California Federal Court Grants Motion to Adopt Version of Model Order on E-Discovery in Patent Cases Promulgated by Federal Circuit

DCG Sys., Inc. v. Checkpoint Techs., LLC, No. C-11-03792 PSG, 2011 WL 5244356 (N.D. Cal. Nov. 2, 2011)

In this patent case, Defendant sought an order adopting a modified version of the Model Order on E-Discovery in Patent Cases (“Model Order”) recently promulgated by a subcommittee of the Advisory Council of the Federal Circuit (available here).  Significantly, the Model Order limits the discovery of email by placing limitations on the allowable number of custodians and search terms.  According to the court, such limitations “are designed to address the imbalance of benefit and burden resulting from email production in most cases.”  The order proposed by the Defendant similarly limited the discovery of email.

Plaintiff opposed the adoption of such an order and urged the court to impose any limits on email discovery pursuant to the applicable provisions of the Federal Rules.  Plaintiff further argued that this case was unlike “those ‘actions brought by non-practicing entities where there are large imbalances in the cost and volume of discovery’” and instead involved direct competitors which “introduces issues in this case that are not contemplated by the Model Order” including, for example, “the issue of whether Checkpoint copied DCG’s products and whether DCG is entitled to an injunction.”

The court was not persuaded:

The court is not persuaded by DCG’s argument for at least two reasons.  First, although the undersigned will not presume to know whether Chief Judge Rader or any of the esteemed members of the subcommittee were focused exclusively on reducing discovery costs in so-called "NPE" cases, there is nothing in the language of the Chief Judge’s speech or the text of the model order so limiting its application.  Second, and more fundamentally, there is no reason to believe that competitor cases present less compelling circumstances in which to impose reasonable restrictions on the timing and scope of email discovery.  To the extent DCG faces unique or particularly undue constraints as a result of the limitations, it remains free, under the Model Order, to seek relief from the court.  But in general copying and the availability of an injunction are issues that are impacted by such restrictions no more than the myriad of other issues (e.g., inducement, state of the art, willfulness) that are present in just about all patent cases.  And if competitor cases such as this lack the asymmetrical production burden often found in NPE cases, so that two parties might benefit from production restrictions, the Model Order would seem more appropriate, not less.

Perhaps the restrictions of the Model Order will prove undue.  In that case, the court is more than willing to entertain a request to modify the limits.  But only through experimentation of at least the modest sort urged by the Chief Judge will courts and parties come to better understand what steps might be taken to address what has to date been a largely unchecked problem.