USPTO Clarifies "Routine Discovery" Permitted in Patent Trials Before the PTAB

Written by: Karl Renner and Dorothy Whelan |March 18, 2013
Garmin International Inc. v. Cuozzo Speed Technologies LLC, slip op. IPR2012-00001 (PTAB Mar. 5, 2013)

In Garmin International, Inc. et al. v. Cuozzo Speed Technologies LLC, the PTAB clarified the metes and bounds of "routine discovery" permitted in patent trials before the PTAB and set forth standards for determining when a party's request for additional discovery would be granted. The decision is important because it illustrates the limited nature of discovery available in patent trials and highlights the differences between PTAB and district court proceedings.

37 C.F.R. 42.51(b)(1) defines categories of "routine discovery" that a party in aninter partesor post-grant review proceeding is entitled to receive without receiving prior authorization from the PTAB. These categories are:

(1) production of exhibits cited in a paper or testimony ( 42.51(b)(1)(i));

(2) cross-examination of opposing declarants ( 42.51(b)(1)(ii)); and

(3) "non-cumulative information that is inconsistent with a position advanced during the proceeding" ( 42.51(b)(1)(iii)).

According to the PTO's Patent Trial Practice Guide, "[r]outine discovery places the parties on a level playing field and streamlines the proceeding." It represents the extent of discovery to which the parties are entitled in the absence of agreement between the parties or PTAB authorization.

In Garmin, the patent owner proposed a number of interrogatories and document requests as well as the deposition of a corporate representative similar to a 30(b)(6) deposition in district court.[1] The PTAB disagreed with the patent owner's attempts to characterize these requests as falling within the definition of "routine discovery" and further denied the patent owner's motion for additional discovery based on these requests.

Under the guise of routine discovery pursuant to 37 C.F.R. 42.51(b)(1)(i), the patent owner sought production of not only the patent prior art references included in the petitioner's petition forinter partesreview but also the corresponding file histories for those patents.[2] The PTAB rejected the patent owner's request, holding that the rules required production of only the patents themselves because the petitioner did not rely upon the file histories in its petition.[3] The PTAB noted the general availability of file histories, pointing out that the patent owner could have readily obtained the file histories on its own if it had wanted to review them.[4]

The patent owner also attempted to categorize its requests for discovery, including the requests for file histories, as information relating to inconsistent positions under 42.51(b)(1)(iii). The PTAB rejected the patent owner's characterization, reasoning that the patent owner's requests encompassed more than information inconsistent with a position that the petitioner had advanced, and contrasting these requests with the narrow class of information contemplated under the rules:

Routine discovery under 37 C.F.R. 41.51(b)(1)(iii) is narrowly directed to specific information known to the responding party to be inconsistent with a position advanced by that party in the proceeding, and not broadly directed to any subject area in general within which the requesting party hopes to discover such inconsistent information. Cuozzo's attempt to label very broad discovery requests as narrowly tailored routine discovery is misplaced.[5]

The PTAB's statements clarify that "routine discovery" under 37 C.F.R. 41.51(b)(1)(iii) is not a broad license for a party to uncover information in the possession of the opposing party that may be inconsistent with a position that the opposing party has taken.

Because the patent owner's discovery requests did not qualify as "routine discovery," the PTAB turned to whether the patent owner nevertheless had demonstrated that it was entitled to the additional discovery. 35 U.S.C. 316(a)(5) and 37 C.F.R. 41.51(b)(2) allow a party to seek additional discovery but further require the requesting party to demonstrate that the discovery requested is necessary in order to advance "the interest of justice." InGarmin, the PTAB emphasized that "ininter partesreview, discovery is limited as compared to that available in district court litigation. Limited discovery lowers the cost, minimizes the complexity, and shortens the period required for dispute resolution."[6] The PTAB then defined five criteria for determining whether a request for additional discovery is "in the interest of justice." The five criteria are:

(1) More Than a Possibility and Mere Allegation The mere possibility of finding something useful, and mere allegation that something useful will be found, are insufficient to demonstrate that the requested discovery is necessary in the interest of justice. The party requesting discovery should already be in possession of evidence tending to show beyond speculation that in fact something useful will be uncovered.

(2) Litigation Positions and Underlying Basis Asking for the other party's litigation positions and the underlying basis for those positions is not necessary in the interest of justice. The Board has established rules for the presentation of arguments and evidence. There is a proper time and place for each party to make its presentation. A party may not attempt to alter the Board's trial procedures under the pretext of discovery.

(3) Ability to Generate Equivalent Information By Other Means Information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice to have produced by the other party. In that connection, the Board would want to know the ability of the requesting party to generate the information without need of discovery.

(4) Easily Understandable Instructions The questions should be easily understandable. For example, ten pages of complex instructions for answering questions is prima facie unclear. Such instructions are counter-productive and tend to undermine the responder's ability to answer efficiently, accurately, and confidently.

(5) Requests Not Overly Burdensome to Answer The requests must not be overly burdensome to answer, given the expedited nature of Inter Partes Review. The burden includes financial burden, burden on human resources, and burden on meeting the time schedule of Inter Partes Review. Requests should be sensible and responsibly tailored according to a genuine need.[7]

After analyzing the patent owner's requests, the PTAB denied the patent owner's motion for additional discovery, primarily on the basis of Factor (1).[8] Factor (1) is the most significant of the five factors and represents the greatest departure from the standards that apply in district court discovery. The PTAB explained the standard as follows, differentiating it from the standard for relevance in district court discovery:

The essence of Factor (1) is unambiguously expressed by its language, i.e., the requester of information should already be in possession of a threshold amount of evidence or reasoning tending to show beyond speculation that something useful will be uncovered. "Useful" in that context does not mean merely "relevant" and/or "admissible." In the context of Factor (1), "useful" means favorable in substantive value to a contention of the party moving for discovery.[9]

Note the PTAB's requirement that the requester "already be in possession of a threshold amount of evidence or reasoning tending to show beyond speculation that something useful will be uncovered." Judging from how the PTAB applied this requirement inGarmin, the interests of justice standard appears to establish a very high bar for motions seeking additional discovery.

InGarmin, most of the patent owner's requests related to objective evidence of non-obviousness specifically, commercial success, long-felt need, failure of others, and copying. In several instances, the PTAB pointed out the patent owner's failure to demonstrate how its discovery of information relating to these factors, if obtained, would be favorable to the patentability of its claims. For example, the PTAB noted that the patent owner, as part of its threshold showing, failed to demonstrate a nexus between the alleged commercial success and the features of the claimed invention.[10] With respect to failure by others, the PTAB observed that the patent owner failed to provide evidence that others, besides the petitioner, had tried and failed, without which discovery of the petitioner's failure would have little probative value.[11] As for copying, the patent owner submitted a declaration from the inventor that described a telephone call with one of the petitioner's lawyers after the inventor had discovered that the petitioner was selling a device similar to its patented devices. Again, the PTAB held that this evidence fell short of the threshold showing:

The above-quoted testimony establishes, at best, only that a Garmin lawyer had evaluated Cuozzo's patent and determined that Garmin's devices did not infringe. It does not even establish that Garmin was aware of Cuozzo's patent prior to making its navigation devices having a "speed limit alert feature." Even assuming infringement of Cuozzo's claims under review by Garmin's devices ... that is not evidence of copying. Garmin might well have independently conceived of and developed the invention.[12]

The PTAB's evaluation of the patent owner's evidence for purposes of a making a threshold showing more closely resembles the standards for evaluating relevance in the context of admissibility at trial than it does the much lower standard required in district court litigation to support a discovery request.

With the exception of Factor (4), the PTAB likewise held that the patent owner had failed to satisfy the remaining factors governing whether the additional discovery it sought was in the interest of justice.[13] Regarding Factor (3) Ability to Generate Equivalent Information By Other Means the PTAB reasoned that the patent owner on its own could have obtained evidence of long-felt need and nexus by conducting its own market surveys or by obtaining opinions of its own experts. Thus, according to the PTAB, it was not necessary to obtain the additional discovery from the petitioner.[14] With respect to Factor (5) Requests Not Overly Burdensome to Answer the PTAB noted that the total cost estimate for the additional discovery ranged from approximately $50,000 to $80,000, an amount it regarded as unduly burdensome.[15]

The PTAB's decision inGarminshould be viewed in the context of the PTAB's mandate to complete patent trials within one year of a decision on the petition. The PTAB, in fact, explicitly made this point in theGarmindecision:

[I]ninter partesreview, discovery is limited as compared to that available in district court litigation. Limited discovery lowers the cost, minimizes the complexity, and shortens the period required for dispute resolution. There is a one-year statutory deadline for completion ofinter partesreview, subject to limited exceptions. 35 U.S.C. 316(a)(11);see also37 C.F.R. 42.100(c). What constitutes permissible discovery must be considered with that constraint in mind.

Against this backdrop, parties should assume that, in the absence of agreement between the parties, discovery largely will be limited to "routine discovery" and even that it will be narrow in scope relative to district court discovery. Accordingly, a party considering filing aninter partesreview petition should note these constraints on discovery in proceedings before the PTAB when deciding whether the PTAB or the district court is the best forum for challenging a patent's validity.

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[1]Garmin, slip op. at 2-4. The patent owner initially proposed 19 interrogatories and 20 document requests. It then reduced the number of interrogatories to nine and the number of document requests to 10.Id. at 2.

[2]Id.at 3.

[3]Id.

[4]Id.

[5]Id.at 4.

[6]Id.at 5.

[7]Id.at 6-7.

[8]Id.at 7 and 16-17.

[9]Id.at 7.

[10]Id.at 8-9 (insufficient threshold showing that (a) requested sales and pricing information were for units whose sales were due to inclusion of inventive feature, and (b) sales were not due to other desirable features not recited in claims).

[11]Id.at 9 ("Absent in Cuozzo's motion is a threshold amount of evidence tending to show that any skilled artisan having knowledge of the pertinent prior art had tried but failed to solve a problem related to speed limit alert indication").

[12]Id.at 11-12.

[13]Id.at 13-16.

[14]Id.at 13-14.

[15]Id.at 15.