Patent litigants in the Northern District of California will have something new to argue over following the Court's approval in January of Patent Local Rule amendments that impose damages-related disclosure requirements. The Court also tweaked a few other patent local rules.
The Northern District pioneered the early disclosure of infringement and invalidity contentions in patent cases. It now is also an early (though not the first) adopter of a requirement that damages contentions be disclosed early in patent litigation. The Northern District appears to have copied liberally from a model local rule proposed by the Sedona Conference last year, though there are substantial differences as well.
Infringement and invalidity contentions serve the useful purposes of giving the other side important information about a party's case, paving the way for subsequent discovery and claim construction, and defining the scope of a party's claims and defenses (subject to a limited right to amend). But contentions also frequently spawn side battles over their sufficiency. The same pros and cons will undoubtedly apply to damages contentions as well.
Key provisions of the new local rule amendments include:
- The parties must discuss damages discovery during their Rule 26(f) conference and in their Case Management Statement. Patent L.R. 2-1(b)(2).
- At the same time, the parties must also "provide the court with a nonbinding, good-faith estimate of the damages range expected for the case" and an explanation of the estimate, or else explain why they cannot, what information they need to do so, and when that will be. Patent L.R. 2-1(b)(5).
- A party's infringement contentions must identify the start and end dates of the claimed damages period. Patent L.R. 3-1(h).
- The document production accompanying a party's infringement contentions must include licenses and other agreements the party may use to support its damages case, marking-related documents, sales data for products as to which lost profits are sought, and documents reflecting a FRAND commitment with respect to the asserted patents. Patent L.R. 3-2(g)-(j).
- The document production accompanying an accused infringer's invalidity contentions must include licenses and other agreements the party may use to support its damages case, and sales data for the accused products during the period of infringement. Patent L.R. 3-4(c)-(e).
- Within 50 days after invalidity contentions are served, a party
claiming infringement must serve damages contentions that identify
the categories of damages sought, theories of recovery, factual
support for those theories, and computations of damages in each
category. If a party contends it cannot respond fully, it must
identify the information it needs to do so. Patent
L.R. 3-8. - An accused infringer must respond within 30 days explaining "specifically" how and why it disagrees with the other side's damages contentions. If the accused infringer contends it cannot respond fully, it must identify the information it needs to do so. Patent L.R. 3-9.
- Damages-related discovery served before the damages contentions are due may be objected to as premature. Patent L.R. 2-5(a).
In addition to imposing these new damages procedures, the Court amended the local rules related to infringement charts, invalidity contentions, the production of documents related to advice of counsel claims/defenses, and claim construction. See Patent L.R. 3-1(c), 3-1(h), 3-3(a), 3-3(c), 3-7, 4-3(f). For example, infringement and invalidity charts must now specify not just "where" but also "how" each claim limitation is found in the accused products or the prior art; the local rule on invalidity contentions has been updated to conform to the America Invents Act; and (perhaps in response to the Supreme Court ruling in Teva Pharms. USA, Inc. v. Sandoz, Inc.) a Joint Claim Construction and Prehearing Statement must identify any findings of fact related to claim construction that the parties want the Court to make.
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