The Northern District of California is one of the most popular venues for patent litigation. Its popularity is attributable in part to the fact that Silicon Valley, with its many technology companies, is part of the district. Another primary reason for the district's popularity is its Patent Local Rules, which establish a protocol for the disclosure of the parties' respective infringement and invalidity contentions and an early schedule for the court's claim construction determination. Innovative when originally enacted in December 2000, these Rules have been adopted by the Eastern District of Texas (now the most popular venue for patent infringement litigation) and as a model by other district courts.
After seven years of use, the district amended the Rules1 to "(1) update the rules to account for recent legal developments, (2) conform the rules closer to the practices of judges of the District, (3) address minor technical drafting issues present in the existing rules, and (4) improve the rules based on the accumulated experience of those working with patent local rules in this District and beyond."2 This article summarizes the most important amendments, which govern all cases filed on or after March 1, 2008. (For actions pending before March 1, 2008, the original rules still apply.3)
Litigants Must Jointly Identify the 10 Most Important Claim Construction Terms
The amended Patent Local Rules require that the parties meet and confer to identify in their Joint Claim Construction Statement the "10 terms likely to be most significant to resolving the parties' dispute, including those terms for which construction may be case or claim dispositive."4
The stated purpose for this new requirement is "limiting the terms in dispute by narrowing or resolving differences and facilitating the ultimate preparation of a Joint Claim Construction and Prehearing Statement."5 The amendment stems from concern that patent litigants had been identifying too many terms during claim construction "to avoid a waiver of rights," resulting in a "potential glut of terms for construction [that] can impede the claim construction process."6 The same concern had led several district judges to adopt a policy of construing no more than 10 claim terms or phrases in Markman proceedings.
The amended Rules do not place a fixed limit on the number of terms for construction by the court, nor would doing so comport with the well-established rule that claim construction is the province of the court, and not the jury.7 Nevertheless, parties litigating patent claims in the Northern District of California should be prepared to seek construction of terms only when truly necessary, and to employ best efforts to reduce the number of disagreements over the meaning of claim terms when their construction is truly necessary.
Initial Infringement and Invalidity Contentions Now Final Absent Amendment Based on Timely Showing of Good Cause
The original Patent Local Rules required that the party claiming infringement and the accused infringer disclose "preliminary" infringement contentions and invalidity contentions before claim construction. Claim construction typically focuses on how the infringement plaintiff applies claims at issue to what is accused, hence the need to identify infringement contentions before claim construction. Similarly, the invalidity analysis by the party defending an infringement claim typically focuses on potential art that relates to the asserted scope of the claims. The original rules thus required disclosure of initial contentions before claim construction, while giving each side the right to serve amended contentions after claim construction or after the
other side's production of materials relevant to such disclosures. In many instances, this two-stage process led to collateral litigation over the propriety of amendments. Moreover, the two-stage process did not tie "litigants sufficiently to their positions."8
Amended Patent Local Rules 3-1 and 3-3 eliminate the two-stage process in favor of one set of contentions for each side. Infringement or invalidity contentions may be amended only through a timely showing of good cause and when doing so will not result in "undue prejudice" to the non-moving party. Rule 3-6 provides three examples of good cause: "(a) a claim construction by the Court different from that proposed by the party seeking amendment; (b) recent discovery of material, prior art despite earlier diligent search; and (c) recent discovery of nonpublic information about the Accused Instrumentality which was not discovered, despite diligent efforts, before the service of the Infringement Contentions."
Parties could not count on amending infringement or invalidity contentions at will under the original Rules. The opportunity to amend as of right following claim construction, however, provided the parties with substantial leeway in amending their contentions under the guise of "final" contentions. The amendments to Rules 3-1, 3-3 and 3-6 augurs greater difficulty in doing so, thus requiring each side to invest as much effort as possible in ensuring that the pre-Markman contentions are as final as they can be.
Other Amendments
Two other amendments to the Patent Local Rules merit attention.
First, recent developments in the law have increased the importance of disclosing early in litigation whether the party claiming infringement alleges indirect infringement and, if so, the bases for the allegation. For example, the Federal Circuit confirmed in DSU Med. Corp. v. JMS Co., Ltd.9 that a plaintiff seeking to establish inducement must prove that the defendant had an intent to induce another's direct infringement, as opposed to merely proving an intent to induce acts that constitute infringement.10 The amended Rules now provide for such disclosures at the same time that the infringement plaintiff discloses its infringement contentions. Rule 3-1(a) requires that the infringement plaintiff identify for the action the relevant subparts of 35 U.S.C. §271. In the event that section 271(b) (inducing infringement) or section 271(c) (contributory infringement) is identified, Rule 3-1(d) requires that the infringement plaintiff provide "a description of the acts of the alleged indirect infringer that contribute to or are inducing that direct infringement."
Second, the requirements for invalidity contentions based on obviousness have been updated. Original Patent Local Rule 3-3(b) provided that in the event the party alleging invalidity contends that "a combination of items of prior art makes a claim obvious, each such combination, and the motivation to combine such items, must be identified." In light of the Supreme Court's recent ruling in KSR Int'l Co. v. Teleflex Inc.11 holding, among other things, that obviousness does not necessarily require an express teaching, suggestion or motivation to combine references amended Rule 3-3(b) merely requires that an accused infringer asserting obviousness give "an explanation of why the prior art renders the asserted claim obvious, including an identification of any combinations of prior art showing obviousness . . ."12 Gone is any express requirement that the accused infringer also provide a "motivation to combine" prior art analysis.
Footnotes
1. The Northern District of California's amended Patent Local Rules and the Advisory Subcommittee's Report are available for download at http://www.cand.uscourts.gov/CAND/LocalRul.nsf/fec20e529a5572f0882569b6006607e0/5e313c0b7e4cd680882573e20062dbcf?OpenDocument.
2. Patent Local Rules Advisory Subcommittee Report (Jan. 2008) (Subcommittee Report) at 1.
3. See Patent L.R. 1-3.
4. Patent L.R. 4-1(b).
5. Subcommittee Report at 2.
6. Id.
7. Id.; A district court has a duty to construe claim terms "when the parties present a fundamental dispute regarding the scope of a claim." O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co., Ltd., 2008 U.S. App. LEXIS 7053 at *26 (Fed. Cir. Apr. 3, 2008).
8. Subcommittee Report at 2.
9. 471 F.3d 1293 (Fed. Cir. 2006).
10. See our Spring 2007 newsletter for a more detailed discussion of the DSU decision, available for download at http://www.ssd.com/files/tbl_s29Publications/FileUpload5689/9884/IntellectualProperty.pdf.
11. 550 U.S. ___, 127 S. Ct. 1727 (2007).
12. Patent L.R. 3-3(b).
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