Wednesday, September 22, 2010

And now for something completely different...

After so much fun, I thought it would be a good time for a wonky post about how to handle missed deadlines in civil litigation.  Particularly patent litigation.

One of the annoying things about patent litigation is that in many jurisdictions there are local rules that require the exchange of various pleading-like documents that set out the parties' infringement claims and invalidity defenses in great detail.  These are intended to replace the prior practice of exchanging contention interrogatories (though this is still the practice in most jurisdictions).  In my experience, these local rules generally create more problems than they solve, and create much satellite litigation about the timing and adequacy of the required disclosures.  While lawyers fight these issues out, the actual merits of the case sit off to the side.  Waiting.

I was reminded of this while reading an order issued yesterday by Magistrate Judge Jeffery Cole in the United States District Court for the Northern District of Illinois.
 In short, the issue was whether the defendant should be allowed to rely on prior art that it didn't disclose until just a few months before trial--years after its "invalidity contentions" were due under the judge's scheduling order.  Judge Cole said no:  deadline expired and deadline enforced by exclusion of evidence.

My first impulse is to cheer.  As the kind of guy who wishes people would cross the street only in crosswalks, I like it when there are consequences for breaking the rules.  But patents present a unique case.  The patent owner gets the right to exclude everyone from practicing the invention, not just the defendant in the particular case.  And if a patent owner gets a judgment of validity against one defendant, this will have the practical effect of deterring future defendants from even trying to defend against a lawsuit.  Patent cases are just too expensive to litigate to take that kind of risk.  Thus, when a patent does get litigated, there should be a very strong preference for a trial on the merits that includes all relevant prior art.  Arguably, exclusion of prior art is never an appropriate remedy.

Judge Cole considered but rejected this argument.  His response was that if such a policy were broadly enforced, "no rule of exclusion for noncompliance with discovery could ever be enforced" and "invalidity contentions could be raised at any time without regard to whether a defendant could have acted sooner or a plaintiff had adequate notice to respond."  In light of a statute that requires a patent defendant to give notice of prior art at least 30 days before trial (35 U.S.C. § 282), Judge Cole thought such a result would be absurd.

But nothing in that statute specifies exclusion of relevant evidence as the penalty for untimely disclosure.  And there are other effective penalties that can deter parties and lawyers from ignoring deadlines.  Namely:  sanctions.  Almost always it is the lawyer's fault that a deadline is missed, especially in these patent cases where it usually just boils down to lawyers playing games that the client knows nothing about.  It should be lawyers that pay.  That way there is a trial on the merits, but someone still gets the rod.

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