Patent re-examinations used to have no provisions for discovery. Under their duty of disclosure, patent owners had to provide all material relevant to patentability to the Patent and Trademark Office (PTO), but that was it—no depositions, no document discovery, no protective orders. Now, with the new contested proceedings available under the America Invents Act (AIA), limited discovery is available to the parties and the PTO has the authority to manage and to enforce it.

Discovery can be especially worrisome for inside counsel. For PTO contested cases, limited discovery is available to the parties at each phase of the contested proceeding, alternating between patent owner and petitioner. Mandatory document production, depositions and evidentiary challenges can incrementally drive up costs of the proceeding. And for unwary inside counsel, the amount could be significant. With the initial set of contested cases in the early stages, it is too early to know for sure how the Patent Trial and Appeal Board will manage discovery. But we can glean information from the published rules and past experience with interference practice, which also has limited provisions for discovery. Here is the good, the bad and the potentially ugly aspects of discovery in contested proceedings.

The good: The rules limit the scope of discovery and the board will strictly enforce those limits.

The periods for discovery are limited, as are the potential avenues for discovery. If interferences practice is an indicator, the board will not allow fishing expeditions and will tightly control the timing and reach of discovery.

During the pre-trial phase between filing of the petition and the board’s decision on the petition, only discovery related to standing will likely be available. Early board decisions have confirmed this. Additionally, the board will typically authorize this discovery only if the patent owner already has some facts that reasonably show standing may be an issue. To compel this early discovery, a patent owner must meet the strict “interest of justice” standard.

During the trial phase, document production proceeds either by agreement of the parties, or by motion. To control discovery costs, parties should preferably  proceed by agreement. The board rules and the Trial Practice Guide provide fairly clear guidance on how to proceed by agreement, with the scope of production dictated by the issues to be raised. If the parties choose to proceed by agreement, they must notify the board no later than the deadline for the patent owner to file its preliminary response. If the parties cannot reach an agreement on discovery, the discovery will proceed “by motion.” Depositions in contested cases will likely be strictly limited to the declarants the parties use to support their substantive positions on patentability, and their scope will be much narrower than is the norm in civil litigation.

The bad: Inside counsel should expect document production and deposition testimony to be fully available to the public

In civil actions, it is easy to keep material out of the public record through the applicable protective order. This will likely not be true for PTO contested cases and inside counsel should expect the proceeding to be conducted in full public view. Given the likelihood that a contested proceeding on a patent will happen either before or concurrently with a civil action, a party’s arguments (including claim construction) and public disclosures to the board should be carefully reviewed.

The rules and comments discussing protective orders show the board will likely default towards public disclosure of any information necessary to its decision. Parties wishing to keep produced documents or testimony confidential must do so by motion and certify that they tried to resolve the dispute before filing the motion. For fully confidential documents, a non-confidential description is required. For partially confidential documents, the motion must explain why the material should be protected, the party must submit sealed and redacted versions, and the party seeking protection must also explain why the information should remain confidential. The board has the final say and can sua sponte decide that information should be public.

Finally, the default protective order does not have different layers of confidentiality, such as a higher classification for software or other particularly sensitive information. The parties are free to negotiate stronger protections, but any proposed protective order remains subject to Board approval, as does any decision to keep information confidential. And if one party will not negotiate, the Board will likely return to its default protective order.

The ugly:The discovery phases are extremely short, which makes timely actions and decisions critical

The extremely short discovery periods make timely decisions critical. For instance, once a trial is initiated, the patent owner has three months to respond to the order. In that period, the patent owner must complete its mandatory disclosures, analyze the petitioner’s disclosures, make any necessary objections to the initial evidence presented by the petitioner, analyze the order and determine the substance of its patentability positions. It must then depose (i.e., cross-examine) the petitioner’s declarants with sufficient time to then use that testimony in its response. Initiation and resolution of discovery disputes must therefore be quick—the board will not suffer delay, confidentiality disputes or other dilatory discovery tactics that would put the statutory deadlines for completion in jeopardy.