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IP, Patent

Damn The Injustice!

A bit belated, but in early January, Chief Judge Randall Rader (Court of Appeals for the Federal Circuit) spoke in Singapore about a CAFC advisory committee to revise electronic discovery rules. Judge Rader is concerned about the cost of litigation, and in particular the cost of  patent litigation (although there was no mention of whether proposed reforms would be limited to patent cases). Specifically, Rader suggests that litigants requesting discovery be limited to five search terms of their choosing, and pay for any additional discovery. Doing so, according to Rader, “would introduce some economic check on enthusiasm to request every record”.

A little background first. Over the past ten years, discovery practices have finally adapted to the modern way that companies keep records. Instead of handing over boxes and boxes of paperwork (like so many lining the shelves of conference rooms when I worked as a summer associate), lawyers hire e-discovery vendors to tap in to their client’s servers (and employee computers) and make digital copies of everything that might be relevant to a case. Then, they pay paralegals, temps, and contract attorneys to sit at computer terminals for hours, flagging various electronic documents as privileged and (occasionally) removing irrelevant documents. Naturally, one way of limiting the number of documents collected is by using search terms.

Being realistic for a minute, a patent owner claiming patent infringement has a lot more need for discovery than the party defending the claim. And the patent owners are generally loathe to agree to limit discovery to documents responsive to a list of search terms in the first place. If you’re conducting an investigation, you naturally want anything that might be relevant, not just the documents that happened to include the right words. So the prospect of being limited to just five terms is downright frightening. (As an aside, I wonder if you could just pick “the”, “of”, “to”, “and” and “a” as your five terms.)

This is an extreme limitation on discoverability of documents, and increases the probability that relevant documents would never be handed over without repercussion for the withholding party. Rader’s callousness to this is startling:

Rader recognised that this would not come without a cost, but, he said, “I believe in a little injustice“. The results of any restraint, he acknowledged, would be that somewhere down the line there will be a case in which a party will not discover a document that could have changed a final outcome. However, he stated: “I believe in allowing that to happen because it facilitates the greater justice of encouraging effective discovery procedures.” As things stand, he continued, discovery is often used as a tactic that may even price some parties out of the judicial marketplace.

via Rocking Rader calls for judicial consensus and attacks astronomical e-discovery costs – Blog – IAM Magazine (emphasis mine).

There are number of things I’d never want to hear a Judge say, and I’m not sure where “I believe in a little injustice” ranks in the list … but it’s up there. And Rader’s justification for this demonstrates that the entire idea is completely out of touch with the realities of litigation.

He notes, according to the article, that the high cost of complying with discovery “may even price some parties out of the judicial marketplace.” I’m assuming that means that some parties are turned away from seeking justice due to the cost of discovery. However, patent owners increasingly seek financing to fund infringement lawsuits due to the cost, leaving them with a smaller share of any recoveries. Putting the financial burden of discovery onto the patent owners will only encourage this phenomenon. Further, document collection for discovery tends to be carried out in a very inefficient manner, and cost shifting will only encourage parties responding to discovery requests to be even less concerned with efficiency.

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