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How will the new Federal Rules of Civil Procedure on electronic information, which take effect Dec. 1, change patent practice? Legal Times talks to Adam Kessel of Boston’s Wolf, Greenfield & Sacks, who knows patent litigation and prosecution from the inside. Excerpts of our e-mail conversation follow.
What do the new rules require? The new rules establish a uniform procedure for dealing with electronically stored information in federal civil litigation. They reward litigants who develop a comprehensive e-discovery strategy at the outset.
Are these rules new and different? The rules formalize several trends in the case law. In that sense they’re not so much new and different, but rather a clearer source of authority for practices that courts and litigants have adopted over the past few years. They are new and different inasmuch as they answer several disputed questions and resolve splits in authority. Most importantly, they send an unequivocal message that courts take e-discovery issues seriously.
What falls under the rubric of “electronically stored information”? Potentially, any data stored in any electronic medium. Aside from the obvious examples of server and desktop hard drives, that could include e-mail, faxes, and voice mails, as well as data stored on cell phones, PDAs, BlackBerrys, portable memory sticks, or even iPods. Backup and archival storage is another source. Of course, the types of information to be identified or searched will vary. In a patent infringement case where the key question is the amount of the infringer’s profits, it’s unlikely, although possible, that the relevant sales figures will be stored only on an iPod. Litigants should first brainstorm all possible locations where electronic data may be stored, and then use a bit of common sense to prioritize those locations. If certain areas will be particularly burdensome to search — for example, backup tapes on obsolete media — a party may have a duty simply to disclose the existence of that media but not to search at its own cost.
Why are these changes particularly important to patent attorneys? Because patent prosecution and litigation are very document-intensive. First, it’s not unusual for an infringement case to be a “bet the company” suit, in which both sides will leave no stone unturned, electronic or paper. Second, electronic documents are often key evidence in patent disputes. An e-mail may provide crucial evidence as to the time an invention was conceived. Infringement may hinge on analysis of source code at various stages in time. Willful infringement depends, in part, on the defendant’s state of mind, and electronic evidence can be essential to establishing that. Increasingly, the smoking gun in a patent case is an e-mail.
What should patent prosecutors be doing in light of the new rules? Patent prosecutors can help lay the foundation for the best e-discovery strategies. First, they should inform their clients of the duty to preserve evidence in anticipation of litigation. This includes preventing automatic destruction of information by data-storage systems — for example, a server that deletes all e-mails after 180 days. If a court finds that evidence has been lost or destroyed when a party should have anticipated litigation, it can impose sanctions up to and including a default judgment. Second, patent prosecutors should be aware of the existence of metadata, which can reveal information such as the last 10 authors to edit a document and the history of changes made. When exchanging drafts of disclosure documents, applications, and office-action responses with clients, send only “clean” copies, scrubbed of metadata to avoid unintentional disclosure later on. This is even more important when exchanging documents that will ultimately be made public. For example, if a client is working with an attorney on a PowerPoint presentation describing the client’s patent portfolio for investors, take care to scrub the file of any metadata that could reveal privileged communications. Third, patent prosecutors should adopt consistent practices with their own files. If they know that a patent is going to be litigated as soon as it issues, they should not purge their files when it issues. Of course, theoretically, every patent might be litigated, but the duty to preserve evidence likely does not extend that far.
And patent litigators? Patent litigators should advise their clients that all documents, paper or electronic, are potentially discoverable if they contain relevant nonprivileged information. They should work closely with clients, particularly in the early stages of litigation, to understand the clients’ electronic storage systems, taking particular care to identify any data that might be lost or automatically changed over time. Litigators should consider carefully in which form they want to request, and produce, data. In some cases data in its native, or original, format will prove most useful, but in other cases attorneys may want to request a more easily searchable format.
Where can we expect future litigation sparked by the rules? Attorney-client privilege and waiver is a big issue. When parties produce the equivalent of millions of pages of documents, it’s difficult to ensure that no privileged document slips through. The new rules set up a procedure for resolving claims of waiver in the case of inadvertent disclosure, but they don’t provide guidance as to the substantive law to be applied. Parties are encouraged to agree at the outset on issues of accidental disclosure, but in many cases they won’t. Moreover, entities not party to the agreement will not be bound by it. Another likely dispute involves difficult-to-search data, such as old backup media. The new rules require parties to disclose the existence of such data if it may contain relevant information, but set up a balancing test for courts to apply as to whether a search will be required and which party will bear the cost.

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