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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.