EDTX Imposes Early, Tight Limits on Asserted Patent Claims and Combinations of Prior Art References

At the Eastern District of Texas Bench-Bar Conference on Friday, November 1, 2013, Chief Judge Leonard E. Davis unveiled the district’s new “Model Order Focusing Patent Claims and Prior Art to Reduce Costs.”  The Model Order is a revised version of the “Model Order Limiting Excess Patent Claims and Prior Art” prepared by the Federal Circuit Advisory Council.  The Model Order is now included as an appendix to the Eastern District of Texas Local Rules.

The accompanying commentary states that the goals of the Model Order include “reducing the burden on the court and lowering the expense of the parties by focusing patent cases to the issues at the core of the dispute.” The Model Order provides some flexibility to make modifications (including increasing or decreasing the numerical limits) to accommodate the facts of each case.  The Model Order makes it clear the parties should discuss what limits are appropriate, seek to find agreement, and “jointly submit any proposed modifications” early in the case.  After an order setting these limits on claims and prior art has been entered, good cause must be shown to modify the numerical limits if the parties cannot agree.

The Model Order requires a patentee to serve a “Preliminary Election of Asserted Claims” consisting of no more than 15 claims in a single patent suit, or no more than 10 claims per patent and 32 total claims in a multi-patent suit.  This election must be made “by the date set for completion of claim construction discovery pursuant to P.R. 4-4.”  The commentary states the deadline for this disclosure was selected, in part, because it “allows initial claim construction disclosures to take place, giving the parties the benefit of each other’s claim construction positions in making their preliminary elections.

Fourteen days after the patentee makes its Preliminary Election of Asserted Claims, the accused infringer is required by the Model Order to serve its “Preliminary Election of Asserted Prior Art,” consisting of no more than 18 “references” for a single patent suit, or no more than 12 “references” per patent and 40 total in a multi-patent suit, ignoring “obviousness combinations.”

For purposes of the Model Order, a single “reference” can include “a prior art instrumentality (such as a device or process) and associated references that describe that instrumentality” as well as “the closely related work of a single prior artist.”  One potential area of uncertainty is whether a company, as opposed to an individual or group of individuals, can be considered a “single prior artist” for these purposes.  Given the difficulties sometimes encountered in ascertaining relative strengths of prior art and supporting evidence early in a case, and consistent with the Model Order’s stated goal of providing the parties with additional time in order to make an informed choice when selecting asserted claims and prior art references, accused infringers may consider whether to propose a fixed deadline for their Preliminary Election of Asserted Prior Art, rather than one controlled by timing of the patentee’s election.

Once the parties have exchanged “preliminary” elections, and with the goal of “lessening the costs associated with expert reports and final preparation of the case for trial,” the parties must make their “final” elections.  Under the Model Order, at least 28 days before serving its expert’s report on infringement, the patentee must serve its “Final Election of Asserted Claims” from among the preliminarily-elected claims, and consisting of no more than eight claims in a single patent suit, or no more than five claims per patent and 16 total claims in a multi-patent suit.  The accused infringer must then, by the date the expert reports on infringement and invalidity are due, serve its “Final Election of Asserted Prior Art” from among the preliminarily-elected references,” consisting of no more than nine references for a single patent suit, or no more than six “references” per patent and 20 total references in a multi-patent suit.

However, in this “Final Election,” each “obviousness combination [counts] as a separate prior art reference.”  The commentary shows a concern that “a small number of prior art references can be combined to form an exponentially greater number of bases for invalidity.”  The Court may be called upon to decide just how many “references” have been elected (e.g., whether a single piece of prior art that arguably both anticipates as well as renders an elected claim obvious in light of the ordinary knowledge of a skilled artisan will count as one or two “references” for these purposes).

Because the Model Order requires the accused infringer to make its “Final Elections” as to which prior art and combinations thereof invalidate the finally-elected claims without the benefit of seeing how the patentee’s expert is ultimately applying those claims, accused infringers should consider taking early actions to clarify any vague infringement contentions and/or to exclude any expert infringement theories deviating from those described with clarity in infringement contentions.

Finally, the Model Order does not expressly address the effect of a judgment on non-elected patent claims.  In In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303, 1312-13 (Fed. Cir. 2011), the Federal Circuit approved the practice of requiring the patentee to show that non-elected claims raise separate issues of infringement and invalidity.  The failure to make such a showing will likely bar the patentee from asserting the non-elected claims against the same accused infringers in a subsequent action.  How and when this issue will be addressed in cases in which the Model Order applies remains to be sorted out.