it may not amend its complaint. However in most cases, if a party finds something new and relevant during discovery, it will generally be able to amend its complaint. The focus now turns to the frequency of jury trial requests.

More often than not, a plaintiff will demand a jury trial, although notable exceptions include complex pharmaceutical litigation where the subject matter may be too complicated to be left to a jury. For example, pharmaceutical patents are often evaluated during “bench trials” (no jury) in the Southern District of New York. However, since the Upaid case was filed in the Eastern District of Texas, I am fairly positive the plaintiff wants this case in front of a jury. The jury pool in this part of the country is perceived, correctly or not, as patent-friendly. See for example this patent brief on an ED Texas decision involving Boston Scientific.

As per whether the trial will proceed as scheduled, once again this is a case-by-case determination. Trials are rarely scheduled very shortly after a complaint is filed. In some instances you have “rocket dockets” that move quickly because they don't grant continuances. However, most other dockets take years to resolve patent cases. This is because judges’ calendars are crowded and discovery is meant to ensure that every relevant piece of evidence be discovered and analyzed before trial. The more complex the case, the longer discovery is likely to take. Accordingly, judges will usually let parties extend discovery to make sure they get whatever evidence they claim they need. Another bonus of this approach is that with fewer hidden surprises, the parties are more likely to settle and trial can be altogether avoided. In fact, the vast majority of disputes and case filings never make it to trial in the U.S.

However, although Judges generally remain flexible with respect to trial dates, as the litigation proceeds closer to trial and schedules are set, judges naturally become less flexible. Think of it as a sliding scale. The closer you get to trial, the less reasonable your request for a continuance will be and the less likely it will be granted. This is because, witnesses may be scheduled, travel arrangements may be set, other trials may be scheduled, etc. Also, it is assumed that the parties involved will be more likely to settle, the closer they get to a trial date. And judges who want to encourage settlement may be less inclined to grant extensions. However, if you ask far enough in advance, you will get a continuance. Keep in mind though, that each judge may have her own rules of procedure and that each jurisdiction has its own "local rules." So the old maxim of "it depends" applies here as well.

As the Upaid case continues, or as I am presented with some more questions, I will try as best I can to fill in the blanks. I hope this helps answer questions some of you may have had.