In a recent order issued by the Eastern District of Texas in the Uniloc litigation, Judge Davis recognized that multiple-defendant suits can be effectively and economically managed by modifying the typical scheduling procedures to encourage early mediation and settlement. By employing customized case management procedures, 104 of the 124 original defendants were able to settle their disputes prior to the Markman hearing and, importantly, "without the need for voluminous and expensive discovery." Uniloc USA, Inc., et al., v. Sony Corp. of Am., et al., Case No. 6:10-cv-373-LED, Order (Dkt. #215) at 6 (E.D. Tex. Nov. 3, 2011).

In order to effectively manage a case of this magnitude, Judge Davis held an early status conference to request input from the parties regarding strategies to promote the efficient and economical management of the case. Based on that input, Judge Davis fashioned a scheduling order: (1) implementing an early disclosure of plaintiff's Infringement Contentions, previous licenses, and defendants' accused product sales data; (2) setting an early mediation deadline and deferring invalidity contentions and all other disclosures under Federal Rule of Civil Procedure 16 until after the mediation deadline; and (3) giving each defendant the option to disclose source code related to the accused product and, if a defendant chose to disclose its source code, obligating the plaintiff to amend its infringement contentions within 30 days thereafter. Notably, Judge Davis did not require the defendants to undertake the expense of providing their invalidity contentions and document productions until after the mediation had occurred.

In a recent Order, Judge Davis took the opportunity to comment on the procedure outlined above, and recognized the time- and money-saving benefits that resulted from these unique scheduling procedures. Id. In particular, Judge Davis noted that "the early disclosure of source code and sales data facilitated substantive discussions regarding non-infringement and allowed the parties to evaluate their relative positions at an early stage without the need for voluminous and expensive discovery." Id. Judge Davis also recognized that this approach "allowed the parties to narrow the number of asserted claims and accused products significantly," which also helped reduce the cost of discovery for the remaining parties. Id. The judge commended "the parties for taking the modified schedule seriously," particularly in light of the significant cost savings recognized by the parties and the judicial economy resulting from this approach. Id. at 7.

What This Means for You

As the Uniloc cases demonstrate, courts are recognizing the benefits of employing creative and unique scheduling solutions to resolve cases early, and without forcing the parties to incur significant – and often unnecessary – discovery costs. Particularly in large multi-defendant cases, however, the parties need to be prepared to help the court facilitate such scheduling solutions. When proposing such solutions, parties should consider: (1) what particular discovery is truly necessary for the parties to fairly evaluate their respective cases; (2) whether mediation can effectively occur prior to the provision of invalidity contentions and general document productions; and (3) whether construing certain key claim terms and/or submitting early motions for summary judgment can resolve key issues in the case.

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